Clause 1 - Meaning of ``residential property''and other expressions
Homes Bill
11:00 am

Mr Nigel Waterson (Eastbourne, Conservative)

I beg to move amendment No. 31, in page 1, line 15, leave out `or intended to be occupied'.

Mr Roger Gale (North Thanet, Conservative)

With this it will be convenient to take amendment No. 32, in page 1, line 16, leave out

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

Mr Nigel Waterson (Eastbourne, Conservative)

I hope that I will have similar success in persuading the Minister to do my bidding as the Committee stage progresses, but something tells me that will not be the case. We are grateful to our right hon. Friend the Member for Skipton and Ripon (Mr. Curry) for making our deliberations more comfortable.

I assume, Mr. Gale, that you wish to follow previous practice and that, if you allow a wide-ranging debate on amendments to a clause, we may do without a clause stand part debate at the end. I also assume that it will be helpful if I flag up the approach that I propose to adopt as we come to such amendments and clauses rather than have anyone—least of all yourself—taken by surprise when we reach the end of a group of amendments.

Mr Roger Gale (North Thanet, Conservative)

I should have pointed out that that is what I normally do. Those Members who have served under my chairmanship will know that I am perfectly prepared to accept what is, in effect, a stand part debate at either the start of the debate or at the end, but not both.

Mr Nigel Waterson (Eastbourne, Conservative)

I am grateful, Mr. Gale. I will remind myself to indicate the way in which my remarks will develop.

I begin with amendments Nos. 31 and 32. Unusually, clause 1 contains a raft of definitions. We will have to look at some of those in some detail because they underpin much of what follows in the Bill and its schedules. Amendment No. 31 would exempt unoccupied homes, which would include derelict homes, from the requirement to have a seller's pack. That would not exclude new homes, to which I will return in the context of the next amendment. The Minister may wish to intervene to confirm that that is the Government's intention.

Clause 5(1) states that the Bill will not apply to properties that, at the time of sale, are not available with vacant possession. That is taken up in paragraph 26 of the explanatory notes. Clause 5(2) states that the manner in which the property is being marketed will indicate whether there is vacant possession. That could imply that derelict property or property in need of renovation is to be exempt, but the Bill is not entirely clear.

The amendment is the first of several designed to establish what the Government have in mind. Perhaps they intend such properties to be exempt. If the straightforward answer is that that is their intention, perhaps the Minister will assure me that it will be made more clear than it is now. If so, I shall be happy to give way.

We do not want to do anything that has unintended consequences. I have in mind the fact that imposing the ludicrously inappropriate requirement of seller's packs on derelict property will only add a wholly unnecessary expense; in addition, attempts at regeneration might be hampered. We cannot see how anyone could be interested in a home condition report that merely reported faithfully the fact that the property was derelict, perhaps lacking a roof, windows or walls. Clearly, in such cases, the requirement for a seller's pack should not apply. Again, that may be the Government's intention, but they have not made it clear, so I hope that the Minister will deal with it.

Amendment No. 32 would entirely exempt new homes from the requirement to have a seller's pack. We see no benefit in producing home condition reports on a new property or one that has yet to be constructed, as that would be superfluous and a waste of money. More importantly, there would be a danger of duplicating the National House Building Council certificate issued to new properties. That certificate is valid for 10 years and deals with all the obvious main concerns of a buyer of a new property. I commend the NHBC scheme, which has operated effectively for many years. It gives considerable reassurance to people buying brand new properties, given all the problems that they might expect to encounter.

I might be knocking on an open door, given that paragraph 27 of the explanatory notes states that new homes sold ``off-plan'', to use the jargon, are included. Paragraph 51 suggests that they could be the subject of an exemption authorised by the Secretary of State using regulations made under clause 7. I hope that I am not the only person who finds that a little confusing and contradictory. Should new homes be within the provisions of the Bill or outside them?

We shall, no doubt, have further discussions on the subject. At an appropriate moment that is convenient for the Committee, I intend to raise a point of order about draft regulations made under the Bill, but it would be extremely helpful if the Minister would give us some indication of his thinking. In due course, might he want to make regulations under clause 7 to exempt new homes altogether? Is that being actively considered in his Department? If that is his intention, such an exclusion from the Bill is too important to be left to mere regulations, to be made in due course.

Although we intend to ensure that they do not have the opportunity to do so, the Government do not intend to introduce the new system until 2003, so there is plenty of time to get things right. However, if they have decided or are on the brink of deciding to exempt new homes in principle, why not make that clear now? It would dispel many concerns and doubts in the surveying, estate agency and legal professions and throughout the housebuilding industry.

One has only to consider the Bristol pilot scheme, about which you will probably hear a great deal more than you ever wanted, Mr. Gale. One reason why it is unreliable is that 30 of the 90 homes on which sales were completed during the pilot were brand new Beazer homes. They were all sold by exchange sale within the short period of 28 days, not sold and marketed in the same way as other houses in the scheme, which suggests that, in the context of the pilot, they were hardly typical sales and that they really had no need of seller's packs.

I think that I am right in saying that those 30 homes did not have seller's packs, although I am open to correction by the Minister. He nods, indicating that they did. I am happy to accept that, but even if they did, what knowledge could the purchasers have obtained from the packs beyond that which they would already have gathered from the NHBC certificate? It might be useful to compare the two documents.

If buyers of brand new properties are seeking reassurance about physical condition, there is nothing better than an NHBC certificate. It should give buyers all the reassurance that they need—indeed, it has been developed over the years for precisely that purpose. Buyers of such properties do not have to deal with the legal complexities, such as problems with rights of way or other delays to the conveyancing process, which might arise in connection with an older house. The sales of the new Beazer homes involved in the Bristol pilot went through very quickly, which, presumably, skewed the average speed of the transactions in the scheme.

Mr Geoffrey Clifton-Brown (Cotswold, Conservative)

Does my hon. Friend accept that one of the essential differences between new and older houses is that new houses are usually built by developers? Developers differ from private individuals in that they have an incentive to sell the houses quickly, whereas private individuals face all sorts of problems, such as being part of a chain—trying to sell their house while trying to buy another house. Because developers want to sell their houses quickly, it is unnecessary to require them to produce a full seller's pack that includes information on the condition of the house, as that should be covered by an NHBC certificate.

Mr Nigel Waterson (Eastbourne, Conservative)

I am grateful to my hon. Friend for pointing that out. He is absolutely right: any developer will want to improve cash flow by disposing of properties as quickly as he can. That is why show houses and so on are set up. Not only will developers have glossy sets of drawings to aid the process, but they will put together their own version of a seller's pack. Why on earth a developer should be interested in any delay is a mystery to me. Whatever the differences between the official Opposition and the Government on the benefits of seller's packs, one thing on which we can agree is that they have no role in the selling of brand new homes.

Mr. Raynsford indicated dissent.

Mr Nigel Waterson (Eastbourne, Conservative)

I am sure that we shall hear from the Minister in a minute.

I would have thought that my point is obvious. No one on this side of the Committee is saying that seller's packs are a bad thing or that the packs will not inexorably be used more and more. Whether the seller is the developer of new housing described by my hon. Friend the Member for Cotswold or a private individual, it is in the seller's interest to effect a sale sooner rather than later.

People already produce a form of seller's pack. Our objections are that it should not have the force of law, that it should not be subject to criminal sanctions and that it is misleading and unhelpful to impose a requirement that the pack should include what is called a survey report, but what is, in fact, a home condition report—which is much less thorough—and a local authority search. I shall not pursue that point now, because the Committee will discuss the contents of seller's packs later. Boldly eliminating brand new homes from the provisions would have a major effect. We remain to be persuaded of any benefits that would result from including brand new homes in the requirements.

Mr Tom Brake (Carshalton and Wallington, Liberal Democrat)

I am pleased that you are in the Chair, Mr. Gale. I am sure that your presence will help the Bill to pass smoothly through Committee.

It is clear from the comments of the hon. Member for Eastbourne that we are in general-election mode. He focused at length on the so-called secret deal between the Liberal Democrats and Labour, which exists only in his over-heated imagination.

I understand the purpose of the amendments. It is right to ask the Minister to clarify whether derelict and new properties are included in the provisions. However, I do not agree with the hon. Member for Eastbourne. There are many reasons to include new properties, as those who purchase a property, whether it is already constructed or still under construction, are entitled to information about title, warranty, service charges and all the other elements that might be in included the seller's pack.

The amendments focus on the definition of the term ``dwelling-house''. As far as I can tell, it appears nowhere in part I except at the very end, when a wonderfully circular reference is made to the definition in clause 1(3). Was it intended that part I should contain more about dwelling-houses? Can we expect more provisions to be tabled? Is the explanation simply that, during drafting, someone thought the definition would be useful, but no one ever got around to putting anything about dwelling-houses in the Bill? The Minister is smiling, which suggests that my second suggestion is accurate. If so, it pulls the plug on the Conservative amendments, which would amend a definition of a term that is not used in part I except in the circular way that I described.

