Lords Amendment

– in the House of Lords at 7:08 pm on 16 November 2004.

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128 Clause 137, page 94, line 40, at end insert—

"( ) That duty does not apply if, and for so long as, the seller determines that the property is to be sold without a home information pack, and in the event the estate agent for the seller is the responsible person, the seller has so informed him."

The Commons disagree to this amendment for the following reason—

128A Because a voluntary scheme for home information packs will be ineffective

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

rose to move that the House do not insist on its Amendment No. 128 to which the Commons have disagreed for their reason numbered 128A, but do propose Amendment No. 128C in lieu thereof—

128C After Clause 143, insert the following new Clause—

"Suspension of duties under sections 137 to 141

(1) The Secretary of State may make an order suspending (or later reviving) the operation of any duty imposed by sections 137 to 141.

(2) An order under this section may provide for the suspension of a duty to take effect only for a period specified in the order.

(3) A duty which is (or is to any extent) revived after being suspended under this section is liable to be suspended again."

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, I have said all that I intend to say about home condition packs. There is no sense in going over the history and explaining the reasons. Therefore, I will be extremely brief.

We have listened to the House and those outside it on home condition packs. I am disappointed that the "Lie Society", which masquerades as the Law Society, is still quoted as saying that anyone could walk into an estate agent's office and find out information about burglar alarms, defective doors and so on, when we have repeatedly made clear that that very thing could not happen. I do not know why the Law Society persists in telling untruths about what is in the Bill. Nevertheless, we have listened to concerns in this place and the other place, and have modified the Bill accordingly.

I shall deal briefly with the practicalities. We have a clear timetable of work and intend to publish final details of the contents of the pack and their application as early as spring next year, with the regulations to follow shortly afterwards. There is a huge amount of work to go on along with the industry and our stakeholders. One of the stakeholder working groups will be looking into the possibility of excluding from the requirement to have a home condition report those homes fully covered by a satisfactory warranty scheme. That issue has been raised several times by the noble Lord, Lord Fowler, and it received a good degree of sympathy around the House, from a practical point of view.

We will also look carefully at the scope for special treatment for sellers who are leaving owner occupation, particularly elderly people who may be moving into residential care, and for those marketing homes of low value. Those are issues that we need to consider.

We announced to your Lordships at an earlier stage our intention to have a dry run at the pack on a voluntary basis in the six-month period before the launch of the compulsory scheme in 2007. During that period, we will test out all the components of the statutory schemes.

One of the issues raised by the noble Lord, Lord Phillips of Sudbury, and others was the need for a more structured pilot scheme, rather than a dry run. We are setting up a stakeholder working party to help us work up the detailed arrangements for the dry run. I can give an assurance that, unless there are unforeseen practical problems that we subsequently identify with the industry, we will undertake a full exercise in a designated area to run alongside the voluntary dry run in the rest of England and Wales. Key stakeholders will be invited to assist with the monitoring and evaluation of the exercise. That goes much further than we have gone before to satisfy noble Lords. I wanted a regional, legal pilot, but I was told that that was not practical. So, we arrived at another way. There is a good degree of flexibility in the Bill.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

My Lords, I want to make clear what the Minister just said. He talked about a "legal pilot". I construe that as meaning a compulsory pilot in a region.

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, that is what we will discuss with the stakeholder group. The scheme would run alongside the voluntary dry run that was already taking place in a designated region. The region must be big enough to allow us to know that the thing will work.

We are confident that a good degree of flexibility has been built into the Bill, to allow us to respond quickly and in a variety of ways to any problems that arise before or during the dry run period or any compulsory element through regulations.

Photo of Lord Donaldson of Lymington Lord Donaldson of Lymington Crossbench

My Lords, would the Minister consider withdrawing the remark that the Law Society should be called the "Lie Society"? I cannot believe that that is in accordance with the traditions of the House. If I have to declare an interest, I should say that I am an honorary member, but that is beside the point.

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, I intended nothing personal by it, and I am happy to withdraw it. However, the society should stop telling lies about the Bill. That is the issue.

I have read all this on more than one occasion. It is not fair for a responsible professional body to use the excuse that it always hangs on: that the home condition packs will give out details of burglar alarms and so on. The society has had it from the Dispatch Box here and in the other place and in writing that that cannot and will not happen. Why does it keep saying it?

