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Home Information Packs

Volume 460: debated on Tuesday 22 May 2007

With permission, Mr Speaker, I would like to update the House on the Government’s proposals for the implementation of home information packs. It was the Government’s intention to implement home information packs, including energy performance certificates, on 1 June. In debate last week, reference was made to the judicial review requested by the Royal Institution of Chartered Surveyors. That judicial review focused on energy performance certificates, not home information packs. On Wednesday, the judge issued an interim order, which was received by my Department on Thursday. That order would have effectively prevented the introduction of energy performance certificates on 1 June, while the case was being considered.

The Government believe that introducing home information packs without energy performance certificates would be neither practical nor acceptable. It is important to introduce energy performance certificates and home information packs at the same time, because cutting carbon emissions should go hand in hand with market transformation. We have been in detailed discussion with the RICS to prevent lengthy legal delays. Both the Government and the RICS are committed to the swift and smooth introduction of home information packs and energy performance certificates. I am pleased that we have reached a pragmatic way forward—[Interruption]—that gives certainty and allows us to get on with implementation.

Order. Let the Secretary of State speak. Hon. Members often say that they wish Ministers would come before the House. The Secretary of State is here before the House; hon. Members should listen to her.

Thank you, Mr. Speaker.

As a result, we propose to withdraw the home information pack regulations to clear the way for successful implementation of revised arrangements.

Although the issue of the judicial review is now resolved, long-running uncertainty has already had an impact on the numbers of energy assessors. For implementation on 1 June, we would need at least 2,000 assessors to be accredited, with over 2,500 by the end of the month. Today I am updating the House with the latest figures. There are over 2,500 people currently in training. A further 3,200 have already passed their home inspector or domestic energy assessor exams. Of those, 1,500 have been accredited or have applied for accreditation, but only 520 have been fully accredited. These figures show that the number of assessors is unlikely to meet our needs for 1 June implementation. Equally, they show that in the long term there will clearly be enough assessors to meet demand.

The Government remain convinced of the importance of home information packs and energy performance certificates. Home information packs will cut costs and delays in buying homes. Energy performance certificates will help to reduce energy bills and cut carbon emissions from our homes, which, as they make up 27 per cent. of our national carbon emissions, could make a big difference in our effort to tackle climate change. The measures in the energy performance certificates will cut carbon emissions by nearly 1 million tonnes every year.

I have always said that the right test of the legislation should be how it brings benefits for consumers and how it protects the environment. Today, therefore, I am setting out a practical way forward. I propose to change the start date for home information packs to 1 August, and intend to phase their introduction. From 1 August home information packs, including energy performance certificates, will be required for the sale of four-bedroom properties and larger—the properties where there is the greatest potential to make energy efficiency savings. This will ensure work for energy assessors who have already been trained and accredited. We will extend to smaller properties as rapidly as possible, as sufficient energy assessors become ready to work. As we see the number of accredited assessors rise, so more properties will be included in the system.

We are also introducing a number of transitional measures. First, until the end of the year, we propose to allow people to market their properties as soon as they have commissioned a pack, rather than make them wait until they have received it, in order to avoid unnecessary delays when the systems come in. Secondly, to allow energy performance certificates to be implemented at the earliest opportunity, we will make amendments to allow energy performance certificates to be up to 12 months old when the property is put up for sale, extending the current three-month age limit.

Thirdly, we are inviting councils and registered social landlords to work with us to introduce energy performance certificates on a voluntary basis in social housing—for example, at the time of stock transfers. This will also provide work for energy assessors at an early opportunity. I will shortly introduce revised regulations to implement the changes that I have outlined.

Towards the end of the year we will assess the implementation of home information packs and consider what further steps might be needed to maximise the reduction in carbon emissions and drive forward the reform of home buying and selling. This assessment will be informed by the operation of the market from 1 August, by the results of the area trials, and by a further consultation on the next steps in implementing home information packs and energy performance certificates, which we will begin in the summer.

The approach that I have set out gives clarity to everyone about the next steps. It delivers home information packs and energy performance certificates, removes uncertainty for energy assessors and others, and ensures a smooth transition for the people buying and selling their property. Most importantly, it provides an opportunity to make real progress towards cutting carbon emissions from our homes.

