National House Building Council

Debate between Jo Churchill and Steve Double

Monday 16th October 2017 Commons Chamber

[Steve Double]

I agree that we need to put more attention into the design of the housing that we are building rather than just building to the usual design standards.

The experience of many is that when they take out the 10-year warranty, the insurers routinely resort to delay and obfuscation, denying and hindering legitimate claims for truly shocking examples of poor workmanship and defects or offering cost-cutting remedial works that fall short of producing a satisfactory solution.

[Jo Churchill (Bury St Edmunds) (Con)]

Does my hon. Friend agree that the problem with many of the big house builders, such as the one he alluded to that set aside a large contingency fund for these issues, partly stems from the fact that they have no workforce of their own, particularly no site managers and the like? Interestingly, that company said recently that it would not support the levy continuing for the Construction Industry Training Board, which is having to be subsidised by architects and small builders, and not by the large house builders that we should arguably be holding more to account?

[Steve Double]

I am grateful for my hon. Friend’s intervention; she makes a very good point. At the heart of this problem is the quality control on building sites. Too often, subcontractors are used and there is not the level of management oversight of the quality of their workmanship that there has been in the past and that we need to see today.

I have been seeking to assist a couple in my constituency who had obvious and serious problems with their new-build house. They first discovered the serious defects with their newly built property eight weeks after taking possession. Four years later, they are still fighting their case. They purchased their brand new house for £395,000. The most recent estimate of the cost of rectifying all the faults and defects comes to £325,000. That is truly shocking, and it is surely a sign of the complete failure of the inspection regime. The level of defect is such that somebody must have known about the problems before completion.

[Steve Double]

I thank my hon. Friend and Cornish neighbour for that intervention. I have heard of that company, and getting an independent inspection of a new property before signing the completion papers is one way to address the issue.

[Jo Churchill]

Surely the fundamental point is that when someone spends nearly £400,000 on a product, they expect, under their consumer rights, that product to be fit for purpose—a house should stand under its own construction and be there for the duration. We should be asking for that, rather than relying on a third-party snagging company.

[Steve Double]

My hon. Friend makes a good point. I was alluding to the fact that in the current system, getting an independent view of the property is worthwhile. Long term, I do not think that that is the answer. We need to get to the point where a house purchaser can be confident in the quality of the housing that they are buying.

I return to the situation of the couple I have been assisting in my constituency. It transpires that similar defects have emerged on several other houses on the development, adding to the couple’s anxiety and consternation. They said to me that far from being helped by the 10-year warranty company provider, they felt thwarted at every turn. They were sent around in circles and left for months on end with unhelpful responses or, indeed, no response at all. They said that far from working with them to resolve the matter, the warranty company appeared to be in cahoots with the developer. I believe that that is at the heart of the issue that I want to address. The perception is that NHBC has a too cosy relationship with the building companies, and lines are blurred as to precisely who they work for. That cannot be acceptable.

My own interaction with NHBC has been very unsatisfactory. I first became involved in the case before I was elected in 2015, and I have spent almost three years trying to assist progress, to very little avail—that is, until recently. It is notable that since notice of this debate was published, I have had direct and constructive contact from NHBC’s chief executive, Steve Wood. He phoned me just last week and admitted that my constituents had been let down by the system. He said that he was determined not only to resolve their case, but to ensure that NHBC improved its service. Having spoken to Steve Wood, who has only been in post for three months, I am more hopeful that things may change for the better. However, although that response is welcome, an MP should not have to secure a debate in this House before the NHBC takes some action. New homeowners should be confident of getting the service they are entitled to without the intervention of their Member of Parliament.

Although I accept that many customers of NHBC will be satisfied with the service they have received, it is clear that far too many are being let down. Therefore, I believe that we need a review of the new homes warranty market. My constituents spoke to me of being thwarted and foiled at every turn, and that has proved to be a startlingly accurate description of the experience of other new homeowners across the country, as has recently been reported in the press.

One issue that has come to light is that NHBC has close ties with some developers, and that it operates a washout system of premium refunds. Once policies have expired, NHBC pays back to the builders a proportion of the fees paid for the policies—reportedly amounting to tens of millions of pounds—as a reward for, or in recognition of, a low or no-claims record. Between them, they have a vested, incestuous interest that is in conflict with the benefit and welfare of the very people they purport to act for—the homeowners. There is a clear blurring of lines about whom the warranty company actually represents. The builder pays the premium, and if no claims are made, it gets a rebate. No wonder builders do all they can at times to avoid agreeing to a claim.

[Jo Churchill]

Is my hon. Friend aware of whether any statistics on this are collected by the Department so that it can understand which builders are particularly poor and allow planners or other people to get involved at an earlier point?

[Steve Double]

I am aware of what has been reported in the press, but I am sure that those data should be available, given the way in which the NHBC operates. That could certainly be followed up.

