Home Information Packs and Stamp Duty

Opposition Day — [19th Allotted day] – in the House of Commons at 3:51 pm on 10th October 2007.

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Photo of Grant Shapps Grant Shapps Co-Chair, Conservative Party 4:16 pm, 10th October 2007

I beg to move,

That this House
notes the growing concern over the effect of Home Information Packs (HIPs) on a fragile housing market;
observes that the Royal Institute of Chartered Surveyors has warned that the introduction of HIPs has already led to a downturn in the market for both four and three bedroom homes;
recalls that the Government was warned against introducing HIPs from across the housing industry;
is concerned that none of the revised secondary legislation for HIPs was scrutinised or debated by the House before its implementation;
calls for Home Information Packs to be scrapped and Energy Performance Certificates to be implemented separately;
and asserts that ending stamp duty for first time buyers up to £250,000 would do far more to help home buyers and sellers.

Were the country looking for a single policy that best encapsulates the Government's failure to listen, I suspect that home information packs would be in the running. In forcing through the legislation, Ministers have consistently ignored the advice of housing experts, the industry, the market, buyers, sellers and colleagues on both sides of the House and in the other place. Now that HIPs are partially implemented, the results are becoming all too clear, with an already fragile housing market shaken to the core by a dramatic drop in the number of new homes being put up for sale. While everyone agrees that home buying and selling really should be faster and easier, is it not time that the Minister admitted that the Government have forced on England and Wales a half-baked law that is clumsy, ineffective and damaging to the housing market?

Time and again, the Government watered down their flawed proposals, and HIPs quickly turned into nothing more than expensive but worthless red tape. Then, under pressure to rescue the policy, the Minister for Housing made home condition reports optional, thereby destroying the centrepiece of the legislation. Although the Government's website still says that home condition reports are

"an important part of the Pack", does she accept that, for all intents and purposes, they have been shelved and forgotten?

On that point, can the Minister tell us what proportion of home information packs are being ordered with the optional home condition reports included? To add to the incompetent nature of the legislation, the HIPs small print says that

"including information on flooding, subsidence and contaminated land is all at the discretion of the seller".

Can the Minister tell us how many sellers with homes known to be at flood risk have voluntarily paid this extra money to point that out to buyers?

The net result of the muddle, confusion and incompetence is that buyers simply cannot trust HIPs. All the usual valuations, searches and surveys are mostly still required by the banks, building societies and solicitors. Costs are up and effectiveness is down.

It is not just me or the Conservative party who are saying this; the industry agrees. When the Consumers Association was in favour of the original HIP proposals, the Government warmly welcomed that and quoted it regularly. Does the Minister now agree with the Consumers Association's more recent conclusions that the new "half-HIP" is a

"useless but a very expensive waste of time"?

As the start date approached, we warned the Government that there were not enough HIP inspectors, but they were not listening. Blinkered to the truth, they tried to push stubbornly ahead with HIPs, only to be forced red-faced back to the House at the eleventh hour to announce an embarrassing delay. Fortunately for the Housing Minister, that job did not fall to her. In August, HIPs on four-bedroomed homes were finally introduced. Despite a 50 per cent. drop in the number of four-beds coming on to the market, the Government still failed to assess the impact, instead choosing to impose HIPs on three-bed homes from September.

However, with all that confusion, delay and lack of marketable properties, another group of people was starting to hurt. We warned the Minister that she was wrong to suggest that qualified HIP inspectors could earn up to £70,000 a year by training to become a HIP inspector or domestic energy assessor. In reality, those hard-working people have been hung out to dry by the Government. Many of them have spent their savings on a fundamentally flawed scheme, and they, I think, deserve an apology. Will the Minister take this opportunity to apologise to those enterprising people who now find themselves without sufficient work and out of pocket?

Photo of Andrew Miller Andrew Miller Chair, Regulatory Reform Committee

Are these the same hard-working people that the motion wants to put out of work? Has the hon. Gentleman had any face-to-face discussions with home energy certificate providers and pack providers? The largest company in my constituency to deal with those matters, employing 500 people, tells me that that is not happening. The motion has come out of thin air.

Photo of Grant Shapps Grant Shapps Co-Chair, Conservative Party

I shall come on to what the rest of the industry is finding out about the situation. If the hon. Gentleman is seriously suggesting that we should maintain bad law for the sake of bad law, I have to disagree with him. This Government have led those people into training for jobs that do not exist. According to the Royal Institution of Chartered Surveyors, they would never be paid £70,000 a year even if HIPs were fully up and running, which they are not.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

My hon. Friend will know that when the scheme started we warned the Government that there was no way in which there would be enough providers. The training systems were not up to training them. The Government knew that at the time. Does he agree that they have misled the country and should apologise to the House and the nation?

Photo of Grant Shapps Grant Shapps Co-Chair, Conservative Party

My hon. Friend is right when he says that the scheme has been a fiasco from beginning to end. It is an exemplary example of a Government who have refused to listen to common sense. It is not just us whom they have not listened to; they have not listened to the industry or the consumers, all of whom are lined up against this atrocious piece of legislation, which does not help anybody to buy or sell a house.

Photo of Grant Shapps Grant Shapps Co-Chair, Conservative Party

I want to make a little progress.

By contrast, we have always been crystal clear about our opposition to HIPs. We saw what was wrong with them. We voted against them. Last week, we pledged to scrap them.

Photo of Grant Shapps Grant Shapps Co-Chair, Conservative Party

I want to make some progress.

Where the Government have thrown the market into complete and utter turmoil, we have sent a clear signal that would end this bureaucratic nightmare of HIPs. As they have become increasingly discredited, the embarrassed Minister has tried to use energy performance certificates as a green fig leaf with which to cover up her embarrassment.

We think that EPCs can be introduced more quickly and effectively without HIPs. Will the Minister explain why our approach was possible in Northern Ireland but not in England and Wales? On their own, energy performance certificates are a good thing. They mean that house buyers will have better information about their new homes. However, even the Government's Better Regulation Commission warned that the new regulations are imposing

"additional administrative burdens without adequate justification" and go

"beyond the requirements of the Directive", with

"no supporting evidence to justify this 'gold-plating'."

Does the Minister accept that damning indictment of her policy by the Government's own commission?

We said that HIPS could increase the cost of moving home, that sellers would be put off, that housing supply would be restricted and that instability could rattle the marketplace. The letters and e-mails that I have received since the introduction of HIPS suggest that our concern was not misplaced, with agents reporting a shortage of three and four-bedroom houses coming on to the market. A survey conducted by the Royal Institution of Chartered Surveyors last month revealed that 73 per cent. of respondents had recorded that fewer three and four-bedroom properties were becoming available than in the same month last year, and that new instructions requiring a HIP had decreased by 37 per cent. In the face of that compelling new evidence, will the Minister now concede that the introduction of HIPS has had a deeply detrimental impact on the housing market?

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

The hon. Gentleman will, I hope, have done his homework, and will have seen the August bulletin of the RICS, to which he referred. It commented that new instructions to sell property had fallen for the third consecutive month. Will the hon. Gentleman now explain what was happening in June and July in relation to HIPS?

Photo of Grant Shapps Grant Shapps Co-Chair, Conservative Party

The hon. Gentleman will—I hope—be pleased to learn that I have done my research. I did not hear him mention that he has an interest in the Association of Home Information Pack Providers.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

On a point of order, Mr. Deputy Speaker. I should make it clear that my interest is declared in the Register of Members' Interests. I always declare my interest at the beginning of a substantive speech, but do you agree that it is not necessary to declare an interest when asking a question?

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

I am perfectly happy with the explanation given by the right hon. Gentleman, but I think that there is nothing to stop a Member from making a debating point about the matter—without, I hope, making an insinuation of dishonour on the part of the right hon. Gentleman.

Photo of Grant Shapps Grant Shapps Co-Chair, Conservative Party

Thank you, Mr. Deputy Speaker.

I am sure that the Minister will try to characterise this as a problem only for those with a vested interest, but it is not. The truth is that the public are worried. London and Country, the United Kingdom's largest mortgage broker, recently asked a panel of its own customers for their thoughts on HIPS, which revealed that 62 per cent. thought that the information contained in them would not help to sell their properties. Even more damning, 78 per cent. thought that HIPS were bad value for money.

The cost of obtaining information that does not come with the now weakened HIPS may not be quite as significant for those privileged couples who, through generous taxpayers' allowances, can buy a second home in, say, central London, but first-time buyers struggle to pay for their surveys, and every penny really does count to them. Does the Minister agree that, unlike this expensive red tape, our policy of raising stamp duty to £250,000 would make a real difference to nine out of 10 first-time buyers?

HIPS is the story of a Government who have been in office for 10 years but are fast running out of steam. It is a fiasco that started when the Government employed consultants whom the National Audit Office later described as having a "clear conflict of interests". As compelling evidence mounted that the original HIPS proposals were seriously flawed, all that the Minister could do was shut her eyes and charge ahead with legislation that stumbled from crisis to crisis.

Photo of Rob Marris Rob Marris PPS (Rt Hon Shaun Woodward, Secretary of State), Northern Ireland Office

The hon. Gentleman mentioned stamp duty. He wishes to assist first-time buyers; so do the Government, and they have. Cutting stamp duty will be of no benefit to first-time buyers, because house prices will simply adjust upwards. Conversely, HIPs shift costs from buyers to sellers. Does the hon. Gentleman not see a contradiction in his position?

Photo of Grant Shapps Grant Shapps Co-Chair, Conservative Party

I do not see a contradiction in a position that makes it easier for nine out of 10 first-time buyers to purchase a house and removes bureaucracy from the home buying and selling process. There is simply no contradiction in that.

Photo of Phyllis Starkey Phyllis Starkey Labour, Milton Keynes South West

May I take the hon. Gentleman back to the point I attempted to make in my earlier intervention when he was mentioning the "industry"? For the sake of clarity, will he explain whether the "industry" is solely the Royal Institution of Chartered Surveyors, which has a strong vested interest? If not, what other representatives of the "industry" is he citing?

Photo of Grant Shapps Grant Shapps Co-Chair, Conservative Party

The hon. Lady will correct me if I am wrong, but I understand that the RICS also supplies HIPs, so it has a strong vested interest in both directions. It has spoken in a truthful manner, as has almost every other professional body that has been consulted on the issue. In fact, we have now reached the stage where the Association of Home Information Pack Providers is pretty much the only organisation supporting this flawed measure.

The last time I stood at the Dispatch Box, I asked the Minister for Housing 11 questions. Reading from a prepared text, she failed to answer a single one of them. Today I have asked the Minister a further 10 questions, and I am sure that Members would like to hear her answers to them, plus those to three more questions that I have for her.

Will the Minister guarantee today that information gathered for HIPs will not be used for stealth council tax revaluation? Is the Minister aware of a leaked memo from her own West Yorkshire Trading Standards Service that confirms that HIPs are completely unenforceable throughout large parts of the country, including her backyard? Finally, as the statutory instrument introducing HIPs has yet to be laid before Parliament, will she accept my invitation to follow the lead of the Prime Minister and Chancellor of poaching yet another of my party's policies by announcing to the House that she will today abolish the costly, ineffective and discredited HIPs?

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing) 4:32 pm, 10th October 2007

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

'believes that the ongoing reform of the home buying and selling process should revolve around the interests of the consumer and environmental sustainability;
considers that the most important thing for the housing market is macroeconomic stability including sound public finances;
therefore further believes that unfunded tax cuts including on stamp duty would be irresponsible;
further believes that increased house building to deliver more affordable homes is essential to help first time buyers;
further considers that the introduction of Home Information Packs and Energy Performance Certificates can improve the process of home buying and selling for consumers and provide them with vital information about the energy efficiency of homes and practical suggestions about how to cut fuel bills and reduce carbon emissions;
and notes that the Government continues to work with industry to consider further reform of the home buying and selling process in order to maximise the benefits for consumers.'.

I welcome Grant Shapps to what I believe is his first Opposition day debate. I also believe that he has just made his first parliamentary remarks on home information packs. I noticed that he and his party chose not to take up any of the opportunities to debate HIPs in July—in one of their Opposition day debates or by seeking an early date for Committee consideration of the regulations. Neither did he take up the opportunity to ask about HIPs or raise stamp duty during the first oral questions after his appointment. In fact, he did not raise housing at the first oral questions because he was not present; apparently, he was in a place called Ealing at the time. I am sure that he has fond memories of his important role in the Ealing campaign—I can certainly tell him that we do, and that we are always very happy to remind him of the role he played.

The hon. Gentleman raised a series of points about HIPs and stability in the housing market. Although stamp duty is mentioned in his motion, he refrained from mentioning it, except when my hon. Friend Rob Marris referred to it.

Home information packs and energy performance certificates are now in place for three and four-bedroom properties. The Government set out a phased roll-out last May, which is now under way; more than 1,000 energy performance certificates have now been processed. I should point out that many of the calamities that Opposition Members predicted have not materialised. HIPs are not creating months of delay; in fact, the average time taken to compile a HIP is five to seven days, far faster than it takes to gather the same information under the old system.

Photo of Robert Syms Robert Syms Conservative, Poole

The Minister spoke of a phased roll-out. Will she give us the date on which properties with one or two bedrooms, or other properties, will be covered by the regulations? If the policy is to be pursued, logic demands that a timetable be set.

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing)

No, I shall not set out the timetable today. In May, we set out the criteria for the phased roll-out. One element in those criteria was the number of energy assessors—which has been increasing very quickly—and another was that the policy's implementation, and the experience in the market so far, should be monitored. That consideration is taking place at the moment, and we will set out the timetable for the next steps in due course.

I can also tell the House that, contrary to predictions by the Opposition, HIPs are not costing an average of £1,000 each. The current average market price is £300 to £350, most of which covers the cost of things that buyers and sellers of homes pay for under the traditional system. That means that they are saving money thanks to the introduction of HIPs.