I thank the Secretary of State for her grace and courage in coming to the House to make the statement today. It cannot have been easy announcing a retreat on a policy that she had no part in implementing originally. It is big of her to take the flak.

I also thank the Secretary of State for allowing me sight of her announcement, which I received just 25 minutes ago—clearly this is a day for doing everything at the last minute.

May I ask why, after being warned more than a year ago that they were comprehensively mishandling this issue, Ministers have seen fit to retreat only now with eight days to go before home information packs were due to be implemented? Why did Ministers not take the opportunity that we offered last week to think again? Was it stubborn vanity or sheer incompetence? The Secretary of State may argue that this humiliating climbdown was precipitated by the judgment issued in the High Court today, but that prompts the question that goes to the heart of the matter: why did Ministers find themselves in court in the first place? Why did they press ahead with a scheme that everyone who knows anything about the housing market told them was flawed at the heart?

Those warnings, unlike this climbdown, did not come at the eleventh hour. In this House at this Dispatch Box a year ago, we told the Government that their scheme was flawed. The Government told us that we were scaremongering, but 11 months ago they were compelled to execute the first in a truly embarrassing series of U-turns by dropping the mandatory home condition report, which was the keystone of the original home information pack, just hours after the Minister for Housing and Planning had defended it in this House. However, they were still determined to press ahead after that U-turn. Why did they not take the opportunity to work with us and others to put the stability of the housing market first? Why did Ministers decide to ignore the growing chorus of concern, shut out expert advice and carry on regardless?

On 21 February, all the key stakeholders who were originally invited to help the Government set up the scheme issued a warning letter to the Minister for Housing and Planning asking for an emergency meeting to address fundamental concerns with the scheme. They were not granted the meeting for which they asked: why? In desperation, the same group wrote to the Secretary of State on 2 March asking for a collective emergency meeting. Again, they were snubbed and no collective meeting was granted: why? What explains that refusal to listen to the experts, who were once charged with setting up the policy and whose involvement would be key to implementing it? Was it because this Government could not bear to be told that they were in the wrong, or did they not realise what a mess they were presiding over? Was it deadly arrogance or fatal ignorance? After today’s announcement, we know that this lady is for turning.

There are still many unanswered questions. The Government were warned that there were not enough qualified, accredited and certificated home inspectors in place. Over a year ago, I warned that getting those people in place was crucial. Only last week, the Minister for Housing and Planning told us that we had enough people to ensure the smooth operation of the scheme—she told us that everything would be all right on the night. Why did she offer that cavalier assurance, when the Secretary of State has told us that there will not be enough people in place after all? We know that relations between these Ministers are bad, but did the Secretary of State find out only in the past few days how few qualified people are in place? When did she know the real numbers? And why was not the House informed about the truth last week?

How can Ministers ever again ask to be taken seriously on the environment, when they have comprehensively mismanaged a measure that they argued throughout was vital to fighting climate change? Will the Secretary of State also confirm that today’s judgment in the High Court underlines what we have argued all along and what best practice in the European Union shows—you do not need home information packs for energy performance certificates? Will she agree to meet me, my colleagues, the Liberal Democrats and everyone with an interest in getting the housing market right to ensure that there is at last some expertise in this process?

Is this not a desperate, last-minute retreat designed to ensure that the Minister for Housing and Planning is airlifted out of this Department by her friends in the Treasury in a future reshuffle, so she does not have to cope with the chaos that she has created? And is it not truly tragic that confidence in the industry, the stability of the housing market and the battle against climate change have all been damaged by this Government’s arrogance and incompetence?

I am absolutely delighted to see the hon. Member for Surrey Heath (Michael Gove) enjoying himself and in his place. Indeed, only this morning the right hon. Member for Witney (Mr. Cameron) asked the Conservative party whether it wants to be a serious force for governmental change, or whether it wants to be a right-wing debating society. Today, we have had our answer, and there he is, the honorary president.

The hon. Gentleman asked me to meet him. I would look forward to, and enjoy, meeting him on any occasion to discuss our policy on energy performance certificates or HIPs.

