I beg to move.
That an humble Address be presented to Her Majesty, praying that the Home Information Pack Regulations 2007 (S.I., 2007, No. 992), dated 23rd March 2007, a copy of which was laid before this House on 29th March, be annulled.
The home information pack regulations, which are being brought before the House today, are a test case in how not to legislate. They will do nothing to take the strain out of home buying and add only cost and complexity to the housing market.
Not at this point. [Hon. Members: “Frit!”] All in good time.
The Labour peer who chaired the House of Lords investigation into the matter said that he could not think of proposals about which so many experts were so strongly critical. His colleague, Lord Tunnicliffe, another Labour peer who led the House of Lords investigation into the regulations, called the Government’s case for HIPs
“the most data-free I have ever seen”.
The Consumers Association, once a great supporter of the packs, now argues that, under the Government, they will be
“of little value but great expense to consumers—an expensive waste of time.”
Ministers have botched the process from beginning to end. Instead of following the advice of the Chancellor of the Exchequer and listening and learning, they have ploughed on regardless, heedless of their potential damage to the housing market at an acutely delicate time. The change to the way in which we buy and sell our houses is probably the biggest and most jarring intervention in the housing market since Nigel Lawson abolished mortgage interest tax relief. History teaches us that we play politics with people’s homes at our peril, but that is just what Ministers are doing.
I shall not at this point, but I am sure that the hon. Gentleman knows that the Bank of England has written a letter to the Chancellor of the Exchequer pointing out that his policies are driving up interest rates and leading to higher inflation than at any other time for more than 10 years.
There are increased house prices, mortgage rates and stamp duty. At that uniquely nervous time in the market, the Government are introducing a measure that creates the risk of unnecessary turbulence. Let me make Ministers an offer: if they drop all the unnecessary bureaucracy and concentrate on delivering the one good aspect of the package—the energy performance certificate—we will help them out of their mess. If Ministers press ahead with the folly, the country will know whom to blame for the mess that follows. As Lord Rooker said in another place:
“If it is a failure, we Ministers will carry the can. That is our responsibility.”—[Official Report, House of Lords, 20 October 2004; Vol. 665, c. 827.]
As matters stand, the Government’s approach fails three vital tests. The regulations do not command the confidence of the market. They will not speed up transactions or make the process of house buying less stressful—quite the opposite. They have not been prepared in a way in which anyone who is serious about combating climate change would consider adequate.
I recall turbulence in the housing market, especially on a morning in 1992, when, as a solicitor, I was representing a client who called on me at 9.30 am to tell me that interest rates had risen to 10 per cent. By 12.30 pm, they had increased to 15 per cent. That is the sort of turbulence that we experienced under a Conservative Government. Is it not rich of the hon. Gentleman to lecture a Labour Government, under whom interest rates are a third of what they were under the Conservatives?
I am grateful to the hon. Gentleman for his history lesson, but he only underlines my point. Given the importance of the housing market and given that interest rates are increasing, only a Minister in the grip of folly would press ahead with an alteration that will only add to potential turbulence and do nothing to restore confidence.
On market confidence, we have the benefit of expertise from all who have a responsibility for the health of the housing market, because they have let us know their view of the regulations.
Not at the moment. Instead of listening to the hon. Gentleman, let us listen to the experts—for example, the Royal Institution of Chartered Surveyors. [Interruption.] I am about to quote the Royal Institution of Chartered Surveyors—if the hon. Member for Ellesmere Port and Neston (Andrew Miller) thinks that it does not know anything about the house buying industry, I shall be interested to hear his speech. The institution states:
“We are concerned about the detrimental impact the introduction of HIPs will have on the market and therefore the economy. We are also concerned at the Government's cavalier approach to the legislative process. We do not believe the current implementation approach will work and in particular we envisage a detrimental effect on first time buyers from rising prices, shortage of supply and abortive cost.”
If I got such a survey, I would worry about pressing ahead with the transaction, but the Government, once again, ignore expert advice.
The Government also ignore the Law Society. It argues that it does not believe that the regulations
“serve in any way the government’s aim of making the home buying process easier and more transparent. They will, in fact, make the process more difficult, much more expensive and remove existing transparency from the marketplace.”
If I were drafting a law, and the country’s leading body of lawyers told me that I had got it so badly wrong, I might be tempted to think again—but not the Government. They ignore the surveyors, the lawyers and the Council of Mortgage Lenders, which argues that the Government’s approach
“presents a significant threat to the operation of the housing market and has the potential to cause strategic damage to the wider economy”.
Not only the lawyers, surveyors, banks and building societies express concern; everyone who has commented on the proposals—from Oxford Economic Forecasting to the Society for the Protection of Ancient Buildings—has warned the Government of the danger of pressing ahead without listening and learning.
Will my hon. Friend give way?
Not at this stage—forgive me. As I said, the Consumers Association called the regulations an expensive waste of time. Local authority trading standards officers said that the process will
“add extra costs to the buying and selling of homes”
“the home buying process easier and more transparent”.
What do the Government and their supporters on the Back Benches say? They claim that those groups constitute vested interests.
Does the Consumers Association have a vested interest? Do trading standards officers have vested interests? All the groups that I have mentioned were explicitly asked by the Government to consider the regulations and invited to be key stakeholders. When they disagreed with the Government, they moved from being stakeholders to those with vested interests. We know the Government’s definition of a vested interest: an expert who happens to disagree with them. Junior doctors disagree with the training programme—they have vested interests; generals say that military overstretch is a problem—they have vested interests; teachers say that they are overburdened by bureaucracy and regulation—they have vested interests. If one dares to disagree with the Government—even more important, if one dares to know what one is talking about—the only thing that the Government can say is, “vested interest.”
Surely the hon. Gentleman acknowledges that there are some practical examples of the use of HIPs. Will he point to any occasion on which the horror stories that he identified were realised in places where HIPs have operated?
Yes. I was on the radio this morning discussing the matter with a solicitor in north-east Wales who was directly responsible for implementing the dry run. He said that there were not enough assessors and that the search facilities that local authorities provided did not have enough capacity to give people HIPs in a timely fashion. He had supported HIPs but changed his mind because of the Government’s botched implementation of the scheme and was prepared to go on the radio to make that case.
The dry runs were not independent, as we were promised by Lord Rooker and the Ministers who were responsible for the policy when it had a chance of being competently executed, but run by people who had a vested interest in the process. Yet even they tell us that they failed.
No more than my hon. Friend, whom I congratulate on his stance and on the service that he has done the House in highlighting the way in which the Government have botched the matter. We warned them that it would go wrong when the Housing Act 2004 was in Committee. My hon. Friend will remember that they cited the Consumers Association at length and prayed it in aid. The reason why the Consumers Association changed its mind is that these are only, in its words, half HIPs: without the home condition report, they are meaningless. Will my hon. Friend take my advice—I say this with appropriate humility—and let the Minister for Housing and Planning off the hook, even at this late stage, by inviting her to withdraw this nonsense and do away with this half-hearted botched policy?