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat 7:15, 16 November 2004

My Lords, I cannot give the Minister a specific answer, but, as a member of the Law Society of long standing and knowing a lot about the way in which it operates, I assure the Minister that there would have been no malice aforethought in saying what it did. If the society is, as the Minister rightly says, mistaken, I apologise on its behalf, but I assure him that there would have been no wilful attempt to mislead the public.

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, I fully accept that. In that case, it is just professional incompetence—it must be. It must be an inability to read documents and understand something that has been set out clearly. It is not an unimportant matter; that view is used to undermine the concept of the home condition report. That is the point. If it were some tinpot organisation that did not matter, the issue would not matter; but the Law Society is an important body, and that is why we highlight the point.

On the other hand, we have, with the amendments, given a commitment to undertake research and create flexibility in the Bill. Nevertheless, a good many doubts have been expressed about the practicalities, the timetable and other matters, and therefore we have tabled Amendment No. 128C. It would add a new clause giving the Secretary of State the power to suspend the home information pack duties. We do not expect that we will face problems that we cannot solve quickly through the regulations, so we do not expect to need to exercise that power. However, as a long stop in case things go wrong, even with all the preparations, it would be useful to have a power in the Bill to suspend the duties while the problem that has been identified is put right.

Moved, That the House do not insist on its Amendment No. 128 to which the Commons have disagreed for their reason numbered 128A and do propose Amendment No. 128C in lieu thereof.—(Lord Rooker.)

Photo of Baroness Hanham Baroness Hanham Shadow Minister, Local and Devolved Government Affairs, Deputy Chief Whip, Whips

rose to move Amendment No. 128D, as an amendment to Amendment No. 128C:

128D* Line 3, at beginning insert—

"(A1) The Secretary of State shall report to Parliament on the outcome of the pilot scheme.

(B1) The Secretary of State shall, following the report to Parliament referred to in subsection (A1), make an order for the continuation of the scheme.

(C1) Any order made under subsection (B1) shall be made by statutory instrument subject to the approval of both Houses of Parliament."

Photo of Baroness Hanham Baroness Hanham Shadow Minister, Local and Devolved Government Affairs, Deputy Chief Whip, Whips

My Lords, the rejection by Members of the other place of the amendments moved by my noble friend Lord Hunt, establishing a voluntary scheme for home information packs came as no particular surprise. The fact that the Government remain intransigent on the matter is still of concern far beyond the walls of this House. However, it is not one that we can usefully pursue further, so we must concentrate on the pilot scheme—or "dry run", as the Minister is pleased to call it—to see whether the home packs are likely to be successful or useful.

The Minister gave us a deal of information this evening about the way in which the pilot would run and how there would be a voluntary scheme running beside it. I am bound to observe, at this stage of the Bill, that not one regulation or code of guidance to govern the dry run has been seen by the House. It is very late in the day. I made stringent inquiries with the Library today to see whether the Government had laid anything about it, and I gathered that there had been nothing.

We do not know when the pilot scheme will commence. We do not know who will undertake it. We do not know who will report on it or when they will report on it. The only thing we know is that it will start in 2007. What is going to start? We have not the faintest idea. That has been the situation all the way through the progress of the Bill. It is extraordinary that we still have no clear idea how something as important as a pilot for this part of the Bill will be operated.

Apart from that, as things stand, Parliament will not know the outcome of the pilot. It will not have an opportunity to consider the results before they are implemented throughout the country.

This is a pilot scheme which has been discussed at length. Throughout the passage of the Bill it has been held up as the Government's answer to how the home information packs will be tested. Yet, unless the Minister changes his mind today, Parliament is not to have any look at the scheme. It is to have no further role in it whatever.

We believe that Parliament should be the final arbiter as to whether the compulsory home information packs are to be implemented generally. It should be deciding that on the basis of an impartial report. That is why we move the amendment today.

I want to make it clear that we accept the amendment moved by the Government today to enable them to suspend the requirement to have a HIP when marketing a property if something goes wrong during the course of the pilot and it becomes clear that it should not continue. It makes eminently good sense not to have to come back to Parliament for that. However, we believe that our amendment is an important adjunct as it retains the right for Parliament to scrutinise the dry run, if it completes its full trial period.

I believe this to be an important matter. We have had to table this amendment at this late stage and I beg to move.

Moved, That Amendment No. 128D, as an amendment to Amendment No. 128C, be agreed to.—(Baroness Hanham.)

