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Mr. Forth: How much those two were worried about energy efficiency, I shall leave to my hon. Friend's imagination. We had better pass over that fairly quickly.
I do not want to be diverted, as I am determined to get through the new schedule in the time available, so as to do full justice to it; I would not want my hon. Friends to feel short-changed. It deserves the full attention of the House, and I am trying to be helpful.
As a deregulatory, non-interventionist party--I note the identities of some of my hon. Friends in whose names the new schedule stands--we provide in paragraph 5 that the
- "Secretary of State shall make regulations".
- "which must be met by the lender in relation to the preparation of an energy efficiency report."
Intriguingly, paragraph 5 adds that these
- "regulations may . . . require a report to include . . . a statement recommending measures which could be taken for the purpose of improving energy efficiency".
The provision before us simply requires a statement that recommends measures. Presumably we shall have a rather expensive analysis--if it is to be any good--of a quick, cheap and cheerful look around. It will say, "We really think that you should have cavity wall insulation or double glazing." The individual will not have to follow that advice, but he might think about it. We shall spend a great deal of money on stating why a building is not energy-efficient, only to say rather mildly, "We think that on balance it might be quite a good idea if you followed our advice."
The provision falls between two stools. Either we insist on people becoming energy-efficient or we leave them to their own devices, which would be my preference. We are as near as we shall get to what my hon. Friend the Member for Sevenoaks said that he would expect. Paragraph 5(4) states:
- "Regulations under this paragraph may not require an energy efficiency report to contain any information in respect of the dwelling which is not readily ascertainable on a visual inspection of so much of the exterior and interior of the dwelling as is accessible without undue difficulty to the person undertaking the inspection".
What will be the use of the provision if the requirement is for someone, even if he is relatively expert, to stroll round the building to have a quick look at it, followed by a quick stroll inside, and then make an assessment of energy efficiency? I fail to see the point. Either the process should be undertaken properly or it should not be undertaken at all. The very words of this long and complicated schedule seem to undermine its purposes at almost every turn.
The one piece of good news that I have found so far--I hope that this helps my hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton)--is that sub-paragraph (7) states:
- "In making regulations under this paragraph, the Secretary of State shall have regard to the cost of preparing an energy efficiency report."
The bad news returns, because paragraph 6(1) states:
- "If the borrower suffers loss by reason of the failure of the lender to comply with his duty under paragraph 1"--
- "the borrower is entitled to compensation".
8.45 pm
There is a better solution to the problem. However, I shall pose a question to those on the Government and Opposition Front Benches before giving it. The hon. Member for Ceredigion (Mr. Thomas) mentioned the Kyoto protocol, which seems to absorb many people for many of their waking hours. Not that long ago--and I say this strictly in the context of energy efficiency--it was argued that the answer to wicked vehicle emissions was to increase tax on vehicle fuel, which would reduce those emissions. At the same time, in some people's book, another argument said that domestic fuel caused even more environmental pollution than vehicle emissions. There was therefore an argument, which the previous Government accepted, for increasing tax on domestic fuel for exactly the same reason as we increased tax on vehicle fuel.
We did that, and were roundly criticised by the then Opposition, who are now the Government. The environmentalists did not quite know where to stand on the matter: some said yes and some said no. We are now in a curious position. Apparently, it is okay to tax vehicle fuel to reduce emissions--but as soon the Government got in, they reduced tax on domestic fuel. I never understood the logic behind that, and I still do not. If we are to be serious about domestic energy efficiency, there is a good old-fashioned market solution--to increase tax on domestic fuel. That approach is an alternative to the regulatory approach, and I propose it for exactly the same reasons as the environmentalists use when they argue that we should increase vehicle tax.
Dr. Iddon: Tell the pensioners.
Mr. Forth: Well, pensioners drive motor vehicles. The hon. Gentleman may not know, but pensioners have been hit hard by the "environmentally justified" swingeing tax on vehicle fuels. If he claims to be an environmentalist, how can he look the environment in the eye, having presumably supported a reduction in domestic fuel tax and, by implication, encouraged pollution by encouraging the wasteful use of domestic fuel? It goes around and it comes around in various intriguing ways.
The new schedule vaguely attempts, by regulation, to intervene in a market process--a private transaction between freely choosing buyers and sellers. It contains no
detail to guarantee that it will deliver the results that it seeks. I fear that my hon. Friends may have overlooked the market solution with which, I would have thought, we were instinctively in tune. All in all, my hon. Friends have a lot more work to do to persuade me that we should support the provision; my hon. Friend the Member for Sevenoaks made a similar point.I am aware of the passage of time and the restrictions imposed by the Government's arbitrary and unnecessary time limits on these debates--so, as it appears that the Minister and I are in broad agreement on the proposal before us, I look forward to celebrating that by listening to what he has to say.
Mr. Raynsford: I hope that I will not disappoint the right hon. Member for Bromley and Chislehurst (Mr. Forth). I shall come to the same conclusion as him, but for almost exactly opposite reasons. I hope at least to give him a little intellectual challenge.
On Second Reading and in the debate on clause 7 in Committee, I made it clear that the Government fully support the inclusion of energy efficiency information in home survey reports, and that we intend to make that information part and parcel of the seller's pack. There is an overwhelming argument for making that information available. It is when people purchase a new property that they are most likely to consider improvements and changes, and it is right that they should have information. The measure does not require them to do anything, but the information will be available to enable them to reach an informed judgment about whether it is sensible to carry out improvements to the energy efficiency of the property.
