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Lenders specifically said that an additional survey evaluation would be needed where the mortgage was worth more than 80 per cent. of the value of the house, where the property was distinctive, newly built or a character home, and particularly for flats and conversions. As I am sure hon. Members will not need reminding,
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there are few first-time buyers whose mortgage is less than 80 per cent. of the value of the home. In addition, they are likely to be disproportionately represented among those buying new-built homes and flats. Ministers spent a great deal of time, and public money, trumpeting the benefit of home condition reports for first-time buyers, but those buyers, who are already hit by the Government’s increases in stamp duty, would have faced paying twice, for the home condition report, which would have been added to the cost of the home, and for a lender’s survey on top of it. As the party that has constantly championed wider home ownership and put support for first-time buyers at the heart of our policy process, we can only welcome—along with first-time buyers everywhere—the Government’s retreat.

Mr. Raynsford: Will the hon. Gentleman tell the House how many first-time buyers, when entering into what is probably the largest financial transaction of their life, have any detailed information about the condition of the property they are buying? Does not he think that is a defect and that it is time something was done to improve it?

Michael Gove: I will tell the right hon. Gentleman what is defective: home condition reports designed by the Minister for Housing and Planning and conceived in the Department that the right hon. Gentleman once graced. How effective is a report that contains no details about flood risk or land contamination? How effective is a report that lenders will require a separate valuation or survey to back up?

Mr. Betts: Will the hon. Gentleman give way?

Michael Gove: No, I must make a little progress.

Angela Browning: Will my hon. Friend give way?

Michael Gove: I would love to make progress but I will give way to my hon. Friend.

Angela Browning: I am grateful to my hon. Friend.

Of course surveys are needed for valuation, but as anybody who has ever claimed on a chartered surveyor’s professional indemnity insurance because of a defect found in a property would know, no home pack could ever give that level of assurance.

Michael Gove: As ever, my hon. Friend makes an excellent point. One of the many defects of the scheme was that, as of yesterday, there was no adequate indemnity insurance scheme for home inspectors, so the Government would have asked home inspectors to conduct inspections even though no private sector supplier was, at this stage, willing to insure them.

Mr. Betts: Will the hon. Gentleman give way?

Michael Gove: I must try to make a little progress—I gave way to the hon. Gentleman earlier.

When the Minister makes her speech, I hope that she will not try to paint her retreat—which we want to celebrate—as a precursor to the reintroduction of the
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scheme, for there is no prospect of her being able to deliver on her Department’s earlier pledges. As several of my hon. Friends have pointed out, there are not enough qualified home inspectors ready; as my hon. Friend the Member for Castle Point said, there are fewer than 250, yet the Government said that they would need at least 7,500 to make the scheme work. The Minister has often told me and others that 4,000 inspectors are in training, but how many of them have merely registered for training? How many have actually ponyed up the £8,000 necessary to complete the course? When she tells us how many have put the money up front, will she tell us what words of condolence or what compensation she will offer to all the people who have sunk their money into a scheme that will not be honoured?

The Government were prepared to spend £3 million on advertising the scheme—£3 million for spin doctors but no compensation for those who have lost their savings as a result of the Government’s U-turn. What will those who invested in that flawed scheme think when public money is used to advertise the merits of a flagship that has already been sunk?

More than that, there were real worries about the home condition report database, which was integral to the scheme. As we know, and as we have heard from Members on other occasions, the Government have grave problems in handling IT schemes. Lenders said that they needed 12 months to get systems in place to reconcile them to the HCR database, but even yesterday we still did not have details about the tender or the operating rules for the database. Last week, it was reported that two of the potential bidders to run the scheme had already pulled out. After yesterday’s announcement, how many will offer to run it now? Rather than trying to nail the dead parrot to the perch, would not the Minister be better off admitting that the home condition report has shuffled off the mortal coil and gone to join the choir invisible?

