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Public Bill Committee Debates

Home Information Pack (Amendment) Regulations 2008

The Committee consisted of the following Members:

Chairman: John Cummings
George, Mr. Bruce (Walsall, South) (Lab)
Goldsworthy, Julia (Falmouth and Camborne) (LD)
Griffiths, Nigel (Edinburgh, South) (Lab)
Hain, Mr. Peter (Neath) (Lab)
Hill, Keith (Streatham) (Lab)
Holloway, Mr. Adam (Gravesham) (Con)
Hurd, Mr. Nick (Ruislip-Northwood) (Con)
Iddon, Dr. Brian (Bolton, South-East) (Lab)
Öpik, Lembit (Montgomeryshire) (LD)
Ruane, Chris (Vale of Clwyd) (Lab)
Shapps, Grant (Welwyn Hatfield) (Con)
Stewart, Ian (Eccles) (Lab)
Stoate, Dr. Howard (Dartford) (Lab)
Syms, Mr. Robert (Poole) (Con)
Tredinnick, David (Bosworth) (Con)
Watts, Mr. Dave (Lord Commissioner of Her Majesty's Treasury)
Wright, Mr. Iain (Parliamentary Under-Secretary of State for Communities and Local Government)
Sarah Hartwell-Naguib, Committee Clerk
† attended the Committee

Fifth Delegated Legislation Committee

Wednesday 14 May 2008

[John Cummings in the Chair]