Mr Nigel Waterson (Eastbourne, Conservative)

First, may I take this opportunity to wish the hon. Gentleman's wife well in her confinement? Secondly, will he at least agree that it would be superfluous for a brand new property's seller's pack to include a home condition report, given that an NHBC certificate will be provided?

Mr Tom Brake (Carshalton and Wallington, Liberal Democrat)

I agree entirely and thank the hon. Gentleman for reminding me that my notes include a comment that a home condition report could well be superfluous for new properties.

Will the Minister explain the purpose of the definition of ``dwelling-house'' in part I? Is not the fact that the amendments focus on that definition, which has no application in part I, symptomatic of the Tory approach to entire areas of policy and campaigning?

Mr Geoffrey Clifton-Brown (Cotswold, Conservative)

I begin by declaring an interest as one of only two chartered surveyors in the House.

I shall speak principally to amendment No. 32. One of the central features of the seller's pack is that it is bound to increase the cost of selling and buying a home. The argument thus centres on whether the benefit outweighs the increase in cost; only time will tell. We should ask which way that balance tips in respect of new houses—after all, most new houses are built by builders or developers, who usually have severe cash flow problems. Some major housebuilders have announced that they are to merge, which reflects the financial pressures on the major firms of housebuilders in this country. Minor firms that do not have the considerable land banks of the major companies must be under even greater pressure.

I strongly believe that, where possible, one should leave matters to the market and that the nanny state should not intervene. It is much better that a willing buyer and a willing seller agree everything by themselves, with the old principle of caveat emptor applying, than it is to set down a prescription in legislation.

Mr Nigel Waterson (Eastbourne, Conservative)

My hon. Friend speaks with great authority on such issues. Caveat emptor is a principle of English law that has stood for centuries. Does he not find it curious that although the Bill subverts caveat emptor, it contains no provision specifically to reverse it?

Mr Geoffrey Clifton-Brown (Cotswold, Conservative)

I am grateful to my hon. Friend for that important point and I shall diverge slightly from my argument to answer him. He is a solicitor with great experience in conveyancing. The principle of caveat emptor will still apply: however much the nanny state provides seller's packs and everything else, it will ultimately be up to the purchaser to satisfy himself that the contents of the seller's pack are truthful and meaningful.

I shall return to the amendment, which is about the balance between cost and benefit. As developers and builders have a huge incentive to ensure that a sale proceeds as quickly as possible—not least given their cash-flow problems—they will bend over backwards to ensure that the purchaser has every piece of information that he could require as quickly as possible. In my experience of house buying and selling, the developers have in many cases produced the type of seller's pack envisaged in the Bill for years, simply because they want to ensure that such transactions take place as quickly as possible.

I hope that the Minister will reassure the Committee that there will be benefit, especially in the case of new homes. As I mentioned in my intervention on my hon. Friend the Member for Eastbourne, most new homes have a National House Building Council certificate, an especially valuable tool for new houses. For members of the Committee not familiar with the procedure, I should explain that the NHBC produces a guarantee scheme under which, if any defect is found, usually within 10 years, it will supervise the original builder, if he is still in business, to put it right. If he is not in business, the NHBC will step in, find another builder and pay him to do whatever is necessary.

I know of a recent case in which that has happened, as a result of a serious defect in the damp-proof course around a house's windows. I got on to the council, which surveyed the situation and agreed that there was a serious problem and that every window in the house would have to be removed. That involved removing not only the window, but the brickwork on the outside, and all the decoration around every window had to be refurbished after the windows were put back. It was a very extensive and expensive job. The original builder, needless to say, had ceased to trade, so the council had to find another builder. The job was done satisfactorily and the guarantee continues for the remainder of the 10-year period.

A scheme of that kind—and I am not aware of them anywhere else in Europe—is a very positive benefit to anyone who buys a new house. In fact, anyone who buys a new house would be well advised to insist on the scheme before going ahead. There is an overwhelming case for not imposing the seller's pack provisions to purchases to which the scheme applies. I hope that the Minister will pay serious attention to that problem.

I hope, too, that the Minister's departmental resources will enable him to tell us, with reference to these or later amendments, the total compliance cost of part I. After all, that will ultimately fall on the purchasers. My hon. Friend the Member for Eastbourne has mentioned 1.5 million transactions and people should have an idea of how much the Bill will increase the cost of buying and selling a house. There has already been a considerable increase in cost by way of stamp duty under the present Government—one of their many stealth taxes. I hope that there will not be more increases in stamp duty.

Mr Nigel Waterson (Eastbourne, Conservative)

Perhaps my hon. Friend could add to his shopping list of inquiries for the Minister whether the Department has held discussions with the NHBC to ascertain whether some of the benefits that the Government anticipate from seller's packs could be incorporated in the NHBC documentation for brand new homes, thus eliminating the duplication of cost and effort to which my hon. Friend has eloquently referred.

Mr Geoffrey Clifton-Brown (Cotswold, Conservative)

My hon. Friend has raised an eminently sensible point, with which the Minister will need to deal. What discussions have taken place with the NHBC to ensure that the seller's pack and other information provided by the NHBC are compatible? In most circumstances, the developer will need to provide the same home condition information to the NHBC to enable it to certify that the houses are covered by the scheme.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

We have had an interesting opening debate. It got off to a curious start with the right hon. Member for Skipton and Ripon asking me to move seats. As soon as I had done so, of course, the sun went in, removing the cause of his request. However, I feel slightly nervous, because from where I stand, the sun, having passed to the south-west of this Room, came to a position which might have given the hon. Member for Carshalton and Wallington reason to complain that, in the terms used by the right hon. Member for Skipton and Ripon, I had dissolved into a blur. I want to place on the record the fact that I have no intention of dissolving into a blur. If at any stage my position in relation to the sun causes difficulty, I shall be more than happy to move for any right hon. or hon. Member.

Mr Don Foster (Bath, Liberal Democrat)

Does the Minister recall the fact that the last time the right hon. Member for Skipton and Ripon raised the matter, his complaint was that the Minister appeared to have a halo?

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

I hope that the right hon. Member for Skipton and Ripon will have cause to see that same phenomenon during the passage of this Bill.

Amendment No. 31 is intended to exclude derelict properties from the definition of a dwelling-house, but would not do so, as I shall explain. Amendment No. 32 is intended to omit new homes, or those that are due to be constructed. Our intention is that the marketing of single dwellings for sale with vacant possession should be subject to the seller's pack obligations. There are good reasons for that, which I will come to in a moment.

The definition of a dwelling-house is crucial, and I will jump ahead to deal with the points raised by the almost perspicacious hon. Member for Carshalton and Wallington, who said that he could see only one reference to ``dwelling-house''—in its definition—and wondered, therefore, why it was included in the definitions. Had he looked back to clause 1(2) he would have seen, under the definition of residential property, that a residential property consists of a ``single dwelling-house''—so there is another reference. The term ``residential property'' occurs frequently in part I, and the term ``dwelling-house'' is fundamental to the definition of ``residential property''. I give him full marks for observation and hope that he is satisfied that the one appearance of the phrase that he had not spotted is crucial to that definition.

Mr Tom Brake (Carshalton and Wallington, Liberal Democrat)

I spotted the look of relief on the Minister's face when the appropriate note was passed.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

I try to be frank on such matters. I hope that the hon. Gentleman will accept that there was an exchange of notes between myself and the officials to check that my interpretation was correct, and they confirmed that it was. I always ensure that my understanding is correct before I give advice to a Committee on such an important matter.

Mr Geoffrey Clifton-Brown (Cotswold, Conservative)

Will the Minister clarify what is considered to be a dwelling-house in relation to shared use with commercial accommodation? There can be dwelling-houses with common stairwells, common passages, a shop or an office. How, under such circumstances, is the dwelling-house defined, and are the passage and the stairwell and so on defined with it?

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

That is a fair point. There are two different sets of circumstances. One he did not mention, but of which he will be well aware, is where residential properties such as mansion flats have some shared facilities. The definition covers the single dwelling within that, but there will be arrangements for leasehold properties. We will discuss those when we deal with the contents of the seller's pack for leasehold properties, for which specific documentation relating to the management of the common parts will be required.

The hon. Gentleman raised the issue of mixed commercial and residential properties. I will have more to say about that in terms of some of the exemptions from the provisions of the seller's pack, because we accept that in some cases involving mixed properties, it may be appropriate for there to be an exemption. That is a complex and difficult subject, which is not germane to the amendments, so I hope that the hon. Gentleman will accept that I will deal with that when we reach the relevant point in the Bill.

The hon. Member for Eastbourne explained that the amendment was intended to exclude derelict properties. However, leaving out

or intended to be occupied

from clause 1(3) would exempt from the seller's pack obligations the marketing of homes that at the time of marketing are unoccupied, which is a far wider category than that of derelict properties. For example, the category would include properties where the previous occupant had died and his or her executors were disposing of the property. It would also include properties where the owner had moved or was temporarily abroad. I cannot see why any distinction should be made between a property that is currently empty, and being marketed, and one that is currently occupied by the vendor. I do not believe that the amendment is sensible in that respect.