I could not have put it better myself; my hon. Friend makes the point for me. Just one year ago, when we were debating the matter in Committee with the Minister, she was praising the Consumers Association. It was the source of sweetness and light, wisdom and judgment, because it happened to support her proposal. Then, last July, under pressure from her right hon. Friend the newly appointed Secretary of State for Communities and Local Government, the Minister was compelled to drop the home condition reports and execute a humiliating U-turn. At that time, the Consumers Association decided that it no longer wished to support the policy. As a result of withdrawing its support, did it remain a valuable source of wisdom and judgment? No, it was reviled and joined the ranks of the vested interests. This listening and learning Government decided to be deaf to consumers just when it mattered. This was not just a U-turn, but hypocrisy at the heart of HIPs.
We are aware that one body is supportive of the proposals. That, of course, is the Association of Home Information Pack Providers—[Laughter.] Does the Association of Home Information Pack Providers count as having a vested interest in the provision of home information packs? Perhaps in due course the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) will enlighten us on that count. One of the key things about that association is that it has been no slouch in communicating to its members. Indeed, members of the association are already salivating at the prospect of the extra cash that they are going to make out of the poor consumer. In this week’s Mortgage Strategy, one of its members was writing under the headline, “Let’s make some money out of HIPs”. As far as they are concerned, this is a lucrative opportunity to fleece the consumer—a lucrative opportunity created by the Government who have failed the consumer.
On that very point, it is not only that there will be expenses at the beginning of the process and not enough people to produce the packs. Is it not also the case that if a house or flat does not sell quickly, people will have to pay all over again to renew the information—and still with no guarantee that they will get a sale?
Does my hon. Friend agree that the Government’s stance is hypocritical? They hold themselves out as encouraging home ownership, yet HIPs will be an additional obstacle to first-time buyers in particular, because they will certainly be required to get a structural survey. A HIP will be of no value to them, because they will not have a track record with the mortgage lender. If we add in stamp duty, all that will make it harder for people—particularly people in London and the south-east such as my constituents—to get started on the housing market.
My hon. Friend makes a very good point. When home information packs were originally introduced, they were sold to us as helping the first-time buyer and relieving that buyer of the obligation or requirement to have a valuation or survey. As matters stand, they do not help first-time buyers in any way at all: indeed, first-time buyers will still require a valuation and a survey and will still have to pay for the additional document, while nothing will be done to reduce the risk of gazumping.
I am grateful to the hon. Gentleman for giving way at last. Will he acknowledge that £1 million is lost every day by members of the public through abortive costs—survey costs, searches and other costs incurred—because one in four transactions fall through? Will he tell us what he will do to address that gross inefficiency in the present arrangements that is working against the public interest?
Order. These are serious matters. I think that hon. Members can be relied upon to declare their interests at the appropriate time.
I am grateful, Mr. Deputy Speaker. As we know, the right hon. Member for Greenwich and Woolwich is a figure not just of expertise but of dignity. He respects the rules of the House and I am sure that he will be grateful to me for reminding the House that he is the director of a firm that produces home information packs. As a right hon. Gentleman with expertise in that area, he will also know that home information packs do absolutely nothing to speed the home buying and selling process and nothing to remove the risks associated with surveys and valuations.
What home information packs do, however, is help one person: the Chancellor of the Exchequer. VAT will be levied at 17.5 per cent. on every home information pack, which will be sold at an estimated cost of anything between £500 and £1,000. That is VAT on documents either on which VAT was not levied beforehand or which were not required before this legislation. It is a significant tax take for this Government—as if the home buyer was not milked enough with stamp duty and council tax. It takes the particular devilish ingenuity of this Chancellor to come up with a new tax on the home buyer and home seller—a tax that is likely to raise millions while doing nothing to help the housing market at a vulnerable time.
I am not giving way again, as the right hon. Gentleman has signalled that he is anxious to speak later.
We know that the test of market competence has been failed. I have run through every group that takes responsibility for the health of the housing market and they are all opposed to these regulations. However, what of the secondary test? Will these regulations speed up transactions and make them less stressful? Will they end gazumping, as we were once told that they would? Every expert opinion, as we have heard, says no. Why? That is because under these regulations, before anyone can even market their property, they will need to assemble a bundle of documents, which it will be no easy business to get in place in time. Let us take the requirement to have local authority searches. We know that there is a wild variation in the cost and speed with which those documents are provided. We also know from the limited dry runs of HIPs which the Government have so far allowed that local authorities are simply not equipped to provide the searches required in the time required to allow properties to be marketed.
One of the largest companies in the business of providing search material is MDA SearchFlow. As it has explained:
“In the Dry Run areas the search market moved from 40 per cent. of the searches being personal to 100 per cent. of the searches being personal. This has caused significant delays as local authorities have struggled and ultimately failed to cope”.
The managing director goes on to warn:
“There is no way that all of the 2 million odd personal searches required can be facilitated by the local authorities… The Government’s proposals to solve this problem are wholly inept. The market will be chaotic.”
That is from a company that supports HIPs, yet it believes that the Government’s execution has been comprehensively botched. If sellers cannot get the searches done in time, properties cannot be marketed, so sellers will be frustrated and buyers will see the supply of housing even further constrained. At a time when the supply of housing is drying up and when housing supply is one of the key problems in the housing market, we will have a slower and less responsive market—not to mention a market with more costs.
Does the hon. Gentleman agree that where responsibility to gain these searches is transferred to the seller, the burden on local authorities will reduce? There will be one seller rather than two, three, four or sometimes umpteen buyers doing these searches.
I am grateful to the hon. Gentleman for making that point, because it shows that he completely misunderstands what will actually happen. At the moment, as the experts have pointed out, local authorities are simply not equipped to meet the demand for personal searches, but more than that, there will be additional demand for them. As the Law Society has explained, many buyers will be advised not to accept the personal searches supplied by sellers. The law of caveat emptor applies in house purchases. In many cases, buyers will look at the document supplied and their solicitor will tell them that they cannot be certain that it is not shoddy or partial or inadequate. They might advise them to commission their own searches, so there will potentially be twice the number of searches commissioned, additional costs throughout the process and additional complications. The Law Society has told us that; when solicitors were surveyed, more than two thirds said that the process envisaged by the Government would be inadequate for their clients.
I have been following the hon. Gentleman’s arguments, and I am finding them rather contradictory. On the one hand, he is saying that the obligation to provide HIPs will result in the housing market drying up because people will refuse to put their houses on the market. On the other hand, he is saying that the overwhelming number of searches that will be needed will throttle local authority bureaucracies. How does he reconcile those two points?
I reconcile them using a process called logic, with which the hon. Gentleman might be unfamiliar. It is because it is so difficult to get searches that the number of properties on the market will dry up. That point has been made by every expert body that knows anything about the housing market. The pipeline will be narrowed, and supply will be constrained. It is a matter not only of logic but of economics, and I would be happy to go through both processes with the hon. Gentleman any time he likes.
The Government have failed not only on searches but on the most crucial test of all: seriousness about the environment and climate change. Their record on the environment is patchy at best. Ministers in the Department for Communities and Local Government have recently been proclaiming their green credentials. How recently? I have been reading the speeches of the Minister for Housing and Planning on her website, and very instructive and entertaining they are too. From the moment she was appointed to her present responsibilities, however, there has been scarcely a mention of the environment. There was support for more housing and for more regulation, but nothing on the environment before December 2005. I am sure that hon. Members will remember what happened at that time. My right hon. Friend the Member for Witney (Mr. Cameron) became leader of the Conservative party and put the environment at the heart of our campaigning. After December 2005, what was there on the Minister’s website? There was silence until May 2006, just two weeks after my right hon. Friend had secured 40 per cent. of the vote in the local elections. The Minister then suddenly emerged from her purdah, her self-imposed silence, to make her first speech as a Minister for five months. To whom? To the Green Alliance.
