Home Information Pack Regulations 2006


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Stephen Pound: I shall remind myself of my injunction not to trespass on your patience, Mr. Bayley. On HIP inspectors, does the hon. Gentleman not accept that access to this specialist training, although the training is specific in a certain sense, widens the opportunities available to such people, and that there are a number of roles that will still be available to them which would not have been available had they not completed the training? It is not an ideal situation, but such people are now vastly better qualified, and jobs analogous to that of a paralegal are now available to them.
Andrew Stunell: I take that intervention as being a note of desperation. I do not know whether the hon. Gentleman was present, but the hon. Member for Crosby (Mrs. Curtis-Thomas) told the House yesterday that she was taking up the training, and the more training there is, the more job opportunities there are—perhaps the hon. Member for Crosby had that in mind when she undertook the training. Yes, trained is better than untrained, but employed is better than unemployed. That brings me to the most important factor, which is that many of the people who have undertaken the training have done so at their own expense. Yesterday I drew the attention of the House to a report that I had received from one of the participants in the course provided by Reading university. Four hundred and eighty people are undertaking training in courses that are supervised by that university and they have put £8,500 on the table to do so. In a specific case, there were travelling costs from quite a distance away to attend that course. All of that has been invested by people who thought they were training to take up a franchise that was on offer from what we might call not so much a major multinational as a major national—the Government.
The Government had a scheme and those people could buy into the franchise by putting some money on the table, getting the training and accreditation and then doing it. Much as I weep for Rightmove’s loss of share value, what is far more important, as the hon. Member for Surrey Heath said, is the impact on the individuals who have been drawn into this and are now stranded.
I offered the Minister a way out yesterday. It may be that the hon. Lady will say that the number of people who have been trained or are on training courses is so small that they will be just the right number to deal with those buyers and sellers who go with the voluntary scheme.
We know that the voluntary scheme will be about10 per cent. except that we know that that figure is overly optimistic. If she is going to tell us that only about 5 per cent. of the necessary number for a compulsory scheme have been trained and that they will be employed, that is fine—they will fill the gaps. It is another matter whether there may be a high density of people around the area of Reading and a serious deficit in the north-east of Britain. Let us assume that people are in the right place.
If those figures stack up, the Minister may be able to say, “no problem; do not worry; everyone has got a job”. However, if she cannot say that, what is she going to say to those people who have invested their savings—in some cases, people who have borrowed against a business proposition in order to qualify and find themselves with that proposition kicked away from underneath them? We need to know the answer to that.
I would like to deal with the overall costs and savings predicted under this scheme. As I say, we do have a difficulty in that we cannot tell what is going to happen now because it was not one of the options evaluated by the impact assessment. I shall not go down the route of saying that we should not make any changes until we have an impact assessment, but might the Minister undertake that a similarly rigorous examination of the current option will be done and made available to Committee Members at some future date? I would not want to stand in the way of taking a decision today at all.
However, if one looks at the figures that appear on page 53 of the regulatory impact assessment, under the existing system, described as option A—the existing scheme plus the energy certificate—the cost per successful transaction is said to be £1,696. Option C—the home information pack excluding the home condition report, but on a compulsory basis—is £1,642. That is to say, it is £54 cheaper than the existing system.
The voluntary system is not dealt with here at all. It is difficult to see what it might produce. Let us take the figure of a £35 million saving for a 10 per cent. take-up, which appears in the paper as being a valid figure. It seems possible that the new scheme might save, at the national level, about £100 million out of an overall cost of £2 billion for house buying and selling over a year. Whether or not the Minister is in a position to say “yes”, “no” or “maybe”, that figure should be before the Committee—if not now, then certainly by way of follow-up.
We are in an unusual situation. We have a 54-page explanation and impact assessment about a set of regulations and it is “none of the above”, as they say in electoral circles. We have a wonderful exposition in great detail of a scheme that we are not approving today.
