Home Information Pack Regulations 2007

– in the House of Lords at 5:06 pm on 22nd May 2007.

Alert me about debates like this

Photo of Baroness Hanham Baroness Hanham Deputy Chief Whip, Whips, Shadow Minister, Scotland, Shadow Minister, Transport, Shadow Minister, Communities and Local Government 5:06 pm, 22nd May 2007

rose to move, That this House calls on Her Majesty's Government to revoke the Home Information Pack Regulations 2007 (SI 2007/992), to take account of the report on the regulations by the Merits of Statutory Instruments Committee and not to lay further regulations concerning home information packs until after full consideration by the Government and Parliament of the pilot schemes and of the representations of stakeholders and consumers.

Photo of Baroness Hanham Baroness Hanham Deputy Chief Whip, Whips, Shadow Minister, Scotland, Shadow Minister, Transport, Shadow Minister, Communities and Local Government

My Lords, we seamlessly move on in this debate. Noble Lords will share with me an overwhelming sense of déjà vu as we debate again these infamous home information packs. I tabled this Motion in response to the Government's intention to introduce the Home Information Pack Regulations from 1 June. They have rightly now changed their position—all in the blink of an eye. Still, the Government intend to reintroduce these regulations despite extensive and authoritative objection to them from all sections of the housing industry, strong opposition in another place and the highly critical assessment from the Merits of Statutory Instruments Committee in its 18th report. Its thorough investigation and informative findings were backed up by evidence from professionals from all aspects of the housing industry.

Feeling among professionals and consumers on these regulations is unanimous: they are unnecessary and cannot work. The Motion today reflects that view. It tells the Government to take the regulations away and to think long and hard again. This has been a fiasco from start to finish. I remind noble Lords that the original intention was that each home information pack should contain a home condition report. Those had to be abandoned last year when it became apparent that there was no confidence that they could be relied on. Mortgage companies were not happy that they would contain sufficient information on which they could base mortgage offers. Potential buyers did not feel that they would provide sufficient information about the condition of the property. And, in any event, there were insufficient trained home inspectors to undertake the work involved.

Therefore, the proposals were jettisoned in favour of some "dry runs"—pilots to you and me—reports of which have still not been made available. I am glad to hear from the Minister today that we are likely to see some results in July, although some seem to be being delayed until August, which is after the new start date of these new regulations.

Not to be put off, the Government then turned the tables and decided that the main ingredient of a home information pack would not be a home condition survey but an energy efficiency report, which—as Yvette Cooper, the Minister in another place, said—one would give to a property rather as one would to a fridge. This would take pride of place in the pack. Domestic energy assessors had to be recruited and trained to perform this tick-box exercise. To date, although some have been trained, few, as the Minister has already told us, have been accredited or cleared by the Criminal Records Bureau, so they are not in a position to do the assessments, which must be done before a property can be put on the market. In short, there are simply not enough assessors to cover even a small proportion of the properties that will require an energy report from, we understand, 1 August. The Minister accepted that in the Statement today. Yet the department did not see fit to inform the House or the public until the last possible moment.

I am bemused by the fact that the Government delayed these regulations without waiting for the pilot schemes to conclude or having enough assessors in place, and for no other reason than a last-minute panic attack as a result of poorly thought-through policy brought on by poorly planned administration. The Minister told us in a reply to a question earlier this afternoon that there are 2,000 trained inspectors and 3,500 inspectors in training, but that only 500 inspectors are actually accredited. The Royal Institution of Chartered Surveyors was so concerned about the lack of consultation on the home information packs that it initiated the judicial review proceedings against the Government, which have brought this whole thing to a grinding halt. The stark truth is that the Government have made a complete mess of this, because they did not, and still do not, have sufficient inspectors to carry out the assessments. In any event, they have gold-plated the EU directives by making them a condition for the sale of a house, rather than as part of a 10-yearly inspection. Despite endless questions from this House, it is now apparent that the energy performance certificates were not in a state fit for implementation.

Like the Royal Institution of Chartered Surveyors, we are not against energy performance certificates per se. Indeed, we see room for them in a properly thought-through standalone energy policy, but not as one of the few elements of a home information pack. Those elements are indeed few, as the Government, as well as throwing out the mandatory home condition report, made it clear earlier this year that local authority searches and leasehold information would not now need to be included in the home information pack at the outset. My party has offered over and again to work with the Government, if they so wish, to produce a serious and effective energy policy for fairer and more effective use of energy performance certificates in accordance with the EU directive.

Perhaps I should remind noble Lords of the real effect of home information packs, even without the energy performance certificate. Buying a house will not be quicker; it will be slower. Slow progress in preparation and the exclusion of the home condition report have seen to that. Home information packs will amount to reams of red tape with no return. The regulations are a poor imitation of where this all started. Despite what the Government hope, valuations and surveys will still be needed, and there is no guarantee that home information packs will provide adequate searches, if they provide searches at all. Indeed, two-thirds of lawyers have said that they would advise clients to supplement home information packs with their own legal documentation. There are many and intricate criticisms to be levied against the regulations, but we have come to a point where the analysis is unquestionable.

Responses from the industry are staggering. The Law Society has said that home information packs will,

"make the process more difficult, much more expensive and remove existing transparency from the market place".

The Royal Institution of Chartered Surveyors has called the Government's approach to these regulations "cavalier". In particular, it envisages,

"a detrimental effect on first-time buyers"— one of the reasons given for the home information packs was to help those people—

"from rising prices, shortage of supply and abortive costs".

The National Association of Estate Agents told the Merits Committee that home information packs are now purely an administrative burden to the home buying and selling process. The Better Regulation Commission considers that the use of energy performance certificates in the home information packs is gold-plating the EU directive, which will require energy ratings for properties for sale and rent by 2010.

I am baffled that unanimous opposition from the industry and the strictures of the Merits Committee have apparently fallen on deaf ears about the value of this whole process. I urge the Government to take the proper course of action, to take account of the 18th report of the Merits of Statutory Instruments Committee, to wait for the completion of the pilot schemes and the reports from them and, most importantly, to give full and adequate consideration to the representations of all the people who gave evidence to the Merits Committee who were so wholeheartedly against this whole process.

The Government have no defence for these measures now and will have no defence for them in August. It is irrefutable that they will freeze the housing market at a time when it needs liberation. Whether these regulations are delayed or not, this miserable pack will contain only an energy performance certificate, if you can get one; the title deeds of the property, which the owner should have anyway; a sales statement; and the pack index. All that will cost several hundred pounds of the seller's money, which will almost inevitably be added to the cost of the property, so it will be the buyer's money. And all for what? Valuations and surveys will still be needed. There is no guarantee that home information packs will provide timely or adequate searches. Two-thirds of lawyers have said that they would advise clients to supplement home information packs with their own legal documentation, which will be another expense.

It is my sincere hope that the Minister will accept the reasonable tones of this Motion and will, once and for all, bury the plans for a proposal that is hurtling towards failure. All along this House has been right about home information packs—when it voted against them in 2004, when it warned over the regulations last year and when, in the brilliant report from the noble Lord, Lord Filkin, the Merits Committee shredded the idea. Is it not high time that the Government listened to this House, to those in the other place and to those in the housing professions? Would they not be far better served if they did? I beg to move.

Moved, That this House calls on Her Majesty's Government to revoke the Home Information Pack Regulations 2007 (SI 2007/992), to take account of the report on the regulations by the Merits of Statutory Instruments Committee and not to lay further regulations concerning home information packs until after full consideration by the Government and Parliament of the pilot schemes and of the representations of stakeholders and consumers.—(Baroness Hanham.)

