Housing Bill

Public Bill Committee, 5 February 2004.

Standing Committee E

Clause 120 - Meaning of ''residential property'' and

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I beg to move amendment No. 334, in

clause 120, page 84, line 15, leave out

'or intended to be occupied.'.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to discuss the following amendments:

No. 335, in

clause 120, page 84, line 16, leave out

'(and includes one that is being or is to be constructed)'.

No. 313, in

clause 133, page 90, line 3, at end insert—

'(5A) But in the case of a new home sold by the builder to a first buyer with the benefit of ten year warranty issued by a warranty provider the requirements under subsection (5)(d) and (e) shall not apply.

(5B) In the case of a new home sold within 10 years of the issue of a warranty applying to it issued by a warranty provider (other than in the circumstances described in the preceding subsection) the information required under subsection 5(d) and (e) may be provided by the warranty provider so long as—

(a) the individual providing the information meets the requirements of section 134(3), and

(b) the warranty provider has a scheme which meets the requirements of sections 134(3), (4), (5) and (6).

(5C) In this section ''warranty provider'' means the National House Builders Council or other warranty company certified by the appropriate national authority for issuing a warranty in respect of new homes.'.

No. 420, in

clause 134, page 91, line 16, at end insert—

'(8) A responsible person will be exempt from the requirement to provide a Home Condition report in the following circumstances—

(a) the sale of a new home provided that it is registered with a warranty provider designated by the Secretary of State,

(b) the resale of a new home where the warranty cover remains in force,

(c) the transfer of ownership by a developer of a new home to another company prior to marketing the property to the public where the company assuming ownership is registered with a warranty provider designated by the Secretary of State.'.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

It is nice to start part 5, because there has been consensus up until this point and now we can have the proverbial bun-fight. As you will know, Mr. Conway, the Liberal Democrats and the Conservatives have a problem with home information packs.

Amendment No. 334 is a probing amendment. We are trying to elicit from the Government, information as to the types of property that would require a home

information pack. We want to ensure that full consideration is given to which properties will, or will not, be subject to the requirements of part 5. Sellers of unoccupied properties, such as derelict ones, could be required to provide a home information pack. This amendment would exempt unoccupied properties from the requirement to have one. Under the amendment derelict property would be excluded, but new homes that are specifically included elsewhere in the clause would not. That is sensible. It is absurd that a derelict or run-down property should have a home information pack, even if one were happy to agree to the absurdity of home information packs in the first place.

Derelict and run-down properties are sold for refurbishment. People know that such properties are in a bit of a mess; they do not need a home information pack to tell them that. Likewise, I do not think that a directive on energy efficiency would apply.

David Kidney (Labour, Stafford)

The scheme is about offering properties for sale for people to buy. If someone is going to buy a house that has stood empty for a long time, is it not relevant that they should know from the local searches whether the local authority has a plan to demolish or compulsorily purchase it? If the property is brand new, is it not relevant to find out whether there is a guarantee for the first 10 years of its life? Why does the hon. Gentleman say that it is ludicrous to require that information, which is so relevant to the buyer, to be supplied?

Edward Davey (Liberal Democrat, Kingston and Surbiton)

We are talking primarily about developers, who will redevelop a derelict property. The idea that such people would need a home condition report on a derelict property seems ludicrous. There is no problem with exempting that type of property. We are trying to be helpful to the Government. The Minister and I will have a couple of boisterous discussions in the next two or three sittings. I do not think that the Government want to place the requirements of legislation like this on such properties.

Brian Iddon (Labour, Bolton South East)

One of my relatives attempted to purchase a property that was being refurbished, but the people who were refurbishing it could not afford to complete the job. It was semi-derelict. He incurred all the costs of solicitors and so on, and then discovered that the garage was standing on land for which no lease was available. That was only discovered late in the process, when he had spent a terrible amount of money. Is it not right that people who are buying properties—derelict or otherwise—should know whether a proper agreement is established?

Edward Davey (Liberal Democrat, Kingston and Surbiton)

In that case, what we shall be arguing later on would apply—caveat emptor is relevant. Most of the properties that we are talking about in relation to amendment No. 334 are not properties of the type that the Government originally had in mind as a populist measure in their 1997 manifesto.

Amendment No. 335 deals with new homes. Why should they be included? This is a probing amendment to help us to understand the Government's thinking on the issue. Presumably, new homes come with

guarantees. They are also covered by other regulations of the building industry, and will have to be inspected by building inspectors. New homes will have to be signed off, and the builder will have to give a 10-year guarantee.

David Kidney (Labour, Stafford)

Surely the point of the scheme is that people get all the relevant information at the beginning? Part of that information is whether there is a guarantee. I cannot understand why, if the hon. Gentleman thinks that the guarantee should be provided to the buyers, he would want to scrap the scheme. That, effectively, is what he would do by excluding some properties.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

Let me explain: I am against the whole of part 5. [Hon. Members: ''Oh!''] I do not pretend otherwise; I would like part 5 to be removed. I am only surprised that those on the Government Benches are surprised about that. They clearly were not paying attention on Second Reading. If we could have tabled a nice, simple amendment to delete part 5 and there had been agreement on it, we would have saved an awful lot of time. What we are trying to do, through a number of amendments, is to make part 5 slightly more sensible. It has not started off as being terribly sensible, and we reject the entirety of the thinking behind it, but if we are forced to have such unnecessary, heavy-handed regulation, with all its disastrous consequences, let us try to make it slightly less damaging. That is the purpose of amendments Nos. 334 and 335. They would exclude certain properties that we think do not need to have a home information pack.

John Hayes (Conservative, South Holland and The Deepings)

It is a delight to be here once again, debating important issues, as we move on to part 5, which is perhaps in some ways—hon. Members may agree—the most contentious part of the Bill. I do not mean to suggest that the earlier and later parts are not just as significant; but this is probably the part of the Bill that the public will look to with the most concern. As the hon. Gentleman suggested, we too have profound concerns about this part of the Bill. It is frightening that in that respect we may agree with the Liberal Democrats on a number of occasions in the coming hours and days—it frightens me, anyway.

The Liberal amendments in the group do have a point. The hon. Gentleman is on slightly dicey ground when he talks about the Minister and Labour Back Benchers not paying attention, given his and his colleagues' variable attendance record. People in glasshouses should not throw stones. I notice that the Liberal Democrat Committee members are all here together; I had begun to believe that they were a single person with a series of cunning disguises—or that, like the royal family, they did not like to travel together. However, they are here, so it is important that we look at their amendments.

The Liberal amendments make an important point about exceptions, but there is a real problem with exceptions: they will confuse lenders. Certainly, the Council of Mortgage Lenders is anxious that, in the clause and in this part of the Bill, we do not end up

with a multiplicity of arrangements, so that people really do not know on which properties they need to get reports, and on which they do not. There is an advantage in clarity and simplicity. Although I have some sympathy with the hon. Gentleman's argument about extreme cases—derelict properties may fall into that category—I am slightly more persuaded by the intervention of the hon. Member for Stafford (Mr. Kidney). The cases on the margin, of which there will be many, would cause confusion and a lack of clarity. That would certainly be disadvantageous to lenders and possibly to others.

I come to the amendments in the group that stand in my name and those of my hon. Friends. We are concerned at a more fundamental level about the new properties that will be drawn into this net. Our amendment No.420 is not proposed in respect of derelict properties but for those properties where there is already a reasonable level of protection for all concerned with the transaction.

I can see the point made by the hon. Member for Stafford about properties for which there is no protection and very little information. As he suggests, it may be highly desirable in those circumstances to glean more information. However, to suggest that a range of measures should be inserted that will overlap with—and may not have as much force as—a warranty that is in place, seems to be close to duplication. This point has been made to me by a number of people associated with the industry, particularly the House Builders Federation, which argues for this strongly. The Minister will have had representations from the federation, which says:

''Such warranties provide a good and fully sufficient protection for purchasers, including the ability to secure remedial action in the event of a problem with the home''.

Given that such warranties and therefore such homes must be compliant with a range of well established and well understood national criteria, there is an argument against applying the provisions proposed in the Bill to this type of property. I know that the Minister will have considered that, because the argument did not begin today—the case that I have made has been put on a number of occasions.

The warranties issue also needs to be examined in terms of the protection that is likely to be given by the new packs. There is a question about how they will be indemnified and how much security they will offer. Ironically, the warranties might offer more security, and it would be a curious situation where we replaced—or at least duplicated—an existing provision that was providing a higher level of protection for those purchasing homes.

Therefore, in consumer terms, there is little argument against amendment No. 420. In administrative terms, there is a good argument for it. The cost and bureaucracy associated with doing a job twice are undesirable. Later in the course of the Committee we will talk about the difficulties of recruiting sufficient people to implement part 5. Of course, it will help in that respect as well, because it will exempt those new properties that are covered by warranty and the properties that are resold from one builder to another from the requirement for a home

condition report—I saw the hon. Member for Bolton, South-East (Dr. Iddon) looking sceptical during my peroration and I see that he wants to intervene, so I am happy to give way.

Brian Iddon (Labour, Bolton South East)

Particularly in urban areas—on brownfield sites—there can be problems with land ownership. When I bought my new house, which I currently live in, the builder—who is a well known national builder—was unable to tell me whether he had purchased the whole of the land. It was in five ownerships. Halfway through the process, I was told that the house would be sold leasehold, but finally, when the contract came, it was freehold. Does the hon. Gentleman not think that builders who build on brownfield sites should establish the ownership of the land prior to the sale?

John Hayes (Conservative, South Holland and The Deepings)

Yes, that is a good point. Builders should be absolutely clear about the ownership of the site prior to the sale. The hon. Gentleman will know that there are a range of legal requirements and guidance at local and national level that assist in that process. As the hon. Gentleman suggested, it is entirely undesirable that there should be a lack of clarity about the original ownership of the site at the point at which a consumer or a purchaser becomes involved in the chain. However, he would acknowledge that while that case is not unique, it is unusual. He is suggesting that it may become more typical as we have moved towards building on more difficult sites. The brownfield sites that remain will increasingly be those that are hard to develop, because of contamination due to previous industrial use and so on.

The hon. Gentleman has a fair point, but the force of the argument is still weighted heavily towards the amendment. Such exceptions should be dealt with, but they will be better dealt with if the legislation is targeted and focused than if there is a broad-brush approach as a result of which all new homes are affected by the provisions despite the fact that a high proportion of them do not suffer from problems of the type that he has described. The hon. Gentleman makes a good point but I do not think that it is sufficiently powerful, although clearly he thinks that it is and he is about to tell me why.

Brian Iddon (Labour, Bolton South East)

This is a very quick intervention: 70 per cent. of Bolton's current new homes are being built on brownfield sites. That is above the Government requirement, which is very high.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman has given a quick advert for the Minister, which I am pleased about. He has reminded the Committee that the Minister has achieved 70 per cent. The Minister has failed the House, the Government and the country in many ways, but in this way he has not. He has set a target and he has bettered it; he has achieved 70 per cent., rather than the 60 per cent. target.

Despite that, it must be said that not all brownfield sites are difficult sites. The vast majority have neither the profound difficulties of ownership that the hon. Member for Bolton, South-East has described nor profound difficulties of development. Some of them have those difficulties, but many do not. It would be unhelpful to broadcast the message that there is a

problem with extending brownfield development because of the issues that the hon. Gentleman has rightly highlighted, and I know that he would not wish to do so in this Committee or elsewhere.

The hon. Member for Kingston and Surbiton (Mr. Davey) is welling up because he wants to intervene, and I am delighted to accept his intervention.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The hon. Gentleman has not answered the valid point made by the hon. Member for Bolton, South-East about certain types of brownfield development. The key question is whether we should use a sledgehammer to crack a nut. The vast majority of homes that are bought and sold every year are not on brownfield sites. Their legal status is well known through many transactions. We do not need all the heavy-handed regulation that is in part 5.

John Hayes (Conservative, South Holland and The Deepings)

That is of course true, but it is a different point from that raised by the hon. Member for Bolton, South-East. The hon. Member for Kingston and Surbiton is rightly saying that the overwhelming majority of transactions in any year do not involve brownfield new build. That is a good argument against the provision as a whole. The specific point that the hon. Member for Bolton, South-East made applied to new buildings on brownfield sites of a difficult nature. He mentioned the issue of the ownership of the land. He could have mentioned the difficulty of conducting some of the searches that are required where there was a previous troubling industrial or other use that means that people might have worries about subsidence, toxicity and so on.

The hon. Member for Bolton, South-East makes a good narrow point that could be dealt with by a focused legislative approach. The hon. Member for Kingston and Surbiton makes a broader point, which is that the issue raised by the hon. Member for Bolton, South-East not only involves a small minority of new build—and a small majority of brownfield new build—but involves an even tinier proportion of the total number of transactions that take place every year.

I defend the hon. Member for Bolton, South-East on the grounds that he has brought an important point to the Committee's notice. However, I do not think that it is a sufficiently strong point in terms of the total number of houses or of new houses bought and sold to negate my argument that not only will new houses built on brownfield sites or elsewhere be subject to all the building regulations, which provide a high level of protection, but there will also be a warranty that meets national standards, which already provides a higher level of protection for the consumer than the proposals in the Bill could provide. That is the reason why we tabled amendment No. 420.

Amendment No. 420 relates also to the resale of a new home while the warranty is in force. We are talking about people who buy a new house, builders that resell to another builder or developer in the early life of a new house, and the early resale of that house. The amendment would have a beneficial effect from the Government's point of view because it would make things easier to apply by removing the demand for

home information packs from a significant number of properties. The amendment would also reduce the bureaucratic burden and avoid duplication, which house builders and others feel would result from what the Government propose.

Mr. Clive Betts (Sheffield, Attercliffe) (Lab) rose—

John Hayes (Conservative, South Holland and The Deepings)

I will give way only briefly, as I am approaching the end of my remarks.

Clive Betts (Labour, Sheffield, Attercliffe)

Resale is slightly different from the original sale. A property that is resold five years after it was initially bought could well have changed in some way. For example, a conservatory or an extension could have been built on, which would not be subject to the warranty but would still need a survey to establish its state before it was sold on, and that would form part of the home information pack. The problem is that that is not covered in the amendment.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman is, as ever, incisive and attentive. I could have moved my amendment without mentioning the issue of resale, but I thought that I would do so to be fair to the Committee. He is absolutely right that there is a different argument about scale. A new extension or building attached to a house, if it is a substantial development or addition, will probably have received planning permission and been built in compliance with the building regulations, and the original house would still be covered by the warranty that was issued when it was first sold. The warranty is time-limited so, unless the individual has built something outside of regulations and without planning permission, and it is of poor quality, and then has sold their house on that basis, which would be outside existing law, the hon. Gentleman's point is less powerful than it seems.

Existing regulations and standards will apply to someone who extended their house soon after purchasing and then sold it on, which affords protection both to them, in terms of ensuring that they got what they wanted from their builder, and to the person to whom they sold it on. The hon. Gentleman is right that there is a separate argument about resale. One could say that brand new houses fell into one category and houses resold within the first five or 10 years into another, but the weight of the case is still in favour of including everyone who is covered by the warranty. If we did not accept that argument, we would have to start making split arguments about the warranty, so that people with a warranty were required to have a pack in some cases but not in others. That would complicate the Bill unacceptably.

Clive Betts (Labour, Sheffield, Attercliffe)

There is a further problem. If the warranty is about to expire within one month of the sale going through, it is hardly worth anything. The hon. Gentleman is suggesting that the buyer should rely on the warranty, which is about to expire, yet no up-to-date survey will have been conducted, and that is not a good guarantee for the person who is buying.

John Hayes (Conservative, South Holland and The Deepings)

That argument could, of course, be used for the home information pack. There will always be

marginal cases. If a home condition report has been produced and it has a period of validity, it might well be that the house is sold the day before the home condition report expires. Any provision of this kind—warranty, guarantee or whatever—will always have a margin and at that margin it is possible for a transaction to take place. That is true of a guarantee or warranty for any item that one buys anywhere. When one buys a house, a car or any other major purchase, there will come a point when the guarantee or warrantee expires. So, although the hon. Gentleman always puts forward a compelling and attractive argument, in this case I am persuaded that my amendment would be a useful addition to the Bill.

The Liberal Democrat amendments are interesting and I am grateful to the hon. Member for Kingston and Surbiton for tabling them, even though, on balance, I am concerned about the multiplicity of arrangements that might flow from his proposals being accepted. On that basis, I urge my colleagues to listen to what the Minister says, but if he is not very persuasive, we may have to consider moving to that difficult stage in our proceedings at which the Committee divides.

