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I hope that the Government will pursue their plans and will make sure that in future all originally anticipated requirements are a part of the home information packs or whatever may take their place and that home condition reports will be a mandatory part of the package before too long.
Lord Bruce-Lockhart: My Lords, I speak as chairman of the Local Government Association. I am grateful for the reversal of the implementation, but it still leaves us with great uncertainty—in many ways, more uncertainty than we had before. There is uncertainty for home buyers, home owners, professional organisations and my own particular interest, local government trading standards staff.
Local government trading standards staff have been heavily involved in the preparation for this. They have been training for it and are involved the regulation, its enforcement and the wider issue of public awareness. Trading standards officers have an immensely professional body called LACORS. It normally deals with any legislation in a responsible and professional way and often simply cautiously welcomes whatever the Government say. However, I shall remind the House of the evidence that LACORS gave to the Select Committee of your Lordships’ House. Its professional officer wrote:
Indeed, LACORS also felt that the enforcement provisions are problematic and that HIPs would not be effective in delivering the Government’s policy for making property transactions cheaper or more transparent.
For our staff, it is a bit like being in the grand old Duke of York’s army. They have been marched up the hill of home conditions reports; they have been marched up the hill toward 1 June; and they have now been given a new hill of four-bedroomed homes, which my noble friend Lord Caithness spoke about so well. We need absolute certainty. In local government, we do not even have certainty about the funding issues. The preparation of this proposal has cost a great deal of money and time.
The Minister will remember some months ago that some £2.2 million was supposed to have been identified for local government. At Christmas we asked where it was and we were told that it had been included in the annual base increase awarded the year before. Our local government staff seem unable to find it, so I think we need some clarity on the issue. I should like confirmation that this extra cost will not put any burden on to council tax payers.
The original objectives were to try to have a process which added to transparency and was simpler. We have heard a lot of talk about climate change today. The original objectives of home condition reports, which objectives at least were understandable, have moved to objectives which are less clear. If this issue is simply about energy, I have a lot of sympathy with the noble Baroness, Lady Deech. She asked whether this is actually the best way to improve energy efficiency. I am one of those people who has lived in my house for 40 years. I do not intend to move. Are we saying that these home condition reports are only for when you move? Therefore, we really do need a rethink on this. Above all, I ask for clarity in the process and in the timetable, and certainty for local government staff and trading standards staff, who have worked very hard on this matter and who have been let down by a process that has not been well managed.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Andrews): My Lords, I am sure that the quality and scope of the debate has reinforced the sense of the noble Baroness, Lady Hanham, that it was important to have a full debate on the issue. The contributions from around the Floor have been very generous, wide-ranging and thoughtful. From my point of view, although the word “surreal” was used, this felt only too real. I will think very hard about what has been said. I want briefly to describe some of the opportunities for listening again to the very important arguments that have been raised.
The Government have been sincere in what they have attempted to do. I say that to the noble Lord, Lord Selsdon. We have tried very hard throughout this process to be careful and open. I hope that in the debate noble Lords have seen that the Government have met many of the points raised in the Motion—for example, in terms of the consultation we are promising, the fact that we are revoking the regulations, and that we are listening to stakeholders. I hope that on that basis alone the noble Baroness will not press this to a vote.
Let me clearly put the position on revocation. The regulations have not yet been revoked. We expect that to be done as soon as possible. We have a duty first to consult the National Assembly for Wales, which we have not yet had an opportunity to do. As soon as all those processes are complete we will revoke the regulations.
I give particular thanks to noble Lords who have not only supported the policy—and they have not been entirely my noble friends but some noble Lords from other parts of the House—but given a clear exposition of why we felt it was very important in the first place to bring forward HIPs and then EPCs, and to tie them together. I pay particular tribute to my noble friend Lord Graham for taking us through some of the history of this attempt to wrestle with a hugely complex problem. The noble Baroness, Lady Deech, illustrated that. Buying and selling our homes, and property law, is very complex. It is very personal, and it affects us all very deeply, which is why we have to be so careful. The noble Lord, Lord Elystan-Morgan, took us through some of the contextual problems that we face when we begin to wrestle with these things. I suspect that that is what has made previous Governments back off and remove themselves from the fray. We decided that we would try to address those problems, for the reasons that I hope I made clear in my Statement.