When we campaigned with the message “Vote blue, go green”, we had no idea that the Minister would take that message to heart. Now, as a new convert to Cameron conservatism, she is talking about building eco-homes. Let me remind her that, as the Economic Secretary to the Treasury pointed out in Committee yesterday, no zero carbon homes have been built so far, and the number qualifying for zero stamp duty on the basis of zero carbon in the years ahead will be—as he said in answer to a parliamentary question—“negligible”.
Ten years in office, and no progress on the environment. Yet as soon as my right hon. Friend the Member for Witney was elected leader of the Conservative party, Ministers were galvanised into greenery. Just imagine what we could do for the environment if we were actually in power—[Laughter.] We would certainly take the provision of energy performance certificates seriously, unlike this Government and their Back Benchers, who seem to regard the environment as a subject for hilarity. I am glad that they are laughing at their own record. There will be plenty of opportunity for them to weep when the voters pass their verdict on it at the general election in a couple of years’ time.
If the Government were serious about energy efficiency they would have put the people in place to carry out the energy inspections that are at the heart of the provisions on energy performance certificates, but once again, the Minister and her Department have failed to listen and learn. A year ago, we said that there were not enough people in place, but the Government said that they would get the 7,500 inspectors that they needed; it would be all right on the night. A month ago, however, they revised that figure down and said that they would need only 2,500. Why the sudden reduction? We asked two weeks ago how many inspectors were fully trained and accredited, and we were given the answer at 5 o’clock on the Friday of the May bank holiday weekend: not one domestic energy assessor had passed the test and been accredited. With less than four weeks to go before the implementation of what the Minister describes as a key policy to combat climate change, not one of the 2,500—or 7,500; which is it?—qualified, accredited inspectors is ready to respond. How does the hon. Member for Newcastle-under-Lyme (Paul Farrelly) explain that?
I thank the hon. Gentleman for giving way. He must have seen me straining at the leash. I am sure that the House would appreciate hearing not only about what he and his colleagues started to say 12 months ago, but about what the Conservatives did during 18 years in office up to 1997.
The hon. Gentleman insists on giving us a history lesson. Let me remind him that the first significant international agreement on combating climate change was signed by my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) when he was Environment Secretary. The first world statesman to sound a warning on global climate change was Baroness Thatcher, at the Government Dispatch Box in 1988. We will take no lessons from the Johnny-come-latelies from Staffordshire. There are many fine Members of Parliament in Staffordshire. Some of them, however, need not only a history lesson but an ecology tutorial before they open their mouths again on this subject.
The Government are now trying to rush through a few more domestic energy assessors who have passed their test and been accredited. Yesterday, however, I was talking to representatives of the largest HIP provider in Britain, Spicer Haart. It is in despair; it has given up on the Government. It said that
“we have only managed to identify sufficient assessors to cover 40 per cent. of our requirements”.
And let us remember that those are people who have not even been accredited; they have only passed their exam. Spicer Haart went on to say that
“given that we have significant managerial and capital resources at our disposal, you can begin to appreciate the scale of the difficulty the industry as a whole has”.
With less than four weeks before HIPs went live, there was not a single person qualified and accredited to give out an EPC. How can that be taking climate change seriously? With less than two weeks to go, the biggest provider of home information packs cannot identify enough people to carry out even half its requirements. How can that be taking climate change seriously?
If the Government are serious about climate change, why are they not introducing EPCs into the rental and commercial sectors on 1 June? It is because they simply have not laid the necessary foundations, and the right hon. Member for Greenwich and Woolwich knows it. This is the Government who say that they favour energy efficient homes, but only last week they were cutting grants to their low carbon building programme, slashing spending on solar energy by 80 per cent. and hacking back support for wind and other renewables by 50 per cent.
It certainly is not.
The way in which the Government are trying to use HIPs to prop up their faulty green credentials has been exposed by no less than the Cabinet Office and its Better Regulation Commission, which said that the regulations were
“ill considered regulatory responses to the climate change challenge”,
and that Ministers were
“using climate change as a justification for measures which have other motivations.”
The Government are using energy performance certificates as a fig leaf—a piece of greenery deployed to cover their massive embarrassment—but no one is convinced. Let me offer to save them further embarrassment. If they will ditch home information packs—that is the motion under debate today—we will help them to ensure that energy performance certificates work. After all, Ministers discovered greenery only after the Conservatives showed them the way. The truth is that the regulations will add cost and complexity to the housing market, when what we need is more supply and economic stability. In the interest of keeping the housing market healthy, I ask the House to throw out once and for all these botched, bungled and broken-backed regulations.
The hon. Member for Surrey Heath (Michael Gove) has entertained us—and, of course, himself—in his usual way this afternoon. The debate is on the HIP regulations and energy performance certificates, but hon. Members could be forgiven for thinking that it was on something else entirely, having listened to such a huge amount of nonsense and misinformation about our sensible and practical proposals.
The main document in the home information pack—the only new document that is being added to the process—is the energy performance certificate. The certificates will give people’s homes an energy rating for the first time. That is like a fridge rating for the home that they are hoping to buy. We get such information on our washing machines, our fridges and our dishwashers, and it is high time that we got it on our homes.
The threat of climate change is real and urgent, and 27 per cent. of our carbon emissions comes from our homes. How can people be expected to make the necessary improvements if they do not have proper information about what is needed to make a difference? How many of us have any idea about the lagging in the loft, when we are looking for a home to buy? How many of us have any idea whether a home has cavity walls, or even know what a cavity wall is? This year, people will get that kind of information in energy performance certificates for the first time. That will make it possible for people to think about proper energy efficiency improvements to their homes.
As for the impact of fridge ratings, if we look at all the white goods in Comet and Currys, we see that the overwhelming majority now have “A” ratings. The provision of that information has had an impact on the market and on the way in which people behave. The energy performance certificates go further: they will give people not only the rating on their home but information on what they can do about it—what their fuel bills are likely to be and how they can cut them, and how they can cut their carbon emissions.
The Minister makes an analogy with the consumer. On that basis, why has the Consumers Association described her proposals as
“a useless but very expensive waste of time”?
Does she not recognise that what was originally a half-baked idea is now barely lukewarm?
Certainly, Which? wanted us to go further and to introduce a home condition report. We agree with Which? that the home condition report could be valuable and could have a big impact on the housing market. It was not practical to introduce home condition reports this summer, but we are continuing trials so that we can support their roll-out as they are valuable. Members need to recognise that energy performance certificates are valuable. They do not exist at the moment, and it is right to include them in estate agents’ particulars. The energy ratings on homes should be displayed in estate agents’ windows, just as the energy ratings of white goods are displayed in Comet.
So why does the Better Regulation Commission point out that the EU directive on which the Minister has relied refers only to the need for a certificate at the point of sale or letting rather than marketing, and that the Government have produced no evidence to justify going beyond the requirements of the directive, adding costs to the housing market? Why do the Government seem to know better than the Better Regulation Commission?