Before I deal with the specific points raised by the thrusting, young, ambitious hon. Member for Surrey Heath, I cannot help but observe that he has clearly thrust aside the hon. Member for Meriden (Mrs. Spelman), who is sitting beside him. Is that because he enjoys debating so much, or is it because the hon. Lady has been barred from addressing the House today because she dared to speak the truth about her party’s position on energy performance certificates on television only last week? She said that

“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.”

I fail to see how she can claim to support energy rating of homes if she opposes the idea of people going round to other people’s houses to check what their energy ratings are. What does she have in mind—drive-by energy assessors? That does not sound very green to me.

Let me deal with the points made by the hon. Gentleman. He said that we have refused to meet stakeholder groups such as estate agents or the Royal Institution of Chartered Surveyors. I can tell him, and the House, that those groups have had meetings with my hon. Friend the Minister for Housing and Planning. Indeed, I offered to meet the RICS before the introduction of the regulations, but somehow it could not find the time.

The hon. Gentleman asked when I knew about the interim order and the judicial review. Our Department was informed on Thursday, and I was informed later than that, at the weekend. In the past half an hour, we have reached a resolution with the RICS and set out a practical way forward that recognises that 5,000 energy assessors are in training or have already passed their exams. It is clear that lots of people want to be energy assessors, but—perhaps unsurprisingly given the campaign of misinformation from the hon. Gentleman and the threat of judicial review—several of them have adopted a wait-and-see approach instead of paying their final £300 to become accredited. That means that we have certain practical considerations to address. We need to provide certainty for energy assessors. That is why we are delaying the implementation of the proposals but also bringing forward some of our social housing stock, on which EPC assessments can be performed.

Our approach must be based on the two tests that I set out earlier: first, how do we maximise consumer benefit; and, secondly, how do we meet our climate change goals? The package that I have put before the House is a sensible way forward that does both. I should have thought that Members on both sides of the House would agree with WWF and Friends of the Earth that EPCs are

“one of the most important pieces of environmental legislation to affect households in recent years.”

I do not think that anyone could say that the package of measures before us today is anything other than a sensible and pragmatic response to the current situation. That is why I welcome the hon. Gentleman’s support, look forward to meeting him, and hope that we can now establish a consensus in favour of the proposals.

I, for one, welcomed HIPs and energy performance certificates, understanding the valuable role that they would play in our efforts to curb climate change. I recognise what my right hon. Friend has done to get a viable solution for this country. She confirmed that the RICS’ objections centred on EPCs. We have established that sufficient people are in training to undertake EPC assessments when they are in place. Does she agree that the Opposition’s continuous opposition to this measure is very destructive, jeopardises people’s employment, and jeopardises the environment?

My hon. Friend has a long-standing interest in such matters. She is absolutely right—we have now proposed a sensible way forward. I ask hon. Members of all parties to welcome the steps that we have taken to come together and ensure the smooth implementation of home information packs and especially energy performance certificates.

Smooth implementation is fine but the Secretary of State might acknowledge that it is a bit of shambles at the moment. Last week, I referred to the scheme as a train crash. Today, the first aid workers are on the scene but many hon. Members do not have much confidence in the doctors and nurses who are ministering to the injured.

Matters first went wrong last July and we were assured that everything would be fixed and ready for this June. It has all gone wrong again. Will the Secretary of State publish the risk assessment for her decision to move the scheme to 1 August? Is she satisfied that the risks inherent in it will be resolved and settled positively before we reach that August date?

Will she confirm that 3,500 transactions will be completed by 1 August? Mr. McDonald from the Department told the House of Lords Select Committee on the Merits of Statutory Instruments that that number was needed before the pilot study could be validated. Is the Secretary of State’s choice of 1 August as the new date in any way connected to the fact that it is well beyond the reach of parliamentary scrutiny?

The statement refers to four-bedroom homes. Does the right hon. Lady have a legal definition of a four-bedroom home? How many offices, studies, boxrooms and loft conversions will suddenly crop up? What regulations will she propose? Will she confirm that, according to most people’s estimates, the number of homes that she is considering will represent around 10 per cent. of the housing stock? How does the two-month delay and the reduction by 90 per cent. of the number of transactions fit with the capacity of 1,500—it may be 5,000—assessors who will be in the market looking for work at that time?

