Clause 127 - Duty to have a home information pack
Housing Bill
5:00 pm
Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)
I beg to move amendment No. 344, in
clause 127, page 86, line 20, leave out 'have' and insert
'indicate whether or not he has.'.
Mr Peter Pike (Burnley, Labour)
With this it will be convenient to discuss amendment No. 346, in
clause 127, page 86, line 22, at end insert
'unless the property is explicitly advertised as being sold without a home information pack.'.
Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)
The amendments go to the heart of part 5. They deal with whether home information packs should be compulsory. Members of the Committee may think that I am off on some strange trip, but I know that at least one member—in fact two, but only one is present—of this Committee has, as a member of a Select Committee, already concluded that they should not be compulsory. I have a copy of a report by the Office of the Deputy Prime Minister: Housing, Planning and Local Government Committee on home information packs. Its response to the question whether packs should be compulsory was:
''At this stage, we cannot recommend that home information packs are made compulsory.''
Two members of that Select Committee are serving on this Committee, and I hope that if the matter is put to a vote they will continue to back the view that they have already expressed.
Amendment No. 344 would make the provision of the home information pack voluntary. That the packs will be popular with buyers is the essence of the Government's assertion, but I am not convinced. If the Government were right, sellers would have every incentive to provide packs as a valuable marketing tool. If the packs were such a good idea, the market would dictate. Even the Minister has probably moved towards believing that the market can deliver on some things, although I should not push him too far down that line, lest he start to feel a bit uncomfortable.
Mr Clive Betts (Sheffield, Attercliffe, Labour)
The hon. Gentleman referred to my hon. Friend the
Member for Ipswich (Mr. Mole) and me, and to the recommendations of the Select Committee. What we intended by the recommendation was to express our view that, because of concerns about the supply of inspectors and so on, there should be a bit more use of the pack on a trial basis. In particular, we wanted the pack to be rolled out across the country, rather than to have a big bang nationally all at once. We therefore said that the pack could be non-compulsory at first, and then be introduced gradually on a compulsory basis. It was not that the Select Committee objected in principle to compulsion; we simply thought that the packs could not be introduced all at once nationally on a compulsory basis.
Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)
The hon. Gentleman obviously knows why he agreed to what he said, and I will not challenge him on that. The report says:
''We recommend that the pack should be introduced nationally only when further research and extensive pilot-testing has been carried out in different parts of the country.''
That report was produced last July. I am not convinced that, in the intervening period, further research and extensive pilot-testing have been carried out in different parts of the country. The report goes on:
''It is essential to establish the extent to which the pack may have adverse effects in different types of markets.''
That has not been done. Then, the report says:
''At this stage, we cannot recommend that home information packs are made compulsory.''
Mr John Hayes (South Holland and The Deepings, Conservative)
The hon. Gentleman is probably right about that. I asked the Minister a little while ago about the pilot and the types of property involved. He was strangely silent when I asked him to confirm that the study that had been done was restricted to one geographical area and was therefore flawed. I wonder whether the hon. Gentleman is to be sceptical about the breadth of the further research.
Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)
The hon. Gentleman makes his point extremely well.
The Government still have to make a case for making the packs compulsory. If the packs are wonderful, the market will drive demand for them. If the Government want to help to get them off the ground, they can provide fiscal incentives. I am sorry that the Under-Secretary is not here, because she could have made sure that word got to the right part of the Treasury about producing such fiscal incentives.
The Government are forcing people to do something, but at the same time saying, ''Don't worry, the scheme will be really popular.'' I struggle to reconcile the two. The Government normally have to force people to do something unpopular. The Minister has failed to convince me—and, I suspect, many others—that the packs should be made compulsory now. It seems that all the schemes under the Bill are to come into force simultaneously. The hon. Gentleman who were on the Select Committee were right to raise the issues that they did in their report.
Mr Clive Betts (Sheffield, Attercliffe, Labour)
The Government response to the recommendations said:
''The power to make different provisions for different areas could also be used to facilitate a phased introduction of compulsory home information packs as part of a rollout across England and Wales, if this were found to be practicable and advantageous.''
Our concern was that a big bang, all-at-once approach was not practicable, and the Government responded to that in an appropriate way.
Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)
The problem is that the Select Committee report does not talk about a phased roll-out. Its concerns are that the packs
''should be introduced nationally only when further research and extensive pilot-testing has been carried out in different parts of the country.''