The Better Regulation Commission wants to water down energy performance certificates. It takes the view that less information should be provided. The information should be provided, however, as part of estate agents’ particulars. Just as it is provided for people who browse around fridge shops, it should be provided for people browsing around estate agents. People ought to have such important information at a time when it will make a difference to them.
Can the Minister not understand the big difference between a fridge and some of the ancient housing stock that characterises constituencies such as mine? Such homes do not have cavity wall insulation. What will she say to my constituents who simply do not understand how the tick-box EPCs will help them?
The hon. Gentleman is right: there is a big difference between a fridge and a house. Homes are responsible for 27 per cent. of our carbon emissions. They are the biggest investment that most of us will make in our lives; their running costs are considerably higher than those of fridges; and if the information is provided for a fridge, it ought to be provided for a home. The issue is a basic one of giving proper information that will help consumers to take decisions to improve the energy efficiency of their homes, and help them cut carbon emissions and their fuel bills.
According to the Energy Saving Trust, homeowners could save up to £300 on their fuel bills every year if they act on basic recommendations about their homes. Many will also be able to get grants of £100 to £300 from their new energy supplier, linked to the measures in the energy performance certificate. Some will be able to get much larger grants through other programmes. Companies are now developing green loans and mortgages to be linked to EPCs. The measures in the EPCs could help to cut carbon emissions by nearly 1 million tonnes a year. That is why WWF, Friends of the Earth, the Campaign to Protect Rural England and a series of different organisations are supporting those measures.
The remaining elements of HIPs are the legal and search documents that one already needs when buying and selling a home, but they will be gathered at the beginning rather than the end of the process, to speed things up and improve competition. For many of us, buying and selling a home is a baffling process. There can be huge delays between offer and exchange. In complex chains, that can mean that sales fall through. Most people will struggle to keep track of what services they are getting and paying for. HIPs will make the process much clearer and faster. In many other industries, competition, new technology and rising customer expectations have lowered prices, increased transparency and speeded up transactions. Importantly, however, that has not happened to the process of buying and selling a home. In fact, the move from offer to exchange takes longer even than 10 years ago, and in many areas where house prices have doubled, for example, so have estate agents’ fees.
I accept that HIPs might bring some extra upfront costs, particularly with regard to producing the energy performance certificate, but that might lead to savings and people might think it a price worth paying, given our commitments on climate change. Does my hon. Friend agree, however, that the rest of the packs will result in savings through the elimination of duplication? Those savings will be shared with sellers, because most sellers are buyers, too. That point is ably made today in The Guardian, by my former colleague, Julia Finch, who presents a much more balanced opinion than the Johnny-come-later from Surrey, the hon. Member for Surrey Heath (Michael Gove), who used to pontificate—and still does—for The Times.
My hon. Friend is right to say that there will be savings throughout the process. He also refers to upfront costs, and many providers are already saying that they would charge at the end of the process, not at the beginning, and that they would offer no-sale, no-fee deals. A couple have said that they would provide HIPs for free. As he is right to point out, most of us buy and sell a home at the same time, so the transfer of costs from the buyer to the seller will not make any odds to us. The people who will really gain will be first-time buyers. Currently, if a sale falls through, they might have to pay for searches on a series of different properties. In future, they will get that information for free. It is right that we should help first-time buyers in that way.
On costs and savings for sellers and buyers, does the Minister agree that the cost for sellers of part-equity in a house is disproportionate? According to the HIP providers to whom I have spoken, sellers will have to pay 100 per cent. of the HIP’s cost even though they are perhaps selling only 50 per cent. of the equity in a house.
People buying or selling shared equity properties already have to pay transaction costs, estate agents’ fees and search fees. All that we are doing is transferring the cost from the buyer to the seller in a way that introduces greater transparency and competition. That competition is already having an impact in bringing costs down. We have seen the cost of searches come down in a series of local authorities —25 local authorities have cut their costs in anticipation of HIPs because they know that, for the first time, the charges and the length of time taken will be transparent to the consumer and to HIP providers. There will be much greater pressure to provide a good service.
Does the Minister not see that if HIPs are so wonderful—if they lead to people making savings on their energy account and speed up transactions—they will take off naturally, given all this publicity? Why do we not withdraw the mandatory element, and see whether she is right to say that they are helpful? I think that they are unhelpful—the market will dry up, and they are another tax to go with the swingeing stamp duty and the penal council tax.
The right hon. Gentleman must recognise that the home buying and selling process has not changed properly for a generation. It has not reformed in response to new technology or responded effectively to competition. The Office of Fair Trading, for example, pointed out areas in which price competition was not effective. There is such a lack of transparency and so much complexity that it can be difficult for consumers to be clear about what they are paying for at which stage in the process. HIPs introduce greater transparency and new providers into the market, which is why many current providers are feeling a little anxious and threatened. We take that competition seriously. We want to monitor it and ensure that it is promoted and that it increases, and that consumers see the benefits. I will now take an intervention from the hon. Member for South Holland and The Deepings (Mr. Hayes) and then I want to make progress.
When the hon. Lady debated these matters with us alongside the then Minister for Housing and Planning, the right hon. Member for Streatham (Keith Hill), the plan was altogether more ambitious. Now she tells us that home buyers will not receive information on a number of salient issues. Does she not recognise that people will want to know about flood risk, a history of land contamination, electrical safety and risk of subsidence? There will no reduction in the number of extra surveys that people commission when they buy their homes, because mortgage companies will insist on them. Will the hon. Lady acknowledge that the packs will not improve the lot of buyers, but will clog up the system and will be entirely unhelpful to those who want to purchase homes?
Opposition Members keep contradicting themselves. One minute they want bigger HIPs; the next minute they want no HIPs at all. [Laughter.] Perhaps some Opposition Members are seeking bigger HIPs.
We have always said that we think home condition reports will be very valuable. We have also said that we do not think it practicable to introduce them on a mandatory basis this summer, but because we think that they will be valuable we are conducting trials. We have made amendments to HIPs in response to consultation and the results of trials, and we will continue to work on their implementation with stakeholders across the industry.
I must declare an interest. I have just sold my father’s house, because he has gone into care. He has the good fortune to live in the Bristol area, where a pilot scheme has operated for some time, and I was offered the opportunity to use a home information pack. The process was very transparent, and led to the early sale of my father’s house. I do not understand why the experiment is not more widely known about, and why the advantages that the estate agent made so clear to me have not been translated to the rest of the profession. I think that it is very sad. Can my hon. Friend elucidate?
My hon. Friend is right. Advocates of the home information packs that are currently in the market have not often been heard. Their voices have been drowned out by those of a number of organisations representing people in the industry who are anxious about and resistant to change, which is unfortunate. Another hon. Member gave me an e-mail that he was sent by one of his constituents, who has been an estate agent for many years. He wrote that, having spoken to virtually every solicitor and estate agent in Reading and Wokingham, he found they were all ready to proceed with gusto. I believe that many people in the industry expect considerable benefits.
It is true that there has been opposition from some representative bodies—the hon. Member for Surrey Heath quoted a few—and that the Royal Institution of Chartered Surveyors is launching a judicial review. However, we consider the review to be completely groundless, and in any event it concerns energy performance certificates: the institution thinks that the information in them should be provided when it is up to 10 years old. We disagree. The Council of Mortgage Lenders published a detailed report this week containing its assessment of the future of the housing market. So concerned is the council about the impact of HIPs that it does not even mention them. It is also true that other organisations, such as Which?, want to go further, but we think that these are the right measures to introduce this summer.