Home Information Pack (Amendment) Regulations 2008

2.30 pm
Grant Shapps (Welwyn Hatfield) (Con): I beg to move,
That the Committee has considered the Home Information Pack (Amendment) Regulations 2008 (S.I., 2008, No. 572.).
Here we are again, debating for the third or perhaps even the fourth time—
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): Fourth time.
Grant Shapps: The Minister has kindly checked, after my request last evening. The first day marketing principle—the idea that we should be able to walk into an estate agent and put something that is rightfully ours and is probably our largest asset on the market at the moment we decide to sell it—is at stake yet again. It is extraordinary that the Government keep putting the House through this torture. It must also be torture for the Minister to have to defend the indefensible—a policy that is so far past bust that I am surprised not to see its abandonment in one of today’s U-turns or at least adopted from my party’s policies. It is manifestly clear.
I must declare a small, partial interest, which I have declared in previous Committees. Since I have become shadow Housing Minister, my wife has taken an administrative job in a local estate agents. She has bluntly informed me that nobody—but nobody—ever walks in and asks to see the HIP. In fact, the HIP does nothing but cause problems and confusion. It takes much longer to get hold of a HIP than the Government said it would when they last postponed the ending of first day marketing, when we debated the last statutory instrument laid for that purpose.
In reality, even the Government’s own statistics and MORI polling costing the taxpayer £4 million demonstrate absolutely that most people—eight out of 10—do not give a dam about the HIP. People are not interested in it. It is, in fact, a block to progress in what can only be described in the Housing Minister’s private, not public, words as a very delicate situation in the housing market. Today, an opportunity is being wasted. I say to the Minister through the Committee that we could do something very simple: instead of going for another six-month suspension of the implementation of the full legislation, which means that we must not sell our house on the first day, before we have a HIP, let us just make the position permanent. Let us have a situation in which we can sell our house uninhibited by the Government saying, “No, you must collect the red tape and certain paperwork before you can sell what is yours.”
We know not only from the £4 million trial that did not report until after the Government had enforced the legislation, but from a recent survey by the National Association of Estate Agents, that most of the time people are not receiving the HIP in anything like the time that the Minister insists is the case. Rather than four, five, seven or 10 days, it is typically taking two or three weeks to get the HIP. Neither is the cost as low as the Government maintain: Ministers quote £300, sometimes £350, for a HIP, but they conveniently forget about the VAT. The average price of a HIP is therefore much higher than the figures that are quoted.
I have primary research, collected from many thousands of estate agents, and I offer the Minister the opportunity to sit down and discuss matters in a sensible, rational way, in the spirit of a relaunched Government and today’s new draft Queen’s Speech. So many of our other policies have been adopted into the Government’s programme, this is one that we give them for free—the method that they could use to ensure that the housing market is able to work again, without the constant threat of the disruption that will be caused if the first day marketing is ever ended.
The Minister has a great opportunity to introduce a statutory instrument at the earliest possible moment to ensure that we postpone implementation indefinitely. If he wants, he can come back to the House at another stage and reintroduce the measure. He has the power under primary legislation to do that. Let us deal with matters that way round, rather than having the embarrassing situation in six months’ time in which a red-faced Minister is dragged back to yet another statutory instrument Committee to postpone the measure again for a further six months. Let us deal with the matter in a painless way.
I am trying to help the Minister through this difficulty. I know that he is just the fall guy. I know that he does not want to be doing this. The Minister for Housing used to handle the subject herself, but the Government have passed it down the line as it got trickier and trickier. I think that there is an obvious way out.
Ian Stewart (Eccles) (Lab): Good afternoon, Mr. Cummings, it is good to see you in the Chair. It strikes me as significant that the hon. Member for Welwyn Hatfield does not have the experience to realise that he is supposed to grovel and welcome the Chairman before he starts speaking. How can he have the judgment to give the Government any advice?
It strikes me as exceedingly strange that the hon. Gentleman offers a policy to the Government free of charge, but then says nothing more than, “Please don’t do what you intend to do. Let us talk further.” Is not that typical of the Tory party? They have no policies and nothing sensible to suggest.
Grant Shapps: I absolutely accept the first point of the intervention. I make a humble and grovelling apology to you, Mr. Cummings, and I welcome you to the Chair. It is just that so many Chairmen have been put through statutory instrument Committees on this subject that I imagined that this was a dA(c)jA vu situation. I have thanked the previous Chairman for presiding over exactly the same debate, but the hon. Gentleman is absolutely right.
On the second point, if the hon. Gentleman wants to debate wider housing policies, I will happily do that, particularly after today’s rehashed Queen’s Speech, because there is so much to discuss. However, I fear that the very Chairman whom I was encouraged to welcome would rule my comments out of order.
The Chairman: Indeed I would.
Grant Shapps: I have confirmation of it.
We can make a good start by not scrapping first day marketing, by allowing first-time buyers to buy their homes without nine out of 10 of them having to pay stamp duty and by getting the economy moving in the way that it should by sharing the proceeds of growth. We should start on that immediately. Let us make some progress so that we can stop coming back for these six-monthly meetings, which are enjoyable, but embarrassing for the Minister because he has to continue to defend the indefensible.
Mr. Adam Holloway (Gravesham) (Con): Why does my hon. Friend think that the Government are doing something that seems completely unnecessary and is frankly unpopular?
Grant Shapps: To answer that question, we have to consider why the Government do all sorts of very unpopular things. For example, why would they double taxation of the very poorest people in the country, whom they claim they came to power to represent? [ Interruption. ]
The Chairman: Order. Let us all just simmer down.
