A half-hearted and utterly toothless version of the Government's Home Information Pack (HIP) initiative finally comes into force across England and Wales tomorrow - a policy that has been so watered down it will now fail to remedy any of the problems that it was first designed to tackle.
The policy wonks who cooked up HIPs almost a decade ago had hoped to simplify the process of buying a house in Britain, ensuring that prospective buyers did not waste thousands on surveys and solicitors fees, only to find themselves gazumped at the last minute.
Although HIPs, in their original guise, would have increased the cost of selling a home by several hundred pounds - forcing sellers to pay for a survey and various relevant searches - they would have reduced the expense for buyers, helping first-timers, who are now increasingly priced out of the market, to get a foot on the ladder.
As with any radical change, there was plenty of resistance. The Royal Institution of Chartered Surveyors was unhappy about the prospect of their members having to get a new set of qualifications. Estate agents were concerned that the introduction of HIPs would discourage people from putting their houses up for sale - causing a possible market slump. Consumer groups were worried about unnecessary additional costs being borne by home sellers.
Nevertheless, as the Government began to talk in ever more certain terms about HIPs, the industry mobilised itself for their introduction. So far, so good.
It all started to go wrong last summer, however, when the Government suddenly decided to rip out the heart of HIPs, by making the "Home Condition Report" an optional extra. The HCR was the part of the HIP which would have compelled sellers to pay for the survey and relevant searches. Without it, HIPs began to look increasingly irrelevant.
By the time HIPs approached their original proposed launch date of 1 June this year, they were nothing more than a way of forcing sellers to pay for an environmental assessment of their property (something that all UK households will have to do by 2009 to fall in line with EU policy). And after screams that the industry still wasn't ready for the introduction of even this diluted and fairly pointless policy, the Government threw yet another gallon of water into the policy pot, moving the launch date back another two months, and agreeing to only force houses with four bedrooms or more to adhere to its new rules.
As a result, the number of home sellers who will be forced to buy a HIP after tomorrow's launch will be minimal. And of those who do fall under the new legislation, many will simply get around it by describing their fourth bedroom as a study.
Admittedly, the Government has plans to roll out the policy more widely in time. But only so that it can satisfy the EU rules on home energy assessments by 2009.
The policy wonks who cooked up HIPs 10 years ago have good reason to be depressed. In their current form, the packs not only fail in their efforts to make it easier and cheaper to buy a home, but they also inadvertently add an additional layer of bureaucracy and expense to the process of selling a property. The Government would be better withdrawing them altogether, rather than wasting any more time on this embarrassing and sorry fiasco.
ICI has the courage to say No
All too often the captains of British business have been prepared to roll over at the merest hint of an offer and the institutions that hold the majority of their shares have been complicit in their surrender. Bids, after all, help to boost the short-term performance of their funds, which does no harm at all to their remuneration packages.
In recent years, this has led to a slew of quality companies falling to foreign bidders, or private equity firms, while the replacements that have joined the markets have looked, well, rather less than top class. Perhaps this has begun to concentrate minds. Yesterday, ICI refused to take the easy route and surrender to Akzo Nobel for 650p per share, with the public backing of Standard Life. The Dutch group raised its offer by teaming up with Germany's Henkel, which will extract considerable synergies from the adhesives and electrical coverings businesses it will take from the deal. ICI is therefore quite right to demand that some of those synergies should go to its shareholders.
The fact that Britain has refused to get involved in the sort of protectionist games indulged in by many, if not most, of its developed rivals, is a good thing. It leads to stronger markets and, ultimately, stronger companies.
But bidders should not feel that they can come in and buy companies on the cheap. Both the London Stock Exchange and J Sainsbury have proved that shareholders can be richly rewarded if management has the courage to say no. It will not be easy for ICI's management to pull of this trick, but, if Akzo is unwilling to raise its game, they deserve the chance.
Pensions and private equity
There wasn't much bite in the Treasury Select Committee's report on private equity. That wasn't that surprising. What the MPs needed was a crash-course in the industry. That they got. Now they say they will hold another round of hearings before they make any hard recommendations.
What was a bit odd, however, was that there wasn't too much bark in the report either. After all the public grandstanding, they produced 57 pages with nary a mention of one of the most crucial aspects of the private equity debate: pensions.
Most of the money that the buyout industry uses comes from large pension pots - about two-thirds by the committee's estimation. Yet the committee had precious little to say about whether the buyout barons are responsibly investing the future retirement funds of everyday workers, and what they can do to assure that that happens.
One way to help to do so would be to grant a larger role to pension trustees of companies involved in a buyout - either bringing them in earlier in the process or giving them more legal power to negotiate or object to a deal. At the moment, the law does not require that pension trustees even be informed that there is a bid in the works. They could also ask trustees whether it is responsible to be investing in funds that can overlook the interests of other pension scheme members.
Lawrence Graham, the City law firm, has pointed some of this out in an open letter to committee honcho John McFall. He and his colleagues would do well to take it up in the autumn. It seems likely that at the very least the next round of hearings will be more substance, less theatre. And the playing field will be a bit more level. The committee was clearly lacking a basic understanding of the industry that it now has.
Merrill Lynch and Moneysupermarket
I committed something of a howler in Friday's Outlook column. In writing about Moneysupermarket.com's difficult IPO, I quite wrongly said Merrill Lynch had advised the internet-based price comparison service on its flotation, launched during a challenging week for stock market investors.
Merrills has had some involvement with Moneysupermarket.com. It successfully advised founder Simon Nixon, when he bought out sleeping partner Duncan Cameron's share of the business earlier this year, a deal that was crucial in paving the way for the company to list on the London stock market.
However, it was Credit Suisse, rather than Merrills, which actually ran the Moneysupermarket.com new issue last week. My apologies to all concerned.Reuse content