Moreover, some estate agents are offering HIPs on a no-sale, no-fee basis, or even for free. Indeed, search costs are coming down as a result of HIPs, with more than 80 local authorities cutting the price by an average of £30, and a couple doing so by more than £100. In addition, the Energy Savings Trust has said that the new energy performance certificates have the potential to save homeowners £300 a year on fuel bills.

Photo of David Jones David Jones Shadow Minister (Wales)

I thank the Minister for giving way, and I refer to my declaration in the Register of Members' Interests. Does she agree that most local searches for HIPs are personal searches that are not widely acceptable to the industry? For most purchasers, it is necessary to make a second, official search. Does that not add to the cost to the process?

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing)

That is simply not the case. In fact, personal searches already account for about 40 per cent. of the market. They are a very important, significant and established part of the process: a lot of solicitors already use them, and lenders are familiar with them. It is not the case that all buyers are having to purchase additional searches as a result of the introduction of HIPs, which can include either personal or local authority searches.

It is significant that the introduction of HIPs has improved competition and cut the cost of searches. I believe that searches need to be reformed further, but it is important to recognise that personal searches are covered by all sorts of insurance and protections, and to ensure that what is effectively misinformation about them is not spread around.

HIPs and EPCs are already increasing transparency. They are speeding up the process of providing information, and bringing in new competition to help cut costs for consumers.

Photo of James Duddridge James Duddridge Conservative, Rochford and Southend East

The Minister was kind enough to write to me about EPCs in July, when she explained that the certificate would have to be compiled in the 12 months before a property was put on the market but that that requirement was to be reviewed over the summer. Will she update the House about that review?

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing)

We will be consulting fully on the appropriate age for EPCs. We have made it clear that it is important for people to have information that is relevant and up to date, and we will shortly make it possible for people to express their different views. For example, Opposition Members believe that the certificates should have a life of up to 10 years, although I cannot imagine that many people making a decision about buying a house would find such old information especially useful, given that it deals with fuel prices and the measures that they could take to change their homes.

Photo of Robert Goodwill Robert Goodwill Shadow Minister (Transport)

Does the Minister agree that most householders already have very useful documentation that could be made available to buyers? I am referring to gas and electricity bills, which people are used to reading and understanding.

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing)

That is true but, if that is Opposition policy, it does not say much for their commitment to the environment. Consumers need to be aware of what more they can do to cut their carbon emissions as well as their fuel bills. After all, 27 per cent. of this country's carbon emissions come from our homes, and a lot of it comes from existing homes.

It is important that people have up-to-date information. Shops such as Comet or Currys make sure that their fridges carry energy efficiency ratings. The introduction of those ratings means that it is hard to find a fridge or washing machine that is not A rated. Those certificates have been important, as they have provided people in the market with information and an opportunity to make decisions accordingly. Given the serious climate change challenges we face, it is right that we provide people with such information. It is deeply unfortunate that Conservative Members are so opposed to the measures and have tried to water down energy performance certificates, which is why organisations such as the World Wide Fund for Nature and Friends of the Earth have been so critical of their approach.

Photo of Julie Kirkbride Julie Kirkbride Conservative, Bromsgrove

Will the right hon. Lady answer the point made by my hon. Friend Grant Shapps? Why have the Government done things differently in Northern Ireland?

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing)

The hon. Lady may be aware that a different approach is being taken not only in Northern Ireland but also in Scotland. It is right that we provide people with proper energy performance information that they can use to cut their carbon emissions and to reduce their fuel bills. They can also use the information to get access to grants and additional help—to install loft lagging or cavity wall insulation. When we look at houses, not many of us think about whether there is cavity wall insulation. For the first time, the certificates will provide people with that important information.

It is unfair that people are denied such information, which is why we support its provision, and it is deeply disappointing that Conservative Members are so hostile to it— [ Interruption. ] They have been hostile; they have tried to water down energy performance certificates. Indeed, the party chair did not want the certificates to be introduced at all because she is opposed to energy assessors visiting homes to carry out the work.

The hon. Member for Welwyn Hatfield suggested that an easier way to do the work would be to ask Centrica to provide energy performance certificates. I have to inform him that Centrica is already putting energy performance certificates into the market because it believes that they are a good thing.

Photo of John Redwood John Redwood Conservative, Wokingham

How right the Minister is, but I like effective measures, not imposed measures of questionable value. We do not like the element of compulsion. If energy certificates were valuable, people would buy them.

As the Minister says that she wants more affordable housing, will she tell us how far house prices will have to fall before she thinks houses will be affordable?

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing)

I shall be happy to have a discussion with the right hon. Gentleman about affordable housing. I intend to say more about it shortly. The problem with house prices over the past 30 years is that they have risen so much faster than earnings, as a result of the lack of house building or insufficient house building. Even the houses that have been built were strongly opposed by the Conservative party and by Conservative MPs across the country.

I want to complete my remarks about energy performance certificates, as they are important. The hon. Member for Welwyn Hatfield revealed the view of the Conservative party: the Conservatives do not believe in energy performance certificates, do not want them introduced and lack commitment to them. The hon. Gentleman told the Conservative conference that he wanted to abolish home information packs. He did not say that he wanted to retain energy certificates. He was challenged by Building magazine, which reported:

"The shadow minister told Building Magazine he had intended to mention energy certificates but had not thought it necessary."

That reveals the Conservatives' approach. They are not interested in action on the environment or in the energy performance certificates that are making a huge difference by giving people throughout the country proper information.

Photo of Grant Shapps Grant Shapps Co-Chair, Conservative Party

I hope the Minister will accept that as EU law is not optional energy certificates have to be part of it. We are simply arguing that the process is much less bureaucratic in Northern Ireland and she still has not answered the fundamental question why the same thing cannot happen in England.

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing)

In other words, the hon. Gentleman grudgingly accepts energy performance certificates because he believes that he is being forced to do so by Europe. That is his approach. We think we are right to put energy performance certificates in place. They have been implemented earlier than in many other European countries because of the decisions we have taken.

Members have also made points about the impact of the measures on the housing market and about stability in the housing market, which is an important issue. However, they are wrong to say that everything that has been happening in the housing market is the result of HIPs—although we understand why they are doing so. As my right hon. Friend Mr. Raynsford has already pointed out, the housing market was quiet in many areas even before HIPs were introduced. Things were quiet throughout the market, even for one or two-bedroom properties.

Stability in the housing market is important, and the Government have to do what they can, through their areas of responsibility, to support it. That means doing what they can to support low mortgage rates through good macro-economic management and sound public finances. The measures in the motion tabled by the hon. Member for Welwyn Hatfield would put that at risk. We know, of course, how the Conservatives screwed up in the past: mortgage rates hit 15 per cent. and remained at over 10 per cent. for many months at a time. As a result, 75,000 people lost their homes in one year alone. Part of the mismanagement that contributed to the recession was down to the Conservative Government's complete lack of control over the public finances.

I repeat that the approach that the hon. Gentleman and other Opposition Members take to stamp duty is to set out a completely unfunded proposal, and that is part of creating a huge black hole in the public finances, which is irresponsible. There are unfunded proposals on inheritance tax and on tax cuts for the married, and the sums do not stack up. It does actually matter that Opposition Members' sums do not stack up. It matters to real people—to mortgage holders and homeowners. If the public finances do not stack up, and if one blows a hole in the public finances, interest rates and mortgage rates go up. It is not a game; it actually affects people in the real world. Serious parties that are interested in government have to take such matters into account. That is why the hon. Gentleman's approach is so irresponsible.

Opposition Members chose the subject for debate. They talked about home information packs, and only marginally about stamp duty, because their views on HIPs are all that they have as housing policy. They are not prepared to face up to the serious decisions that have to be taken to promote housing market stability and help first-time buyers.

Photo of Claire Curtis-Thomas Claire Curtis-Thomas PPS (Rt Hon Baroness Scotland of Asthal QC, Attorney General), Law Officers' Department

Will my right hon. Friend confirm that her Department has invested a substantial amount of money in research on producing eco-friendly housing, and housing that is a net negative user of electricity, and which can indeed even export it? One of the reasons we need energy performance certificates is so that we can start with existing housing stock and produce a far better environmental and carbon footprint. A consequence of that is investment in research and businesses that are interested in the environment.

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing)

My hon. Friend is right, and there is a lot that we can do with new and existing homes to help to cut the carbon emissions from housing. It is right to do so, and irresponsible not to, given the carbon emissions that come from housing.

We must recognise that if our aim is to promote stability in the housing market, and to help first-time buyers, that means building more homes in the long term. We understand that the hon. Member for Welwyn Hatfield always feels a bit traumatised when we speak about building more homes. We have teased him before in the House about his local "No way to 10K" campaign. Let me remind the House what his local website said on the day he was appointed Conservative housing spokesperson:

"We believe you cannot build your way out of a housing crisis."

A week later, he changed it, so that it said

"whilst building more properties is obviously vital".

The hon. Gentleman was asked by Inside Housing to explain his views, and particularly to say whether his local "No way to 10K" housing campaign made him a nimby. He answered:

"No way 10k is not actually about 10,000 houses: it just happened to rhyme".

We thought it was bad policy, but it is just bad poetry.

Opposition Members are campaigning in every corner of the country against increased housing. I do not criticise Tory MPs who oppose individual developments, because we all know that there are atrocious developments that should be blocked at local level, but the hon. Member for Welwyn Hatfield knows that Conservative MPs across the country oppose increased housing.

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing)

I shall let the hon. Gentleman intervene if he will join me in condemning, for example, Mr. Vaizey, who summed this up when he was asked on BBC radio whether he supported more homes in his constituency and he said:

"I'm not opposed to new homes per se, I just think they should be built in Andrew Smith's constituency."

Photo of Grant Shapps Grant Shapps Co-Chair, Conservative Party

I am grateful to the Minister for citing a popular local campaign in my constituency; we are willing to build 6,000 houses, but 10,000 is too many. Incidentally, the campaign is supported by the entire local Labour party. Will the Minister comment on the behaviour of six of her Cabinet colleagues who are opposing development in their constituencies?

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing)

The hon. Gentleman was clearly not listening, because I said just 30 seconds ago that I do not criticise Tory MPs who oppose individual developments, as they might well be atrocious and inappropriate. However, I do criticise Conservative MPs who oppose overall increases in housing because they think that there should be fewer homes in their constituencies and across the country. They are not supporting the additional homes that the country needs— [ Interruption. ] The Labour party supports having 3 million more homes by 2020 and I challenge the Conservatives to do the same —[Interruption.]

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. I think that the sedentary chorus from the Opposition Front Bench is becoming a little intrusive.

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing)

Thank you, Mr. Deputy Speaker. I challenge Conservative Members to support the increased housing that we need in Britain. They should support having 3 million more homes by 2020 and the fact that 1 million of those must be zero carbon. They should join us in signing up to support the additional housing that first-time buyers and people on council lists need. We need those homes. No matter what else the hon. Gentleman says, as long as they oppose the increases in housing that we badly need, they are betraying first-time buyers and people on council waiting lists, and their housing policy is a sham. He should forget the policy and stick to the poetry.

Photo of Paul Holmes Paul Holmes Chair of the Parliamentary Party, Cross-Portfolio and Non-Portfolio Responsibilities, Shadow Minister (Housing), Department for Communities and Local Government 4:52 pm, 10th October 2007

It has long been clear that the introduction of home information packs was a shambles. That argument has been rehearsed many times, not only today, but back in the summer in this House and in the other place, and many times before. I shall not go into all the details again because we all know them.

Suffice it to say, the introduction of HIPs is emblematic of this Labour Government and of a lack of transparency. Where are the reports that they carried out on the pilot studies before the introduction of HIPs? Why have they still not been shared with us and with the public? It is also emblematic of sheer incompetence. The introduction of this bungled scheme has cost the taxpayer about £20 million to date, and since the summer of 2006 we have seen three sets of regulations, a legal challenge from the professionals and the scrapping of the compulsory home condition reports.

So much about HIPs remains clouded. When will the Minister release the results of those pilot tests? Why has there been such a delay? Since the legislation came into force, how long has it taken to put the packs together and how does that compare with the four to five days envisaged by the Government? The Minister said that the answer is seven to eight days. The scheme has been running for nine weeks, so for how many of those weeks and on how big a sample is that figure based? How much have the packs cost in reality, and how does that compare with the £400 average predicted by the Government? The Minister suggested that the answer is £300 to £350 on average so far, but on how many weeks and on how big a sample is that based? Given that this legislation has been so controversial, surely she should share this information and research with the House, so that we can reach an informed decision on HIPs and their future.

The motion concentrates not so much on HIPs but on their effect on a fragile housing market. It seems to ignore the fact that a struggling housing market is the result of many other factors, including the lack of social housing to rent, which puts a huge upward pressure on house prices; the moratorium on council house building over the past 10 to 13 years; the lack of affordable housing, which also forces up house prices; the housing investment frenzy, whereby housing is increasingly seen as a speculative investment rather than as a home; the effect of, and crisis arising from, cheaper money generally; and the effect of the sub-prime market. When that hit the US, we were told that it would not be a problem in this country, yet a week later the Northern Rock disaster happened. How much more of that is still to feed through into the housing market?

The Conservative motion does not mention any of that, and it seems to blame a fragile housing market on HIPs. It provides an answer by suggesting the scrapping of stamp duty for first-time buyers on houses up to £250,000. One obvious question is how to define a first-time buyer. If, for example, a divorced couple buy a house separately later, is either of them a first-time buyer? Is one of them a first-time buyer? If separated partners go on to buy a house with a new partner, and the new partner has never bought a house before, are the new couple first-time buyers or not?

Photo of James Duddridge James Duddridge Conservative, Rochford and Southend East

Would it not be possible to establish whether those people's names were on a mortgage paper or on deeds? If not, they would be first-time buyers.