That has not happened. I agree that the Committee did not completely rule out a compulsory introduction, but the report makes it clear that that should be done only after further research and extensive pilot-testing. That has not happened, so I hope that the hon. Members for Ipswich and for Sheffield, Attercliffe (Mr. Betts) will support me if I press the amendment to a vote.
Amendment No. 346 would insert the phrase
''unless the property is explicitly advertised as being sold without a home information pack''.
It works with amendment No. 344 and allows for the home information pack being optional or voluntary. I hope that the amendments receive support on both sides of the Committee in line with the well thought out views of the Select Committee.
Mr John Hayes (South Holland and The Deepings, Conservative)
The hon. Member for Ludlow is right that the amendments would make home information packs voluntary, and I have considerable sympathy with that. I hope not to sound pedantic, but I am not sure that the amendments are the right way of doing that, although he made a strong case.
There seems to be a strong and reasonable argument for improving the information available to buyers, but that might be better done through a partnership of all associated with the industry to introduce a better voluntary code. Warranties, where they exist, could be extended in a coherent and regulated way to meet national criteria in the way that the 10-year warranties already do. Searches could be improved by ensuring that all local authorities follow the example set by the vast majority and speed up the process by introducing electronic searches and setting stiff targets. Additional surveys could be made accessible to people at an affordable rate through proper agreement with the industry and by bringing on board those with the expertise to carry them out. That could all be done without the unnecessary obligation, additional regulation and intrusion of the packs.
Proposing such a code might have been a better way to proceed, and although the hon. Gentleman did not flesh out his argument as fully as that, I think that that is what he was implying. I am sympathetic to his case: for once—and I hope once only—the Liberal Democrats and Conservatives have found common cause.
Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)
The hon. Gentleman reminds me of one point that I meant to make. The Law Society
operates a voluntary transact TransAction scheme, the take-up of which is growing quickly, and there is no reason to suggest that other voluntary systems would not be taken up. However, the key point is that both parties involved would have a choice: the seller could choose to produce a pack, and the buyer to buy a home that had a pack. We should leave such matters to individual choice rather than central diktat.
Mr John Hayes (South Holland and The Deepings, Conservative)
I did not know about that scheme, and I am grateful to the hon. Gentleman for informing me—one does not often hear politicians saying that, so we should relish the moment. That is the kind of scheme that I was referring when I spoke earlier about the desirability of delivering through proper partnerships much of what the Minister, for good reasons, intends to introduce, but without the unnecessary regulation and intrusion provided by the packs.
A contradiction was revealed in the exchange between the hon. Members for Sheffield, Attercliffe and for Ludlow, and in the Minister's remarks. The hon. Member for Sheffield, Attercliffe—an ever-diligent member of this Committee and MP—drew attention to the fact that when the Select Committee examined the draft Bill, phased implementation was considered. Based on the Government's response, there was a strong suspicion that they might well go down that road because of the practical difficulties of doing everything at once. I referred to a practical difficulty when we debated an earlier amendment about the number of people qualified to implement the scheme. It seems that the Government have now abandoned that idea—or at least the Minister has not said that they have stuck with it and that they will phase in the scheme. They now seem to be very confident that the whole thing can be introduced in one hit by 2007. Therefore, there is a contradiction. The Minister might want to explain that when he sums up.
I do not think that we can support the amendments because this is not the right place to address this matter. However, I advise the hon. Member for Ludlow to watch this space, because I think that there will be other opportunities to achieve his objectives through agreement between his interest group and our great party.
Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)
Is the hon. Gentleman saying that he will not support the amendment if I press it to a Division?
Mr John Hayes (South Holland and The Deepings, Conservative)
I do not think that the hon. Gentleman would want to press the amendment to a Division as that would expose the fact that only a third of the Liberal Democrats who are eligible to sit on this Committee have bothered to turn up this afternoon. However, if he does, we would have to take a considered view, drawing on the youthful enthusiasm of my hon. Friend the Member for South-West Bedfordshire, the sagacity and experience of my hon. Friend the Member for Chipping Barnet and the insight and wit of my hon. Friend the Member for Poole. I conclude on that happy note. I look forward to hearing the Minister's considered response to the important points that have been made.