Ministers will try to clutch at two straws in their efforts to say that HIPs are still alive: the need for energy efficiency ratings, up front at the point of marketing, and the need for local government searches, also up front at the point of marketing. The Government have tried to make a great deal of the energy efficiency report, but the truth is that it is a fig leaf. It is small and it looks green, but it cannot really cover the Minister’s embarrassment. As the Government have themselves admitted, and as I pointed out in response to two questions earlier, we do not need HIPs to implement energy efficiency reports. The Northern Ireland Office said that

Indeed, given that HIPs apply only when a home is bought or sold—obviously—how can we ensure that all the homes in the country have their energy efficiency rating fixed if we rely only on transactions for the commissioning of those ratings or reports? It simply does not make sense.

The Government’s pretensions to environmental consciousness in respect of house building policy will raise a hollow laugh in many parts of the country. Their code for sustainable homes has been criticised by both the World Wildlife Federation-UK and the Association for the Conservation of Energy. The WWF-UK resigned
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from the sustainable buildings taskforce, saying that it felt unable to defend the draft code because it did not do enough to promote energy conservation. In the last Parliament, the Environmental Audit Committee, chaired by my hon. Friend the Member for East Surrey (Mr. Ainsworth), drew considerable attention to the environmental defects of the Government’s house building programme. Indeed, it was only thanks to my hon. Friend the Member for Bexhill and Battle (Gregory Barker) that the Climate Change and Sustainable Energy Bill has provisions to ensure that microgeneration is one of the factors that planning committees take into consideration when deciding whether to go ahead with new developments.

Dr. Alan Whitehead (Southampton, Test) (Lab): Rubbish—the provision was always in the Bill.

Michael Gove: It was an amendment introduced by my hon. Friend the Member for Bexhill and Battle, which I was delighted to support. It is a commitment to the fact that when it comes to construction the Opposition take their environmental responsibilities seriously.

Ian Lucas: Will the hon. Gentleman give way?

Michael Gove: No thank you.

The final straw that the Minister may be tempted to clutch is the need for local searches, paid for at the point of marketing. But as anyone who has been involved in the home-buying and selling process knows, the key problem with local searches is that they need to be timely; after three months, they instantly date. It is much more sensible to make them at the point of sale rather than at the point of marketing. Indeed, the Government’s pretensions to be an agent of quicker searches overall are undermined by their record. They presided over the introduction of the national land information service, which was designed to cut delay, but according to the Council of Mortgage Lenders NLIS is a mess; it is another flawed IT project. Fewer than 25 per cent. of local authorities can accept a request, process the search and deliver it electronically. Some local authorities take weeks to deliver. Nothing has been done to achieve full connectivity and more than half of local authorities say that the key problem is the Government’s failure to ensure a fully joined-up system—yet another reason for the Government to get the detail right before pressing ahead with over-ambitious schemes.

I have a specific question for the Minister on searches. At present, local authority searches do not incur VAT, but HIPs were supposed to incur VAT, so will we now have VAT on local authority searches as part of the HIP? Is that another stealth tax that the Minister is trying to rescue from the wreckage of her schemes?

The home information pack was a sickly child; now it is being abandoned even by those who were anxious to bring it into the world. The Consumers Association—once the Government’s loyal ally in this regard—said that the Government have come up with a half-baked compromise and shown that their house is made of straw. Today, the Financial Times said of yesterday’s climbdown:


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It is indeed time for the Government to go back to the drawing board. They have failed to provide adequate consumer protection in the housing market, failed to manage the crucial detail even though they were warned years ago, and failed to use their time and public money to bring about genuine improvements to the house-buying process. I suspect that it will fall to another Government to bring about the changes that first-time buyers and others need to secure the improvements that the country desperately needs.

2.28 pm

The Minister for Housing and Planning (Yvette Cooper): I beg to move, To leave out from “House” to the end of the Question, and to add instead thereof:

As always, we heard an entertaining speech from the hon. Member for Surrey Heath (Michael Gove). It was rather lacking in fact or substance but entertaining nevertheless.