Photo of Paul Holmes Paul Holmes Chair of the Parliamentary Party, Cross-Portfolio and Non-Portfolio Responsibilities, Shadow Minister (Housing), Department for Communities and Local Government

That ignores the point that I just made. If a married couple or a couple living together separate and sell their house, and if one of those partners goes on to buy a house with another partner who has never bought a house before, does the new couple with a joint mortgage count as a new buyer or not? There are dozens of other examples that would confuse the system and create a bureaucratic nightmare.

Photo of Phyllis Starkey Phyllis Starkey Labour, Milton Keynes South West

May I add a couple of other examples that are not dealt with by the helpful intervention from James Duddridge? First, an individual who was extraordinarily rich and had bought a house cash in hand would not have a mortgage but would be able to masquerade as a first-time buyer. Secondly, what if someone got their child to buy a house, which they then bought from them? They would not really be a first-time buyer. The scope for defrauding the system is enormous.

Photo of Paul Holmes Paul Holmes Chair of the Parliamentary Party, Cross-Portfolio and Non-Portfolio Responsibilities, Shadow Minister (Housing), Department for Communities and Local Government

I agree. Many other examples could be cited to show the confusion that would arise from trying to define a first-time buyer under the scheme.

Does Grant Shapps think that abolishing stamp duty would, for example, help a 24-year-old earning £20,000 to buy a home in London or many other urban areas? How would the proposal help young families? It is irrelevant for many first-time buyers.

More alarming is what was not in the motion. How would the Conservatives provide for the long-term affordability of housing, as the motion does not deal with that? Would they build genuinely affordable homes, and how would they end the emasculation of council housing? The hon. Gentleman's speech was full of buzz words and aspiration, but answers were absent.

The stamp duty announcement had more than a hint of Blairite spin. It was a good headline-grabbing initiative but will it do any good? Even if we leave aside the questionable economics, there are innumerable problems. For example, a Halifax survey in December 2006 stated that the average salary necessary to afford a house was just under £30,000 a year, so there is a genuine affordable homes crisis. Teachers, nurses and postmen, to name a few, all earn less than that. How will a token measure on stamp duty help those people and help the market as a whole?

Moving on to the questionable economics, perhaps the hon. Gentleman did not read The Daily Telegraph on Monday, in which three economists all discredited the stamp duty proposal and stated that rather than helping home buyers, it would benefit sellers and increase house prices.

Photo of Robert Goodwill Robert Goodwill Shadow Minister (Transport)

Does the hon. Gentleman agree that in the north of England, in places such as Scarborough and Chesterfield, the stamp duty proposal would help many people?

Photo of Paul Holmes Paul Holmes Chair of the Parliamentary Party, Cross-Portfolio and Non-Portfolio Responsibilities, Shadow Minister (Housing), Department for Communities and Local Government

I fail to see how, in places such as Chesterfield and much of the midlands and the north, scrapping stamp duty would help many first-time buyers. Although the average first-time house buyer pays about £169,000, that is not remotely the position in my constituency or in many areas in the north and the midlands. I do not see how it would help there.

The proposal would not help the buyer, but it would help the seller. It is a simple matter of supply and demand. With more money across the board and a fixed amount of property, property prices increase. The stamp duty proposal would do little, if anything, to help first-time buyers. It would give more equity to existing owners. The announcement is far more likely to distort the housing market further and does nothing to rectify the real problem with stamp duty: the slab system. At present, no stamp duty is paid on a house up to £125,000. On a house costing £125,001, stamp duty is due. Under the proposal, the buyer would pay nothing up to £250,000, but at £251,000 they would suddenly have to pay £7,500. Stamp duty should be applied incrementally. It should be low at the point at which first-time buyers cross the threshold, and it should increase up the scale to multi-million pound homes, so that it hits the people who can afford it.

Real aid to first-time buyers would not include a gimmick on stamp duty; it would include measures to tackle the issue of affordable housing. The Conservative announcement smacks of token measures on affordable housing. Perhaps I am being unfair—at least the Conservatives now recognise that there is a crisis in affordable housing—but the announcement was rushed out last week in expectation of a general election. The announcement was more a case of what was left out rather than what was put in—there was no mention of affordable homes, community land trusts or long-term affordability—and it did not include anything that would solve Britain's housing crisis.

I read the conference speech by the hon. Member for Welwyn Hatfield with great interest. One line stood out:

"And today I can tell you how."

I have read the speech three times, and I am still trying to work out how the Conservatives would solve the housing crisis and, in particular, the affordable housing crisis. They will not do so through that gimmick on stamp duty. The Prime Minister has discussed his vision; the hon. Member for Welwyn Hatfield has asked us to imagine what it is like to be a first-time buyer; next, the Leader of the Opposition will tell us that he has a dream. That is cosy consensus politics at its vacuous worst.

The problem cannot be solved by raising the stamp duty threshold. It requires bold action, and the solutions are not hard to find. Community land trusts have been used in America and across Scandinavia, and pilots have already worked in this country. They can provide genuinely affordable homes for a wide range of people. Rather than handing over, as the Government seem to suggest, large tracts of public land from, for example, the NHS and the Ministry of Defence to private developers to allow them to make the maximum profit from selling houses, the Government should hand over large chunks of land to community land trusts. The value in the land would be held by the community, and individuals would buy and sell the bricks and mortar. The price would therefore be affordable from day one, which is rarely the case under existing affordable housing schemes, and property would remain affordable after it was sold.

Shared equity is another tried-and-tested model that works. When the Liberal Democrats ran South Shropshire district council, for example, the council used equity mortgages to provide low-cost affordable housing for key workers and first-time buyers. The scheme worked brilliantly, but, unfortunately, the Conservatives abandoned it after they took over.

The HIPs scheme contained some good provisions. As has been rehearsed on many occasions, the scheme's introduction was botched, and the question is whether we can salvage what was good. Having initially opposed energy performance certificates, which we have discussed, even the Conservatives now recognise that they are a good feature.

The policy on the local authority search has many attractive features. How many times do people find an attractive house at a good price, only to drop out when they discover from the search that, for example, a bypass, sewage farm or industrial estate will be built next to it? In such cases, many people pay for searches, and the only people who gain are the solicitors and other companies who carry out the searches over and again. The inclusion of one search in the HIP is a great asset to the consumer, rather than people who make money out of conducting such searches. We should consider the interests of the consumer.

In the second week of August, I was hiking on Dartmoor when a national journalist rang me to comment on the fact that personal searches, which were increasingly common before HIPs were introduced, are now rejected by mortgage lenders when conducted as part of a HIP survey. People therefore had to arrange two surveys, whereas the HIPs scheme was supposed to involve only one. Is that just initial teething trouble that the Government have already solved, or is it an insurmountable problem that renders HIPs pointless? We need the evidence and research from the Government in order to take an evidence-based decision.

I first heard of home condition surveys back in 1997, when the new Labour Government floated the idea. My only declarable interest in housing is that I have purchased two houses in the past 20 years, and I know what a boon it would be to have one good survey that includes all the details on the condition of the house. How many times do people have a survey done but, for whatever reason, the purchase does not go ahead? In such a case, 10 different people might pay for a survey on one house. Why not include one survey in the HIP? The Government bottled out on that one and abandoned it very early in the process.

The Government amendment states that certificates "can improve" the house-buying process and promises that the Government will work with the industry—the same industry that launched legal proceedings against them not many months ago—to reform further the home-buying process. On 17 August, Royal Institution of Chartered Surveyors spokesman Jeremy Leaf stated:

"The government has no idea how this"— that is, the introduction of HIPs—

"will affect the housing market...We find it hard to believe that the government is pressing ahead with this policy at such short notice without first conducting a proper market impact study."

The Government pressed ahead anyway, so now let us have the market impact study that RICS was calling for. Let the details of the pilot studies, which are still confidential, be released and let us have a proper evaluation of HIPs working in practice over this summer and into this autumn. Nine weeks is not long enough, especially during the summer holidays, when housing sales are always slight, and at a time when interest rates are at their highest since 2001 and the crisis at Northern Rock has knocked confidence in the housing market.

Along with the pilot results from the early studies, let us have a decent longitudinal study of how HIPs work in practice. On those grounds, we could support the Government in the vote tonight, but only if such a serious and open review of HIPs were undertaken in practice. If they are a disaster, according to a serious, evidence-based review, we should scrap them. If they are good, and we can rescue their good features from the botched introduction and strengthen them, let us do that. However, let us ground the decision in evidence-based policy, not knee-jerk, headline-seeking motions.

Photo of Nick Hurd Nick Hurd Conservative, Ruislip - Northwood

Does the hon. Gentleman share my concern that the botched introduction of HIPs by the Government—and it has been a shambles—risks polluting the water of public attitudes towards the energy performance certificate? Would it not be simpler to go straight to that policy instrument and try to build consensus around it?

Photo of Paul Holmes Paul Holmes Chair of the Parliamentary Party, Cross-Portfolio and Non-Portfolio Responsibilities, Shadow Minister (Housing), Department for Communities and Local Government

Even that is not a simple solution. We cannot simply scrap HIPs and go to EPCs; a whole series of procedural regulations and legislation would be needed to make the relevant adjustments. By the time we had done that, we could have had a proper review of the system and allowed it to bed in.

As I said, if the Government can promise that there will be a serious and open review of the first three or four months of operation, and if they can release the pilot studies, we will support their proposal. As it stands, the Conservative motion is simplistic nonsense in respect of HIPs. On stamp duty, it both misses the point and would have an adverse effect on prices—to the cost, not the aid, of first-time buyers. On those grounds, we cannot support it.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich 5:07 pm, 10th October 2007

I draw attention to my declaration in the Register of Members' Interests.

I agree with a great deal of what Paul Holmes said, and I agree with him wholeheartedly about the need for sensible, clear and rational appraisal, rather than the over-the-top comments that we have heard from many people about the introduction of home information packs.

I want to go back to first principles and why HIPs were necessary. In the course of the debate about the implementation, which has been less than satisfactory, we are at risk of losing sight of the benefits of the project. Under the previous house-buying and selling process, buyers had to make an offer, in what in most cases would be the largest single transaction in their lives, with only rudimentary information about the product that they proposed to buy.

Self-evidently, that is a bizarre way of proceeding and no one would accept it as a rational way of buying any other commodity. The practice evolved over centuries, but that does not make it any better. As a result of the lack of adequate information, buyers had to undertake searches and commission surveys to obtain more information about the property that they intended to buy before the contract became unconditional. Inevitably, that made the process long and cumbersome and increased the scope for failures or problems in the transaction—either because the potential buyer found in the survey and search information unwelcome items of news that suggested the need to renegotiate the purchase price, or because the vendor had chosen to sell to someone else in the meantime. The practice of gazumping has been a scourge in the housing market at times. All these inefficiencies existed, and under the old system approximately £1 million a day was lost by members of the public in abortive costs as a result of inefficiencies in the market. It is shocking that members of the public lost £1 million a day because of unnecessary and abortive costs. The whole purpose of introducing reform to the system was to try to eliminate those inefficiencies and create efficiency savings that would not just save consumers' money, but speed up some of the slower, more tortuous elements of the process of buying and selling houses, while adding transparency and taking some of the heartbreak and stress out of it. It can be a very stressful process for many people.

In 1997, that was the background to the study, to which the hon. Member for Chesterfield referred, that was made very early in the lifetime in the present Government. It was commissioned to look at the whole process and recommend ways forward. It was inclusive, it involved all the relevant professional bodies, and it was published in December 1998—a year later than the hon. Gentleman said, but he was pretty near. It concluded that there was a strong case for making essential information about the property available upfront, including necessary survey and valuation information. That concept was then trialled in Bristol in 1999-2000, so this policy was not rushed in without thought or trials. The pilot in Bristol demonstrated a high level of satisfaction with HIPs among the people who had experienced them.

Photo of James Duddridge James Duddridge Conservative, Rochford and Southend East

Does the right hon. Gentleman recognise that those packs were provided for free, rather than costing up to £1,000? If something were provided to me for free, I imagine I would be greatly satisfied; that would not necessarily be the case if there were a much higher cost.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

Of course the packs were provided free as part of the pilot, but the purpose of the pilot was to look at the process, to see whether or not it achieved benefits. I have to say to the hon. Gentleman that one of the problems in all of this is that people have bandied estimates of the cost of HIPs, particularly the house condition report, with very little understanding of what the process would involve if the scheme were introduced on a mandatory basis and there were considerable competition in the market to secure custom.

I do not think that the introduction of the current system was satisfactory—I have made that clear in speeches in the past, and I shall do so later. However, even now, a number of providers are offering either to provide the home information pack for free, or deferring the charge until the sale is completed, which removes completely the fear of cost that was used, I am afraid to say, by the Opposition among others to scaremonger. There are other elements, to which I shall return later, that provide scope for reducing costs to the public, and the public interest has been lost in much of the hysterical comment made about the scheme.

Photo of Phyllis Starkey Phyllis Starkey Labour, Milton Keynes South West

Is my right hon. Friend aware of cases in my constituency in which estate agents have been very innovative? One month, they told customers that if they sold a house with them during that month, they would not have to pay for a HIP, as a teaser to encourage them. The very next month, those estate agents enticed customers with the promise of a free HIP. Does that not say more about the entrepreneurial nature of estate agents, than it does about their having a settled view about HIPs one way or the other?

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

My hon. Friend makes a very good point, and she reminds me that one of the commentators on the pilot in Bristol to which I referred was the then chairman of the National Association of Estate Agents, Mr. Hugh Dunsmore-Hardy, who was extremely supportive of the scheme. Not all of his members were supportive—some of them opposed the scheme—but he was the chairman of the association and he was very supportive, as were most professionals. The Royal Institution of Chartered Surveyors was extremely supportive at the time. When the Bill to introduce HIPs was laid before Parliament, the institution said:

"RICS has consistently supported the concept of Home Information Packs."