Photo of Lord Richard Lord Richard Labour 5:15 pm, 22nd May 2007

My Lords, I had hoped to speak before the noble Baroness sat down, but since I am on my feet I shall say two things. I have been looking hard at the terms of the noble Baroness's Motion on the Order Paper. I also heard the Statement read by my noble friend Lady Andrews. As I understand it, the regulations have been withdrawn. The Government have said that they will reintroduce them to take effect from 1 August. As of this moment, the regulations have ceased to be. They are no more. They have gone. They are not technically in front of the House. In those circumstances, how on earth can the noble Baroness move to revoke regulations which have already gone?

If ever there was a case when the self-regulatory mechanisms of this House may not be appropriate, this is it. Anyone who has been in the other place will know that faced with this procedural situation, there would have been a ruling from the Speaker of the House of Commons that the Motion was out of order. I make the point; I cannot enforce the point; there is no way that one could. But for the life of me, for now to spend two hours or whatever it will be on a Motion to revoke regulations that have ceased to exist is, it seems, even for this House, a waste of time.

Noble Lords:

Hear, hear.

Photo of Baroness Scott of Needham Market Baroness Scott of Needham Market Spokesperson in the Lords, Department for Communities and Local Government

My Lords, I have some sympathy with the noble Lord who has just spoken. However, here we are and since the only alternative is to take my bat and go home, I prefer to participate in the debate. In fact, there is some merit in doing so because the Government now have an opportunity to pause for breath, take stock, and perhaps think again.

We all agree that house purchase is fraught with difficulties. The main problems are and always have been gazumping, the length of time taken on searches, difficulties in getting a mortgage and, finally, surveys. With the removal of the home condition report from the home information pack, not one of those problems will be solved by the pack. A whole raft of groups has expressed concern about the packs. The Royal Institution of Chartered Surveyors was originally in favour, but now regards the pack as poorly conceived and has launched a judicial review. Estate agents, as one might expect, are not in favour, but neither are the Council of Mortgage Lenders, the Law Society or the Better Regulation Commission. Most telling of all, Which?, the Consumers Association, withdrew its support once home condition reports were made voluntary. It regards home information packs as currently constituted as,

"of little value but great expense to consumers".

Finally, the body representing trading standards organisations is also against the pack, saying it does not believe that the proposed £200 penalty is any kind of incentive to comply. Trading standards officers are now supposed to rush around checking whether a three-bedroom house really has three bedrooms or four.

A lot of apocalyptic statements have been made by all sides in recent weeks. Personally, I have never bought into the idea that the whole market would come to a grinding halt if the packs were brought in, but enough serious concerns were raised that the Government should have listened to professional bodies sooner and taken action. Last week the Minister in another place rather dismissed the comments and kept referring to "vested interests". It fascinates me that when people agree with the Government they are stakeholders, but the moment they disagree they become vested interests.

It would have been possible for the Government to refute a lot of the arguments being brought forward if they had published the results of the pilot schemes. However, we have had to take all that on trust. It is interesting to note that on the one hand the Minister has said that it is too early to publish the results of the pilots, but on the other hand that the Government have listened to what has come out of the pilots and have made changes. The civil servant who gave evidence to the Merits Committee confirmed that the pilot studies should have started last July but could not get going until October because the regulations were not in place. In fact, most of the schemes started in January and therefore it is too early to evaluate their impact. He went on to say that he did not know whether savings in transaction times had been made or how the public had responded. When asked about the cost, he replied that it could be anything from nothing to several hundred pounds. He was asked about home condition reports, and said he thought it was right that they should be voluntary but admitted that a voluntary scheme would be unlikely to result in a high take-up. I am not shooting Mr McDonald—he is just the messenger—but what he said was that there is no evidence of transaction times being cut, no clear idea of the cost to consumers, and no confidence that voluntary home condition reports would be taken up.

I want to turn to energy performance certificates, which are the subject of a different statutory instrument, but have become inextricably linked because the Government put that certificate into the home information pack. Both practically and in terms of debate it would have been much easier if the Government had not linked the two. We hear a lot of talk about the need to reform house purchase procedures, and then people talk about energy performance certificates which are a response to the climate change agenda and have nothing to do with the way we buy our houses. Members on these Benches have always been in favour of energy efficiency measures and we have argued for them for many years, but we have to be sure that however energy performance certificates are delivered, it is done properly if they are to be an effective way of helping householders properly to assess the energy efficiency of their homes and to determine how best to spend their precious money on energy efficiency measures. My fear is that if this is not done properly the whole domestic greening agenda could be brought into disrepute by measures that are not properly thought out.

The guidance was not published until 29 March and there was a very short time for the industry to prepare for what should have been a 1 June start. Over recent months there has been question after question about the number of assessors until, finally, there has been an admission today that only a few hundred have gone through the complete process.

I have a question for the Minister. Defra used to have an approval of energy assessors until recently as part of its grant-giving scheme. I am told that about 8,000 people were assessed and approved under the Defra scheme. The Government decided that they were not going to allow a "top up" scheme so that assessors who were accredited under the Defra scheme could take a short course and then move on to the EPC framework. However, in April they finally relented and organised a fast-tracking scheme. Why did the Government leave it so late to move people who were already accredited in the principles of energy performance into this new scheme?

The Minister said that there will be a roll-out of energy performance certificates—whether over the forthcoming months or years we do not know—and as new surveyors come on stream the categories of property which will have to have EPCs will be revealed. But it is asking for a huge leap of faith on the part of people training to be assessors to say to them, "If you train, we will give you the work". You are asking these people to spend more money to be trained when the evidence they have had in recent months is that government promises cannot be relied upon.

There is an inconsistency in the Government's approach to EPCs. The rented sector, which is around 11 per cent of properties, was not supposed to need these certificates until October next year. As a result of today's Statement, we now think that certainly some socially rented properties will be brought in, but only after stock transfer. Representatives of the buy-to-let sector have told me that landlords have been told that they will need to renew the certificate only every 10 years. So the EPC regulations will state that a new tenant has to have a certificate, but that that certificate could potentially be up to 10 years out of date.

In another place, when asked about the 10-year period for people buying houses, the Minister said:

"it is a fat lot of use to a new home buyer to have information ... that could be up to eight or nine years old".—[Hansard, Commons, 16/5/07; col. 646.]

Why are the Government saying that it is a fat lot of use to someone buying a home to have a certificate of that age but that it is fine for someone renting a property?

If the Government are serious about domestic energy saving, it is high time that they reduced VAT on the materials to do so. That is the kind of measure that would show a real commitment to energy saving, rather than forcing people through a bureaucratic measure.

Home information packs should be scrapped. There is no evidence that time or money will be saved or that any of the problems associated with house buying will be reduced. Energy performance certificates should go ahead—indeed, they have to under European Union legislation—but separately from home information packs.

The Merits of Statutory Instruments Committee has done a great service in highlighting the problems associated with home information packs and how far short they fall of achieving the Government's intended aim. The Government should listen to the committee and professional bodies and scrap them. There is no reason why the public should take all the risk for a bungled government scheme.

Photo of The Earl of Caithness The Earl of Caithness Conservative

My Lords, I have to confess that part of me believes this is a fitting farewell to Mr Prescott. He started this policy and it ends in a farce. Perhaps some Ministers who have been involved with the policy—I exclude the noble Baroness the Minister—are not fit for purpose. The Civil Service is fit for purpose but perhaps its bosses were not.