Mr Andrew Selous (South West Bedfordshire, Conservative)
I rise to support the thrust of the amendment, if not its precise form and its position in the Bill. I accept the general contention of the hon. Member for Ludlow that it would be better if home information packs were brought in on a voluntary basis. If they were established, they would quickly lead to a significant marketing advantage to the seller, and they would be useful to buyers. However, I have grave reservations about the expense of the packs, particularly the ongoing expense for people who are trying to sell properties that do not sell easily. Some properties may be on the market for a year or more; information would have to be renewed as it becomes out of date. Introducing the system on a compulsory basis is not justified because of the time delay caused to sellers who want to move quickly. However, I hope that it becomes best practice and that it is much used.
Mr Clive Betts (Sheffield, Attercliffe, Labour)
I wish to return to the discussion we had about the Select Committee's point of view. I do not support the amendment moved by the hon. Member for Ludlow because the Select Committee did not come to the view that the introduction of compulsory packs was a bad idea in principle. The Committee reflected on the information and evidence given to it and concluded that it wanted reassurance from the Government on several points of concern before it would be prepared to accept that immediate introduction on a national basis of a compulsory scheme was the right way to go. That is what Select Committees do.
Mr Chris Mole (Ipswich, Labour)
Does my hon. Friend agree that the hon. Member for Ludlow was being selective when he quoted from the recommendations of the Select Committee? He did not take account of the following statement:
''The Home Information Pack would create a better informed housing market, giving buyers a sounder basis on which to make offers.''
Mr Clive Betts (Sheffield, Attercliffe, Labour)
Absolutely. The Committee was trying to take a balanced view and to say that it saw lots of good things, but that it had some concerns and wanted responses on those concerns before it took a definitive view.
Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)
For the sake of the Committee, I shall read the entire paragraph—it is not very long—because we have just heard another selective quote.
''The Home Information Pack would create a better informed housing market, giving buyers a sounder basis on which to make offers. This is to be welcomed. However, it is unclear to what extent the Pack will serve the Government's objective of speeding up the process of residential property sales, and of reducing the proportion of sales falling through. It is also unclear what effect the Pack would have on the supply and hence prices in the housing market. We recommend that the Pack should be introduced nationally only when further research and extensive pilot-testing has been carried out in different parts of the country. It is essential to establish the extent to which the Pack may have adverse effects in different types of markets. At this stage, we cannot recommend that Home Information Packs are made compulsory.''
I ask the hon. Gentleman whether he is satisfied that
''further research and extensive pilot-testing has been carried out in different parts of the country''?
Mr Clive Betts (Sheffield, Attercliffe, Labour)
There clearly has been some research and some pilot-testing. Although there may be some points
which I would like to hear more information from the Minister, in other responses he has promised that there would be research on the number of inspectors and the insurance arrangements for them, and that that research would be available for us to reflect on as part of our current deliberations.
Mr Chris Mole (Ipswich, Labour)
Again, one should refer to the Government's response. We need to place that in the context of the Minister's stated intention to implement by 2007. The Government said that they were
''considering the case for special arrangements for very low-value homes in areas of low demand.''
That is an indication that the Government will undertake research on a localised and area basis to achieve their objectives before 2007.
Mr Clive Betts (Sheffield, Attercliffe, Labour)
I agree. There are a number of areas in which the Government have indicated that they will carry out more research before the packs are finally introduced.
My two main concerns were, first, whether we could train enough inspectors and, secondly, whether there would be adequate arrangements for insurance, so that when those inspectors make mistakes, which they will do in some cases, there will be proper redress for the individual who has relied on the home condition report they produced. The Government have promised to examine those issues, and the Minister has reassured us that they will consider the possibility of rolling those aspects out across the country as one way of dealing with the problem. I am pleased with the Government's response.
Hon. Members suggested that if measures are introduced but not made compulsory, the market will take over and implement them, but they have more faith in the market than I have. Sometimes markets do not work perfectly. Estate agents and solicitors may well like the traditional way of doing things and will not change unless they are pushed down a particular route. A view must be taken about whether the new scheme to be introduced is likely to benefit the house buying and selling process and to give more reassurance to the people engaged in it.
Mr Andrew Selous (South West Bedfordshire, Conservative)
I challenge the hon. Gentleman on that point. If home information packs, by providing a real marketing advantage, will be as useful to sellers as to buyers, as he believes they will be, both buyers and sellers will want them—estate agents will not make the choice. If the people selling and buying houses want them, why is compulsion needed?