David Kidney (Labour, Stafford)

My amendment No. 313, like the amendment tabled by the hon. Member for South Holland and The Deepings (Mr. Hayes), focuses on new homes. The way in which the debate has concentrated on new homes shows your good sense in grouping the amendments Mr. Conway.

The hon. Member for Kingston and Surbiton aims, through the lead amendment, to exclude new homes from the requirements of the home information pack. If it were accepted and the rest of the Bill remained as it stands, an individual seller would be required on the sale of the house to produce evidence of the interest that is for sale, the title of the property, guarantees for the property and information from the registers of the local authority, whereas a national house builder selling thousands of properties a year would be exempt from those requirements. That strikes me as an odd approach to consumer protection.

My amendment would deal with the situation in the same way as the amendment tabled by the hon. Member for South Holland and The Deepings. It covers new properties that are sold by a builder with a guarantee that lasts for 10 years. The National House-Building Council is not the only provider of warranties for the first 10 years of a property's life, but it is by far the biggest in the market. We should remember that its guarantee means that there are two years of comprehensive cover for a fault with the property, and a total of 10 years of cover for structural problems. That is a good standard of protection.

Why require a surveyor to carry out a survey of a property on day one, when it has not been occupied by anyone and changes therefore cannot have been made? Given the usual standards of competence, we expect the builder to have built it properly, and there is a good system of protection for the buyer if anything

goes wrong. Why put the builder to the expense of paying for a surveyor, too? That is a good argument in respect of a brand new property for a first-time buyer. It is covered by the first part of the amendment tabled by the hon. Member for South Holland and The Deepings and by the first part of my amendment No. 313.

The Minister has a good get-out from my amendment, which is all my own work. He could easily say that it is technically deficient and promise to return with a decent amendment of his own. I would be satisfied with that. His consultation document about the contents of the home information pack has a chapter beginning on page 41 entitled ''Pack contents—New homes'', which sets out Government's intentions regarding a new home that is sold off-plan. If a person buys the property even before the builders have finished building it, to move in when it is completed, there would be no requirement for a home condition report.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman makes a good point about the consultation document. That is why I said to the Minister—albeit in slightly more subtle terms—that he would have thought hard about the matter and received representations about it. I am aware that there may have been a change in the Government's thinking during their deliberations about what must and must not go into the Bill.

David Kidney (Labour, Stafford)

Yes, and I agree with the hon. Gentleman that we should listen to the Minister's response to learn about the Government's thinking. The matter is stated strongly in the consultation document. If a property is complete and sold to a first-time buyer, the document asks whether we should exempt the builder or developer from producing a home condition report for the property. Under the first part of my amendment, the builder would not be exempt from providing the whole pack, but only from providing the home condition report and the energy efficiency assessment. That is consistent with the consultation document.

As the hon. Gentleman said, we each received a letter from the Minister in which he enclosed his proposals about regulations to be made under part 5. I looked in vain for any comment about the exemption of first-time sales of new properties from the requirement to provide a home condition report. Does that omission mean a cooling off of the Minister's part, or was it simply an oversight and he will now tell us that that remains the Government's intention?

My hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) quizzed the hon. Member for South Holland and The Deepings by about resale within 10 years, in respect of which my proposal—which I freely admit is drawn from a suggestion made by the industry—is slightly different from his. The person selling a house that is less than 10 years old to a second buyer should have the option of choosing who makes the home condition report. It could be an outside inspector authorised under the legislation; or the warranty provider's inspector—also authorised under the legislation, with the proper insurance and so

on—could be engaged to carry out the inspection and make the report.

The benefits to the provider of the warranty, and therefore its interest in providing such a service, are that it would have opportunities to provide additional consumer education by explaining that the warranty still exists and the extent of the cover, as well as to refresh the covenants in the warranty—to say, ''We can extend this, if you want us to, at a very reasonable price.'' Most important, it gives the provider a much better handle on the risk to be managed during the 10 years covered by the guarantees that it has given. That is, apparently, a very valuable asset for providers.

Sir Sydney Chapman (Conservative, Chipping Barnet)

The hon. Gentleman is on to an extraordinarily good point. He mentions the National House-Building Council in his amendment. It is not some sort of esoteric organisation; it has been in existence for some 65 years—less than I have, but for quite a long time none the less. The NHBC inspects 85 per cent. of new homes coming on to the market—it undertakes 750,000 inspections per year. It is a well established, non-profit-making organisation. It provides the guarantee—or warranty, as I prefer to call it—in the first place. If we are going to tackle unnecessary bureaucracy, surely it makes common sense that the warranty provider should have the right to re-inspect a building that is to be sold one year before the expiry of a ten-year warranty, and to examine conservatories and any other additions to the property. It makes sense that we extend the warranty provisions in that way.

David Kidney (Labour, Stafford)

I thank the hon. Gentleman for what sounded like a supporting speech.

Sir Sydney Chapman (Conservative, Chipping Barnet)

It was intended to be.

David Kidney (Labour, Stafford)

I entirely agree with what he said. The NHBC carries out an awful lot of building regulation inspections in place of local authority inspectors, it has the history, and it certainly has the capacity and expertise to provide the service that I suggest. I am not saying that it should replace external independent inspectors, but merely that the seller should have the option of choosing who is to carry out the inspection.

Because I support part 5 as a whole in relation to consumer protection, I will discuss the benefits for the consumer of accepting my proposal. First, because there would be competition in providing surveys and reports, prices would be keener. Secondly, there would be the possibility of warranty cover being improved, providing a benefit in terms of guarantees on the property being extended beyond 10 years, or extended to cover more things than it originally covered. People who have the benefit of the warranties would have better information: when I met with NHBC representatives, they told me—very wearily—of the number of times that they passed a brand new certificate to solicitors or other buyers' representatives who put it away somewhere and the buyer never knew that they had the cover. That is a pretty sad state of affairs. My proposal would clearly make the warranty much more important and something that people would be more aware of.

The suggestion made by the hon. Member for South Holland and The Deepings that a property resold within 10 years should simply be exempted from the requirement is quite a neat development, but I agree with my hon. Friend the Member for Sheffield, Attercliffe that a lot can happen within that 10 years. There should be a report, and the purpose of my amendment is to ask who should provide it.

John Hayes (Conservative, South Holland and The Deepings)

My hon. Friend the Member for Chipping Barnet (Sir Sydney Chapman) was right—the hon. Gentleman is on to a good point. It may even be that the amendment tabled by the hon. Member for Stafford is, as he suggests, although he did not use these precise words, a more sophisticated version of mine. My sole doubt arises from the fact that, under his system, there would be a greater variety of arrangements, and therefore more complexity, than under mine. Some people would choose one route and others would choose another. People at different stages of ownership would have different rights. Furthermore, lenders have repeatedly asked for clarity in the measures, so I wonder how they would feel about the system he proposes. In terms of guaranteeing standards, I wonder whether it would not create an extra administrative burden.

David Kidney (Labour, Stafford)

I would not like to be called sophisticated, so I again acknowledge the help that the NHBC gave me in developing my proposal; it is not all my own work. The wording of the amendment, however, is all my own work, and that is what may need some refining.

On the question of complexity, I echo the point made by my hon. Friend the Member for Sheffield, Attercliffe about NHBC inspectors who carry out building regulation inspections. That arrangement developed under the Conservative Government, I think, and it is now a well established part of the market. One might say that it would be more complex to allow either the local government inspector or the NHBC inspector to carry out the inspection, but the market has coped so far, so I have no worries on that point. As for whether consumers and lenders need have any concerns, I repeat that the inspectors would still have to have the qualifications, certification and insurance cover that any other home inspector would need to have. There is no suggestion of letting the NHBC off compared with the standards that everyone else would have to meet.

I think that I have explained my point well. I have explained to my right hon. Friend the Minister how he can get out of accepting my amendment today, but I hope that he will give the industry some comfort about his future intentions.

Robert Syms (Conservative, Poole)

I can see that, although there may be differences between hon. Members on both sides of the Room on the principle of home information packs, there is probably consensus on the narrow point we are arguing about in relation to amendments Nos. 313 and 420. I hope

that that consensus might even include the Minister by the end of the debate.

It is clear that, initially, the Government were going to allow the certificate on new-build houses to be used instead of a home condition report. Like the hon. Member for Stafford, I am concerned that that was not mentioned in the letter. We would like the Minister at least to make it clear today whether it remains the Government's intention that the NHBC certificate can be used for the first sale and in the resale. Of course, much of what needs to be done through the Bill could be done by regulation, but we are anxious to get the Government's intentions on those points clearly on the record.

My hon. Friend the Member for Chipping Barnet is absolutely right—the NHBC is a substantial organisation. It has been going for 70 years, I think, and it has £1 billion in reserves, as well as a lot of dedicated surveyors. It provides a good service and, as the hon. Member for Stafford said, it does a lot of building regulation work for local authorities. It would be quite sensible if the NHBC and the other two organisations in the industry that provide that sort of insurance could be used to supplement and perhaps enhance what the Government want to do. We are talking about a 10-year guarantee on property, after all.

To pick up on the point made by the hon. Member for Sheffield, Attercliffe, if the regulations were framed so that those organisations had the opportunity to re-inspect properties and to extend the warranty if necessary, those with new-build houses or fairly young properties would get an enhanced service—much better than that given to those with a home condition report. That would be much better for the consumer. The logic of the amendments, however inelegantly worded they are, is that they would ensure that those in new-build housing got better service and coverage to than the Government's proposals would provide. That would be sensible.

The hon. Member for Stafford made a good point about competition between surveyors. One of the key points in the debate about home condition reports is that there will be a real problem with surveyors. The Royal Institution of Chartered Surveyors says that up to 10,000 may be needed, so several thousand need to be trained, whereas the Government assume that 7,500 to 8,000 are needed. Organisations such as the NHBC already have dedicated surveyors. If those experienced individuals could take on that part of the new-build market, it would help deal with one of the major problems of implementing this legislation by 2006 or 2007. That is an important point.

There is much to commend the amendments tabled by the hon. Member for Stafford and my hon. Friend the Member for South Holland and The Deepings. We want the Minister to put on the record today what the Government intend to do through regulations. In addition, we hope that they are at least open-minded about considering, as the Bill proceeds to another place and Report, amending this provision to give an enhanced service to those who are buying new or nearly new properties. That might mean that the Government's objectives, which they have set out

clearly in lots of glossy documents, would have a much better chance of being met than if our proposals were turned down and we returned to a narrow focus on the home condition report.

There is a lot to commend the amendments. I hope that the Government are in listening mode, because there are benefits for the Great British public and consumers.

Clive Betts (Labour, Sheffield, Attercliffe)

First, I shall pick up where the hon. Gentleman finished on staffing issues, because that is a good point. The proposal made by my hon. Friend the Member for Stafford on the sales of brand new properties is spot on. He suggests that the survey done for warranty purposes should stand as a survey done for the home condition report, thereby saving staff input into the process. If we exempted all first-time sales of new properties at the outset of the home information pack system, when we will be struggling to carry out all the additional surveys, that would be an asset to getting the new system up and running.

My hon. Friend made an important point. His amendment deals only with home condition reports, not with an exemption from home information pack. He suggests that that element be taken out for the first-time sales, which is a valuable addition. If there is no need for an additional survey for first-time sales of brand-new properties, the process will get running more quickly. I am sure that the Minister will want to take that idea on board, because it has considerable merit.

If there is any suggestion at all that the current survey for warranty purposes does not meet the standards the Minister is seeking in the home condition report, that could be discussed with the providers of the warranties—the NHBC and others. I am sure that small adjustments could be made to the way in which they carry out their surveys as part of the warranty process and that those could be brought up to the standard that the Minister requires for home condition reports. My hon. Friend is right to propose new subsection (5A), and even if the wording is not as precise as it needs to be, I am sure that the Minister will reflect on it.

There is a much more difficult and in some ways more interesting issue around the resale of houses during the warranty period. I return to what I said a few minutes ago to the hon. Member for South Holland and The Deepings. People cannot withdraw from the new survey process once a house is resold, because changes could have been made to the property in the meantime—an extension or addition, or something has happened structurally which requires another survey—or the warranty period could be so close to ending that it is virtually meaningless. There is no point saying, ''There was a survey nine and a half years ago''. That is not much comfort to someone who is investing a considerable sum in buying a property. A further survey is necessary in such cases.

My hon. Friend the Member for Stafford suggests in proposed subsection (5B) that the initial warranty provider should do the second survey. That has great attractions, so I shall tease out whether it might go even further. It would seem greatly advantageous that

the second survey on the point of resale be done by the original surveyor who provided the warranty. That would be a lot simpler for the purchaser, because if anything went wrong subsequently they would have one point for redress. The purchaser could go back to the organisation that carried out the original warranty survey—NHBC or some other body—and redress could be found with that same organisation. That is an enormous advantage for the purchaser. In addition, the warranty provider might want to consider an extension to a warranty, which could be an additional new service and an arrangement that benefited the purchaser. As my hon. Friend suggested, I know that the NHBC has suggested that it might want to be involved in extending warranties if it is the one conducting the survey on resale.

I want to tease out from the Minister whether he has had legal advice on the following point: if the amendment tabled by my hon. Friend were accepted, the vendor could decide that he did not want to go back to the warranty provider for a survey on resale, but wanted to go to another organisation. That it is a cause of slight concern. If the initial warranty is in place but another survey has been done and something then goes wrong with the property—a structural fault of some kind develops—where do the purchasers of the property, which is now their home, go? Do they go to the initial warranty provider, or to the organisation that has done the survey on resale? Would there be any conflict about where to find redress? Could one of the organisations—the NHBC if it had done the initial warranty—say, ''Hold on a minute, it is not for you to challenge us on the warranty. You have had a survey done since then, and that supersedes the initial warranty, so you ought to go to the organisation that did the survey on resale.''?

That is a legal problem to which I do not know the answer. Could the person who has purchased the property on the second sale be caught in a dilemma about where they can claim redress? I wonder whether included in the 10-year warranty and the home information pack should be a requirement, rather than an option, to go back to the same warranty provider for the survey. My hon. Friend uses the word ''may'' in his amendment, but I wonder whether it ought to be ''should.'' I know that there are competition issues related to that—we would be handing a monopoly to the initial warranty provider to provide the survey on resale—but provided that an arrangement could be reached about a fixed priced for surveys, that could simplify the whole process in legal terms. The Minister might want to look into that.

My right hon. Friend might be able to reassure me that there is no legal problem, and say that it is acceptable for a new purchaser to rely on the initial warranty and a survey provided by someone completely different. However, if there is a problem, I am sure that he will want to think about it and find a way forward.

Keith Hill (Labour, Streatham)

Let me begin by assuring the Committee that we intend to approach this matter—including the principle to which we are clearly committed—with as much open-mindedness as possible. There is a great

willingness on our part to engage constructively with the industry—after all, it is the industry that will have to deliver on the proposals for home information packs. I am delighted to say that already there is a high level of engagement on the part of all elements of the industry in considering the implementation of the proposals. I hope to demonstrate that as we continue our proceedings.

I am grateful for the constructive spirit in which amendments have been tabled. My hon. Friend the Member for Stafford has become, to all intents and purpose, my guru in these matters. I also appreciate the spirit in which Opposition Members have spoken to their amendments, and the helpful way in which the hon. Member for Kingston and Surbiton raised issues—notwithstanding his root-and-branch ideological objection to our proposals.

We have had a very particular debate on this first set of amendments, which is natural and proper. However, with your permission, Mr. Conway, and that of the Committee, I want to move from the particular to general issues before I address the amendments by offering my overview of this part of the legislation. We have got into the habit of doing that in this Committee, and on the whole it has been found to be helpful. Therefore, I hope that I will be allowed to offer—I am unsure whether I dare use this phrase—a tour d'horizon by explaining the broader purposes of and justifications for part 5, which provides for the introduction of home information packs into the process of buying and selling homes in England and Wales.

I have no doubt that Committee members have had their own experiences of home buying and selling and will have heard horror stories from their constituents. Nevertheless, I hope that I may be forgiven for spending just a few moments outlining the main problems. The present home buying and selling process is deeply flawed: it is painfully slow by international standards, it is inefficient and wasteful, there is a high rate of failed transactions, it does not operate in the best interests of consumers, it causes buyers and sellers considerable frustration and stress, and there is wasted expenditure.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

Will the Minister give way?

Keith Hill (Labour, Streatham)

Allow me to develop my broader thoughts on this matter in my own characteristically open-minded fashion. I suspect that the Committee may want to revert to a general discussion about the purposes of the clause.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

May I make a tiny intervention?

