The
Committee consisted of the following
Members:
Chairman:
†
Mr.
Bill
Olner
†
Byers,
Mr. Stephen
(North Tyneside)
(Lab)
†
Cawsey,
Mr. Ian
(Brigg and Goole)
(Lab)
†
Hesford,
Stephen
(Wirral, West)
(Lab)
†
Holmes,
Paul
(Chesterfield)
(LD)
Howarth,
Mr. George
(Knowsley, North and Sefton, East)
(Lab)
†
Hurd,
Mr. Nick
(Ruislip-Northwood)
(Con)
†
Jones,
Mr. Kevan
(North Durham)
(Lab)
Moran,
Margaret
(Luton, South)
(Lab)
†
Scott,
Mr. Lee
(Ilford, North)
(Con)
†
Shapps,
Grant
(Welwyn Hatfield)
(Con)
†
Smith,
Ms Angela C.
(Sheffield, Hillsborough)
(Lab)
†
Spellar,
Mr. John
(Warley)
(Lab)
†
Stuart,
Mr. Graham
(Beverley and Holderness)
(Con)
†
Stunell,
Andrew
(Hazel Grove)
(LD)
†
Walker,
Mr. Charles
(Broxbourne)
(Con)
†
Watts,
Mr. Dave
(Lord Commissioner of Her Majesty's
Treasury)
†
Wright,
Mr. Iain
(Parliamentary Under-Secretary of State for
Communities and Local
Government)
Sara
Howe, Committee
Clerk
†
attended the
Committee
The
following also attended, pursuant to Standing Order No. 118
(2):
Jackson,
Mr. Stewart
(Peterborough)
(Con)
Third
Delegated Legislation
Committee
Thursday 18
October
2007
[Mr.
Bill Olner
in the
Chair]
Home Information Pack (No. 2) Regulations 2007
2.30
pm
Grant
Shapps (Welwyn Hatfield) (Con): I beg to move,
That the Committee has
considered the Home Information Pack (No.2) Regulations 2007 (S.I.
2007, No.
1667).
The
Chairman:
With this it will be convenient to consider the
Housing Act 2004 (Commencement No. 8) (England and Wales) Order
2007 (S.I. 2007, No. 1668), and the Housing Act 2004
(Commencement No. 9) (England and Wales) Order 2007 (S.I.
2007, No.
2471).
Grant
Shapps:
That home buying and selling could be a lot easier
is beyond doubt, but that is not the subject of today’s debate.
The real question is whether home information
packs—HIPs—make it easier. Our argument is that that is
certainly not the case, and that it is leading us down the garden path
into more bureaucracy and more red tape than the housing market
requires or can stand.
The Government are fond of
telling us that we need HIPs to protect the energy performance
certificate element. That, however, is a red herring. The point of
energy performance certificates, a mandatory function resulting from an
EU directive, is to give home buyers an idea of the energy performance
of prospective purchases. We believe that that could be implemented far
more easily, more cost effectively, and more cheaply and quickly,
through the simple process of requiring energy performance certificates
to be provided before a house is put on the market. That could be
easily achieved—it would not require the wrap-around of the home
information pack. The pack has become nothing more than a fig leaf with
which to cover the embarrassment of Ministers, who have taken us a long
way down that route but who now realise that there is little or no
point in it.
It is
not only we who think that. As recently as last year, through
the Northern Ireland Office, the Government
said:
“we do not believe
that a home information pack is necessary to ensure compliance with the
Directive.”
For some
reason, therefore, it is not required in Northern Ireland. But it is
required here.
What,
then, of the evidence on HIPs? How have they been performing in the
marketplace? We are talking today about their commencement through
regulation, but they have been running for more than two months.
Strangely, we still do not know the results of trials that took place
last year and this. Those trials cost the taxpayer some £4
million, yet the Government have
failed to provide an outcome of, or any information on, the
process—£4 million of taxpayers’ money, yet
we do not know whether those trials were successful.
Parliamentary questions were asked in January and June this year, but
the Government failed to provide any information, or even an
indication, as to when that information will be forthcoming. Public
money is being spent, but presumably—the suspicion must be
there—it is providing the wrong outcome from the
Government’s point of view. The public and the House are being
denied information that must surely now be made public, given that we
are debating the commencement order.
I have been wondering about
that £4 million. The Government have a partner
in those trials—the Association of Home Information Pack
Providers. Yesterday, at a meeting in the House, I asked the
association whether it could tell us the outcome—information
that we had not been able to extract from the Government, despite
asking parliamentary questions. I asked how the trials had worked out
but, interestingly, the association did not know. The message this
morning from the association is this:
“Part of the agreement
with the Government was that they would share the independent research
by MORI from the 6 locations with us. They have not done
so.”