There is a parallel with low-value properties. I understand the concern that in some cases the requirement of a seller's pack might inhibit the sale of a derelict property. However, just as with low-value properties, it is precisely where there is a worry about the structural condition of the property, where there may be serious costs involved in bringing a derelict property back into use, that a seller's pack becomes particularly useful, and we would be reluctant to exempt derelict properties from the requirement to have one.

Mr. Waterson rose—

Mr. Tim Loughton (East Worthing and Shoreham) rose—

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

I hope that hon. Members can decide which of them is seeking to intervene. I shall then happily give way.

Mr Nigel Waterson (Eastbourne, Conservative)

I hear what the Minister says, but does he not accept that the seller's pack is no more than a report on the home's condition, which is a different kettle of fish from a proper survey? We shall come to the detail later, but it is simply a matter of ticking boxes and setting out in skeletal form the condition of the property. I cannot see—I am open to persuasion—what a home condition report will add that a potential buyer of a derelict property cannot see with his own eyes.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

I am sure that, in his research, the hon. Gentleman has read the format for the home condition report that was proposed by the Royal Institution of Chartered Surveyors. He will know, therefore, that it is extensive and that it covers a large range of issues. He will also be aware that the term ``derelict property'' covers a range of circumstances. I accept that, at one extreme, a property with no roof would be completely open to the elements and totally uninhabitable, that bringing it back into use would involve massive costs, and that a home condition report would be superfluous. That is why I was cautious in what I said about low-value properties.

On Second Reading, I gave a clear undertaking that we would look at the case for making exemptions if they could be justified, but, as the right hon. Member for Skipton and Ripon knows, I was guarded about giving that undertaking because of the importance of the information in the home condition report to people buying low-value properties where the cost of unforeseen repairs could be disproportionate, given the low value of the property.

Mr. Loughton rose—

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

I shall give way to the hon. Gentleman when I have finished answering the hon. Member for Eastbourne.

Although I do not rule out the possibility of the exemptions that we have already undertaken to make for certain low-value properties applying also to some derelict properties in certain circumstances, I would be reluctant to extend them more widely. For instance, a derelict property may have suffered a certain amount of superficial damage, but the bulk of the property may otherwise be in good order. Information, for example, about the condition of the electrics or of other elements in its fabric could be important to a potential buyer seeking to decide whether it was appropriate to make an offer and, if so what offer to make, given the potential repair costs.

Mr. Curry rose—

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

I shall give way in a moment—first to the hon. Member for East Worthing and Shoreham and then to the right hon. Gentleman.

It is precisely because of the need to be cautious and the wish not to deny the benefits of the seller's pack to people buying properties, especially those properties where the information could be particularly useful, that I am wary of making blanket exemptions. That is why I invite the Committee to reject the amendment should it be pressed to a Division.

Mr Tim Loughton (East Worthing and Shoreham, Conservative)

The Minister appears to have started making concessions that were not clear. One of the major reasons why three quarters of a million empty homes, which are mostly privately owned, are not brought back into occupation is the cost of the repairs. Ideally, we would like those houses brought back into use to help put people on the housing ladder. It would be a specific disincentive to add yet another cost to selling those properties. It would help his affordable homes policy, with which we all agree, to bring those derelict homes back into circulation by exempting them from that additional stealth tax. It would help bring derelict property back into circulation by acting as a specific incentive.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

The hon. Gentleman is completely wrong. The Government have taken action on a number of fronts to try to reduce the cost of bringing empty property back into use. He will be aware of the VAT exemption announced by my right hon. Friend the Chancellor and of the capital allowances for bringing flats above shops back into use. Those important measures will act as a real financial incentive. As I stressed in response to the hon. Member for Eastbourne, I believe that the availability of a seller's pack will, in many cases, make purchase a more realistic option to those thinking of buying an empty property as it will give them a greater handle on the condition of the property and the potential costs that they may have to incur.

It seems entirely fallacious to suggest that the seller's pack could be an impediment to bringing such properties back into use. In many cases, it could make it easier to attract buyers, to secure successful sales and to reassure buyers who, without the information, would be nervous about buying empty property.

Mr David Curry (Skipton and Ripon, Conservative)

We may end up imposing seller's packs on houses worth £500,000, for which the purchasers ought to be competent enough to know what they are doing. However, the Minister is contemplating exemptions on low-value property, which may be subject to first-time purchase. Perhaps it is purchasers of such property who need assistance. Does he agree that there is a real danger that those houses will be labelled as being unable to get a licence, and that they will therefore be described as ghetto properties? Is it not precisely the low-value end of the market—the grotty end, to put it colloquially—that needs help? The idea of imposing the packs on people who are perfectly capable of spending £750,000 on a house seems dotty. A lot of pressure is from those in his party.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

The right hon. Gentleman made exactly that point on Second Reading, and I agreed. I stressed that we did not want to give blanket exemptions at the bottom of the market, and I stress it again. He will recognise that there may be limited circumstances in which exemption might help property of a low value in some of the most depressed areas, about which we heard on Second Reading. Some of those properties might be derelict. It was for precisely that reason that I made it clear, in my response to the amendment moved by the hon. Member for Eastbourne, that although we did not rule out the possibility of a limited exemption in some cases, we did not support the proposal for a blanket exemption that was the purpose of the amendment. I agree with the right hon. Gentleman; his view is much more in line with ours than with that of his Front Bench.

Mr David Curry (Skipton and Ripon, Conservative)

Further to that, I have no doubt that the question of exemptions will drift in and out of our conversations. Is the Minister talking about individual exceptions, or ones on enumeration districts or council wards? After all, there are socio-economic indicators of levels of deprivation in wards. So that we can focus ourselves as we go into the debate, we should know whether we are talking about a certificate to exempt a property, or exemptions that apply to a zone.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

As I made clear on Second Reading, we have not reached firm conclusions on the matter, but I am not attracted to widespread exemptions such as ones using a specific band for council tax purposes, or ones involving assisted areas. That would not seem a sensible way forward.

I do not want to leave the Committee with the impression that firm decisions have been taken, because they have not. However, if there is a case for exemptions—I have been guarded in my comments on the matter—it would probably be easiest to apply them to properties that have a defined low value. The actual value of the property would be the easiest way to do that, so a property—please do not treat this example as a suggestion of the Government's intentions—with a value of less than £10,000 might be exempt in certain cases. That is only a possibility. The price distinction is an easier and more credible way to define exemptions, if one chooses to do so, than the alternatives about which the right hon. Gentleman spoke.

Mr David Curry (Skipton and Ripon, Conservative)

That will inevitably have a geographic implication. The Minister would agree that if one plotted a map of properties worth £10,000 or less, it would probably peak in Newcastle or other parts of the north-east. Precious little of it would relate to London properties, no matter how grotty, so there will inevitably be zonal implications.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

The right hon. Gentleman is correct, but he will recognise that the concerns voiced on Second Reading came from the northern regions. I do not believe that there would be a case for any exemptions in London, as there is no evidence whatever that there is difficulty in selling property in the London area. In fact, there is a considerable demand for it. A regional dimension would probably follow from a definition based on price. I hope that the right hon. Gentleman will accept that there is logic in that distinction.

Mr Geoffrey Clifton-Brown (Cotswold, Conservative)

I want to follow on from the sensible points made by my right hon. Friend the Member for Skipton and Ripon. We should be careful because if properties below £10,000, for example, are exempted, they will be stigmatised. I should be grateful if the Minister would address the point I made in an intervention on the Second Reading which he failed to answer properly, as several of his hon. Friends pointed out to me. The point is that the seller's packs will have to be time-limited because local authority searches are time-limited to 28 days. Any reputable surveyor will want his survey time-limited because conditions can change. The Minister will have to address that necessity.

The low-value properties, to which my right hon. Friend referred, tend to remain on the market longer as they are more difficult to sell. If the seller's pack were time-limited, it would have to be redone; therefore, low-value properties may have more than one seller's pack and more than one set of costs. We have the anomaly that a low-value property will be saddled with higher costs than in a normal transaction.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

No, the hon. Gentleman has it wrong. I thought that I made it clear on Second Reading that there is no obligation. As he will recall, it was the Under-Secretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Sunderland, South (Mr. Mullin), who summed up the debate for the Government. There will be no obligation to produce a new seller's pack, only an obligation to produce a pack.

On the issue of updating the information, a prospective buyer may feel if a property has been on the market for some time that it is appropriate to obtain more up-to-date information. Local authority searches are the one area where there is general agreement that after—perhaps—three months there is a need for a new check. The Government hope that, with the introduction of the national land information service, such information will be available at a tiny price. That would be one benefit of the modernisation of the processes of obtaining information for conveyancing. The NLIS will make that kind of update possible. The majority of the information in the seller's pack will continue to be viable and valid for several months beyond that period. In some cases, it will still be valid a year or more after the seller's pack was produced. The Bill does not create an obligation on the seller to produce another pack, so the suggestion that it will load on additional costs is wrong.