6.30 pm
I shall not repeat everything that I have said. Indeed, that would be unnecessary, because many of the things that I said will stand. I have listened to the expertise of Members around the House this evening, particularly in our debate on the nature of stakeholders’ engagement. It is particularly important to say to my noble friend Lord Graham that this is an opportunity to re-engage with stakeholders to ensure that, in the space that we have created around consultation, we address the realities of what we hope to achieve now by bringing forward transitional arrangements in the way in which I have described. That includes the trading standards officers, who will play such an important role. I am sure that a lot will depend on their ability but, again, phasing in this scheme will give them scope for a smooth and measured introduction.
Let me begin properly by saying that the changes that we have announced today certainly do not mean that we have lost faith in the principle of the necessity of HIPs or, indeed, in the relationship between HIPs and EPCs. Many noble Lords have spoken very powerfully about the importance of EPCs and the whole energy issue that they imply. We believe that the two things go together; HIPs provide a vehicle for EPCs, and EPCs give greater substance to HIPs. We fully intend to introduce HIPs and EPCs together and in a way that will generally benefit the consumer, the community and the country, so that they can obtain maximum benefits.
I was very glad that the noble Baroness, Lady Scott, referred to the fact that she had not been impressed by the apocalyptic statements about the impact on the market. That was worth saying, because one has had the sense as the debate has unfolded that the market will somehow be overturned because we have imposed a HIP on the process of buying and selling. The chief economist at the Halifax said in the Guardian very recently:
- “are really going to have much of an impact at all ... Yes, it is an additional cost, but in the grand scheme of things, people need to move house because they need to move house ... It's not going to stop people moving”.
My noble friend Lord Graham—indeed, I picked this up from other Members around the House as well—talked about the way in which people seem to welcome change but at the same time think, “Make me good, oh Lord, but not just yet”, because we do not actually want to commit ourselves to specific changes. We believe that there needs to be more transparency and predictability in the way in which houses are bought and sold so that costs and wastage are cut. Some sort of revolution is needed in the way in which we use and pay for energy in the home. It is not practical or acceptable to separate the two.
We believe, on the evidence that we have, that HIPs will make the process of buying a house swifter, simpler and surer, for the reasons that many noble Lords have given. Having information up front removes uncertainty, and being able to count on legal searches so that one is not adrift in some process over which one has no control and which requires endless phone calls to check up on progress will surely reduce waste and inefficiency. We do not believe that it is inevitable—it is certainly unacceptable—for one in four transactions to fail, or that £1 million is wasted in searches and legal costs. The additional cost, as I have said, is £100 for EPCs, which is even lower than my noble friend Lord Graham suggested.
It is unacceptable that consumers do not know how to make informed choices about whom to purchase services from, or that many buyers do not know exactly what they are paying for or how much their searches cost. We have no incentives in the system to improve that process, so it is fraught with information failure, lack of transparency and absence of control, and requires people to work together at the same speed in transactions. It is a chaotic system. As I hear myself describing it, I can hear how chaotic it is.
The noble Baroness, Lady Deech, raised a point about first-time buyers. They will benefit and will not have to pay for the things that they pay for now, which is bound to be an improvement. People entering the market for the first time will have the guaranteed security of information that they need in their hands for free. It was partly for those reasons that we responded as we did to the first comments of the Merits Committee. In response to the noble Earl, Lord Caithness, as I said in response to the Statement, there are many ways in which this sits alongside other changes in the market. The sort of change that is making a difference, which we think HIPs will help, is e-conveyancing, which is certainly making a major impact. HIPs are a part of that revolution. I also disagree with the noble Earl about the speed of transaction. Independent evidence suggests that the process between different stages of the transactions is 10 days slower than it was 10 years ago. I have already said that new providers are entering the market and cutting costs. HIPs are being offered free in some places and local authorities are reducing their search fees. All that is part of the argument that we are making for HIPs.
On EPCs, we are entirely of the view that home owners must have up-to-date information if they are to make their homes more energy efficient. The noble Baroness, Lady Hanham, asked about first-day marketing and what had changed. We have moved on to this for the transitional period to ensure that home assessors have work to do. Putting this work at the beginning will give some security and space to achieve that, which, again, is about keeping faith with the assessors and getting people used to the system as it unfolds. For that reason, we propose that every time a home is bought and sold it will require an EPC, and I have listened to what noble Lords have said about that. That will give the new owner the information needed to make their homes greener, to cut carbon emissions and to cut their bills. In response to a Question today, I gave the figure of £300 in savings.