The
Government have kept their partners in the trial in the dark, yet they
have seen fit to introduce HIPs. It simply does not make sense
to deny the public, Parliament and even their partners information from
the trials, and then to introduce the packs. Fortunately, I suppose, we
know how HIPs have been operating in the marketplace. We have evidence
from their first two months of operation. The Government are keen to
tell us, when we cite pretty authoritative sources such as the Royal
Institution of Chartered Surveyors, that we are citing only one
industry body. However, RICS has done research showing, for example,
that the number of three and four-bedroom homes coming on to the market
is down by 37 per cent.
In order to help address
Ministers’ concerns, I shall quote from some other leading
industry bodies. For example, the Council of Mortgage Lenders
says,
“We are
disappointed that as yet the Government has done little to simulate the
potential impact of HIPs, and we urge them to do so
urgently.”
They are
wrong, of course. The Government have tried to judge the impact of
HIPs—they have done the work—but they will not release
the data.
The
National Association of Estate Agents says,
“We have consistently
stated that the Government’s, and our, desire to improve the
Home buying and selling process will not be improved by the
introduction of
HIPs.”
The Law Society
warned that HIPs
“could
skew the conveyancing market and could encourage the improper use of
referral fees, possibly creating a lack of transparency and choice for
consumers.”
If the Law
Society is against it, what do the Government say? One arm of
government, the Better Regulation Commission, warned
that the new regulations would impose
“additional
administrative burdens without adequate
justification”.
The
industry is pretty conclusive in its damning indictment of HIPs, but
what do the people who are
operating them say? A HIPs provider, who stands to
gain financially from the system, sent me an e-mail yesterday. It
stated:
“Whilst
we always knew what a complete waste of time these were I would like to
briefly make my point...We have had HIPs for nearly 3 months now
and I do not believe one applicant has asked to see a HIP or EPC or
shown any interest in one whatsoever. Vendors couldn’t
give”—
the next
phrase may be unparliamentary, so I shall leave it out. However, people
are obviously not that interested, they do not understand them and they
do not want to pay for them. The e-mail
continues:
“Therefore
as we have always known it does absolutely fail to speed up the house
sale process. All it does is cost vendors money and cause confusion. If
they bring it in for all properties soon and impose the ‘must
have it before marketing
rule’—
that will
not come into effect until the end of this
year—
“we will all
grind to a halt!”
That is
straight from the horse’s mouth—from only one of the
companies that has an interest in supplying HIPs. Even those people
think that the system is not working.
The only people who now think
that HIPs are working are the Government and the Association of Home
Information Pack Providers. The industry thinks that they do not work
at all. As we debate the introduction of regulations for three and
four-bedroom houses, one overarching question remains completely
unanswered. Why have the Government failed to come forward with a date
for the introduction of HIPs on one and two-bedroom houses? If the
system is so genuinely wonderful, surely it should be introduced with
the greatest possible haste.
Is there not a contradiction at
the very heart of the Government’s claims for
HIPs?
Mr.
Kevan Jones (North Durham) (Lab): On a point of order,
Mr. Olner. I am listening carefully to the hon.
Gentleman’s speech. Is this an Adjournment debate, or are we
debating the detail of the regulations before the
Committee—which I believe to be the job of Standing
Committees?
The
Chairman:
The regulations are being debated under the
negative procedure. I shall therefore give the Committee some leeway,
and not accept that as a point of order.
Grant
Shapps:
Thank you, Mr. Olner, but I am speaking
on the specific point of one and two-bedroom houses, as well as about
the commencement orders on three and four-bedroom houses.
On Tuesday night, the Minister
for Housing failed to show up for a long-standing engagement at the
annual conference of the Association of Home Information Pack
Providers, sending her junior instead. When I asked AHIPP what had been
said, it kindly provided the text of the junior Minister’s
speech, in which he makes it clear that volatility and uncertainty in
the marketplace, combined with unusual market
conditions, means that this is not the time to announce the
introduction of one and two-bedroom HIPs. If that is true, and if the
Government accept that introducing HIPs introduces volatility to the
market or creates additional volatility, how can it make sense today to
vote through legislation for three and four-bedroom HIPs? The situation
is clearly contradictory.
On the other side, the
Government always claim that they have been consistent, so if they
honestly believe that HIPs will somehow improve the operation of the
marketplace, making home buying and selling easier, surely they should
not only approve three and four-bedroom HIPs, but introduce one and
two-bedroom HIPs. Will the Minister—finally—tell us, the
industry and home buyers and sellers when the Government intend to
introduce one and two-bedroom HIPs? I suspect that he will say that the
market is volatile. But if it is volatile for one and two-bedroom
homes, it must be for three and four-bedroom homes, so there is no
reason why the legislation should be passed
today.