Mr Clive Betts (Sheffield, Attercliffe, Labour)
In market arrangements as complicated as those in the housing market, it would be interesting to see whether sufficient pressure from buyers and sellers could be generated to push the professionals in that direction. The evidence that we took from Maria Coleman about Bristol, where the scheme had been up and running for a number of years, indicated that everyone was content with it. There was a very low drop-out rate among people who made offers on properties before completion, and when they did drop out, they were not charged the fee because the additional costs were rolled up into the fees for the sales that were completed. It was an interesting arrangement that worked well, and surveys of the
buyers and sellers who were involved showed great satisfaction with the process. None the less, the scheme had not been replicated. It was successful and welcomed by the people who used it, but it was not replicated even among estate agents and solicitors in the Bristol area. That demonstrates that even a good scheme will not automatically be adopted and rolled out unless the Government intervene.
Returning to the fundamental point, only a third of house buyers in this country get a proper survey done. When, as an MP, one has sat with somebody who has bought a house without a survey and it has all gone wrong and their lives have been devastated, one thinks that perhaps the Government ought to do something to protect people from themselves.
Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)
That was a lively debate. My hon. Friends the members of the Select Committee have demonstrated that they keep up with events. They recognise that with time comes change and that the entire house selling and house purchasing community has been engaged in the process of rolling out the home information packs. They also recognise that assurances on insurance, training and certification sought by my hon. Friend the Member for Sheffield, Attercliffe are now in place. It is precisely on the basis of that engagement with the whole house purchasing and house selling community that we look forward to a national roll-out after a trial period at the beginning of 2007. That is exactly what the industry is asking us to do. In the course of our exchanges today, I have been able to demonstrate that, step by step, in every aspect of the proposals, we have the necessary provisions and arrangements in place. Over the next three years we shall work to ensure that when implementation occurs, it does so successfully.
The Committee has talked a lot about the clear benefits to consumers, so why on earth have not home information packs been used? To some extent, I am reminded of an issue with which in a previous incarnation I was extremely deeply engaged: the regulation of the minicab industry. I had to deal with it as a Back-Bench member of the Committee dealing with the excellent Bill ultimately brought in by the right hon. Member for North-West Hampshire (Sir George Young). I later dealt with its implementation as a Transport Minister. That market was crying out for some form of intervention on behalf of consumers. In London and throughout the country, millions of people were engaged in daily personal interface with a wholly unregulated industry. There was no regulation of the vehicles used, the operators or the drivers. If we had left it to the industry, nothing would ever have happened. It is preposterous and unreasonable to expect that we should now introduce the HIP system on a voluntary basis.
Let me get rid of at least one canard that has been raised in the Committee. I have noticed before in Committees that a hare is set running and immediately everybody latches on to the pursuit as though it were gospel truth. On Second Reading the hon. Member for Kingston and Surbiton referred to the Law Society's TransAction scheme. ''Ho, ho!'' said the hon. Member
for South Holland and The Deepings, ''That sounds like an excellent idea and ought to be encouraged as a voluntary scheme.'' However, the Law Society's TransAction scheme has been in place for years. Has it had any take-up or any success? Not a jot. It is a failure. It is quite wrong to say that it is growing quite fast when, in fact, has got nowhere.
I need only persuade my hon. Friends on the Committee that if implementation of the scheme were left on a voluntary basis, it would simply not happen. There must be a compulsory roll-out of the scheme. The first point to bear in mind is that we are talking about consumer protection, not the inconvenience to estate agents—although I am delighted to say that the National Association of Estate Agents is now on board and involved in our scheme. The important point is the protection of consumers from failed transactions—one third of transactions fail—and the protection of the home buyer from the uncertainty, stress and the cost of a deeply flawed process. We on the Government Benches are not adopting the ''head in the sand, no change, trust the market, ignore consumers' interests'' attitude manifested by both Opposition parties. We put the consumer first and that is why we wholly support the home information packs.
Mr Andrew Selous (South West Bedfordshire, Conservative)
There is a fundamental difference between regulating an industry or large businesses and interfering in the private transactions between individual consumers. The Minister is talking about regulating transactions between a Mrs. Smith and a Mrs. Jones. I hold no brief or candle for estate agents, who often does not behave particularly well, but he is talking about interfering and making it illegal for the buying and selling of properties to go on between members of the public without specific, costly and time-consuming measures being taken. That is different altogether from regulating the minicab industry, large companies, or anything else. I do not think that the Minister has recognised that in his remarks.