Let us now turn briefly to the situation we face. I shall try to answer some of the other questions raised by noble Lords. I shall reiterate why we introduced the changes that we did. The Royal Institution of Chartered Surveyors requested a JR because it believed that the Government had not consulted sufficiently on the EPCs. The judge considering the application issued an interim order allowing HIPs to go ahead on 1 June provided that they did not include EPCs. The judge has also indicated that the matter could not be resolved before 1 June as he required more time to consider RICS’s application.
We were deeply concerned by this state of affairs for a couple of reasons. First, the delivery of EPCs is directly linked to the delivery of HIPs, of which EPCs are a central part. Secondly, there are now many people around the country—I have cited figures several times today—who have invested time and money in training to become energy assessors. I think that the noble Baroness, Lady Deech, raised quality assurance. I can assure her that the quality systems which have been put in place and accredited through the Qualifications and Curriculum Authority are extremely tough and rigorous. We continue to work very closely with the assessment centres to make sure that they are monitored properly, so we are convinced about quality.
I think that the noble Earl, Lord Caithness, described the process, which seemed to me to be very rigorous. However, the uncertainty that has been generated in a number of ways has had an impact on the numbers of fully accredited energy assessors. But the numbers who are now attending courses and who have passed their exams suggest that there are enough assessors in the system to meet the demand. We believe that continuing uncertainty would be detrimental to the market and to the implementation of the scheme. Noble Lords have called for clarity and certainty, and I respect what they are saying. I can give an assurance that we will work with stakeholders in every way we can to make the process as clear as possible.
To establish certainty and to ensure that energy assessors, home buyers and other stakeholders in the market know that we remain committed to the principle and convinced of the benefits of HIPs, and to prevent legal delays, we will be making transitional arrangements immediately. We will over the next few weeks revise the regulations we are revoking today. As I said earlier, the new date is to be 1 August when we will begin to implement the measures in phases. From that date, HIPs and EPCs will be required for the sale of homes with four or more bedrooms because we believe that there is enormous potential for larger properties to contribute towards energy efficiency. In response to the noble Baronesses, Lady Hanham, Lady Hamwee and Lady Scott, by taking a phased approach we can ensure that assessors who have already been trained and accredited can use their skills and that there will be sufficient numbers to meet demand.
Under the current regulations an EPC is required every time a property is bought and sold, but is valid for only three months. As a temporary measure we will amend the regulations so that a new EPC is required only if the certificate that exists is not under a year old. That means that the maximum age of an EPC when a property is marketed will be 12 months. In order to smooth the transition further, which answers the question put to me by the noble Baroness, Lady Hamwee, sellers will be allowed to market their home without a HIP provided that they have commissioned one. They will still be required to provide a HIP before the exchange of contracts, but the demand for assessors will be spread over a longer period when HIPs are first introduced and the demand is high.
In response to the point about rented housing made by the noble Baroness, Lady Scott, we have already said that we will introduce EPCs for rented housing in October 2008 but, as I said earlier, we will certainly now begin exploring the opportunity for implementing EPCs on a voluntary basis in social housing, at the time, for example, of stock transfer. Later this year we will assess the implementation of HIPs so that we can consider what further steps may be needed to reduce carbon emissions and drive forward the transformation of the home buying and selling market.
I shall answer a few of the specific questions put to me before I conclude. On the pilots and the evidence available, as I said, early results from the trials in terms of the practicalities of delivering HIPs informed the January consultation and the 2007 regulations. Full results reflecting completed transactions and the impact on time will be published when we have the large volume of HIPs we are expecting in the autumn as they become available. That will certainly illuminate the effect on transactions.
I turn to the questions put about the home condition report. We lost some friends for this policy when we withdrew the report, but we did so because we were so strongly advised by mortgage lenders that it was not practicable to go forward with it. We have balanced these issues as best we can in the interests of the consumer. I am sure that there is a consumer benefit, but we shall continue to listen to opinions because HCRs are now being tested in detail in the trial.
I am grateful for the wide-ranging comments of the noble Lord, Lord Selsdon, outlining his alternative scheme. I cannot promise that it will be given a great deal of serious thought, but I shall take it back to the department where officials will be interested to consider it.