That was the climate at the time.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

I remember debating the matter with the right hon. Gentleman at the time in this Chamber. One of the problems was that it became more and more complicated, and less and less understandable, so more and more people became suspicious. The right hon. Gentleman is right about opinion at that time, but subsequently all those bodies, including mortgage lenders, solicitors and everyone else, said, "No, we think it is a bad idea."

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I am afraid that the hon. Gentleman's memory is a little unclear. Matters did not get more complicated, they were simply delayed—that was the problem. Some bodies were unsympathetic from the outset. For example, the mortgage lenders were ambivalent from the start, but they have a vested interest. Their members charge every mortgage applicant a significant fee for commissioning a survey. That part of the system increases costs for the public. Under the proposed new system, there was scope for automated valuations, which would have dramatically reduced the cost to the public but undermined the interests of lenders.

Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government

The right hon. Gentleman said that the public were losing £1 million a day. Would it help his case if he explained to whom the £1 million a day was being paid?

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

The hon. Gentleman makes a good point. The money was being paid essentially to the professionals—the surveyors, lawyers and mortgage lenders—who have a considerable financial interest in the matter.

In the early days of the scheme, professionals in general, albeit not all of them, were supportive. As delays occurred, the group that opposed the scheme gained confidence and became more raucous, and the climate of opinion changed. That was unfortunate and I believe that it happened because of delay. The Bill that was due to effect the HIP proposal after the Bristol pilot was introduced in December 2000 failed to complete its passage before the 2001 general election and therefore fell. It was not reintroduced until 2004, and that long delay allowed momentum to be lost. The seeds of the problem were sown.

The Government made the regrettable decision in the summer of 2006 to drop the home condition reports on grounds that I do not believe to be sound. That added further uncertainty and created a position whereby we are now considering a scheme that does not have all the benefits that the original prospectus offered. However, I believe that it can evolve into a workable scheme that will benefit the public.

It is important at this stage to take stock, consider the current position rationally and try to prepare a proper, cool analysis and sensible recommendations for making progress rather than scaremongering or hysterically crying for extreme solutions. Scrapping HIPs, which the Opposition pledged to do, is not the right way forward. It would do nothing to tackle the problems that I have described—the inefficiencies and delays in the existing system. It would simply give comfort to those who do well out of those inefficiencies, but it would not help the public. Indeed, it would be a betrayal. It would also threaten the livelihoods of the many people who have trained to carry out inspections and energy performance certificate work, on whose behalf the Opposition shed some crocodile tears. Perhaps they would like to listen to one such person, who wrote to me a few months ago. He said:

"I write to you as a recently qualified and certified Home Inspector. I did what Parliament asked me to and qualified and certified before 1st June 2007. I will not forgive the opposition parties for opposing this, nor will the 1,000s of people who have paid £1,000s to be trained."

The Opposition should remember that their irresponsible scaremongering, criticisms and attacks contributed to the problem that those people who trained have experienced in losing the prospect of jobs that they should have had.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

The right hon. Gentleman's memory is as hazy as mine. I seem to remember his saying that there would be £70,000, that everybody would be looked after, that training grants would be available and that the Government would support the scheme. None of that happened. The right hon. Gentleman misrepresents what happened with the public at large.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

A process of training took place in which many people, including the one to whom I referred, enrolled and for which they paid good money. With proper implementation, they could have benefited from that training in full. As it is, they are benefiting from the introduction of the limited scheme and the work on energy performance certificates. Some of them are working on home condition reports, but the scale is not what was originally anticipated and hoped. It is the Opposition who are responsible for that, because it was they who called for the scrapping of the scheme, not this side of the House.

Another thing that is not required is scaremongering about the impact of HIPs, in which the Opposition have also indulged. Claiming that HIPs have single-handedly led to a decline in the market is economic nonsense. As I pointed out in an earlier intervention, the Royal Institution of Chartered Surveyors has published a survey showing that new instructions to sell property fell in August for the third consecutive month. Most people who were against HIPs said that there would be a rush to get properties on to the market before their introduction as people would not have to pay for one, and a decline when they were introduced. According to that analysis, there should have been booms in June and July and a fall-away in August. Not a bit of it: the fall began in June and it continued in July and August. There is not a shred of evidence to support the scaremongering from the Opposition.

I regret the Opposition's economic illiteracy. If they did a little more homework and looked at the detailed analysis, they would see that the pattern varied regionally. It was not a uniform pattern; in fact, the RICS said that in August there had been "marginal increases" in instructions in London and Yorkshire and Humberside. Why were there increases in instructions in London and Yorkshire and Humberside following the introduction of HIPs? There was a uniform national introduction of HIPs. Why was there regional variation if HIPs were the entire reason for those decreases? Once again, there is clear evidence that the Opposition's case is completely unfounded and fanciful.

What is required is calm rational analysis and support for ways to progress the implementation of HIPs until they deliver the benefits that they have the potential to deliver. That requires ensuring that we get as much information up front to buyers at the start of the process. That has already begun, but there is a long way to go. We must also realise the benefits for first-time buyers, who are the sole gainers from HIPs. HIPs have no downsides for them whatever. First-time buyers do not have to incur any costs at all in commissioning a HIP, but they receive the benefit. At a time when we are concerned about the interests of first-time buyers, that should surely be a pertinent consideration.

We also need to continue to apply downward pressure on the time and the cost of various elements in the process. I am thinking particularly of searches, in which too many slow and inefficient processes are still involved, and valuations, where I have referred to the unreasonable demands imposed on potential buyers because of the requirement that they should pay for an expensive survey and valuation, when in practice an automated valuation could in most cases give the information much more cheaply and quickly.

So far I have not mentioned energy performance certificates, which are hugely important, because we all recognise that climate change is the biggest challenge that our society faces. However good we are at improving the energy performance of new properties, the poor energy performance of many existing homes is a fundamental problem. That is why it is essential that house buyers purchasing an existing property are given accurate information at the outset about the energy efficiency of that home and about what cost-effective measures they can take to improve it. They can thereby see, for example, that there is a relatively short pay-back period for certain improvements that they could make cost-effectively and thus both reduce their own costs and help to reduce carbon emissions.

That is common sense. It is absolutely correct and proper. To suggest, as the Opposition do, that the HIPs scheme should be scrapped and that there should be a different introduction of energy performance certificates seems crazy. Energy performance certificates are in place now. We need to extend them, not talk about scrapping the system. That requires, ultimately, the implementation of the whole scheme, which must be extended to all house sizes. I hope that my right hon. Friend will introduce measures as soon as possible to extend the application of HIPs to all houses in the market. Also, to repeat what I said before, it will be necessary to extend the scheme in due course to include home condition reports as well, because that will bring the full benefit of the scheme to the consumer.

I have made it clear that I was not happy with the way in which the scheme was introduced. There were problems and weaknesses, but the situation is not irretrievable. There is a basis on which we can build, and our determination now should be to ensure the benefits to the public and a real improvement in the house buying and selling process.

Photo of Robert Syms Robert Syms Conservative, Poole 5:25 pm, 10th October 2007

This is not the first debate that we have had on home information packs, and I doubt that it will be the last. This one is going to run and run. As Mr. Raynsford has just said, the genesis of the matter goes right back to the beginning of the Blair Government. Indeed, I served on the Committee that debated the 2003 Housing Bill, which became the Housing Act 2004. I find it amazing that, having had such a long lead-up, the Government did not get more of their ducks in a row to produce the scheme in good time.

I am not sure that the Government understood what they needed to do to establish the scheme. They needed to build capacity, to get people trained, and to give a degree of certainty of the outcome, yet every time it came to the crunch, they seemed to duck the issue and move away. The abandoning of the home condition reports, which were such a central part of the pack, largely undermined the existing scheme. We on this side of the House take a different point of view from the Government in that we do not think the scheme is salvageable.

The right hon. Member for Greenwich and Woolwich mentioned the losses incurred through transactions not proceeding. There are several reasons why transactions do not proceed, but we do not believe that the solution is to impose costs on the whole selling industry in order to offset the cost of those lost transactions. The cost of the scheme to the industry will in fact be rather higher than the cost of lost transactions under the previous system.

There were trials, but, as we pointed out in Committee, giving someone a pack for free is rather different from making it compulsory and charging them for it. That was always going to be a difficulty. The Bristol trials were thrown at us on a daily, if not hourly, basis in Committee, and we were told that they were terribly popular. The reality, however, is that this country is somewhat different from Australia and some of the other countries that use this system. When I served on the Housing Bill Committee, I started off by feeling unsure about home information packs, but the more I heard about them, the more convinced I became that the idea would not work in the way that the Government said it would.

The other approach we took in Committee was that if this was such a wonderful idea with such marvellous consumer benefits, and if people wanted it so much, why should it not be a voluntary scheme? Why make it compulsory? We argued that people would pay for it if it would result in an efficient market. The Government responded that they had to make it compulsory so that everyone would have a home information pack in order to speed up the chains and get a more efficient market. At the moment, however, only some housing is in the scheme, so we have a system in which only the buyers and sellers of certain types of houses have HIPs. We do not have a properly working scheme at the moment.

We need an assessment of whether the scheme is working or not, but at the moment it is too early to tell, as we do not have a properly implemented scheme. We will not see the benefits—if there are benefits, as stated by the right hon. Member for Greenwich and Woolwich—unless we move to a system in which all houses are in the scheme and everyone has to have a pack. The logic of that argument is that we have to speed up the system, which is why I intervened on the Minister to ask when this would happen. If the Government are going to persevere with this, they are going to have to move quickly to include the other houses so that the logic of the system can work properly and effectively.

There are problems. It is all very well for the Government to throw at us the fact that we are against the scheme, but what about the poor inspectors? Many people looked at the websites and saw a business opportunity. They spent £7,000—sometimes £10,000 or £11,000—to train. The proposition on which they undertook that training has changed, however. If they take the optimistic view of the right hon. Member for Greenwich and Woolwich, the scheme as originally intended might be implemented at some stage in the future. Between now and then, however, the potential marketplace for those people presents a problem. It has been pointed out that they did not get a grant. Some of them set up small businesses, websites and goodness knows what else. I am not sure that an apology would be worth very much, but I certainly think that the Government should give some thought to it. There are many people out there who took the assurances at face value and are now struggling. If the Government are not careful, those people will not do what they were trained to do but go into some other business because they do not see the prospects that they wanted coming to fruition. The capacity in the system will start to decline, so the ability to spread the scheme to smaller homes will be less. The Government have got themselves into a bit of a pickle.

A debate on energy performance certificates has taken place across the Chamber and the Minister has talked about savings of up to £300 a property. What we need to remember is that only a small percentage of all this country's properties come up for sale and that a large percentage of those that do are new build, so they have some environmental benefits within them. About 96 or 97 per cent. of property does not come on to the market. At the moment, only four-bed properties—and we are soon to move to three-bed properties—have a home information pack with the energy performance certificate, so we are talking about only a percentage of a percentage. The vast majority of British housing stock does not have an energy performance certificate.

If we are serious about tackling climate change—we are also going to have to face difficult decisions on what to do about nuclear power and increasing the generating capacity of our nation—the logical approach would be to look at the whole of the housing stock, perhaps over a period of years, to see whether efficiency savings could be made. It is sometimes the homes that are not sold for 20, 30, 40 or 50 years that are most in need of energy performance certificates. On the Government's approach, yes, it has been implemented early, but it covers only a small percentage of our housing stock. Substantially more could be done if more thought were given to how to spread the benefit throughout the entire housing stock—even to those homes that do not actually come on the market. We would then be able to make much greater and better progress.

Photo of Paul Holmes Paul Holmes Chair of the Parliamentary Party, Cross-Portfolio and Non-Portfolio Responsibilities, Shadow Minister (Housing), Department for Communities and Local Government

Does the hon. Gentleman not agree that we have to start somewhere? In Germany, the process started a few years ago. The Germans attempted to cover 5 per cent. of existing houses every year in order to bring them up to acceptable energy standards. In San Francisco, it was started 20 years ago. The fact is that we are abysmally behind on environmental measures in this country, but we have to start somewhere. Is this not one of the first steps?

Photo of Robert Syms Robert Syms Conservative, Poole

I agree, but the Government should have some sort of target for doing the whole housing stock over a period of several, perhaps 10 or more, years. There might be a role for local government here. Why not fund some local authorities to ensure that the housing stock in their areas has a high percentage of energy performance certificates? Those with the highest percentage of housing with certificates should get some kind of benefit. If the carbon footprint and the environmental agenda are important, we have to deal with those aspects in homes, where so much energy is generated and wasted. At the moment, we are considering only a small percentage of the problem, so we can afford to broaden the argument and do substantially more by covering the whole housing stock.

On the question of stamp duty for first-time buyers, we know that there are many concerns about young people not being able to get into the housing market. It is a great fear among many of my constituents, and we all know about the difficulties that youngsters face. We also know that many of them are buying at a rather older age—rather than the later 20s, it is the 34s and 35s who are buying—and some of that is down to lifestyle. People get married later; they want to do their own thing by going to Nepal or other places; they do not necessarily want to get into the housing market straightaway.

I would say that even though the Conservative proposals are not the only answer to the problem, they are a help. As we all know, buying a home comes with all sorts of associated expenses—carpets and curtains, for example—and people who are buying a home for the first time because of a relationship or marriage often end up with children. We know that poverty usually hits those families with one or two children in the first years of marriage, often because one of the household incomes goes down if the wife has to give up work. Our proposals offer some help to people who are struggling at the beginning of their adult lives. Insofar as we can pick bits apart, that is fine; it is a debating point. Ultimately, most of us, as politicians, would hope that we can address the problem and help people who want to get on to the housing ladder. What we are doing is helping. I therefore commend what was proposed today by our shadow Minister for Housing and at our party conference. Even if the other parties in the House do not agree with the proposal, let us hope that it engenders public debate about how to address the issue. There is not an easy answer, but the matter is of real concern to our constituents and many young people.

