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We are aware that one body is supportive of the proposals. That, of course, is the Association of Home Information Pack Providers— [Laughter.] Does the Association of Home Information Pack Providers count as having a vested interest in the provision of home information packs? Perhaps in due course the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) will enlighten us on that count. One of the key things about that association is that it has been no slouch in communicating to its members. Indeed, members of the association are already salivating at the prospect of the extra cash that they are going to make out of the poor consumer. In this week’s Mortgage
Strategy, one of its members was writing under the headline, “Let’s make some money out of HIPs”. As far as they are concerned, this is a lucrative opportunity to fleece the consumer—a lucrative opportunity created by the Government who have failed the consumer.
Mr. John Redwood (Wokingham) (Con): On that very point, it is not only that there will be expenses at the beginning of the process and not enough people to produce the packs. Is it not also the case that if a house or flat does not sell quickly, people will have to pay all over again to renew the information—and still with no guarantee that they will get a sale?
Michael Gove: My right hon. Friend is absolutely right. The whole HIP package leads to an unnecessary duplication of costs.
Robert Neill (Bromley and Chislehurst) (Con): Does my hon. Friend agree that the Government’s stance is hypocritical? They hold themselves out as encouraging home ownership, yet HIPs will be an additional obstacle to first-time buyers in particular, because they will certainly be required to get a structural survey. A HIP will be of no value to them, because they will not have a track record with the mortgage lender. If we add in stamp duty, all that will make it harder for people—particularly people in London and the south-east such as my constituents—to get started on the housing market.
Michael Gove: My hon. Friend makes a very good point. When home information packs were originally introduced, they were sold to us as helping the first-time buyer and relieving that buyer of the obligation or requirement to have a valuation or survey. As matters stand, they do not help first-time buyers in any way at all: indeed, first-time buyers will still require a valuation and a survey and will still have to pay for the additional document, while nothing will be done to reduce the risk of gazumping.
Michael Gove: I happily give way to the right hon. Gentleman.
Mr. Raynsford: I am grateful to the hon. Gentleman for giving way at last. Will he acknowledge that £1 million is lost every day by members of the public through abortive costs—survey costs, searches and other costs incurred—because one in four transactions fall through? Will he tell us what he will do to address that gross inefficiency in the present arrangements that is working against the public interest?
Michael Gove: I am always interested to hear what the right hon. Gentleman has to say, as he is a figure of considerable expertise. However, it is a source of regret to me that he did not declare his interest in making his intervention.
Mr. Raynsford: I will declare it later.
Michael Gove: I look forward to that. I appreciate that the right hon. Gentleman, as well as bringing expertise— [Interruption.]
Mrs. Curtis-Thomas: On a point of order, Mr. Deputy Speaker. Will you confirm that it is not necessary to declare one’s interest in an intervention? [Interruption.]
Mr. Deputy Speaker (Sir Michael Lord): Order. These are serious matters. I think that hon. Members can be relied upon to declare their interests at the appropriate time.
Michael Gove: I am grateful, Mr. Deputy Speaker. As we know, the right hon. Member for Greenwich and Woolwich is a figure not just of expertise but of dignity. He respects the rules of the House and I am sure that he will be grateful to me for reminding the House that he is the director of a firm that produces home information packs. As a right hon. Gentleman with expertise in that area, he will also know that home information packs do absolutely nothing to speed the home buying and selling process and nothing to remove the risks associated with surveys and valuations.
What home information packs do, however, is help one person: the Chancellor of the Exchequer. VAT will be levied at 17.5 per cent. on every home information pack, which will be sold at an estimated cost of anything between £500 and £1,000. That is VAT on documents either on which VAT was not levied beforehand or which were not required before this legislation. It is a significant tax take for this Government—as if the home buyer was not milked enough with stamp duty and council tax. It takes the particular devilish ingenuity of this Chancellor to come up with a new tax on the home buyer and home seller—a tax that is likely to raise millions while doing nothing to help the housing market at a vulnerable time.
Michael Gove: I am not giving way again, as the right hon. Gentleman has signalled that he is anxious to speak later.
We know that the test of market competence has been failed. I have run through every group that takes responsibility for the health of the housing market and they are all opposed to these regulations. However, what of the secondary test? Will these regulations speed up transactions and make them less stressful? Will they end gazumping, as we were once told that they would? Every expert opinion, as we have heard, says no. Why? That is because under these regulations, before anyone can even market their property, they will need to assemble a bundle of documents, which it will be no easy business to get in place in time. Let us take the requirement to have local authority searches. We know that there is a wild variation in the cost and speed with which those documents are provided. We also know from the limited dry runs of HIPs which the Government have so far allowed that local authorities are simply not equipped to provide the searches required in the time required to allow properties to be marketed.
One of the largest companies in the business of providing search material is MDA SearchFlow. As it has explained:
“In the Dry Run areas the search market moved from 40 per cent. of the searches being personal to 100 per cent. of the searches being personal. This has caused significant delays as local authorities have struggled and ultimately failed to cope”.
