With this we may take the following: Government amendments (a) to (d) in lieu of the Lords amendment.
Lords amendments Nos. 123 to 127, 129, 131 to 134, 136, 138, 139, 141, 142, 145 to 150 and 260.
It may be for the benefit of the House if I explain that amendments Nos. 123 to 127, 129, 131 to 134, 136, 138, 139, 141, 146, 150 and 260 are technical amendments that clarify or remove ambiguities or repetition in the Bill, and improve the definition of the word "marketing". Amendments Nos. 142, 145, 147, 148 and 149 would make provision for an estate agents redress scheme. I do not propose to dwell on those amendments at great length, as there seems to be a high level of agreement about the proposals in them—although I shall, of course, be happy to return to them if they are raised by other speakers.
Amendments (a) to (d) in lieu of Lords amendment No. 140 would ensure that adequate safeguards are placed on the register of home condition reports. If the House will forgive me, I shall say a few words about those, because this is new matter for this Chamber.
It will be vital for the public to have confidence in the new home condition reports, and a register for home condition reports will help to ensure that. The register will prevent unscrupulous people from tampering with home condition reports once written, because paper copies can be compared with the register. The register will also ensure that the home condition report can be prepared only by a member of the certification scheme. Someone fraudulently passing himself off as a home inspector —or, indeed, a former home inspector who has been expelled from the scheme—will be unable to register a home condition report.
To guard against the possibility of a seller "shopping around" and obtaining a number of home condition reports from different home inspectors, we propose that the home information pack include copies of all home condition reports obtained on the property within the previous 12 months. The register would ensure that that requirement could be enforced. It would be an important resource to help the certification schemes ensure the competence and probity of home inspectors, and that the inspectors were properly insured. Taken together with the checks and balances already in the Bill, this should enable buyers and sellers to rely with confidence on home condition reports.
If the hon. Gentleman will forgive me, I feel that I need to say a few more words in amplification of the proposals for the scheme first, but I will happily give way to him in due course.
Provision is already made for such a register in clause 145(5)(d). The purpose of the amendments is to ensure that that register is kept in a proper way. Amendments (a) and (b) to Lords amendment No. 140 strengthen the provisions for approved certification schemes for home inspectors producing home condition reports. The scheme is required to make provision for the registration of all home condition reports. That will greatly enhance the ability of consumers and others to use the home condition report and to trust it, for the reasons that I shall explain.
Certification schemes would be approved by the Secretary of State. They are likely to be run on a not-for-profit basis by private companies owned by stakeholders. We had initially intended the control of access to information on the register to be left to the terms of approval. However, that might not be legally effective, and might not be sufficient to ensure that appropriate and adequate safeguards are placed on the creation and use of the register.
Amendment (c) inserts after clause 145 a new clause that will ensure that the Secretary of State can make regulations allowing any private keeper of the register to restrict access to it to certain limited and prescribed circumstances and purposes. It requires that the onward use of information obtained from the register should respect privacy considerations, and that as far as possible, any conditions imposed by the seller on the use of information in a home information pack, in accordance with clause 139, be respected. It also makes the unauthorised disclosure of information a criminal offence in order to deal with someone who, for example, sells details to a double glazing salesman, or the selling of information on the home of a public figure to a newspaper. Finally, the amendment allows the Secretary of State to maintain the register if the private operator proves unsatisfactory.
Can the Minister say in what form the register be kept? Will it be kept electronically and who will have access to those records? Will the Government have access to them? There is the suspicion that they could use home condition reports to do the next council tax revaluation for nothing. How will the Data Protection Act 1998 protect people's privacy, given that there will be a lot of very private information in the packs?
It is precisely because I anticipated that the hon. Gentleman—whom I know well, and with whom I have jousted on many previous occasions—would take an interest in these matters that my speech includes what I hope will prove persuasive answers to those issues.