Mr Geoffrey Clifton-Brown (Cotswold, Conservative)

I do not want to be a nuisance, but what the Minister said is leading us into a more anomalous situation. The purchaser will have a seller's pack that is out of date, although he may not realise it. Also, the hon. Gentleman did not allude to the problem of surveys. As a chartered surveyor, I would not wish to produce a survey unless it were time-limited because things change within buildings. The Minister must address the problem, which particularly applies to low-value housing.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

I have addressed the problem, as have a large number of professionals, who contributed to the development of the proposals, including the RICS, which is the hon. Gentleman's professional body.

I shall now move on to new homes. I partly agree with the hon. Member for Eastbourne—although with one element of his comments, and not with his amendment. There is no need for a home condition report on a new property that is covered by an appropriate warranty. That is an important safeguard. If all new properties were excluded, that would include some built by builders who do not belong to the National House Building Council or to the Zurich Insurance Company, which also offer warranties. Where there is in place a warranty provided by the NHBC, the Zurich Insurance Company or any other firm in the market that provides the cover that the hon. Gentleman discussed in his speech, there is no need for a home condition report on the first sale. On that point I agree with the hon. Gentleman. The Government are minded to make that specific exemption as we define the details in regulations.

The remainder of the seller's pack should be available in the case of new properties. The case is perhaps best made by the company that the hon. Gentleman quoted, Beazer Homes. It participated in the Bristol survey and 30 of its homes were sold with the benefit of a seller's pack. Beazer told us that the homes that were sold with a seller's pack reached exchange 31 days after offer, compared with an average of 69 days for other new homes on the same site without a seller's pack. That is pretty convincing evidence that the seller's pack helps the process of marketing.

The point was well made by the hon. Member for Cotswold—I know that he is rather excited about the matter, but perhaps he can contain himself and listen to what I am saying—that many builders put together packs for the marketing of homes. The provision is not the imposition of an onerous burden, as the Opposition have tried to present it, but a sensible arrangement to ensure that the information that people need will be available. The seller's pack will also include copy title deeds. Is the hon. Member for Cotswold seriously suggesting that title deeds should not be made available to someone who is buying a property? It will include a property information form containing the seller's replies to standard pre-contract inquiries; the consents relating to planning and listed building matters and building regulations—all important matters—and warranties and guarantees, which we have mentioned as crucial. There would clearly not be a case for exemption from a home condition report if no warranty existed. How could one tell if the warranty were not available? For a leasehold property, the pack would include a copy of the lease, the memorandum and articles of the landlord or management company and all other such essential documentation.

Mr Geoffrey Clifton-Brown (Cotswold, Conservative)

On a point of order, Mr. Gale. The Minister appears to be quoting from a document that has not been circulated to the Committee. May I ask you to ask him to identify it and, if necessary, circulate it to the Committee?

Mr Roger Gale (North Thanet, Conservative)

That is not strictly a matter for the Chair, but the Minister has heard the hon. Gentleman's remarks.

Mr Bob Ainsworth (Government Whip (technically a Lords Commissioner, HM Treasury); Coventry North East, Labour)

We have not got one, either.

Mr Roger Gale (North Thanet, Conservative)

Order. If the Minister wants to enlighten the Committee, I am sure that he will do so.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

I am very happy to enlighten the Committee, Mr. Gale.

I am sorry to disappoint the hon. Member for Cotswold, who thinks that he has spotted a secret document that has not been made available to the Committee. I am referring to the consultation document used by the Government for consultation about the proposals before the Bill was introduced. It is a public document and was widely circulated. I am sure that all the assiduous members of the Committee who have done their homework have referred to it. However, if there is any doubt, I shall ensure that copies of the consultation document are circulated to all members of the Committee.

We have had a thorough debate. I have made it clear that there is no case for accepting amendments Nos. 31 and 32. I have said that the Government intend to give further thought to the issue of very low-value properties, perhaps including some derelict properties. We shall return to that matter. I have also made it clear that we do not intend to prescribe a home condition report as part of seller's packs for new homes for which an appropriate warranty exists as a guarantee to the buyer. With those assurances, I hope that the hon. Gentleman will agree to withdraw the amendment.

Mr Nigel Waterson (Eastbourne, Conservative)

We have had a constructive, detailed and helpful debate, which I hope will be characteristic of the Committee's deliberations. The Minister's replies have mostly been positive and constructive and have justified the tabling of the probing amendments. I do not intend to divide the Committee on the amendment.

I was grateful for the comments of my hon. Friend the Member for Cotswold, who, as a qualified surveyor, speaks with great authority on the practicalities of the matter. I take issue with him on one point. He spoke of my great experience in conveyancing. You will recall, Mr. Gale, that on Second Reading I referred to the entry in the Register of Members' Interests, as I am a solicitor. However, I can honestly say that I have never carried out a conveyance in my life. I happily practised in the sphere of shipping law, which could not be much more removed from conveyancing. However, I did pass an exam in it once, and I suppose I should refer to that entry in the register before proceeding further.

I was happy to accept from the Minister his view that amendment No. 31 goes slightly wide of merely derelict properties. However, we must grapple with one further matter. The Minister has said that an attempt will be made to allow some exemptions. Our discussion will probably be academic for the most part because a canny and sensible would-be purchaser would have a full survey report made of any property that was derelict, or anything like it. I should have thought that was axiomatic, which shows how circular many of our debates are likely to be. If the property had a missing roof or whatever, a potential purchaser would be barmy not to have a proper survey done to see what he was letting himself in for.

As my right hon. Friend the Member for Skipton and Ripon said, we are beginning to accumulate a tally of potential exemptions. I have made the point—I shall make it again in more detail at a convenient moment—that we need a clear idea of what will be in the draft regulations. However, the Minister has already referred to the possible exemption of derelict properties. We hope to have bulletins later in Committee on how the Minister or his officials are getting on with that.

We also have the issue of new homes. I am delighted that the Minister has accepted my point that it is absurd and wasteful to have a home condition report as well as a relevant warranty. The Minister is right to remind us that, as well as the NHBC warranty, Zurich Insurance provides a scheme on which we have all had presentations. There will be another specific exemption in that case, too.

We are beginning to see some cracks in the edifice of the legislation. I have a nasty feeling—as, I suspect, does my right hon. Friend—that, by the end of the Committee stage, we will have a raft of potential exemptions. That is leaving aside the overall question of how much benefit or point there is in imposing seller's packs on consumers. The Minister made the point himself. He talked with some delight and triumph in response to points made by my hon. Friend the Member for Cotswold and said that the fact that developers often produce seller's packs showed the wisdom and importance of the proposals.

We take the opposite view. Many people, as I said in the earlier debate, sensibly produce a pack of relevant documents, which are readily available at that stage in proceedings. Who would not do that, especially if that person were the developer of new housing, if it helped to speed up the process? But there are other matters, and the home condition report is the best, or worst, example, depending on one's point of view, which should not be imposed as a requirement. Nor do we think that the law, particularly the criminal law, has any place in the requirements. If people think seller's packs are helpful and practical, they will offer them anyway, just as some people already are. The one sliver of common ground between the two sides of the Committee is that seller's packs in one form or another are already operating in the real world without the benefit of legislation or criminal sanctions.

I am delighted that the Minister has taken our point seriously and is addressing it and we look forward to hearing more. On that basis, I beg to ask leave to withdraw amendment.

Amendment, by leave, withdrawn.

Mr Don Foster (Bath, Liberal Democrat)

I beg to move amendment No. 51, in page 1, line 17, at end insert—

`( ) ``Energy efficiency'' means the extent to which the sources of heating and lighting in domestic premises are used without unnecessary waste, as measured by an approved assessment procedure.'.

Mr Roger Gale (North Thanet, Conservative)

With this it will be convenient to take the following: Amendment No. 27, in clause 7, page 5, line 44, at end insert—

`(ca) the energy efficiency of the building, identifying the presence of existing measures for improving energy efficiency and those which may reasonably be expected to be added;'.

Amendment No. 23, in clause 7, page 6, line 2, at end insert—

`(da) the energy efficiency of the property, including

(i) the presence or absence in the dwelling of specified measures for improving energy efficiency, and

(ii) measures which could be taken for the purpose of improving energy efficiency.'.

Amendment No. 28, in clause 7, page 6, line 8, at end insert—

`(aa) a report on the energy efficiency of the property, identifying energy efficient aspects of the structure, ranked with comparable properties, and including advice on improvement measures which it is feasible to make;'.

Amendment No. 24, in clause 7, page 6, line 10, at end insert—

`(ba) an energy efficiency report containing advice on measures to improve the energy efficiency of the property, and an indication of the cost and pay-back period of each of these measures.'.

Amendment No. 25, in clause 8, page 6, line 26, after `section 7(5)(d)', add `and (da)'.

New clause 4—Energy efficiency report: transitional provision—

`. The Secretary of State may by regulations bring Schedule (Energy Efficiency reports) into effect for a period of time set by those regulations if in his judgement this would assist or provide information relevant to the marketing of residential properties in England or Wales.'.

