Consumers, Estate Agents and Redress Bill [HL]

moved Amendment No. 88: 88: Before Clause 52 , insert the following new Clause— ““Standards of competence (1) Section 22 of the Estate Agents Act 1979 (c. 38) (standards of competence) is amended as follows. (2) For subsections (1) and (2) substitute— (1) The Secretary of State will by regulations made by statutory instrument designate any body of persons as an approved body which people engaged in estate agency work, including both the sale and lettings of residential property, must belong to. (2) The approved bodies must make membership conditional on signing up to rules and codes of conduct, which will include— (a) prescribe minimum competency standards; (b) ensure that firms have adequate professional indemnity insurance and, as appropriate, clients money protection insurance; (c) require a minimum level of professional development per year; and (d) require membership of a redress scheme.”” The noble Earl said: My Lords, this has been a very frustrating Bill to take part in. In Committeewe were hopelessly confused by the groupings of amendments. I commend the Minister for what he has done to make the groupings much better on Report. Now that we are on Report, we have had our concentration broken by what I would consider an unnecessary intervention of a Statement when we were well over two-thirds of the way through the debate. As usual, I must declare my interest as a consultant to an estate agency in London. I thank the Minister very much for the letters that he has written to me and for our meeting. I am extremely grateful to him; he could not have done more to at least listen to what I had to say, although whether it moved him at all is doubtful. Amendment No. 88 is a revised version of the one that I tabled in Committee. In Committee a number of arguments were made against my proposals, and I should like to put the counterarguments on the record. The first was that the standards and qualifications that I wanted would inhibit competition in the industry. I believe that the reverse is true; most honest agents want some form of qualifications and are happy to obtain them. Only very recently a record number of 1,200 people sat the various examinations that the National Association of Estate Agents sets. It is interesting to know that the average age of the members of that association has fallen to only 35. I believe that the minimum competency standards should be a basic knowledge of the law, building constructions techniques and valuation techniques. The minimum competency standards set by the NAEA, which are the same as the three points that I have just mentioned, equate to an NVQ level 3. Another argument raised against the measure was that the problem is not incompetence but one of malpractice and lack of integrity. We all support the idea of a redress scheme but it is equally important that provisions are made for structures to be placed up front. While malpractice and lack of integrity are a problem, they are often encouraged by a combination of not having to abide by rules and codes and from a lack of adequate understanding. Exactly the same arguments can be applied to all the other professions involved in the buying and selling procedure that have to have licensing and regulation; for example, conveyancers, solicitors, surveyors and financial advisers. The Government’s position that you can regulate most of the groups dealing with buying and selling but shy off when it comes to estate agents is totally illogical. It was argued that my concerns would be dealt with by the negative licensing powers of the Office of Fair Trading. Again this comes back to the issue that a redress scheme will punish only those who have committed a crime; it will not prevent the crime. I welcome the Government’s actions on implementing a redress scheme but I believe that it should be up front and that positive licensing is the easiest and most effective method to check malpractice within the estate agency profession. The noble Lord, Lord Borrie, said that, as usual, all I really wanted was an expensive closed shop. I counter that by repeating the point that all the other professional bodies involved in buying and selling are effectively closed shops as a result of government action. Thousands of consumers are being ripped off every year because a small number of estate agents are not qualified and are acting as cowboys in what should be a sensible profession. It is not the case that industry bodies are keen to control the industry themselves. Under my proposals the Secretary of State would agree what the approved body would do or require. I should like to see an approved body that would ensure minimum competency standards and indemnity insurance and client protection insurance as required. I related to the Minister the insurance that I have to carry in order to retain my membership of the Royal Institution of Chartered Surveyors. Membership of a redress scheme is covered by the Bill. There should be a commitment to a minimum number of hours of continued professional development. That happens in most industries and it is only logical that it should be extended to estate agents. Consumers will be confused as in due course some estate agents will be regulated and licensed under the alternative business structures in the Legal Services Bill. A large number of the bigger estate agents want to go into partnership with lawyers and produce a one-stop shop, and they will be regulated when they do so. So we will have a dual market—some will be regulated but others will not. I think that the real reason the Government are refusing to act is what is happening in Europe. As most of your Lordships will know, the EU is looking at the whole question of standards in estate agency. Could the Minister confirm that the final draft of the proposed standards which is being drawn up is likely to be agreed in Rome in March, that there will then be a further 12 months for discussion and that the final standards will be published in March next year? Could the Minister also confirm that Brussels recently informed the Confédération Européenne de l’Immobilier that if countries do not take up the standards voluntarily, it will look to bring them in by directive in 2011-12? As those standards are very similar to those of the National Association of Estate Agents, I take the rather cynical view that the Government are saying, ““No, we are not going to do it now because we can blame it all on Brussels in four years’ time when it will be imposed on us””. That is not a sensible way in which to legislate. There has been British representation in all this through the British Standards Institute. The measure has been supported by the Government, and now the Government fail to take the initiative. That is a very good reason for moving this amendment. I beg to move.