Photo of Baroness Hamwee Baroness Hamwee Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions

My Lords, on behalf of my noble friends, I welcome the Government's Amendment No. 128C. The Minister understandably played down its significance, but we see it as a considerable shift. If that offends the Minister, we see it at least as allowing a subsequent administration to treat it as a shift. It is a concession. The idea contained in Part 5 is adventurous—or, to put it another way, risky. We wish it well and, throughout, our attitude has been to save trouble and not make it. The opportunity that the provision gives to the Secretary of State to suspend any duty is notable and we therefore support the Government's amendment.

With regard to Amendment No. 128D, tabled by the noble Baroness, Lady Hanham, we of course believe that government should be reporting to Parliament and to that extent we support what she said. However, it does not seem to me that Amendment No. 128D works quite as the noble Baroness described it. New subsection (A1) refers to "the pilot", but there is no provision requiring a pilot—although we heard what the Minister had to say about it. That undermines the rest of the amendment. To talk about "the continuation of the scheme" when there is no provision stating that the scheme shall discontinue does not seem to be right. I would not normally be so picky, but at this stage of the Bill one must deal with such points. The noble Baroness shakes her head, so perhaps when she winds up she can explain where I have gone wrong.

Amendment No. 128F stands in my name, but I do not intend to press it. I have given the Minister notice that I have tabled it in order to be able to ask a couple of questions, in particular about the EU energy directive. I understand that the provisions in Part 5 will be the only legislative basis for the implementation of the directive—obviously, it is open to the Government to bring in other primary legislation—and we see the importance of the directive being implemented. Perhaps the Minister could confirm whether I am right.

I am a little concerned that as the Bill stands—I was not able to persuade the Public Bill Office of a way of addressing the issue directly—the permitted period within which the HIP is to be provided is 14 days from marketing. The EU directive, which in itself may be contentious, provides for an energy efficiency report to be provided at the point of sale. That may be rather late and perhaps a period in between would be sensible. Can the Minister confirm that the Bill taken as a whole would allow the period to be varied? We discussed regulations with the Bill team this morning and it would be helpful to hear from the Minister at the Dispatch Box.

In a similar vein, but extending beyond the energy efficiency report, can the Minister tell the House whether the new clause, taken together with the regulation-making power, will mean that not everything has to be provided within the HIP at the same time?

Photo of Lord Hunt of Wirral Lord Hunt of Wirral Conservative

My Lords, I thank the noble Lord, Lord Rooker, for having carefully thought of a way to meet some of the concerns. However, I agree with my noble friend Lady Hanham that there must be something more than merely the power to suspend. The Minister has spoken a great deal about the dry run. We need to know and to have assurances that there will be a report to Parliament. It is all well and good for stakeholder groups to be managing the transition, but in this House and in the other place Members should have the opportunity to consider the results of the pilot scheme and to decide whether there could be further improvement and amendment.

I do not want the Minister to take that too badly. As he has already set fire to the Law Society, I do not want him to set fire to me. I genuinely say to him, "Thank you very much". However, I regret his words about the Law Society because I am also a member. Many of its members have been seriously concerned about home information packs and about the need to overcome chains. If I remember correctly, the Minister's last speech was largely on the basis that home buyers are born free but everywhere they are in chains.

I am not too sure that he has thought through the consequences of what he has been saying. As the Law Society has explained to me at great length, chains occur for a variety of reasons. It is usually because the poor individual who is trying to buy a house either has to sell a property and cannot do so or has been unable to raise the finance. The answer is not to make it more costly and expensive. In our previous debates on the Bill, the noble Baroness, Lady Hamwee, was right in saying that we need a workable, cost-effective scheme.

We are concerned about the cost, but the chain has bedevilled the debate and confused it. Let us be clear that there will be a dry run and that there is now an undertaking that it will be compulsory if that can happen. All we now need is for the Minister to accept this amendment so that we can have a good debate in the House about the results of the pilot scheme and then make a decision about moving forward. I therefore strongly support my noble friend.

Photo of The Earl of Caithness The Earl of Caithness Conservative 7:30, 16 November 2004

My Lords, I welcomed the Minister's comments about the dry run. However, that was tempered by a conversation I had today with the Council of Mortgage Lenders. It said that if there is to be a compulsory dry run in one area of the country while there is a voluntary one in the rest of it, it will not use the home condition reports at all in the compulsory area. I therefore wish the Minister good luck in trying to sort out the incredibly good mess that he has got the Council of Mortgage Lenders and agents into.

I do not take the same rosy opinion of Amendment No. 128C as the noble Baroness, Lady Hamwee. It is the softer sop: the Government knew that they would have to give something at the end and that is the easiest because it is rather meaningless as it stands.