I appreciate that the Minister has taken a sensible and pragmatic view. It has inevitably been at short notice. However, it means that we are at something of a disadvantage in trying to bring critical thought to bear on the current scheme. Anything that the Minister can do to satisfy us on those points will be welcome.
I said yesterday that I believe that, in the circumstances, the Minister has made the right choice. I am extremely pleased that energy certification has not been lost. It is important not to lose sight of the underlying objective of the process, which was supposed to be to make the buying and selling of houses faster, cheaper and less stressful. I hope that the Minister can give us at least a clue as to how her thinking has advanced since Tuesday towards what she sees as being the next steps in that process.
3.11 pm
The Minister for Housing and Planning (Yvette Cooper): It is a pleasure to serve on a Committee under your chairmanship, Mr. Bayley.
I shall try to respond to some of the points that have been made this afternoon. Clearly, the regulations must be amended in light of the statement that was made earlier this week. They stand, but will need to be amended. Many of them concern things that need to be taken forward, but others—in particular, regulations 8 and 11—will need to be adapted. There will also be a series of consequential changes, some minor and some significant.
I can inform the Committee that the RIA that was produced with the regulations is not accurate and will need to be revised. In revising the RIA and developing revised regulations, we will take account of some of the baseline research into the state of the market and the home buying and selling process that is being done at the moment. We hope that it will be completed over the next few months, but it could not be incorporated into the previous RIA process. We need the regulations to stand to be able to set out the other contents of the HIP, to facilitate full testing as part of the dry run and to allow certification schemes to be considered and developed. Given that we intend to proceed with HIPs from 1 June, we need to be able to deliver them.
Mr. Hands: Conservative Members also welcome support for consumers. In the Westminster Hall debate on HIPs that I initiated on 24 May, the Minister quoted at length to show her support from Which?, the leading consumer body in favour of HIPs. Can she tell us about any conversation that she had with Which? either just before or just after this week’s announcement?
Yvette Cooper: I have spoken to people at Which? and they are very disappointed that we are not able to go ahead with the full roll-out from 1 June next year. I understand that. We still agree with Which? that HIPs that include searches, surveys and energy information will be valuable for consumers, but we had to take decisions based on the readiness of the market, the information pulled together and the plans for testing.
We concluded that a big bang implementation on1 June of next year would not be in the best interests of consumers. I understand that people have different views on that, but that was our pragmatic judgment. As a result, we want to proceed with HIPs including the energy information aspect, which we think is critical, and the searches, but we will promote a phased and voluntary take-up of the HCRs. We have said that the mandatory approach remains on the table.
There is a difference between that approach and the voluntary one set out in the RIA, which was referred to by the hon. Member for Hazel Grove (Andrew Stunell). We are not talking about the voluntary take-up of the whole of an HIP, but the introduction of HIPs with searches and energy performance certificates. The question is whether we can promote voluntary top-ups for a full HCR and HIP. Clearly, that needs to be tested as part of the trial.
The dry-run trials will test concerns such as the workability of the systems, the attitudes of people towards energy performance certificates and HCRs and the consequences and impact that they might have—things that we always intended to test. We will also look at further options for promoting take-up, incentives that might be needed, possible barriers to a marketplace roll-out of full HCRs and any other measures that could be taken
Andrew Stunell: I think that I have understood correctly. Is the Minister saying that there will be a roll-out of a full pack in some areas and a half-pack in others and that we shall see what works in different areas? Or will we have a mixture so that, in one street, someone might be on the half-pack, someone else on the full pack and another person on the “no” pack? Will she describe how she envisages that working?
Yvette Cooper: Obviously, the hon. Gentleman will appreciate that we are still discussing that in some detail with stakeholders and the industry. I hope that hon. Members will understand that there was a limit to how far we could discuss the next steps before the written statement this week. We felt that it was important to inform Parliament of our position. Obviously, the statement included market-sensitive information, and although we held detailed consultations with stakeholders, a lot remains to be worked through in the light of the written statement.