Keith Hill (Labour, Streatham)

The hon. Gentleman wants to make a tiny intervention. If I give way to him, every Committee member will want me to give way so that they can make a tiny intervention. However, I will make an exception for the hon. Gentleman.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The Minister is most generous. I do not necessarily agree with what he has said so far, but I just wanted to add to his list of descriptions of the

home selling process in the UK. Does he agree that it is also the cheapest such process in the world?

Keith Hill (Labour, Streatham)

The hon. Gentleman has made that assertion in the past, but I have not seen the evidence to support it. In any case, our proposals will enhance the efficiency and cost-effectiveness of the process, and in all circumstances there will be significant savings as a result of that increased efficiency.

I return to the broader issues. Consumers are fed up with the system. Research by Yorkshire bank found that nine out of 10 people are unhappy with it; there is a 90 per cent dissatisfaction rating. Over the past five or six years, my Department has commissioned extensive research in this area and backed that up with wide-ranging consultation. Our starting point was the most extensive study ever carried out into the home buying and selling process. That involved tracking 800 transactions through the process in a range of areas and markets. The study showed that the key problem in all areas and markets is that important information that buyers and sellers need in order to make decisions is not available at the start of the process.

Let us be clear about the purposes of our proposals for home information packs. They are about the consumer; they aim to afford greater up-front certainty, to increase consumer satisfaction and to secure fewer failed transactions.

In many cases, that information, which is so necessary to the buyer, does not become available until after terms have been negotiated and agreed. Buyers make offers and then negotiate ''blind.'' They learn about problems with the property only later in the transaction process, often weeks or even months after terms have been agreed. When problems are revealed, buyers then want to renegotiate or pull out completely. That causes buyers and sellers considerable uncertainty, stress and wasted costs. There is a knock-on effect throughout the chain. In our discussions, we must always remember that the focus is on the consumer's interests and the effects of this process on the chain. Nearly 30 per cent. of transactions fall through after terms have been agreed, and the price of failure is high—on average about £1,000 a transaction for consumers alone. That does not count wasted costs incurred by estate agents and others in the industry.

John Hayes (Conservative, South Holland and The Deepings)

I wonder whether the Minister will elucidate what proportion of those failed transactions involved new homes. His argument about people changing their mind once they have received information is bound to apply, to a much greater degree, to homes that are not new and where there are more complex circumstances—some of them were referred to in an earlier intervention. The argument is not forceful unless it can be suggested that in respect of the amendment there is also a major problem with new homes.

Keith Hill (Labour, Streatham)

The hon. Gentleman draws us back correctly to the purpose of the amendments, which I am about to deal with. Perhaps, with his permission, I can deal with the issue of new homes in what, I hope, is a helpful fashion when I discuss the amendments.

The Bill addresses the issue of failed transactions head-on. It requires sellers and their agents to assemble key information before the property is marketed, and to make that information available to potential buyers. That will bring much-needed transparency into the process. It will enable any problems with the property—for example, with title or planning consent—to be identified and addressed early on, before they put the sale at risk. It will help the seller and the estate agent to decide on a realistic price, which reflects the true condition of the property. It will give prospective buyers the information needed to make a well informed offer and to proceed quickly once terms have been agreed. It will greatly reduce the risk of transaction failure or of terms' having to be renegotiated. It will shorten the period of uncertainty between offer acceptance and the exchange of contracts, thereby reducing the window of opportunity for gazumping and other problems.

However, as the Committee will be aware, part 5 is essentially enabling legislation. It sets out the home information pack duties and the arrangements for enforcing them. I look forward to debating those matters in detail as we discuss the part clause by clause.

Part 5 provides an indication—in clause 133—of the information that will be included in the home information pack, but the final detail is left to be prescribed in regulations. It is important for both consumers and the industry that we get this information right. I want to assure the Committee that we have no intention of introducing the home information pack requirements until we are satisfied that we have achieved that. For example, we will not introduce the home condition report until we are satisfied that adequate numbers of appropriately qualified and insured home inspectors are available.

All the main industry stakeholders and consumer representatives are working with us on this, and we have already made significant progress. To assist our discussions, I have made available to the Committee four sets of documents, the first of which is the consultation paper of the Office of the Deputy Prime Minister on the contents of the home information pack together with a report on responses to that consultation that was published earlier this week. The Committee will note that the responses reveal a high level of agreement with our proposed contents. We shall now start refining the pack's contents in close consultation with the industry and consumer stakeholders.

I refer secondly to the ODPM consultation on options for applying packs to low-value homes in areas of low demand, together with a report on responses that was again published earlier this week. I say in all candour that the issue is tricky. On one hand, we do not want to add to the problems of marketing the homes; on the other, we do not want to add to the stigmatisation suffered by the areas nor deny them the benefits of home information packs.

Part 5 of the Bill, specifically clause 133(9)(c), provides for different provision to be made for different areas and types of property. I look forward to gauging the Committee's views about that. I say

genuinely that I look forward to the input of members of the Committee and will be grateful to receive it.

Chris Mole (Labour, Ipswich)

Will my right hon. Friend give us his views on the impact of the introduction of home information packs on that element of the market that is managed by the individual who makes his own arrangements rather than employing an estate agent?

Keith Hill (Labour, Streatham)

My hon. Friend raises an important issue, and one that we need to be clear about because it has been the source of some uncertainty. If he will forgive me, I shall deal with the matter when it arises naturally, which it will probably do in later clauses. I am keen to ensure that we are all absolutely clear about definitions.

Thirdly, I have provided the Committee with a report by the Building Research Establishment on technical and consumer pilots of the home condition report, which reveals a high level of consumer satisfaction. It also provides several helpful suggestions for improvements, which we shall be considering further with the industry and consumer stakeholders. Fourthly, I refer to a report on an investigation by the former Property Services National Training Organisation of the likely labour pool for home inspectors. That also is reassuring. I hope that the documents and the considerable research that has been carried out by—I emphasise—independent consultants, and steered with the help of the industry and consumer stakeholders, will satisfy the Committee that we are adopting a considered and inclusive approach with the reforms.

David Kidney (Labour, Stafford)

I do not wish to seem impatient, but another document is the consultation paper that states:

''While a home is being marketed 'off-plan' . . . a home condition report . . . and energy efficient assessment . . . should not be required.''

Is that still the Government's position?

Keith Hill (Labour, Streatham)

That is the Government's position and I intend to deal with that matter—almost immediately. If my hon. Friend will be patient for no more than 10 seconds, I shall complete my peroration on my tour d'horizon. I say in all humility that we recognise that much still needs to be done to finalise the detail, but we are satisfied that that can be achieved and that the home information pack can be introduced smoothly and successfully from the beginning of 2007. That is quite an important announcement and it is a commitment that the industry will be interested to receive. Let me conclude my introductory passage by saying that the reform is, of course, long overdue. I look forward to further debates on the matter.

Richard Younger-Ross (Liberal Democrat, Teignbridge)

The Minister referred to the testing of reports of that kind that have been done. An estate agent in my constituency already produces the reports voluntarily. He says that they are satisfactory, and he is pleased with them. I accept that when people volunteer for the reports, they are successful; but the Minister, in his peroration, was talking about moving to a point where everyone has to have them done. If there is a negative

market, and there is negative equity and falling prices, people have difficulty paying their mortgage. How can they then afford to pay for a report to be done, so that they can sell their house?

Keith Hill (Labour, Streatham)

I am certain that we will come back to the issue, but the reality is that if people, irrespective of their personal financial condition, want to sell a house, they will incur costs in the process anyway. It is perfectly clear that the cost of the home condition report—and that is the only new cost involved in the Government proposals; the seller already needs to spend money on all the other elements in the home information pack—is a relatively small part of the overall costs that are likely to be incurred. To that extent, we contend that the cost will not be a major additional burden on the seller. However, I am sure that there will be the opportunity to revert to these issues in due course.

We also argue that there will be clear benefits for the seller in those difficult personal circumstances as a result of the home information pack, in that the pack would speed up the process of the sale, and it would remove possible impediments to the sale. Also, the pack would enable seller and purchaser to identify a realistic price for the property.

So, yes, there will be a small additional burden for the seller; but that is likely to be equalised because, as a purchaser himself—that is normally the situation—the seller would not require himself to spend money on a survey. To that extent, the cost of the process is equalised. On the whole, although one obviously understands and sympathises with the sort of predicament that the hon. Gentleman describes, I think that the pack will not be found to be an undue burden; indeed, it is likely to confer large benefits.

Let me attempt to deal with the amendments. I begin by expressing my thanks to my hon. Friends for their highly constructive input on our discussions, and for the considerable expertise that they displayed. The Government intend the marketing of single dwellings for sale with vacant possession to be subject to the home information pack obligations. The definition of ''dwelling-house'' in clause 120(1) is key to securing that. I contend that making the deletions suggested in the amendments would run counter to that objective.

Amendments Nos. 334 and 335 are in the name of the hon. Member for Kingston and Surbiton. I appreciate the helpful spirit in which he moved the amendment, notwithstanding that he has profound objections to the Bill. He asked about the types of property that would be affected. Will home information packs be needed for derelict or run-down properties? I thought that my hon. Friend the Member for Bolton, South-East dealt with that effectively when he pointed out that many of the elements of the home information pack will be necessary for such properties—for example, those relating to the local authority search or the water and drainage search will have to be engaged in under any circumstances.

With regard to derelict properties, I say to the hon. Member for Kingston and Surbiton that we are open-minded. We recognise that there is an issue that must be considered, and we will do so. Under clause 132, problems can be excluded from home information packs by regulations, if that is necessary. We do not have a closed mind on the issue. We recognise that certain searches will have to be undertaken. The hon. Gentleman raises a fair point in that specific respect, and we will examine the matter.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I am grateful for the Minister's reassurance on that. He is in listening mode, and it is helpful to know that he will consider those points. However, I have difficulty with being asked to pass legislation without being quite sure what the Government are going to do. We have been consulting on this matter for a while. Can the Minister say whether he will get back to us about it on Report, or will we have to wait for regulations after we have passed the primary legislation?

Keith Hill (Labour, Streatham)

I do not want to sound as though I am being impatient with the hon. Gentleman, but the issue he has highlighted is a specific one, and one that, frankly, is of limited range. That often happens in Committee. However, the central purposes of the Bill include consumer protection and the securing of up-front certainty in the house purchasing process. Set against that, I do not think that it is a major dereliction of the Government's duty if we do not have a ready answer about derelict properties. This is an interesting, but not a massive, issue that we are willing to take a look at. The hon. Gentleman should contain himself: that would allow me to get on to the real thrust of what we are discussing, which is new properties.

I turn again to the effect of the hon. Gentleman's amendments to clause 120. Amendment No. 134 would delete the words

''or intended to be occupied''

from the home information pack obligations for the marketing of homes that at the time of marketing are unoccupied. That is unacceptable. There are a number of reasons why a property might be unoccupied while it is being marketed, of which the hon. Gentleman has identified only one marginal case. The more obvious examples include when the owner has already moved, and when someone is selling the home of a deceased relative. The benefits of up-front information in the home information pack apply just as much during marketing to that type of home—which is by far the most normal type of vacant property—as they do to a home that is occupied.

The effects of leaving out the words

''and includes one that is being or is to be constructed''

would also be undesirable. It is common practice for house builders to market new homes before construction is completed. Indeed, homes are commonly marketed off plan before a single brick has been laid. Buyers of those homes need up-front information of the sort that the home information pack will provide just as much as do buyers of existing homes. That is already recognised by house builders, most of whom provide prospective buyers with a pack

of helpful information about their new home. Our intention is that the home information pack will bring that information in line as far as possible with information available to buyers of existing homes. I accept that commissioning a home condition report on a home that does not exist, or is only half-built, is unnecessary and that is not what we propose. Clause 133(9)(c) provides the power for the Secretary of State to address that in regulation.

John Hayes (Conservative, South Holland and The Deepings)

Will the Minister give way?

Keith Hill (Labour, Streatham)

I am coming to issues relating to new homes, which have been the subject of most of our debates. I apologise if distractions and overviews have strained the patience of the Committee, but I hope that what I have said so far has not been unhelpful.

I shall say a few words about new homes and our approach to them. I draw the Committee's attention to clause 133, which contains provisions relating to the contents of the home information packs. It gives the Secretary of State the power to prescribe the documents to be included in the pack, as well as the contents of the documents themselves. Clause 134 contains provisions relating to home condition reports.

We want to prescribe the detailed contents of the pack in secondary legislation rather than in the Bill, which will allow time for detailed components to be drawn up in consultation with consumer and professional stakeholder representatives. It also provides important flexibility to make changes quickly, if changes in the housing market make some items redundant or if new sources and important information come to light. Clause 133(5) refers to the sort of information that will go into the pack.

Amendment No. 313, spoken to so ably by my hon. Friend the Member for Stafford, would add three new subsections, which relate to the information in the pack. The effect of proposed new subsection (5A) would be to ensure that information about the physical condition of the property and its energy efficiency would not be considered as relevant information for inclusion in the home information pack for purchasers of brand new homes, where the home is registered with a warranty provider.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

Will the Minister give way on that point?

Keith Hill (Labour, Streatham)

I will give way on that point, although I was trying to deal with amendment No. 313.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I wanted to intervene earlier, but I failed to catch the Minister's eye. I am surprised by what he is saying, because I understood that, under article 7 of the energy performance directive, an energy performance certificate was required even on a newly built property.

Keith Hill (Labour, Streatham)

I intend to say a lot about energy certificates in relation to new properties, so the hon. Gentleman should bear with me.

I return to amendment No. 313. Proposed new subsection (5B) would enable information on the condition and energy efficiency of the property to be provided by the warranty provider where a new home is resold within the 10-year warranty period, as long as

two conditions are met. The first condition is that the person providing the information is the person qualified to carry out home condition report inspections under an approved certification scheme. The second condition is that the warranty provided is part of a certification scheme that has been approved by the Secretary of State. I shall say something about both of those in due course. Proposed new subsection (5C) would define in the Bill the warranty provider as the NHBC or any other body certified by the appropriate authority.

Before I deal with those proposed new subsections in greater detail, I fully accept the principle behind amendment No. 313, tabled by my hon. Friend the Member for Stafford, with regard to the relationship between warranties and home condition reports on first-time sales. He and my hon. Friend the Member for Sheffield, Attercliffe raised the issue of the seller having the option to get the warranty provider to carry out the home condition report. That is fine as long as the person is licensed under a certification scheme approved by the Secretary of State and is a fully qualified home inspector.

My Department has discussed with the NHBC the application of the home information pack to sales of new homes where a good designated warranty is in place. The NHBC has some reservations about that, which my hon. Friend's amendments reflect, although they were very skilfully drawn up by him. The ODPM consultation paper on the contents of the home information pack proposes that if a physically complete new home being offered for sale were registered under a warranty scheme designated by the Secretary of State, the seller—usually the developer—would be exempt from providing a home condition report in the pack. I shall explain why in a moment. The Committee has been provided with a copy of the consultation paper and the report on the outcome of the consultation.

Let me say a few words about the results of the consultation. The 17 respondents who commented had mixed views on whether a home condition report should be provided to potential buyers on practical completion of a property. Some thought that to create a level playing field a HCR should be included in a pack, whereas others thought that if the property were covered by a designated warranty scheme there would be no need for a HCR. The House Builders Federation and the NHBC additionally suggested that where the period of the warranty cover has not expired sellers of second-hand homes should have the choice of either a HCR or an update on their warranty. We must consider further all those views. I promise that we will do so in consultation with stakeholders. However, the Committee will appreciate that the home condition report is an important part of the pack for second-hand homes. There is a danger that any attempt to substitute it for some alternative provision could deprive consumers of the level of comfort or information that they need to help them make important decisions when buying and selling their home.

My hon. Friend the Member for Sheffield, Attercliffe vividly illustrated some of the problems that could arise in extensions, or other building works, that could leave the property in a different state at the point of second sale from its original condition. The home condition report is a statement that is aimed at giving buyers good information about the condition of the property they wish to purchase. That is less of a necessity for a brand-new home if there is a warranty agreement in place, because that will require the builder to put right anything defined as a defect that comes to light in the first two years and provide insurance for defined sorts of damage arising in years 3 to 10.

John Hayes (Conservative, South Holland and The Deepings)

Will the HCR be covered by similar insurance?

Keith Hill (Labour, Streatham)

Oh yes, the Committee will want to deal with these matters, but we are clear that indemnity insurance is essential if the system is to have any validity and credibility. We are confident that that is achievable and are working with the industry to secure it.