In the light of the time and the fact that this is the third occasion on which I have had to explain the scheme, I close by saying that I shall read Hansard closely and make sure that noble Lords are given written replies to any remaining questions. In conclusion, I know that all who are seriously concerned about the way the market functions and about the need to cut carbon emissions cannot be satisfied with the current provisions. The Government have thought long and hard about how to reflect the best evidence in their approach. We have made the changes that we have announced today in the best possible spirit, taking with us, we hope, the major stakeholders and creating an opportunity for more consultation and re-engagement in the way I have suggested. We believe it is a pragmatic and sensible way forward which keeps faith with the policy and with the people who have kept faith with us by entering training and committing themselves. I hope that we have given as much certainty as we can and we will continue to do all we can to bring more and greater clarity.
We believe that we are minimising the risks to buyers and assessors while maximising the consumer and environmental benefits that will flow from the regulations. On that basis, I hope the noble Baroness will feel that she does not have to seek the opinion of the House and is satisfied with the debate. I am grateful to all noble Lords who have taken part.
Baroness Hanham: My Lords, I, too, thank everyone who has taken part. It has been a long HIP day but the debate has been more than worth having. In the light of the Statement earlier, it was a balance as to whether to continue with it, but it gave us an opportunity to look at the process in greater depth.
I remain sceptical about the EPCs. It is a pity that the Government have withdrawn them for such a short period because they have not given themselves time to think through, first, the comments that have been made by other people and, secondly, to hear what the Commons now proposes to do. Clearly some of the announcements again are flawed. The Government may well want to rethink the proposal about a four-bedroom house when they come to work out the practicalities.
We will remain sceptical about this aspect and about the value of the home information packs. The Government have withdrawn the regulations—for today, anyway—but, as I made clear, they are not yet revoked. This is reason we were able to undertake the debate and, because the regulations are temporarily in suspension, I beg leave to withdraw the Motion.
Georgia
6.47 pm
Baroness Rawlings rose to ask Her Majesty’s Government what is their assessment of the current situation in Georgia.
The noble Baroness said: My Lords, I have tabled this debate today in order to raise issues that have been thrust into the limelight by this weekend’s EU summit in Samara. I thank the three noble Lords and the Minister who will be contributing.
As distant and remote as Georgia may seem to be, there is growing realisation among individual European Union states that unilateral decisions are not necessarily the best way to resolve differences with states close to current EU borders. A hasty decision with one country, no matter how justified it appears to be, from a narrow perspective, can have unfortunate consequences on another country’s affairs. I hope the House will forgive me if my comments sometimes appear to go beyond the boundaries suggested by the debate, but it is only in the wider context that relationships within and without Georgia can be understood.
The unfortunate failure of Germany to secure its ambitious agreements with Russia this weekend is a clear reminder that the recent expansion of the EU has given us new responsibilities as well as new markets. We cannot choose to ignore tensions between the new members and Russia, or between Russia and other former Soviet states, whenever it is convenient for us to do so. Nor can we fall into the trap of viewing these tensions only through a Cold War perspective. Instead, I hope the Minister will be able to reassure us that we are taking all steps necessary to improve the current dichotomy of a Cold War energy infrastructure imposed on a 21st-century political reality. What steps are the Government taking to break dependence on Russian energy supplies—not only Georgian dependence, but also Europe’s as a whole? Recent events last winter show how vulnerable we all can be. Such insecurity must be harder for a state such as Georgia to respond to calmly and effectively. The Baku-Tbilisi-Ceyhan pipeline is certainly a step in the right direction but the proportion of oil provided from Russia is continuing to rise, and the recent expansion of Russian control over Kazakhstan and Turkmenistan’s gas and oil exports will not help.
In addition to growing uncertainty about its energy supply, Georgia continues to face internal instability in South Ossetia and Abkhazia. Where do Her Majesty’s Government stand on the request by Georgia to replace the Russian-led peacekeeping force with a multinational force? The Sochi agreement has been a success in preventing all-out warfare between the different factions, but it cannot be seen as a long-term solution. How do the Government hope to see further progress in that area, and what steps are being taken to prevent Russia meddling in Georgia’s attempts to find a way forward in South Ossetia? These steps are never going to be effective if EU countries continue to disregard each other’s concerns over policy approaches. What progress has been made on developing a unified and consistent EU approach to questions of self-determination?
The EU may not be the only international body that we should be working with to resolve Georgia’s difficulties. That country has frequently expressed how important it is for it to join Nato, and talks have been continuing. What stage has that dialogue reached, and what implications will eventual succession have for the already tense relationship with Russia?
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