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The Government have announced that they are going to delay the introduction of home information packs until 1 August. That is eight weeks away. Will the Minister say when the new regulations will be laid, when we will have sight of the result of the pilots which have taken place and whether they are aware that the Royal Institution of Chartered Surveyors is still pursuing the judicial review?
We must all be grateful for the serious and considered judgment handed down by Justice Collins today. But why, when the Government had 10 years to get this right, has it taken the intervention of a High Court judge to finally bring a stop, if only temporarily, to what has been an unbelievable mess?
Justice Collinss intervention will, I hope, protect home buyers and the house market for the time being. Why did the Government not pay more attention to the crucial report of this Houses Merits of Statutory Instruments Committee, which demonstrated that the policy was not fit for implementation? While the present stay has come about as a result of the Royal Institution of Chartered Surveyors seeking judicial review, the Minister must be aware of the extreme hostility there has been to the introduction of these packs from both consumers and the housing industry.
The Governments only defence for the emasculated home information packs has been the inclusion of the energy performance certificate. Housing information packs without either the home condition report or the energy performance certificate are now nothing more than an empty packet. Tackling climate change and helping first-time buyers have been relegated to the afterthoughts in this entire process. It is clear that todays delaying tactics are nothing more than a botched attempt to minimise the Governments embarrassment over yet another U-turn.
Whatever the spin, we all know the truth. The housing information pack saga has been a model of how not to do government. HIPs are unnecessary, ill designed to address the problem they claimed to address, badly planned, badly timed, badly executed and, incredibly, not even ready for implementation after three years of legislation and more years of planning. Can there ever have been such a fiasco from the department? Home information packs as now conceived were a tax on home owners which offered no help to home buyers and would have frozen the market just when it needed liberating.
Would it not now be better just to bury this whole issue quietly and to bury it deep? Will the Minister accept that this House has been right all along on this matter? Noble Lords were right in 2004 when they rejected the idea by a majority of 47, but the Deputy Prime Minister insisted on reimposing it. This House was right in resisting the original regulations. The outstanding report produced by the noble Lord, Lord Filkin, who is in his place, and the Merits Committee was right and they deserve congratulations.
Is this climbdown not a major vindication for this House and its right to vote against regulations, and a major humiliation for the Government? Will the Minister confirm that in future the Government will conform with recommendations of the Merits Committee, and do so with less foot-dragging and much better grace? Will she take back the message from this House that this ill conceived plan should never again see the light of day?
Baroness Scott of Needham Market: My Lords, one can but sympathise with the Minister who is having to defend the indefensible. Last week the Royal Institution of Chartered Surveyors launched a judicial review. It was an unprecedented move, which it did not take lightly. It took it in the end in desperation because it simply could not get anyone in government to listen to it. Today, Sir Andrew Collins has agreed that there is an arguable case and that the RICS could not have moved any sooner than it did. Because we cannot have a hearing before 1 June, the stop-gap was to go ahead with home information packs without the energy performance certificates. It really begs the question what on Earth would be left inside the HIP. Householders would be left paying to hand over an empty folder. The solution now is to postpone the whole thing for two months. That means that we shall have another set of hastily scribbled regulations, which will have to come to this House in the next six weeks if there is to be any parliamentary scrutiny of them at all before the recess. It is simply not good enough.
The Government started looking at changes to house purchase 10 years ago. Seven years ago they brought forward legislation which introduced the home information packs. The practical objections from all sides of the industry, particularly the Law Society, led these Benches to oppose the measure. The Government ignored the advice they received and ploughed on anyway. It took them two years to bring forward regulations and, at the last minute, under pressure from an industry that knew that it could not deliver what it was being asked to deliver, they removed the home condition surveythe most important part of the pack. Since then, there has been a whole year in which the Government have continued to ignore the advice that they have been given, until they have been forced to make this ignominious U-turn today. They have finally admitted that they do not have sufficient energy assessorsafter months of questions from noble Lords in this House and after months of assuring us that there were enough. Why has it taken a judicial review finally to reach the truth of this matter?
In her Statement, the Minister said that this will bring clarity. It is difficult to see how. We are going to start with four-bedroom houses. For the next two months, people will be converting bedrooms into studies at a rate of knots. My noble friend Lord Shutt wants to know whether the room that contains his model railway will be classed as a bedroom if he puts his house on the market. I am afraid that I am unable to tell him. We will have to wait to see whether the regulations include a model railway clause.
We are now told that social housing is to be included at the point of stock transfer and will apply regardless of where the stock transfer is taking place and how many houses are involved. Stock transfers involving many hundreds of homes could take place in areas where there are no surveyorsbut we do not know, because that has not been thought about.