Owing to the passage of time, lack of upkeep by the previous owners, or the possibility of modifications that may not be covered or may invalidate the warranty, it is more important that the prospective buyer should have an objective statement of condition for second-hand homes. However, our minds are not closed on this issue and my officials will continue to work with the NHBC and other interested parties to discuss issues related to new homes.

My hon. Friend the Member for Sheffield, Attercliffe asked whether the seller could go to another provider for a survey, because a survey is different from a warranty. On the issue of recourse in the event of a survey on resale that identifies defects, my hon. Friend asked where redress is to be sought. In those circumstances it would be possible to claim on the warranty where there is no need to prove negligence. In addition, if there has been a negligent survey that has caused them loss, it might be possible in those circumstances to achieve redress.

Clive Betts (Labour, Sheffield, Attercliffe)

On that point, I understand that the Minister is saying there might be redress against the warranty where there has been no negligence, but there would have to be negligence to have redress against a survey that proved to be faulty. However, where there was a fault on the survey—also an issue that could be dealt with under the warranty—what does the buyer of the property do? Where do they go? Is there not a potential conflict when they could have redress both against the surveyor who had been negligent and against the warranty? Is it possible that those two organisations might get involved in a court case that could affect the legal rights of the purchaser?

Keith Hill (Labour, Streatham)

My hon. Friend is right to seek greater precision. The answer in those circumstances is to go to the warranty, which is where the key responsibility lies.

John Hayes (Conservative, South Holland and The Deepings)

Will the Minister give way on that point?

Keith Hill (Labour, Streatham)

On that specific point? Yes.

John Hayes (Conservative, South Holland and The Deepings)

The Minister has just told us, in answer to a very incisive intervention, that they would rely on the warranty. So what on earth is the point of having this survey? If the warranty is their legal protection for defect, what is the point of having a survey that they will not rely on in the event of a dispute or a problem? In that response, the Minister undermined his whole case. He should now say that the duplication he is implying is entirely unnecessary and wasteful.

Keith Hill (Labour, Streatham)

Quite simply, the fact of having a survey does not invalidate the warranty. Let me now deal with the issue of the energy efficiency certificate raised by the hon. Member for Kingston and Surbiton, and we will come back to these other issues in due course.

We envisage that an energy efficiency certificate will normally be included in the home condition report, so a free-standing energy efficiency certificate will need to be provided in any instance when a home condition report is not included in a pack. Newly built homes are required by building regulations to meet good standards of energy efficiency but, even so, cost-effective improvement might still be possible. In addition, European Union directive 2002/91/EC on energy performance of buildings requires member states to ensure that the owner makes an energy efficiency certificate available to prospective buyers when a building is offered for sale, together with recommendations drawn up by an independent expert on cost-effective improvements of the energy performance of the property. This Bill seems the logical place to provide for that duty.

I encourage house builders to register all homes being built for sale under good housing warranty schemes; however, I hope the Committee will agree that it would be inappropriate to name any particular warranty provider in the Bill. We intend to consult separately about designated housing warranty schemes, although I am prepared to say a little more about that in response to questions raised by the hon. Member for Poole (Mr. Syms).

Robert Syms (Conservative, Poole)

To return to the point raised by the hon. Member for Sheffield, Attercliffe, the NHBC has a warranty scheme that lasts up to 10 years. It has balances of £1 billion. In order to get redress, once a certificate has been issued, it will do the work without court action. Will the Minister confirm that a home condition report would be accompanied by some sort of insurance so that people would have redress if it were wrong, or if there were a problem with the home? Would that have to be actioned through the courts? Someone's redress taking place in the courts is different from its being a matter of course when a certificate is granted.

Keith Hill (Labour, Streatham)

The Bill sets out the requirement for proper insurance in the situation, and the normal processes of claims and liabilities with regard to insurance would prevail. We do not anticipate a separate structure or system in that regard. It is essential that there should be redress for the key players in the process if there are errors at any point in the provision of information in a home information pack that lead to errors on the part of the purchaser.

We expect the normal arrangements for insurance claims and redress to prevail. For the sake of further clarification, I make the point that it is important to remember that those home condition reports simply provide information, whereas the warranty is the device for easy redress.

I turn to the amendments tabled in the name of the hon. Member for South Holland and The Deepings. Amendment No. 420 would add a new subsection to clause 134. Proposed new subsection (8)(a) has a similar intention to proposed new subsection (5A) in amendment No. 313 tabled by my hon. Friend the Member for Stafford. It would exempt a responsible person from providing a home condition report on new home sales. New subsection (8)(b) has a similar purpose to new subsection (5B), but rather than enabling an alternative to an home condition report if the property is resold while the warranty cover remains in place, it would remove the duty to provide a report. Subsection (8)(c) provides that a home condition report is not needed when the ownership of new homes is transferred from a developer to another company prior to marketing, where the company assuming ownership is registered with a designated warranty provider.

That view is also proposed in the ODPM consultation on the contents of the home information pack—to which I referred earlier—and 16 respondents commented specifically on that suggestion. The majority were in favour of the proposal. I do not feel that the matter should be prescribed in the Bill, because it can be better dealt with in regulations. I assure the Committee that my officials will, as ever, continue to work closely with interested parties to discuss issues relating to new homes.

I shall now respond to the intervention made by the hon. Member for Poole, who invited me to put on record our intentions with regard to warranty schemes. For the benefit of the Committee and the industry, I shall take the opportunity to set out our thinking with regard to the designation of warranty schemes.

In our view, an effective housing warranty scheme will involve inspections at the construction stage with a view to preventing or correcting defects before completion. An effective warranty scheme will also provide a good measure of redress for the home owner if defects come to light after completion. It should provide for the builder to rectify defined sorts of defects, including quite minor ones, for an initial period, and should then provide no-fault insurance cover for a further period against significant damage arising from defects in the original construction.

The designation of any housing warranty scheme by the Secretary of State would be on the basis of a scrutiny of the operational effectiveness of the scheme and the extent of the cover provided. We intend to consult separately on the designation criteria for designated housing warranty schemes. We envisage that the criteria would have regard to the process for vetting builders seeking admission to registers and for monitoring builders on the registers, the technical

standards laid down by the schemes, builders' undertakings in relation to compliance with the scheme standards, warranty scheme operators' arrangements for checking plans and carrying out site inspections, the arrangements under schemes for resolving disputes between owners and builders over what remedial work is needed to bring a home into compliance, the terms of the insurance cover underpinning the builder's obligations, and, finally, the terms of the insurance under which the owner can claim if damage due to non-compliance with scheme standards comes to light following the end of the builder's warranty period.

I hope that the Committee will forgive me for speaking at some length in response to issues raised in this debate. I hope that, in the light of the comprehensive information that I have supplied to the Committee, hon. Members will agree not to press their amendment.

Robert Syms (Conservative, Poole)

I thank the Minister for putting that on the record. I presume from what he said that, apart from the NHBC, there are three major players already in the warranty market, and that he will not try to redesign those organisations, but will certify them, because they are doing a good job at the moment. I presume that if somebody else wanted to enter the market at some point, as one might hope, they would have to meet the standards that are currently being met. I hope that what the Minister was reading was not a description of a whole new set of regulations, controls and burdens that would be placed on the industry. I hope that he will say that if the organisations have good practice, that is great and they can get on with the job.

Keith Hill (Labour, Streatham)

I am grateful to the hon. Gentleman for giving me the opportunity to clarify that we are not looking at new burdens on the industry—on the contrary. We envisage that existing organisations will play a central role in the scheme. We will expect new organisations entering the scheme to comply with the criteria that I set out, and also to match up to the excellent standards already in place.

Several hon. Members rose—

Derek Conway (Conservative, Old Bexley and Sidcup)

Order. Before I call the next hon. Member, I should make it clear that this is an important part of an important Bill and therefore I allowed the Minister considerable leeway in order to set the tone for the part and to help the Committee in its consideration. However, we must stick to the order of consideration for amendments and clauses. I hope that colleagues will not take the Minister's comments as a reason to broaden the debate to the whole part of the Bill as we deal with this group of amendments. The Minister's words will not prevent clause stand part debates, which will cover the wider principles. I want us to stick reasonably firmly to the amendments as they are grouped, and the subject headings. If we do not, on a complicated part, we shall be all over the place, and no one would want that.

Sir Sydney Chapman (Conservative, Chipping Barnet)

On a point of order, Mr. Conway. The Minister has been extremely helpful in giving an outline of the Government's approach not only to this clause, but to part 5. Do I

understand that, exceptionally, you might grant us a debate on part 5 stand part, as well as a stand part debate on each clause? If not—I suspect that you will decline my invitation—can we speak fully about the whole of part 5 in a stand part debate on a particular clause, if necessary?

Derek Conway (Conservative, Old Bexley and Sidcup)

The Committee will not have a stand part debate on part 5 because that is not a motion that is put to the Committee. The Committee will resolve its opinion on the Bill clause by clause. However, where the clauses themselves are broad and affect all aspects of part 5, I or my fellow Chairman will allow the Committee to cut across clauses where they relate to other clauses. The object is not to try to restrict the Committee in any way, but to ensure that we take things in a proper and ordered manner. We will seek to be as helpful as we can to the Committee.

Andrew Selous (Conservative, South West Bedfordshire)

On a point of order, Mr. Conway, would the debate that you alluded to happen under the amendments relating to clause 127—the central clause of this part of the Bill? Could you tell us when that general debate might take place?

Derek Conway (Conservative, Old Bexley and Sidcup)

I think that the hon. Gentleman has picked up on a clause where he will be able to contribute on a wide-ranging matter. On the whole, the Chair tends not to restrict Members from going backwards and forwards. Only the knife will restrict that.

David Kidney (Labour, Stafford)

Mine is not the lead amendment in this group, and I simply wish to express my satisfaction with the Minister's explanation, answers and assurances.

Brian Iddon (Labour, Bolton South East)

I wish to raise a new point, Mr. Conway, to ensure that innovation in the new house building market is not ruled out. I give an example from my own local authority, many years ago, when we tried to help people to get into new house building by selling shells that were wind and weather-tight and left it to the purchaser to completely finish all the fittings of the interior of the house. That included plastering—or dry lining—electrical wiring, plumbing and all the usual fittings of the bathroom and kitchen. I want to ensure that we do not rule out innovation in the new house building market, whereby local authorities or housing associations can sell properties that are not complete.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

We have had both an excellent and frustrating debate today. Members from all parts have made some exceedingly good contributions. If you cast your mind back to the beginning of our proceedings, Mr. Conway, you will remember that I introduced my amendments briefly and succinctly. I did not expect such a long debate, although it has been an important one. I should like to tell the Committee—I am sure that hon. Members will be very happy to hear this news—that duties on the Floor of the House this afternoon will prevent me from being involved in the Committee's debate. I very much regret that, particularly because of the quality of the debate. However, I want to focus on my frustrations.

Chris Ruane (Labour, Vale of Clwyd)

Ooh!

Edward Davey (Liberal Democrat, Kingston and Surbiton)

May I reword that? I want to focus on my frustrations about today's debate, Mr. Conway.

In a long, generally helpful and constructive answer, the Minister told the Committee—in his open-minded, engaging and endearing way—that the Government are prepared to look at all the options. The problem is that although the Government first published a consultation paper on this issue in 1998, and introduced the Homes Bill in the last Parliament, and the legislation has gone through a draft legislative process, and now we are being asked to give our consent to primary legislation, we were still told in the very first debate that the Government have not yet worked out which properties will be covered by the legislation. One would have thought that they might have got that right by now—five years on—but they have not. That shows the complication of producing legislation such as this; there is massive regulation where it is not needed. After five-plus years the Government have still not got the details right. In a commendably open-minded yet frustrating way, the Minister is not able to give us the final response of the Government on those key issues. I find that very frustrating.

I know that the Minister—who is very popular with all parties in the House—has not been in his post for the full five-plus years during which the Government have been thinking about this, but unfortunately, that is not a satisfactory answer to the Committee. Because I will not be present later this afternoon, I will speak briefly about the principle—in two lines. The Minister could get out of the hole that he has dug himself into—or that his predecessors dug and pushed him into—by saying, when we discuss clause 127, that the whole of part 5 could be voluntary. Take away the element of compulsion and a lot of these problems—the problems of detail and of substance—go away. He simply needs to say that.

The Labour party's 1997 and 2001 manifestos did not say that the home information pack scheme would be compulsory—they said that the scheme would be introduced. There would be support on both sides for a voluntary scheme, set down in legislation that explained what would be in the pack. That would get agreement, and we would let the market take forward such a home information pack described in the regulations. We could get rid of all these problems and we could excuse the Minister's lack of answers. It is the Committee's job to get answers. I intervened on the Minister earlier, having been rather frustrated by the fact that, while he was being open-minded, he could not give us a timetable. This is important.

Keith Hill (Labour, Streatham)

I have given a timetable.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The Minister has given a timetable for the introduction of the whole scheme at the beginning of 2007, but that is irrelevant to the Committee. It is being asked to give its consent to the legislation. Which houses will be involved is a pretty important principle. It is not a minor detail; it is absolutely key. I want the Minister to tell us whether we will have answers to these questions by Report. Will we have to wait until the Bill goes to the other House? When will we know the Government's answers?

Sally Keeble (Labour, Northampton North)

On the point of compulsion, my reading is—correct me if I am wrong—that clause 127 imposes a duty. However, that duty is only to comply with regulations made under clause 133, which is wide and permissive. So it is saying that one has to have a home information pack that complies with regulations, but it does not say what type of regulations will have to be made. It would help to know whether my understanding is correct, because this is an important point for the public.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I do not know whether the hon. Lady is coming over to thinking that this should not be compulsory. If she is, that is very welcome. My understanding of clause 127 is that it was the point at which a duty—which would have a compulsory element—would be introduced. If, in reply to these remarks, the Minister says, ''No, the regulations will be permissive and there will be no compulsion after all'', we can all relax.

Chris Ruane (Labour, Vale of Clwyd)

The Consumers Association's briefing says:

''The idea of making the pack voluntary would not deliver the much needed cultural change in the way in which we buy and sell homes.''

Last month it surveyed consumers on the issue of HIPs, and a resounding 82 per cent. said that they would be very useful.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

We could all quote a range of external organisations at length—the Consumers Association, the National Association of Estate Agents, the Law Society, the Royal Institution of Chartered Surveyors. A whole group of people—and other independent experts—have commented on this. My only complaint to the Consumers Association is that it is going against the interests of consumers. I think that it has got its arguments utterly wrong. That is my concern about this legislation.

I do not want to stray too wide, because I want to return to the amendments. I take the Minister's point that the purpose behind amendment No. 334—and the way that I introduced it with respect to derelict properties—may be a smaller issue. However, on the rest of the debate one can choose one's solution—whether that is our amendment No. 335, amendment No. 313 tabled by the hon. Member for Stafford, or amendment No. 420 tabled by the hon. Member for South Holland and The Deepings. They are different approaches to a crucial issue: whether new properties will require home information packs. The Minister was very discursive in his response to this. I was trying to get a nuance of where his thinking was going, but he was so expansive that I was left without any indication as to where the final decision will be made. Will it completely keep new homes within the home information pack regulation? It was not at all clear. Perhaps it is my fault. Maybe I was not listening carefully—it was a rather long speech and I cannot say that I was concentrating on every moment of it—but I think it is vital that the Minister gives a clear indication of the Government's intention.

John Hayes (Conservative, South Holland and The Deepings)

I have to say that I very largely agree with the comments made by the hon. Member for

Kingston and Surbiton, although I am neither frustrated like him, nor easily satisfied, like the hon. Member for Stafford. The Minister may have spoken at great length, but he did not speak with much clarity. He has opened a Pandora's box this morning, certainly in terms of legal liability. He says that the warranty is what people will need to rely on, yet he is unclear about whether they will also need home information packs. He says that it will be important that the warranty is properly controlled. He is right—our amendment says that, as does that of the hon. Member for Stafford. We do not deny that there should be proper checks and balances on warranties and who provides them, but that is not an argument for the Government's proposals on home information packs. He says that the Government are still listening, are prepared to take advice and are open to all comers and all suggestions. Yet they have been taking advice and consulting for a considerable time.

The Minister says that this will all be dealt with by secondary legislation, by regulation, and then points with a degree of pride to clause 132, as though this was an answer to all the queries today. He then argues that there may be power for the Government to accept the inclusion of certain properties, but does not give us any indication as to which properties these may be.

There is an extraordinary lack of clarity in what we have heard this morning from the Minister. I freely acknowledge that the Minister is a wise and generous man, who genuinely listens to the views of all Members. However, when we come to decide what is in the Bill we, as members of this Committee and as Members of this House, deserve a little more certainty than we have been provided with this morning. That is particularly true in relation to the amendments from the hon. Members for Stafford and for Kingston and Surbiton, and in relation to my own amendment.

