Consumers, Estate Agents and Redress Bill [Lords]

That does clarify the matter, so I am grateful to the Minister. However, in the course of his earlier answer, he used, perhaps by accident, the word ““voice””. However, we now know what the answer is, and that is fine. Our second area of specific concern is the lack of provision relating to internal complaint handling procedures. We differ from the Government over how best to ensure that complaints are dealt with quickly and effectively. Redress schemes are at the heart of the Bill, yet they are the last resort of the unhappy consumer. The first port of call is, and should be, the company from which the goods and services were purchased. Effective complaints procedures at this stage would have the effect of ensuring that more complaints were resolved at their outset. It would reduce the burden on the new NCC and make for better satisfied consumers too. Good internal complaints procedures are the best way to protect and empower consumers, and yet there is precious little about that in the Bill. Existing redress schemes vary greatly from granting immediate access to insisting on a three-month wait before the consumer can invoke the services of the ombudsman. Three months is a long time to wait for a consumer and that creates an opportunity for supplier companies to avoid resolving complaints quickly, knowing that the process for the consumer may simply turn out to be too long and drawn out for them to bother pursuing things further. Conservative Members believe that companies should have in place effective internal complaints procedures to deal with consumers quickly and efficiently. The best way to make that happen is to insist that internal complaints procedures that reflect best practice are a fundamental requirement for the membership of any approved redress scheme for which the Bill provides. This is not re-inventing the wheel—a similar model already successfully works in the financial services sector. The Financial Services Authority requires that membership of the Financial Ombudsmen Service is dependent on an organisation having an appropriate and effective internal complaint-handling function. We hope that a similar system can be replicated. I am glad to see the Minister nodding. That is good news, if that is what is going to happen. Initially, the Government made only a small concession towards this approach when the issue was raised in the other place. The phrase that they introduced into clause 49 was a tad vague. They required regulators only to"““have regard to…such principles as…the…generally accepted principles of best practice””." Of course, that is welcome, but, to my mind, it does not really go far enough. Effective internal complaint handling is central to the aims of the Bill. It should be a prerequisite of redress scheme membership and that should be included in the Bill. Redress schemes are being provided to catch the worst failings of their member companies, but it must be preferable for the redress schemes to be proactive about preventing failures in the first place. Our third area of disquiet concerns the independence of the new national consumer council. The Government have said that they want the new NCC to be independent and for the relationship between the NCC and the Government to be transparent and accountable. That is a proper aim, but I fear that the text of the Bill reveals a rather different approach. Clauses 17 to 19 concern reports and advice that the NCC may produce on consumer matters. In each of the circumstances described in the Bill, there is discretion as to whether the reports are made publicly available. When the NCC itself determines that the report shall be produced, it has the discretion to publish. However, when the Government ask the NCC to report on specific matters, it is the Secretary of State who chooses whether the public ever get to see what the NCC has to say. This is a serious matter of public accountability and of transparency for the consumer. The NCC will receive public funding, but the reports that it provides to the Government are not necessarily—so it seems—to be made available to the taxpayers who fund them. We believe that all reports produced by the NCC should automatically be made available to the public. That need not raise a cost issue, as has been claimed, because the documents could simply be made available on the NCC’s website. A Minister in another place, arguing against that suggestion, claimed that not all such reports would be ““of interest to consumers””. However, I fail to see how reports from a public body set up to look after consumers’ interests would not be of interest and relevant to consumers. Work that one out, Madam Deputy Speaker. I cannot and I do not know who can. It seems that the Government wish to use the NCC for their own purposes, or at least that could be the perception. The fact that the NCC will not have the right to publish its own reports goes to the heart of the question whether the relationship between the Government and the NCC is sufficiently transparent. On this side of the House, we believe that it is essential that all such reports are published to ensure that the NCC is genuinely independent. For years, the NCC has been funded by the Government but has been unhindered in choosing for itself the focus of the work it undertakes and then reporting on that as it wished. I hope that the Secretary of State will agree that this is a better way to continue in the interests of empowered consumers. Our fourth, and perhaps most serious, area of concern relates to estate agents. For the vast majority of people, buying a house is the single largest financial commitment they ever make. It is therefore right that the Government have sought to tackle the problem of rogue estate agents. We welcome the steps taken in the Bill to ensure that estate agents are members of an approved redress scheme and to give more powers to the Office of Fair Trading to take action, where appropriate, against estate agents. We are concerned, however, that in both those regards, the provisions do not cover all house sales. The Minister referred to this matter a moment ago, but we will have to explore it further in Committee. The Government cannot hide behind the supposed complications that follow amending an existing piece of legislation. It seems a grave omission that new homes sold directly by the developer and houses bought and sold off-plan are not covered. After all, that still involves the purchase of a house. It seems illogical that the Government should take a positive step regarding estate agents and yet not extend the same provisions to cover all house sales. I am also worried that the penalties set for estate agents will be too low. For example, the penalty for not joining a redress scheme will be only £1,000—I think that the amount was raised from £500 to £1,000 in another place. However, given that the average fee charged by estate agents is approximately three times that—£3,000—the penalty does not seem an adequate deterrent. We thus intend to table amendments in Committee that would raise the penalties for that and other rogue practices up to even £10,000. The third flaw in this part of the Bill, and the probably single biggest omission in the Bill, is the lack of any reference to the lettings and residential property management markets. There has been rapid growth in that sector over recent years. Indeed, since the Estate Agents Act 1979 was passed, the proportion of the housing stock that is let has increased by a third. Letting not only accounts for a significant proportion of the housing market, but provides a sizeable chunk of the work undertaken by businesses that would call themselves estate agents. That alone should be reason enough for lettings and residential property management work to be included in the definition of estate agency. However, if we add in the fact that consumers in the lettings market are likely to be less able than others to afford professional advice and advocacy, it becomes all the more important that protection should be afforded to them. In another place, the Government argued that fully updating the 1979 Act so that it would to cover lettings and residential property management would be too complex. Despite what the Minister for Trade said in his speech, we still find that totally and utterly unconvincing. The Government further argued that the Office of Fair Trading report on the estate agency market did not cover lettings—the Minister referred to that today. That was, of course, the Government’s omission, and I hope they will not in this House rely on that same omission as a justification for disadvantaging a whole group of consumers. The redress scheme model that is at the heart of the Bill is a simple enough idea and it is a good one. Conservative Members see no reason at all why the Government could not extend the areas of work covered by redress schemes to include lettings and residential property management. That would be a step in the right direction, but we would urge the Government to go further. They could, and should, use the Bill to update the 1979 Act so that it would cover lettings and, more generally, to make it better reflect a property market that has changed a great deal in the past 28 years. The House might not get an opportunity to examine estate agency again for another 28 years, so surely this is the right time to act. Although the Bill is somewhat flimsy, it is not a bad Bill, and there are aims in it that are to be commended, especially the provision of a basic redress scheme for home buyers. Our concerns are about the strength and independence of the new national consumer council and the regulation of estate agents in all their activities. In Committee, we will table amendments to ensure that the NCC is free to publish its reports, to increase the penalties for rogue estate agents, and to extend protection to all house purchases, including those bought off-plan, and the lettings market. In the spirit of what we have seen this afternoon, I hope that the Government will work constructively with us on those issues so that we can make a little more of this well-intentioned Bill. As it stands, the Government risk missing a golden opportunity to modernise the 1979 Act and to bring better protection to home buyers and tenants. The Bill should also give more power, protection and representation to consumers, especially those in vulnerable groups, so my colleagues and I look forward to working with the Government to achieve that.