New schedule 1—Energy Efficiency Reports—

`1.—(1) Subject to the provisions of this Schedule, it shall be the duty of any person in whose favour a mortgage of any legal estate in a dwelling is granted (in this Schedule referred to as ``the lender'') to ensure that, if any qualifying survey of the dwelling has been undertaken by him or on his behalf in connection with that mortgage—

(a) a report on the energy efficiency of the dwelling (in this Schedule referred to as ``an energy efficiency report'') has been prepared by or on behalf of the lender in accordance with regulations under paragraph 5 on the basis of the physical inspection undertaken for the purpose of the qualifying survey, and

(b) the person granting the mortgage (in this Schedule referred to as ``the borrower'') has been provided, before the grant of the mortgage, with a copy of the energy efficiency report.

(2) No duty arises under sub-paragraph (1) unless—

(a) the mortgage relates only

(i) to a single dwelling, or

(ii) to a single dwelling together with premises occupied or intended to be occupied for business purposes,

(b) the loan to which the mortgage relates was made in pursuance of an application made to the lender by the borrower, and

(c) the dwelling is occupied by, or is intended for occupation by, the borrower as his residence.

(3) The lender may, in fixing the amount of any fee to be charged for a qualifying survey, taken into account any additional costs reasonably incurred in preparing the energy efficiency report, but the duty in sub-paragraph (1) arises whether or not the borrower has paid, or agreed to pay, any such additional costs.

(4) In sub-paragraph (1) a ``qualifying survey'', in relation to a dwelling, means any survey or valuation which includes a physical inspection of both the exterior and the interior of the dwelling.

2. The duty in paragraph 1 does not arise in relation to any dwelling which was provided (by construction or conversion) less than three years before the date on which the borrower applied for the loan to which the mortgage relates.

3. The duty in paragraph 1 does not arise where, before the grant of the mortgage, the borrower has obtained, or been given a copy of, a report which—

(a) relates to the dwelling,

(b) complies with regulations under paragraph 5, and

(c) was prepared less than twelve months before the date on which the borrower applied for the loan to which the mortgage relates.

4.—(1) The duty in paragraph 1 does not arise where—

(a) the lender is a member of the borrower's family and is not lending in the course of a business carried on by the lender, or

(b) the lenders are the trustees of a trust created by an individual for the benefit of members of his family and their descendants.

(2) For the purposes of sub-paragraph (1) a person is a member of another's family if—

(a) he is the spouse of that person, or he and that person live together as husband and wife, or

(b) he is that person's parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew or niece.

(3) For the purposes of sub-paragraph (2)(b)—

(a) a relationship by marriage shall be treated as a relationship by blood,

(b) a relationship of the half-blood shall be treated as a relationship of the whole blood, and

(c) the stepchild of a person shall be treated as his child.

5.—(1) The Secretary of State shall make regulations specifying the requirements which must be met by the lender in relation to the preparation of an energy efficiency report.

(2) The regulations may, in particular, require a report to include—

(a) information as to the presence or absence in the dwelling of specified measures for improving energy efficiency, and

(b) a statement recommending measures which could be taken for the purpose of improving energy efficiency.

(3) Regulations under this paragraph may make different provision for different cases and different areas.

(4) Regulations under this paragraph may not require an energy efficiency report to contain any information in respect of the dwelling which is not readily ascertainable on a visual inspection of so much of the exterior and interior of the dwelling as is accessible without undue difficulty to the person undertaking the inspection.

(5) Regulations under this paragraph may not require an energy efficiency report in respect of a flat to contain information about the common parts of the building in which the flat is situated.

(6) Before making regulations under this paragraph, the Secretary of State shall consult—

(a) such mortgage lenders or persons appearing to him to represent mortgage lenders as he considers appropriate, and

(b) such other persons as he considers appropriate.

(7) In making regulations under this paragraph, the Secretary of State shall have regard to the cost of preparing an energy efficiency report.

(8) Regulations under this paragraph shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

(9) In this paragraph—

``common parts'', in relation to a building, includes the structure and exterior of the building and common facilities provided, whether in the building or elsewhere, for persons who include the occupiers of one or more flats in the building;

``flat'' means a dwelling which is a separate set of premises, whether or not on the same floor, divided horizontally from some other part of the building;

``mortgage lender'' means a person who, in the course of a business, lends money secured by mortgages of dwellings.

6.—(1) If the borrower suffers loss by reason of the failure of the lender to comply with his duty under paragraph 1, the borrower is entitled to compensation for that loss from the lender.

(2) In determining for the purposes of this paragraph whether the borrower has suffered loss as mentioned in sub-paragraph (1) and, if so, the amount of that loss, a court—

(a) shall assume that the borrower would have taken every measure that would have been recommended in a report complying with paragraph 5,

(b) shall have regard to the cost that would be likely to have been incurred in taking those measures if they had been taken immediately after the grant of the mortgage,

(c) shall determine the likely expected life of each measure and apportion that cost rateably over that life, and

(d) shall calculate the savings that would have been made during the relevant period if the measures had been taken.

(3) In sub-paragraph (2) ``the relevant period'' means the period beginning with the day on which the mortgage was granted and ending immediately before the sixth anniversary of that day or, if earlier—

(a) in relation to any measure falling within sub-paragraph (2)(a) which has in fact been taken by the borrower, with the day on which the taking of the measure is completed,

(b) in a case where the lender provides the borrower with, or with a copy of, an energy efficiency report complying with paragraph 5 prepared not less than 12 months before the day on which it is provided, that day,

(c) the day on which the borrower ceases to own any interest in the dwelling,

(d) the death of the borrower, or

(e) the day on which any proceedings under this paragraph are first determined by a court or by the award of an arbitrator.

7. In this Schedule—

``the borrower'' and ``the lender'' shall be construed in accordance with paragraph 1;

``dwelling'' means a building or part of a building occupied or intended to be occupied as a separate dwelling, together with any yard, garden, outhouses or appurtenances belonging to it or usually enjoyed with it, but does not include a mobile home;

``energy efficiency report'' shall be construed in accordance with paragraph 1;

``mobile home'' means a caravan within the meaning of Part I of the Caravan Sites and Control of Development Act 1960 (disregarding the amendment made by section 13(2) of the Caravan Sites Act 1968);

``mortgage'' means any mortgage or other charge on property for securing money or money's worth which is made by deed.

8.—(1) Paragraph 5 and this paragraph shall come into force on the day on which regulations made under section 7( ) take effect.

(2) The remaining provisions of this Schedule shall come into force on such day or days as the Secretary of State may by order made by statutory instrument appoint, and different days may be appointed for different purposes or different areas.

(3) The power to make an order under sub-paragraph (2) includes power to make such transitional provisions and savings as the Secretary of State considers appropriate.

(4) The Secretary of State shall consult the National Assembly for Wales before making any regulations under this schedule which relate to Wales.

(5) This schedule extends to England and Wales only.'.

Mr Don Foster (Bath, Liberal Democrat)

We come to the important issue of energy efficiency. In addition to speaking to my amendments, I shall comment on amendments Nos. 27 and 28, tabled by the Conservative Party. I shall attempt to be brief, but the issue is important, so I hope that the Committee will not mind if I detain it long enough to cover some of the complex matters that arising from the amendments.

Amendment No. 51 provides a definition of energy efficiency, which fits in with the other definitions of the terms in the legislation. Amendment No. 23 would add a requirement to include an energy efficiency report in the list of items included in the seller's pack. Amendment No. 24 would add the energy efficiency report to those items that may be specified by regulation; it would also require that a potential buyer should be told what needs to be done to improve the energy efficiency of the property and why it would be financially advantageous to carry out such work. We hope that it will be possible to show individuals that they can make enormous financial gains by acting on the energy efficiency proposals contained in such a report. We also hope to persuade them that not only will they benefit, but everyone else will as well.

The sort of home energy efficiency report that I propose is a relatively simple matter. I have an example that shows the current energy rating and estimated running costs of a typical home. The report would list energy efficiency measures currently installed, such as double glazing or good heating control; it would then make a series of recommendations tailor-made for the property and detail the cost to its prospective owner of such measures being installed, the annual savings and, crucially, the estimated payback time. From that information, it would be possible for the prospective home buyer to have a clear idea of the annual financial benefits and the initial outlay. Amendment No. 25 is a technical amendment required to alter numbering and lettering.

New clause 4 and new schedule 1 are different from the other amendments, which would amend the contents of the seller's pack. There will be a period before the introduction of the seller's pack and because 1.5 million transactions involving homes being bought and sold take place each year, it would clearly be sensible to have in place measures to ensure that energy audits took place in the interim. New clause 4 empowers the Secretary of State to bring into effect new schedule 1, which would comprise the interim measure.

In Committee, such matters are often highly controversial, but on this occasion, I am delighted to say that there should be no controversy, given that the measures I propose have, in one form or another, been supported by bodies as diverse as the Council of Mortgage Lenders, Friends of the Earth, the Association for the Conservation of Energy, the Conservative party, the Government and the Liberal Democrats. The vast majority of Members of Parliament have supported similar measures, with the notable and sad exception of the right hon. Member for Bromley and Chislehurst (Mr. Forth).