The noble Baroness asked me to consider completing my training and obtaining my EPC qualification. The reason I am not going to do that is quite simple: it is because I identified early on in my training course that the home condition survey, in which one had three boxes to tick and there were many get-out clauses, was generally a waste of a survey; it was not a proper survey.

The EPC, on the other hand, is a very detailed survey, involving the number of windows, external walls, doors, boilers and radiators. Those are just the sorts of thing it is easy to get wrong. The boiler is the most important component when you heat your house, and if I get it wrong—if, out of the boxes marked A to E showing the energy value of the house, I tick the box marked B—and someone comes along and says, "That's exactly what I wanted, a 'B' house", and buys it, then sells it two years later and the next surveyor says, "Actually, it's an 'E' house", that is exactly when the surveyor gets sued. That is the risk, which is unacceptable when you are a surveyor in a small firm and you are not doing the rest of the work that goes with it. At my age I am not going to join a big firm that would have the insurance cover and the necessary protection. The threat of getting sued is the reason why a lot of estate agents have sold out to banks.

It is a difficult situation for our surveyors. I have done the training. I have half the energy qualification; I just need to update that, but I will not. I am not going to take that unacceptable risk. Perhaps that is why on the Government's website there is only one qualified EPC surveyor for the whole of London. It is not really surprising that with only one surveyor they have had to pull the regulations. Until that situation has resolved itself—and some court cases are bound to come up—the Government will always have a problem on their hands.

The noble Baroness, Lady Scott of Needham Market, mentioned the £200 fine if one did not comply with the regulations. The Trading Standards Office does not have time to check the number of properties sold around the country and whether they are three, four or five-bedroom. There is a wide variety of ways you can describe a house when it comes to the fourth or fifth bedroom. I have seen some estate agents' particulars for London in which they class as a bedroom a room that is no more than a walk-in cupboard. That will certainly be taken off the list in future, but they will still get the same price for the house because when they show the applicant around they will say, "This could be used as a bedroom". I ask the Minister to look at that again, as it will not give clarity. It certainly will not help us surveyors. We will err on the side of not putting the number of bedrooms; that's it—we are free. I can draw a plan and give the square footage, but I am not going to say how many bedrooms there are in a house any more, if there is any doubt. That is the way the market will react to something that has not been thought through terribly well.

What is the way forward? How can we help the Government? I agree with the noble Baroness, Lady Scott of Needham Market: let us separate the EPC from HIPs. The EPC is a regulation imposed on us by Brussels. It will not be the be-all and end-all of ending climate change. It tells you the value of the house, but it is actually up to the owner or the tenant to make the necessary alterations; put in the new boiler, change the radiators or put in more lagging. Again, the noble Baroness was right when she said we should get rid of the VAT on those improvements. That would get the confidence of the public, who would say, "This is not a diktat from central government"—which it is at the moment—"but something we can buy into. I will feel good from having extra lagging, and I will be able to get it cheaper than I can now because there will be no VAT".

HIPs are dead. They are not adding anything to the buying or selling process. The market has moved forward, as have the solicitors and the estate agents. A lot of what the Government set out to do 10 years ago has happened and will continue to happen. More and more people are selling through the internet rather than going through agents. It is a constantly changing situation.

The time everything takes is coming down, which everybody wants. There is no benefit to a surveyor or an agent in not having quick transfers of houses, although there might be to solicitors, who can build up a big file and charge the client more money. The sooner one can sell or buy a house for somebody and get the deal done, the quicker one can go on to the next one.

This is a very difficult situation for the Government to get out of. We all want this market to work. I live and work in it pretty well every day of my life and what is happening is making matters more and more difficult and confused. I should like the Minister to take one message away from the House—to keep the EPC and do it separately; it does not have to be tied in with HIPs. Then we can look at the buying and selling process again.

I urge the Government to work with us surveyors. I know for a fact that communication with the National Association of Estate Agents and the Royal Institution of Chartered Surveyors was pathetic. The situation was bound to end in tears; it has done. Now that we have reached this stage, please can the department and the Government listen to what the agents are saying? I know that they do not agree with us, but we live and work in the market and we need that market to work for our own benefit as well as that of the Government.

Photo of Lord Elystan-Morgan Lord Elystan-Morgan Crossbench 5:30 pm, 22nd May 2007

My Lords, I reiterate the remarks of the noble Lord, Lord Richard. There is a bizarre element to the situation in that we are seeking to pray against an instrument that no longer exists.

Photo of Lord Hanningfield Lord Hanningfield Deputy Chief Whip, Whips, Shadow Minister, Transport, Shadow Minister, Communities and Local Government

My Lords, unfortunately, the noble Lord, Lord Richard, is not in his place, but we have had advice from the Clerks that the regulations will not be withdrawn until tomorrow. Therefore, it is quite appropriate to have this debate today because the regulations have not yet been withdrawn.

Photo of Lord Elystan-Morgan Lord Elystan-Morgan Crossbench

My Lords, I did not say that the debate was invalid; I said that it was bizarre. In the light of the noble Lord's comments, it is more bizarre still.

Don Quixote tilted at windmills; he had a physical target to aim at, but for us the target will disappear tomorrow and there will be nothing for us to tilt against. Given that the Government are about to withdraw the regulations, can we stand back from the immediate question of the home information packs and look at the broader problem? It is of long standing and arises from the fact that, under our statute law, there is inevitably a gap between the moment there is an agreement subject to contract and the moment there is an exchange of contracts.

That gap arises out of statute law. It started with the Statute of Frauds 1677 in the aftermath of the civil war, when claims regarding hundreds and thousands of transactions might or might not have been valid. The 1677 Act ordained that there should be some evidence in writing to confirm a sale and purchase of land. That was the situation in the Law of Property Act 1925 and it was strengthened by the Law of Property (Miscellaneous Provisions) Act 1989. The Law Commission report of that year said that it was not sufficient that there should be some note or memorandum in writing evidencing a sale but that the contract itself should be in writing.

During that period of uncertainty, when the transaction is in a state of limbo, all sorts of abuses are possible, gazumping being the very worst of them. The noble Earl suggested that solicitors might have been working for their own purpose in delaying these matters. Lawyers have had to face that charge of delay for many centuries. The Roman poet Ovid said in the first century that delays in law are odious—every Member of the House will know exactly how it reads in Latin, so there is no need for me to reiterate it. I do not believe that lawyers are responsible for that delay. During that period, a great deal has to be done as far as the purchasing party is concerned. Normally, a third party is involved; that is, a lender. The lender, be it a building society or a private lender, will often be concerned not only with the physical state of the property but with the valuation. In addition, the building society, as well as the private mortgagee, may want to know a great deal as to the state of the purchaser's finances. All of that is bound to take time.

Probably the worst indictment that can be brought against the Government, who have played fair in this matter and have been sincere and consistent for 10 years, is that they have overestimated the significance and status of the home information pack. They have done so for the reasons that I have mentioned. It is only one of a number of factors that affect this situation. Whether or not one has a perfect system of home information packs—this is far from perfect—one will always face the basic problem, which will exist unless we change our statute law.

Some people will say, "Look at Scotland". There, by giving formal replies to a number of missives, one arrives at a concluded and binding contract. I shudder from seeking to make any evaluation of the state of the law north of the Tweed. France has a totally different system. While the system that we have is under statute, and I doubt whether we can change it without bringing about greater anguish, these problems will remain and the possible advantages of the home information pack will at best be limited.