How much faith can we, the industry, or the public have in a solution that has, by the Governments own admission, been cobbled together over the past few days? Individuals out there have paid to become accredited home condition surveyors. When the surveys were pulled, they had wasted their money. They then paid to become accredited energy performance surveyors, but now the future of those is in doubt, too. We must retain some form of energy performance certificates, because EU legislation demands them and, in any event, the climate change agenda demands that we take steps to reduce domestic energy emissions. Where will the assessors come from now that they have had their fingers badly burned by the Governments mishandling of this matter?
Another measure that we are told will be taken is first-day marketing. In other words, you can put your house on the market without having a pack in place. We proposed that measure when the Bill was going through and we were given all sorts of reasons by the Government why it would not work. Four years later, we suddenly find that that is the answer. If this matter was not so serious, it would be laughable and it brings a new meaning to the expression, Whitehall farce.
The most important asset owned by anyone is their home. Whatever the shortcomings of the previous system, at least the uncertainties were well understood and could, to an extent, be planned for. As a result of the Governments bungling, the system is in tatters. Neither the industry nor households have any idea what is coming next. It takes a staggering degree of incompetence to end up with no policy and every single interest group opposed to youbut the Government have managed it.
Baroness Andrews: My Lords, I suppose that I should be grateful for sympathy, but I have no problem in defending the Governments policy, which is certainly not in tatters. We have spelt out exactly where we are going and the reaction this afternoon highlights some of our problems in trying to keep the confidence of the market in assessors, which has been very much at the forefront of our minds as we have made our decisions in recent days.
First, perhaps I may clarify the specific point on where we are in the judicial review process. Judicial review has been stayed. We welcome, and I am sure that the House will welcome, our discussions with the RICS. We do not expect the claim to continue and we look forward to moving forward with the RICS. Let me also restate that we remain convinced that, for a market that has seen no change since my mother and father bought their house 25 or 30 years ago, it is right to try to reform and improve a system that is the slowest, the least transparent, the least predictable, the most costly and the most stressful in Europe. The information that we are receiving from our area trials of HIPS is that 70 per cent of sellers actually agree with us that HIPS are useful.
Some of the criticisms should be held for a little while. We remain committed to the principle of home improvement packs and we remain equally committed not just to the principle but to the necessity of energy performance certificates. Every week, we have a new report about the speed of climate change. Every week, we are told that unless we act now it will be too late. By bringing forward the energy performance certificates, we have tried to set a lead and an example in Europe.
Both noble Baronesses said that we had not listened; they said that we had rushed ahead and refused to listen to common sense, including to what this House and the Merits Committee said. In fact, we have listened extremely hard for the past two years. When the Council of Mortgage Lenders told us that it was not ready to implement the home condition report, we withdrew it as a mandatory element of the pack. We have looked at the evidence from our area trials, which we set up last autumn; I explained to the House at the time that we were doing that to get more evidence. We have made transitional arrangements for when, for example, leaseholds and legal searches will be presented. We have listened hard to what the stakeholders have told us about the problems that they have encountered. That is why the consultation exercise that we are putting in place will address the specific issue that the RICS raised about the EPC, so that we can determine at what age we can generate a performance certificate that is proportionate, effective and in the best interests of the consumer and the community. So we have listened.
I was asked how we will know that we have enough trained assessors. Earlier, I gave figures that I think are extremely healthy and very sound. We have 2,500 people in trainingthose who are still to do their exams. We have 3,200 people who have passed their exams. As I said, 1,500 people are accredited or in the pipeline for accreditation. These are people who have made a commitment for a new career. We keep faith with them, which is why the process that I outlined is about keeping up their confidence in a climate that has been extremely difficult and harassing for them, because of the responses of some of the stakeholders and the constant commentary in some of the press. Our intention is to ensure that they have the work that they want. That is why we are introducing this in a phased manner, starting with the larger houses on 1 August, because we know that we can guarantee that work for them.
We will look to the social housing sector, not least because that is the right thing to do. We will have detailed negotiations with the RSLs and local authorities. We will be pragmatic and practical at this point. We will use the evidence that is coming forward from the numbers of assessors that we have and the work that they are getting to plan properly across the autumn how we bring other properties online.
I was asked about four-bedroom houses. I do not have anything in my brief about model railways, but I have a strong sense that trading standards officers and the people involved will have a good idea about what a four-bedroom house is. I think that the point is a bit of a red herring.
I was asked when the regulations will be laid. I cannot give a date now, but I assure the House that there will be ample opportunity for full parliamentary scrutiny. Indeed, I am happy that we are having the debate later this afternoon, as that will be a good opportunity for the House to explore some of the aspects that we do not have time for with this Statement.
I was also asked when we will be able to retrieve information from the pilots. We have already had two tranches, which have informed the changes that we have made, and we will get more information in July and August. Because transactions in this country take a minimum of six months, we will not have the full information until early autumn. We will certainly take the evidence into account.