We have not discussed Amendment No. 140C at all. This amendment got off to a bad start on Report and was not moved at Third Reading. I should like to ask the Minister three questions about it. Can he tell the House who will have access to the register? What about firms, such as builders or damp-proofing companies, that decide to employ home inspectors? They will have an unfair advantage because they will know the condition of houses and will be able to benefit from that. What will happen when inspectors put in different reports about houses? If those reports are to be filed, will there be action taken against an inspector who got it wrong?

On 2 November, 16 highly experienced surveyors were taught how to fill in the home condition report. It was a department training exercise. Those 16 people have an enormous number of years of experience, including one person with 45 years' experience of surveys. The exercise degenerated into a complete farce. The group were asked what they should do about the roof of a property on which the felt tiles were coming off. Half of the group said that the whole roof needed to be repaired. The other half said that the roof needed to be renewed. The consequence was a vast difference in cost between the two different groups of surveyors. Just like lawyers, surveyors will give different opinions.

If surveyor A says that the roof of a property needs to be repaired, and it is in the home condition report, that will cost one figure. If surveyor B says that the roof needs to be renewed, that figure would be multiplied by about 10, which would be totally different. If one of your Lordships tries to buy a house and is faced with a home condition report that is inaccurate in that way, goodness knows in what other ways it will be inaccurate. I now understand that the home condition report will not allow surveyors any room for free text. It has been dumbed down to the lowest common denominator: one size fits all.

In tabling Amendments Nos. 128H and 128J, I support government Amendment No. 128C, but would like to amend the Bill so that we can have first-day marketing. I really want to help the Government on that. This was an amendment that the noble Baroness, Lady Maddock, moved on Report. I supported her then because I had a somewhat similar amendment.

But if we are to have speedier marketing of houses, which everyone wants, we must be allowed to market at day one. All that Amendment No. 128H says is, "If we are going to have a compulsory pack, let us market on day one and let us have the pack within 14 days of marketing".

What the Minister said at an earlier stage about how agents work was totally wrong. The way in which the Minister portrayed the profession as working is not the profession that I work in and know. I plead with him that this would be an enormous help for the housing market.

The Minister will take a harsher line with Amendment No. 128J, which would remove the home condition report. I wish to remove the home condition report partly for the reasons to which I have already alluded in respect of Amendment No. 140C. But there is the economic cost. The Government say that the cost of not having surveys at the moment is something like £350 million. The cost of rectifying that with the home condition report is £600 million, which is a much worse figure. That is a minimum based on a home condition report costing £300. That is the new Prescott penalty, which will apply for everyone who wishes to sell a house. It is a new additional charge that people will have to pay. It will be £1,000 in most cases in London. That information has been clearly given to the Minister's officials.

I oppose having the home condition report from the lender's point of view because there would not be a valuation. Having spoken to the Council of Mortgage Lenders it is clear that it will have to do valuations in order to continue with its lending programme. The automated valuation models will not be the answer that people think. They are used about 60 per cent of the time in America, which is 10 years ahead of us. The Council of Mortgage Lenders thinks that it will not even be 50 per cent over here.

There is also the shelf life of the home condition report. A mortgage valuation offer now is valid for three to six months; a home condition report has to be done in the three months prior to the date of coming on the market so that it can be included in the pack. As most houses take at least six months to sell, the home condition report will be way out of date.

We still have the problem of adequate indemnity insurance. On economic, lending, consumer and insurance grounds, the home condition report is the real Achilles heel in the home information pack and should be removed.

Photo of Baroness Maddock Baroness Maddock Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions

My Lords, perhaps I may ask the Minister to turn to day-one marketing in his response, particularly looking ahead to the dry run and where things may go wrong. He will be aware that many estate agents are very concerned about what that will do to the market. I realise that we have not been able to persuade him substantially to change his position on that, but it would be very helpful if in the future on looking at this the Minister could give us some reassurances. It is something that we would look at quite carefully.

Photo of Lord Selsdon Lord Selsdon Conservative

My Lords, I support the efforts and the initiative of the noble Lord, Lord Rooker. It is a pity that he is a member of the Government, but that is a side comment. Since last week, I have consulted widely. I believe that it would be possible for Members in this House to produce all the necessary regulations probably in an afternoon.

But my worry is that the market changes. The noble Lord, Lord Rooker, last week kept banging on—without thumping the Dispatch Box—about the consumer and the buyer. In this past week, there has been a change towards the buyer and away from the seller, because the market has shifted quite dramatically. Therefore, a buyer now tends to ask sellers to produce far more information than he would have done a few weeks ago.