Dealing with these important issues administratively when approving a certification scheme involves doing so behind closed doors, but we feel that it is in everyone's interest that they be dealt with openly and on the record through regulations. The amendment should ensure that the register is kept in a proper way, while respecting privacy considerations. An electronic register of home inspectors and of home condition report data is essential to ensure authenticity and trust. I should emphasise that access to the register will not be a free-for-all and will be strictly controlled.
We envisage that access will be available to the seller and potential buyers, and to their professional advisers and agents, so that they can, for example, check the integrity of copies of home condition reports supplied to them. We also intend to enable access to certification schemes in order to assist with their operation, and to ensure that proper standards are maintained. We envisage that certification schemes will use the register of home condition reports to monitor, or to undertake, spot checks on the work of home inspectors to ensure that they maintain the required standards.
Allowing mortgage lenders online access to the register of home condition reports will assist with valuation assessments and help to avoid unnecessary valuation inspections. It will enhance the efficient operation of the home buying and selling process, and reduce costs for home buyers. We continue to work with the Council of Mortgage Lenders and other stakeholders to ensure that lenders can use the home condition report as a source of information from which a valuation can be derived, without the need for a separate valuation inspection.
Much of what the Minister is saying is welcome, but I am concerned about what happens when someone chooses to market their property without going through an estate agent, as they have the right to do. When they produce their pack, how will they check who has access to such information? Will a prospective buyer gain access to the register? If so, will they access such information only in respect of the property in question, or will they be able to peruse information on all properties online, simply because they have said that they are interested in buying a particular property? I am slightly confused as to how the process will work.
It will be for the seller or their agent to make the home condition report available to the potential purchaser. Provision will be made to ensure that access to the report is restricted to those potential buyers to whom the would-be seller wishes such information to be made available. If the hon. Gentleman will allow me, I shall spell the situation out in a little more detail in due course.
The expected content of the home condition report has already been discussed in detail with lenders to ensure that it incorporates the data that they will need to create valuations, using automatic valuation models or other innovative valuation methods. We therefore envisage that access to the register will be allowed to lenders and others involved in carrying out valuation assessments on behalf of lenders.
I should point out that no final decision has been taken as to whether one of the proscribed uses of information from the register will be as a source of statistics on the condition of the nation's housing stock and its energy efficiency. If such a use were permitted, it would be subject to data protection and privacy considerations. Amendment (c) provides for regulations that restrict access to prescribed circumstances or purposes, and to prescribed descriptions of persons. We intend that access will not be indiscriminately available. For example, a potential buyer would need to have the HCR reference number in order to access a home condition report on the register. That reference number would be available only from the seller or their agent, which will ensure that data on the register is not available to any person who cannot satisfy the seller or their agent that he is a bona fide potential buyer.
The Minister has virtually admitted that what I said to him a few minutes ago is true. He says that the Government will use this information for statistical purposes. Is it not true that that will enable them to use it to obtain a revaluation of the entire nation's housing stock at very little cost, and without involving valuers?
The hon. Gentleman is getting over-excited about a possibility that the Government are not contemplating. We have made no final decisions on this matter, but we do take into account the possibility that the register could be of value in making broad assessments of the condition of the nation's housing stock. The hon. Gentleman takes a close interest in this issue, and he surely will not regard such an approach as disadvantageous, should we decide to pursue it. However, this is a matter for consultation and open discussion in due course.
I hope that my right hon. Friend finds my intervention helpful. Is it the Government's intention to make it a criminal offence for people to disclose information from the register that should not be disclosed, and is that the purport of subsection (7) of amendment (c)? Moreover, is there a typographical error in that subsection? It states:
"A person who contravenes subsection (3) is guilty of an offence", yet subsection (3) deals with the paying of a fee in order to include a report on the register. In fact, it is the contravening of subsection (4) that would constitute a criminal offence.
Can the House be surprised that I describe my hon. Friend as my guru in these matters? Not only has he anticipated exactly the point that I was about to make on disclosure, but he has also made a typically shrewd point about a typographical error in the amendment. I can confirm that there is indeed such an error, and it will of course be put right. I am most grateful to him for drawing the House's attention to it, and I am sure that he is grateful for my immediate and positive response. That certainly demonstrates the listening character of this Government and this Minister.