It is no good the hon. Member for Vale of Clwyd (Chris Ruane) saying that people all liked the pack in the trial.

Chris Ruane (Labour, Vale of Clwyd)

I was scratching my arm.

John Hayes (Conservative, South Holland and The Deepings)

The hon. Gentleman sits there scratching his arm, but it is no good him maintaining that people liked the pack in the trial. They did not have to pay for it in the trial, and people like things when they are free, but not when they are told that they have to pay £600, £700 or £1,000 for them.

Geraldine Smith (Labour, Morecambe and Lunesdale)

Does the hon. Gentleman not accept that people selling a home are quite often buying another home, so they would save on wasted survey fees and the process would be much quicker? I think that this will be welcomed by both sellers and buyers.

John Hayes (Conservative, South Holland and The Deepings)

I am delighted at the hon. Lady's intervention. She is telling us that the costs will be passed down the line, and so there will be a trickle effect. As people sell a house, if they know they are required to buy one of these surveys they will add a little to their price, then as the next person in the chain is in the same situation they will add a little to their price, too. If the house is of low value—at the bottom end of the market—and these packs end up costing not

£600 but £1,000, they will be a substantial additional financial burden for people in that chain. I am not sure that the hon. Lady would want to impose that sort of burden on some of the most hard-up and desperate young families in her constituency, who are trying to get into the housing market for the first time—or is that what she is telling us she wants? I doubt it. Knowing her reputation as a diligent Member of the House, I would find it very surprising if she did.

Geraldine Smith (Labour, Morecambe and Lunesdale)

The hon. Gentleman must accept that there will be savings on wasted survey fees for many people. I have had the same thing happen myself. I wanted to buy a house and got into a lengthy process, and then found out at a very late stage that there were serious problems with the house. That happens to many of my constituents. The measures will speed up the process and prevent those problems, and it will be much welcomed by many of my constituents.

John Hayes (Conservative, South Holland and The Deepings)

As a result of my oration—I was going to say my Periclean oration, but I do not want to over-egg the pudding—we have found the last remaining enthusiast for the proposal: the hon. Lady. She is an unabashed enthusiast for it.

The hon. Lady tells us that this will speed up the system, but imagine the case of a new home covered by the amendments. The buyer has had to get a mortgage and a survey at the lender's stipulation. The buyer has a warranty and the house has been indemnified as a result. He is comfortable with the relationship that he has formed with the house-builder. Then he is told by an interfering Minister—a gentleman from St. Reatham—that he must also have an additional report, perhaps conducted almost simultaneously with that warranty provision, and an inspection from the company that is to lend him the money to buy the house. Will that be welcomed by anyone? Will it speed up the process? The buyer will have more inspectors drumming around the house for the first few weeks than he can shake a stick at. It is nonsense to suggest that the proposed system is more efficient.

The Minister has made a thoroughly unconvincing case in a typically charming way. He is like a good batsman on a dodgy wicket or like a man with a glasshouse trying to grow beautiful flowers, but with no sun to enable him to do so. Only you will understand the reason for that contorted metaphor, Mr. Conway. He is a good Minister dealing with a bad part of a Bill in which there are parts that we welcome. He knows that this is the weakest part of the Bill and I am sure that he is somewhat embarrassed by it.

I hope that my hon. Friends, Liberal Democrat Members, Members such as the hon. Member for Kidney—[Laughter.] I mean the hon. Member for Stafford—the hon. Member for Bolton, South-East and others who have raised legitimate concerns about the clause will join me when I press my amendment to a Division.

At the beginning of the debate on this part of the Bill, we highlighted the profound problems with a scheme from a Government that have not sorted out

their view on the matter. They know that their manifesto commitment does not wash with most people in the industry and the vast majority of those who have looked at the provisions closely. In fact, I do not think that it washes, in honesty, with most Members of the House or the Committee. We need to test the issue by way of a vote, and we will need to return to the subject as the Bill proceeds through the House.

Keith Hill (Labour, Streatham)

Well, we have been treated to some flights of rhetoric in these concluding moments of our considerations on the amendments. The Committee will forgive me if I do not follow those flights of fancy in which Members of the Opposition have engaged.

I feel that I have paid the penalty for my efforts to provide maximum information to the Committee, in terms of the condemnations that I have received. I have sought to lay all openly on the line—and it has clearly sent the hon. Member for Kingston and Surbiton to sleep, so I am damned if I do and damned if I do not. I do not know how many more times I have to say, on the question of new homes, that warranties will suffice and that we will require home condition reports on second sales. I have said it repeatedly. I hope that it has now registered with the hon. Gentleman. He has a fixation with derelict properties, but perhaps I can drag him away from that fixation and explain to him in terms the definitions and the applications of properties to which this part of the Bill will apply.

The clause sets out the meaning of residential property for these purposes. If the hon. Gentleman will do me the courtesy on this occasion of not falling asleep and not discussing the subject of derelict property with that rare bird, the hon. Member for Teignbridge (Richard Younger-Ross), I shall remind him that residential property means a single dwelling together with any ancillary land—for example, a garden—that is or is meant to be occupied as a separate dwelling. That definition includes homes that are still under construction or not yet built. The duties described elsewhere in this part of the Bill would therefore apply to homes being sold off plan.

I have said that I am open-minded on the subject of derelict properties, but let me make it entirely clear what properties the Bill excludes.

John Hayes (Conservative, South Holland and The Deepings)

Will the Minister give way?

Keith Hill (Labour, Streatham)

No, I will not. I am enjoying this. I ask the hon. Gentleman to pay attention for one moment.

We are talking about residential properties. Therefore, excluded from the Bill are non-residential properties, mixed commercial and industrial or residential property, a residential property that does not qualify as a dwelling house, such as a mobile home—I hope that that will not set off further inquiries, but we will possibly have an opportunity to discuss that later—probably being sold with sitting tenants and not, therefore, available for owner occupation, portfolios of properties in circumstances where no offer for a single dwelling would be accepted and leases of less than 21 years. It could not be clearer.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

The Minister is being very helpful to the Committee. I take it that if a commercial property is being sold to someone who wants to convert it into a residential property, a home information pack is not needed.

Keith Hill (Labour, Streatham)

I can give the hon. Gentleman that assurance. We must always remember that the Bill is about consumer protection: it is about the house purchase and selling process.

In that connection—

Sally Keeble (Labour, Northampton North)

Can I ask the Minister one question?

Keith Hill (Labour, Streatham)

Let me complete my sentence and then I shall give way. Finally, let me deal with the issue of whether it should be a voluntary or a compulsory scheme.

Sally Keeble (Labour, Northampton North)

My question relates to sitting tenants and my hon. Friend may want to send me a note on this. He referred to a sitting tenant. Does he mean a sitting tenant who occupies all the property, so there is no issue about land, or someone having a tenant in one room, which he uses as a dodge, particularly in low-value areas, to avoid having a home information pack?

Keith Hill (Labour, Streatham)

I need to consider that question. The issue of using sitting tenants in low-value areas to avoid a home information pack is something that I need to think about. If my hon. Friend will forgive me, I shall not even write to her. Issues relating to sitting tenants arise later in our considerations.

David Kidney (Labour, Stafford)

Clause 131.

Keith Hill (Labour, Streatham)

My guru tells me that these issues arise in clause 131. With my hon. Friend's permission, we shall deal with those issues at that point.

Let me finally, in the dying moments of this debate, deal with the question whetherthe scheme should be voluntary. If it were left as a voluntary scheme, it simply would not happen. That is the reality.

Chris Ruane (Labour, Vale of Clwyd)

Another argument for compulsion is that the home owner who is moving house and who believes in HIPs, and so would have had one prepared and paid for it, may take a double hit. He will pay for the HIP on the property that he is selling, but if the person from whom he is buying a property does not believe in HIPs, he will have to pay for further surveys on that property too. The person who believes HIPs will thus be doubly hit, whereas those who do not will have to pay nothing.

Keith Hill (Labour, Streatham)

I need say nothing further, as my hon. Friend makes the point that I was about to make. We must remember that the measure is aimed at chains of purchasers and sellers. If it is a voluntary scheme, there will always be someone who wants a free ride, which will negate the entire purpose of facilitating house purchases in a chain. My hon. Friend agrees with me; I agree with my hon. Friend.

Chris Ruane (Labour, Vale of Clwyd)

We agree with each other.

Keith Hill (Labour, Streatham)

We agree with each other. I rest my case.

John Hayes (Conservative, South Holland and The Deepings)

The Minister became untypically heated in his final remarks. I am disappointed that the hon. Member for Stafford has chosen not to press his

amendment, which in some ways contains a more perfect form of words than my own. Had he pressed it to the vote, Conservative Members would have been encouraged to support him. I hope that he considers our amendment in the same spirit.

David Kidney (Labour, Stafford)

I seem to be going around the track for the third time, which I did not intend to do. I am not pressing my amendment, because my right hon. Friend the Minister has given a categorical assurance that the regulations will exempt first-time sellers of new homes from having to produce a home condition report. That is fine. In addition, my right hon. Friend has not excluded the possibility of organisations such as the NHBC offering an alternative way of providing the report on properties sold within the 10 years of the warranty. That is why I will not press my amendment. I would vote against the amendment No. 420, because the drafting is so sloppy in paragraphs (b) and (c), which relate to sales subsequent to the first one.

John Hayes (Conservative, South Holland and The Deepings)

I am very surprised at the hon. Gentleman, as I had always thought that he was a kind man. His accusation regarding my amendment has cut me to the quick.

Although the hon. Gentleman is right to say that the Minister has gone some way to satisfy the Committee in respect of new homes, about which there was considerable doubt and we will seek even greater clarity, the right hon. Gentleman has not clarified the issue of the early resale of houses covered by warranty. The Minister has said that he will be agreeable to supporting the current warranty schemes, as we propose, and ensuring that any new warranty schemes comply with proper standards to ensure effectively that, if the Bill becomes law and home information packs are introduced, there is a proper marriage between good-quality warranties and the pack. However, although he has freely acknowledged that the warranty is the principal legal device through which one seeks redress, he has not said that houses that are covered by warranty will be exempted from the information pack requirement. He may have said that he will think about that, but he has given us no guarantee.

It is unacceptable to leave that door open and to say to people with warranties who may sell their house within a year, or two, or three of buying it, that they must still have home information packs with home condition reports.

Clive Betts (Labour, Sheffield, Attercliffe)

Is the hon. Gentleman actually going to press an amendment that could lead to a situation in which someone sold a home built nine years and nine months previously without a report, so that the purchaser had the benefit of a warranty lasting no more than a few weeks, but not a new, updated survey to cover it?

John Hayes (Conservative, South Holland and The Deepings)

Again I say to the hon. Gentleman that that is true of any scheme. It is certainly true of the scheme that the Minister envisages. There will always be cases on the margin in which any warranty, guarantee, or other scheme is coming to the end of its life. That will certainly apply to the home information packs, which will have a limited life. Someone who buys or sells at the end of that life

period may be caught on the margin. However, that is not a substantive argument against my amendment.

The most straightforward way to deal with that is to point out that in respect of houses covered by warranty, to which we will return later, only 20 per cent. of people currently have surveys, and there is no guarantee that that will not continue. Perhaps all the people who want an additional survey will buy one anyway. The home information pack might be seen as a baseline product against which people choose to seek further assurances. It is sensible that the Government rest on the warranties, where people have them, and work with the industry to ensure that property is certificated and that there are the checks and balances necessary to guarantee consumer the protection that all hon. Members want. I encourage all Committee members to support amendment No. 420 to improve the Bill and to get the Minister out of the deep hole that he has dug and plunged into.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I am sure, Mr. Conway, that you will be delighted to know that I am slightly less frustrated than I was before, particularly after the Minister's response to amendment No. 334. However, I intend to press amendment No. 335, because it would exclude not only home condition reports, but home information packs, on new properties.

We are totally against this measure. We would prefer to have sections of properties on the market taken out of this onerous legislation, but the big debate on that will come later. The Minister's response on the voluntary-compulsory issue is not good enough. Given that the Government have taken so long to get to this point, and given the inadequacies of the pilots, it would surely be wise to proceed on a voluntary basis for the first few years. The Government could give themselves regulatory powers in this Bill to make the packs compulsory in due course if a voluntary scheme did not work out properly.

We know that the Minister has held discussions with the industry about a regional roll-out, and we know about the complications around that. Surely, it would be better to see whether the measure works on a

voluntary basis for the first two or three years, after which time the Government could come back to it if it were a real failure and make it compulsory by regulation.

Derek Conway (Conservative, Old Bexley and Sidcup)

Let me explain what I am about to do, so that everyone understands what they are doing. I shall ask the Committee whether it wishes the hon. Gentleman to withdraw amendment No. 334, then I will ask him to move amendment No. 335 formally and the Committee will take a view. Amendment No. 420, tabled by the hon. Member for South Holland and The Deepings, will be taken later on—probably on Tuesday morning, at the point at which it is reached in the Bill, when it will be voted on formally. So now we all know what we are doing.

Edward Davey (Liberal Democrat, Kingston and Surbiton)

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 335, in

clause 120, page 84, line 16, leave out

'(and includes one that is being or is to be constructed)'.—[Mr. Edward Davey.]

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 12.

Standing Committee E

Housing Bill

Peter Pike (Labour, Burnley)

For the guidance of the Committee, let me say that a Division is expected in the House at 4 o'clock, at which point I will suspend our proceedings for 15 minutes. There will be another Division at 6 o'clock. What to do about that is in the hands of the Committee: if we are still sitting, I will again adjourn for 15 minutes.Clause 120 Meaning of ''residential property'' and ''home information pack''

Clause 120 - Meaning of ''residential property'' and ''home information pack''

Matthew Green (Liberal Democrat, Ludlow)

I beg to move amendment No. 336, in

clause 120, page 84, line 20, leave out 'or may become'.

Peter Pike (Labour, Burnley)

With this it will be convenient to discuss the following amendments: No. 337, in

clause 121, page 84, line 23, leave out 'first'.

No. 404, in

clause 121, page 84, line 24, at end insert—

'( ) The Secretary of State may make regulations defining the meaning of marketing for this purpose'.

No. 338, in

clause 121, page 84, line 26, leave out

'it is taken off the market or'

and insert

'the agent's instructions are terminated in writing or it is.'.

No. 339, in

clause 121, page 84, line 28, leave out

'or to a section of the public.'.

No. 391, in

clause 125, page 86, line 11, at end insert—

'(5) The seller does not become responsible under subsection (1) by marketing the property to an individual who is known to him, by virtue of any informal conversation with that individual.'.

Matthew Green (Liberal Democrat, Ludlow)

When I told my hon. Friend the Member for Kingston and Surbiton (Mr. Davey) that, as he had to attend the Chamber to debate the forthcoming local finance settlement, I would happily take over from wherever he had got to, I had no idea that we would be discussing only the second group of amendments to this part of the Bill.

The amendments are designed to discover the precise meaning of the wide-ranging and unclear set of definitions that the Government are using. Amendment No. 336 would remove the words ''or may become''. Subsection (2) states that the seller's pack is

''a collection of documents relating to the property or the terms on which it is or may become available for sale.''

With reference to becoming available for sale, at what point must a seller's pack be produced?

Sir Sydney Chapman (Conservative, Chipping Barnet)

I think that the phrase is needed. If it is removed, a home information pack could not be assembled until the property was put on the market. Common sense dictates that it is much better if people draw up their information pack after they have decided to sell their property. That would cut down on unnecessary wastes of time.

Matthew Green (Liberal Democrat, Ludlow)

I thank the hon. Gentleman for making that point. The problem with his view is that it will appear to be almost a requirement for householders to draw up such a pack when they are only thinking about making a property available for sale. It costs money to produce the packs, and it seems odd to force people to draw one up when they are merely deciding whether to sell their house. People often wonder about whether to sell their home without subsequently deciding to put it on the market. However, subsection (2) refers to homes that

''may become available for sale.''

This is a probing amendment: we want to discover what the Minister understands that term to mean. He may be able to reassure me on the point.

Andrew Selous (Conservative, South West Bedfordshire)

Does the hon. Gentleman share my concern, which I think the amendment might address, about people who are approached to sell their property out of the blue? What if a person is not seeking to sell their house, but somebody comes up to them one day and says, ''I would like to make an offer for your house''? We do not seem to have any answers for that situation.

Matthew Green (Liberal Democrat, Ludlow)

That is a very valid question, to which the Minister must give a full response.