The managing director goes on to warn:
“There is no way that all of the 2 million odd personal searches required can be facilitated by the local authorities... The Government’s proposals to solve this problem are wholly inept. The market will be chaotic.”
That is from a company that supports HIPs, yet it believes that the Government’s execution has been comprehensively botched. If sellers cannot get the searches done in time, properties cannot be marketed, so sellers will be frustrated and buyers will see the supply of housing even further constrained. At a time when the supply of housing is drying up and when housing supply is one of the key problems in the housing market, we will have a slower and less responsive market—not to mention a market with more costs.
Paul Farrelly (Newcastle-under-Lyme) (Lab): Does the hon. Gentleman agree that where responsibility to gain these searches is transferred to the seller, the burden on local authorities will reduce? There will be one seller rather than two, three, four or sometimes umpteen buyers doing these searches.
Michael Gove: I am grateful to the hon. Gentleman for making that point, because it shows that he completely misunderstands what will actually happen. At the moment, as the experts have pointed out, local authorities are simply not equipped to meet the demand for personal searches, but more than that, there will be additional demand for them. As the Law Society has explained, many buyers will be advised not to accept the personal searches supplied by sellers. The law of caveat emptor applies in house purchases. In many cases, buyers will look at the document supplied and their solicitor will tell them that they cannot be certain that it is not shoddy or partial or inadequate. They might advise them to commission their own searches, so there will potentially be twice the number of searches commissioned, additional costs throughout the process and additional complications. The Law Society has told us that; when solicitors were surveyed, more than two thirds said that the process envisaged by the Government would be inadequate for their clients.
Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): I have been following the hon. Gentleman’s arguments, and I am finding them rather contradictory. On the one hand, he is saying that the obligation to provide HIPs will result in the housing market drying up because people will refuse to put their houses on the market. On the other hand, he is saying that the overwhelming number of searches that will be needed will throttle local authority bureaucracies. How does he reconcile those two points?
Michael Gove:
I reconcile them using a process called logic, with which the hon. Gentleman might be unfamiliar. It is because it is so difficult to get searches that the number of properties on the market will dry up. That point has been made by every expert body that knows anything about the housing market. The pipeline will be narrowed, and supply will be
constrained. It is a matter not only of logic but of economics, and I would be happy to go through both processes with the hon. Gentleman any time he likes.
The Government have failed not only on searches but on the most crucial test of all: seriousness about the environment and climate change. Their record on the environment is patchy at best. Ministers in the Department for Communities and Local Government have recently been proclaiming their green credentials. How recently? I have been reading the speeches of the Minister for Housing and Planning on her website, and very instructive and entertaining they are too. From the moment she was appointed to her present responsibilities, however, there has been scarcely a mention of the environment. There was support for more housing and for more regulation, but nothing on the environment before December 2005. I am sure that hon. Members will remember what happened at that time. My right hon. Friend the Member for Witney (Mr. Cameron) became leader of the Conservative party and put the environment at the heart of our campaigning. After December 2005, what was there on the Minister’s website? There was silence until May 2006, just two weeks after my right hon. Friend had secured 40 per cent. of the vote in the local elections. The Minister then suddenly emerged from her purdah, her self-imposed silence, to make her first speech as a Minister for five months. To whom? To the Green Alliance.
When we campaigned with the message “Vote blue, go green”, we had no idea that the Minister would take that message to heart. Now, as a new convert to Cameron conservatism, she is talking about building eco-homes. Let me remind her that, as the Economic Secretary to the Treasury pointed out in Committee yesterday, no zero carbon homes have been built so far, and the number qualifying for zero stamp duty on the basis of zero carbon in the years ahead will be—as he said in answer to a parliamentary question—“negligible”.
Ten years in office, and no progress on the environment. Yet as soon as my right hon. Friend the Member for Witney was elected leader of the Conservative party, Ministers were galvanised into greenery. Just imagine what we could do for the environment if we were actually in power— [ Laughter. ] We would certainly take the provision of energy performance certificates seriously, unlike this Government and their Back Benchers, who seem to regard the environment as a subject for hilarity. I am glad that they are laughing at their own record. There will be plenty of opportunity for them to weep when the voters pass their verdict on it at the general election in a couple of years’ time.
If the Government were serious about energy efficiency they would have put the people in place to carry out the energy inspections that are at the heart of the provisions on energy performance certificates, but once again, the Minister and her Department have failed to listen and learn. A year ago, we said that there were not enough people in place, but the Government said that they would get the 7,500 inspectors that they needed; it would be all right on the night. A month ago, however, they revised that figure down and said that they would need only 2,500. Why the sudden reduction? We asked two weeks ago how many
inspectors were fully trained and accredited, and we were given the answer at 5 o’clock on the Friday of the May bank holiday weekend: not one domestic energy assessor had passed the test and been accredited. With less than four weeks to go before the implementation of what the Minister describes as a key policy to combat climate change, not one of the 2,500—or 7,500; which is it?—qualified, accredited inspectors is ready to respond. How does the hon. Member for Newcastle-under-Lyme (Paul Farrelly) explain that?