Such proposals have a long history. In May 1984, Lord Walker of Worcester—then Peter Walker, Secretary of State for Energy—proposed that mortgage companies should include energy efficiency advice in their required surveys. The Select Committee on Energy concluded in 1989 that it

believed that a standard, uniform and mandatory labelling system for appliances and domestic buildings should be introduced.

That statement was made in paragraph 115 of its report ``Energy Policy Implications of the Greenhouse Effect''. In 1993, in paragraph 102 of its report on energy efficiency in buildings, the Environment Select Committee recommended that

the Government consider a mandatory scheme for home energy labels, to be introduced at the point of sale.

I am delighted to see the Under-Secretary of State, the hon. Member for Sunderland, South (Mr. Mullin), in his place and I look forward to our deliberations over the coming weeks. He, too, has indicated his views on this subject. In 1997-98, before the strictures of being a Minister were placed upon him, he signalled his support for such measures when he signed early-day motion 165, in which he stated his belief that

houses should be rated for energy efficiency

and that

an excellent time to achieve this desirable end is at the point of sale.

We clearly have his support.

In 1997, when she was Energy Minister, the current Under-Secretary of State for Social Security, the hon. Member for Wallasey (Angela Eagle), spoke to the fifth annual national homes energy rating conference. Her words were particularly apposite, as I shall show. She said:

I support energy rating...the question from where I stand is: Is there is a viable voluntary which would ensure that all mortgage lenders provided tailored, reliable energy efficiency advice along with a rating and estimates of energy costs savings and the likely cost of improvement measures. Or having worked on this for several years to no significant effect, is legislation the only option?

Shortly thereafter, the hon. Lady made clear which of those options to go for. The Government of which she is a member supported the Energy Efficiency Bill proposed by my hon. Friend the Member for Torridge and West Devon (Mr. Burnett), from which many of these measures are taken.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

I am following the hon. Gentleman's remarks carefully and I agree with much of what he says. Do his remarks refer to the entire group of amendments, or does he exclude new schedule 1? He will be aware that the latter would not require mandatory information to be provided at the point of sale.

Mr Don Foster (Bath, Liberal Democrat)

I am grateful to the Minister and I shall return to that point later.

I hope to have shown that there is broad support for such measures. Indeed, I would say that there is considerable support, even among Labour Members. We should examine the early-day motions that have been raised on this and related subjects; excluding the Government Whip, the Minister for Housing and Planning and the hon. Member for Clwyd, West (Mr. Thomas), all the Labour members of the Committee have supported more than one early-day motion that directly relates to the matters referred to in the amendments. I should add one more exception—the hon. Member for Wigan (Mr. Turner), who was not elected until 23 September 1999 and would therefore not have been able to sign any early-day motions save the last, and he would have needed to be remarkably quick to sign that, as it closed fairly soon after his election.

There is clear support for the broad principle and I hope that all members of the Committee will acknowledge that the benefits would be significant. It would take but a few additional pounds to carry out the sort of survey that I propose—between £5 and £15—yet the expected savings are thought to be significant. The Energy Saving Trust estimates an average saving of about £250 a year per property. Every year, 1.5 million mortgages are taken out and 1.5 million homes are transferred. If those 1.5 million homes were to benefit from such a survey we were to assume an average saving of £250, the total saving would be roughly £250 million. That calculation involves an additional assumption, which is that not everybody who received such an energy efficiency report would act on it.

A 1991 Which? survey found that at least 60 per cent. of people were keen to have such information provided. If we assume that the other 40 per cent., despite having been given advice on how they can save money, choose to ignore it, we arrive at the figure of £250 million. Were everybody to take the recommendations on board, the savings would be even greater.

Mr Geoffrey Clifton-Brown (Cotswold, Conservative)

The hon. Gentleman is making some constructive remarks, with which I broadly agree. However, in fairness to the purchasing public involved in those 1.5 million transactions, may I ask whether he has considered the compliance costs of the amendments? He has said that the benefit will be £250 per house, but what does he think the average cost of producing such a survey would be, and how many extra consultants would have to be employed to produce those 1.5 million surveys?

Mr Don Foster (Bath, Liberal Democrat)

I am grateful for that intervention. The hon. Gentleman said that he was listening carefully, but perhaps he missed my earlier point—[Interruption.]

Mr Roger Gale (North Thanet, Conservative)

Order. There are too many private conversations taking place in the Room. Would hon. Members please conduct such conversations outside?

Mr Don Foster (Bath, Liberal Democrat)

Thank you, Mr. Gale. I said earlier that the estimated additional cost of such a survey, assuming that it was carried out by the same person who carried out the survey that was already required, would be between £5 and £15. The cost of the work that the home buyer may want to have done in the light of the advice will vary according to the kind of advice. For example, if it is advised that a cylinder jacket is installed, the cost would be roughly £20. The annual saving would be an estimated £16 a year, so within less than a year and a half there would already be a payback, and from then on there would be real benefits. With a more expensive item such as cavity wall insulation, the installation is estimated to cost, on average, £360, and the annual saving is estimated at £110 a year. That would mean a longer payback time but, in less than three and a half years, real benefit would accrue to the house buyer. We should not forget that the nation as a whole also benefits from reduced energy consumption. The scale of the problems that are associated with our high level of energy consumption would be reduced.

Amendment No. 23 would help to bring about such a reduction. I hope that the wording of the amendment will find favour with the Government, because it follows closely that of the Energy Efficiency Bill that was presented by my hon. Friend the Member for Torridge and West Devon but, in effect, was drafted by the Government. We have also been careful to ensure that amendment No. 24 is likely to be supported by the Government. Its wording is taken directly from a parliamentary answer provided by the Minister to the hon. Member for Plymouth, Sutton (Mrs. Gilroy) on 21 December 2000. Hon. Members can check the wording of the amendment against what he said, which was:

It is currently intended that Regulations prescribe the inclusion of an energy report in the seller's pack, and that this will include generic advice on measures to improve energy efficiency, and an indication of the cost and payback period of each of those improvements.—[Official Report, 21 December 2000; Vol. 360, c. 313W.]

I hope that the Minister acknowledges that we have carefully drafted the amendments to tie in closely with commitments and undertakings already given by the Government.

I have already outlined the need for interim provisions with reference to new clause 4 and new schedule 1. An interim measure is clearly needed to bring about the benefits more quickly than would be permitted by waiting for the introduction of the seller's pack. I can imagine the Government responding along the following lines: they will argue that, even if the new schedule is passed, it will be about a year before it is in force, whereas the Government's measures will be in force by 2003, so that only a relatively short period will elapse between the two. Why go to all the fuss and bother to deal with such a short time?

My first response is that, even if I had confidence that the Government's regulations for the seller's pack could be passed in time, something in the region of 1.5 million transactions would be made in the relevant period. That could produce a saving of at least £250 million in energy consumption. That is well worth aiming for. In addition, during the introductory period, many lessons could be learned, which would prove enormously beneficial with respect to the final arrangements for energy surveys to be carried out as part of the seller's pack. Practical experience would have been gained.

What I have said is based on a generous view and the assumption that the Minister will really be able to realise the proposals by 2003. However, I am not that optimistic about his chances of success. I hope that the Minister will not take my remarks in the wrong way, because we understand the difficulty that he and the Department face in establishing complex regulations, but perhaps we should examine what they have said about other, similarly complex, regulations, in particular the updating of part L of the building regulations, relating to energy efficiency, in which respect, as the Minister has often pointed out, we are light years behind other countries. There is an urgent need to update those regulations. When the Minister has consulted on the issue, he has received wide-ranging support from all political parties and all the bodies that he has consulted. However, the Minister's suggested date for bringing in the regulations failed to bear fruit.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

I hesitate to move into territory that I consider it only peripherally relevant to the amendments, but as the hon. Member for Bath has implied that we are dragging our feet, I put it to him that the issues are, as he has acknowledged, extremely complex, involving strong differences of opinion among technical experts, including those involved in house construction and renovation, and potential conflicts with other building regulations, not least those on noise transmission between properties. Those facts are matters of concern and it would be inappropriate to proceed over-hastily with measures that might have both desirable and undesirable consequences.

Mr Don Foster (Bath, Liberal Democrat)

I am grateful to the Minister for making that point, in the way he did. I hope that he will acknowledge that my point was that I fully understood the complexity of the issue, and in no way was being critical of the delay. I merely sought to point out that, around the time that we first attempted to discuss the matter in the House, the Minister said in a press release:

We then aim to consult on a first package in the latter half of 1999 to enable significant improvements to come into effect in the first half of 2000. Other packages will then follow.

The Minister said that he has not been able to deliver on that timetable, for the good reasons of the significant technical difficulties and the conflicts that have begun to appear between the proposals and other pieces of regulation.