I was about to say that any disclosure, except as provided for in regulations, would be taken very seriously and would amount to a criminal offence. My hon. Friend Mr. Kidney is absolutely right about that. Anyone committing such an offence, for instance, by passing on data from home condition reports to a building firm or to the proverbial double glazing salesman, would be liable on summary conviction to a fine of up to level 5 on the standard scale—currently a maximum of £5,000. That is equivalent to the penalty for offences relating to infringing the Data Protection Act 1998. The Home Office has confirmed that criminal offences for the unlawful disclosure of information are the norm in legislation and has approved this particular offence.
Clause 153 provides that the Secretary of State may make grants towards expenditure incurred in connection with the development of proposals for the contents of home information packs or of potential home inspector certification schemes. Amendment (d) is consequential on the introduction of the new clause and provides that the Secretary of State may also make grants towards expenditure incurred in the development of a register of home condition reports.
There are legitimate sensitivities surrounding disclosure of information—I fully concede that to Mr. Clifton-Brown—we will not know for some time which certification scheme will get approval. We will need to begin work on developing the technology for a secure register of home condition reports as soon as possible in order to address those issues, and that work will require a grant. We also need to ensure that the register is not specific to a particular certification scheme so that it is possible for the keeper of the register to be changed, if necessary, without resulting in practical difficulties.
It is important that consumers and lenders can trust the home condition report and be able to rely on it with confidence. Together with the provisions for home inspectors' certification schemes already in the Bill, these amendments should provide that confidence. In moving these Government amendments, I draw the House's attention to my support for amendments Nos. 142, 145, 147, 148 and 149.
This is an important part of the Bill; it is just a pity that we are here at five minutes to midnight debating such important detail. I wish to put a number of questions to the Minister.
The proposal to have a register of approved surveyors or inspectors is sensible because people can check the register to see whether the person is qualified. One of the major concerns in Committee was whether the supply of surveyors or inspectors would be sufficient, so having a register also seems reasonable on those grounds. My question is whether the register will be broken down into regions or counties. There could be a surplus of surveyors in the north-west, with other areas having a deficiency, which could affect the ability to produce home condition reports within a reasonable time frame. It would be helpful to have a breakdown of surveyors and inspectors, including where they live.
The Minister made several points about the home condition report—for example, whether it should have a reference number or be put on the internet and what the controls should be. My hon. Friends have raised a number of concerns about those issues. If the information is too restricted, there is a danger of missing some opportunities. Will the register of home condition reports be made available to those who are registered inspectors or surveyors? If a home has been sold four times and had four home condition reports, the logical starting point for a surveyor would be to look at the last four reports on the home to see whether there had been any problems in the past. It seems silly to start from a blank sheet of paper when, first, there is a shortage of surveyors and, secondly, the home to be inspected has already been inspected many times.
May I suggest a simple way around that problem? My hon. Friend might want to press the Minister on what I am saying. If the home condition report and home seller's pack become the property of the purchaser on completion of the purchase, the purchaser will then have full property rights and would be well advised if he wanted to sell the house subsequently to make the information available to his surveyor because it would reduce the cost of producing a new home condition report.
I thank my hon. Friend for making that reasonable suggestion. I am sure that what he says will be heard. When a house is modern and has been sold a number of times, it would be illogical to deny information about it to registered surveyors or inspectors.
The Minister also referred to lenders having the information. The standards of building on estates in certain parts of the country are not particularly good, so is it not a matter of concern that, if lenders have access to the register, they might blight certain estates? Accusations are already sometimes made about lenders, particularly when certain areas have a bad reputation. How free will access to lenders be? Will they be able to look at individual reports or at the register in its entirety? I suspect that many lenders will build up a picture, which could lead to decisions being taken on the basis of the postcode. That could be a problem for some people. How will the proposals operate in practice? It is important to get the balance right between having reasonable access so that we do not always have to reinvent the wheel and protecting the privacy of the homeowner or home seller. As the Minister said, we do not want the double glazing salesman or building company to have full access to the information.