Given the shouting across the Dispatch Box earlier, it seems that housing will probably be a battleground of the future. Building millions of homes is not the answer; we have to manage our existing housing stock. A lot of houses are empty, and a lot are sub-standard and can be done up. One million flats over shops are not in use. Many people live in homes that are too large for them, and tax incentives could be used to bring some of the unused bedrooms and other rooms back into the system and offset some building.

A report by the Town and Country Planning Association, with which the right hon. Member for Greenwich and Woolwich has been associated in the past—as president, I think—found that one of the factors in the need to build more houses is longevity. People are living longer not just in the south but in the north and across the UK, so if more houses have to be built to deal with that, they will have to be built across the UK.

Management of our housing stock is just as important as building. Whatever figures Ministers use—2 million or 3 million—we must remember that it is one side of a complicated equation for the provision of decent, environmentally friendly housing stock for our electorate. Using existing stock more effectively is an important part of that.

Photo of Andrew Miller Andrew Miller Chair, Regulatory Reform Committee 5:36 pm, 10th October 2007

It is interesting to follow Mr. Syms, who made a thoughtful speech. I hope that he allows logic to prevail and joins the Government in the Lobby tonight, because his conclusions do not lock into his thoughtful contribution. I feel sorry for Paul Holmes, who had to read the conference speech of Grant Shapps three times; once would have been a punishment, but three times is far too much for anyone.

I have taken a particular interest in this subject. I accept that there is a constituency interest, and it is not improper to argue the case for one's constituency in the Chamber. The new, revived Ellesmere Port and Neston constituency has changed dramatically from having an unemployment rate in the mid-teens under the Conservatives to having very low unemployment and exciting, vibrant new companies moving in. One of the companies to move into the Cheshire Oaks business park is LMS, which provides about a fifth of HIPs across the country. I have been following its fortunes with great care, as it not only employs several hundred of my constituents but its product has been controversial in the House. As with any company that has a controversial product, I want to make sure that I am on the right side of the argument, and not just because the company is in my constituency. I am firmly convinced that its product is good not only for the consumer but for the lender, and is beneficial for the whole market, which needs to develop some momentum.

In a moment, I shall make some observations about the lower end of the housing market, which needs a stimulus. I want to encourage my right hon. and hon. Friends on the Front Bench to drive forward the policy to its logical conclusion.

Figures have been bandied about, but HIPs from LMS—if I can do an advertorial for it—start at just £249, including an energy performance certificate, and people can have them within a few days. An interesting consideration is that lenders can add their margin to the cost. The Department needs to reflect on how far it is reasonable for them to mark up the cost of the HIP product provided by a third-party company.

An extremely good relationship has developed between LMS and the local further education college. Perhaps my right hon. Friend the Minister for Housing can pass that information on to my right hon. Friend the Secretary of State for Children, Schools and Families. The energy aspect of the product and, indeed, the whole package are new, and the technology that supports it is by necessity, if it is to be efficient, very sophisticated. A partnership has developed with the college to provide training to people who work within the company. That new technology training is most welcome in a traditional manufacturing constituency. Although it benefits hugely from the retail and leisure sectors, it needed some modern service industries, at the cutting edge, to support its economy.

Some of the world's leading names support the LMS platform and it has provided important work for my constituents. I asked its managing director, Andy Knee, what effect the motion would have— [Laughter.] The Opposition think it is funny to make people redundant. Andy Knee said:

"The scrapping of HIPs would force LMS to make around 300 redundancies. Around ½ of these would be at our offices in Ellesmere Port and the other ½ would be energy assessors up and down the country. We would also have to write off a £12m investment programme."

That is just one company. Others have also taken a perfectly honourable position and adopted new businesses in a new field. The Conservatives are happy to scrap their jobs. They are laughing. They always think that unemployment is a joke. They thought that it was a joke when 3 million were unemployed—when unemployment was in the mid-teens in my constituency; it is now at 2 per cent. and falling.

I want to press the Under-Secretary on why the Government are delaying the roll-out of HIPs for the whole property market. What estimate has been made of the level of unnecessary carbon dioxide emissions produced by one and two-bedroom properties? Having looked at the Government's amendment, which I support, it is axiomatic that there must be a figure. It would help if the Under-Secretary could let us know whether work has been done on that. It would be hugely beneficial if we could get that figure into the public domain and help people to understand that there are real benefits, not just for them as individuals, but for their families and society, from driving HIPs forward.

There is no evidence that HIPs have adversely affected the market. My right hon. Friend Mr. Raynsford made that point extremely well. All agents report that stock levels of all property types are rising. There is plenty of property for sale; the problem is that there are not enough buyers.

The Royal Institution of Chartered Surveyors's own figures are worth looking at. They suggest that listings of one and two-bedroom properties are down by almost 30 per cent. Surely if HIPS were distorting the market, the number of properties listed in that sector would be up, not down, as sellers rushed to beat the next commencement order. We cannot have it both ways, save for the Opposition. Their argument was false earlier this year, and it is false now. Many factors affect the market, and downturns happen from time to time.

Photo of Andrew Miller Andrew Miller Chair, Regulatory Reform Committee

It is a market, and markets fluctuate. During other debates on this subject, I have heard people say, "It will be different in different months of the year, because of the holiday season." It is a market fluctuation. The pattern governing one and two-bedroom properties, and the fact that listings are down by 30 per cent., has nothing whatever to do with HIPS

The cost of an HIP, which can be deferred until the property sale is completed, represents a tiny fraction of the cost of moving home. A very good friend of mine has just experienced three abortive sales because his property was outside the scope of HIPs when he put it on the market. The simple fact was that in the 25 years he had owned the property lawyers' standards of due diligence had risen, and more and more queries were being raised about matters that used to be taken for granted. He has ended up with a problem resulting from a document that may not have been as strong legally as it should have been, but the sale of the property was delayed simply because of the way markets work. Had the HIP been in place and had he been required to arrange a survey in advance, he would have confronted the problem before the property went on the market.

The simple reality is that the RICS and the Law Society want to protect the financial interests of their members. They want to keep conveyancing costs high and to exclude any other type of professional from inspecting properties. Their thinly veiled attempts to protect their own members' luxurious lifestyles ought to be resisted. We must proceed to a full roll-out of HIPs as soon as possible. Those who will gain most will be first-time buyers: they will begin to benefit, and we shall then be able to get down to the important business of improving energy efficiency.

The housing market varies tremendously up and down the country. Mr. Syms mentioned flats over shops. In my constituency, excellent work by the Methodist Homes Housing Association in partnership with the local authority and shop owners has produced solutions, but such interventions make very small contributions to the market. There are many such small interventions, and I agree with the hon. Gentleman that we should give incentives to housing associations and local authorities.

My hon. Friend the Under-Secretary should maximise the flexibility that he gives local authorities to develop schemes that suit the needs of their communities, each of which has a slightly different pattern. There cannot be a one-size-fits-all solution. What applies to the constituency of my right hon. Friend the Member for Greenwich and Woolwich will certainly not apply to my constituency in Ellesmere Port, although the two constituencies contain a proportionately similar number of people at the disadvantaged end of the spectrum. Our housing markets are quite different.

I ask for flexibility and an early roll-out. We should be confident. I agree with the hon. Member for Chesterfield that we should monitor the situation and that there should be transparency, but we should also stop listening to the weasel words of those Opposition Members who are simply singing the song of vested interest, and instead get on and do the job.

Photo of Charles Walker Charles Walker Conservative, Broxbourne 5:50 pm, 10th October 2007

We have just returned after an extremely long summer recess, but when those of us who have been Members for at least two and a half years—and have therefore been involved in the whole home information pack fiasco—sit through debates such as this one, we realise that the summer recess is in fact not long enough. It should instead be about 11 months long, because when Members are away from the House they do not come up with hare-brained schemes such as the home information pack, which is just yet another tax on home owners.

This Government clearly do not have a great love for home owners, because on top of massive increases in stamp duties over the past 10 years and the recent Northern Rock fiasco—which has led to interest rate rises for home owners—they want to bring in yet another cost in the form of home information packs. It is all very well for the Minister, who clearly does not believe in them any more either, to say that a HIP will cost only £350 or £400—that it amounts to merely a marginal increase in the cost of buying a house—but £350 or £400 is a lot of money for many people. I have not met anyone in my constituency or anywhere else who has said, "Actually, I think home information packs are a very good idea."

In his speech, Andrew Miller expressed faux compassion for LMS, one of the largest HIP providers. It is clear that LMS wrote his speech for him—and it is also clear that it managed to get it to him only a couple of hours ago, because it was not well rehearsed.

The situation is bizarre: our country has a good housing market that works fairly well—in fact, it is one of the best-working housing markets—but this Government have decided in their wisdom to gum it up. Of course, major transactions such as buying or selling a house do not always proceed as smoothly as one would like. They can come undone; people can pull out of a sale or purchase, or raise or drop the price. That is the nature of the market; and I wish this Government truly understood the market, because then they would not spend so much time interfering in its workings and making things all the more difficult for the many hundreds of thousands, if not millions, of people who want to buy homes each year.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Secretary of State for International Development

I apologise for not having been present for the entire debate. During the recess, I bought a house and sold a house, and my sale took longer as a result of the pack because the searches are limited and the purchaser's solicitor insisted on doing his own full searches, which he had relied on in the past. I also think that the energy performance certificates are suspect and cannot be relied upon; I thought my house was extremely well insulated—it is double glazed throughout and the roof and tank are insulated—yet it got a relatively low score.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

My hon. Friend makes an excellent point. If I wish to buy a house in the future, I will not take the word of someone acting on behalf of the vendor. I will want to have a good look at the house for myself. Therefore, I will still pay my solicitor to do my searches. It is a little like buying a car. When we buy a car, the seller says, "I've got the service history," but we reply, "That's very useful, but I'm still going to get the guy from the AA to come along and have a look under the hood."

Many of the people I talk to about this measure are concerned that it is just yet another excuse to have more people working in a quasi-governmental role snooping round their homes. They say, "There will be yet more people I've got to have in my home looking behind the curtains, looking under the bed, telling me what I should be doing." There is not a huge appetite for that.

Again, we can ask: what will happen to the information once it has been secured? Will the Government take ownership of it and use it at a later date to raise our council tax bands, or use it as an excuse to increase stamp duty? We do not know with this Government, because any excuse is always grabbed to put up the cost of things such as buying homes or to increase taxes. That is the way this Government work.

If this Government were an honest Government, they would have had an election last week—but setting that aside, they would also realise that this measure has been an unmitigated disaster. It is so boring to come to the Chamber and hear former Ministers justify what they did before they were removed from office. Mr. Raynsford gave a lengthy exposition of why the HIPs idea was so reasonable and good, but it is neither. Seven years have passed since he introduced it, but the faces of the few Labour Members still attending the debate make it clear that they know in their hearts that it is a disaster. Why do they not have the courage to say, "Look, we got it wrong. Let's get rid of this nonsense. We're very sorry we've wasted so many people's time, and that we've conned those poor men and women into giving up their jobs and spending £4,500 on training to become inspectors."

Opposition Members are nothing but fair. We recognise that those people must be compensated, even though taxpayers' money would have to be used. We hate to see people disadvantaged—unlike the lot over there, who are quite happy to see millions of home owners every year disadvantaged by yet another tax. That is pretty thin gruel. Whenever the Prime Minister calls a general election, I think that people will let him know as much.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe 5:56 pm, 10th October 2007

I do not usually start a speech by agreeing with the Liberal Democrats, but Paul Holmes made a very succinct and accurate analysis of Conservative proposals to reduce stamp duty. I also agree with him that it would be better if we could eventually move to a graduated stamp duty, instead of the stepped approach that we have at present, as that causes particular problems. The hon. Gentleman also offered a balanced and fair analysis of where we have got to with HIPs. He gave general support for what the Government are trying to achieve, but set out some criticism of the approach that has been adopted. I might disagree with the hon. Gentleman about other matters to do with general housing policy, but I accept what he said on those points.

I first began to consider HIPs when the Select Committee covering the work of the former Office of the Deputy Prime Minister held an inquiry into the draft Housing Bill in the previous Parliament. We had lots of questions about the impact that HIPs would have on the market, especially in respect of low-value homes, and we were also concerned about the process and the costs that would be involved. Like me, Mr. Syms was a member of the Standing Committee considering the Bill, and he has already described the further discussions that took place. A lot of analysis was done, but I am not sure that sufficient account was taken of all the concerns expressed about the process that needed to be gone through before HIPs were introduced.

I shall say a little more about that in a minute, but I was eventually persuaded that something needed to be done when I examined the system that we have now. Does anyone here really mean to suggest that the current process for buying and selling homes in this country is perfect, ideal, satisfactory and incapable of reform? Mr. Walker, who has just spoken, seemed to come close to doing so. The trouble is that the Opposition oppose the introduction of HIPs but, as far as I can see, do not have any policy to improve and reform the process of buying and selling homes.

The Opposition appear to be satisfied with the current arrangements, but anyone who has gone through the process of buying and selling a home will describe all the flaws and frustrations in the system. Lots of elements in the process do not work, and I am not talking about the frustrations caused by lumping furniture around during the removals stage. It is the process of buying and selling that makes people so frustrated that they say, "We'll never do this again!"

A few minutes ago, the hon. Member for Broxbourne almost got as far as describing the fundamental flaw in the process, which is that people making the most important purchase in their lives make an offer on a property without all the essential knowledge that they need. They do not know the property's true condition, or its energy performance. They do not always know whether the people selling the property actually own it, yet still they make an offer.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

Many offers are made, but they are subject to survey.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

Of course, that is exactly right, but would it not be an awful lot better to make an offer once the survey had been done? Only three out of four offers made go through to conclusion, which means that one in four is dropped. Those prospective purchasers who, once the relevant information is made available, decide to withdraw their offer and not complete, discover that they have wasted the money that they have already spent. The process is nonsense. The hon. Gentleman is absolutely right: he would not make an offer on a car without getting it tested by a qualified person. He would not hand over £10,000 for a car until a survey had been carried out. That shows what nonsense the process of buying and selling property is and why we need reform.