2.41
pm
Paul
Holmes (Chesterfield) (LD): When Lewis Carroll wrote
“Alice’s Adventures in Wonderland”, many people
speculated on how he came up with the ideas. Was he taking substances
that were then legal but are today illegal? I favour the theory that he
spent some time studying the workings of Parliament. I understand that
he spent some time observing and reporting the work of Parliament in
Victorian times, and clearly he got some of his crazy ideas from the
procedures of this place. Here we are today, on 18
October, considering three pieces of delegated
legislation that variously came into effect on 2 July, 1 August and 10
September. Today, three months, two months and one month after those
dates, we are debating that legislation. To a member of the public, it
must seem a crazy way to proceed when something of such importance,
because it is either successful or a flop, is not debated until well
after it has come into force.
Debating this legislation long
after it has been introduced epitomises, as we said in a debate on the
Floor of the House a couple of weeks ago, the rushed
and chaotic process by which the Government
introduced HIPs, with frequent changes of content, delays and, finally,
HIPs’ application to four-bedroomed and then three-bedroomed
homes.
There are two
documents on introducing these measures, first to four-bedroomed homes
and then to three-bedroomed homes in September, but they do not specify
what constitutes a four-bedroomed or three-bedroomed home. When HIPs
came into effect, there was much speculation that, in order to avoid a
HIPs package, people with a four-bedroomed home might say that it was a
three-bedroomed home with a study, and that those with a
three-bedroomed home might say, after 10 September, that it was
two-bedroomed home with a study. One flaw in the legislation is that it
does not cover such an obvious way in which a seller, if they wanted to
avoid HIPs, could do so simply by changing the name of a room and
saying that it was used for some other purpose.
One important issue that
emerged in the first two weeks after the introduction of HIPs
for four-bedroomed homes was that of personal versus official searches.
Searches are dealt with in paragraph (j) on page 9 of the regulations.
The paragraph explains the different ways in which one would lodge a
personal or official search. Only two weeks after HIPs came into
use—about the second week of August—there were already
cries from people involved in some sections of the market, saying that
personal searches were no
longer being accepted. Mortgage
lenders were considering HIPs with a personal search, and saying,
“No, we don’t accept that. You’ll have to have it
done again through an official search.”
For a year or two before HIPs
came in, personal searches had become widespread, with people and
organisations competing with solicitors to offer a cheaper search. If
personal searches were accepted before HIPs came in, why have they not
been accepted since? In August, when there was quite a fuss, did the
Government undertake any surveys of how such searches worked in
practice, and consider how they related the to definitions in the
legislation. Was there in fact a problem with personal, as opposed to
official, searches? Both are named in the legislation as being equally
valid, but apparently they were not being accepted as such in the
marketplace. Was that simply a blip, was it a real problem or was it a
scare story? Have the Government evaluated the situation? Do they have
any hard evidence? If there is evidence that personal searches, having
previously been accepted, were being rejected perhaps because of this
legislation, will the Government have to come back with revised
legislation at a future
date?
The general
arguments about HIPs we have already heard expounded. We had a long
debate on that a couple of weeks ago, and I will not reiterate all the
points that were made then. What is the value of HIPs? Potentially,
there could be a lot of value in them, as I said before. Everyone
agrees on the value of the energy performance certificate, but that
could be a free-standing measure, separate from
HIPs.
The big argument
in favour of HIPs is that if they work properly, they will assist the
consumer greatly—a point to which the legislation refers. If
HIPs provide simple, clear packages of acceptable statements on the
results of searches, and of deeds of ownership, that will speed up the
process for the consumer. Inevitably, some of the organisations that
make money from repeat searches are not very keen on HIPs. RICS,
obviously, is not so keen on HIPs because they could cause its members
to lose business. The Law Society also makes money from repeat legal
work on houses when sales fall through. The more searches that are done
and the more people who go through the process, the more business its
members get, so it is obviously not so keen on
HIPs.
Equally, the
Association of Home Information Pack Providers, which was quoted
extensively in the debate a couple of weeks ago, is in favour because
it is on that side of the market. Surely the role of the Government,
the House and the Committee is to make a more objective assessment of
the value, if any, of this process. It is difficult to achieve that,
however, when there are so many unanswered
questions.
At what
point will HIPs, if they are working effectively for three and
four-bedroomed houses, be extended to one and two-bedroomed houses? As
has been said, if the Government have a particular view on this issue,
they should share it with us today. They should explain the rationale
for not extending HIPs to one and two-bedroomed houses, and tell us
when the scheme will be
extended.
