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The Earl of Caithness: My Amendment No. 208A and Amendment No. 209, in the name of my noble friend Lady Hanham and myself, are grouped. The noble Baroness, Lady Maddock, is absolutely right. This is a fundamental and crucial amendment to how this part of the Bill is going to work. It is a consumer protection amendment. I am sorry that the noble Lord, Lord Borrie, is not in his place because I think that on this occasion he would probably be with us.

Given the advocacy and passion with which the Government have promoted the Bill, one might well have thought that many other countries in the world are ready to follow this lead and the unprecedented step that the Government are taking for England and Wales. But the silence is deafening. Nobody is following what the Government are advocating in Part 5 of the Bill.

The reason for that is simple. The surveyor must be totally independent from all other parties. In the US, it is illegal for there to be any link between home inspectors and the selling agent. Financial institutions are not allowed to own an estate agency chain as their view is that a consumer needs independent financial advice on a mortgage, not from someone selling a property. If transgressions are found, a practitioner can lose his state licence. That is very different from what is happening in the UK, where it is not a question of a conflict of interest but more of a vested interest.

I have concerns about the home condition inspector being responsible to the seller, the buyer and the lender. Those concerns have been somewhat eased by the Minister's comments that the home condition report does not need to be updated. All the surveyor—but let us not call him a surveyor as he does not have the qualifications of a surveyor; he will have the qualifications of an inspector, which are not the same and of a lesser standard—all the inspector will have to say is, "At the time that I did the report it was right, but that was nine months ago. It is now up to the vendor or
 
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the purchaser to get an up-to-date survey. You prove that what I said nine months ago was wrong". That is not a good position for an inspector to be in. It gives him a get out clause. But we still have the position where the inspector is responsible and can be sued by three different parties.

Another group that has a vested interest is my institution, the Royal Institution of Chartered Surveyors. All those who have the proper surveying qualifications automatically have the qualifications to be a home inspector. It is not surprising that many firms see this as a good way to increase the turnover of their business without adding to costs.

I move on to an agency that has been giving the Government a lot of advice and which the Government seem to think to be rather good news—Countrywide Assured. But it has a vested interest, in that it is seeking to become a one-stop-shop. If one looks at its annual statement in 2000, it states that it had recently taken an investment amounting to 47 per cent of equity shares in Teramedia, a company that has been granted a licence to access and provide Land Registry and local authority searches electronically. Countrywide also has surveyors. So within one building, within one firm, actions are being taken against the interests of the consumer because if one goes to that firm, it will say that it can recommend a surveyor, who happens to be sitting at a desk there, and that, of course, he will be independent. No, he cannot be independent, he is working for that firm and that is utterly unacceptable.

On a smaller scale, let us turn to the case of Maria Coleman. When she did the pilot scheme in Bristol, she was in control of a company promoting the sale of voluntary seller's pack schemes to estate agents. I asked the Minister yesterday whether she declared that interest to the Government. At the moment, as far as I can see from her website, she is selling 16 properties. That is not the basis on which the Government of this country should be making legislation. That is quite wrong. I must press the Government for an answer. Did Maria Coleman advise the ODPM or the Government of her dual interest, her conflict of interest?

This is where the trouble is going to begin. This is where there will be a huge amount of consumer resistance. At the moment, packs are voluntary, but when all the packs become compulsory and consumers start to wake up to the fact that, rather than getting independent advice, they are getting advice from people who are selling properties as well as being surveyors, or who are working within the same firm, or who are controlled by a financial institution, like the lenders, then consumers will lose even more confidence in the housing market and the way it works.

The noble Lord, Lord Rooker, read out seven examples from letters. Those letters are nothing in comparison to the letters he will get in a few years' time. In a few years' time, the letters are going to say exactly the same thing, but they will have this sentence:
 
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"You misled us; you told us that this was going to be a better system". No, it is not a better system but one way we can improve what is proposed by the Government is to have the inspector totally separate and verifiably independent from any of the other institutions: from the purchaser, the vendor and the lender.

Lord Bassam of Brighton: Amendment No. 205A would require that home inspectors are "independent". The amendment does not really give any more depth than that, but it is an important statement in itself. The home condition report should of course be completely objective. We recognise and understand the concern that this objectivity could be compromised if there were to be any potential or actual conflict of interest. I know that there is a particular concern about risks where, for example, the home inspector and the seller's estate agent are employed by the same company.