Paul Farrelly: I thank the hon. Gentleman for giving way. He must have seen me straining at the leash. I am sure that the House would appreciate hearing not only about what he and his colleagues started to say 12 months ago, but about what the Conservatives did during 18 years in office up to 1997.
Michael Gove: The hon. Gentleman insists on giving us a history lesson. Let me remind him that the first significant international agreement on combating climate change was signed by my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) when he was Environment Secretary. The first world statesman to sound a warning on global climate change was Baroness Thatcher, at the Government Dispatch Box in 1988. We will take no lessons from the Johnny-come-latelies from Staffordshire. There are many fine Members of Parliament in Staffordshire. Some of them, however, need not only a history lesson but an ecology tutorial before they open their mouths again on this subject.
The Government are now trying to rush through a few more domestic energy assessors who have passed their test and been accredited. Yesterday, however, I was talking to representatives of the largest HIP provider in Britain, Spicer Haart. It is in despair; it has given up on the Government. It said that
“we have only managed to identify sufficient assessors to cover 40 per cent. of our requirements”.
And let us remember that those are people who have not even been accredited; they have only passed their exam. Spicer Haart went on to say that
“given that we have significant managerial and capital resources at our disposal, you can begin to appreciate the scale of the difficulty the industry as a whole has”.
With less than four weeks before HIPs went live, there was not a single person qualified and accredited to give out an EPC. How can that be taking climate change seriously? With less than two weeks to go, the biggest provider of home information packs cannot identify enough people to carry out even half its requirements. How can that be taking climate change seriously?
If the Government are serious about climate change, why are they not introducing EPCs into the rental and commercial sectors on 1 June? It is because they simply have not laid the necessary foundations, and the right hon. Member for Greenwich and Woolwich knows it. This is the Government who say that they favour energy efficient homes, but only last week they were cutting grants to their low carbon building programme, slashing spending on solar energy by 80 per cent. and hacking back support for wind and other renewables by 50 per cent.
Mr. Eric Pickles (Brentwood and Ongar) (Con): That’s not very good.
Michael Gove: It certainly is not.
The way in which the Government are trying to use HIPs to prop up their faulty green credentials has been exposed by no less than the Cabinet Office and its Better Regulation Commission, which said that the regulations were
“ill considered regulatory responses to the climate change challenge”,
“using climate change as a justification for measures which have other motivations.”
The Government are using energy performance certificates as a fig leaf—a piece of greenery deployed to cover their massive embarrassment—but no one is convinced. Let me offer to save them further embarrassment. If they will ditch home information packs—that is the motion under debate today—we will help them to ensure that energy performance certificates work. After all, Ministers discovered greenery only after the Conservatives showed them the way. The truth is that the regulations will add cost and complexity to the housing market, when what we need is more supply and economic stability. In the interest of keeping the housing market healthy, I ask the House to throw out once and for all these botched, bungled and broken-backed regulations.
1.58 pm
The Minister for Housing and Planning (Yvette Cooper): The hon. Member for Surrey Heath (Michael Gove) has entertained us—and, of course, himself—in his usual way this afternoon. The debate is on the HIP regulations and energy performance certificates, but hon. Members could be forgiven for thinking that it was on something else entirely, having listened to such a huge amount of nonsense and misinformation about our sensible and practical proposals.
The main document in the home information pack—the only new document that is being added to the process—is the energy performance certificate. The certificates will give people’s homes an energy rating for the first time. That is like a fridge rating for the home that they are hoping to buy. We get such information on our washing machines, our fridges and our dishwashers, and it is high time that we got it on our homes.
The threat of climate change is real and urgent, and 27 per cent. of our carbon emissions comes from our homes. How can people be expected to make the necessary improvements if they do not have proper information about what is needed to make a difference? How many of us have any idea about the lagging in the loft, when we are looking for a home to buy? How many of us have any idea whether a home has cavity walls, or even know what a cavity wall is? This year, people will get that kind of information in energy performance certificates for the first time. That will make it possible for people to think about proper energy efficiency improvements to their homes.
As for the impact of fridge ratings, if we look at all the white goods in Comet and Currys, we see that the overwhelming majority now have “A” ratings. The
provision of that information has had an impact on the market and on the way in which people behave. The energy performance certificates go further: they will give people not only the rating on their home but information on what they can do about it—what their fuel bills are likely to be and how they can cut them, and how they can cut their carbon emissions.
Mr. Mark Prisk (Hertford and Stortford) (Con): The Minister makes an analogy with the consumer. On that basis, why has the Consumers Association described her proposals as
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