If the
Government are sure that HIPs are proving valid, at what point will
they restore to HIPs the measure that most people thought the most
worth
while when they first heard about it 10 years
ago—the home condition survey? Many people try to buy a house,
have the survey done and then withdraw their offer because a problem
has been found. Instead of 10 potential buyers going through the
expense of a survey, only to find out that something is wrong, a HIPs
package could alert them to the problem from day one. Speaking as
someone who has bought two houses in 25 years, I consider such a survey
a great potential asset. I certainly would have found that useful when
I was house-hunting; however, it is not in the HIPs package. It was
dropped in 2006, partly because of opposition from vested interests in
the industry. Do the Government have any plans to restore that measure
to HIPs—if they continue with them—given that most people
thought it one of the main values of
HIPs?
How are we going
to evaluate the success so far, after two or three months of operation,
of HIPs? Will Opposition Members and members of the public have access
to an objective evaluation of the information? The Government kindly
offered Members one-to-one meetings to discuss the matter during the
previous debate. That is very welcome and we will take them up on that
offer, but it excludes other people and the public at large. We have
not seen the many studies; we have not seen any objective information
from the Government on how the regulations are working out in practice.
For example, are there problems with personal searches being accepted?
What about the definitions of three and four-bedroomed houses?
Will the Government commit to a date when they will release all that
information, so that we can evaluate whether HIPs, in this partial
form, are successful and are speeding up the process and helping
consumers? I am not as bothered about the people providing the services
as I am about the consumers who are supposed to benefit. When will we
have that information, so that we can judge whether the scheme should
be extended to one and two-bedroomed houses, whether it is worth
including home condition surveys, or whether the whole thing should be
scrapped because it is counter-productive and not
working?
I do not
subscribe to the school of thought that says we should just scrap the
scheme on the basis of some newspaper reports during the summer, as
that is a flimsy and flawed way to make policy and to implement
something that could be so important to the consumer. However, if there
is evidence that it is a waste of time, we should know about it, so
that we can take action and vote accordingly. We cannot do that unless
the evidence is in the public domain. One-to-one talks are not enough;
will the Government commit to releasing the information for a
proper, public independent analysis by the end of the autumn at the
latest?
2.50
pm
Andrew
Stunell (Hazel Grove) (LD): I support what my hon. Friend
the Member for Chesterfield said. We have raked over this issue many
times in the past 18 months and it may be beginning to irritate some on
the Government Benches. However, that raking over has been caused by
their own performance. Nobody could claim that this project has been
the Government’s finest hour, or even their finest two
years.
We have
rehearsed the key issues in a series of debates on the Floor of the
House—the delay, the
dilution of the proposals, the disruption to the
training and preparation for it, the fact that many supporters of the
original scheme have been alienated and are openly hostile to its
development and the undeniable loss of credibility of an idea that
clearly had a bold and imaginative beginning but is now rapidly
petering out.
During
its rather bumpy progress through the procedure the scheme succeeded in
sabotaging the careers of a number of people who were committed to the
project and undertook the necessary training. I cannot be the only
member of this Committee who has received representation from
constituents who invested substantial amounts of their own capital in
training to fulfil a business plan that has been wrecked by the delays
and mismanagement of this
project.
It has not
been the Conservative party’s finest hour either. I remember the
Conservatives’ first Opposition day motion,
which said that they wanted to scrap the lot. It was only during the
debate that their Front-Bench team became aware that it was not cool
and green to get rid of energy performance certificates. Even so, I
noticed in that debate that the Tory Back Benchers whose pagers were
not switched on carried on calling for the complete
abandonment of the whole scheme.
Despite the train crash that it
has become, there is a very important element of the home information
packs: providing consumers with the information that they need to judge
the environmental performance of their homes and prospective homes. The
concept is right, but it started to go wrong when, for no reason that
anyone has explained, the Government delayed publication of the draft
regulations. Because they delayed that publication time after time it
was impossible to make a timely start to the pilot studies, which could
be based only on the propositions contained in those draft
regulations.
The
scheme has come off the rails, too, because the conclusions and the
analysis from those pilot studies have never been brought to bear on
the regulations that we have now. One would have supposed that the
right process to follow was to have the pilot studies, to bring them to
a conclusion, to analyse the results, to notice what needed fixing, to
fix it in the revised regulations, to ensure that the training
programme was in place and that sufficient people were trained to
implement it and then to launch the full scheme. Yet practically none
of that has happened in the way that it should have
done.
