Homes Bill

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Mr. Loughton: Is my hon. Friend aware that this is not the first time that the CML has caved in to Government pressure? When consideration of the regulation of mortgages through the newly formed Financial Services Authority began—I was a member of the relevant Select Committee and the Standing Committee on what became the Financial Services and Markets Act 2000—the CML was entrenched in its opposition to mortgages coming under regulation by the FSA; mysteriously, however, as the months passed and that legislation progressed, it changed its view, as it saw the writing on the wall from the Government and attended discussions behind the scenes.

Mr. Waterson: I will not pursue my hon. Friend down that avenue. However, he provides another graphic example of the bully-boy tactics—[Laughter.]—that Ministers are prepared to adopt. It is amazing that Government Members find that a cause of hilarity. The Minister for Housing and Planning has not yet sought to intervene, although he is welcome to do so. I hope that he will not try to evade the opportunity to give the Committee precise details of the pressures that have been brought to bear on the CML, whether by him or by officials at his behest. Unless his explanation is thorough, complete and clear, I intend to table a series of parliamentary questions to tease out the details of meetings between the CML and him or his officials. The CML has obviously seen fit to haul up the white flag after being bullied by the Minister; it has given up its its genuine opposition to the Bill. That should cause the Committee great concern.

Mr. Nigel Holt, director of the Independent Association of Estate Agents, has made some useful comments on the Bill. I shall not weary the Committee with all of them. He writes:

    The overall thinking behind this legislation is flawed . . . the complete package of measures is likely to hinder the market and have detrimental and have unintended side effects.

Let us hope that Mr. Holt is not shortly to receive a visit from the Minister or any of his henchmen and that, in a week or two, we will not have a totally different view being adopted by the Minister in his briefings.

11.45 am

Mr. Holt cites places such as Portugal and sees parallels being drawn with other countries as inappropriate. He talks about chains in property transactions, something with which we are all familiar, and says:

    These new packs will not save one day from a proposed sale time if a chain is involved.

He makes a telling point, which we have not covered adequately, on competition:

    We pointed out to the Government in March 1999 that one of the risks inherent in the proposals was that large groups of Agents, usually referred to as ``Corporates'', and generally owned by financial institutions, would have the financial clout to offer these packs free. The independent agent would not have that facility.

Mr. Holt makes the perfectly reasonable point that that

    will not be good for the general public.

He says that, at a recent meeting to discuss the Bristol pilot, the Minister for Housing and Planning was reported as saying—the hon. Gentleman will have every opportunity to deny it if he thinks the reported statement is untrue—that

    small estate agents may not survive. This is part of general competition.

The Minister is reported as going on to say that

    his main duty was to consumers and not small businesses.

That will come as relevant information to organisations such as the Federation of Small Businesses, the Independent Association of Estate Agents and the National Association of Estate Agents.

Referring to estate agents, Mr. Holt repeats a point which has been made before that

    a significant part of their business in some areas arises from the speculative seller who, although not quite certain, decides to test the water with an agent. Such vendors will disappear.

Mr. Holt talks about a massive overkill and says:

    A criminal record for failing to produce the right documents? Mussolini would have been proud.

This final and useful point was made by Mr. Holt:

    Is the Government suggesting that they can police the Internet too?

He talks about

    a vendor offering a property on the Internet via a server in, say, the British Virgin Islands.

All told, that is a series of very convincing points about the Government's proposals.

As Mr. Holt's letter indicated, it is not as if the Government have been short of good independent advice on the subject. People have been queueing up for a while to advise Ministers that these ideas are wrong-headed and impracticable.

I have another lengthy letter from Cormac Business Systems, a company specialising in putting together the computer software back-up that is likely to be involved in producing seller's packs. Mr. Michael Mortimer makes telling and detailed points which he apparently made to the Minister when he attended meetings at the DETR on the subject. The most interesting aspect is the benefit of Mr. Mortimer's experiences with the United States. Mr. Mortimer says that last August he wrote in some detail to the Minister for Housing and Planning and Mr. Nutall and Ms Whitehead of the Government consultants Martin Hamblin about the experience in the United States and had meetings with officials and consultants.