The home condition report being a non-mandatory part of the home information pack is a massive weakness. The Merits Committee states at paragraph 18 of its report on the regulations:

"The Law Society expressed their view that the decision to remove the mandatory HCR had undermined the whole concept of the HIP; that it was inappropriate to link EPCs to HIPs; and that HIPs, 'will, in fact, make the process more difficult, much more expensive and remove existing transparency from the market place'".

I am not sure that that is absolutely correct, but the main thrust and the main potential benefit of the home information pack are lost unless there is a mandatory provision in relation to the home survey. That may simply not be possible at the present time. It could succeed only if there was an adequately manned inspectorate, made up of people who had not only examination qualifications but also experience. That experience will be invaluable with regard to the status of the home information pack in the market.

Therefore, I shall ignominiously abstain if the matter is brought to a Division. The Government have thought well about this matter, have been sincere and have been concerned with a real problem that affects so many people. About 25 per cent of all transactions fall in the three to six months that it takes for the deal to be concluded. The wastage in money is of the order of £300 billion to £400 billion per annum. That is a real social and economic problem.

I do not believe that it would be right for me to vote against the Government and certainly I cannot vote for them in this situation. Therefore, I am left in that purgatorial situation of abstaining.

Photo of Lord Graham of Edmonton Lord Graham of Edmonton Labour 5:45 pm, 22nd May 2007

My Lords, the noble Baroness, Lady Hanham, concluded her remarks by inviting the Minister to bury the current proposals, but I am looking forward to a resurrection. Although the Government may not even yet have got it right, I congratulate them on being driven by a number of imperatives.

I begin by saying what I would have said if this had been a standalone debate. I am puzzled, frankly, by the number of individuals and bodies agreeing in general that something should be done but not that which is proposed, or saying that it should be done quickly but not as quickly as is being proposed. I have a funny suspicion that a great many organisations mentioned this afternoon profess that they are in favour, in general, of action along the lines proposed, but are very conscious of the fact that they are trade protection organisations. There are professions to be protected. One early element that has emerged in my reading of the situation, although I am not as competent as some professionals who have spoken here this afternoon, and the general tenor that I sense in this discussion, is that there is a resistance to people entering a field that has been hitherto an exclusive preserve of the profession and that those people are seen as Johnny-come-latelies who are perhaps not as fully qualified as members of the profession. It is with a faint dose of praise that they say to the Government that something must be done, but not by the Government. They are saying, "Leave it to us—we are in the position to make the situation better".

The House needs to be reminded of one or two facts. The main basis on which we have come here today is that there has been a lack of consultation. Well, we have all been in consultation. If the Government listen carefully but decide not to change their attitude, it is said that the Government have steamrollered and ignored other views. On the other hand, if as they have done today and more than once during this process, the Government come back and say that perhaps they can improve things, people sneer. People laugh and grin at what they believe to be a great humiliation. I do not see what the Minister or her colleagues have done as humiliation; instead, they are determined to try to get it right. I hope that we can build on what the Minister said in the Statement. There seems to be an emergence of a working arrangement between the main protagonists and the Government. One might say, "That's good news, but it is a bit late".

When I was in the Commons some 25 years ago, there was a vogue for something called a logbook, which was to put right what has been attempted now. The idea was floated and a lot of flesh was put on the bones of the idea that every house should have a logbook, which was part and parcel of the sale. That was 25 years ago. I referred earlier to the advice that Peter Walker gave in 1984 that mortgage lenders should insist on information of the kind that we are talking about being part of every sale. Early Day Motions have been introduced in the Commons for action to be taken and Select Committees have come out in favour, in general.

I am not competent to argue the minutiae of the detail of the proposals, but I am looking in general at the situation with which we are faced. Frankly, it is an appalling situation. As regards the energy situation on the ground, I am told by Friends of the Earth that 2 million people are at risk from fuel poverty and that 1 million do not even have hot water insulation. That costs only £20. The cost is so little but the reality is that millions of homes in this country could be improved. Some of us have taken necessary steps such as having loft insulation installed. We incurred a cost but it was not tremendous. We may ask why on Earth other people do not take those steps when they have the same need to have a better insulated and more energy efficient house. The sad fact is that they do not. They can either be compelled to do it—of which I am not in favour—or encouraged to do it by sticks and carrots offered by the Government.

Eight million people lack cavity wall insulation and 6 million lack roof insulation. If that is the situation, you cannot really blame the Government for trying to put right that which is patently bad. A recent United Nations report on climate change identified energy efficiency measures as crucial to reduce CO2 emissions. Reference has been made to the fact that we are under a stricture because we have to comply with EU regulations by a certain date. I hope very much that the Minister will take away from this debate the fact that millions of people, whether they know it or not, will benefit from legislation of this kind. Many noble Lords opposite have not suggested proposals to deal with the basic problem, as opposed to being negative. Tinkering with the issue has been suggested, as have incentives, and perhaps other ways of doing it. I hope that the atmosphere which is generated around the table by the main players in this matter will lead to the laying of the order, which we are promised by 1 August. That is not a long time away; it is two months. These things take time, as I demonstrated. It has taken 25 years to reach the present position.

Reference was made to the support, the lack of support, or the unanimity of the opposition to these proposals. However, it is not necessarily so. I have a list entitled the Directory of Home Information Pack Providers. It is a long list, including conveyancing and legal services, companies, estate agents, surveyors, search companies, finance houses, technology and others. It is not an extensive list or even large. To say that there is unanimity among the professions is nonsense. This matter is being used as part of a general stick with which to beat the Government, not just on this but on other issues.

I sincerely hope that the Minister will keep in mind the burning ambition that she and I share that the homes in which people live should be made as comfortable and as energy efficient as possible. I refer also to the terrible waste that occurs—£1 million every day is wasted in transactions which subsequently fail. Although a majority of noble Lords will vote on party lines against what she is doing, I hope that the Minister will take heart from that fact that she can use the period won in the past day or two to re-engage with anyone willing to support proposals to deal with the basic problem—that people are entitled to a decent home. Noble Lords talk about the costs. Well, I have been told that the cost will be between £350 and £400 per energy efficiency report. Given that the average cost of a house is nearly £200,000, that would be money well spent.

I say to the Minister and her colleagues: you have listened carefully so far, you should listen further to me and to others. All power to your elbow.

Photo of Lord Hanningfield Lord Hanningfield Deputy Chief Whip, Whips, Shadow Minister, Transport, Shadow Minister, Communities and Local Government

My Lords, I do not wish to say much. I am sure that we will have another debate. I wish to make two points, particularly in response to the noble Lord, Lord Graham. He referred twice to the £1 million a day wasted on home transactions. We all agree with that. He and others do not seem to understand that home information packs will not save money but are likely to add yet another £1 million to the costs of selling homes.

We estimate that some 600,000 sales are aborted each year, and that will not be prevented by home information packs. If the packs cost around £600 a piece, that represents around an additional £390 million on the cost of selling houses, an extra £1 million a day. Anyone who claims that they will save £1 million a day is talking rubbish; that is why we are against them. Given the need for affordable homes, the extra £1 million a day is unacceptable.

As my noble friend Lady Hanham and the noble Baroness, Lady Scott, said, we are all for the energy element of this legislation, particularly as regards the European directive—the House is unanimous on that—but we are against home information packs. They are a total waste of time and we need something different if we are to help the people of this country.