I have a criticism of the Government. I agree with my right hon. Friend Mr. Raynsford that it is a great shame that they dropped the home condition reports from HIPs and made them voluntary. The reports will not work on that basis and will eventually have to become a proper part of HIPs, so that everyone produces a home condition report before they put a property on the market. People will then be able to see what they are buying.

Members say that they would not trust a survey or search commissioned by someone else. We explored that issue in detail in the Housing Bill Committee. We asked what would happen if a survey was found to be faulty and the condition of the property was not as described. Would a third party—the buyer who had not commissioned the survey—have the right to sue the surveyor if the job had not been done properly? The answer is yes; they would have that right. It is clearly on the record in Hansard.

I am content with that position. If people can sue the surveyor for doing his or her job improperly there is no problem in trusting a survey commissioned by the seller. If the buyer goes through with the purchase and the survey is found to be faulty, they will have a right in law to take action. That is a satisfactory position.

I accept that the implementation of HIPs has been far from perfect. As I have already said, it was not the happiest episode in the Government's life. The process was too slow, the direction was not clear and we should have had pilots. We have not got it right in a number of respects.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Secretary of State for International Development

The hon. Gentleman always follows these debates with great care, so will he take on board my practical example of what happened to me when I tried to sell a house? The standard survey included in the pack was not trusted by the purchaser's solicitors. The same thing would apply to surveys and everything else. In this country, we have the principle of caveat emptor—the buyer must satisfy himself as to the information he is given. If he is not given sufficient information he will have to do the whole thing all over again.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

I think the hon. Gentleman is referring not to surveys but to searches and my right hon. Friend the Minister dealt with that point. As HIPs come into effect and are more common and people understand them, the problem of buyers wanting second searches or second surveys will not arise. People will come to accept HIPs as a legitimate part of the process.

There have been temporary hiccups in the introduction of the new scheme, but they are minor compared with what the Conservatives told us would happen. They said there would be Armageddon in the housing market; the market would collapse, no one would put their house up for sale and if they did it would take weeks to get the packs produced. No energy surveyors would be available and delays would result from the shortage. The cost would be £1,000 a time. That is what we were told over and over again, but what actually happened?

My right hon. Friend the Member for Greenwich and Woolwich demolished the argument that houses would not come on to the market because of the introduction of HIPs. There is no evidence for that. The cost is not £1,000 but between £300 and £350 on average, including the energy performance certificates, which were not part of the original process. I hope that most people welcome the fact that we have those certificates even if they cannot agree that they should be part of the HIP process.

There have not been long delays. There are plenty of energy surveyors able to do the work. All the disasters we were told would befall us when HIPs were introduced have not happened. There is not a shred of evidence.

I have not had a single complaint from a constituent buying a house or from an estate agent since HIPs were introduced. I guess that is the case for most Members. We have had no complaints because the process was introduced far more smoothly than even I as a supporter of HIPs believed possible. That is the real situation.

The hon. Member for Poole made a reasonable speech. He talked about energy performance certificates. It is right that they should be part of HIPs. We have at least introduced them, and an increasing number of houses will get them as buying and selling with HIPs proceeds. However, I agree with him that we have to consider what more we can do to roll out energy performance certificates for houses that probably will not come on to the market for a number of years. The Communities and Local Government Committee will hold an inquiry on energy conservation for existing homes; that is one of the issues that we want to take up. It was a reasonable point, and the Government ought to think about it.

I agree with the hon. Gentleman that HIPs will not operate properly if they are used for only some houses. My solution is to get one and two-bedroom properties into the HIP process as quickly as possible, not to scrap the process for properties with three or more bedrooms. However, he made a reasonable point, and the Government have to think about how quickly we can introduce the process, so that we can get more sense into the market. Of course, introducing HIPs for one and two-bedroom properties is most likely to help first-time buyers, who tend to buy such properties, as there will be a transfer of cost from the people buying properties to people selling. So first-time buyers will benefit far more once smaller properties are brought into the system. My question for the Government is: how quickly can we get that done? We need it done as quickly as possible.

Finally, I come back to home condition reports. I still believe that one of the fundamental problems with buying and selling a home in this country is that people not only make offers without knowing the condition of a property, but often buy it with only a minimal survey having been done. Such a survey will not reveal potential fundamental flaws with the property. [Interruption.] Okay, we can all shout out, "buyer beware", but I believe that the Government have a responsibility to try to make sure that there are safeguards for people undertaking the most important purchase of their life. That is a different approach; Opposition Members are happy to leave it to the market, but I believe that we Members have a responsibility to our constituents in that process. We have a responsibility to bring in appropriate safeguards. Integrating home condition reports in the HIP process would achieve that, and I hope that the Government will eventually come to that point of view.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater 6:06 pm, 10th October 2007

I am staggered by some of the speeches that we have heard from Labour Members, and I am perturbed by the lack of a sense of reality that is coming through loud and clear. I want to put on record the situation in Bristol, which the Government have talked about.

"There were 15,000 voluntary packs" sent out in Bristol,

"only 250 of which had a home condition element."—[ Hansard, House of Lords, 11 October 2006; Vol. 685, c. 336.]

None of them could be tested because there were not enough people to test them. Although there were 250 such packs, only 189 people participated, and only 90 sales were completed under the scheme, of which only 30 involved new properties. It was a shambles from beginning to end. I am sorry, but for the Government to say that they did a proper test is completely false. The words I quoted are those of Baroness Andrews, who was then—and still is—Under-Secretary of State, Department for Communities and Local Government.

The situation has got out of hand. There is no doubt that it is getting ever more difficult for people to see the truth. Hon. Members have made some good interventions and speeches pointing out that there is total mistrust in the system. What Government in their right mind would suggest to people that they spend £4,500 to £8,000 getting a qualification when they know that it cannot be implemented, just because they have carried out a test in Bristol? The test was carried out under Government guidance—they put £320,000 into it for good measure—to see whether the system worked, and it did not. Surely the Government should not only compensate the people involved but apologise to them.

I was staggered to hear what Mr. Raynsford said, because I know perfectly well that last year he praised the quality of the teaching, saying that everyone who got the qualification would definitely get a job, and would earn a considerable amount of money—we have heard a figure of £70,000 bandied about, but in reality I do not think that anyone knew what the amount would be. For the Government to be stuck in this way is ridiculous.

I would also like to take up the point on what the housing market has done. My hon. Friend Mr. Clifton-Brown spoke about his experience. According to the latest Royal Institution of Chartered Surveyors survey, which was done in September, prices have continued to fall in England and Wales, when compared with prices in the same month in 2006. Some 73 per cent. of the respondents indicated a decrease in the number of three-bedroom or larger properties coming on to the market. The biggest decreases were in East Anglia, where there was a decrease of 87 per cent., and in the west midlands, where there was a decrease of 82 per cent. I am sorry to tell the Government that claiming that this scheme has not affected the market is fundamentally flawed, and they cannot have it both ways. They were warned by the Oxford Economics forecast in 2006 that this situation would occur and, to put it crudely, the chickens have come home to roost. It is fundamentally wrong for Labour Members to say that that is not the case.

The history of the scheme has been a catalogue of disasters because nobody on the Government Front Bench could agree what should be in the packs in the first place. I am not fundamentally against having some form of energy test on my house, and I am perturbed that my hon. Friend the Member for Cotswold said that he did not think it was right. My property is double-glazed throughout. It has solar panels and water butts to collect rainwater. I happen to believe in such a test, but how do I get somebody to be responsible for the report? As things stand, if one sues a HIP provider, one has no recourse.

It has been rightly pointed out that it is up to the buyer to make up their mind and not for the seller to tell them what the case is, because there is no recourse against the seller. If they leave the country, divorce, split up with someone or go on to benefits, how would the buyer get any money back? They would not be able to do so. We should examine how to provide a report on energy efficiency, but we should not do it in a way that costs more and more money.

The other thing that I find iniquitous is the fact that this scheme started in August, with no recourse to Government or Parliament. The Opposition have been forced to demand this debate to bring it to the Government's attention. They have sneaked it out when we were all on holiday—the rugby had not even started then—and that is fundamentally wrong. They cannot sneak out a flawed system pretending that it will work when everything says that it will not.

Mr. Betts made a valid point that the housing market is not perfect. I know that because I used to build houses, but I do not believe that the right approach is to make the system more complicated. I fundamentally disagree with him, because his method would make it far more complicated.

One of the things that I have always admired is the Scottish system of missives. When buying a house one goes to one's advocate and signs an undertaking. One is not allowed to gazump or break that, because if one does, one loses 10 per cent. of the contract value, whatever that may be. That is a sensible approach—I have bought and sold houses in Scotland for various family reasons and have found that it works well. There is no leeway in that market. Why can we not explore that approach? Instead of imposing more conditions on people, we could use an existing system. I believe, although I may be wrong about this, that Paul Holmes said that the system in Germany works well. Let us explore what we can do, without trying to reinvent the wheel.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

Does the hon. Gentleman understand that one of the problems with the Scottish system, about which there are complaints, is that because people have to put in a bid for a property that they must stand by if it is accepted, everyone who puts in a bid must do a condition survey in advance? That multiplies the amount of surveys being done and the cost to people, particularly to those whose bids are not accepted and who have simply wasted their money.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

I thank the hon. Gentleman for that interesting point, which was eloquently made by my hon. Friend the Member for Cotswold. It is up to the buyer, the mortgage lender and the solicitor to satisfy themselves. I would not sell or buy a house unless I was totally happy with the system and with what I was doing. Nor would I allow anyone else to do it. I do not think that the Government should hold the hands of every person in this country when they buy or sell a house. We should let the market decide—that point has been made—but let us have a system that works. I cannot agree with the hon. Gentleman.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Secretary of State for International Development

I do not think that the House would want to be misinformed. The Scottish system has recently been upgraded, so that now one must put in an expression of interest. All those expressions of interest are then sifted by the buyer, who accepts one offer. That offer is binding, subject only to survey, and so the system of all the buyers having to do a survey is no longer current in Scotland.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

I thank my hon. Friend for pulling me up. The system has changed. It is a little while since I bought a house, so I am grateful to my hon. Friend for clearing that up. I still disagree with the hon. Member for Sheffield, Attercliffe, but I take my hon. Friend's points on board. He is qualified.

In conclusion, the Government have a responsibility. HIP providers say that if the scheme goes, people will be made redundant. People have already lost money. Estate agents still do not know what is going on. There is uncertainty in the market, which has changed. All that is the Government's responsibility. I hope that the Minister will make it clear tonight that it is not acceptable for the Government to have got a sector of our community into such a situation. The scheme is fundamentally flawed and has no legitimacy at all. If hon. Members do not think that I am right, they should listen to people such as solicitors and mortgage lenders, who all say the same—it is not working.

Photo of Douglas Carswell Douglas Carswell Conservative, Harwich 6:15 pm, 10th October 2007

The evidence is so overwhelming that I shall be brief. Home information packs are a monument to incompetent government. The Royal Institution of Chartered Surveyors, the National Association of Estate Agents, the Council of Mortgage Lenders, and even the Government's own Better Regulation Commission have been critical of HIPs. Even the Consumers Association, which was originally a supporter of the packs, said that

"the new 'half-HIP'"— which lacks a home condition report—

"will be a useless but a very expensive waste of time".

In evidence to the House of Lords, the National Association of Estate Agents stated:

"There are many other ways of improving the home buying process but HIPs will not achieve this. . . HIPs will actually have an adverse effect on the market. Our independent research indicates that a significant number of potential sellers will think twice before marketing their property if they have to consider paying for a HIP . . . The net result would be a reduction in supply".

The big problem in housing is constraints on supply. Anything that further constrains supply will only exacerbate the problems that we have with housing.

Recent research carried out by the Royal Institution of Chartered Surveyors draws a direct link between the introduction of HIPs and the decline in instructions. Respondents to the RICS survey recorded an average fall in new instructions of 37 per cent.

The Government have done more than anyone to build roadblocks to home ownership. They have restricted the right to buy. They have driven up council tax by turning it into a stealth tax. Now they have introduced HIPs—a further constraint on supply. How can Ministers claim that HIPs will improve home buying or home selling, when they will do nothing to address issues such as gazumping? If the Government wish to be creative about solving the problems, they should look, as my hon. Friend Mr. Liddell-Grainger suggested, at some of the ideas north of the border. HIPs are not the answer to the problem.

The HIPs debacle, which is still unfolding, has been a test case of how not to legislate. It has been a brilliant illustration of how not to improve home buying and home selling. Home information packs represent yet another Government initiative desperately searching for a rationale. Like that other huge, monstrous Government extravagance, ID cards, HIPs are a solution looking for a problem. It is right and proper that the Conservatives are committing to the abolition of HIPs.

Photo of James Duddridge James Duddridge Conservative, Rochford and Southend East 6:19 pm, 10th October 2007

It is always a pleasure to follow my hon. Friend Mr. Carswell, who made an excellent speech. It is also always a pleasure to follow an Essex MP.

The motion refers to both stamp duty and HIPs. Government Members may be interested to know that following the Conservative party's announcement on stamp duty, I have not received a single letter supporting the Conservative party's position. That is, of course, due to the Government's mishandling of the postal strike, so I have received only e-mails of support. One young couple stopped me on Sunday morning—I am sure that hon. Members will sympathise with this—when I was out and about trying to do my business with a young child in tow. One of them said, "You don't mind if I have a word." I hesitated before saying, "Of course, carry on." They explained how they had been Labour supporters but not Labour voters—they had not bothered to vote—and how, because of the stamp duty change, they had decided to vote for the first time. I am looking forward to receiving my mailbag from the Royal Mail in Southend, once the situation returns to normal.