The Secretary of State referred to stock transfer of local authority housing. I welcome the inclusion of social housing in the scheme. However, to do it at the point of stock transfer, when there may suddenly be 1,000 or 10,000 homes all at once, makes little sense. Will she take a second look at the way in which social housing should be integrated into the scheme?

Is the Secretary of State persuaded that her Department’s third attempt under her leadership to deliver the scheme will be any more successful than the other two, or does she take comfort from the thought that, if it is not, a different Minister will have to be held to account?

We chose 1 August because it maximises certainty for energy assessors, delivers on our climate change goals at the earliest opportunity and maximises the benefit for consumers. That is also the reason for our choice of four-bedroom properties—I am happy to work with the hon. Gentleman on a definition, if he wishes; I am sure that a common-sense approach will be adopted. However, I understand that four-bedroom properties represent about 18 per cent. of the market. The assessment is cautious and based on the number of assessors who have already been trained.

To provide assessors with sufficient work or give them greater opportunities for work in the interim period, we will work with social housing providers—both local authority and registered social landlords—to try to bring on stream, through stock transfers or perhaps other measures, enough work to continue to generate additional demand for energy assessors so that they can become available in due course to meet the demands that are placed on them in the home-buying and selling process. That is a sensible way forward, which guarantees that there is work for them to do.

The hon. Gentleman asked for information to be published. I said that we will publish a consultation paper, to which a full regulatory impact assessment will be attached. I am sure that he will take the opportunity to comment on that. However, I hope that he agrees that that is a sensible and pragmatic way forward.

National Energy Services, based in my constituency, is one of the major trainers for energy assessors and I have seen the training and work that is done on site. It is quite clear that many assessors have not paid for the final accreditation precisely because of the misinformation and the opportunistic opposition of the Conservative party and the Royal Institution of Chartered Surveyors. What is necessary now so that people who have committed themselves to training as assessors have some certainty of employment is to ensure that there is no further delay beyond what I understand has had to be a pragmatic accommodation between the Secretary of State and the RICS. Has my right hon. Friend received an assurance from the RICS that it will stick to that agreement and not cause further insecurity by backtracking or derailing this measure, which is so important for home owners and for improving the energy efficiency of homes?

I thank my hon. Friend for her comments. As I said, in the last three quarters of an hour we reached a resolution of the judicial case with the RICS. My hon. Friend is absolutely right that we need some certainty in the market to encourage energy assessors to pay their final fees in order to become accredited. I think that everyone can take comfort from the fact that, within less than a week, more than 1,000 extra energy assessors have passed their exams. People are going through training, becoming qualified and passing their exams at a quite dramatic rate. The challenge now is to ensure that they have the time to become properly accredited and that there is then work for them to do. That is why we are taking this sensible and measured approach.

In recognising this as the Government’s second great triumph over the previous week, may I ask whether the Secretary of State will give the House an assurance that she will not seek to recruit assessors from the ranks of junior doctors?

I always enjoy the hon. Gentleman’s wit. He makes his point in his own way, but the fact is that we have to provide as much certainty as possible for energy assessors while ensuring that we meet our climate change goals and maximise benefits for consumers. I believe that I have set out a sensible way forward on that.

May I express the disappointment of, I am sure, the whole House that lawyers have interfered with the democratic will of the people? In areas such as Wakefield, where many houses were traditionally reliant on coal-fired fuel, estate agents have welcomed HIPs and have advertised their services in the Wakefield Express. People will feel very cheated by this latest delay. Does my right hon. Friend agree that, in areas such as mine, where people are heating water with very inefficient back boilers or heating their homes through often dodgy flues, energy performance certificates have the potential to reduce the number of accidents and the number of people dying of carbon monoxide poisoning or from scalds?

I know that my hon. Friend has championed the cause of safety in the home ever since she became a Member of this House. I give her credit for doing so. She is right that many estate agents up and down the country have been implementing systems to bring in HIPs and energy performance certificates at the beginning of June. No doubt they will be disappointed by today’s news. The fact is that we have to minimise the risks and ensure that we sensibly introduce measures that provide some work for energy assessors, continue to build the market and inject a greater degree of confidence in the system.

May I ask the Secretary of State about a three-bedroom house for which a planning application has already been made for a third bedroom—[Interruption.]