Opposition Members have had an opportunity to choose between backing the National Association of Estate Agents and backing Friends of the Earth. They have chosen, and we have seen which side they are really on.
Energy performance certificates are central to home information packs. We have stressed the importance of energy assessors because we take it very seriously. According to the latest estimates, 2,000 energy assessors will be needed at the beginning of June, rising to 2,500 by the end of the month. More than 2,200 have passed their examinations, and over 3,000 more are in training. Of those, around 1,100 are accredited or their accreditation is currently being processed.
I would caution the hon. Lady over what she should believe in the Daily Mail. I did not read the Daily Mail today, but I can assure her that that report is not correct. However, I will go and check. Heaven forbid that I forgot to read the Daily Mail this morning!
I welcome the Minister’s comments. Will she ensure that the many people, including constituents of mine, who answered the Government’s call for people to train to become self-employed home inspectors and domestic energy assessors—at great expense to themselves, in some cases—are not driven out of the market by the dominance of a small number of large HIP providers who are working with estate agents on larger contracts?
We think that competition is very important. Part of the intention behind the reforms is to improve information and transparency and support competition. I assure my hon. Friend that we will closely monitor competition in the market, and think about whether further steps are necessary.
As for the impact on the housing market, of course it is true that some estate agents have been using the advent of HIPs as a marketing strategy to try to drum up business and increase their share in a tight housing market in May. It would not be surprising if that had an impact on the timing of listings in both May and June, and it may take time for people to get used to the new system. However, listings fluctuate substantially from month to month. A million houses are sold every year, at an average cost of £200,000. Estate agents’ fees alone can amount to an average of between £2,000 and £4,000. We do not think it plausible that people will decide not to move house because of an energy performance certificate. That is an absurd assertion by Opposition Members who simply want to cause alarm and convey misinformation that scares people.
We have not only seen such misinformation in the press—as my hon. Friend says, it has been used as a marketing ploy by some of the more unscrupulous agents—but heard it from Opposition Members. The cries that we hear about the housing market drying up are absurd. That is not constructive opposition; it is merely hysterical opportunism.
My hon. Friend makes an important point. We must look for the real dividing lines in the argument. The central element is the energy performance certificate, which includes additional measures to help improve the way in which the housing market operates.
The Opposition seek to overturn the HIP regulations, and they seek to stop the introduction of HIPs and energy performance certificates this summer. They say that they support EPCs and measures to improve the energy efficiency of people’s homes, but if that is the case, why did the hon. Members for Surrey Heath and for Meriden (Mrs. Spelman) and the right hon. Member for Witney (Mr. Cameron) sign early-day motion 1264, which calls for the overturning of the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007? Those regulations do not contain measures relating to HIPs, searches or title documents. The only measure that concerns home owners relates to energy performance certificates. The hon. Member for Surrey Heath said that he needed to table the early-day motion to secure the debate. What nonsense! The debate is not about those regulations; it is about the HIP regulations.
The hon. Lady has been in the House for 10 years. She will be familiar with the workings of the Table Office. We prayed against the Home Information Pack Regulations 2007, which meant that both sets of regulations had to be prayed against. We simply followed the advice of the Table Office to ensure that this debate took place on the Floor of the House.
The hon. Lady knows from our speeches, statements and letters that we are in favour of energy performance certificates. Will she now withdraw the entirely erroneous and misleading assertion that we are opposed to them, or is she prepared to see her credibility diminish as a consequence?
What utter nonsense. The hon. Gentleman asks for evidence of his opposition to energy performance certificates, and I must tell him that there is plenty of it. The hon. Member for Meriden rose early this morning—even earlier than I did—to make clear her hostility to energy performance certificates on GMTV. She objects to them because she does not like the fact that someone will have to carry out energy ratings of people’s homes. She said
“the new feature is having energy performance assessors come round and actually look at how your house is put together… so it’s a very intrusive measure.”
Perhaps the hon. Lady will explain how she can support energy ratings of homes if she opposes the idea of people going round to those homes to carry them out. How does she think that energy ratings on homes will be done? That provides more evidence of Conservative Members opposing energy performance certificates.
The hon. Member for Surrey Heath takes a different line. His objection is that we are gold-plating EU regulations. That is true; we are going beyond the minimum requirements for energy performance certificates set out in the EU directive. However, that is not gold-plating; it is green-plating, and we make no apology for that. The European minimum that the hon. Gentleman advocates is that people should be able to use an energy performance certificate if it is up to 10 years old. Well, it is a fat lot of use to a new home buyer to have information on a home’s fuel costs and running costs that could be up to eight or nine years old. There will not be a huge impact in respect of how people respond to energy performance certificates if they know that the energy information in them is out of date.
The fact is that Opposition Members are trying to block energy performance certificates; they are trying to delay them and to water down the information. They are also telling different things to different audiences. On 1 May, the hon. Member for Surrey Heath told the Daily Express:
“If we can stop them we will”.
On 2 May, he told The Guardian that
“we shall not use our vote to impede prompt and effective EPC implementation.”
On 4 May, he told the Daily Mail:
“I hope MPs will put pressure on the Government to go back to the drawing board.”
Why is he not straight with people? The truth is that he does not like energy performance certificates at all.
The Conservative party’s leader claims to care about the environment, but time and again it will not back the practical measures needed to help to cut carbon emissions. The right hon. Member for Witney took a trip to the Arctic, organised by WWF, to demonstrate his commitment to the environment. It was his photo-opportunity to hug a husky. While he was there, he was asked for his top tips for people to go greener. He mentioned bicycling to work and growing vegetables, and he said that some of the steps that we can take to reduce our impact on the environment, such as home insulation, will save us money. He also stated that leadership means doing the right thing not just saying it. Well, the Conservatives should do the right thing now. They should back these measures to bring in environmental improvements. However, they will not back them.
What do WWF and Friends of the Earth now say about the Conservatives’ environmental policy? Let me quote from a letter from them to the Conservatives:
“Your party is currently campaigning for the local elections, under the slogan ‘Vote blue, go green’”—
That sounds familiar. The letter continues:
“However, we are concerned that by attempting to block the HIPs, you risk scuppering one of the most important pieces of environmental legislation to affect households in recent years.
We therefore urgently request that you…reassure us that under no circumstances will you allow their introduction…to become a victim of moves by your party to delay the rest of the HIP.”
The huskies have just cocked their legs on the Conservatives’ environment policy. If their environment policy were energy rated now it would get a big “G”. Perhaps that is not the only big “G” that they will have to reckon with in the next few months.
The green groups are right: this is a good measure and it should be implemented. The Conservatives should start to back it now.
I was going to start by congratulating the Minister on her measured and emollient response to the debate, but she rather spoilt that plan in the last 30 seconds of her speech.
The Minister might have acknowledged that this scheme is in a bit of a mess. Those who believed in the whole gospel of compulsory home condition reports, home information packs and energy performance certificates were taken up the aisle by the Secretary of State and have been dumped. It is unsurprising that some of those people are angry and embarrassed, and are shouting, “Betrayal.” She cannot completely dismiss the fact that Which? and the Law Society, which were supporters of the scheme in its original form, have now backed away and are feeling very despondent about the scheme as it currently stands.