The hon. Gentleman began his speech with an important issue. He talked about stability in the housing market and in the economy. I think the people of this country will be astonished that the Conservatives are attempting to say that they have concern for housing market reforms because they are concerned about the stability of the economy and the housing market. The Conservatives put interest rates up to 15 per cent. They pushed people out of the housing market and pushed that market into free-fall. The hon. Gentleman talks about helping families on to the housing market ladder, yet his party pushed half a million families off the housing market ladder.

The hon. Gentleman referred to a report that he knows is based on utterly unfounded assumptions—or at least I hope he knows, given his party’s concern and its pretensions to try to regain some economic credibility. He also talked in some detail about his concerns about first-time buyers, and other hon. Members raised that issue. First-time buyers, by definition, are not sellers. They do not have to provide home information packs. In fact, they get the packs for free. They will get the information, for which they currently have to pay, for free. That is why home information packs are good news for first-time buyers and why the Labour party is supporting first-time buyers. Conservative Members say that they are concerned to help first-time buyers, yet they oppose home information packs, they oppose the new homes that we desperately need to help first-time buyers, and they oppose the funding of shared ownership schemes to help people get their first step on the housing ladder.


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Michael Jabez Foster: Is not the situation even worse? Under the present scheme, do not first-time buyers quite often pay for surveys several times over, following abortive sales?

Yvette Cooper: My hon. Friend is right. If a first-time buyer, or any buyer, wants to buy a house and the sale falls through, another buyer will come along and have to pay for all the same searches all over again. That seems to be an awful lot of duplication and waste. It seems that an awful lot of money is going into the hands of people who are gathering that information, but the consumer should not be spending that money time and again.

We know that Conservative Members have always opposed all aspects of home information packs. One minute they complain that they will cost too much, the next they tell us that sellers should pay more for extra information on flooding or on radon gas in their HIPs. One minute they say that HIPs are too bureaucratic, the next they say that they want someone who lives on top of the Pennines to pay for an extra bit of paper saying whether their property is subject to flood risk. We do not think that that is appropriate. The fact is that consumers can waste a lot of money under the current process. I do not understand why Conservative Members want to keep defending the status quo. Why do they want to keep defending a situation in which consumers waste huge amounts of money every day?

Adam Afriyie (Windsor) (Con): I noticed that there were chuckles from the Labour Benches when the Minister was making some of those statements. If the home information packs are so important and essential, why have her Government now abandoned them?

Yvette Cooper: Let us be clear—we are not abandoning home information packs. The chuckles from the Labour Benches were at Conservative Members pretending to support the interests of first-time buyers and blatantly opposing measures that will help them.

We think that we should not simply defend the status quo in the housing market. There are serious problems in the way in which that market works at the moment. Consumers can end up wasting a lot of money. There is a lack of transparency. They cannot have the information that they need. We think that we need to amend the way in which we introduce the home information packs and we have changed our approach in the light of the work on the dry run and the information on the readiness of the market. Many hon. Members have called on us to do more work on the testing, and we agree. We are doing more work. We will introduce area-based trials later in the year, underpinned by independent monitoring and research, to test the costs and benefits of the home information packs and to look at some of the underlying assumptions. We think that that is appropriate.

Mr. Gordon Prentice (Pendle) (Lab): I just wonder what the implications are for home inspectors. A constituent e-mailed me this morning to say that he had borrowed £7,000 to become a home inspector and he does not know what the future holds.

Yvette Cooper: My hon. Friend is right. We recognise the uncertainty that many home inspectors are
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expressing. We are keen to tell them that we believe that home information packs will need to be introduced from 1 June next year and that they will need to include energy performance certificates, so there is work to be done to introduce those certificates by that date.

We also want to promote the roll-out of the home condition reports. We think that those are valuable. However, we are concerned that a big bang approach and introducing all aspects of the home condition reports next year would pose too many risks to consumers. Therefore, in the trials that we shall begin later in the year, we shall look in particular at ways to support the roll-out of home condition reports. We shall work with the industry in order to increase take-up and look at both voluntary and mandatory approaches in order to be able to promote the roll-out of home condition reports. We think that the surveys will be very valuable for consumers.