John Hayes (Conservative, South Holland and The Deepings)

I want to follow up the point made by my hon. Friend the Member for Chipping Barnet (Sir Sydney Chapman). We can go two ways: either we say that the pack should not be prepared until the house is on the market—later amendments suggest that periods such as seven or 14 days should be allowed for the preparation of plans—or we say that pack must be available when the house becomes available for sale. It seems that the hon. Gentleman is somewhere between the two, as my hon. Friend suggested. If the amendment was accepted, he could not have the rest of the provision. There is an argument for getting rid of the whole provision and starting again, but the amendment is not well drawn in that respect. If the hon. Gentleman explains amendment No. 338, I can tell him where that is flawed, too. I can see his point, but the wording of the amendment is not helpful.

Matthew Green (Liberal Democrat, Ludlow)

Well, it is nice to listen to interventions about amendments that I have not reached yet. The hon. Gentleman knows our position full well: we would not introduce seller's packs at all.

The second amendment would establish exactly what the Government mean by the clause—

Richard Younger-Ross (Liberal Democrat, Teignbridge)

Will my hon. Friend give way?

Matthew Green (Liberal Democrat, Ludlow)

Certainly. I can see that this is going to be a long debate.

Richard Younger-Ross (Liberal Democrat, Teignbridge)

I wish to clarify matters. There is a fear about the definition of something being put on the market. If I announce to my friends in the pub that I am thinking of selling my house, am I in breach of the law because I have not assembled the home buyer's pack? That is my hon. Friend's question.

Matthew Green (Liberal Democrat, Ludlow)

Amendment No. 337 deals with that point. It is a probing amendment to find out the definition of ''first made public''. For example, if someone mentions to his friend in the pub after a few pints of beer that he plans to sell his house, is that the point at which such information is ''first made public''? We are supported by the Law Society, which is concerned about the meaning of that statement. The explanatory notes make a distinction in respect of stating among family and friends that a property is or may come up for sale, but if a prospective seller speaks to his family and friends too loudly in public, will he be caught by the definition? We want clarification.

Amendment No. 338 is an attempt to clarify the definition of

''is taken off the market''

by requiring written instructions to the agent. It would make clear what the Government mean by the phrase. The explanatory notes state that it is

''an ordinary expression that should be given its usual meaning'',

but that is a semi-meaningless explanation.

John Hayes (Conservative, South Holland and The Deepings)

I do not want to be too unkind to the hon. Gentleman, which is why I warned him that I might make known my doubts about the amendment. It is grouped with an amendment that relates to a situation in which someone might inadvertently or deliberately advertise that he is selling his house down the pub—a sort of public sale. I remind the Committee that the phrase

''agent's instructions are terminated in writing''

rules out anyone selling his house privately. The amendment states specifically that an agent ends the arrangement, not an individual. We have lurched from the man down the pub to someone who is obliged to involve an agent if he wants to take the house off the market.

Matthew Green (Liberal Democrat, Ludlow)

I hear what the hon. Gentleman says. I remind him that we come from the starting point of not wanting the packs at all. We want to probe the Government about their definitions. The fact that the amendments are grouped together is not a choice of mine; it is the result of the Chairmen's judgment. I would not begin to question that—nor, I hope, would the hon. Gentleman. There is a contradiction, but I do not see that as a particular problem. One of our jobs in Committee is to probe the Government on what they mean, for the benefit of the public and practitioners. We should do so in case this part of the Bill becomes law. I do not think that what the hon. Gentleman is attempting to do is fair.

John Hayes (Conservative, South Holland and The Deepings)

It does seem like ganging up, but just to kill off this pitiful moment once and for all, the

Council of Mortgage Lenders, to which I defer in this matter, says:

''The amendment does seem flawed in that it assumes that an agent will be employed in each and every sale, not taking account of the circumstances''

created when an individual attempts to sell his or her own home. It would be better for the hon. Gentleman to acknowledge that he has made an error, so we can move on quickly.

Matthew Green (Liberal Democrat, Ludlow)

I am delighted that the Council of Mortgage Lenders takes such a close interest in amendments tabled by the Liberal Democrats. We do not want to prevent people from selling their houses privately. I hope that that is sufficient clarification for the hon. Gentleman.

As is often the case, the wording of our amendments—and, indeed, many Conservative ones—is not technically perfect. My colleagues and I are not parliamentary draftsmen. Getting provisions technically perfect is the job of the Government. The point of the amendments is to raise an issue. I am sure that the Minister can do a perfectly good job of rubbishing the amendments from a technical point of view if he wants to, but much of the Committee has been taken up much more constructively than in rubbishing the technical aspects of amendments. I hope that that will continue, not least because it will speed up our proceedings. We have spent a long time talking about such aspects already.

Amendment No. 339 is an attempt to get an explanation from the Government of what

''a section of the public''

means. Clause 121(3) says:

''A fact is made public when it is advertised or otherwise communicated (in whatever form and by whatever means) to the public or to a section of the public.''

Are we back to the friend in the pub? Can the phrase refer to one person? I hope that the Government will explain. In a sense, the words are superfluous, because what is the difference between ''the public'' and a ''section of the public''? If we removed the words,

''or to a section of the public'',

would it alter the meaning of the paragraph? I suspect that there is not that much difference between the phrases. The term ''the public'' is, I believe, used regularly in Bills and is not meant to refer to every single person, so presumably it always refers to just ''a section of the public'', but I would like the Minister to justify including those words. Perhaps they are simply some of those superfluous words that the Under-Secretary of State made it clear that the Government quite like.

Amendment No. 391 relates to the conversation with the person in the pub. It would amend not the provisions relating to an agent, but those relating to the individual acting for him or herself. It would insert:

''The seller does not become responsible under subsection (1) by marketing the property to an individual who is known to him, by virtue of any informal conversation with that individual.''

That is just a means of making the Government's intentions clear; I am sure that they want that, too. I am sure that the amendment is worded badly and all

that nonsense, but we do at least need clarification from the Minister that such a case is not intended to be caught. The right hon. Gentleman does not mean that a person who says over a pint, ''I'm going to sell my house'', but who does not have a seller's pack, has broken the law.

John Hayes (Conservative, South Holland and The Deepings)

I think that we have spoken enough about the amendments, and, like the hon. Gentleman, I do not want to delay the Committee unduly. However, I need to say a word about our amendment No. 404.

The hon. Gentleman made an important point in terms of defining what ''marketing'' could reasonably be said to be. He is right that in a private sale, putting a note in the newsagent's window, for example, might reasonably be regarded as a kind of marketing. On the other hand, would standing on a chair in the proverbial pub in Ludlow and saying, ''I'm thinking of sellin' me 'ouse, mate. What d'you think? Are you interested?'' constitute a marketing initiative? One might argue that it would. It might not be terribly sophisticated, and it might be ineffective, but it could be deemed to be marketing. The Bill is unclear.

As the hon. Gentleman rightly said, the measure applies to private sales. A significant number of transactions in the housing market are private sales. We tend to think of selling houses as exclusively about selling a house through an estate agent, but that is not always the case. Therefore, because of the importance of marketing to this clause—it triggers all sorts of other concerns—the Government need to be crystal clear about what constitutes marketing. Clarification is the purpose of amendment No. 404. It is generous in that it suggests that the Secretary of State define marketing in regulations. It is not something that can necessarily be defined straightforwardly in the Bill. There is an argument for that, but it is more appropriate—because it might be quite complex and might need to illustrated by examples—to define it in regulations.

By way of support—not that I am so nervous about my own interpretation that I need to draw on third parties continually; I only draw on them because they show how apposite, well worded and thought through our amendments are—The Royal Institution of Chartered Surveyors argues:

''As a person will not be able to market a property without a pack, there needs to be a sharper definition of what constitutes marketing''.

The RICS has commissioned a paper defining the marketing of residential property in England and Wales. When that paper is published, it might go some way to assisting Ministers in framing the regulations referred to in our amendment. Thus, I propose our amendment, which is part of the group—

Peter Pike (Labour, Burnley)

Order. You speak to your amendment.

John Hayes (Conservative, South Holland and The Deepings)

Thus, I speak to our amendment, which is part of the group. Of course, I will not be able to propose it separately, Mr. Pike. I might ask that it be taken separately, but that will depend on your

discretion and on the Minister's response to my brief words.

Peter Pike (Labour, Burnley)

I will try to be of help. If you give me notice that you wish to move an amendment formally at the appropriate stage, I am always prepared to accept that.

John Hayes (Conservative, South Holland and The Deepings)

That is a further illustration of your wisdom and generosity, Mr. Pike, for which I am very grateful.

Sir Sydney Chapman (Conservative, Chipping Barnet)

I made a comment on the first amendment tabled by the hon. Member for Ludlow (Matthew Green) and I need not come back to that. Obviously the Minister will tell us about amendment No. 404. I have always wanted to be a Minister, but I have never been successful except as the wrong sort of Minister—I was a Government Whip for six and half years.

I take into consideration the fair point that if the word ''public'' is used, we have to show that the house is advertised universally to the public. Strangely, the correct definition of the public is that if something is in the London Gazette—which I have never seen—it is supposed to be for public consumption. I presume that the reason why the Government or the parliamentary draftsmen have put in

''or . . . a section of the public''

is because, in all likelihood, the property for sale will be advertised by the estate agent or in a select periodical. However, that is for the Minister to answer.

I want to row heavily behind amendment No. 391, tabled by the hon. Member for Ludlow, and indeed amendment No. 404 tabled by my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes). It is essential that the Bill contain a clearer definition of where the provisions will operate. I have it written down, but it is not clear to me whether a property is for sale, or put on the market, if it is transferred privately to another person for an agreed sum. I will give a brief example. The Minister has excited us with his many tours d'horizon, which always settle back in St. Reatham. I want to take him a bit further downmarket and down the road from his constituency, to Batterséa, where I have a very modest pied-à-terre. When my time here is fulfilled—and that time is coming closer and closer—[Hon. Members: ''Oh no!'']—I fully intend to put that little property on the market. At that time I will take the precaution of calling it south Chelsea, not Batterséa, because that might give it a better chance.

It is a very small, ground-floor property with one-and-a-half floors above it—a loft extension—owned by someone whom I have got to know well. We have an understanding that I will give him first refusal if, and when, I need to dispose of the property. That seems an eminently sensible thing to do. If that happened, he would probably go to a friend or and estate agent and quietly ask: ''How much do you think the property below mine is worth?'' I would ask an estate agent the same thing. If we were sensible, we would not go back to either of those estate agents to sell the property. Instead, if we agreed on a figure, then there would be a mutual exchange of contracts. That is just an example.

I would like to have it confirmed that that could take place without triggering the provisions of part 5 of this Bill. It ought to be written into the record. I have found many instances in which we could disregard the minutes of our debates if the Government made certain situations clearer. That would be very helpful. I assume that if someone uses the internet to try to sell their property, that is within the provisions of part 5. We need a more defined position from the Minister concerning these two instances.

Keith Hill (Labour, Streatham)

The Committee will be aware that the amendments range across clauses 120 and 121, so we are making some progress.

Clause 121 defines the circumstances in which a property is regarded as having been put on the market, and the period during which it is regarded as remaining on the market. Property is considered to be put on the market when the fact that it is, or may become available, for sale is first made public.

Notwithstanding the generosity of the amendment tabled by the hon. Member for South Holland and The Deepings—I am sure this will come as no surprise to him—I do accept that we need to offer further definition of marketing. However, I hope to clarify the Government's understanding of the expression in the course of my remarks.

I may be able to assist the hon. Member for Chipping Barnet—my old jousting partner—who is also, it appears, a resident of Batterséa. He said that he was thinking of describing the area as south Chelsea. That would be somewhat more plausible than the case of a certain educational institution in my constituency. It is called the South Chelsea School of English, although stands opposite Brixton tube station. Those who arrive at the South Chelsea School of English for the first time must get a shock when they discover its location—however, I must not get distracted.

The hon. Gentleman was unnecessarily humble when he said that a Whip, as he has been, was the wrong sort of Minister. Nothing could be further from the truth. He will undoubtedly have graced the Dispatch Box, and being a Whip is the most honourable of ministerial undertakings. As a former deputy Chief Whip, I recall that great motto with which he, too, will be familiar: once a Whip, always a Whip.

Let me immediately allay the hon. Gentleman's concerns by providing two explanations. A private transaction between two individuals in the proverbial pub does not constitute being put on the market. I do not think that I could be clearer than that. Equally, use of the internet certainly would be interpreted as a marketing exercise.

I shall turn in rather more detail to the generous amendment, No. 404. That would provide a power for the Secretary of State to define by regulation what marketing entails. I fully acknowledge that sellers and their agents should be clear about when the home information pack obligations begin and end. Clause

121 does that by defining ''on the market''. A property is put on the market when

''the fact that it is or may become available for sale is, with a view to marketing the property, first made public . . . by or on behalf of the seller.''

A property remains on the market until it is taken off or sold. Further on in part 5, clauses 123 to 125 build on that and set out the circumstances in which the seller and the person acting as estate agent are responsible for marketing the property, and when that responsibility arises and ceases. That is important because the person or persons responsible for marketing the property are the persons to whom the home information pack duties apply.

We are satisfied that the definitions in clause 121 are sufficient for the purposes of this part of the Bill. However, I am grateful for the opportunity to clarify further the difference between marketing activity, which triggers the home information pack duties, and pre-marketing activity, which does not. That is particularly important to persons acting as estate agents.

Under clause 130, the home information pack duties in relation to people acting as estate agent are triggered by any action taken with a view to marketing the property, which

''communicates to any person in England and Wales . . . that the property is or may become available for sale''.

That is necessary to ensure that agents do not seek to evade their duties by, for example, contacting a few individuals on their books who they know might be interested in the property, and not putting the property on the market by advertising its availability to the public at large or to a section of the public.

Matthew Green (Liberal Democrat, Ludlow)

The Minister has just said that that applies if estates agents do that to any person in England or Wales. Let us say an estate agent in Berwick-upon-Tweed—

Terry Rooney (Labour, Bradford North)

That is in England.

Matthew Green (Liberal Democrat, Ludlow)

Yes. If that estate agent rang up someone in Scotland—

Andrew Selous (Conservative, South West Bedfordshire)

Jedburgh.

Matthew Green (Liberal Democrat, Ludlow)

In Jedburgh, for example, they could say, ''I've got a property coming on to the market.'' Alternatively, an estate agent in Dover could ring up someone in France—after all, buying properties across the European Union is becoming increasingly popular. Would that be outside the remit of the clause? Can the Minister clarify whether we are talking about just England and Wales?

Keith Hill (Labour, Streatham)

The hon. Gentleman represents a marcher constituency and is therefore alert to such boundary issues. However, the possible cases that he described are not caught by the Bill's provisions, which will apply to transactions in England and Wales. Therefore, I suppose that there could be a transaction between two parties in which the same obligation was not laid on both—[Interruption.] The hon. Gentleman should not get too excited. He is frequently tempted

along legislative byways rather than highways, and this is a byway.

I am thinking this through, and it is my clear understanding that where a seller is operating in England the requirements of the law would apply to them. In other words, a seller in England who is in the process of marketing a property would be required to make available a home information pack. For a buyer in Scotland, that would be a matter of choice. I suspect that such buyers would want to avail themselves of it.

I now see where we are going. A seller in Scotland who is selling to a buyer in England would not be caught. Across the border between Jedburgh and Berwick, there might not be the same requirements. However, I feel that I can live with that.

Matthew Green (Liberal Democrat, Ludlow)

The Minister was passing down some byways of his own there. That was not what I was rising to say. I wanted clarification about, for example, where an estate agent in France is marketing a property in England, in much the same way as English estate agents market French properties for English buyers. Is the Minister saying that a French company marketing English properties would not need to produce seller's packs?

Keith Hill (Labour, Streatham)

I might not have caught the end of the hon. Gentleman's question, so if I do not answer it he will have to forgive me and perhaps come back to me on it.

If a property is marketed in England and Wales, the estate agent will be responsible if he is in England and Wales. If a property is marketed in England and Wales and the estate agent is located abroad, the seller is responsible and must have a pack. I hope that that is helpful, and that it takes us a little further forward.

John Hayes (Conservative, South Holland and The Deepings)

Just before the Minister carries on, will he give way?

Keith Hill (Labour, Streatham)

How can I resist the hon. Gentleman, who can hardly resist himself?

John Hayes (Conservative, South Holland and The Deepings)

To paraphrase Oscar Wilde, I can resist anything but myself.