I have received a lot of correspondence about HIPs. I shall begin by returning to my intervention on the Minister for Housing during her opening remarks. She wrote to me on 26 June 2007 following some correspondence from my constituent, Anthony Bennett of Southend, about energy performance certificates:

"When a property is first placed on the market, the EPC contained in the HIP cannot be more than 12 months old. This is a transitional measure, pending the result of the consultation on the allowed age of an EPC, which will be conducted over the summer."

In replying to my intervention, the Minister seemed to indicate that that consultation had not even happened. Will the Under-Secretary confirm whether the letter of 27 June was inaccurate or whether the Minister's comment was not a fair reflection of what happened? Was the consultation over the summer abandoned and kicked into the long grass because of other problems with HIPs, or did it take place and reveal something that the Department needs to spend more time working on?

I have also received a number of letters from people who are training to become HIPs inspectors. I have not got this constituent's authorisation to mention their name, but they stated:

"I'm just a bit of political roadkill that no one gives a damn about."

Some of the anger related to all politicians, but the Government introduced the initiative. There were certain EU directives around the EPC that were absolutely essential, but the Government added to the problem. The situation is an unnecessary disaster of the Government's creation. One of my constituents spent more than £10,000 training as a home inspector, which is significantly more than the sums mentioned earlier.

I have also received correspondence from local solicitors. Charles Latham is a partner in Tolhurst Fisher. He is a respected gentleman who has served as mayor of Southend, although he is no longer directly involved in local political life. He wrote to me and stated:

"I do seriously believe that the introduction of the packs will have a serious effect on the housing market which in turn is bound to have an effect on the overall economy of the country."

He has 25 years' experience of conveyancing, and he has experience as an estate agent. He continued:

"the Government has watered down the contents of the pack to make it, frankly, of little use to any interested purchaser."

The Government have done neither one thing nor the other, and we have the worst-case scenario—a fudge between the two, which will not work. The energy report could have been done separately, which would have been simpler than gold-plating EU directives and adding to regulation. Both Government and Opposition Members care passionately about the environment, but there are different elements to it. For example, the environmental impact of flooding is especially important in Southend. Even if we were to introduce a home information pack, different people want different things in it. In Southend, environmental protection is, perhaps, more important than energy efficiency.

Mr. Raynsford clearly has a vested interest in the subject both through his entry in the Register of Members' Interests and, more importantly, through his experience as a Minister. He pointed out that the housing market system has grown organically over a period of time, which is how any changes should have been introduced. If there is a market value to energy certificates, and if there is a market value for the buyer in providing a home condition report, why were people not buying such things to start with? It would be much better for the market to lead the change than for the Government to do so.

Mr. Betts said that the survey done by the seller could be used by the buyer. I have experience as a retail banker in the UK—admittedly four or five years ago; legislation might have changed—and the hon. Gentleman's recollection of advice given to the Select Committee is certainly not my recollection of the legal position in the United Kingdom. For there to be legal recourse to the survey, it would be important not only for the buyer to have paid for it, but for it to be addressed also to the mortgage provider, if it were to have any validity. Of course, the home condition report refers only to a particular type of survey; many people will want to do a much wider survey, so will end up having to pay double anyway. That does not make any sense whatever.

While looking at the BBC website, I came across one provider of HIPs called HipHipHooray.com. It is poetically named, but given that HIPs have been a disaster rather than a cause for celebration, perhaps that provider should be taken to trading standards for implying that they are anything to be happy about. The HIPs process, managed by this Government, has been a complete and unmitigated disaster that will continue. There is still an awful lot of uncertainty.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

Does my hon. Friend share my view that there is no appetite left in Government to bring the issue forward? If they were honest and up front, they would ditch the disaster now and get on with other things for the next two and a half years.

Photo of James Duddridge James Duddridge Conservative, Rochford and Southend East

If they were a bolder, brighter Government looking forward not backward, they would certainly ditch the idea. The only problem is that that would be simply too embarrassing—but the people who suffer are our and their constituents.

Andrew Miller—or should I say for Ellesmere Port, Neston and LMS; if the company has not been mentioned in the House of Commons before, it will be pleased with its number of mentions in this debate—suggested that we found it laughable that jobs might be lost. The suggestion that hon. Members of any party would think that someone losing their job was a laughable matter is horrific. What is laughable is the belief that sustainable jobs are created by overburdening Government regulation. The Government set up HIPs and encouraged people to get the qualification, which was demanded not by the market but by the EU and Government bureaucrats; those jobs were not sustainable. If there was laughter on the Conservative Benches, it was due to the lack of a grip of basic economics rather than the terrible situation of the LMS employees, who I am sure are trying to make a good job of a very bad situation.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party 6:28 pm, 10th October 2007

This debate has been lively and interesting—particularly interesting to me because HIPs figured large in the by-election that brought me to this House not too long ago. By way of preliminary, I should say that I could not find a single person on the streets of Bromley and Chislehurst who thought that HIPs were a good idea then, and nothing has happened since to suggest otherwise. I spent Saturday morning on the streets of Bromley and Chislehurst, and I might add that the view remained firmly the same. There was, however, a great deal of support for my party's proposal on stamp duty and making home ownership more accessible for first-time buyers.

That said, it is a pretty worrying state of affairs that is indicative, perhaps, of the Government's situation, that the Minister for Housing— [Interruption.] I am delighted to see her return to the Chamber, dead on cue. It is pretty worrying that she felt obliged to begin her defence of the Government's policy by recycling a joke that she had told before. That is becoming standard for the Labour party as far as this issue is concerned. With respect, it is indicative of the enthusiasm that Government Front Benchers feel for the policy; it is probably the same enthusiasm there was on the Australian rugby team's flight home. They are trying to defend something that they know does not have any legs.

We have had some useful interventions from Members of all parties, who made specific points based on a great deal of experience and strong feeling, on both sides of the argument. Paul Holmes made a valid and legitimate point at the beginning of his speech regarding the importance of putting the results of the market testing and surveys in the public domain. That links to things that were said later on in the debate. It is quite impossible to have the sort of rational consideration that Labour Members, including Mr. Raynsford, called for without putting that information into the public domain. The only conclusion one can draw about why the Government have consistently failed to do so, and why, even after the Minister's speech there is still no timetable for it, is that they know that that evidence will undermine their case. One is forced to ask what they are hiding.

Thereafter, the hon. Member for Chesterfield performed the well-known Liberal Democrat trick of sitting on the fence and getting splinters in uncomfortable places. With respect to him, it is no good simply saying that we wring our hands about the affordability and costs of home ownership for first-time buyers. The simple truth is that our proposals on stamp duty would assist something in the order of nine out of 10 first-time buyers. Until his party comes up with something that would have that degree of impact on first-time buyers, it is better for him not to criticise—at least until he has something constructive to say.

Photo of Paul Holmes Paul Holmes Chair of the Parliamentary Party, Cross-Portfolio and Non-Portfolio Responsibilities, Shadow Minister (Housing), Department for Communities and Local Government

I wonder whether the hon. Gentleman could explain in some detail exactly how he would refute the arguments of the economists in The Daily Telegraph on Monday who said that the Conservatives' proposals would drive up house prices to the detriment of first-time buyers, and not help them at all.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

It is often said that if one puts any number of economists from end to end, one can get a different answer for each day of the year, and probably each hour of the day. The average first-time buyer would save about £1,700. That is real money and a real saving, and until the hon. Gentleman comes up with a real answer, there is not much point in having the argument.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

With respect to the hon. Gentleman, he did not answer the question. Has he got any evidence at all from any independent experts—we know that his party is very fond of those—showing that there will be no impact on house prices by cutting stamp duty in the way he proposes?

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

If we assist and encourage first-time buyers, of course that will be beneficial to them. It is a bit rich for Labour Members to talk about independent evidence when, as I pointed out, they are the ones withholding independent evidence on this issue.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

My hon. Friend is absolutely right. Our party is talking about giving £1,700 back to first-time buyers. Your party is talking about taking hundreds and hundreds of additional—

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. I will not be referred to and drawn into this debate.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

Thank you, Madam Deputy Speaker. I am grateful for my hon. Friend's point, which is, as ever, well made.

I know that the right hon. Member for Greenwich and Woolwich, for whom I have every personal respect, feels passionately about this issue, and he has been very much involved with it. I have to say that I come to a different conclusion from him. He knows that, and it will not come as any great surprise. It was interesting that he made the point, which is perfectly true, that to start with, the home condition reports were at the heart of this scheme. His gripe is really with his own Government on this matter. The reality is that once the Government scrapped the home condition reports, they took the heart and guts out of the scheme and made it an empty shell. If he has an understandable grievance, it lies with his Front Benchers rather than anyone else here.

My hon. Friend Mr. Syms, who again has great knowledge and experience in these matters, made a thoughtful and constructive speech, and I was grateful to him for the points he made. As someone who comes from London, I especially take on board his point about making better use of existing stock. The right hon. Member for Greenwich and Woolwich and I were having a discussion about that elsewhere earlier on today, and it is a timely reminder of the importance of that issue.

With respect to Andrew Miller, he appears to have a slightly schizophrenic view of the market. He said that the housing market was free but urged more regulation on some matters. My hon. Friends have already made the point that the market cannot be efficient if it is over-regulated.

My hon. Friends the Members for Broxbourne (Mr. Walker), for Bridgwater (Mr. Liddell-Grainger) and for Harwich (Mr. Carswell) made useful and well-thought-through contributions. Mr. Betts is one of the last remaining true believers in HIPs. It is touching to watch him and the right hon. Member for Greenwich and Woolwich trying to defend that line.

An air of unreality pervaded several contributions from Labour Members. Some interventions from hon. Members who are not now present suggested that they had never looked at a set of deeds. Trying to rubbish our proposals for first-time buyers does not therefore hold water, as any trainee solicitor would tell them. It is as simple as that. I was grateful to my hon. Friend James Duddridge for his observations. He prayed in aid a gentleman whom we both know to be a respected member of his profession—someone who has probably seen far more deeds than most of the parliamentary Labour party and therefore speaks with rather more authority on the topic.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

It is also notable that the mortgage lenders, solicitors, banks and everybody who is involved in house-buying are anti the scheme because they know full well that it is unsustainable. As time goes on, it gets increasingly complicated and the Government get into more of a mess.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

My hon. Friend is right. The Government are culpable for the effect on the market—no amount of flannel gets around the destabilising effects—and for the position of those who bought a pig in a poke and took a commercial risk by setting up firms as HIPs providers. I regret the fact that the Government misled them, but that is what happened. If there is, regrettably, a commercial consequence to abandoning the scheme—which will doubtless happen in due course—the Government must shoulder the responsibility for leading them up the garden path. We will take no lectures on that from Labour Members.

Every supporter of the scheme has crept away from it. It is a little like the Haydn symphony in which all the musicians blow out their candles and disappear, with only one left at the end—two in the case that we are considering. Even the Consumers Association, which was originally a great supporter of the scheme, makes the point that, without the home condition report, it

"will be a useless but a very expensive waste of time".

That comment was made by the Government's chief ally in the initial stages.

The Government have not allowed the House to scrutinise the secondary legislation adequately or revealed any of the material on which we could reach a considered view. The House did not get a chance to consider and vote on the extension to three-bedroom homes until after the measure had been pushed through. Why are the Government scared to put the material before us? It is because the emperor—even the rather new emperor—has no clothes. It is surprising that the Government did not take the opportunity of a change of some personnel in the Department to bury the scheme before it became an embarrassment to them. That is their error because we do not intend to let them off the hook.

The tragedy is that HIPs are a distraction from the real task of creating houses. They will not get a single new home built for anyone. They are a side show of the worst and most dogmatic kind.

Photo of James Duddridge James Duddridge Conservative, Rochford and Southend East

Is my hon. Friend as worried as I am that some elderly people in large houses, who would otherwise consider downsizing, thus putting more accommodation on the market for hard-working families, will not do that because of the complexity of the proposed legislation, which will do the opposite of what the Government suggest?

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

My hon. Friend makes a valuable point. It is all very well for Government Members to laugh—perhaps they should go and speak to some elderly householders. I know that my hon. Friend does in his constituency, as I have in mine, where we have exactly the same situation. The scheme is a potential block on mobility. It is in the interests of the efficient use of the housing stock to remove barriers to mobility rather than imposing extra costs.

The debate comes back to that air of unreality, which suggests that somehow there is a free lunch and no cost to the scheme. Ultimately, the cost of the HIPs is going to be passed on. Never mind where it falls legally, at the end of the day it will be passed on in the transaction costs one way or another. HIPs are another barrier to home ownership. We shall sweep that barrier away and, with our stamp duty proposals, remove a separate significant barrier.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

The hon. Gentleman is talking about costs. Will he identify a single cost in the HIP arrangement that would not have to be met as part of the buying and selling system for houses under the previous arrangements? All the costs, on the searches and the energy performance certificate, would have to be met anyway.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

What about the duplication of surveyors' fees for a start? The hon. Gentleman ought to understand that—his party is good at double counting. He should have recognised that when it was coming.

The simple truth is that the Government seem to be wedded to a piece of dogma, when all the evidence goes to the contrary. It flies in the face of belief that the Government should have the gall to rubbish anyone who happens to disagree with them as being a vested interest, yet be perfectly happy to pray in aid those who might have a vested interest on the other side. That is not honest politics.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

As the hon. Gentleman is interested in double counting, will he tell the House what the costs are to the individual who is unable to proceed with a house purchase because it falls through after he or she has commissioned surveys and searches and paid legal fees, when those costs are all aborted? What is the hon. Gentleman's party going to do about the £1 million a day that is lost by consumers because of the inefficiencies in the current system?

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

The sadness is that the right hon. Gentleman forgets that the scheme that he was so fond of does nothing about gazumping or those vendors who do not have the wherewithal. Those costs are an element of the flaws in the current scheme.

The Government's defence is about as credible as when the late George Davis stood up and told the Old Bailey that he happened to be minding his own business walking past the Bank of Cyprus one day, when a chap he had not seen for five years ran past and stuck a sawn-off shotgun in his hand. That defence did not have any credibility as I recall, and neither does the Government's, which is shot through with holes.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

Government Members may think that £400 is not a lot of money, but my constituents think that it is a great deal of money. HIPs are another Labour tax on hard-working men, women and families, so is it not about time that the Government admitted it?