The hon. Member for Ceredigion (Mr. Thomas) asked what was included in the Bristol pilot. The energy efficiency survey covered the SAP, or standard assessment procedure, rating for the property; the potential SAP rating--that is, the amount by which the energy efficiency could be improved; the annual heating costs associated with the current SAP rating; and the CO 2 emissions, for the benefit of those rightly interested in environmental concerns.
Crucially, the pilot also included advice on measures that would improve the energy efficiency of the property, including both the estimated installation cost and an indication of the energy saving, and therefore the cost saving, per year, thereby giving people information about the long-term pay-back period for investment in energy efficiency measures. That is a wholly sensible approach providing information to the public at the time when it is most useful to them in helping them reach decisions about whether to proceed to improve the energy efficiency of their home. That is the information that we intend to include as part of the proposed home condition report.
Clause 7 deals with the seller's pack. The clause gives the Secretary of State power to prescribe the contents of the pack and gives an indication of the sort of information that we believe should be included. Information concerning energy efficiency could be covered by clause 7(4). That was the point that I made in Committee, where I expressed the view that the Bill already provided for that. Because we had shown, through the Bristol pilot, our intention of including energy efficiency information in the seller's pack, there was no need to be prescriptive in the Bill.
However, to put the matter beyond doubt, we have taken note of the concerns that were expressed in the House and in Committee, not least by the hon. Member
for Bath (Mr. Foster). I am delighted that he should take some of the credit. He can send another e-mail home on the subject.Having taken note of those concerns, we decided that there should be a mention of energy efficiency in the Bill. Government amendment No. 22 specifies that the energy efficiency of a property is relevant information for inclusion in the seller's pack. Government amendment No. 23 is consequential and ensures that information on energy efficiency can be included in the home condition report. That makes it clear beyond doubt that that is intended and will happen.
Let me deal with new clauses 13 and 14. I am sorry to intrude on the private grief of the Conservative party in relation to their possible impact. New clauses 13 and 14 are modelled on the private Member's Bills tabled by my hon. Friend the Member for Eltham (Mr. Efford), which served an important purpose in raising these issues. However, time has moved on, and we have chosen to adopt a different, more comprehensive and more effective route to achieve the objective that my hon. Friend the Member for Eltham sought to achieve.
New schedule 1 is designed to place an obligation on lenders to commission an energy report when they carry out a valuation inspection for mortgage purposes. In Committee, I acknowledged that the measure could in theory enable an interim partial system to be put in place on a slightly shorter time scale than that for the introduction of the seller's pack, but I pointed out the fundamental objections to that. We believe that the seller's pack, with its comprehensive package of proposals, will provide a more appropriate route to ensuring that energy efficiency information is made available to all home buyers.
The proposed new schedule would apply only where an application for a mortgage was made and where, as a result, a survey was carried out on the property. However, we know that 25 per cent. of properties are bought without a mortgage. In those cases, the measure would bring no benefit at all. [Interruption.] The hon. Member for East Worthing and Shoreham (Mr. Loughton) asks about the other 75 per cent. He will know, because we debated the matter in Committee, that there is a growing trend among mortgage lenders to move towards desk-top valuation. He will know, because he will have studied carefully the wording of the amendment, which he will shortly have to defend, that there is no provision for the requirement to apply if there has not been a personal inspection of the property. If a desk-top valuation had been carried out, the provision would not bite. Such valuations are a growing trend among lenders and the proportion of properties that would not be covered is likely to increase.
For all those reasons, we do not believe that the measure would achieve what its promoters hope. We have no objection to energy reports being provided on a voluntary basis as part of the mortgage lending process. The hon. Members for Sevenoaks (Mr. Fallon) and for Ceredigion (Mr. Thomas) made the point that lenders could provide such reports if they wanted to, and we agree with that and would be perfectly happy for such a proposal to proceed. However, we see no justification for making such provision compulsory, since to do so would be confusing, cumbersome and unduly complicated. It would require sufficient surveyors to be trained and certified to carry out the work, because not all surveyors and valuers currently have the necessary skills to do an
energy rating assessment. As that training and certifying would be going on at the same time as the training for home condition report certification, there would inevitably be two separate training and certification processes going on in parallel. That would clearly be undesirable, unduly cumbersome and bureaucratic. We are satisfied that our proposals offer the best way to achieve the objectives that the proposed new schedule seeks to achieve.I assure the hon. Member for Sevenoaks that he is not alone in opposing the new schedule tabled by Conservative Front-Bench Members, because we shall not support it either, for the reasons that I have explained. I hope that, equally, I have assured those hon. Members concerned about energy efficiency that we are utterly committed to it and we shall achieve it by a more effective route.
On the question of the time scale, the hon. Member for Bath expressed the view that the home seller's pack process might be delayed. The one proposal that would be more likely than any other to delay its introduction would be a requirement for an interim scheme, since all the training and certification involved would delay and obfuscate the process of putting in place the necessary certification scheme for the full home condition report.
There could have been an interim of perhaps only six to nine months--the amendment that was tabled would leave it to the Secretary of State to decide the period--one year after implementation. The schedule itself allows different parts of the provision to come in at different times. No one can therefore tell exactly when it will come into effect. However, it is likely to be a matter of only a few months before the introduction of the seller's pack. Given the risk of a great deal of extra cost, confusion and bureaucracy, it would not make sense to introduce an interim scheme for that short period of time. The Government's proposal is the right way forward and I recommend it. I urge the House to reject the amendment.
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