Let me address some of the other questions that I was asked. We made an initial response to the Merits Committee by putting additional information in the Library of the House and by writing to the chair. One of the committees specific criticisms of the Government concerned the age of the EPC. We are addressing that and will address it in the consultation that we will bring forward. I have dealt with the issue of stock transfer.
In conclusion, as the Secretary of State said earlier today, our intention is to maximise the benefits and to proceed with the people with whom we need to keep faith by being as open, frank and pragmatic as possible. We need to minimise the risks but maximise the benefits to the consumer both in the way that houses are bought and sold and also by cutting carbon and costs for the consumer.
Lord Tebbit: My Lords, do the Government have a definition of a bedroom which would stand up in law? Has the Minister not seen advertisements in estate agents windows for houses with two/three bedrooms or three/four bedrooms? The Government must have a legally binding and watertight definition; otherwise this situation will be more of a shambles than it looks now. Further, can the noble Baroness say who in government should take the credit for what she clearly feels has been an administrative coup?
Baroness Andrews: My Lords, there is no definition of a four-bedroomed house in any housing law that I am aware of, but I should have thought that we could bring a fair degree of common sense to bear in the matter. We know that four-bedroomed houses represent 18 per cent of the stock, which is why we have specified that size of home at this point. We shall certainly issue guidance to trading standards officers, who will have responsibility in this area, and we shall certainly listen to stakeholders, who I am sure would want to ensure that we got things right. With regard to who takes credit, there is collective responsibility, as the noble Lord knows.
Lord Elystan-Morgan: My Lords, does the noble Baroness agree that this situation is so charged with human misery, waste and frustration and is so serious that it should not be the subject of party bickering or of trite political points? Furthermore, does she accept that for 10 years the Government have shown remarkable consistency in this matter? They made it a commitment before the 1997 election; in 2000, a Bill was introduced, which ran out of time; and it was the subject of Section 163 of the Housing Act 2004.
However, does the Minister accept that, whereas the Government can improve the situation for the community at large in only a limited areathere is no magic wand that can change the basic problem of the gap between the agreement and the ultimate exchange of contractswhat really counts in relation to HIPs is the home condition survey? If that is not made compulsory, there is very little prospect that the scheme will succeed. If it is made compulsory, there has to be a credible inspectorate that wins its spurs in executing its duties. But, if the survey is not made compulsory and it is left on a voluntary basis, the scheme will be a ship without a bottom.
Baroness Andrews: My Lords, I am grateful to the noble Lord, who is absolutely right. We made a commitment in the 1997 manifesto to try to improve the home-buying process. I suspect that from his professional experience the noble Lord knows more than most how many millions of pounds are lost each year in failed transactions and how many times people have to arrange yet another survey because a house is withdrawn from the market. The insecurity, lack of information and lack of transparency makes the process a misery. When I answered questions in this House a week ago, a noble Lord on the Cross Benches pointed out that the system was much better in France. He was absolutely right, and that applies to many other European countries as well.
We withdrew the home condition survey as a mandatory element of the pack because mortgage lenders told us that they felt that valuations would still be necessary. It seemed to us that we had to test that assertion, and that is what we have been doing in the area trials. However, the information coming back to us is that people like home condition reports. They give them information when they first look at a house so that they do not get nasty surprises. It is extremely important that they should have that information. But we are where we are, and I shall no doubt be reporting to the House in due course on how the trials are affecting transactions.
Lord Graham of Edmonton: My Lords, sympathy has been expressed to the Minister; she is entitled to have it, given the history of this matter. I hope that she and her ministerial colleagues will persist in ultimately producing a scheme that is acceptable to all parties. I remind the House that it was Peter Walker in 1984 who began outlining a scheme whereby the kind of thing that the Government are now introducing should be part of every mortgage. Over the years, successive House of Commons Select Committees have asked for this sort of thing, and I cannot understand how people, especially those from another place with constituency experience, do not understand the importance of its introduction and the misery caused by the present hiatus.
The Minister spoke in general about waste, but I have seen figures proving that £1 million a day is wasted under the present system. Will she confirm whether that is the case? Surely any scheme that ultimately helps to eradicate such waste is useful. Will she confirm, too, that despite remarks from the opposition Benches that this scheme has no friends, bodies such as the Council for the Protection of Rural England, Friends of the Earth, the World Wildlife Fund and others are its friends and should be encouraged? Those really interested in this matter can prove their interest in about half an hours time by staying behind to hear the debate that the noble Baroness, Lady Hanham, has said we will persist with. I cannot see the purpose of that, but I assure the House that the best speech that has never been made will be heard during that debate.
Baroness Andrews: My Lords, that is surely an irresistible invitation to all noble Lords to stay and take part in the next stage of this debate. I am delighted to know that the Conservatives were so creative and committed in 1984 to bringing forward similar ideas, but I wonder what happened from 1984 to 1992.
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