If we move on to what has also changed—I have taken the trouble of checking with some of my colleagues in that field—there is a worry that the costs are wrong. My noble friend Lord Caithness raised that. He touched briefly on professional indemnity. The professional indemnity fees or charges for surveyors for that sort of work will rise dramatically. It may even be impossible to get professional indemnity insurance.

The noble Lord, Lord Phillips, may remember this example. There was a surveyor who used to do some work in London. Suddenly, one day, he was employed to evaluate a house near Gatwick Airport. But he forgot to put in the report that aeroplanes would fly over the house. If I remember correctly, he was sued for something like £500,000. That is the worry: people may not be able to get the insurance that is necessary. There may be a number of cowboys taking up the work without anyone trusting them.

I still believe that the idea of having standardised information, which may be used by solicitors, agents and everyone is correct and proper. But the current drafting leaves things a little bit too open. I do not want to say that the office of the Minister has got it wrong, but even those of us who have a nautical background think that there is something that does not go well with being a pilot and a dry run. I just hope that the Minister does not run aground.

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, I shall do my best to answer. Some of those points, with respect, have been answered before. There is no secret about the proposed or planned timetable. I do not say that it will be fixed to the last month or even to the quarter of the year. As I have said today and previously, our intention is to get the regulations settled by the middle of next year. The plan is that the pilot mark one, which is the voluntary dry run, would run for the six months of the second part of 2006, prior to becoming compulsory some time in 2007. We have never said it would be January or April because it is too far away.

There is no secret about the broad block of dates, but in the mean time we need the Bill to be given Royal Assent so that we can genuinely arrange for the stakeholder groups to be set up and working. Given the history of this process—this is not the first Bill to introduce the idea—one can understand those outside saying, "Get the Bill through, make it an Act and then we will talk turkey and practicalities—given what happened before 2001". That is our broad timetable.

The idea that this House will not be discussing the matter again before the scheme becomes compulsory is a nonsense. It certainly will discuss it. Although I cannot say whether that would be by means of secondary legislation, I am sure that it would be tabled even for a Wednesday debate. Equally, the other place will discuss it. With 40,000 dwellings a week being marketed, Members of Parliament looking after their constituents will want to keep a close track of what is going on.

I am also not getting into a big debate about the costs. The figure given is about £1,000, but we have repeated many times that some £635 of that is already being spent now. That is not new money. The noble Earl can shake his head all he likes, but that is all I am saying. It has been said before and it is a matter of public record.

Photo of The Earl of Caithness The Earl of Caithness Conservative

My Lords, the £1,000 was purely for the home condition report, and those were figures given to the noble Lord's officials.

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, I have just said that I will say no more beyond that £635 is already being spent now.

I turn to the issue raised by the noble Earl of the inspectors not being able to use free text. I do not know who has told him that, but it is not true. Inspectors will be allowed to use free text, but given the scale of the industry it is expected that they will develop electronic reporting processes and packages to aid efficiency. None the less, free text will be allowed. However, home inspectors would be required to follow the reporting standards prescribed in the certification scheme. That is important because there must be a degree of consistency here.

On the question of first-day marketing, I know that this is seductive and has been the subject of many debates. In some ways, I rest my case on what I said during our last debate. If one goes for first-day marketing, one would not be following the rules and guidance of the National Association of Estate Agents. That guidance sets out clearly what agents are advised to do. I shall not go into the detail, but it is not possible to do first-day marketing properly for someone who just walks into the office and to conform with the existing guidelines. So it is misleading to talk about first-day marketing. I do not say that it does not happen now, in the sense that people do walk into agencies and the rules are not followed.

The guidance is set out on page 39 in module 1, section 1.10, covering approval and availability. Following the association's own rules and guidance, it is not possible to operate first-day marketing because you cannot do in one day all that should be done according to the guidance. It just is not a runner.

The noble Earl asked who has access to the register. I fully accept that there was a hiatus when my noble friend and I did not move our amendment as a result of the noble Baroness spotting what may have been a flaw. But that covered access to and policing of the register rather than the register itself.

In terms of access to the register, the amendment would allow the Secretary of State to make regulations specifying who may access it. Final decisions have yet to be taken. I do not apologise for that; it is the same for stakeholder working groups. These issues have to be turned into practical propositions for the industry. At this stage we intend that sellers, along with bona fide potential buyers and their professional advisers, should have access to the home condition report on an individual property. For example, home inspectors would be able to access previous reports on a home if there was a need to check condition-related aspects of its history.