Photo of Lord Berkeley Lord Berkeley Labour

My Lords, it is good to know that the noble Lord, Lord Hanningfield, agrees that £1 million a day is a reasonable estimate of the money wasted. The packs will cost money but they are to be produced on behalf of the seller. On average, every transaction involves three aborted attempts to purchase before there is a success—a 1:4 ratio. Whatever the costs—we could debate them for a long time—it would seem reasonable to suggest that there is £1 million a day of aborted work.

Part of the reason that the Royal Institution of Chartered Surveyors and other organisations have opposed these proposals so strongly is that they will probably lose that business of £1 million a day. The Government have opened up much of their work to competition, and professional bodies do not like competition. I am a member of the Institution of Civil Engineers, as is my noble friend Lord Howie. We value our professional qualifications and do not like competition, but we should have it, as should the RICS.

Noble Lords opposite say that everyone is against the proposal, but the only person who has spoken in this debate in favour of consumers—buyers and first-time sellers—is my noble friend Lord Graham. Those people, represented by my noble friend, should be listened to. Of course the professional organisations will say, "We are going to lose all of this money, it will be the end of the world and the quality will go down", and so on, but there are many checks and balances. We should accept that the Government are trying to make this more accessible so that, when you buy a house, you do not have to commission four or five surveys for four or five different houses that you do not end up getting, in place of the one that should come with the home information pack.

I was struck by the amount of time and effort that we have spent in this debate complaining first that there are not enough inspectors and then that, when inspectors get their qualifications, there are not enough jobs for them. We cannot have it both ways. There are bound to be start-up problems, when there may be too many or too few inspectors, but I hope that my noble friend's new timetable will sort that out. I wish this new timetable and the whole project very well.

Photo of Baroness Deech Baroness Deech Crossbench 6:00 pm, 22nd May 2007

My Lords, perhaps I could try to dispel some of the ill tempered comments about the professions. My interest is that I used to teach property law, so I hope that I have sufficient detachment to see the effect of property law on buying and selling. We could, perhaps even starting in this House, change the law, but there are complications that cannot be overcome, because in recent years property law has been seriously affected by informal family and third-party rights—the rights of divorced wives or other people living in the house. Your Lordships will well know how complicated landlord and tenant law is. Unless one abandons all humanity, British land law will remain very complicated, so house sales will also be complicated, as others have said.

I want to make a few short points. The first is that, given the difficulties that I have described, there is now no point in the HIP in itself, if we leave to one side the energy performance certificate. It is unfair to say that the professions are trying to hog the matter for themselves. Bearing in mind the announcement this afternoon, I feel that there is nothing as dangerous as a half-dead animal, which will hit back and sting before it is finally dead. In the next few months, the situation will be, especially for first-time buyers, even more costly, stressful, complicated and deceptive.

Secondly, the energy certificate must be a good thing; indeed, it is an obligation. However, it still needs careful attention. As a member of the Merits of Statutory Instruments Committee, I received a great deal of most useful information, out of which a few points arose. It is hoped that the energy performance certificate will lead to savings in energy costs, but the cost of the certificate, which may be a few hundred pounds, will not be recovered for something like nine years; the financial outlay that buyers and sellers will have to make now will not be recovered for a long time, by when there will no doubt be other energy considerations.

Another point is that, if the certificate is to be provided every time the house is sold, in many cases this will be too often—that is, less than 10 years. However, some people do not sell their family home for 20, 30 or 40 years, in which case there will be no energy inducement; there will be no need to get a certificate and no need to think about energy improvements. Tacking on the energy certificate to house sale does not make sense.

Finally, I was not reassured in studying the material before the committee that there will be sufficient checks on those who make the energy inspection. I did not think that the qualifications and security issues attaching to those people who enter the house were sufficiently taken into account. There seemed to be no assurance that the accuracy and helpfulness of the energy certificate would be properly checked. In other words, the certificate might not be worth the paper it was written on, even if all the training goes forward; there is not yet sufficient infrastructure for that.

I therefore simply want to add my voice to those who have said that the home information pack should be abandoned and that the energy performance certificate should be taken forward, but in a way that focuses solely on saving energy and has nothing to do with buying and selling houses, which in English law, going back as it does 1,000 years or more, is complicated, but complicated for good reasons.

Photo of Lord Selsdon Lord Selsdon Conservative

My Lords, I rise to support the evergreen Minister in this Chelsea Flower Show week because I think that people have failed to understand that the Government really have tried. I want to refer to the debates that we had on this subject with the noble Lord, Lord Rooker. I spoke on that occasion too. He invited all of us to go to Committee Room 4, where he had the biggest bunch of officials that I have ever seen. They had been working on these issues for 10 years and were all good men and true. Then, suddenly, everything went wrong.

Frankly, we have a disaster on our hands today. There are 2,000 to 3,000 people with families who thought they were going to get jobs and genuinely set out to do something but are now regarded as a liability by the Minister, who said that we must do something with them. Why not? We also have a bunch of officials who have studied absolutely everything in this field. Therefore, there is an opportunity, and I congratulate the Minister on having done the right thing in a charming way, having announced that the Government are going to stop and think again. It is a case of going back to the drawing board.

I started my life in a drawing office, where, if you used too much Indian ink or spilt it on the tracing paper, you had to pay for a new sheet of paper. I was taught to work in cubic feet and metres but everyone else works in square feet and metres. Perhaps I am unusual in that. I should like to disclose, as I have already, my interests in this field. I was a director of a house-building company and also, for 20 years, a director of a company that manufactured baths, cookers, heaters, fridges and boilers—all the energy-consuming things. I had to worry about methane and learnt that the one thing to be concerned about was consumption and energy.

We sold baths in Germany and worked in a cast iron factory. The cast-iron baths were wonderful because they had high insulation, but it was the volume that counted—how much hot water went into the bath. I do not know whether the Minister knows the WETs concept of water and energy tests. It concerns water, waste water, energy and the environment, and is all tied in with the EU. If we bothered to think, we would say that these are important factors. The first issue concerns cubic feet or metres and the question is: what is the air volume of the house? It is not the number of beds that matters but the volume of air that has to be heated. What are the Btu or kilo-calorie values and how quickly does the heat transfer from one side of a wall to another, whether or not there is a cavity? One of the great advantages of flying freeholds is that other people are heating your house, and the idea now in terraced houses is to encourage the people around you not to insulate well so that you can steal their heat. Therefore, the volume of the air in a house is important rather than the number of bedrooms. If you are not careful, a four-bedroom house can take you into a higher tax band when you buy or sell.

The second question is: how many cubic feet or metres of water are consumed? Water is dispersed as waste water, carrying effluent with it, or it may have to be heated. So the questions are: what is the volume of the bath; how many people have showers; and what are the benefits? These issues will not go away, and the answer may be to go back to our earlier discussions.

When we debated the matter before, I suggested that we should agree a code of conduct or a code of practice on the information that should be provided by a willing seller to a willing buyer. We should have new WETs legislation to deal with all the factors. I do not want to correct noble Lords who said that things are better on the Continent but, at the moment, because there are rural areas throughout Europe, studies and tests have to be carried out on sewerage. People have to submit a return on the volume of water consumed, how environmentally friendly the system of disposal is, how the water can be reused or treated naturally and what worms must be present to digest the waste. Those issues will apply here as well.

With water shortages, we will have water consumption tests and, as consumption rises above a certain level, the charges will probably rise even further. We want to know the energy consumption of each house, and that information is readily available in gas and electricity bills, which show the number of British thermal units consumed. Again, the volume of water consumed is also important.