If the Minister has enough time, will he say more about whether the insurance scheme for home condition reports is in place? I know that concerns have been raised about that. Insurers are also worried about problems of flooding, underground drainage and so forth. Has a final decision been taken about what type of report will be used for the register? We have only a few more minutes left, so I will end there to allow other hon. Members to ask a few questions.
I will be brief. We broadly welcome the amendments in the group, including the Government amendments, which go a long way towards dealing with the concerns of the House of Lords, but I want to ask the Minister a couple of questions about the administration and security of the system.
From what the Minister described, it would appear that, under the system, people producing the reports could post them on to a register via a remote server somewhere. The difficulty arises in controlling access to it. The Minister says that buyers will be given a unique number for a particular property, allowing them to look into that single property alone. Even with a good random generator of numbers, given the sheer number of properties available on the market at any one time, it would be possible for someone to guess the numbers and be able to look at other properties. That will be a problem if the register is accessed through a single number, however large. In reality, there are likely to be patterns in the numbers; they are not purely random. From what the Minister described, it would be possible for people to view other properties.
The question of security raises another potential concern. As we saw last week, online banks can have problems with unauthorised access to some of their systems. Can the Minister be confident that no one could hack into the system holding the details on, say, the house that the Prime Minister has just purchased and sell the information or publish it on the internet? Can the system be secure at the same time as being flexible enough to allow access to all the users who need it? The Minister seems to have much more confidence in the ability to set up a foolproof system than I have.
The amendments have gone a long way towards addressing the issues raised in the other place. We do not support home information packs, but if they do go ahead the amendments will be necessary. On that ground, we will not oppose the Government on this issue tonight.
I shall take one minute to make a few key points and to enable the Minister to reply to the important points that have been made.
First, access to information is critical. One of the key aspects is that, if it is possible for unauthorised people to access the information, the home information packs could become a burglars' charter. I hope that the Minister will reassure us that hackers will not be able to access the information if it is stored electronically. Given the record of such systems, I do not know how he can do that.
Secondly and most importantly, many inspectors will be needed. Inevitably, some of those inspectors will be trained at very short notice and mistakes will therefore be made. It is important that an adequate insurance scheme is in place. People must also have the ability to sue on the reports if they prove to be incorrect. I hope that the Minister can tell us whether that will be the case, because otherwise the reports will have zero value.
I shall take the issues raised in reverse order. Mr. Clifton-Brown asked about insurance against error in the reports. I may say that an indemnity scheme has always been part and parcel of the proposition. The indemnity scheme will apply to home inspectors as it already does to conveyancers, and we think that it is a good idea to extend it to estate agents, through the estate agents redress scheme, which has been approved by the other place and has received a general welcome for both particular and general reasons. The monitoring of home condition reports will also allow judgments to be made about the performance of individual inspectors.
The hon. Gentleman raised the hoary old issue of access to information and the burglars' charter. We have gone over that matter on many occasions, but I shall reiterate—given that the allegation always seems to creep into adverse media coverage—that the home condition reports will contain no plans of the property, no information about security devices or alarms and no information about safes. We do not believe that the reports will remotely begin to add up to what he described as a burglars' charter.
Matthew Green raised several points and I am grateful for his qualified support. He asked about the operation of the electronic system and whether someone could hack into its numeration arrangements. That is a valid issue. We need to get the details right, and that is why we would do a great deal of work with all the relevant partners to ensure that that could not happen.
Mr. Syms raised several issues. He asked whether lenders will be able to look at individual reports, and the answer is yes. They will have the advantage of looking at the entirety of the property, which is not always the case in the present system. He asked whether the register would be open to other inspectors and would they have access to all home condition reports on the register. Again the answer is yes. He also asked whether there will be regional or local registers, and the answer is yes. I hope that I have been able to reassure him on the points that he raised.
Lords amendment disagreed to.
Government amendments (a) to (d) in lieu of Lords amendment No. 140 agreed to.