However, the Government believe that the checks and balances that we intend to put into place will ensure that those fears, while completely understandable, are misplaced. We intend to tackle those risks through the regulations made in accordance with Clauses 144 and 145 and the terms under which the home inspectors will belong to the certification scheme. All the main stakeholders, including the Council of Mortgage Lenders and the Consumers' Association are involved in that work. Certification schemes will not be approved unless all the interested parties can rely on those reports.

I will outline some of the checks and balances. First, we intend that the guidance will be made available. It will set out clearly what the home inspector must do when preparing a home condition report. If the inspector fails to act correctly, that will be readily apparent. Secondly, we intend that inspectors will be required to make a "related parties" statement on the front page of the home condition report if the firm is related to that of the estate agent selling the property. That will make any link fully transparent.

Thirdly, we expect that approval will be granted to a certification scheme only if it clearly establishes the duties and responsibilities of home inspectors and publishes clear guidance about the conduct expected of inspectors, particularly in cases of perceived and actual conflicts of interest. Furthermore, approval will be granted only to certification schemes that monitor and audit the work of home inspectors.

The evidence from our research—and the practical experience of those operating voluntary home information packs in the real world—is that most buyers are prepared to trust a report that is provided by the seller now. Our objective is to ensure that when home condition reports are being provided under the terms of an approved certification scheme, they will be completely above suspicion. In that respect, our aim is to ensure that home condition reports will be regarded in much the same way as an RAC or AA report on a second-hand car is regarded now.
 
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Any home inspector producing a report in a manner that is partial to one party risks being sued by the other and a claim against indemnity insurance will impact on renewal terms. That would also be likely to trigger a complaint to the certification scheme, which could lead to sanctions and even expulsion from membership of the scheme and the loss of livelihood. In summary, that robust package of safeguards will ensure the objectivity of home condition reports.

Amendment No. 208 seeks to delay the implementation of the certification scheme until the Secretary of State is satisfied. I apologise, I should have turned to Amendment No. 208A. The points in respect of Amendment No. 208A are similar to those for Amendment No. 205A. Again, we understood the concerns, but the checks and balances that we have put in place will cover the points that are of concern to the noble Earl.

Amendment No. 209 seeks to delete Clause 145(7). As we have explained many times, Clause 144 contains the general powers for the Secretary of State to prescribe by regulations the documents required to be included in a home information pack and information to be included in, or excluded from, those documents. Regulations regarding the inclusion of a home condition report in the pack would be made under the powers in Clause 144.

Clause 145 is supplementary to Clause 144. It makes provision for what may be required in any Clause 144 regulations made in relation to home condition reports. It also sets out points on which any regulations shall require the Secretary of State to be satisfied before approving a certification scheme for the production of home condition reports.

Clause 145(7) confirms that nothing in Clause 145 limits the Secretary of State's powers under Clause 144 to make provision about home condition reports in regulations. That is the case because Clause 145(3) provides only that the Secretary of State may require in regulations that a home condition report must be prepared by an individual who is a member of an approved certification scheme. It does not require him to do so. Only if the Secretary of State makes a requirement must he make provision for the approval of certification schemes and for the schemes to contain appropriate provision for the arrangements regarding qualifications, indemnity insurance and other aspects set out in Clause 145(5).

I appreciate that that is a technical point, but given the knowledge available on the Opposition Benches and the fact that we have dispatched consultation papers on the pack's contents specifically proposing the inclusion of a home condition report supported by one or more of the certification schemes, I hope that it will be understood. Clause 145 is not intended to provide an exhaustive list of what might be provided in regulations regarding home condition reports. It may prove necessary for regulations to cover considerations not mentioned in that clause: possible examples are monitoring and auditing arrangements and provision for insurance of last resort; that is, cover
 
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to protect the homebuyer should the home inspector's run-off cover have lapsed, for example, following his death.

Accordingly, for the avoidance of doubt, Clause 145(7) provides that nothing in Clause 145 limits the Secretary of State's power under Clause 144 to make provision about home condition reports and regulations. I hope that that has covered the issues of concern relating to the amendments.

To answer the specific point raised by the noble Earl, Lord Caithness, concerning Maria Coleman, the Government have always been aware of her commercial interests in estate agency and home information packs. She was operating packs before the Government prepared these proposals, so it has been well known to us for some time. We have acted entirely properly and taken good advice in bringing forward our proposals. I hope that the noble Earl will accept that we have acted in good faith, as I am sure he does.

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