We know that the
partial pilot studies—the initial results from the first bit of
the pilot studies—produced some amendments. Indeed, that
evidence was given to the House of Lords Merits of Statutory
Instruments Select Committee by the civil servant from the Department,
who said that the preliminary results from the early pilot studies had
led to changes in the regulations that have come forward. That is in
the information notes that were provided for this Committee. In other
words, a partial analysis produced a partial reform and change to the
regulations. Most of us, logically, would expect that further
amendments to the regulations would present themselves as necessary
when the full pilots were completed.
I looked at paragraph 7.23 of
the explanatory notes, which
states:
“Close
attention was also paid to the progress of the national voluntary dry
run and area trials of home information packs...Over 4,000 packs
were produced as part of the trials which are looking particularly
at”
what they describe as hone information
reports. “Honed” is the last thing that this is. It is
perhaps a characteristic typographic error. The results of the trials
are being independently assessed by MORI. That is in the explanatory
notes provided for the Committee today, when we are being invited to
sign off the regulations. That is a clear statement that the area
trials independent assessment has not yet been completed or is in any
way in the course of action. Of course, that might be a coded way of
saying, “We have got the report, but we do not want to tell
you.” If that is the case, I invite the Minister to come clean
with the Committee and say so clearly.
Rather than the logical process
of testing, revision, training and launching, we have had the
blundering into the three and four-bedroomed house situation. My hon.
Friend the Member for Chesterfield has already asked the key question
about the one and two-bedroomed houses and when they will be
considered. If the Minister cannot give us a date and is not prepared
to concede the Conservatives’ rather partisan point that the
Labour Government have perhaps wrecked the housing market, can he at
least tell us what criteria he and the Department will take into
account before they bring forward the plans for one and two-bedroomed
homes? What are going to be the criteria when they sit around the table
and ask, “Shall we go on 1 December or shall we not?” It
is entirely proper for the Minister to tell the Committee what is going
to happen.
I have
some questions for the Minister. Have those pilot studies officially
ended, now that we are into the compulsory three and four-bedroomed
stage? Have the full results been written up and is everything in the
hands of MORI, or has MORI told the Government what the outcome of that
assessment is? Will he give an undertaking that, whatever else happens,
he will publish those results before we are presented with the
statutory instrument for one and two-bedroomed homes? In other words,
at least part of the process ought to be informed by the results for
the whole of the pilot
study.
In conclusion,
it seems that the project would make an admirable case study on the
implementation of Government policy—not. I
hope that, when the Communities and Local Government Committee
considers the Department’s annual report, it will give some
consideration to investigating what has happened—I understand
that it will consider that report at one of its forthcoming sittings. I
was going to say that it should investigate what has gone right and
what has gone wrong, but the first part of such a report would be
comparatively short.
Even for those of us who
started off simply as critical friends of a bright idea, there is the
utmost difficulty in giving wholehearted support to the
Government’s scheme as they have managed to bungle and mismanage
it today. The Minister owes the Committee some serious answers to the
genuine criticisms that abound.
3pm
The
Parliamentary Under-Secretary of State for Communities and Local
Government (Mr. Iain Wright):
May I say what a
privilege it is to serve under your chairmanship for the first time on
the Front Bench, Mr. Olner? We share a birthday, I
believe.
The
Chairman:
Not the same year though,
unfortunately.
Mr.
Wright:
I do not think so.
This has been an interesting
debate. I do not want to start on a negative tack, but I am bemused at
the timing of the debate.
Grant
Shapps:
It should have been several months
ago.
Mr.
Wright:
The hon. Gentleman says from a sedentary position
says that it should have been a few months ago. That is exactly right,
because there should have been some degree of discussion and debate
about this. However, the Opposition Front Benchers chose not to do
that. In her statement to Parliament on 22 May, when she was Secretary
of State for Communities and Local Government, my right hon. Friend the
Member for Bolton, West (Ruth Kelly) announced to the House that the
start date for home information packs for properties of four bedrooms
and above would be 1 August. She
said:
“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.”—[Official Report, 22 May
2007; Vol. 460, c.
1108.]
So the decisions set out
in August, when we rolled the scheme out to houses of four bedrooms and
above, implemented that parliamentary announcement.
To clarify, revised regulations
were laid before Parliament on 11 June, following the commencement
order for four-bedroomed property sales on 8 June. We also
published a statement on 11 June, “Home Information Packs
Implementation Update”, which set out the details of the
implementation proposals. So the Opposition had that opportunity to
hold a debate in the House on the regulations and our proposals for a
phased implementation. I understand that the other place had a debate
on this, but a debate did not take place in the House of Commons.