Those inside the Labour big tent who are still supporters of the scheme in its full-blooded, 1997 manifesto style could at least get some reassurance from the way that things were evolving by thinking that they would have the slimmed down scheme before them with the results of the evaluation of the pilot studies also available and that in this debate they would be able to rebut the challenges and accusations from the Opposition Benches by referring to the detailed results of those studies which would show that all the bad predictions were not justified. However, the pilot studies have not been completed; there has been no proper evaluation and there is no hard evidence of success. The safeguard of those trials producing evidence on which we could take a proper and balanced decision—which was much talked about last year when the scheme was debated on several occasions in this House—is not available. The safeguard has been swept away.
I want to bring to the attention of the House some of the evidence that Mr. McDonald gave to the Merits of Statutory Instruments Committee of the other place. Mr. McDonald appeared on behalf of the Department for Communities and Local Government, and he said that it cannot yet check the pilot studies to find out what savings have been made in transaction times. He said that that was because it would need at least 3,500 transactions to have been completed before it could make that assessment. I was surprised when I read that evidence; I was not surprised by the idea that 3,500 examples would be needed to reach a judgment, but I was astonished that 3,500 transactions had not been conducted so far. The Minister did not deal with the issue of the pilot studies. There was a good reason for that; to have done so would have underlined the embarrassing situation that she is in and the difficulties that the scheme faces.
The pilot studies were supposed to have started in July last year. They could not start because the regulations were not produced in time. They were supposed to restart—have their second start—in October last year. Yet the evidence that Mr. McDonald gave to the Committee was that most of the schemes had not started until January this year and that it was therefore too early to evaluate whether they were performing in accordance with the Minister’s predictions.
Does not that bear out the fact that there is a problem in that we can have pilots—it will be good to see the evaluation from them—but unless there is also the power to make things mandatory people, will not make the changes that we all want them to make in terms of being sensible and serious about facing up to their climate change responsibilities?
The hon. Gentleman makes a fair point, which brings me on to another part of the evidence given by Mr. McDonald. That related to whether there should be a voluntary or a compulsory element to the home condition reports. On that, the Department—Mr. McDonald—was caught betwixt and between. In one part of his evidence he said that the reason why the Department had changed to a voluntary system for the home condition reports was that it thought that it was right for that to be taken forward by the market, rather than be imposed by regulation. However, he also said that the Department estimated that a negligibly small amount of home condition reports would actually be taken up. On the one hand the Department wanted to rely on the voluntary principle to deliver home condition reports because it thought that the market would suck them in, and on the other hand it accepted that none—or almost none—would be done. In support of his point of view that the voluntary scheme would not work, Mr. McDonald added that the Law Society had had its own voluntary scheme which it had tried to market in previous years and that it had failed and had to be withdrawn.
It is most useful that the hon. Gentleman has drawn attention to events in the other place, particularly as the Minister said almost nothing about the pilots in her speech. The hon. Gentleman has shown remarkable consistency on the matters under discussion—which is hard to reconcile with his membership of the Liberal party—so I would be interested to learn if he has come to the conclusion that the pilots were of the wrong scale, or at least, set out on the wrong timetable, because that seems to be the conclusion that most people have drawn from the evidence given to the Lords.
I suppose that a backhanded compliment is better than no compliment at all. I will move on, if I may.
I want to draw the House’s attention to a third aspect of Mr. McDonald’s evidence. He was persistently asked what he thought the cost to the consumer would be of the packs in the form that the Secretary of State proposes. After what might in other circumstances be described as some shilly-shallying, he said:
“It could be anything from nothing to several hundred pounds.”
He could provide no evidence that the packs would reduce the transaction time—the whole point of introducing them in the first place—he could not estimate the cost to the consumer, and he had to admit that the voluntary home condition report was going to be a dead letter. It is no wonder that the gloom among the Government has spread in the last few months as this situation has built to its climax.
The hon. Gentleman is making a valid point. Is it not reinforced by the contrast between the extremely vague and weak evidence given on the Department’s behalf, and the very clear evidence on cost given by the Council of Mortgage Lenders? It specifically advised that buyers will still have to commission and pay for valuations and associated surveys, particularly if the loan-to-value ratio of the mortgage is more than 80 per cent.—that will affect four in five first-time buyers—and if the property is a flat. So that is specific evidence against HIPs, and there has been nothing from the Government to rebut it.
The hon. Gentleman makes an interesting point; that certainly is the evidence given by the CML.
We have tended in this debate to adopt extremely polarised views about home information packs and the associated costs and liabilities. As a Liberal Democrat, I always feel slightly uneasy at aligning myself with the National Association of Estate Agents, and one does have to take some of the criticism with a pinch of salt. Nevertheless, it has to be said that the Minister has failed to show the House any evidence that time will be saved in the overall transaction. There is no evidence on the likely cost imposition on consumers, and there is clearly no chance of home condition surveys catching on.
I thank the hon. Gentleman for giving way, and I certainly welcome his moderate and emollient tones. The purpose of the pilots is to uncover the evidence, in order to form or modify a policy that the Government of course hope will work by making the market more fluid and contributing to their green goals. Does he therefore share my alarm at the fact that the Government will not hold off on this measure until the evidence is in? That seems bizarre.
The hon. Gentleman makes a very strong point. Back in July of last year, the Government’s whole argument was that we should see the pilots come to fruition, which would satisfy our every qualm and concern. That is a perfectly fair starting point—but not if the scheme is then introduced before the pilot study has been completed, before an evaluation has been made and before a report has been placed before this House.
In the emollient part of her speech, the Minister said that the pilot studies have in fact influenced the final document—that changes have been made. If Members take a careful look at the Government’s explanatory memorandum, they will see that it details some of the changes that have been made as a consequence of taking account of the first half of the pilot studies. The Government found evidence of changes that need to be made, but they seem to have closed their mind to the possibility that the second half of the pilot studies might equally produce such evidence. Instead of taking time to consider that possibility, they have pitchforked us into these regulations, which could be described as half-formed.
That is your view. Will the hon. Member for Hazel Grove (Andrew Stunell) confirm that he is in favour of energy performance certificates, and that he can understand why they would be of particular use to those who are considering purchasing a property and therefore paying its likely running costs after purchase?
Had I not taken the hon. Lady’s intervention, I would in any case probably have got to the part of my speech dealing with energy performance certificates, so perhaps I might move on.
I want to make one more point about the Merits of Statutory Instruments Committee hearing. The Committee was very scathing indeed about the regulatory impact assessment, as the hon. Member for Surrey Heath (Michael Gove) mentioned. However, at least there is a regulatory impact assessment, be it good or bad, and regardless of whether the arithmetic stands up. However, where is the risk assessment of this project? I begin to wonder whether the Department has a new acronym: the WAAP assessment, which stands for “with a wing and a prayer”. Before we introduce this scheme, we need some evaluation of the risks of pressing ahead.
It will not do to say that the scheme is coming in regardless before the pilots have finished, given that the people who will pay the price, literally, are the 1 million—perhaps nearer 2 million—householders who will be buying and selling. Who will carry the risk of this scheme going wrong? It might be a very low risk, and perhaps the Minister will be able to return to the House in a year’s time triumphant, but there is a risk. I doubt whether the Minister will carry that risk; it is the 1 million to 2 million householders who will face the extra stress and difficultly. It is they who will take the risk and face the music.
