Defective Building Work: Householder Protection (Hansard, 16 April 1996)

Lord Lucas
My Lords, the Government have absolutely no intention of introducing any such compulsory schemes. They would be an impractical and bureaucratic nightmare, expensive to operate, and unlikely to achieve their objectives.

§ Lord Borrie
My Lords, I thank the noble Lord for his very negative Answer. However, is he aware that such a proposal as suggested in the Question arises from the respected all-party organisation of lawyers, known as Justice, and that without a compulsory scheme it is most unlikely that the significant number of householders who every year suffer from defective building work will ever be able to have an effective legal remedy?

Lord Lucas
My Lords, I believe that the noble and learned Lord, Lord Woolf, is currently looking at the legal side and at how court procedures can be improved. We await his report with great interest. I am, of course, aware of the Justice report and have studied it. However, we approach this from a different angle from noble Lords opposite. We believe that where possible people should take responsibility for their own lives. The party opposite believes in a stakeholder society where other people take that responsibility.

§ Baroness Gardner of Parkes
My Lords, will my noble friend confirm that the National House-Building Council, in which I must declare an interest as an honorary vice-president, does a very effective job already in insuring new-build properties for anyone registering with it?

Lord Lucas
My Lords, I can confirm that we are delighted by the progress made by the National House-Building Council in terms of looking after new properties. In the main, such properties are built by large firms and the scheme works well for them.

§ Lord Williams of Elvel
My Lords, in his rather dismissive Answer, the noble Lord said that he had read and, indeed, studied the Justice report. But has he paid attention to the foreword of his noble friend the noble Lord, Lord Alexander of Weedon, who is recognised by all in this House as being a distinguished lawyer, in which he states: 556 Over the last quarter-century many attempts have been made by official and semi-official bodies to tackle this problem. They have not succeeded"? What Justice is proposing in the report is not bureaucracy; it is not something to which the noble Lord objects; it is a perfectly simple way of solving a problem that has affected at least 3 million people over the past three years in connection with building works. Will the noble Lord take the suggestion a little more seriously than he has up to now?

Lord Lucas
My Lords, we have taken it seriously and we have arrived at our conclusion. I do not believe that the noble Lord or, indeed, Justice has any evidence of the extent of the problem. There are no figures available and I do not believe that Justice tried to find any. It certainly produced none in its report.

§ Lord Williams of Elvel
My Lords, will the noble Lord look at the foreword that I have quoted in which his noble friend the noble Lord, Lord Alexander of Weedon, stated: an Office of Fair Trading survey estimated that every year as many as three million customers were dissatisfied with building work they had had done"? Given that the noble Lord, Lord Alexander of Weedon, signed that, how can the noble Lord, Lord Lucas, say that there is no evidence?

Lord Lucas
My Lords, I am quite aware of what my noble friend Lord Alexander said in his introduction. However, that survey was not a statistical survey on which it is possible to rely. I know that my noble friend believes that that is sufficient evidence; we do not.

§ Lord Clark of Kempston
My Lords, does my noble friend agree that monitoring such a scheme would mean an additional quango? As we already have sufficient quangos, would it not be much better to let private enterprise look after this sort of thing?

Lord Lucas
My Lords, if such a scheme were to work properly, it would need a whole enforcement mechanism, which would be both expensive and exceedingly onerous on builders. It would mean a great deal of extra expense for householders who would be forced to pay for it. We do not believe that that can be justified unless the person who wants the work done specifically wants such a guarantee, in which case he or she can go to one of the firms which operates a voluntary guarantee scheme where he or she may expect to receive such a guarantee and to pay more for it.

§ Lord Monkswell
My Lords, bearing in mind the Government's initial Answer that they totally reject an insurance-based scheme, and bearing in mind the protection that is offered to the public as a result of the education, training and qualifications of the medical and legal professions, will the Government think in terms of ensuring that building operatives who engage in work for the ordinary public are properly educated and trained to a high standard of proficiency?

Lord Lucas
My Lords, it is all a question of proportionality. If you are going into hospital to have 557 your heart operated on, you want to be able to rely absolutely on someone who has an expertise that you cannot begin to comprehend or criticise. However, I think that most of us expect to know a good painter or a good electrician when we see one.

§ Lord Haskel
My Lords, is the noble Lord aware that many complaints relate to money paid in advance to small builders and that the proposed scheme would at least enable people to get back that money; whereas at present it is often impossible to get back one's money from small builders if one is dissatisfied with their work?

Lord Lucas
My Lords, we agree that in principle there may be a potential for improving court procedures to enable people to get money back from delinquent builders rather better than they can at the moment. That is the subject of a number of paragraphs in the Justice report and another study that is currently being conducted by the noble and learned Lord, Lord Woolf. As far as concerns the imposition of a compulsory insurance scheme to cover every individual builder and DIY effort in this country, to police it and to pay for it, we believe that that amounts to an elephant sitting on a toadstool. It will crush it. It is totally disproportionate to the problem.

§ Lord Borrie
My Lords, does the Minister appreciate that there is no licensing, registration or quango involved in the scheme that is presented by Justice? The scheme is self-enforcing.

Lord Lucas
My Lords, it does not seem to me to be self-enforcing. It contains no mechanism which in practice would enable it to be enforced unless there is policing of it to make sure that builders offer this guarantee and it is happening. For example, I am sure that the noble Lord is aware of the additional costs imposed on householders by the effective cartels in the alarm industry, which about double the cost. In general building work there is no cartel and the costs are much lower. We do not wish to impose these extra costs on householders for very little benefit.

§ Lord Elton
My Lords, is my noble friend aware that the NHBC scheme, referred to by my noble friend Lady Gardner of Parkes, is self-enforcing, does work and should be encouraged to spread, thus obviating the need for anything else?

Lord Lucas
My Lords, I believe that the NHBC scheme covers about 95 per cent. of new build, and that it does very well.