The first phase of the analysis that we propose to carry out over the summer will include customer attitude testing and an analysis of about 15,000 HIPs so far produced—that might be the wrong number, but I think that I used the correct one yesterday. I was asked how many of those had been included in the surveys—very few of them; most were simply the HIPs with the searches. Nevertheless, important work needs to be done to analyse those and the impact of customer attitudes.
We will also be looking at the appropriate design of the next phase of the dry run and the area trials. We have always been clear that the industry will want to conduct roll-outs themselves and that there will be value in monitoring the industry-led roll-out across the country—not in specific areas, but in work separate to ours. We are interested in having proper independent monitoring that would report back publicly on its conclusions.
We are also exploring the appropriateness and workability of area-based trials. There are many ways that they could work. As I said in the House yesterday, the Government are keen to consider different approaches. As part of the dry run’s design, we will be considering different approaches to both voluntary and mandatory take-up. We will not simply consider HIPs with energy performance certificates, although clearly we need to ensure that the mechanisms for them work effectively in time for 1 June. We must ensure that we have tested them effectively and that we test the home condition reports as well.
I will give the House and the public more information about the details of the dry runs as further work gets under way. I am happy to share that information. It is important that the dry run and area-based trials work effectively.
Andrew Stunell: I appreciate it that the Minister is trying to help us. Could she give us some indication of when she expects the area-based trials to start? How long must they last to produce viable results? What will be the evaluation period beyond the trials?
Yvette Cooper: We originally envisaged that the area-based trials might start in early autumn and therefore that it might be possible to make results available in the new year and early spring. Any late changes could be based on those results and made in time for implementation on 1 June.
We concluded that to test the HCR properly, it would take longer to get the detailed trials up and running, and that four or five months would not be long enough. Therefore, the risk of having to make late changes, particularly involving the HCR, was significantly higher than we had thought. To make late changes or delay the programme would be costly and undesirable for consumers and the industry. We recognise that there are concerns about this week’s decision, but we feel nevertheless that it is the right and pragmatic thing to do, rather than increasing the risk of having to make late changes.
I cannot yet confirm how long we think the dry run trials will take. We are evaluating them to ensure that they work effectively, but we think that there will be appropriate time. Given that so many HIPs have been introduced already without surveys, we think that there will be time to trial them with energy performance certificates before 1 June. We are working to ensure that the details are under way.
The hon. Member for Surrey Heath asked aboutthe approach being taken to energy performance certificates. The advantage of including energy performance certificates in HIPs is that it allows a survey on the house’s overall condition to be combined with a visit to assess its energy efficiency and carbon emissions. There are significant benefits to combining the two, because many of the things that the surveys evaluate are similar. We think that introducing energy performance certificates as part of HIPs will have significant benefits to consumers.
We are among the first European countries to introduce energy performance certificates. Some are ahead of us—Denmark, for example—so we do not pretend to be the first. Nevertheless, we are ahead of many other European countries in doing so. We are also going further than the European directive in a number of important ways.
The hon. Member for Surrey Heath is right: according to the EU directive, energy performance certificates must be completed for homes being sold or rented afresh. Someone who has been living in their home for 10 years and expects to be there for another 20 will not need an energy performance certificate under the EU directive.
The energy performance certificates only have to be updated every 10 years under the EU directive. As I understand it—I am sure that wisdom will wing its way to me if I have misunderstood—if someone sells on their home within two years, they will still be compliant under the EU directive if they use the energy performance certificate from two years ago, or from three years ago if that was the last time the home was sold and the certificate was prepared at that point.
Clearly, at a time when we want to promote changes and improvements in energy efficiency in our homes—it is particularly important that 27 per cent. of carbon emissions come from our homes—it is essential that the information is updated. To have updated information at the point at which a home is sold again seems to have considerably more value than simply complying with the letter of the EU directive, which would allow people to use an outdated energy performance certificate.
 
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