I am a little sceptical of the Minister's ability to bring the seller's pack in by 2003 because, as our deliberations have already demonstrated, there is not the necessary level of agreement about the proposals for it. That is also the case among the public and among professional bodies. Introducing it is likely to give rise to more complications than arose in relation to the building regulations. I have made strong arguments as to why it is worth accepting the new schedule, even if the seller's pack proposals are introduced by 2003, as it would provide an interim measure. I nevertheless believe it likely that that measure would have to operate for a longer period.

The Minister said that the seller's pack would provide information to all house buyers, whereas new schedule 1 would apply only to those with mortgage surveys. He is correct, as I have told him. I genuinely believe that the seller's pack is a better long-term solution. However, I hope that he will agree that the new schedule was intended as an interim set of proposals that could be rapidly introduced, so I based it on the very legislative proposals that he and his Government had already brought before the House, through my hon. Friend the Member for Torridge and West Devon. The assumption must surely be that they have worked out all the technical difficulties associated with it, and that it could be brought in quickly, so that at least 1.5 million homes could benefit from its provisions.

I apologise for my remarks having been rather lengthy, but the issue is important. I look forward to the debate, and to the Minister's response. If he finds himself unable in any way to accept any of the amendments, I ask him to explain what has changed his mind since the measures were proposed and supported by him, the Government or many of his hon. Friends.

Mr Tim Loughton (East Worthing and Shoreham, Conservative)

We agreed with much of what the hon. Member for Bath said, which is why we were happy to add our names to the new schedule. I shall not go into detail about the points that he made.

The issue should be cut and dried. There is no dispute among the vast majority of members of the Committee about the facts that energy efficiency is desirable and that it can be brought about by measures such as are proposed in our and the Liberal Democrats' amendments, new clause and new schedule. Our amendments, Nos. 27 and 28, would make it clear in the Bill that energy efficiency information should be classed as relevant information required by the Secretary of State, and that regulations should require energy efficiency information to be included in the seller's pack.

The track records of the majority of members of the Committee, including the Minister, should show that there would be no objection to that. I too tripped with great interest through the 1993 report of the Environment Committee, of which the Minister and my hon. Friend the Member for Cotswold were members. I am sure that they could swap distant but affectionate recollections of their discussions.

I acquainted myself with paragraph 102 of the report, which urges a mandatory scheme for home energy labelling. At that time, the energy labelling system was in its infancy and very confused. There were three different energy labelling systems: the national home energy rating system, the star point scheme, and the standard assessment procedures, or SAPs. The report made a useful contribution. The Minister must have supported mandatory labelling, because nowhere in the report can I find any record of division or dissension among the Committee's members. Will he explain why he now seems reluctant to include a mandatory energy efficiency report in the legislation?

The hon. Member for Bath discussed in detail the ancient history of energy efficiency. He paid tribute to a former Conservative Member, now Lord Walker, who was one of the initiators of the subject. The origins of the private Member's Bill that forms the basis for new schedule 1 lie beyond the proposals of the hon. Members for Torridge and West Devon and for Eltham (Mr. Efford); they go back to my hon. Friend the Member for South Suffolk (Mr. Yeo), who was the first of that triumvirate to introduce a private Member's energy efficiency Bill. The previous Environment Secretary, my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), has a great deal of form on energy efficiency measures, going back to the Energy Saving Trust, requirements being placed on suppliers, the home energy efficiency scheme, and so on. All the parties—and the previous Government in particular—have demonstrated interest in and support for energy efficiency.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

If the previous Government had such a commitment, will the hon. Gentleman explain why they did not introduce mandatory labelling at the point of sale to which he is now committed?

Mr Tim Loughton (East Worthing and Shoreham, Conservative)

That is a bit cheeky of the Minister. He is about to tell us that mandatory labelling is so complex that the Government could not possibly introduce it within six years of taking office.

Mr Don Foster (Bath, Liberal Democrat)

The Minister's remark would be worthy if he were to say that he will support such a measure shortly. If he does not, would he not be adopting the same position as the previous Government?

Mr Tim Loughton (East Worthing and Shoreham, Conservative)

That is why I said that the Minister was cheeky. Since the 1993 report, energy labelling and other measures have become much more widespread, and technology has advanced at a great pace. It would be easier to introduce mandatory labelling now than in 1993, when the Environment Committee, of which he was a fully paid up member, produced the recommendation contained in the amendments and new schedule.

The hon. Member for Bath said that 1.5 million private residential property transactions took place last year. The sooner an element of energy efficiency can be added to those transactions, the better. Fuel poverty has not been alleviated under the present Government, despite all their warm words, to coin a pun.

As our discussion of clause 1 has shown, the Bill contains a series of measures that give the Secretary of State a great deal of power and latitude to prescribe what should be in the seller's packs and how the regulations should be determined. The wording of the Bill is vague—necessarily and increasingly so with Government legislation these days. Are we to believe, although we do not see it in the Bill, that the Secretary of State supports the concept of energy efficiency? He certainly makes great play of having signed up in Kyoto to the ambitious target of a 20 per cent. reduction. However, when the opportunity arose to co-operate with other nations in furthering that aim, his response, as we saw recently, was to insult the French Environment Minister.

This is bizarre because it is likely that, as we have discussed, sellers will be required to include in their seller's packs guarantees of damp-proofing and of other such work that has been done on their properties. We shall discuss later how detailed and extensive that list of requirements should be and what should happen if one of the documents goes astray or—as my hon. Friend the Member for Cotswold has mentioned, and as so often happens—the damp-proofing company has gone out of business. Will the absence of a single document hold up the whole pack? That is a separate issue, but if we are to debate such relatively minor details as the inclusion of damp-proof guarantees, in the context of the wider good, should not information about energy efficiency come higher on the list of relevant information required by the Secretary of State as part of the seller's pack?

The availability of energy efficiency information has a serious impact on households' ability to manage themselves financially. It can also influence whether a prospective buyer decides that he can afford to finance the mortgage to make his purchase. It is often the failure of buyers, particularly first-time buyers, to take into account the running costs of a house that leads to problems such as mortgage payments falling into arrears, perhaps ultimately resulting in repossessions. In 1999, there were 30,000 repossessions in this country, despite the fact that the Government claim to have solved that problem. [Interruption.] That is a great deal more than in the 1980s, but I shall not go down that path now.

As a thoroughly modern man, I recently went to purchase a new fridge-freezer. I also had to buy a new washing machine, such is the wear to which white goods in my household have been subjected.

Mr David Curry (Skipton and Ripon, Conservative)

I am not sure to what modernity my hon. Friend is referring. Is it the modernity of the machines or the fact that he, a man, went to purchase them? Is my hon. Friend a new man?

Mr Tim Loughton (East Worthing and Shoreham, Conservative)

I was specifically illustrating my credentials as a modern man, as it is the duty of every good husband to ensure that the equipment with which he supplies his wife performs as efficiently and as helpfully as possible—[Laughter.] My serious point is that my first question to the shop assistant was about the energy efficiency rating of the equipment. Increasingly, we automatically ask that question when buying expensive white goods. Rather than worrying about the colour of an appliance, how fast it goes, how many ice cubes it makes or even what it costs, people, rightly, look for A, B, C, or D on the front of it. Why can the Government not acknowledge that the same consideration should be given in the Bill to the most expensive purchase that the majority of people ever make—their home?

The hon. Member for Bath also mentioned the answer that the Minister gave just before Christmas to the hon. Member for Plymouth, Sutton, in which he said that only generic advice will be given on measures to improve energy efficiency and payback times. However, every house is unique—they have been built at different times and different building regulations and requirements apply to them—and more detailed information is needed.

Denmark must be a country that is close to the Minister's heart because he cited it many times on Second Reading. Last year, the Environmental Audit Select Committee, of which I am a member, produced a report on energy efficiency. Our researches included a trip to Denmark where we had an entertaining meeting with Mr. Svend Auken, the Minister for the country's combined Environment and Energy Ministry and also its Deputy Prime Minister. Indeed, he is similar to our Deputy Prime Minister in many respects, and certainly in respect of size. The major difference between them is that Mr. Auken rides a bicycle and does not own two Jaguars.

In Denmark, the energy labelling of houses is standard practice. The issue of energy efficiency is an integral part of the house-buying process. More significantly, in Denmark, houses, particularly new houses, are given energy ratings, which affect the amount of council tax equivalent that is charged.

Before the Minister intervenes to say, yet again, that Denmark is a marvellous country, I should like to point out that stamp duty is considerably lower there than it is in the United Kingdom. It is 0.6 per cent. for houses of first residence in Denmark. That compares very favourably with the enormous increases in stamp duty that have been introduced here and which have increased the Chancellor of the Exchequer's revenue by £1.5 billion in the past three years.

Until the 1970s oil crisis, 95 per cent. of Denmark's energy needs were met by imported oil. At that time, Denmark realised that it had to change its entire energy policy. As a contribution to that change, energy efficiency considerations were made an integral part of house construction. In Denmark, therefore, home energy labelling came about as a matter of course. The statistics show that that leads to new homeowners undertaking a considerable amount of work during the first three years of ownership to improve the energy efficiency of their homes.