We also intend that mortgage lenders should be able to access the register of home condition reports to inform their lending decisions. Lenders are also keen to have access to all home condition reports to improve their database of comparable evidence to use when valuing other properties. It will serve to make valuations more accurate and more likely to be acceptable to the wider spread of lenders, and in particular to credit rating agencies.

We want to minimise the number of cases where the lender requires a separate valuation inspection of the property. In many cases, although I do not say exclusively, that would be a waste of resources. However, the home inspection certification scheme should have access to the whole register in order to monitor the work of home inspectors and to be able to respond to any reports of wrongdoing or professional incompetence.

In addition to restrictions on who can access the register, there will also be restrictions on the purpose for which it may be accessed and the uses to which the information may be put. We do not want any hares running on this issue because it is a new part of the process.

Photo of Baroness Hanham Baroness Hanham Shadow Minister, Local and Devolved Government Affairs, Deputy Chief Whip, Whips

My Lords, I thank the Minister for that reply. I am bound to say, however, that we now know less about how home improvement packs are to be dealt with than we did when we began. The Minister has been unusually obfuscatory on this, but all the way through our discussions we have not managed to unpick how this pilot is going to take place.

I take slight issue with the noble Baroness, Lady Hamwee, on the question of our amendment. I do not like to draw attention to the fact that we were given legal help by the House with it, nor do I like to point out to the House that the pilot is not actually in the Bill. The pilot, or dry run, has appeared during the course of our discussions and has become an entity. Since it is not in the Bill, it must be dealt with in some way. We shall do so by way of our amendment, which draws attention to the fact that there is going to be a pilot scheme. That scheme ought to be reported to the House.

The Minister has said that of course this matter would be discussed by Members in another place and noble Lords in this House, but in order for it to be discussed, everyone must keep an eye on what is going on. We need to know when the scheme starts and we have to try to keep in touch with its progress. However, that is not what I would call a formal way for this House to deal with the matter. This House ought to have a formal role in discussing the report of the pilot and the dry run before it is rolled out and established on a more general basis. However, the Minister did not say that it would be brought formally before the House.

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, although I did not say that, I mentioned that there are several processes. While I shall not be specific about the dates because I do not have that kind of detail, the plan is to have the regulations by next summer. At that point, one would expect Ministers—myself or whoever is responsible—to be able to provide more information about how the regulations will operate in practice and about the progress on arranging both the dry run, which is a voluntary process over the whole country, and on the more targeted effort in a designated area of the country. However, obviously we need to have talks with the industry about that. At that point, more information will be given.

But that is still some 18 months before any proposal that this will become compulsory. We are talking about the middle of 2005 plus a year before the dry run would start. It is not that there is not plenty of time, along with triggers for more information to be brought forward. The noble Baroness is quite right that more information needs to be given. However, I make no apology for not having that information now; it is simply that discussions have yet to take place with the industry if the Bill is given Royal Assent.

Photo of Baroness Hanham Baroness Hanham Shadow Minister, Local and Devolved Government Affairs, Deputy Chief Whip, Whips

My Lords, the point is not that the information should be available now. We have done what we can to get whatever information there is. However, the report on what happens as a result of the voluntary dry run—one that presumably will be drawn up by someone, or how will anyone know how the pilot has fared?—should be made available by being brought to the House with recommendations from the Government on what they are going to do.

I think that this provision ought to be on the face of the Bill. It should form part of the amendment moved by the Minister and with which we agree. However, since we do not seem to have a unanimity of view, I wish to test the opinion of the House.

On Question, Whether the said amendment, Amendment No. 128D, as an amendment to Amendment No. 128C, shall be agreed to?

Their Lordships divided: Contents, 90; Not-Contents, 120.

Division number 4 Private Parking: Ports and Trading Estates — Lords Amendment

Aye: 88 Members of the House of Lords

No: 118 Members of the House of Lords

Aye: A-Z by last name

Tellers

No: A-Z by last name

Tellers

Resolved in the negative, and Amendment No. 128D, as an amendment to Amendment No. 128C, disagreed to accordingly.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat 8:00, 16 November 2004

rose to move Amendment No. 128E, as an amendment to Amendment No. 128C:

128E Line 3, at beginning insert "Following the operation of a pilot scheme"

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

My Lords, this amendment went to the Public Bill Office a rather splendid thing and emerged in this somewhat attenuated and pathetic form. It seeks to amend the Government's Amendment No. 128C. As others have said, it appears, on this side of the House, that Amendment No. 128C represents a significant amendment to the Bill; it represents an earnest of good faith and underpins the importance of the pilot—or the dry run, as it is sometimes called.