The insulation value is directly related to consumption of energy so you do not need all these people running around. But they are there, and maybe they could be used. Why do the Government not drop HIPs and move on to home improvement grants again? I exclude double glazing, which is not allowed in a listed building because of the light reflection on the windows outside. There are so many complications in our system that it would be better to make it simpler: get rid of the home information packs as they are now; agree a code of conduct with industry, which could be done rapidly because of the pressure that has been put on; and use the officials and those who have been employed to look at introducing and implementing new legislation relating to energy consumption, water consumption, waste disposal, sewerage and, of course, the disposal and reutilisation of home rubbish.

There is an opportunity for the Minister to take initiative. I would love to help her, It would be a waste of time to do nothing and complete folly to try to introduce HIPs.

Photo of Baroness Hamwee Baroness Hamwee Spokesperson in the Lords (Regional & Local Government), Department for Communities and Local Government

My Lords, I should declare an interest as a solicitor, but I should say that I have no interest here in protecting my profession; my interest is in protecting the consumer. Reference has been made to so-called vested interests. Some interests may be vested but it is not appropriate to categorise all those who started out as stakeholders, as my noble friend said, as vested interests who are somehow on the wrong side. Certainly the view of the RICS changed from one of supporting the introduction of home information packs to opposing them because of the difficulties of which we are all aware.

I cannot help but smile wryly at the wrong expansion of the acronym, which has happened even today. Home information packs have been called home improvement packs—would that they were. A question that arises from my experience of observance at a distance of conveyances—I cannot tell one end of a Land Registry document from another—is that, in attempting to streamline the process, there has been, or has been thought likely to be, an increase in personal searches. In using modern technology and encouraging streamlining, does the Minister have any comment on how that might be addressed? Perhaps it is a rather boring point but it is quite important in the question of streamlining.

The Government acknowledged the importance of pilots, which I raised in a question following the Statement earlier. During the proceedings of the Housing Act 2004, we were at first told that it was not possible to pilot home information packs satisfactorily because the markets were not sufficiently localised. Then pilots were introduced, but—I have said this already today, but I will emphasise it—it is important that the results of those pilots are made public. When we debated HIPs last October, the Minister said that the Government,

"will look to see whether people genuinely feel better informed and more confident as a result of the pack".—[Hansard, 11/10/06; col. 337.]

That is a very important statement, which I would extend from home information packs to energy performance certificates. We must not lose those or lose sight of ensuring that there is public confidence in energy performance certificates.

The Statement referred to day-one marketing, and we understand that until the end of the year this will be permitted. This matter was taken up by my noble friend Lady Maddock with some energy, and by the noble Earl, Lord Caithness—until recently, day-one marketing without a home information pack was not on; now it is on but for seven months only. What factors are changing? Why can day-one marketing without home information packs be accepted up until the end of the year, when that will be reversed?

Finally, on energy performance certificates, can the Minister—either today or, if it is too technical a question, following today's debate but in a way we can all share, because it should be on the record—explain why it is not possible to proceed with energy performance certificates without home information packs? I suspect that it is technical and is to do with how the 2004 Act is framed. With the support expressed around the House for energy performance certificates, it is beginning to look more practical and less time consuming to go ahead with a bit of primary legislation to allow separate energy performance certificates, rather than have them caught up with HIPs which are now so controversial and lacking in support.

I confess to feeling personally almost let down; perhaps that is too strong. I started the debate on home information packs seeing a good deal of merit in the proposal. My confidence has ebbed as the years have gone on, and I am now sad that the Government have failed. Although we are to get new regulations, I see it as a failure. Eight weeks will certainly not put it right, nor allow us the scrutiny required after this sorry saga.

Photo of Lord Bruce-Lockhart Lord Bruce-Lockhart Conservative

My Lords, I declare an interest—

Photo of Lord Rosser Lord Rosser Labour

My Lords, I continue to support the Government's intention to reform the process of buying and selling houses. Under the current arrangements, a buyer enters into an undertaking to buy a property without having crucial information on the property from either the seller or the estate agent, who is being paid a fee to sell the property. The buyer, not having been given this crucial information, must then spend money on searches and copies of the deeds to find out whether the undertaking to buy at an agreed price is sound or not.

Logic suggests that those selling the property ought to provide all the necessary relevant information about it to a prospective buyer, rather than leaving them to find out key pieces of information at their own expense. Then, if the information they find leads them to withdraw from the purchase, they have incurred expenditure they cannot recoup and are, of course, no nearer to having purchased a property. If they are part of a chain, their decision to withdraw can lead to other transactions falling through, with expenditure incurred by other buyers being wasted. The reality is that £1 million is lost in aborted costs every day.

Of course, buyers have also spent money they cannot recoup if the seller withdraws after the expenditure has been incurred on searches and copies of legal documents, but before contracts have been exchanged. The groups that do not lose out under the present arrangements are those doing the searches and obtaining the documents, because they get paid for what they do irrespective of whether the sale proceeds. Indeed, if the sale does not proceed, they potentially do better, because any subsequent potential buyer will have to go through the same process of having searches undertaken, again at their own expense.

The Government intend to transfer the cost of searches and obtaining required documents from the buyer to the seller. This means that obtaining required documents only has to be done once on a property, avoiding buyers having to pay such costs—possibly more than once—and more than one search being undertaken on the same property. It also ensures that the person selling the property has an obligation to provide the necessary information which a buyer needs about the property for them to make a decision on whether or not to enter into a contract of purchase. Since the majority of sellers are also buyers, so they would secure the benefits when purchasing. The group that would stand to benefit most, since they are not sellers at the same time, would be first-time buyers when arrangements can be extended to them.

The information required in the home information packs which does not currently have to be obtained is, of course, the energy performance certificate. It is designed to improve energy efficiency through providing information about a property on the issue. What evidence there is suggests that the most likely time for energy efficiency improvements to be made is when a property changes hands. Energy performance certificates give homes an energy rating and, since more than 25 per cent of our carbon emissions come from our homes, addressing this point is relevant in acting against the threat of climate change. Information about energy efficiency measures that have or have not been carried out in a property, what the fuel bills are, how they can be reduced and how carbon emissions can be cut will encourage people to make energy efficiency improvements.

We should be aware of the declared goals of one of the organisations opposing the proposals. I was somewhat surprised to read a letter from the chief executive of the National Association of Estate Agents in one of the appendices to the report from the Merits of Statutory Instruments Committee. It stated:

"We have consistently stated that the Government's, and our, desire to improve the Home Buying and Selling Process will not be improved by the introduction of HIPs. As we have mentioned to the Minister, more than once, if HIPs were really going to achieve this— that is presumably a reference to the improving of the home buying and selling process—

"thus reducing our members' costs and increase their profits, members would have been 100% in favour of them".

It is good to know the goals that drive the National Association of Estate Agents on this issue. They appear to have little to do with securing a better deal for its customers, although one has to say that there is evidence that by no means all estate agents share the view of the national association.

I hope that the Government will pursue their plans and will make sure that in future all originally anticipated requirements are a part of the home information packs or whatever may take their place and that home condition reports will be a mandatory part of the package before too long.

Photo of Lord Bruce-Lockhart Lord Bruce-Lockhart Conservative

My Lords, I speak as chairman of the Local Government Association. I am grateful for the reversal of the implementation, but it still leaves us with great uncertainty—in many ways, more uncertainty than we had before. There is uncertainty for home buyers, home owners, professional organisations and my own particular interest, local government trading standards staff.