Opposition Front Benchers could have had something like 40 days between
when the commencement order was produced, and the regulations laid, and
when we broke up for recess at the end of July, but they chose not to
do it. However, now that we have come back and we have seen four and
three-bedroomed properties rolled out as part of the HIPs process, and
all the indications are that it has been as smooth as can be expected,
we are having a debate. That shows tactical errors and hopeless
misjudgment on the part of the Opposition parties.
Members of the Committee have
mentioned various things, and I would like to cover all of them in
detail. May I say what a pleasure it is to debate with the hon. Member
for Welwyn Hatfield? I enjoyed the HIPs debate on 10 October and I have
enjoyed his contribution today. I completely disagree with everything
that he has said; it showed a great deal of misjudgment on his part,
but I greatly enjoyed it. I do not think that he is taking his party
with him on this issue. I will give him the benefit of the
doubt and accept that he genuinely thinks that energy
performance certificates are appropriate, in contrast to many eminent
members of his party. I believe that the
hon. Member for Meriden (Mrs Spelman) is still party chairman, although
I may be wrong on that. It could be Lord Ashcroft—I am genuinely
uncertain about that.
It is important to roll out
EPCs because they will have a real impact in setting the challenge of
tackling climate change. Carbon emissions from our homes contribute
about 27 per cent. of our CO2 emissions, and we need to
tackle that as rapidly and as dramatically as possible. EPCs are a way
of doing that, the management structure and the architecture are helped
through HIPs, and it would be wrong to separate out EPCs and HIPs, so I
am confused about the Conservative party’s
view.
Mr.
Graham Stuart (Beverley and Holderness) (Con): Why then
did the Government believe that they could be separated in Northern
Ireland without any ill
effect?
Mr.
Wright:
The hon. Member for Welwyn Hatfield mentioned
Northern Ireland and I will come to that, but it is important to point
out that HIPs and EPCs together can have tangible benefits. They will
help to lower family fuel bills by hundreds of pounds, cut millions of
tonnes of carbon that are being pumped out into the atmosphere and help
reduce the millions of pounds that consumers waste, both in buying and
selling homes and in having energy efficient homes. That is so
important, and I do not think that the Opposition are taking it into
account.
Mr.
Stuart:
I am grateful to the Minister for giving way
again. He is always a stylish speaker and enjoyable to listen to, as is
my hon. Friend the Member for Welwyn Hatfield. However, it is with some
desperation that the Minister is trying to tie the environmental
benefits of a European Union directive-driven measure which no Member
of the House can stop with that of HIPs—a failed concept, as my
hon. Friend has pointed out, and one that no longer delivers the basic
function that it originally set out to
deliver.
Mr.
Wright:
I am happy to allow the hon. Gentleman to
intervene on me again, but I wonder whether he agrees with the idea
that, for the past generation or so, the process of buying and selling
houses has been opaque and stressful and has cost consumers millions,
if not billions, of pounds. HIPs is a great way forward in helping to
reform that process. EPCs are an essential part of HIPs to encourage a
greater level of information and transparency and, equally important,
to ensure that climate change is addressed. If those principles are not
correct and the hon. Gentleman does not agree with them, I am more than
happy to give way. He chooses not to intervene. I hope that that is
recorded.
Over the
past few weeks and months we have seen a relatively smooth
implementation of HIPs and EPCs for properties of three or four
bedrooms or more. I will come to that, and to the state of the housing
market, at some length later on.
The hon. Member for Welwyn
Hatfield mentioned Northern Ireland. He also mentioned it at oral
questions this week as he seems to be obsessed with it.
May I make it absolutely clear that EPCs have yet to
be introduced in Northern Ireland, unlike in England and Wales where,
as we all know, they have been phased in as part of HIPs? We must look
at the matter in a different way. People in Northern Ireland are not
benefiting from the improvements to the home buying and selling process
that we have seen with the introduction of HIPs. We have seen a drive
down in costs for local authorities. The hon. Member for Beverley and
Holderness is looking at me now. His local authority has driven down
costs by about £30. I am sure that he will welcome that. Other
local authorities have reduced costs by as much as £100. That is
important and is helping to provide value for money in addition to
transparency on the part of the consumer. I fail to see why
Conservative Members choose to disagree with that sort of principle.
Northern Ireland is a red herring, and I do not know why the hon.
Member for Welwyn Hatfield always mentions it.
A number of hon.
Members have mentioned area trials. That is an important point. I want
to be very clear. It is important that we get the findings from the
area trials, but as yet we have had only preliminary findings. We are
at a very early stage in the house buying and selling process. Full
conclusions from the area trials will be available, but only once
transaction completions occur. I suggest that it is only at that stage
that we can measure the impact on buyers.