I am grateful to the noble Lord, Lord Rooker, for his open-mindedness in listening to the arguments vis-à-vis the pilot. It goes some considerable way to assuaging the anxieties we would otherwise have on these Benches. It is common ground that this is a major change in an area of national life that is highly sensitive. It involves people in the most important transaction they will ever engage in and it is built upon a series of suppositions, because there has never been anything like this before. I do not ask the Minister to acknowledge this, but I think it is also accepted that the amount of research on the basis of which the scheme has been brought forward has necessarily been limited.

The pilot will give the opportunity for the truth to out—so long, that is, as the scheme is objectively and conscientiously undertaken. It will enable all the disputes on the impact of the scheme on the marketing and price of properties, the expenses incurred, and many other issues to be resolved without doubt or peradventure, by experience. Particularly important is the fact, as the Minister has specifically stated, that although this will be a voluntary scheme nationally, there will be one area within which it will be compulsory. I am most grateful to him for making that clear.

Will the Minister give a little more reassurance on the nature of the pilot scheme and what he calls the stakeholder working group? In my Amendment No. 36 at Third Reading, I set out a number of conditions which would apply were the national pilot to be included in the Bill. That amendment was withdrawn when the House decided to make the whole scheme voluntary.

The Minister has referred to the importance of the stakeholder working groups in helping the Government set up the pilot and then evaluate it. My first question is this: in my Amendment No. 36, I said that the advisory group shall include representatives of the Law Society, the Royal Institution of Chartered Surveyors, the Council of Mortgage Lenders, the National Association of Estate Agents and the Consumers' Association, and of such other interests as the Secretary of State shall think fit. Is the Minister prepared to say whether those named bodies will be part of the stakeholder working group that will be responsible for the pilot?

The second crucial issue is the extent to which the stakeholder working group's advice will be received and the importance that will be attached to it. I do not wish in any way to raise the issue of bad faith, but it is important to know just what importance the Government will attach to the stakeholder working group's advice. As will be obvious, the objectivity of evaluating the pilot is paramount. If credence is to be attached to the pilot and the outcome and if this House—let alone the Government—is to be in a position to learn the lessons of the pilot, it is very important that the working group be given a very high significance and that it will be able to ensure objectivity in the pilot scheme.

If the Minister is prepared to give a reasonably satisfactory response to those questions, I am not inclined to press the amendment, not least because it is in rather an inadequate state, if I can put it that way. I beg to move.

Moved, as an amendment to Amendment No. 128C, Amendment No. 128E.—(Lord Phillips of Sudbury).

Photo of Lord Hunt of Wirral Lord Hunt of Wirral Conservative

My Lords, if the pilot scheme and the assessment of it is to be serious, it would be helpful to know from the Minister a little more about the criteria against which the success or failure of the pilot is to be judged. I hope that the Minister might give us some idea.

The Government previously spoke about a benchmark—I believe I am correct in using that word—prior to the pilot, against which the success or otherwise of the new scheme can be effectively monitored. We need to know a little more about the criteria that the Government will use. The key is whether the packs will make home buying and selling easier, less stressful, more transparent, more certain and faster for consumers. There may well be broader criteria as well. I believe that in answer to this amendment, it would be very helpful to hear a little more about the dry run, or pilot scheme, that is planned.

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

I am sure that it would be, my Lords—if I had it. That is not a criticism. With all due respect to the noble Lord, Lord Hunt, who has been incredibly positive and constructive in these debates, I am relying on what I said earlier. It is too early, in some ways. The criteria were set out on Second Reading and in Committee—that is part of it.

The membership is the key to what will happen now. I do not know how many stakeholder groups there are—more than one, anyway, given the different aspects. Certainly, all the bodies the noble Lord, Lord Phillips, mentioned will be included and involved. I can say that without any qualification. I would expect the stakeholder groups to work by consensus. It will be no good putting together a stakeholder group if there is no consensus or the Government ignore the stakeholder group's advice on something because they do not like it and ram it through.

That will not work because we cannot make this work from Whitehall: this system cannot be run by the Office of the Deputy Prime Minister. But it will be run by the industry—the buyers, sellers, professionals, lawyers, estate agents and surveyors. It is important that the practitioners who deal with the practicalities have a role in writing the parameters. My answer to the question is that decisions will have to be taken by consensus.