We hear a great deal about the situation in Denmark—you may feel, Mr. Gale, that you have heard more than you wanted. Mr. Mortimer says:

    I discovered that in the US they have tried their version of Home Condition Reports (known as Pre-listing reports) without any degree of success and that in some cases it has lead to greater conflicts of interest and less protection for consumers.

He talks about recent legislation by some states, for example, Massachusetts,

    whereby it will soon be illegal for an estate agent to make recommendations to a home buyer on a choice of home inspector.

He says that other states are also considering legislation to limit seller's packs. .

All those genuine, well-argued concerns, which are based on experience and knowledge, seem to have gone unheeded by the Minister and the Government. Why? It is all the more important that we insert this innocuous provision which will ensure consultation with relevant bodies before anything can be done.

The Council of Mortgage Lenders may think that it has had enough consultation to last it a lifetime. The Minister and his officials should lay off people such as the CML, stop trying to bully them into withdrawing their public criticisms of the legislation—which they are perfectly entitled to do in our parliamentary system—let them get on with their proper purpose and let us get on with our proper role in scrutinising this legislation. I should be grateful to have that undertaking from the Minister. For the moment, I commend the amendment to the Committee.

The Chairman: Order. Those veterans of the 87 hours of the Standing Committee on the Transport Bill will recall that in the small watches of the night I said that members of the Chairman's Panel were not endowed with crystal balls. The precise line of argument that the hon. Member for Eastbourne was going to undertake was not clear from the wording of the amendment. Had it been clearer, I would probably have been minded to group amendment No. 22 with this amendment. It now seems that similar matters are covered in those amendments. If the hon. Member for Bath wishes to raise now the matters that he intended to raise under amendment No. 22, I shall be happy to accommodate that.

Mr. Don Foster: Thank you for that ruling. I am sure that it will be for the convenience of the Committee to take the two issues together. As I am sure that members of the Committee will not have had time to jump forward to amendment No. 22, for their benefit I remind them that it proposes that in clause 8, page 6, line 30, insert—

    `( ) Regulations under section 7 shall ensure that the home condition report is required to be of a standard likely to be acceptable to mortgage lenders.'.

The purpose of that amendment is clear. When we were debating amendment No. 9, I wrote down some words used by the Minister for Housing and Planning. I hope that I quote him correctly. I understand that he said, ``We intend that the home condition report can be relied on by lenders.'' Later in the debate, referring to the same issue, he said, ``and rightly so.''

I do not think, therefore, that I need to say much more. The purpose of the amendment is clear. It is absolutely clear that the Minister entirely supports it. For those of us who, like you, Mr. Gale, sat through the long hours of the Transport Bill Standing Committee will understand when I say that this is one where I suspect I will have the opportunity of writing a letter home to Mrs. Foster.

The Chairman: Order. I should have made it clear to the hon. Member that, as he has availed himself of the opportunity to include amendment No. 22 in this group, if he wishes to put the matter to the vote at the appropriate time, I shall be perfectly happy to call it forward.

Mr. Clifton-Brown: I did not realise that you were going to call amendment No. 22 at this particular time, Mr. Gale. I would just like to make one important point. The Royal Institution of Chartered Surveyors, in a submission to us, makes the point that it will be, and is, working closely with the Government in developing a multi-disciplined, independent accreditation board for the new home inspector's report. It is clearly in everybody's interest that the people producing home inspection reports should be property qualified. Lest anybody should cast aspersions on what I am going to say, I remind them of my registered interest as a chartered surveyor. It is not, however, in that capacity that I raise this point. It is simply a practical point.

My hon. Friend the Member for Eastbourne quoted from a long letter that we received from Michael Mortimer MRICS, of Cormac Business Systems. I should like to hear the Minister's comments. Mr. Mortimer says that valuations have to be carried out by a qualified valuer, although the same can be said of home condition reports which must be carried out by a qualified surveyor. He adds:

    there are currently only about 3,500/4,000 residential valuers—

I assume that the same number would apply to surveyors—

    who are currently acceptable to mortgage lenders whereas it is estimated that it will take 9,000 personnel to carry out the required number of home inspections.

That is a significant increase of more than 50 per cent. It takes time to train people to produce a properly qualified and reliable home condition report. It cannot be done overnight. I should like the Minister's assurance that that number of extra qualified people will be available when the Act comes into force in two years' time.

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