Trials ended in April and a
transaction completion could be completed some months after. That is
one of the things that we are trying to tackle as part of the HIPs
process. We expect to receive a report by the end of the year, but that
will only be when transactions are completed. There is always a lag
between marketing a property and transaction completion. I am sure that
Opposition Members can recognise
that.
Andrew
Stunell:
I gather that, according to Rightmove, the
average number of days of transaction time is now 85. Counting on from
April, a very high proportion of those would now be completed, and
obviously they will all be completed by the end of the year. Is the
Minister undertaking to produce that information prior to coming back
to the House to talk about two and one-bedroomed
homes?
Mr.
Wright:
I will come to one and two-bedroomed homes later
on. There is varying information. The average time from marketing to
the completion of a transaction could be as much as six and a half
months. Sometimes it is nine months. It is important that
we get the full range of information before we go to
publication.
Grant
Shapps:
I am still confused about the point of
commissioning six different trials of home information packs if the
original intention was not to release the results before introducing
the packs to the entire nation. What is the point in wasting £4
million of taxpayers’ money if there was never any intention of
releasing the results?
Mr.
Wright:
The hon. Gentleman knows that that is completely
false. We are going to publish the findings, but we have only emerging
findings at the moment because the process has not been completed. That
is fairly obvious.
Let me move on to the central
point: the state of the housing market, which the hon. Member for
Welwyn Hatfield mentioned when he was talking about my contribution to
the AHIPP conference earlier this week, and the subsequent roll-out to
one and two-bedroomed properties. Listening to him reminded my of an
old Woody Allen gag in which two ladies are in a restaurant. One says,
“What terrible food,” and the other says, “Yes,
and such small portions.” He criticises the legislation on HIPs
as being appalling and also criticises us for not rolling them out
completely. He holds an erroneous and illogical position.
The housing market was volatile
over the summer. There was the sub-prime mortgage crisis in the United
States, and there were interest rate changes and the unusual phenomenon
that many mortgage holders are coming to the end of a two-year fixed
period and are now going to remortgage, which will have an
impact on mortgage costs. There was also the Northern Rock
issue—the first run on a bank in 150 years. It is perfectly
reasonable to monitor the situation extremely closely in those
incredibly unusual circumstances. There was an extremely interesting
article by Alex Barker in the Financial Times this week about
the state of the UK housing market, which I urge all hon. Members to
read. It says:
“Few have forgotten that
the country’s last housing boom, in the 1980s, ended in tears,
with a crash in home prices and two years of wider recession.
Unemployment doubled in 1990-92 from 1.5m to 3m. At the worst point, in
1991, one in 130 people lost their home. The big difference between
then and now, however, is inflation. Inflation today is around the 2
per cent. target set for the Bank of England. But in the 1980s it was
out of control and, within the space of a year, the government had
doubled interest rates from 7.5 per cent. to 15 per cent.—where
they remained for a year—after inflation almost trebled from 3.4
per cent. in 1986 to 9.5 per cent. in
1990.”
It is
not responsible government to play fast and loose with the housing
market. It is absolutely essential that anything that might have an
adverse impact is considered with the gravest degree of consideration.
I do not want to go back to the situation in the 1990s, when people
were losing their homes because of the gross economic incompetence of
the Conservative party.
Grant
Shapps:
Is not the Minister’s argument completely
inconsistent? He tries to argue that HIPs for one and two-bedroomed
homes and HIPs in general will make home buying and selling more simple
and therefore more effective and streamlined. Surely, in his view, that
is exactly what is required in an unstable housing market, so why are
not we bringing them
in?
Mr.
Wright:
I am saying that the roll-out of HIPs for
three and four-bedroomed homes has worked extremely well and has been
handled by domestic energy assessors and HIP assessors extraordinarily
well, but that we do not want to do anything in this extremely unusual
market. We now have 60 per cent. of the market provided for by HIPs.
That is working well, but we want to ensure that we have all the
relevant information before full roll-out. That is extremely
responsible government; if the hon. Gentleman disagrees, that shows
that the Tories have not moved on from the early 1990s.
The hon.
Member for Chesterfield asked about four-bedroomed properties being
marketed as being three-bedroomed plus, which is quite an old issue. In
south London, which I know is not reflective of the entire country, but
the principle is the same, an average four-bedroomed property goes on
the market for around £620,000, and a three-bedroomed property
goes on the market for £460,000. There is a substantial increase
in price between three and four-bedroomed homes and I do not think that
a £300 HIP is going to stop someone from marketing a property as
four-bedroomed. That certainly has not been the
case.
Paul
Holmes:
The Minister says that he does not think that has
been the case, but we have had three months to judge it on. According
to all the surveys and statistics that I am sure the Government must be
collecting, what is the
evidence?