Sorry, I mean a three-bedroom house where a planning application has been granted for a fourth bedroom. When a home information pack has been commissioned for a four-bedroom house, but it is not received by the time of exchange, will the purchasers be allowed to go ahead?

The hon. Lady clearly wants to become involved and help us with the definition of a four-bedroom property. Trading standards, which will enforce the regulations, will take a common-sense approach. I have outlined an approach whereby a potential seller who has commissioned an energy performance certificate and has it in place at the point of exchange will be able to proceed with the sale of the property.

Last week, I was in favour of the principle of energy performance certificates and of the principle of changing the way we buy and sell houses in this country. I am still in favour of those principles. I recognise that my right hon. Friend has found it necessary to make some changes and postponements today, but I greatly welcome the idea of rolling out energy performance certificates for social housing, which could help some of the poorest families in our community. Does she agree that, however regrettable the resistance of the RICS to energy performance certificates on this occasion, it is nothing compared to the double standards of Conservative Members who want to vote blue and talk green only if no effective action follows?

I welcome my hon. Friend’s support. I am absolutely clear that energy performance certificates and home information packs have an important role to play, and everyone should take the opportunity today to back those principles. Faced with tough decisions on tackling climate change, the hon. Member for Surrey Heath and his party duck the challenge at every opportunity. Today is yet another example of their failure to live up to their slogans.

The Secretary of State has told us that there are only 520 fully accredited inspectors, and that that number is inadequate to implement the regulations on 1 June. That was also true last week. Why were we not told that in last week’s debate on this matter? Why were we told last week that, on the contrary, there were sufficient inspectors? That was not true. I would have thought that this was a resigning issue.

The right hon. and learned Gentleman is not right. The House was told the appropriate number of energy assessors—the number who had passed their qualifications and who intended to start work. Since those figures were given to the House, the number of energy assessors who have completed their training and passed their exams has risen by a further 1,000. We only need 2,000 in place at the beginning of the process. There is clearly sufficient demand, but there is also uncertainty about whether to pay the accreditation fees. The package that I have put before the House today is designed to give that extra certainty.

I understand why my right hon. Friend has had to make this statement today, but I have to say that I am deeply disappointed. In my constituency—where there is not 18 per cent. of four-bedroomed houses—270 people are working for a specialist company providing HIPs. As a result of the action of the RICS and the support of the Conservative party, there is a risk that they will be put out of work. When laying the necessary orders, will my right hon. Friend take into account the needs of the people working for those specialist companies so that they do not suffer unemployment as a result of the Tories’ actions?

I certainly will. I have been very concerned about the impact on individual energy assessors, who have parted with good money—their own money—to be trained and who intend to work to provide valuable energy certificates for my hon. Friend’s constituents and others. That is why we intend to introduce the full scheme at the earliest opportunity and why we are bringing forward work in the social housing sector. That will not only help us to meet our climate change goals, but provide additional work for energy assessors.

The right hon. Lady has come here to make a statement about problems that she has now resolved. She has been asked a simple question about the definition of four-bedroom and three-bedroom houses. Let me remind her that only one group is lower in public opinion than we are: the estate agents who will now be responsible for this provision. She knows very well that people will be able, quite happily, to take one of their four bedrooms and turn it into a boxroom, creating a three-bedroom house. There is no way that she can define that in any legal sense. This is a thoroughgoing disaster. Why does she not drop it and start again?

It is pretty clear to me that if a house owner has applied for planning permission for a fourth bedroom, it must be a three-bedroom house. It is pretty hard to carry out an energy performance assessment on an extension that has not yet been built. This just serves to prove that a common-sense approach will be adopted by the trading standards officers who will have to enforce our policy.

I hesitate to use words such as “capitalism” in this place, but is it not a prime example of the wasteful nature of market forces to insist on a situation in which the same survey is carried out time after time on the same property by different purchasers? This process is designed to end that practice, which the Conservatives and their lawyer friends are trying to keep going. It is essential that we get the process back on the road and ensure that the careers of people such as my constituents who have committed themselves to becoming inspectors are protected, preserved and enhanced. They will not be impressed by the hilarity on the Conservative Benches this afternoon.