Grant Shapps: To answer my hon. Friend’s question I would have to look into the Government’s collective brain. It is very difficult to see inside that murky world. It is probably best if I make no further comment on that subject.
Julia Goldsworthy (Falmouth and Camborne) (LD): Is the hon. Gentleman suggesting that there should be no limit on the time it takes to produce the information before a property is sold, or is he suggesting that there should be some other time scale than the one proposed? Has he taken into account the average period for which a property is on the market before it is sold?
Grant Shapps: Last Thursday, I gathered 120 of this nation’s best property experts in Portcullis House to discuss how to make buying and selling homes easier, quicker and less stressful for people. Despite the fact that there were representatives from the Association of Home Information Pack Providers, there was not a single call to maintain the HIP in its current format. I am therefore suggesting that it would be better if we got rid of the home information pack. I am suggesting that it would be better if we indefinitely postponed the introduction of the inability to sell on the day that you decide to put your house of the market.
We believe in keeping the energy performance certificate, which, once broken free of the rather restrictive shell of a HIP, could expand faster and do more good.
Julia Goldsworthy: Does the hon. Gentleman believe that that certificate should be available at the point of sale?
Grant Shapps: I believe that one can create a situation where most home owners or renters have an energy performance certificate. Although we would keep it tied in to the moment of sale, we do not need to do that exclusively. One could expand it so that EPCs are ordered at all sorts of times. We do not have to be in this restrictive HIP world.
The Government try to tell us that the only way to introduce energy performance certificates is via HIPs, yet Northern Ireland takes precisely the opposite point of view and allows EPCs to be introduced as a stand-alone feature. The same should be done here. It is practical and I believe that the Minister accepts that privately, although I do not claim to know what is inside Ministers’ minds.
We have an ideal opportunity to draw a line under a ludicrous process, wherein every six months we are back in this room debating exactly the same points with no new data on the Minister’s side, and to say once and for all that HIPs have failed. Let us abolish them. For goodness sake, let us stop coming back and having the embarrassment of repeatedly, every six months, postponing the introduction of the exclusion of first day marketing.
2.42 pm
Julia Goldsworthy: For some, I am sure that today’s debate feels like “Groundhog Day”. I wonder whether there is an element of the sort of sentiment that we saw yesterday in that the Government are trying to undo a problem of their own making. In a way, I take a very similar position to that taken by my hon. Friend the Member for Twickenham (Dr. Cable)yesterday, and say that, given the present circumstances, it is difficult to see how any alternative would be a better solution that the one that is being proposed.
The statutory instrument raises two issues. The first relates to insurance. To remove it altogether would create an unlevel playing field. It would make matters worse, because local authorities that wanted to charge extortionate amounts for the specific parts of the search requested would be able to do so. Local authorities not having the capacity to cope with the requests being made is another barrier to home buyers producing the document that they need to sell their homes.
It is the least bad scenario, but it is very frustrating that we are here again considering the delay of implementation of recommendations from a consultation document called “Towards 1st June”. Does the Minister have any plans to change the name of the consultation document as many times as he has changed the implementation timetable? He could add a year—2009 perhaps.
It would have been so much better if all the problems had been ironed out before the Government fully rolled out the programme. It is difficult to now how the public can have any confidence that the Government are going to deliver what they say that they want to deliver in the timescale in which they say they want to deliver it. What confidence can we have that implementation will not reflect a document called “Towards 1st June 2009” or “Towards 1st June 2010”? We have another moving target—the end of December. How can we be confident that that is not going to change again?
The second issue is the rating against the code for sustainable homes. The hon. Member for Welwyn Hatfield, has spoken of the value of energy performance certificates. The Liberal Democrats feel very strongly that this is the most valuable element of home information packs. I am concerned that, although the intention is laudable, it is going to end up confusing home buyers.
We have the energy performance certificate and we are now talking about a rating against the code for sustainable homes for all new properties. It is great that there is an opportunity to understand the wider sustainability impact of a new property. I can think of a commercial property in my constituency—an industrial space—that was built entirely out of rammed earth. The carbon impact of building was kept low, but it is a high-tech building. It would be fantastic to see similar residential developments and to see clearly the benefit that those innovative methods can achieve in reducing the carbon impact—not only in terms of the energy performance of a property, but the energy that went into building it in the first place.
The question is, how easy will it be for the consumer to understand that? The supporting documentation for the SI mentions improving demand, but I am not entirely sure how it would achieve that. There will be a group of people for whom this is a high priority, and it will arm them with better information, but I do not see how it will make people for whom it is not a major priority suddenly feel that it will benefit them massively.
I am also concerned that there is an opt-out whereby someone can have a nil rating if they do not want to engage in the process. What proportion does the Minister expect nil ratings to account for, compared with genuine ratings that have been undertaken? Given the state of the building market and the difficulties that it is facing now, surely the easiest option will be to go for the nil rating? Although the aim is to assert the principle, I am concerned that regulations actually provide a get-out clause, which may mean that everyone will sink to the lowest common denominator.
I would appreciate the Minister’s comments on how he thinks those difficulties will be overcome. I agree with what he is trying to achieve through the rating, but am not entirely sure how it can be delivered or how effective it will be. On the insurance issue, I think that the Government are trying to salvage the least bad situation out of what is not a very positive situation for them, and one that is of their own making.
2.47 pm