Several hon. Members rose—

Yvette Cooper: I will give way in the order in which hon. Members caught my eye.

Justine Greening (Putney) (Con): For those home inspectors and those training to be home inspectors in areas not subject to the pilot tests, will the Government be willing to refund the money that they have spent training to do a job that will never materialise, potentially?

Yvette Cooper: As I have said, we think that we should be rolling out home condition reports. That is the clear aspect of the statement that we made yesterday. We want to start the trials this November. We will need home inspectors in place in order to be able to do the trials from this November for the home condition reports but, clearly, we will want to look at the results of those trials, too.

Mr. David Drew (Stroud) (Lab/Co-op): Will my hon. Friend say something more about what she means by an area-based roll-out? Are we talking about regions of the country, which has some sense in terms of the digital roll-out? Labour Back Benchers are keen, for environmental reasons, that home information packs be continued with. The people who are trained are vital, so we must make sure that they are supported and that there is a clear process. Perhaps she can say something about what that process will be.

Yvette Cooper: My hon. Friend makes an important point. Let us be clear. We think that the energy efficiency information needs to be brought in from 1 June next year nationwide, so that energy efficiency information, as part of the energy performance certificates, will be included on a mandatory basis within the HIP from 1 June next year. Obviously, we will need to test the workings of energy performance certificates and their effectiveness, but we also want to test the home condition reports and the top-up for the full survey. Our approach is to begin this summer with some detailed consumer research and analysis of the HIPs that have been produced already—there are HIPs that have been produced already across the country—in order to develop detailed area-based trials, to begin sometime later in the year. We will set out the details of those trials in the light of the further research
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that is taking place over the summer. We will inform Parliament in due course of further details on that.

Ian Lucas: In the trials, I ask my hon. Friend not to shy away from making the scheme compulsory. There have been numerous attempts to reform the conveyancing system to assist first-time buyers. I have personal experience of those. They have all failed as a result of a lack of compulsion. Sellers and their solicitors have chosen not to supply the information because of the additional cost for sellers, so I urge her to make the scheme compulsory. Consult and get it right, but make it compulsory.

Yvette Cooper: My hon. Friend makes an important point. As I have said, we want to look, as part of the trials, at different ways of supporting the take-up of the full home condition report. That may mean looking at incentives and at all sorts of different approaches, but we want to look at the mandatory approach, too. We are clear that we need the trials to look at a range of approaches to ensure that we can get the roll-out of the home condition reports and to ensure that those are effective. It is important that we learn from the trials and have a pragmatic approach in order to deliver the benefits for consumers and the environment.

Mr. Betts: I welcome what the Minister just said. If we are going to market-test, market-testing mandatory home condition reports in at least some areas of the country will be worth while. I was at a breakfast meeting last week with the hon. Member for Surrey Heath (Michael Gove). At that time, he was also calling for a mandatory trial run on that basis, so we would satisfy him by doing that, too.

Yvette Cooper: Again, my hon. Friend makes an important point. As I have said, we want to consider the precise design of the trials in the light of the research over the summer, so at this stage we cannot confirm exactly how those trials will work. It will depend on the consumer research and the further analysis that we undertake.

Mr. Raynsford: May I press my hon. Friend a little further on that matter? She will know from the research that has been done that the vast majority of dry run packs that have been issued to date have not included the home condition report. How will the evidence from that research help her to conclude which areas would be appropriate for the mandatory tests, to which she responded positively—which was welcome—in replying to the intervention by my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts)?

Yvette Cooper: It is important to make clear what we are considering. We want to look at mandatory, voluntary and other approaches to roll-out, but we cannot make a commitment to conduct a mandatory trial, as there are problems with the practicalities of such a trial, and we must undertake further work over the summer. We are looking at existing HIPs—my right hon. Friend is right that many of them have been produced without surveys—and at consumer attitudes and evidence from other countries. He will know that Denmark, for example, has introduced home condition reports in an extremely popular scheme that is similar to HIPs. We want, too, to look at the experience in
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Australia and other countries. We must therefore undertake detailed and informed work so that we can promote the home condition reports.