My hon. Friend has made an extremely good point. Home information packs are incredibly important to the transformation of the home buying and selling process, which has not changed for a great many years. It is right for us to provide information up front, in as successful a form as possible, for purchasers before they enter into protracted legal negotiations.

Last week, the Minister for Housing and Planning told the House that there were more than enough energy assessors and that she had every confidence that the scheme could go ahead on 1 June. More important, she told the House that the RICS judicial review was “completely groundless”, as can be seen in column 643 of Hansard. Why is the Secretary of State having to cover for the incompetence and arrogance of a Minister who is not doing her job sufficiently well?

My hon. Friend the Minister spelled out the position to the House. She outlined the numbers of those in training and those who had passed their exams. In fact, since then the number who have passed their exams has increased by 1,000.

In six days. The figures are changing rapidly as more and more energy assessors pass their exams, gain their qualifications and pay their dues to become fully accredited. However, they clearly need enough certainty in the system to part with the final £300, and we are not providing that certainty.

The Secretary of State must know that the vast majority of the public want to make their homes more energy efficient, but does she really believe that this bureaucratic and expensive measure is the best way of achieving that? Given all the problems and all the retreats, is it not time to get everyone around the table to think about what is in the best interests not just of energy efficiency and climate change, but of the public?

No doubt my hon. Friend will contribute her views to the consultation that we are organising. The results of the area trials, which are continuing, and wider consultation with the public show a clear need to provide clarity and transparency in the home buying and selling process. The purpose of home information packs is to deliver more transparency and information at the beginning of the process of purchasing a house, rather than waiting until the end of the process to provide that vital information. I consider that to be a common-sense change.

Does the Secretary of State not understand that vendors do not want to incur what is effectively a tax on their transaction before they have gained any money from the sale that they are trying to carry out? Does she not understand that when in a hole one should stop digging, and that it is not a good idea to go against the wishes of the many people who would like to sell their houses or flats in the normal way without Government interference and an effective tax?

I can only conclude from his comments that the right hon. Gentleman does not support energy performance certificates, which are the only new documents in the home information packs.

I hear the right hon. Gentleman say, from a sedentary position, that he does not support mandatory energy performance certificates. Is that the view of his party’s Front Bench? If it is, I suggest—

What discussions has the Secretary of State had with the Chancellor of the Exchequer? This delay is clearly hugely to his advantage, because it will give him the opportunity to knock home information packs on the head when he becomes Prime Minister and, hopefully—for him—not to lose quite so many votes at the next general election.

The Chancellor of the Exchequer has made his absolute commitment to the policy completely clear.

I understand that the RICS has not agreed to much of what the Secretary of State has said and that the court decision has been stayed, not withdrawn.

As the Secretary of State will know, for many weeks I have been asking a named-day question about the number of accredited domestic energy assessors. Week after week, the Minister for Housing and Planning has replied, “I will answer shortly.” The Department chose to answer the question in that way for one of two reasons. Either it knew that it did not have sufficient accredited domestic energy assessors, which would be negligent, or it did not know how many it had, which would be incompetent. Which was it, negligence or incompetence?

As a result of my comments today, the hon. Gentleman will be aware that the figures are changing rapidly. I will put a full set of figures before the House today—I will place a copy in the Library—and I will also make sure that his parliamentary questions are fully answered.

I have come to this House to be as open and transparent as possible. It is clear from the figures that I have presented today that a huge number of people want to become trained energy assessors. However, it is also clear that many of them feel worried about paying their accreditation fees because of the uncertainty that has been hanging over the process. The way ahead that I have set out today is designed to resolve that uncertainty.

I listened to the statement with great interest and it seemed to me to be bizarre and surreal. Among those blamed were solicitors, the market and the Opposition. Do the Secretary of State and her Ministers accept any responsibility for the situation in which they find themselves? If they do not, I suspect from the tone of the debate that the House will soon be roofless.

Our policy is the right one: there should be up-front information for the consumer and we should introduce energy performance certificates to try to meet our climate change goal. However, the uncertainty created by the campaign of misinformation led by the hon. Member for Surrey Heath, combined with the threat of judicial review, has led in the final weeks to not enough energy assessors paying their dues. I have come to the House to put that right.