The Minister has confused the Committee a little—I hope that that is not unkind. We now seem to have a situation where if an estate agent is situated in England and markets properties in France, those properties would have to have—[Interruption.] Okay, an estate agent in France who is marketing properties in England would have to have a pack—[Hon. Members: ''The seller would.''] So the seller in France does not need a pack, regardless of the fact that the property is in England, so properties in England will be sold without packs: is that right?

Peter Pike (Labour, Burnley)

Order. I must ensure that this debate is conducted properly, because Hansard will not be able to record some of these exchanges.

John Hayes (Conservative, South Holland and The Deepings)

Well, let me put my question formally. Am I right in assuming that, depending on where the seller and estate agent are located, there will be a number of properties in England that do not have packs associated with them?

Keith Hill (Labour, Streatham)

I do not propose to pursue this matter much further, but let me try to clarify it. Where a

property is marketed in England and Wales the seller or the agent operating on behalf of the seller is responsible for providing a home information pack. I hope that that is reasonably straightforward and clear.

At first sight the provision in clause 130 might appear draconian and might appear to mean that agents would be caught, even if they just mentioned to employees, spouses or friends that a property were coming on the market, but that is not so. To trigger the pack duties, any action has to be

''taken with a view to marketing the property''—

in other words, the actions are a direct attempt to market the property. None of this is playing with words.

I am also conscious that there is concern among some estate agents that responding to an inquiry about a property, for example, could trigger the pack duties. A common example would be where someone saw the agent's car outside a property and phoned him to find out whether it was for sale. In such circumstances, if the agent replied that he had received instructions but could not market the property or arrange viewings until the pack was ready, he would not be doing something with a view to marketing the property. He could take the inquirer's details and get back to them when the pack was available. Obviously, the hon. Member for Poole (Mr. Syms) does not want to come in at this point.

I turn to the group of amendments introduced, a trifle uncomfortably, by the hon. Member for Ludlow, who began with an apology for the fact that they were not his and said that he inherited them from one of his mobile friends. I got the feeling that the hon. Gentleman would rather be somewhere else, judging from the frequent allusions to the pub.

Richard Younger-Ross rose—

Keith Hill (Labour, Streatham)

Teignbridge wants to come in. How could I resist Teignbridge?

Richard Younger-Ross (Liberal Democrat, Teignbridge)

I have to say that my mobile friends will think even less of me, because although I do not have the ability of bi-location, I have to be on the Front Bench next week and sit in the Fire and Rescue Services Bill Committee at the same time.

I know that the hon. Member for South Holland and The Deepings will deeply regret that I will not be here—[Hon. Members: ''He is not here.''] I am so sad that he has missed that.

Peter Pike (Labour, Burnley)

Order. Let us keep to the amendments.

Richard Younger-Ross (Liberal Democrat, Teignbridge)

But the point of concern is this: if an elderly person is looking to sell and move to where they originated from, or retire to the south coast, it is likely that they will cogitate for a long period before deciding to actively sell their property. During that process they could on several occasions talk to their friends in the proverbial pub in Ludlow, down at the Darby and Joan, or in the Royal Air Forces Association club, about selling their property. They could, during that time, talk to agents about selling. Given what the Minister has said, I am concerned that that person could be caught

attempting to sell their property. Can he confirm on the record that that would be deemed pre-marketing?

Keith Hill (Labour, Streatham)

By the way, may I say that we cherish the hon. Gentleman while he is here and regret the threat of his absence next week. We wish him all the best on that visit.

I should like to allay the hon. Gentleman's concerns. In the event that a senior citizen, such as the one he described, were cogitating in the way he described—although possibly not in the situation of bi-location to which he has alluded—and were to have a conversation with friends about the sale of the property, that would not be construed as marketing, nor would an inquiry about whether an estate agent would be willing to market the property be deemed to be an act of marketing.

Robert Syms (Conservative, Poole)

With a new build project there is often advertising, such as appears in the Evening Standard, saying, ''Gracious living, 50 saunas, tennis courts'', and the rest of it. Perhaps the plans have gone in, but they are not talking about specific properties. Is that covered by marketing? Or will we be in a situation where, rather like a warning on a packet of cigarettes, we will have a beautiful picture of a desirable residence along with the words, ''This is not for sale''? I am just going through the process. At what point do the trigger arrangements start?

Keith Hill (Labour, Streatham)

As ever, the hon. Gentleman has raised a reasonable point, which I expect to come to immediately or in due course. As for whether advertising an estate in general terms, plans to develop an estate and lovely pictures of it constitutes marketing—no, that would not. It is at the point when specific details and invitations to purchase kick in that marketing may be deemed to occur.

As for amendment No. 336 tabled by the hon. Member for Ludlow, in light of the trenchant intervention by the hon. Member for Chipping Barnet, which was right, it may be unnecessary for me to do so, but I shall say a few words about the amendment. Its effect would be that, for the purposes of the Bill, a property would not be regarded as being put on the market until the point at which it was available for sale. In other words, if I have interpreted the amendment correctly, any earlier marketing activity by the seller would not constitute putting the property on the market and would not therefore be subject to the obligation to have a home information pack.

Even after listening to the hon. Gentleman, I am not sure why he would want to introduce such a provision. It would open up a potentially serious loophole which sellers could seek to exploit. If it were applied, a seller hoping to avoid the home information pack obligations could advertise that his property was likely to be available shortly and provide the address and other details. He would hope that a potential buyer would take note of that and seek to gain an advantage over other potential buyers by making a quick visit and putting in an offer.

As the property would not have been ''put on the market'', there would be no obligation on the seller to have a home information pack. For the sake of the consumer, we must not allow such a loophole to develop. The buyer could discover several weeks and several hundreds of pounds later that there were problems with the condition or searches that he would have known about immediately from the pack. As ever, the purpose of the home information pack is to provide up-front certainty and to protect the consumer.

In response to the hon. Member for Poole, clause 121, as it stands, would not mean that a house builder would have to have home information packs if it advertised that it was planning to build a new estate of houses and provided some general information about the types of home that would be available. The home information pack obligation would not kick in until the advertising identified the specific homes and their location. By that stage, marketing in earnest would usually be under way.

Matthew Green (Liberal Democrat, Ludlow)

Will the Minister give way?

Keith Hill (Labour, Streatham)

Ooh! I have obviously sparked off another chain of thought for the hon. Gentleman.

Matthew Green (Liberal Democrat, Ludlow)

What about the common situation in which a new estate is being built, there is a show home and people put down deposits on specific houses that are not yet completed? How can there be a full seller's pack on a house that has not finished being built?

Keith Hill (Labour, Streatham)

Aha. What a pity the hon. Gentleman was not in Committee for the two and a half hours this morning during which we dealt with that issue to our common enjoyment. I have no intention whatever to return to it.

Peter Pike (Labour, Burnley)

The Chairman would not let you even if you did want to return to it.

Keith Hill (Labour, Streatham)

But it was a good idea.

Amendment No. 337 would remove the word ''first'' from clause 121. That would not have a major effect. It would just make it slightly less clear when the home information pack duties apply. The clause already states that if the fact that a property is for sale is made public, and it has not been made public before, the property will be on the market—and it states that more simply.

Clause 121 seeks to make it clear that a property that has been put on the market is regarded as remaining on the market, and therefore still subject to the home information pack obligations, until it is either taken off the market or sold. The hon. Member for Chipping Barnet asked about that. The phrase ''taken off the market'' is not defined in the Bill, but it carries its common meaning. Essentially, a property is not off the market if marketing activity is still taking place.

Amendment No. 338 would change that. A property being marketed on behalf of the seller by an estate agent would be regarded as having been taken off the market as soon as the agent received a

letter from the seller withdrawing instructions. The property would be off the market even if the agent carried on marketing it, without instructions, in the hope of still achieving a sale. In other words, the amendment would terminate the estate agent's obligations to supply a HIP to a would-be buyer even though he was still marketing the property. That would result in a loss of protection to the buyer. I am slightly mystified as to why the hon. Member for Ludlow should want that. I am also mystified about the circumstances in which it is envisaged that that would occur. However, I am certain that this runs contrary to public understanding of when a property is taken off the market; it is completely at odds with clauses 124 and 125, and it would be a recipe for confusion.

As I said to the hon. Member for Chipping Barnet, the HIP obligations do not apply to private sales. I hope that that, and what I have to say about amendment No. 391, will allay the concerns of the hon. Member for South-West Bedfordshire (Andrew Selous). Sales within the family or to friends or acquaintances would not be caught where the property is not marketed publicly. Where a property is marketed publicly, the pack obligations apply. Clause 121 provides that a property is put on the market when it is communicated publicly

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

Amendment No. 391 is unnecessary because an informal or even a formal conversation between a seller and another individual is not a communication to a section of the public. It would not trigger the home information pack obligations. I say again to the hon. Member for South-West Bedfordshire that if there is an entirely private transaction the home information pack is not required. In those circumstances, the old principle of caveat emptor prevails.

Andrew Selous (Conservative, South West Bedfordshire)

I am grateful to the Minister for that clarification. Will private sales' not being covered lead to any distortion in the market or to lack of transparency? As sales through estate agents will cost sellers more and involve delay, has his Department examined what the effects will be? Does he think that there will be a large increase in private sales? Will the market be distorted and less transparent, and will it function less well than it otherwise would?

Keith Hill (Labour, Streatham)

The hon. Gentleman should have a distinction in his mind between a private sale and a sale by a private person. At present, about 5 per cent. of sales are by a private person and 95 per cent. are through estate agents and similar bodies. The key point is the means of communication adopted by the private person. Since it is reasonable to expect that most transactions occur on the basis of some form of advertising, and since in practice it is difficult for a person to go round identifying potential buyers, we can expect the existing situation to continue. As both the private seller engaging in a marketing exercise and the estate agent engaging in a marketing exercise will have to have a home information pack, the provisions need not make very much difference to the existing situation—and we do not expect them to.

Matthew Green (Liberal Democrat, Ludlow)

Will the Minister give way?

Keith Hill (Labour, Streatham)

No; I want to make some progress. I need to deal with further amendments and other issues that have been raised.

We could spend all day debating what is, and what is not, a section of the public for the purposes of the Bill. It might give the Committee a better idea if I mentioned a few scenarios; that might help to clarify the issue. If a person mentions to his friends that he is thinking of selling his home, with or without the benefit of a few pints in a Ludlow pub, he is not marketing to a section of the public. The same is true if he has the same conversation with work colleagues. However—this is the point made by the hon. Member for Chipping Barnet—if he sent an e-mail to everyone in his company, including people he did not know, that could well be marketing to a section of a public, in which case the home information pack obligations would apply.

We have to allow a little common sense to prevail on such matters. I am absolutely certain that trading standards officers, who are the enforcers on this issue, will want to behave with common sense and moderation in dealing with the issue, tempted though they might be by some of the imaginings to which we have been treated in the past few minutes.

Finally, let me turn to amendment No. 339. It would restrict the home information pack obligations to sellers who market their homes to the public at large. Excluding marketing to a section of the public from the pack obligations would, again, open the door to abuse. Sellers wishing to avoid the pack obligations could do so by ensuring that their marketing activities were in some way restricted. Even so, they could market to a large section of the public, perhaps by advertising in a trade journal—that would be a section of the public, but it could be a large section of the public—a trade union journal, or perhaps even, let us say for the sake of argument, in Liberal Democrat News. I imagine that the readership of that journal is so restricted as to make advertising in it tantamount to a private conversation, but we would nevertheless regard that as marketing to a section of the public. I jest, of course.

More seriously, such advertising would extend far beyond the sort of private arrangements to which I have referred, and would result in a large number of sales being conducted without packs. That would have the wholly undesirable effect of bringing about a two-track transactions process in which, in a chain, sales without packs would be made, and would endanger transactions with packs. Preventing that is the purpose of the provisions.

John Hayes (Conservative, South Holland and The Deepings)

I shall be brief, because I know that the Minister is keen to make progress. Of course, the circumstances that the Minister mentions will occur in a case in which some sales follow the process through an agent—or indeed through individual marketing—which attracts the need for a pack, and other sales are made on an entirely private basis, from one person to another. Would not that have the same impact on the chain?

My hon. Friend the Member for South-West Bedfordshire has a point; there may be a growth in a kind of informal selling that does not constitute marketing in any sense that would legally oblige people to obtain a pack, and that may have an effect on the market. That is simply an observation for comment, rather than anything stronger.

Keith Hill (Labour, Streatham)

No, I do not think that the hon. Gentleman is right. A private transaction between two chaps in a pub is not part of a chain; it is a one-on-one transaction. It does not invite the provisions of the legislation. In light of my comprehensive and extremely reasonably explanations, I trust that Opposition Members will choose not to press their amendments.

Sir Sydney Chapman (Conservative, Chipping Barnet)

I am extremely grateful to the Minister once again, because he has cleared the mist from parts of this clause. However, I am left with one horrible nightmare. In giving an example downwind of the Minister's patch, when I stand down at the next election I would not fall within the part 5 provisions if I dealt privately with my upstairs neighbour. I wonder, however, if it were possible that I might now fall within those provisions because I have mentioned my case in this Committee.

John Hayes (Conservative, South Holland and The Deepings)

I simply wanted to say a further word about amendment No. 404. The Minister has defined marketing by giving us a broad indication of those properties and kinds of transactions that will be affected by the Bill's provisions. However, he has opened up other concerns.

There is marketing of a private nature: an advert in a newsagent or, if one wanted to appeal to a smaller number of people, an advert in Liberal Democrat News. However, the Minister has not been clear about the impact on a chain of an arrangement of the type to which my hon. Friend the Member for Chipping Barnet referred. It is entirely possible that my hon. Friend might be selling his house in south Chelsea on a basis that meant that he was not legally obliged to have a seller's pack, but others involved in the transaction—those at the other end of the chain—might be in need of a seller's pack, and they could be held up because of some personal failing on the part of my hon. Friend, hard though that is to believe. I am not sure that the Minister's objective of an entirely transparent process is assisted by the fact that there will be, in whatever number, such exceptions. There will be houses that do not have seller's packs or home condition reports attached to them, and there will be transactions that are not affected by the legislation. Inevitably, there will be inconsistencies. We may be talking about only 1 or 2 per cent. of transactions, but the effect of that will be bigger because, as the Minister says, buyer and sellers are often in chains. The net effect may be considerably greater than he anticipates.

Are we not looking at another illustration, following our long discussion this morning, of why this part of the Bill is ill considered? All kinds of anomalies are beginning to emerge, notwithstanding the smooth veneer that the Minister is attempting to put on these imperfect provisions. Earlier, he was very

open-minded in saying that he was thinking of canning several of his ideas about the earlier aspects of the clause, and I wonder whether he is thinking again about marketing. If he is not, he should be.

To that end, I am not entirely satisfied with the Minister's views on amendment No. 404, but because he is thoughtful and open-minded, and because there are many other things that we want to press on with this afternoon, I am comfortable about withdrawing my amendment.

Peter Pike (Labour, Burnley)

Mr. Hayes, you cannot withdraw your amendment, but I understand that you are saying that you will not be moving it; I would have called it after taking amendment No. 403.

John Hayes (Conservative, South Holland and The Deepings)

Which is what you said you would do, Mr. Pike, so I am asking you not to call my amendment.

Peter Pike (Labour, Burnley)

I have taken note of that.

Matthew Green (Liberal Democrat, Ludlow)

The Minister is rather full of himself today, unlike on Tuesday when he read the wrong speech. The difference is that we did not ungraciously point that out. However, he has not held back from commenting on the fact that I have had to come in to take over from my hon. Friend the Member for Kingston and Surbiton midway through the clause.

As the hon. Member for South Holland and The Deepings said, although the Minister's answers have clarified many of the questions, and the reasons why the amendments were tabled, they have opened up some more anomalies. The hon. Gentleman has revealed one of those, but others spring to mind. If a person living on the Scottish borders in England wanted to avoid the cost of a seller's pack, they could go to a Scottish estate agent in Edinburgh, get them to market the property just in Scotland—not in England and Wales—where they would not have to pay for a seller's pack. It is as simple as that. There is an anomaly over the border between Scotland and England. There would be another anomaly if I bumped into my neighbour who said, ''I am thinking of selling my house'' and we did a private deal, because they would not have to produce a seller's pack. If, however, I did not bump into my neighbour by chance, and they went to an estate agent, after which I saw a sign go up, they would have borne the cost of producing a seller's pack even if I negotiated a private deal with them. In those circumstances, by chance and fate they would have incurred several hundred pounds of costs that they would not have incurred if we had happened to bump into each other in the street before my neighbour had gone to the estate agent.