Local government trading standards staff have been heavily involved in the preparation for this. They have been training for it and are involved the regulation, its enforcement and the wider issue of public awareness. Trading standards officers have an immensely professional body called LACORS. It normally deals with any legislation in a responsible and professional way and often simply cautiously welcomes whatever the Government say. However, I shall remind the House of the evidence that LACORS gave to the Select Committee of your Lordships' House. Its professional officer wrote:

"LACORS does not perceive how HIPs will make the home-buying process easier and more transparent".

Indeed, LACORS also felt that the enforcement provisions are problematic and that HIPs would not be effective in delivering the Government's policy for making property transactions cheaper or more transparent.

For our staff, it is a bit like being in the grand old Duke of York's army. They have been marched up the hill of home conditions reports; they have been marched up the hill toward 1 June; and they have now been given a new hill of four-bedroomed homes, which my noble friend Lord Caithness spoke about so well. We need absolute certainty. In local government, we do not even have certainty about the funding issues. The preparation of this proposal has cost a great deal of money and time.

The Minister will remember some months ago that some £2.2 million was supposed to have been identified for local government. At Christmas we asked where it was and we were told that it had been included in the annual base increase awarded the year before. Our local government staff seem unable to find it, so I think we need some clarity on the issue. I should like confirmation that this extra cost will not put any burden on to council tax payers.

The original objectives were to try to have a process which added to transparency and was simpler. We have heard a lot of talk about climate change today. The original objectives of home condition reports, which objectives at least were understandable, have moved to objectives which are less clear. If this issue is simply about energy, I have a lot of sympathy with the noble Baroness, Lady Deech. She asked whether this is actually the best way to improve energy efficiency. I am one of those people who has lived in my house for 40 years. I do not intend to move. Are we saying that these home condition reports are only for when you move? Therefore, we really do need a rethink on this. Above all, I ask for clarity in the process and in the timetable, and certainty for local government staff and trading standards staff, who have worked very hard on this matter and who have been let down by a process that has not been well managed.

Photo of Baroness Andrews Baroness Andrews Parliamentary Under-Secretary, Department for Communities and Local Government, Parliamentary Under-Secretary (Department for Communities and Local Government)

My Lords, I am sure that the quality and scope of the debate has reinforced the sense of the noble Baroness, Lady Hanham, that it was important to have a full debate on the issue. The contributions from around the Floor have been very generous, wide-ranging and thoughtful. From my point of view, although the word "surreal" was used, this felt only too real. I will think very hard about what has been said. I want briefly to describe some of the opportunities for listening again to the very important arguments that have been raised.

The Government have been sincere in what they have attempted to do. I say that to the noble Lord, Lord Selsdon. We have tried very hard throughout this process to be careful and open. I hope that in the debate noble Lords have seen that the Government have met many of the points raised in the Motion—for example, in terms of the consultation we are promising, the fact that we are revoking the regulations, and that we are listening to stakeholders. I hope that on that basis alone the noble Baroness will not press this to a vote.

Let me clearly put the position on revocation. The regulations have not yet been revoked. We expect that to be done as soon as possible. We have a duty first to consult the National Assembly for Wales, which we have not yet had an opportunity to do. As soon as all those processes are complete we will revoke the regulations.

I give particular thanks to noble Lords who have not only supported the policy—and they have not been entirely my noble friends but some noble Lords from other parts of the House—but given a clear exposition of why we felt it was very important in the first place to bring forward HIPs and then EPCs, and to tie them together. I pay particular tribute to my noble friend Lord Graham for taking us through some of the history of this attempt to wrestle with a hugely complex problem. The noble Baroness, Lady Deech, illustrated that. Buying and selling our homes, and property law, is very complex. It is very personal, and it affects us all very deeply, which is why we have to be so careful. The noble Lord, Lord Elystan-Morgan, took us through some of the contextual problems that we face when we begin to wrestle with these things. I suspect that that is what has made previous Governments back off and remove themselves from the fray. We decided that we would try to address those problems, for the reasons that I hope I made clear in my Statement.

I shall not repeat everything that I have said. Indeed, that would be unnecessary, because many of the things that I said will stand. I have listened to the expertise of Members around the House this evening, particularly in our debate on the nature of stakeholders' engagement. It is particularly important to say to my noble friend Lord Graham that this is an opportunity to re-engage with stakeholders to ensure that, in the space that we have created around consultation, we address the realities of what we hope to achieve now by bringing forward transitional arrangements in the way in which I have described. That includes the trading standards officers, who will play such an important role. I am sure that a lot will depend on their ability but, again, phasing in this scheme will give them scope for a smooth and measured introduction.

Let me begin properly by saying that the changes that we have announced today certainly do not mean that we have lost faith in the principle of the necessity of HIPs or, indeed, in the relationship between HIPs and EPCs. Many noble Lords have spoken very powerfully about the importance of EPCs and the whole energy issue that they imply. We believe that the two things go together; HIPs provide a vehicle for EPCs, and EPCs give greater substance to HIPs. We fully intend to introduce HIPs and EPCs together and in a way that will generally benefit the consumer, the community and the country, so that they can obtain maximum benefits.

I was very glad that the noble Baroness, Lady Scott, referred to the fact that she had not been impressed by the apocalyptic statements about the impact on the market. That was worth saying, because one has had the sense as the debate has unfolded that the market will somehow be overturned because we have imposed a HIP on the process of buying and selling. The chief economist at the Halifax said in the Guardian very recently:

"Looking at the longer-term, we don't think they"—

HIPs—

"are really going to have much of an impact at all ... Yes, it is an additional cost, but in the grand scheme of things, people need to move house because they need to move house ... It's not going to stop people moving".

That is utterly sensible.

My noble friend Lord Graham—indeed, I picked this up from other Members around the House as well—talked about the way in which people seem to welcome change but at the same time think, "Make me good, oh Lord, but not just yet", because we do not actually want to commit ourselves to specific changes. We believe that there needs to be more transparency and predictability in the way in which houses are bought and sold so that costs and wastage are cut. Some sort of revolution is needed in the way in which we use and pay for energy in the home. It is not practical or acceptable to separate the two.

We believe, on the evidence that we have, that HIPs will make the process of buying a house swifter, simpler and surer, for the reasons that many noble Lords have given. Having information up front removes uncertainty, and being able to count on legal searches so that one is not adrift in some process over which one has no control and which requires endless phone calls to check up on progress will surely reduce waste and inefficiency. We do not believe that it is inevitable—it is certainly unacceptable—for one in four transactions to fail, or that £1 million is wasted in searches and legal costs. The additional cost, as I have said, is £100 for EPCs, which is even lower than my noble friend Lord Graham suggested.

It is unacceptable that consumers do not know how to make informed choices about whom to purchase services from, or that many buyers do not know exactly what they are paying for or how much their searches cost. We have no incentives in the system to improve that process, so it is fraught with information failure, lack of transparency and absence of control, and requires people to work together at the same speed in transactions. It is a chaotic system. As I hear myself describing it, I can hear how chaotic it is.