Once HIPs are in place, they can be topped up to become full HIPs with a home condition report. Most people do not have a HIP at all, so their position will be very different if searches are conducted and an energy performance certificate is issued. We want to work with the industry to look at the alternative options in a market-led approach to roll-out. As the amendment makes clear, the Secretary of State believes that the mandatory approach remains on the table.

Rob Marris (Wolverhampton, South-West) (Lab): I am grateful to the Government for proceeding more slowly with home information packs. I welcome my hon. Friend’s measured tone and approach to the issue, in contrast to the pyrotechnics of the hon. Member for Surrey Heath (Michael Gove)—his speech was all sizzle and no steak—and I urge her not to fall for his strictures on local authority searches. I remember conveyancing when the Opposition were in office. Local authority searches could take up to 46 weeks, but the Conservative Government did nothing about it.

Yvette Cooper: My hon. Friend is right. If we provide information at the beginning of the process, rather than at the end, we will cut the time that it takes to buy and sell homes. That takes far too long at present, and it is not a sensible way to run a major market in which people invest huge amounts of money in their most important possession.

Bob Spink: It is claimed that the national land information service is dysfunctional, which would prevent the benefits of HIPs from being realised if the scheme proceeds. How does the Minister intend to make sure that electronic local authority searches work better? Will she, for instance, consider compulsion?

Yvette Cooper: The hon. Gentleman is right that it is important that NLIS works effectively. He will be aware that reforms to e-conveyancing have the potential to introduce a substantial measure of transparency. If there are long delays, people do not know whether it is their solicitor or estate agent or the other party’s solicitor or estate agent who is at fault, or whether there is a problem elsewhere in the chain. Most people who are buying or selling a home do not know whether the delay in the system is legitimate because they cannot work out where it is. They do not know whether someone is ripping them off, because they do not know exactly what is going on. Together, e-conveyancing and HIPs have a huge potential to introduce transparency in the system.

Mr. Clifton-Brown rose—

Yvette Cooper: I should like to make a little progress, as I have given way to many hon. Members.

It is important to acknowledge the importance of the energy performance certificates, but Opposition Members’ response was disappointing. They had an opportunity to back them and welcomed the changes that we have made to the programme. They could acknowledge that HIPs and energy performance certificates will have a
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big impact, as 27 per cent. of carbon emissions in this country come from domestic homes. The certificates will allow us to give people reliable information so that they can cut those emissions as well as fuel bills. However, there is not a word about the certificates in the motion tabled by the hon. Member for Surrey Heath. There was hardly a word about them in his speech, although he did mention them under questioning by Government Members. Opposition Members have a chance to support the introduction of energy performance certificates 18 months earlier than the European deadlines, because it is important to give people information on ways in which they can cut fuel bills and carbon emissions.

Green gimmicks are all that the Tories can offer. They fly to the Arctic and they sledge with the huskies, but they will not tell a first-time buyer how to cut her fuel bills. They ride bikes across London, but only if the chauffeur is following with the shoes. They say that it is okay for the wealthy to buy wind turbines, but they will not tell everyone else how important it is to lag the loft. That is the reality of the Opposition’s policy on the environment. They are not prepared to introduce energy performance certificates early, even though the measure is backed by WWF and Friends of the Earth. There is silence from the Opposition. All that they say is that work in Northern Ireland suggests that we could proceed without home information packs. They may wish to know that Northern Ireland cannot introduce energy performance certificates on 1 June next year, 18 months earlier than the European deadline. It will introduce them, but it still has an awful lot of work to do, as there must be consultation and regulations must be introduced. We are right to introduce the certificates early with HIPs to give people proper information about ways in which they can cut emissions from their homes.

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