Mr John Hayes (South Holland and The Deepings, Conservative)
My hon. Friend is absolutely right. The Minister stretches the credulity of the Committee when he compares home information packs to proper intervention to regulate an industry that was running out of control. I agree with him about minicabs. Let it be said on the record, so there is no doubt, that I am not a blind disciple of the free market. The unregulated free market put boys up chimneys and girls down mines. I believe that the state has a responsibility to intervene on occasion and that local government and central Government can have a civilizing effect on the free market. I am not a 19th century-style Liberal—in fact, I am not any sort of Liberal. I am a Tory, and Tories have always understood that the law has to intervene to protect vulnerable people. Ours is the party of Disraeli, Shaftesbury and Wilberforce—
Mr Peter Pike (Burnley, Labour)
Order. Let us not dwell on the Tory past and the Liberal past. Let us concentrate on the amendment.
Mr John Hayes (South Holland and The Deepings, Conservative)
When intervention is applied in the way that the Minister described it, it must be measured and considered and the burden that it brings must be
properly assessed and costed. The problem is that we are faced with a half-baked, uncertain and unwanted measure that no one has demanded, and that the Government have seen fit to introduce because they promised long ago that they would do so, even though they are now embarrassed about it. That is the truth. This is not a philosophical argument about the rights and wrongs of intervening in the market when it needs to be regulated. It is a case of interference by Government at enormous cost to ordinary people, who will resent and regret it. If the Labour Government stay in office, they will regret it, too. This very good Minister, who has done the Committee so much service through his generosity and clarity, will, as he looks back on his political career in coming years, come to regret it as one of his blackest moments.
Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)
I seem to have stirred the Committee up. It is nice for once to see a bit of passion in the debate, even if the Minister so comprehensively failed to take any interventions. If he had taken an intervention, I would have asked a simple question. Will he say how much extensive pilot-testing in different parts of the country has taken place since July 2003, when the Select Committee's report came out? I am sure that if there has been lots of pilot-testing, the Minister will leap to his feet and tell me about it all.
No, he has not done so. That tends to suggest that the conditions set by the Select Committee have not been met. The two members of this Committee who are on the Select Committee have done a wonderful job of reinterpreting their own words. They ought to be recommended as Ministers in the Ministry of Defence or the Foreign Office.
Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)
Perhaps that remark ought to be put on the record.
I am disappointed that the hon. Gentlemen have not stuck to their guns and come out fighting against the mandatory nature of the scheme and its being introduced all at once, before there has been sufficient pilot-testing and further research.
I was very impressed by the contribution made by the hon. Member for South-West Bedfordshire, because he hit the nail on the head. The difference between this scheme and the Minister's example of the regulation of cabs is that in the case of cabs, members of the public are, in effect, buying a service. They are not going to their next-door neighbour and saying, ''I'll give you a fiver if you take me down the shops.''
Getting a cab is not a private transaction between two people. People were getting bad service and cabs needed regulating.
If the Government needed to regulate the service in the housing market, why have they not chosen to license estate agents, who are unlicensed and will continue to be so? The equivalent for the Minister of his cause célèbre is not these packs—it is the licensing of estate agents. The hon. Member for South-West Bedfordshire was right that in 5 per cent. of sales private transactions between two individuals and the Government are coming in and sticking a costly legal requirement between them. If the Minister thinks that that is wonderful and that everyone wants it, I think that he will be sadly—
Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)
Disillusioned.
Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)
That is precisely the word I was looking for. The Minister is being helpful; it would have been helpful if he had taken some interventions, but he chose not to. He was clearly on such shifting ground that he did not want to.
I am very disappointed by the Minister's response. I am particularly disappointed that the Labour members of the Select Committee will not be able to join me in the vote. This issue is one that will have to be returned to, because it has exposed a fundamental flaw in the Bill. We might be able to frame an amendment, perhaps on Report, that would meet the requirements of the members of the Select Committee. I am sure that we can come up with an amendment that would help to meet their concerns, which the Government have so far failed to do.
Clearly, the amendment has excited the Committee; it clearly excited the Minister to such an extent that he became far more partisan than he normally is. However, I will not press the amendment to a Division. I think that we will return to the question of compulsion on Report, because it is the core of part 5. I believe that there will be considerable support for the position adopted by the Opposition parties, and I suspect that when the Bill reaches the other place it will be something that their lordships will want to examine very closely. It may be an area of some difficulty for the Government. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Further consideration adjourned—[Paul Clark.]
Adjourned accordingly at eleven minutes to Six o'clock till Tuesday 10 February at ten minutes past Nine o'clock.