Effectively, we are talking about professional people—not about someone stupid having a veto just because they do not want to participate. That would be ridiculous. I fully accept that the term "dry run" is not used in the Bill, but it refers to the six months or thereabouts before the measure is compulsory. One cannot be absolutely certain of the date, but we have specified a good period of time—half a year. Within that we have what we could call the designated pilot within the dry run—it may even be a region as a designated area. We would not so much test the measure to destruction, but if it does destruct, there is a problem and we would not introduce it. That is the whole point of this exercise.

I fall back on what I said earlier. Again, this is not a criticism, but the matter is being treated seriously by the Government. This is a high risk operation. That is how it is classed by the management structure within the ODPM. Therefore, one takes the necessary management steps to ensure that that high risk works and does not fall apart. On the issue of how the measure will be dealt with in terms of listening to industry, it is less risky if industry is on board and is content and happy with how the systems will work. The risk is then reduced. Obviously, if the measure is high risk on the day that it is launched, there is a problem and it would not go ahead. The whole point of the stakeholder approach is trying to get a consensus—over a fairly long period of time, do not forget, because this will not be done in three or six months. Hopefully, by the middle of next year we will have regulations and then there will still be discussion for 12 months before a dry run would be started. There will obviously be national publicity and so forth. Then there will be discussion with industry about how we get a designated pilot within the dry run to go forward on a different basis.

A lot of work must be done. I freely admit that, although two years seems a long time, we all know that two years in planning an operation and introducing legislation goes really quickly. This is a big operation for the Government. It will not be starved of resources. There must be changes in our department in the way that we can drive this measure forward and manage it. I cannot be more specific, but I appreciate what has been said. We have tried to meet genuine concerns.

We have had, as one might imagine, internal debates about this issue within the department. Five housing Ministers have dealt with it in the past seven years but with the same team of officials. Therefore, Ministers have come to the problem afresh, examined it and asked questions about it. It may look as if everything has happened at the last minute but, nevertheless, the effect of our amendments and the commitment to try to get a designated, non-voluntary pilot within the dry run is an important element.

As I said, we need to get industry on board. We cannot say, "This is how it's going to happen", because it will not work unless industry comes with us. Without wishing to repeat the paragraph from earlier because it is on the record, if something is insurmountable with the industry, we would not go ahead. Therefore, there must be willingness on our part and that of the industry.

It is in everybody's interests to make sure that this measure works once Parliament has made a decision, but using the criteria of success or failure, more happiness and less stress would be good when buying or selling a home. That is difficult to measure, but one does not need to take a mechanistic approach by tying things down and saying, "Can you knock three days or weeks off the buying and selling process?" With respect, this is somewhat more important than that. We must look at the criteria because we will have to justify our actions.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

My Lords, I am greatly reassured by those further words from the Minister. They reflect what was said to me by the Minister in the other place, Keith Hill, when I had a meeting with him on this subject. I am personally persuaded that the Government are genuinely open minded about this pilot and genuinely intent both on setting it up and construing it objectively. To be fair to the Government, in my view Amendment No. 128C is proof of the pudding. It says that, if we find that the pilot gives us results that we did not expect but which nonetheless appear clear, we will pull the measure. One cannot ask for more than that, and on that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 128F not moved.]

Photo of The Earl of Caithness The Earl of Caithness Conservative

rose to move, as an amendment to Motion 128B, leave out "Amendment 128C" and insert "Amendments 128C, 128H and 128J"

128H page 95, line 7, at end insert—

"( ) It is the duty of a responsible person to have in his possession or under his control a home information pack for the property within a period of fourteen days from the date determined by section 131(2)."

128J Leave out Clause 145

Photo of The Earl of Caithness The Earl of Caithness Conservative

My Lords, I beg to move.

Moved, as an amendment to Motion 128B, leave out "Amendment 128C" and insert "Amendments 128C, 128H and 128J".—(The Earl of Caithness.)

On Question, Whether the said amendment (No. 128G) shall be agreed to?

Their Lordships divided: Contents, 71; Not-Contents, 110.

Division number 5 Private Parking: Ports and Trading Estates — Lords Amendment

Aye: 69 Members of the House of Lords

No: 108 Members of the House of Lords

Aye: A-Z by last name

Tellers

No: A-Z by last name

Tellers

Resolved in the negative, and amendment disagreed to accordingly.

On Question, Motion agreed to.