Despite campaigns such as the ``Do your bit'' campaign and my earlier comments concerning white goods, we have a problem about getting environmental messages across to the British public. Last summer, the Royal Society for the Protection of Birds commissioned an interesting survey into the purchase of second-hand cars. When people were asked to rate the importance of the criteria that influenced their decisions about which second-hand car to buy, only 3 per cent. of respondents rated fuel efficiency as a significant criterion, as opposed to 9 per cent. who rated the colour of the car as more important. That is an amusing but worrying finding and shows why it is so important to make the energy efficiency and energy ratings of houses as transparent as possible. That would make a significant contribution to the UK meeting its carbon dioxide emission targets, but the Bill fails to do that.

The energy efficiency standards of performance scheme—EESOP—introduced by the previous Government and run by the Office of Gas and Electricity Markets, has a structure in place that obliges public suppliers to achieve set levels of energy savings for their customers. That structure is overseen by the Energy Saving Trust. We have a structure in place in which electricity suppliers offer advice on energy efficiency and reducing energy expenditure, mostly as it applies to lights and electrical household appliances. There is already a wealth of experience and expertise that could easily be applied to rating the fabric of the whole house as part of the seller's packs.

I see no reason why energy efficiency should not be included in the Bill. It should be a basic requirement of the seller's packs, if we are to have them, because the payback would be enormous. If the energy reductions were achieved, there would be a payback to the environment and house buyers could judge whether houses would be more viable to run.

As detailed in our amendments, there should be advice on how energy efficiency improvements should be made. There are two sides of the coin for buyers. First, they must consider how affordable a house is, with its energy consumption added to the cost of buying it. Secondly, they should consider the advice available at the point of sale about what measures they could feasibly and easily take to improve energy efficiency. Such improvements would often pay them back quickly, as the hon. Member for Bath said.

Those changes are simple and would not require complex legislation, because some proposals are already on the table. The 1998 Energy Efficiency Bill forms the basis of the amendments and the proposed new schedule. I do not understand why the Minister is holding back, or why he thinks that he may have problems getting it through. Most of his Back Benchers have supported such measures in the past and he supported the principle in 1993. My colleagues and Government Back Benchers alike should gladly support the amendment for the greater good of buyers and the environment.

Mr Gareth Thomas (Clwyd West, Labour)

I rise because my name was mentioned by the hon. Member for Bath. To avoid doubt, I share the view of the majority of hon. Members that energy efficiency should be central. He should not read too much into the fact that I did not sign the early-day motion that he mentioned.

I would be interested to learn what the Government think and, in particular, why it is not possible to put an energy efficiency requirement in the Bill. I understand that there could be technical reasons that mean it is not appropriate to overburden the Bill, but I want to know how the Government envisage the ambit and shape of the regulations that they will have the power to make.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

We have had a good and full debate and I am delighted by the large measure of all-party agreement. It is our clear intention to ensure that energy information should be fully available in surveys and to make such information part and parcel of the seller's pack. It will be included as part of the proposed home condition reports. That will give full effect to the 1993 Environment Committee report's recommendation, to which the hon. Members for East Worthing and Shoreham and for Bath referred, that energy efficiency information should be available at the point of sale in all cases. The proposals before the Committee give effect to that commitment.

Mr Don Foster (Bath, Liberal Democrat)

I was delighted to hear what the Minister said, but will he go further and say whether he intends to make matters clear in the Bill? If he is not prepared to do that, the problem is that the matter may be determined by regulations at a later date. That may be after the next election, when he may not be in a position to ensure that the regulations have the strength that he has described.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

The hon. Gentleman will be aware that commitments given by Ministers are made on behalf of the Government, not individuals. The Government have made a clear commitment to achieve the objective that I have described. The way in which that is done is a more interesting and complex process.

Clause 7 deals with the seller's pack. It gives the Secretary of State power to prescribe the contents of the pack and sets out the sort of information that should be included. We are satisfied that information concerning the energy efficiency of a property is covered by subsection (4) and, more particularly, that the energy efficiency aspects of its current condition are covered by subsection (5)(d). That provides that information on

the physical condition of the property, including any particular characteristics or features of the property

is relevant information for such purposes.

We will discuss later the wider issues surrounding the inclusion of a home condition report in the seller's pack, so I shall confine my comments now to the energy efficiency element of the home condition report. Last year, a trial of the seller's pack was conducted in Bristol to assess how it worked in practice, and to seek consumers' views about its contents.

In Bristol, the pack included a home energy report that gave an assessment of the energy efficiency of the property being sold, improvements that could be made, the likely cost of such improvements, the potential annual savings and the payback time. There was also general advice on energy saving measures. That was of great interest to potential buyers, although there were concerns that the presentation of the information was not as user-friendly as possible. That is why pilots are conducted: they show us how to do things better.

The message has been taken to heart and all the main stakeholders involved in the scheme's development are considering the format of a new report, which will provide consumers with the same information in a more accessible and user-friendly way. Such stakeholders include the Consumers Association, the Law Society, the Council of Mortgage Lenders, the Royal Institution of Chartered Surveyors and the National Association of Estate Agents.

We intend that the energy efficiency report will form an integral part of the home condition report. That can be done by ensuring that it forms part of a certification scheme that is approved by the Secretary of State under powers given by clause 8. The inclusion of the energy efficiency report in the home condition report has obvious benefits. It will be more economic because only one inspector will be involved and the information and advice in the report will be tailored to the specific property. I know that the hon. Member for Bath was concerned about that. I assured him of our intention on Second Reading, and I repeat our commitment so that he is well aware of it. Protections and safeguards that will be available to inspections carried out under the certification scheme will back up the report. These are all important considerations.

The question will be asked—and not just by Opposition Members, as my hon. Friend the Member for Clwyd, West has already asked it—why that measure is not in the Bill. The answer is quite simple, and I suspect that it will become known as argument A, to use a format that has appeared on previous occasions.

Mr Don Foster (Bath, Liberal Democrat)

As the Minister knows only too well, my response is argument B, and I assure him that we will continue to deploy it with vigour.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

I shall outline argument A for the benefit of hon. Members who have not had the good fortune of attending such debates in Committees on which the hon. Gentleman, you, Mr. Gale, and I have served. It is always a mistake to try to put too many specific details in a Bill, because, unless the list is exhaustive, inferences could be drawn from what is excluded. It is far better to give general rather than highly detailed commitments, unless there are overriding reasons why only those commitments are to be implemented.

I will expand the argument with relation to home condition reports. Many other issues are of real concern to certain groups, who will press us for commitments on them. For example, I will give some examples. Noise insulation is a growing concern that worries many people. Disabled persons' access is also an important issue, and the Government have changed building regulations to provide better access for disabled people in new buildings. To give a topical example, there are strong arguments for including information on the risk of flooding.

The danger of specifying one such issue—or group of issues—in the Bill, is that in any future litigation or argument about the extent of a home condition report, it could be inferred that Parliament, by specifying a limited number of matters that must be included, did not intend other issues to be covered, or intended identified issues to be viewed as more important than unidentified ones.

There is always a risk that a good intention—in this case, the desire to list an issue that the whole Committee accepts as important—could result in an unfortunate by-product later, when someone who has not been a party to our discussions has to interpret the Bill and its language.

Mr Gareth Thomas (Clwyd West, Labour)

I well understand why my hon. Friend does not wish to over-prescribe the contents of the seller's pack. Clause 7(5)(d) refers to

the physical condition of the property (including any particular characteristics or features of the property).

Would regulations made under that provision cover matters such as energy efficiency or susceptibility to flooding? If so, Parliament would be being prescriptive.

Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)

As my hon. Friend knows, it is easier to amend or adapt regulations should it emerge later that something has not been included that should have been, or vice versa. That is why we prefer to use regulations when specific listings are needed. I have already given a commitment to the Committee that we intend to include the energy efficiency report, with all the characteristics that I have described, in the regulations. That commitment will be clear to anyone who reads the relevant Hansard. We do not, therefore, accept the amendment although we support its purpose.

On new clause 4 and new schedule 1, we are committed to ensuring that information about energy efficiency is available at the point of sale in all cases. The hon. Member for Bath has conceded that that would not be achieved by new clause 4 and new schedule 1, because they place the obligation on the lender, and so apply only to properties sold with the aid of a mortgage. Approximately one quarter of all sales do not involve a mortgage. The figures that he gave to the Committee are probably slightly optimistic, because in a sale that did not involve a mortgage, the property would not be subject to the information requirements to which he referred. The measure is therefore not as satisfactory as he would have liked, and he has admitted that. The Government's commitment to including a full energy efficiency statement in the seller's pack is a better way to achieve his aim.

Mr Roger Gale (North Thanet, Conservative)

Order. Hon. Members may leave papers in the Room. It will be locked between now and 4.30 pm, when the Committee will sit again. I suspect that Mr. Stevenson will chair that sitting, although that has yet to be determined.

It being One o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

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