There appears to be a closed shop or old boys’ network, with the industry looking after itself, rather than the consumer. By contrast, recent legislation has strengthened consumer rights further, so that faulty goods can be rejected and a full refund obtained, but not so with housing. Homes are specifically excluded from the Sale and Supply of Goods Act 1994. The homeowner has far more consumer rights and protection for a new kettle in their kitchen than they do for the new building that houses it. For the vast majority of people, buying a new home will be the biggest purchase they ever make, and surely we should provide more adequate protection for them. On the thankfully very rare occasions when the builder has completely failed to construct a property fit for habitation, house purchasers should not have to resort to the courts to establish their rights. Sadly, that is too often the case in the current set-up.

Building houses is high on the Government’s agenda, and with plans for 1 million homes to be constructed, now is the time to ensure they are built well, are fit for purpose and consistently fulfil the reasonable expectations of those who buy them. When something goes wrong, there should also be a system in place to protect the purchaser. A recent report by the all-party group for excellence in the built environment made a number of recommendations. I urge the Minister to read the report and to consider its recommendations. As well as calling for a review of the warranty market, the all-party group also called for the introduction of an independent housing ombudsman.

[Jo Churchill]

I chair the all-party group, which for reasons of clarity, I thought I should declare.

[Steve Double]

I am very grateful to my hon. Friend for that clarification. I was not aware who the new chair was, and I am delighted to hear that it is my hon. Friend.

I believe the introduction of an independent ombudsman would be an important move, and I ask the Minister to consider it. By its very existence, an independent ombudsman would bring urgently needed fresh focus to the industry. As ever, it is far easier and cheaper to get it right first time. The prospect of an independent body adjudicating will in itself produce a new impetus to achieve a better outcome more often.

I look forward to the Minister’s response. May I finish by inviting him to visit my constituency in Cornwall so that I can show him some of the problems that my constituents face and he can see them for himself? His visit would be welcomed by exasperated homeowners and provide convincing further evidence of the need to bring fresh order to the industry.

Car Insurance: Young People

Debate between Jo Churchill and Steve Double

Monday 20th March 2017 Westminster Hall

[Steve Double]

Later in my speech, I will talk about telematics and some of the available technology. My response to my hon. Friend is that I think we need both. Yes, we need to embrace technology and use it as much as possible to help people to be safe on the roads, but I am also of the view that we can do better with the current testing regime in helping people at that very initial stage to be safer on the roads.

[Jo Churchill (Bury St Edmunds) (Con)]

Does my hon. Friend agree that the 21st-century driving conditions that my four children, his children and all the young people in our rural constituencies face on the roads mean that we need a different approach? Lessons on night-time driving and motorway driving are not obligatory. Many countries, including New Zealand, Australia and France, run a probationary period, for example, which is something that could be looked at and learned from.

[Steve Double]

My hon. Friend makes a very good point that I will come to later. I think the current testing regime needs to be more robust and more comprehensive to address the many different aspects of driving, rather than just having the very narrow test we have currently. We teach young people to pass the test. We do not equip them to deal them with the many different experiences of driving on roads in the UK today.

--- Later in debate ---

[Steve Double]

The hon. Gentleman makes a very good point. There are many pitfalls to the issue of fronting. The insurance industry should do more to address that issue at the beginning, rather than wait until there is a claim. Companies happily take the premiums before they address the problem. There is more that can be done to ensure that, when older drivers are put on policies, it is proper and legitimate.

Some insurers now offer telematics policies and fit a GPS-enabled transmitter to the car; I believe that smartphone app options are also available. Drivers under 21 who take out such a policy and have the appropriate equipment fitted are typically offered a 25% discount on the initial premiums. Such policies can also further reduce renewal premiums, as there is a record of where, when and how the car has been driven. High-risk driving behaviours are recorded by the technology and can cause renewal premiums to rise, whereas sensible driving can lead to a significant reduction in premiums.

One insurer, Marmalade, which operates a telematic policy, saw a dramatic improvement in the accident rates of novice drivers. On average, one in five new drivers makes a claim in the first six months, but with monitoring equipment in place, that number improved to one in 16—an outstanding and significant improvement. Telematics policies have been growing in number. In 2009, there were about 12,000, but the technology has become more widely known and continues to fall in price, making the policies more attractive: the number has risen quickly to more than 750,000 today.

Dash-cam technology can also be used to improve driving and can lead to a fall in the insurance price. Some insurers now offer lower costs—typically 10% lower —provided that a camera is fitted and is always activated when driving. That footage is made available should there be a claim. That irrefutable evidence can be very helpful, given that young drivers are sometimes blamed and bullied at the roadside for collisions that are not actually their fault, and there is often a presumption that the less experienced driver is at fault. Dash cams also have the effect of improving driving behaviour, as the driver knows there is a record of how the car has been driven.