I am grateful to the hon. Gentleman for giving way. I was late for this debate because I was addressing a conference on HIPs this morning. The 150 surveyors present felt that at the very least, there will be a distortion of the housing market on and around 1 June. The Government proposed HIPs in 1997 but they have not trialled them properly, and they laid the associated major regulations before this House as late as 29 March, thus giving very little time for professionals to get to grips with the details of this far-reaching scheme, which is part of a market worth £250 billion. Is that not reckless?
The Government ought really by now to have learned from what happened last July, when the late issuing of their regulations led to the frustration of the timing of the pilot studies. Like the Irishman, I would not have started from here. It all started to go wrong way back when those regulations were not made available.
The moment may have come to answer the earlier intervention from the hon. Member for Crosby (Mrs. Curtis-Thomas), who asked about energy performance certificates. If home information packs are, in the words of the Scottish returning officer, to be “declared void for want of certainty”, it is important not to throw the baby out with the bath water. Energy performance certificates are an extremely useful starting point for raising the awareness of sellers and buyers alike of the energy efficiency of their homes and what they can do about it.
By way of practical example and to support the Minister in what she said—in the emollient bit of her speech—I point out that there are 5 million homes in this country with cavity walls but no cavity wall insulation. Most of the owners of those homes are probably in the situation that I was in until last November, when I unveiled, as MPs do, a warm homes project and met at the unveiling a cavity wall installer. Like me, those homeowners probably assumed that the house that they bought had cavity wall insulation, while not knowing for sure. I asked the cavity wall installer, “Is there a simple way of finding out whether my walls have cavity wall insulation?” He said, “Yes, it takes five minutes. Do you want me to pop round?” He came round, drilled a little hole, looked, let me have a look and said, “No, you haven’t.” I have got it now. It cost £250 and it was money well spent.
Another 5 million households do not have cavity wall insulation and the EPCs will make that explicit to the owners or the next owners of those properties. We need to make energy use by housing transparent and we need purchasers of new houses to take as much notice of the EPC as they do of a smart kitchen or a wood-strip floor in the lounge.
One has to be careful what one says, even in the House, but one will probably get the former for a third of the cost of the latter and it will be just about as good.
It is no secret that my party and I want to see a rapid and dramatic improvement in the energy performance of buildings. Indeed, my private Member’s Bill—now the Sustainable and Secure Buildings Act 2004, which was well before the right hon. Member for Witney (Mr. Cameron) came into anybody’s sights—gives Ministers the power to move much more decisively on this important issue than just simply labelling. Labelling is important, but we need to go further. I remind the Minister that she has the powers to go further than she proposes today and my party recently set out a scheme that would assist owners in achieving that on a sensible time scale.
On the one hand we have militant opposition to anything to do with this project. We saw a wolf in sheep’s clothing speak with great eloquence at the outset of this debate, but it is a fact that the Conservative party, whether it knew that it was doing it or not, prayed against both elements, including the EPC. The Liberal Democrats strongly support the EPC. We actually want the Government to go further and faster on that and to see some positive results. Whatever the merits and the theoretical benefits of the scheme in its original form, the Government have dithered and bungled on the HIP project. They should press forward with the EPCs and recognise the rest of the project for the train crash that it has become.
Order. I remind the House that the prayer is limited to one and a half hours. We must complete consideration by 3 o’clock, but several hon. Members are seeking to catch my eye. Unless contributions are very brief, many people will be disappointed.
At the outset, I wish to draw attention to my declared interests, specifically as chairman of the Construction Industry Council and a director of Hometrack. As I have made clear in previous debates on this subject, I am a strong supporter, and have been for many years, of reform of the house buying and selling process, which is one of the most stressful experiences in most people’s lives, is unduly protracted and involves a scandalous level of waste and abortive costs. Only last night, I was talking to someone who had lost £1,000 because a seller had withdrawn after he, the buyer, had committed to expenditure on searches and surveys. That experience is repeated hundreds, if not thousands, of times a day. Every day £1 million is lost in abortive costs. I was very disappointed that the hon. Member for Surrey Heath (Michael Gove) simply ignored my question about what the Opposition intended to do about that very real problem.
I agree with my hon. Friend, but such things take time and I would not expect to see an immediate reaction. Over time, the implementation of the reform will help to instil confidence in the system. The failure of the present system is attributable to the fact that it is inherently unsatisfactory. It requires buyers to make a commitment on what is probably the largest financial transaction of their lives without adequate information on the property that they propose to acquire. That self-evidently absurd way of proceeding could not be justified in any other field of commerce. The hon. Member for Bromley and Chislehurst (Robert Neill) asked why we did not propose EPCs at the point of sale. If he thought about it, he would realise what an absurd proposition that was. It would be absurd to be given an assessment of a fridge’s performance only at the point at which one had agreed to buy it, instead of when considering competing models and deciding which is the most energy efficient. That encapsulates the nonsense of the present house buying and selling process and shows why reform is necessary.
Is not the downside of that the real risk that requiring an EPC—which is a good idea, and that has always been the view of Conservative Members—up front adds to the seller’s risk of abortive costs? Those costs are likely to be passed on to the buyer, so it is not as simple as the right hon. Gentleman makes out.
The hon. Gentleman is wrong. The seller puts the property on the market and commissions the EPC. If there are problems with the property, it may prompt the seller to carry out improvements, because he will know that they will give him a better chance of selling. That may help to achieve some cost-effective improvements in the property, but that is entirely in the seller’s hands. Abortive costs will arise only if the seller chooses to withdraw the property from the market, whereas in the example I gave prospective buyers who have commissioned surveys, searches and other reports lose their money for reasons entirely out of their control.
The hon. Member for Surrey Heath (Michael Gove) said that the bureaucratic burden on local authorities of the increased number of searches for house sellers would result in the housing market drying up. Given that buyers currently have to get a search on houses they wish to buy and if that purchase falls through other would-be buyers have to have the same search done, does my right hon. Friend agree that the hon. Gentleman’s point is illogical?
My hon. Friend makes his point well. I notice that the hon. Member for Surrey Heath did not seem to understand the clear and impeccable logic of my hon. Friend’s argument.
Many of the professional bodies that oppose the introduction of HIPs do very well out of the present system. If searches are made repeatedly by different buyers, the solicitors benefit. When valuations are commissioned by mortgage lenders, they make money on the process each time. In many cases, they make rather a lot of money. If the valuation has to be done repeatedly on the same property, they are not out of pocket. No wonder they like the existing system. Every time a surveyor is commissioned to conduct a valuation or survey, their fees are paid, so they are not in a hurry to promote changes to the system, which involves waste to the consumer and the public. This is, therefore, an issue of public interest.
I regretted the Government’s decision last summer to abandon one of the core elements of the scheme—the mandatory home condition reports. That is a fundamental element that will have to be reintroduced and I hope that the Government will recognise that in due course. But I do not believe that we should delay the introduction of HIPs in the hope of getting something better. That would allow the best to be the enemy of the good. We need to get the new arrangements up and running from 1 June and then seek to improve them in due course.
Like me, my right hon. Friend is concerned about the quality of homes and the safety of individuals. Does he agree that this measure will do much to ensure that the homes that people purchase are safe and efficient, and will enable them to understand that before they make a significant commitment?
