§ The Minister of Housing and Local Government (Mr. Richard Crossman)
I will with permission, Mr. Speaker, make a statement about the protection of house purchasers.
In the White Paper "The Housing Programme 1965 to 1970" the Government stated their determination to ensure that houses for owner-occupation are properly built and that purchasers are protected against shoddy work. These aims could be achieved by statutory means—by setting up an agency to inspect houses whilst they are being built and to provide a form of guarantee against defects not revealed by inspection. The Government do not wish to rule out a statutory scheme, but they would much prefer a non-statutory scheme, provided that such a scheme can be made fully effective.
As a result of discussions in which the Government have taken part the scheme run by the National House-Builders Registration Council has recently been improved. Purchasers of houses built in accordance with the scheme, which is based on a detailed specification and several inspections during construction, 1726 now receive a guarantee against minor defects for a period of two years, and a further guarantee, backed by insurance, against major structural defects for a period of 10 years. The scheme also provides a free and simple conciliation service to deal with disputes, and a right to arbitration where conciliation fails.
I regard development of this voluntary scheme into a mandatory scheme as the most satisfactory means of protecting purchasers against the evils of jerry-building. It already applies to nearly 40 per cent. of the private enterprise houses being built, and I would like to see registration made a condition for receiving an advance from a building society.
I am glad to announce that the Building Societies Association is today recommending its members to make participation by the builder a condition for making an advance on a new house. For my part, I am inviting local authorities to restrict loans on new houses in the same way.
I hope that these measures will result in the N.H.B.R.C. scheme becoming well-nigh universal. I accept that this cannot take place overnight. But we cannot wait much longer to give proper protection to all house purchasers. I shall keep a close watch on the situation, and if progress is not quick enough I shall not hesitate to bring forward legislation.
§ Mr. Boyd-Carpenter
As imitation is proverbially the sincerest form of flattery, is the right hon. Gentleman aware that we very much appreciate his adoption of the greater part of some ideas which we put forward some months ago on this particular subject? May I ask him whether, in addition to his adoption of the house builders' registration scheme, he has considered, in view of the fact, as he himself says, that many houses will be outside the scheme for a time, also effecting an amendment of the general law so as to imply on the sale of a house the same warranty as is implied in respect of goods under the Sale of Goods Act?
§ Mr. Crossman
Yes, Sir. I think that these changes of legislation are worth considering, but the thing to do, if the right hon. Gentleman agrees with me, is to get the N.H.B.R.C. working with the building societies. Though the right hon. Gentleman may have aspired to this, he did not achieve it. We have achieved it.
§ Mr. Lubbock
Is the right hon. Gentleman aware also that we, too, very much welcome this approach? Is he aware that the N.H.B.R.C. scheme has been very much improved since about a couple of years ago? Can he say what would be the position of houses in course of construction if the builder is not already a member of the scheme? Will they be able to get a certificate, even though it is impossible for the required number of inspections to take place?
Also, is the right hon. Gentleman satisfied that the N.H.B.R.C. inspectors can cope with the 250 per cent. increase in their work without danger that the standards of inspection will deteriorate?
§ Mr. Crossman
There is no question, in my mind, that the inspectorate of the N.H.B.R.C. is not adequate to deal with the increased number of builders we hope will join the scheme. It has been largely increased now, and one of the reasons I am reluctant to enter on a statutory scheme is that we have a limited number of inspectors. So I strongly urge all builders to join the scheme. I think that they can recruit the necessary inspectors, but I would think that the inspectors are not really the most important thing here. The most important thing is the warranty, and the insurance and the other conditions.
§ Mr. Ioan L. Evans
Does my right hon. Friend realise that this action will be welcomed in the country, that action speaks louder than words, and that although many give lip-service to this action it is he who has done it? May I ask what will happen in the case of those builders who, having built houses and having entered into contractual obligations, may go into liquidation?
§ Mr. Crossman
One of the 10 points of the N.H.B.R.C. is protection of the house purchaser against the builder who goes into bankruptcy. This is the whole point of the scheme. For the first two years of the scheme the builder gives his own guarantee; for the remaining 10 years the N.H.B.R.C. takes over the guarantee itself and protects the house purchaser in this way, so that the person is covered against bankruptcy.
As for my having done it first, I would say that the important thing is to persuade the building societies and the builders to come in. We want them to 1728 do it voluntarily, and it is only in the last resort that I would be prepared to do anything in the sense of legislation.
§ Brigadier Clarke
Would the Minister also say whether this scheme includes the 3 per cent. mortgage as promised by his party at the last General Election?
§ Several Hon. Members rose—