Mr.
Wright:
We are looking at that now to make sure, but all
the evidence shows that people are not marketing their properties as
three-bedroomed plus. We have not seen any evidence of that. If the
hon. Gentleman has anecdotal evidence, I am more than happy to
listen.
Mr.
Lee Scott (Ilford, North) (Con): The Minister spoke
earlier about responsible Government. Surely a responsible Government
would have looked at the pilot results and studied those before ever
introducing the measure in the first
place.
Mr.
Wright:
It is extremely wrong of the hon. Gentleman to say
that we are not looking at this closely: we are. Area trials are going
on, but we have not completed the full
process.
Let me move
on to deal with two fundamental points. First, on personal searches,
which the hon. Member for Chesterfield mentioned, 27 out of the top 30
mortgage lenders—around 88 per cent. of the market—accept
them. Solicitors accepted more than 650,000 personal searches on behalf
of their clients, which is about 40 per cent. of the market, in 2006
alone.
It is a
fundamental point that HIPs are helping to reduce costs and create a
more transparent housing market for consumers. As I have mentioned
already, about 85 local authorities have already reduced their search
costs, some by £100. Personal searches are
allowable.
Paul
Holmes:
The figures that the Minister has just given refer
to 2006. However, we are talking about the introduction of HIPs, just
in the last two or three months in 2007. Was there any evidence at all
during the summer that, as part of HIPS, mortgage lenders were now more
likely to say, “We are not accepting personal searches,”
or was that just a scare story in the
media?
Mr.
Wright:
It is a scare story. Forgive me for not being
completely clear about that. The latest edition of the Council of
Mortgage Lenders handbook in June 2007 shows that 27 out of the 30 top
lenders—the 88 per cent. I mentioned—accepted personal
searches.
The hon.
member for Welwyn Hatfield also mentioned house condition reports. We
still think that
house condition reports have a key role to play in the reform of the
house buying and selling process, which we think should be market-led
rather than mandatory, but we are considering that and it is something
that the stakeholder group under the Minister for Housing, my right
hon. Friend the Member for Pontefract and Castleford (Yvette Cooper)
has been looking at, too. It is certainly open to consultation and
consideration.
HIPs
are working smoothly: they are going out into the field and ensuring
that we have greater transparency and they are cutting costs and
helping climate change. I would have thought that all hon. Members
would agree and support such a move. I cannot believe that the hon.
Member for Welwyn Hatfield and his party have brought this matter to
the Committee today. I find it odd, tactically inept and not in the
best interests of home buyers and
sellers.
The
Chairman:
You started so you can
finish.
Grant
Shapps:
I was confused by the Minister’s last
statement, which suggested that we are the ones moving the
Government’s statutory instruments. The fact is that the other
place voted against HIPs, but that did not stop this Government from
trying to bring them forward. They failed to introduce the statutory
instruments as they could have done for three and four-bedroomed
houses, because they did not want to submit themselves to the
scrutiny. For obvious reasons—it transpires that full research
costing millions of pounds in taxpayers’ money has never been
released, even to the Government’s own partners in this
exercise—it is hardly surprising that we have, as the Minister
describes it, dragged them here kicking and screaming to debate this
proposed
legislation.
It is now
beyond any reasonable doubt that every expert in this field has
ridiculed HIPs. The industry does not want them and the market does not
need them. That is why we will scrap them. I call on the Minister to do
the same thing and get rid of this appalling piece of
legislation.
Question
put:—
The
Committee divided: Ayes 10, Noes
5.
Division
No.
1
]
Smith,
Ms Angela C.
(Sheffield,
Hillsborough)
Question
accordingly agreed to.
Resolved,
That the Committee has
considered the Home Information Pack (No.2) Regulations 2007 (S.I.
2007, No. 1667).
Motion
made, and Question
put,
That the
Committee has considered the Housing Act 2004 (Commencement No. 8)
(England and Wales) Order 2007 (S.I. 2007, No. 1668).—[Grant
Shapps.]
The
Committee divided: Ayes 10, Noes
5.
Division
No.
2
]
Smith,
Ms Angela C.
(Sheffield,
Hillsborough)
Question
accordingly agreed to.
Motion
made, and Question
put,
That the
Committee has considered the Housing Act 2004 (Commencement No. 9)
(England and Wales) Order 2007 (S.I. 2007, No. 2471).—[Grant
Shapps.]
The
Committee divided: Ayes 10, Noes
5.
Division
No.
3
]
Smith,
Ms Angela C.
(Sheffield,
Hillsborough)
Question
accordingly agreed to.
Committee rose at
twenty-four minutes past Three
o’clock.