My hon. Friend has much experience in this area, and she is right to say that it is all about improving the information available to the public. I personally believe that mandatory home condition reports would have done even more than the present package, but I hope that we will reach that point in due course. I certainly do not want to see any backing away from the implementation of HIPs.
If I am to make progress as Mr. Deputy Speaker has asked, I hope that the hon. Gentleman will accept that I cannot take any further interventions.
I do not share the apocalyptic visions of meltdown in the housing market that some of the opponents of HIPs have forecast. They rather remind me of the similar prophecies of doom preceding the introduction of the licensing arrangements in November 2005. On both occasions, the cheerleader was the Daily Mail, but that newspaper was entirely wrong about the licensing arrangements. The Government held their nerve at that time: I hope that they will do the same now and that they will not be persuaded to do anything other than proceed with a reform that is in the long-term interest of the consumer.
I want to highlight two specific items very briefly, and the first is the benefit that HIPs will bring to first-time buyers. The Opposition talk about them frequently, but now the House has an opportunity to do something that is unquestionably in their interest. My hon. Friend the Minister for Housing and Planning has made it clear that they will get all the benefits of the HIP at no cost. The Opposition claim to be the friends of first-time buyers, so why are they not welcoming this measure?
Secondly, on the issue of energy performance certificates: we know that the Government have made real progress in driving up the standards of new homes. When I was a housing Minister, I was proud to be part of the process of ratcheting up part L of the building regulations. The Government have taken that process further, and I applaud that. However, new housing makes up only 0.8 per cent. of the total housing stock each year.
If the hon. Gentleman looks back over time, he will find that the rate of addition to the housing stock has been at about 1 per cent. every year for a very long time. If we are serious about taking quick action to improve energy efficiency, we have to tackle the problems in the existing housing stock. The measure that we are discussing is the most effective way to do that, as there is also a lot of evidence that investment to improve energy efficiency is most likely to be carried out when a property changes hands.
The HIP is the right measure to achieve an improvement that we all recognise as important. I sincerely hope that the House this afternoon will not support the Opposition’s entirely opportunistic prayer, but that instead it will vote for a measure that is in the public interest, in both the short and the long term.
On occasions, this debate has been fairly rumbustious, largely due to the excellence of the opening speech by my hon. Friend the Member for Surrey Heath (Michael Gove). However, in the few minutes remaining, I hope that I can take a slightly different approach to the matter. I think that all hon. Members agree that the energy performance certificates are good news. There does not seem to be any dispute about that, so can we take it as a given that everyone wants them, and wants the scheme, when it is implemented, to be a success?
Like the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), I was a housing Minister. After four years in that job, I can sense when a project is not going to get off the ground. For a number of weeks, I have tabled questions to the Minister for Housing and Planning, asking for details of how many domestic energy assessors and home inspectors there are in each local authority, city and region. Week after week, the response that I got was that the question would be answered “shortly”. Eventually, I raised the matter with the Leader of the House at last week’s business questions, and at last got something of an answer.
However, I was still not given a number. The answer that I received did not disaggregate home inspectors and domestic energy assessors. Instead, it lumped both together, and it gave no breakdown of how many there were per district. The answer did not even disaggregate those who had qualified and those who were still in training. At the end of last week, the best that the Department could do was to say that the total number of inspectors and assessors—both fully trained and still in training—was something approaching 2,000. The answer went on to say that there was no point in giving a breakdown in terms of local authority, city or region because domestic energy assessors will work on a regional basis. The fact that the assessors will have to drive all over a region, thus increasing carbon emissions, is apparently neither here nor there.
Not unreasonably, therefore, at the end of last week I tabled a named day question, asking whether the Secretary of State, pursuant to her answer of 8 May, could tell me how many practising domestic energy assessors and home inspectors there are in each region. After all, we are only 15 days away from the implementation of the scheme, so one would have thought that the Department would at least know how many inspectors and assessors there are in each region. What answer did I get to my named day question? I was told that the Secretary of State would answer it “shortly”.
Only two reasonable inference can be drawn from the fact that Ministers cannot tell the House how many domestic energy assessors there are in each region. In fact, an extrapolation from the answer that I got last week shows that there may be only 57 qualified inspectors in the north-east, 76 in Wales and 152 in London. That is pretty pathetic, so either Ministers do know the numbers involved and are too embarrassed to tell the House, or they have no idea. In either case, I suggest that it would be in everyone’s interest to postpone the scheme for three months, until October.
I have no idea about the merits of the judicial review being sought by the Royal Institution of Chartered Surveyors, but I would be amazed if the single judge who has to make the decision does not give leave for that review to be heard. Moreover, it is fanciful to believe that the High Court could hold a full hearing before 1 June, so that is another layer of uncertainty.
Ministers must be able, with confidence, to tell the House, the country and everyone involved that there are enough inspectors and domestic energy assessors in every region. They will be doing themselves—and people who believe in energy conservation and going green—no favours if they sleepwalk into a disaster with this scheme. All they have to do is postpone it for three months until they—and the country—are confident that there are enough inspectors and assessors. If they do not do that, there is every prospect that the scheme will be a disaster.
It makes tremendous sense for the provision of information to be the responsibility of the seller. We all know of cases where houses remain on the market for ages while prospective buyer after prospective buyer pays for the same information, discovering features that make the property undesirable or unrealistically priced. The onus on the seller to provide a home information pack and an energy performance certificate will help to avoid much duplication.
Many people are both vendors and purchasers, so although they will have to provide information about the home that they sell, they will benefit from the information about the houses that they view. The earlier in the process such information is available, the less likely people are to want, or to be forced, to pull out of the purchase, which can often result in a chain reaction of lost sales, expensive bridging loans and immense stress. First-time buyers will particularly benefit from the fact that the seller must provide useful and valuable information that could save them from going a long way down the line only to discover a major problem.
For many of us in this place, who have experience of living in various homes and paying numerous bills, the features we need to look at to assess energy efficiency may be obvious. First-time buyers are the least likely to have such experience, yet they are often among the most committed to tackling climate change and have the most need to budget carefully for future fuel bills.
We hear plenty of warm words about tackling climate change and reducing emissions, but it is no good talking about it if we are not prepared to introduce measures and incentives that actually encourage home owners to focus on energy efficiency. If people know that they will need to obtain an energy performance certificate when they sell their home it will encourage them to prioritise measures that make their home more energy efficient. They will benefit from lower energy bills, while the do-it-yourself market will respond by providing better information about the energy efficiency of materials and products.
There has been a tendency for opponents of the scheme to say that the pack may not tell the whole story; and of course, caveat emptor—let the buyer beware. None the less, the pack is a valid tool. We could compare the process to buying a second-hand car with a recent MOT certificate. Although the MOT does not tell the whole story, and the purchaser obviously checks the car, nevertheless it provides extremely valuable information about the legality and roadworthiness of the vehicle, as well as information about its emissions—all provided by an expert with the equipment to test features that the average driver cannot examine.
Just as no one now disputes the usefulness of MOTs, so the same will soon be true of home information packs and energy performance certificates.
It being one and a half hours after the commencement of proceedings on the motion, Mr. Deputy Speaker put the Question, pursuant to Standing Order No. 16.