Mr. Wright: Mr Cummings, may I say what a pleasure it is to serve under your chairmanship, particularly as you are my next-door neighbour in terms of parliamentary constituencies? May I also point out, in the interests of collective Government responsibility, that the briefing pack that I have is open and transparent?
I will begin with a correction for the hon. Member for Welwyn Hatfield. I was slightly confused about what he was praying against, because his speech this afternoon concentrated predominantly on first day marketing. However, the regulations that are before us today do not deal with that. He has been talking about statutory instrument 2008 No. 1266, which was laid last week by my right hon. Friend the Minister for Housing and relates to first day marketing. The hon. Gentleman has prayed against statutory instrument 2008 No. 572, so I am slightly confused about why he prayed against something but did not mention it at all. I will be happy to allow him to intervene to clarify that point.
The hon. Member for Falmouth and Camborne actually spoke to the regulations before us today and made some sensible points. As she said, the regulations extend until 31 December 2008 the temporary provision allowing the use of insurance cover where property searches data are unavailable. We are committed to reforming the property searches market to provide the conditions for open and fair competition so that consumers benefit from good-quality searches at competitive prices.
I point out to the hon. Lady that since the introduction of HIPs, we have seen the price of local authority searches fall by an average of about £30, although in some areas the price is falling by about £120. Such information is part of a wider, comprehensive package of the data made available to minimise the hassle of selling and buying houses. Work is already under way to implement the reforms, which I pledge will be complete by the end of the year. For example, we have published guidance for local authorities and personal searchers on access to search data and consulted on future charging arrangements for access to searches data. Extending the provision for insurance cover is therefore a sensible measure while we finalise and put in place the new arrangements. I pledge that we will keep this on board, but I think we will complete those arrangements by the end of the year.
On the rating on the code for sustainable homes, the hon. Lady made a very important point about confusion. I have a lot of sympathy with her comments in that respect, but I do not want to compare apples with pears. Energy performance certificates cover existing housing stock—anything from a house built last year to something built back in the middle ages. There is a huge variety of houses. The code for sustainable homes is a wider environmental measure concerned with new build, which will have much better, much improved energy efficiency measures.
I do not want to sow confusion. If we had an A to G rating on both the code and the EPC, for example, someone could get a G on the EPC and an F on the code. That does not sound right, so I think it better that we have different rating mechanisms to take into account the different things that we are measuring.
Grant Shapps: I have posed this question to the Minister before, and I believe he promised to give it some additional thought. I wonder whether he has. It is confusing that the sustainability code rating is a one to six system where six is the highest rating, but for EPCs it is the other way round, going from A to G, so that we end up with two different systems working in parallel and confusing the public. The two could have been drawn together in a way which would have made sense. One seems to work one way round, with six being the highest; the other works the other way round, with A being the highest. That is fundamentally confusing.
Julia Goldsworthy: My concern about confusion is that people purchasing new homes will not be asked to consider apples or pears, but will be asked to consider apples and pears together. I think that people will find that confusing.
Mr. Wright: I will take that point, but first I will give way to the hon. Member for Welwyn Hatfield.
Grant Shapps: The Minister is being generous. Once again, his argument does not stack up. He says that two different scales for the same code would be confusing, whereas that is exactly what exists in the EPC, where there is a scale for both energy performance and for CO2 emissions. Does not his argument fall down on the fact that it has already been introduced in exactly that way, when there could have been a third scale for sustainability?
Mr. Wright: I disagree fundamentally with the hon. Gentleman because, as I said, I want to minimise confusion as much as possible. We are dealing with different things. We are dealing with homes that are now being built, which will have much improved energy efficiency measures as we move forward towards the very ambitious target of making all new homes zero rated in terms of energy efficiency by 2016. I therefore think that we have appropriate, well established provisions in place to ensure that the consumer—the house buyer—can make good decisions based on energy efficiency that will help to inform his or her decision about whether to buy a particular home.
Julia Goldsworthy: Is it not one of the other aspects of the confusion that new build properties will be required to produce a rating according to the code, whereas a full assessment will remain voluntary? Is this not another factor that will create confusion for the home buyer in terms of what information they are being given?
Mr. Wright: No. We discussed this at length in the Committee on the Housing and Regeneration Bill. One of the things we are trying to do is stimulate the market by providing additional information. If I were buying a house now and there were a zero star rating showing that the house had been built according to existing building regulations as opposed to the code, I would be asking why that was the case. I think we will kick-start innovation on the road to achieving the 2016 target. I do not see any confusion at all. If someone downloads that rating free from the internet, I think that that would stimulate further questioning about what can be done to improve the efficiency. I do not see a confusion. I see well established, consistent procedures to allow people to make a good decision about which home to buy.
I think I have addressed all the points raised, Mr. Cummings, for the SI that is under consideration and perhaps for the SI that has not been under consideration. HIPs are working in a very volatile market; we are seeing some volatility for the first time in about 15 years. We do not want to do anything that worsens the delicacy of the housing market. HIPs are starting to work well and are becoming established, but we do want to do anything that compromises the stability of the housing market. This Government are on the side of home owners and we want to make sure that everybody, where possible, has a chance to own their own home. The regulations before us today are part of that and I commend them to the Committee.
Question put and agreed to.
Committee rose at four minutes to Three o’clock.

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