Some households enter into a written agreement with the novice driver, in which behaviours such as careful, legal and considerate use of the car are set out. Both parties sign the agreement, which, although not legally binding, offers a clearly set out explanation and brings focus, consideration and thought to the very real responsibilities of driving safely. An example template can be found on the website brake.org.

As helpful and welcome as many of those things are, they fail to address the underlying issue. It is time for us to look at our system for obtaining a licence to drive. It is my view that in this country we teach people to pass the test, rather than educate and train them to become safe and competent drivers. Rhys Parker, the instigator of this petition, said to members of the Petitions Committee:

“if young people are so dangerous that the only way to get them to drive safely is forcing them to pay £200 for an advanced driving test, why don’t we just make the driving test better?”

I agree. I think he has a point.

The driving licence was first introduced in 1903, but there was no test requirement. The test was introduced in 1935, and although there have been some changes along the way, such as the introduction of the theory test in the mid-’90s, little has changed. In that time, vehicle technology has changed, cars have become much faster and we have gone from fewer than 1 million cars on our roads to more than 30 million.

The driving scene in our country has changed completely. I believe we need a better, more rigorous and comprehensive system of training and testing that is fit for our age and our roads. I suggest that passing the driving test should be seen not as a one-off, but as a process. Under what has become known as a graduated driving test, new drivers would have restrictions placed on their driving. For example, they would not be able to drive at night or on motorways, or carry more than one passenger, until they received further tuition, gained more experience and further proved their ability to drive.

[Jo Churchill]

I thank my hon. Friend for the powerful points he is making. Will he consider the fact that some young people in our isolated rural areas need that access? Headway, a brain injury charity, spoke to me about the problem it has with carers. For a young person paid the minimum wage, a huge premium is a tough barrier that can prevent them from following a career they wish to pursue.

[Steve Double]

My hon. Friend makes a good point; she represents a rural area similar to mine. As I said at the beginning, that can be a real issue. For a young person in a rural area who needs a car to get to work, get a job or access further education, the cost of insurance can be a real issue. My two young sons passed their test quite young, and we had to work with them to find the money for the insurance. It is a real issue, and we need to tackle it at source by looking at the risk, rather than artificially managing it.

Local Government Finance

Debate between Jo Churchill and Steve Double

Wednesday 22nd February 2017 Commons Chamber

[Steve Double]

The right hon. Gentleman might have been reading the notes of my speech, because that will be my main point.

We undoubtedly need to reform local government, and I broadly welcome the changes the Department are introducing to the way local government is financed, making it much more directly accountable for raising and spending its own finance and far less dependent on central Government. I also welcome the renewed interest in the Rural Fair Share campaign to address the imbalance that has existed for far too long between the levels of funding received by rural councils as opposed to predominantly urban councils.

[Jo Churchill]

rose—

[Steve Double]

I will not take any further interventions, as time is short.

Local government spending still accounts for a large proportion of central Government spending, and it is understandable that we have had to make savings and cuts while we have been dealing with the legacy of the huge and record deficit we inherited from the previous Labour Government. We have had to find those savings across government, including local government. That is the context in which we must see the current situation.

However, I welcome the Minister’s confirmation that a fair funding formula for rural councils, based on the cost of delivery and need, will be brought forward. My concern is about the timing of bringing the review forward. I remember standing on this very spot in last year’s debate, and at the last minute the then Secretary of State provided some transitional funding to ease the huge cuts that rural councils faced, to make sure that the funding gap between rural and urban councils was not further extended.

On that basis, I supported the Government position last year, with the promise that this would be looked at. It is disappointing that we are here again 12 months later and so little progress has been made in addressing the issue. I welcome the fact that some transitional funding is still available for this year, but that will run out next year and there will be no cushion to ease the impact on the rural councils and the widening of that gap.

We must urgently bring forward this review and address this issue. As I said to the Secretary of State earlier, if we do not deal with it now, the unfairness and the lack of funding for rural councils will be baked into the system when we go to 100% retention of business rates. So it is important that the review is brought forward. We can no longer live with what we in Cornwall would call a “dreckly” approach. For the uneducated, that describes something that will happen at some undetermined point in the future. It is a bit like mañana, but not quite so urgent. It feels as though that is the approach that has been taken with the fair funding review, but we need to get on with it. We need to stop talking about it and actually deliver this for our rural councils as a matter of urgency.

I am happy to say that, based on the fact that last year’s funding agreement was a four-year agreement and the fact that the majority of councils have now set their council tax, I will support the motion and the Government’s position tonight. I will do so with a heavy heart, because I am disappointed at the lack of progress that has been made, but I take the Minister and the Secretary of State at their word when they say that these issues will be addressed. I will continue to make this case as strongly as I possibly can and to work with colleagues to ensure that the unfairness that has existed for far too long is addressed so that our rural councils will be much more fairly funded in the future.