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

The point is well made and shows the lack of contact between Government Members and the outside world. Yes, for my constituents £300 is a lot of money. The £1,700 to £2,000 saving that we will introduce through the stamp duty reduction is also a lot of money, especially for young couples trying to get on the housing ladder.

Photo of Anne Main Anne Main Conservative, St Albans

The other thing is the disproportionate effect of having to pay the whole cost on people who have shared equity in a home. They might own only part of a home, but they have to pay the whole cost on selling it. That is also a disproportionate cost and possibly stops mobility.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

The point is exceedingly well made. Mobility is a key issue, as we have already discussed.

I want to give the Minister time to reply. The Government have stuck to the policy, despite all the contrary evidence, with a degree of rigidity and dogmatism that would have done the Bourbons of 19th century-France proud, and we all know what happened to them. The way the Government refuse to accept reality is like a cross between Pius IX and Chairman Mao's red guards. The tragedy is that the people in this country who find hurdles set in the way of home ownership will have to wait longer than we would wish them to before a Conservative Government can get rid of this impediment to home ownership.

Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government) 6:44 pm, 10th October 2007

This has been a fascinating debate. I greatly enjoyed the contribution of Grant Shapps. This is his first Opposition day debate as a Front Bencher, and mine as well. Watching him and the Minister for Housing clash was rather like watching Hartlepool United thrashing Lincoln City 5-2 last night, with my right hon. Friend as the hat-trick hero Joel Porter. I am afraid that we are not going to see a Tory victory here this afternoon—rather like in Ealing.

The hon. Member for Welwyn Hatfield said that HIPs were harshly implemented, and another hon. Member who is no longer in the Chamber said that their implementation had been botched. In fact, we have seen a smooth and measured roll-out of the process on three and four-bedroom properties since August. I can do no better than quote a number of people who have been involved in the process. Tim Barton, of the estate agents Drewett Neate, said on 24 August:

"We have encountered no problems with the provision of the packs. Our provider was ready and there have hardly been any teething problems. The reality is that the introduction has gone so smoothly that it has hardly been noticed...I can quote two cases already where the registered title element has revealed what could have caused major difficulties later on. In one, the registered boundaries were significantly different from those told to us by the vendor and in the other the property was covered by restrictions the vendor was not aware of. HIPs are already proving their usefulness and two sales that might have hit the buffers later on have been put on the right tracks from the start. Now that people are becoming aware of HIPs, they are accepting them as a legal requirement that's part of the property transaction process and see them as a very minor additional cost to the expensive business of moving. Most basic HIPs only cost around £300 plus VAT, a little more for leasehold or larger properties. Better information upfront and more clarity for the whole process has to be a good aim."

Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

No, I will not, because the hon. Lady has not been in the Chamber throughout the debate.

To give the lenders' viewpoint, Jeremy Russ, head of marketing for Beacon Homeloan Group, says:

"From our point of view, these products could have a hugely positive impact on the house buying process if they actually stop property transactions falling through".

Photo of Charles Walker Charles Walker Conservative, Broxbourne

If the Minister does not think that £400 is a lot of money, what does he think is a lot of money?

Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

The hon. Gentleman has made this point a number of times during the debate. Three hundred pounds is a lot of money, but that is already being paid in the house buying process. HIPs will stop duplication, improve efficiency and ensure that the house buying process is smoother than it would otherwise have been.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

If the increase in cost is marginal, where is it coming from?

Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

I shall deal later with energy performance certificates, which were sadly lacking from Opposition Members' contributions this afternoon.

HIPs will help to reduce the risk of problems emerging later—the problems that can cause chains to collapse, wasting money, time and energy—by providing timely information such as local searches at the beginning of the home buying process.

The hon. Member for Welwyn Hatfield tried to give the impression that the housing market had come crashing to a halt with the introduction of HIPs, but that is simply not right. If the evidence were consistent with the Opposition's argument, we would have seen a high jump in the number of properties being put on the market in June and July—much higher than in the comparable period last year—prior to the introduction of HIPs for four-bedroom properties, and it would have been followed by a sharp fall in August. That did not happen, as my right hon. Friend Mr. Raynsford pointed out when he most effectively exposed the Opposition's economic illiteracy.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

I read out the statement from the Royal Institution of Chartered Surveyors, which showed that house buying had dropped. That was its latest statement. Would the Minister care to comment? Has it got its figures wrong? Are the Government saying that it has done its survey incorrectly?

Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

No, I am saying that most serious commentators are clear that interest rate changes, house prices, stock market uncertainty, concerns about sub-prime lending across the Atlantic and the Northern Rock issue have determined the housing market over the summer. Against that background, it is to be expected that property owners might think twice about putting their property on the market, and that buyers might think twice before making substantial investments.

I can do no better than quote Martin Ellis, the Halifax chief economist, who said on 15 September:

"The market remains underpinned by sound fundamentals. The UK economy continues to expand at a robust pace, employment is at a record high and supply is tight. These factors are the drivers of the market and will continue to support house prices."

The hon. Members for Welwyn Hatfield and for Broxbourne (Mr. Walker) mentioned the link between the revaluation of council tax and the introduction of HIPs. This conspiracy theory is complete claptrap. I look forward to debating with those hon. Gentlemen at some future date the equally credible notion that John F. Kennedy and Elvis are living together on the moon. It is a complete fantasy and an example of Conservative party scaremongering.

I also want to deal with the "No way to 10k" quote of Robert Neill said that this gag has been used before, but a good gag is a good gag and I will continue to use it. I quote from "inside housing", I believe:

"No way to 10k is not actually about 10,000 homes. It just happened to rhyme."

I am a proud member of the Government and of the Labour party, but my hon. Friend Rob Marris, who is no longer in his place, suggested another rhyme. I bear no responsibility for this appalling piece of poetry, but instead of "No way to 10k", it should be, "Hip, hip, hooray; let's have 6k"— [Interruption.] I was about to say that bad poetry seems to cross the House.

In contrast to Paul Holmes made a welcome and encouraging speech, for which I am grateful. We are monitoring the impact of HIPs, as he suggested, and we will continue to do so. We are meeting stakeholders later this week to continue that approach and my right hon. Friend the Minister and I are most willing to meet the hon. Gentleman to continue to update him and his party. I hope that that will encourage him and shape his voting intentions later this evening.

Photo of Paul Holmes Paul Holmes Chair of the Parliamentary Party, Cross-Portfolio and Non-Portfolio Responsibilities, Shadow Minister (Housing), Department for Communities and Local Government

I thank the Minister and welcome his comments about inter-party talks, but do the Government have any plans to return to the House in one or two months to update us about their review? What is the time scale?

Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government)

The Government's intention is always to keep the House informed. The hon. Gentleman raised serious questions about roll-out and related detailed issues. I can confirm that the average time taken to produce a HIP in September was four to five days and that the average cost of the HIP was, in contrast to the Conservative party's scaremongering figure of £1,000, only £300 to £350 plus VAT. More than 102,000 energy performance certificates have been lodged since 1 August and the average time taken to produce an EPC is between 2.5 and 4 days.

The whole House will accept that the knowledge of my right hon. Friend the Member for Greenwich and Woolwich in this area of policy is second to none, and I pay tribute to his articulate speech tonight. He mentioned how inefficient, archaic and often duplicatory procedures were costing customers £1 million a day. He knows that home buyers and sellers have repeatedly stated that they find the process confusing, stressful and opaque. That point was also well made by my hon. Friend Mr. Betts.

Many people complain about the lack of information on what is probably one of the biggest transactions of their lives. HIPs have rightly been seen as a first step in the process of reform. They provide an opportunity to improve the lot of home buyers and sellers. They are bringing greater transparency and competition into home buying and selling and, for the first time, energy ratings on homes are part of the energy performance certificate.

I greatly enjoyed the contribution of Mr. Liddell-Grainger, who is a real gentleman and an accountant. We do not have enough accountants in the House, in my opinion. He said that the whole process was, if I quote him correctly, sneaked out, but that clearly was not right. In her statement to Parliament on 22 May, my right hon. Friend Ruth Kelly, then Secretary of State for Communities and Local Government, announced that the start date for home information packs would be 1 August and 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."—[ Hansard, 22 May 2007; Vol. 460, c. 1108.]

The decision set out in August therefore implemented that parliamentary announcement. Revised regulations were also laid before Parliament on 11 June, following the commencement order for four-bedroom property sales on 8 June. We also published a statement on 11 June setting out the details of the implementation proposals. It is therefore simply untrue to say that the process was sneaked out.

Mr. Syms made some extremely fine points, and made good use of his experience on the 2003 Housing Bill Committee. I disagreed with almost everything he said, but he said it beautifully and with eloquence. His contribution improved the quality of the debate. His point about existing housing stock that is not in the market was pertinent and well made. I would like to reflect further on that and discuss it with colleagues. If I have time, I shall mention related points later. His point about local authority involvement in producing some sort of energy rating is somewhat at odds with the position of Conservative Front Benchers, but I welcome his contribution.

I find it astonishing that something as important as energy performance certificates merited seven words in the Opposition's motion, and that hardly any Opposition Member mentioned the importance of EPCs, with the exception of the hon. Members for Bridgwater and for Rochford and Southend, East (James Duddridge). In an intervention, Mr. Goodwill suggested that people could use gas bills to cut carbon emissions. I admire and like the hon. Gentleman, who has close links with Hartlepool, but I found his comments extremely complacent. Ed Matthew, Friends of the Earth climate campaigner, has said:

"The Government is to be warmly congratulated for keeping its nerve and expanding the adoption of Energy Performance Certificates. Critics would do well to remember that without them there is absolutely no hope of making significant progress on low-carbon homes and tackling climate change. This is not red tape but real information that will help people to find out what they can do to make their homes energy-efficient."

That quote is backed up by the evidence and expectations of real people. YouGov research confirms that our approach is right: 71 per cent. of people want more information about the energy efficiency of the home they are buying; 77 per cent. said that it would influence their decision to buy; and nearly half, 47 per cent., said that they would make their home more energy efficient if they had more information. If only one fifth of homeowners made the basic changes set out in their EPC, they could save about £100 million a year on their energy bills, and cut carbon emissions equivalent to taking 100,000 cars off the road. That is precisely why all the green groups agree that HIPs with EPCs will help families to cut their fuel bills and help to reduce the 27 per cent. of carbon emissions that come from our homes. The Conservative party does not seem to agree, however, and I am disappointed by that.

My hon. Friend Andrew Miller made a great speech, standing up for businesses in his constituency, and there is nothing wrong with that. He highlighted the importance of employment and the need to reduce costs in the home-buying process.

Interestingly, the hon. Member for Broxbourne advocated an 11-month parliamentary recess. He praised the current housing market, which is largely a result of the decade of economic stability presided over by this Government. He seemed to forget that bit. He also failed to mention the negative equity, 15 per cent. interest rates and record repossessions—

Photo of Patrick McLoughlin Patrick McLoughlin Shadow Chief Whip (Commons), Opposition Chief Whip (Commons)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 166, Noes 363.

Division number 206 Opposition Day — [19th Allotted day] — Home Information Packs and Stamp Duty

Aye: 166 MPs

No: 363 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—

The House divided: Ayes 347, Noes 169.

Division number 207 Opposition Day — [19th Allotted day] — Home Information Packs and Stamp Duty

Aye: 347 MPs

No: 169 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Question accordingly agreed to.

Resolved,

That this House believes that the ongoing reform of the home buying and selling process should revolve around the interests of the consumer and environmental sustainability; considers that the most important thing for the housing market is macroeconomic stability including sound public finances; therefore further believes that unfunded tax cuts including on stamp duty would be irresponsible; further believes that increased house building to deliver more affordable homes is essential to help first time buyers; further considers that the introduction of Home Information Packs and Energy Performance Certificates can improve the process of home buying and selling for consumers and provide them with vital information about the energy efficiency of homes and practical suggestions about how to cut fuel bills and reduce carbon emissions; and notes that the Government continues to work with industry to consider further reform of the home buying and selling process in order to maximise the benefits for consumers.

Photo of Alistair Carmichael Alistair Carmichael Shadow Secretary of State for Transport

On a point of order, Madam Deputy Speaker. Have you received any indication from the Secretary of State for Environment, Food and Rural Affairs that he intends to come to the House to correct what he said on Monday in his statement on foot and mouth? He said that compensation schemes in Scotland would be the responsibility of the Scottish Government. That is not correct; there is a 1999 concordat between the Department for Environment, Food and Rural Affairs and the Scottish Executive, and the Scotland Act 1998 (Concurrent Functions) Order 1999 states that responsibility for compensation lies with the Secretary of State. Surely he should return to the House to explain what he intends to do to compensate Scotland's livestock industry for the negligence of his Department.

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

I hear what the hon. Member says, and Members on the Treasury Bench will have done so, too, but I am in no position to respond in the affirmative to his point.

Photo of Nick Herbert Nick Herbert Shadow Secretary of State (Justice)

On a point of order, Madam Deputy Speaker. In May, the Government announced an organisational review of the Ministry of Justice. It is a fundamental review, and today the Ministry's permanent secretary issued an update on that review, which could result in the splitting of the Ministry and in major changes to the National Offender Management Service. That update was given not to the House, and not by a Minister, but through an announcement on a website. What guidance can you give me about the appropriateness of that, bearing in mind the fact that the Ministry of Justice is charged with delivering the Prime Minister's declared agenda of strengthening Parliament and the ability of the House to hold the Government to account? Is it not quite wrong that the statement was made by the permanent secretary, and on a Government website?

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

As the hon. Member will know, the Speaker expects Ministers to make statements to the House. Members on the Treasury Bench will have heard what the hon. Gentleman said. I can add nothing further to that.