The noble Baroness, Lady Deech, raised a point about first-time buyers. They will benefit and will not have to pay for the things that they pay for now, which is bound to be an improvement. People entering the market for the first time will have the guaranteed security of information that they need in their hands for free. It was partly for those reasons that we responded as we did to the first comments of the Merits Committee. In response to the noble Earl, Lord Caithness, as I said in response to the Statement, there are many ways in which this sits alongside other changes in the market. The sort of change that is making a difference, which we think HIPs will help, is e-conveyancing, which is certainly making a major impact. HIPs are a part of that revolution. I also disagree with the noble Earl about the speed of transaction. Independent evidence suggests that the process between different stages of the transactions is 10 days slower than it was 10 years ago. I have already said that new providers are entering the market and cutting costs. HIPs are being offered free in some places and local authorities are reducing their search fees. All that is part of the argument that we are making for HIPs.

On EPCs, we are entirely of the view that home owners must have up-to-date information if they are to make their homes more energy efficient. The noble Baroness, Lady Hanham, asked about first-day marketing and what had changed. We have moved on to this for the transitional period to ensure that home assessors have work to do. Putting this work at the beginning will give some security and space to achieve that, which, again, is about keeping faith with the assessors and getting people used to the system as it unfolds. For that reason, we propose that every time a home is bought and sold it will require an EPC, and I have listened to what noble Lords have said about that. That will give the new owner the information needed to make their homes greener, to cut carbon emissions and to cut their bills. In response to a Question today, I gave the figure of £300 in savings.

Let us now turn briefly to the situation we face. I shall try to answer some of the other questions raised by noble Lords. I shall reiterate why we introduced the changes that we did. The Royal Institution of Chartered Surveyors requested a JR because it believed that the Government had not consulted sufficiently on the EPCs. The judge considering the application issued an interim order allowing HIPs to go ahead on 1 June provided that they did not include EPCs. The judge has also indicated that the matter could not be resolved before 1 June as he required more time to consider RICS's application.

We were deeply concerned by this state of affairs for a couple of reasons. First, the delivery of EPCs is directly linked to the delivery of HIPs, of which EPCs are a central part. Secondly, there are now many people around the country—I have cited figures several times today—who have invested time and money in training to become energy assessors. I think that the noble Baroness, Lady Deech, raised quality assurance. I can assure her that the quality systems which have been put in place and accredited through the Qualifications and Curriculum Authority are extremely tough and rigorous. We continue to work very closely with the assessment centres to make sure that they are monitored properly, so we are convinced about quality.

I think that the noble Earl, Lord Caithness, described the process, which seemed to me to be very rigorous. However, the uncertainty that has been generated in a number of ways has had an impact on the numbers of fully accredited energy assessors. But the numbers who are now attending courses and who have passed their exams suggest that there are enough assessors in the system to meet the demand. We believe that continuing uncertainty would be detrimental to the market and to the implementation of the scheme. Noble Lords have called for clarity and certainty, and I respect what they are saying. I can give an assurance that we will work with stakeholders in every way we can to make the process as clear as possible.

To establish certainty and to ensure that energy assessors, home buyers and other stakeholders in the market know that we remain committed to the principle and convinced of the benefits of HIPs, and to prevent legal delays, we will be making transitional arrangements immediately. We will over the next few weeks revise the regulations we are revoking today. As I said earlier, the new date is to be 1 August when we will begin to implement the measures in phases. From that date, HIPs and EPCs will be required for the sale of homes with four or more bedrooms because we believe that there is enormous potential for larger properties to contribute towards energy efficiency. In response to the noble Baronesses, Lady Hanham, Lady Hamwee and Lady Scott, by taking a phased approach we can ensure that assessors who have already been trained and accredited can use their skills and that there will be sufficient numbers to meet demand.

Under the current regulations an EPC is required every time a property is bought and sold, but is valid for only three months. As a temporary measure we will amend the regulations so that a new EPC is required only if the certificate that exists is not under a year old. That means that the maximum age of an EPC when a property is marketed will be 12 months. In order to smooth the transition further, which answers the question put to me by the noble Baroness, Lady Hamwee, sellers will be allowed to market their home without a HIP provided that they have commissioned one. They will still be required to provide a HIP before the exchange of contracts, but the demand for assessors will be spread over a longer period when HIPs are first introduced and the demand is high.

In response to the point about rented housing made by the noble Baroness, Lady Scott, we have already said that we will introduce EPCs for rented housing in October 2008 but, as I said earlier, we will certainly now begin exploring the opportunity for implementing EPCs on a voluntary basis in social housing, at the time, for example, of stock transfer. Later this year we will assess the implementation of HIPs so that we can consider what further steps may be needed to reduce carbon emissions and drive forward the transformation of the home buying and selling market.

I shall answer a few of the specific questions put to me before I conclude. On the pilots and the evidence available, as I said, early results from the trials in terms of the practicalities of delivering HIPs informed the January consultation and the 2007 regulations. Full results reflecting completed transactions and the impact on time will be published when we have the large volume of HIPs we are expecting in the autumn as they become available. That will certainly illuminate the effect on transactions.

I turn to the questions put about the home condition report. We lost some friends for this policy when we withdrew the report, but we did so because we were so strongly advised by mortgage lenders that it was not practicable to go forward with it. We have balanced these issues as best we can in the interests of the consumer. I am sure that there is a consumer benefit, but we shall continue to listen to opinions because HCRs are now being tested in detail in the trial.

I am grateful for the wide-ranging comments of the noble Lord, Lord Selsdon, outlining his alternative scheme. I cannot promise that it will be given a great deal of serious thought, but I shall take it back to the department where officials will be interested to consider it.

In the light of the time and the fact that this is the third occasion on which I have had to explain the scheme, I close by saying that I shall read Hansard closely and make sure that noble Lords are given written replies to any remaining questions. In conclusion, I know that all who are seriously concerned about the way the market functions and about the need to cut carbon emissions cannot be satisfied with the current provisions. The Government have thought long and hard about how to reflect the best evidence in their approach. We have made the changes that we have announced today in the best possible spirit, taking with us, we hope, the major stakeholders and creating an opportunity for more consultation and re-engagement in the way I have suggested. We believe it is a pragmatic and sensible way forward which keeps faith with the policy and with the people who have kept faith with us by entering training and committing themselves. I hope that we have given as much certainty as we can and we will continue to do all we can to bring more and greater clarity.

We believe that we are minimising the risks to buyers and assessors while maximising the consumer and environmental benefits that will flow from the regulations. On that basis, I hope the noble Baroness will feel that she does not have to seek the opinion of the House and is satisfied with the debate. I am grateful to all noble Lords who have taken part.

Photo of Baroness Hanham Baroness Hanham Deputy Chief Whip, Whips, Shadow Minister, Scotland, Shadow Minister, Transport, Shadow Minister, Communities and Local Government 6:30 pm, 22nd May 2007

My Lords, I, too, thank everyone who has taken part. It has been a long HIP day but the debate has been more than worth having. In the light of the Statement earlier, it was a balance as to whether to continue with it, but it gave us an opportunity to look at the process in greater depth.

I remain sceptical about the EPCs. It is a pity that the Government have withdrawn them for such a short period because they have not given themselves time to think through, first, the comments that have been made by other people and, secondly, to hear what the Commons now proposes to do. Clearly some of the announcements again are flawed. The Government may well want to rethink the proposal about a four-bedroom house when they come to work out the practicalities.

We will remain sceptical about this aspect and about the value of the home information packs. The Government have withdrawn the regulations—for today, anyway—but, as I made clear, they are not yet revoked. This is reason we were able to undertake the debate and, because the regulations are temporarily in suspension, I beg leave to withdraw the Motion.

Motion, by leave, withdrawn.