I suspect that the deeper we go into part 5, the more anomalies we will find. The longer people look at this part, the more certain they are that it should not be introduced. The Minister may, by the time we reach the end of part 5, convince himself that home information packs should not be included. Even if he is not convinced about that, I am sure that members of the House of Lords will be convinced when they read our Hansard, as many of them do before considering Bills in the other place.

Andrew Selous (Conservative, South West Bedfordshire)

Does the hon. Gentleman agree that the current provisions will undoubtedly lead to a reduction in the choice and number of properties available to the general house-buying public? There will be more private deals and transactions, so properties will not be generally marketed to the public due to the strong incentive to avoid costs and delay.

Matthew Green (Liberal Democrat, Ludlow)

The hon. Gentleman has a good point. I purchased my first house some 18 months ago. We moved about 400 yd down the road from where we were renting. The sign never went up. The estate agent rang us up because they knew that we were looking for a property and it was all agreed quickly. The sale would have been slowed down if there had been a seller's pack. The estate agent was approached and phoned me the next day, when I visited them and agreed the price there and then. The sale went through within a month. The seller's pack would have slowed down my transaction. It will not speed up every transaction.

Keith Hill (Labour, Streatham)

This is not a serious political debate.

Matthew Green (Liberal Democrat, Ludlow)

The Minister says that, but it has an effect on people. If he thinks that the proposed legislation will not affect some transactions and slow them down—if he wants to say that he believes that every transaction will be quicker as a result of seller's packs—he is wrong. They would have slowed down the transaction that I mentioned.

The hon. Member for South-West Bedfordshire has a good point. More people will seek to negotiate private sales to avoid the cost of seller's packs. That will have a distorting effect on the market; it would be difficult for anyone to argue that it will not have that effect. However, we have teased out of the Minister some explanations, which are helpful and clarify some of the points that needed clarification. He has gone further than the explanatory notes, for which I am grateful. I do not intend to press the amendment to a vote, but if the Minister carries on like this he may convince himself that this provision should not be included in the Bill. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

John Hayes (Conservative, South Holland and The Deepings)

I beg to move amendment No. 403, in

clause 120, page 84, line 20, at end insert—

'(3)(a) The Secretary of State may by regulations prescribe the operational date of all or part of the introduction of Part 5 with regard to the capacity to effectively implement;

(b) the Secretary of State may not make any regulations under this section unless a draft of the regulations has been laid before, and approved by a Resolution of each House of Parliament.'.

[R] Relevant registered interest declared.

I hope that we can deal with the amendment with more speed than its predecessors—as I am sure that you do, Mr. Pike—partly because the ground for it is now well known, thanks to our earlier discussions.

The amendment essentially suggests that the Secretary of State prescribe the operational date for the introduction of part 5. The reason for that is the widespread concern—no doubt shared by you and by members of the Committee, Mr. Pike—that the

necessary expertise, the number of people required to do the job, and the need to produce seller's packs make the Minister's target date of early 2007 questionable at the very least.

As the Minister and the Committee know, between 1.3 and 1.4 million house transactions take place every year in the United Kingdom. The Government have estimated that we will require 7,000 inspectors to carry out the surveys necessary as part of the home information pack. Others have said 8,000, but let us settle on the Government's estimate. The Royal Institution of Chartered Surveyors estimates that, of its 4,500 residential surveyors, there are about 2,000 with the relevant qualifications who have already expressed an interest in being involved in the business. That leaves a shortfall of at least 5,000 inspectors. The need to train those people, and the level of desire among people to become skilled in the relevant way, makes it at least questionable that the Minister will be able to introduce the measure in 2007, even if the House accepts it in its current form.

In truth—I think that the Minister knows this—there is some doubt about whether, in practical terms, the job can be done in the time scale given. I know that the Government have considered phasing in the implementation for precisely that kind of reason. Others too have suggested that part of the pack could be launched—the part that deals with the searches, which is arguably the more straightforward element of it—as a first initiative, to be followed later by the full pack, which would include the home condition report.

We know that there is uncertainty and doubt about not just the principle of the pack, but the practical business of implementing the measures. The Minister knows that, too. Should the Committee and the House, in a desire to be as helpful as possible to the Minister and the Government, be so unwise as to pass this part of the Bill? It is essential that the amendment be made. Let me remind the Committee of what it says:

''The Secretary of State may by regulations prescribe the operational date of all or part of the introduction of Part 5 with regard to the capacity to effectively implement''.

The ''capacity to effectively implement'' would be the make-or-break of the provisions. The amendment goes on:

''the Secretary of State may not make any regulations under this section unless a draft of the regulations has been laid before, and approved by a Resolution of each House of Parliament.''

That reason for that part of the amendment is that by 2007 circumstances may well have changed. The idea that we should now pass enabling legislation that would facilitate the provision of far-reaching measures that might not come into effect until 2007, 2008 or even 2009 without further reference to Parliament is unacceptable. We are asking for a recourse for Parliament, so that we can look at the matter again if the delay that I think might occur becomes a reality.

This is a simple amendment that gives the Secretary of State the necessary flexibility, should my worst fears about the availability of experts to do the job be realised. In truth, I do not know whether those fears will be realised; it may be that the Minister's confidence is well founded, and that people will rush

forward to become inspectors in numbers that one can scarcely imagine; however, it may not be so. At the very least, the amendment would be a safety valve. It is a desire to be helpful by providing a get-out clause for the Minister. I know that the right hon. Gentleman will deal with it seriously before he accepts it with relish.

Keith Hill (Labour, Streatham)

The hon. Gentleman has described the purposes of the amendment admirably. He has asked whether we will attain our target date. He is entitled to ask that question, but it is unclear to me why we would benefit from setting a date for the measure to be implemented under regulation. He may want to come back to me on that issue in due course.

The Committee has, and will continue to have, the opportunity to discuss the principle whether there should be a home information pack and so will the other place. If Parliament agrees to the proposals, which I sincerely hope that it will, there is little need for a full debate in both Houses about the detail of regulations that will give effect to the decision. I understand why the hon. Gentleman is calling for such a debate. When we were in opposition, I tabled plenty of amendments calling for the affirmative resolution procedure. If Parliament had accepted such amendments, we would be doing nothing but discussing affirmative resolutions, so such a proposition is not always practical, nor is it necessary in this case.

I assure the Committee, as I have before, that we have no intention whatever of introducing the home information pack requirement until we are satisfied that all the pieces of the jigsaw fit together. We will not introduce the home condition report until we are satisfied that adequate numbers of appropriately qualified and insured home inspectors are available. Since the hon. Gentleman referred particularly to that, I shall say a word about it in due course.

Chris Mole (Labour, Ipswich)

Given the potential number of individuals who may be qualified to carry out inspection functions, has the Minister considered encouraging local authority environmental health officers, who may have the appropriate qualifications to operate under new training powers that the Government have given them, to make a contribution towards the pool of individuals who could carry out such functions?

Keith Hill (Labour, Streatham)

My hon. Friend's suggestion is reasonable, especially about the pooling of expertise in the training processes. However, if we consider the earlier provisions under the Bill on the health and safety rating system and its implications, environmental health officers will have big new challenges on their hands in the foreseeable future. We shall seriously consider my hon. Friend's proposal.

When we reach the great day of the home information pack, we want to ensure that there is the capacity in the industry to implement part 5 of the Bill. We will therefore continue to consult widely with the bodies that will be affected as we develop regulations and prepare for implementation of home information

packs. The Committee will recall that, on Second Reading, I said about the pack:

''We are continuing to work closely with industry and consumer stakeholders on the detailed components''—[Official Report, 12 January 2004; Vol. 416, c. 542.]

Many members of the home buying and selling advisory group have helped to steer our research and to prepare for the implementation of home information packs. For the record, this will be helpful to the Committee.

I should like to allude to the organisations represented on the advisory group. They include the Consumers Association, the Law Society, the Council of Mortgage Lenders, the National Association of Estate Agents, the Royal Institution of Chartered Surveyors, the Council for Licensed Conveyancers, the Local Government Association, HM Land Registry, the Department of Trade and Industry, the Department for Constitutional Affairs and the National Assembly for Wales. The entire home buying and selling industry—the community—is represented in our advisory group.

I should like to say a word about whether a sufficient number of home inspectors will be found for training—an issue raised by the hon. Member for South Holland and The Deepings. I will also speak, very briefly, about indemnity insurance, which is absolutely fundamental if they are to discharge their duties properly.

I can assure the hon. Gentleman and the Committee that these points are being addressed and resolved with full industry involvement. We estimate that approximately 7,500 home inspectors will be needed to prepare home condition reports, assuming that one-third will work full-time and the remainder up to half-time. Independent research has been carried out by the former Property Services National Training Organisation, now the Sector Skills Council for Property, Housing, Cleaning and Facilities Management. That research has been made available to the Committee. It shows a potential labour force of between 10,000 and 18,000 people with relevant knowledge, understanding and experience who would become home inspectors.

Discussions with a limited number of interested professional bodies, such as the RICS, the Institute of Maintenance and Building Management, the Association of Building Engineers and the Chartered Institute of Building indicate that 90 per cent. of the numbers required have already been identified within those bodies. The required skills and knowledge have already been established in the Qualifications and Curriculum Authority-approved national occupational standards for home inspectors. Universities and colleges are already preparing courses for home inspectors. They include: the College of Estate Management, London South Bank university, the university of Central England, and the Liverpool John Moores university. Other establishments are also planning courses, although not as advanced. Research has confirmed that it is practical at reasonable cost to establish an

independent, self-insured, self-managed indemnity insurance scheme for home inspectors to overcome current gaps in the insurance market.

John Hayes (Conservative, South Holland and The Deepings)

I should like to raise two points about the research that the right hon. Gentleman mentions. Has research suggested that there will be any kind of geographical concentration of inspectors? It seems likely that there will be a shortage of inspectors in the peripheral regions of the United Kingdom—rural districts, and so on.

I am concerned about the impact of surveys that currently take place—and may continue to do so—on the time that can be devoted to the production of home condition reports. The Minister will have made a notional estimate of how many additional surveys he expects to take place once the Bill's provisions are in place. The Minister is grimacing; let me explain.

If someone receives a home condition report that looks slightly suspect, it will provide a baseline of information. It may well be that people who can afford to commission a further survey—I certainly would, and I am sure the Minister would, too—will create a demand within the industry. Currently, approximately 20 per cent. of buyers commission private surveys. Does the right hon. Gentleman expect that number to fall to, say, 5 per cent., 1 per cent. or 18 per cent., or might the home condition report stimulate such additional interest that the number of surveys will increase? People who do not have any sort of survey now may acquire a taste for having more information about a house before they buy one. That will have a big impact on the number of inspectors available to do the proposed work. Knowing how diligent the Minister is, he will have those figures to hand, will have made the notional estimate, and he will bring the research to the Committee so that we can make a judgment about it.

Keith Hill (Labour, Streatham)

I have to say ''tut, tut'' in response the hon. Gentleman's question about the geographical spread of people who are available to act as home inspectors. I have circulated copies of the PSNTO research. If he was a diligent Committee member—as I am sure most other hon. Members are—he would have read it and learned that there is no problem with the geographical spread.

John Hayes (Conservative, South Holland and The Deepings)

Will the Minister give way?

Keith Hill (Labour, Streatham)

No, because we need to speed on. The hon. Gentleman must understand that that was a tease and that he need not defend himself on this occasion. However, I assure him that there is no problem in that regard.

On how many extra surveys will be carried out, for the first time—but by no means the last—in our proceedings I introduce the name of the saintly Maria Coleman, an independent and independent-minded estate agent from Bristol who gave superb and persuasive evidence to the inquiry conducted the Select Committee on the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions. Our Standing Committee is graced by the presence of two distinguished members of that Select Committee. I do not have to hand the figure supplied by Maria Coleman in answer to a question about the

proportion of her clients who, when in receipt of a home condition report, had chosen to go on to have their own survey. I think that I am right in summarising her answer to that as ''a minuscule number'', but I will endeavour to give the actual statistic to the Committee.

Research and soundings from the industry show that we will be able to have all the elements of the certification scheme, including the required number of home inspectors, in place to enable implementation in 2007. That will also allow for a run-in period ahead of implementation of about six months, when the key elements of the scheme will be in place to facilitate voluntary industry initiatives before they become compulsory. A powerful wind is blowing in favour of this proposal. The industry is now heavily engaged. We are working together to iron out the remaining problems, but I am convinced that, with the support of Parliament, the scheme will succeed and we will be able to implement it on the target date.

I hope that I have given ample reassurance to the hon. Gentleman that a commencement order is sufficient to introduce the operational date of the home information pack duties.

John Hayes (Conservative, South Holland and The Deepings)

The Minister has, as ever, been helpful but I do not think that he has done himself any favours. The amendment would enable him to phase implementation if that becomes necessary because of changes the anticipated availability of inspectors. It also suggests that the House might give further scrutiny to any changes of that sort, and it includes in the Bill a provision on

''regard to the capacity to effectively implement.''

They are all good things.

When we have more time, I will talk about my close study of the document that the Minister circulated, so that I can pay him back for his spiteful little tease, which I think was unbecoming. I have decided to press the amendment to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 6, Noes 11.

Sir Sydney Chapman (Conservative, Chipping Barnet)

On a point of order, Mr. Pike. Be it known that had my hon. Friend the hon. Member for Cities of London and Westminster (Mr. Field) and the two Liberal Democrat colleagues of the hon. Member for Ludlow been here, there might have been a different result.

Peter Pike (Labour, Burnley)

And if other people had been present, too, there might have been quite a different figure. However, I understand the point that the hon. Gentleman is making.

Chris Ruane (Labour, Vale of Clwyd)

Further to that point of order, Mr. Pike, had we all been here, there definitely would have been.

Peter Pike (Labour, Burnley)

Fortunately, I do not have to respond to that.Clause 121 Meaning of ''on the market'' and related expressions

Clause 121 - Meaning of ''on the market'' and related expressions

Sir Sydney Chapman (Conservative, Chipping Barnet)

I shall be brief. I mean that sincerely.

Mr. Pike, your predecessor in the Chair suggested that we could raise matters generally on these clauses because there could not be a debate on part 5 stand part. The progenitor of the Bill was a Government Green Paper in 2000 and a draft Bill produced in March 2003, which was scrutinised—if that is the right phrase—by the Select Committee on the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions. However, the Select Committee would have considered various issues arising from the Bill and its provisions, not its phraseology or wording. I am a Select Committee member and know how they work.

This is another classic example of a Bill that should have gone to a special legislative Committee before it came to this one. Such a Committee would have pointed out various omissions, which we have raised. The integrity of the Minister is beyond doubt, but I feel that we are examining—

Peter Pike (Labour, Burnley)

Order. I accept the hon. Gentleman's point, but he must try to make it refer to clause 121.

Sir Sydney Chapman (Conservative, Chipping Barnet)

On clauses 121 and 122, I feel—

Peter Pike (Labour, Burnley)

We are not taking clause 122 yet.

Sir Sydney Chapman (Conservative, Chipping Barnet)

I shall not give up on clause 122, Mr. Pike. However, confining my remarks to clause 121, the wording could have been better and it could have been less ambiguous.

I want to be constructive rather than negative. Therefore, I say to the Minister that even on Report he would be able to introduce amendments that would add something to the clause. They could deal with the avoidance of doubt—a phrase that has been used. He could refer to various situations or some of the instances that have been mentioned. He has helped the Committee by saying that the south Chelsea case that I mentioned would not come within the provisions of the clause. I leave that as a constructive suggestion to the Minister.

Whether or not the Bill and this part of it are enacted, we are obliged to ensure that it is as comprehensible and as easily understood by our constituents as possible. Therefore I ask the right hon. Gentleman most sincerely to consider making additions that make clearer the situations in which this clause operates and those in which it does not.

David Kidney (Labour, Stafford)

If the Minister responds to this clause stand part debate, will he confirm my understanding of one particular point about part 5? Under clause 121, a residential property that is on the market must have a home information pack. On Second Reading there was some confusion about whether that applied to a council property that was going to be sold to the tenant under right to buy. In the debate on 12 January, at column 560, the hon. Member for South Holland and The Deepings—correctly, I believe—put it to the hon. Member for Kingston and Surbiton that it did not apply to a council. The hon. Member for Kingston and Surbiton said that he thought that that was wrong, that it did apply and that it will be a new great burden on councils. My understanding is that that view is wrong, because the council property will never be on the market. I would be grateful if the Minister could clarify that point. Briefings given by the Local Government Association at the time did not make it clear, although I understand that local government is encouraged to give more information to tenants along the lines of what will be contained in the home information pack.

The rest of the debate is in Hansard.