Consumers, Estate Agents and Redress Bill [Lords]

Today’s debate is best described as short but surprisingly insightful; in that respect, it reminds me of the Minister for Trade. We have heard a number of contributions from Members on both sides of the House. The right hon. Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) not only tested our ability to name his constituency but highlighted some of his concerns about the way in which the jigsaw will be put together. The hon. Member for Richmond Park (Susan Kramer) spoke of a common purpose. I confess that I was a little confused to hear her first suggest that more organisations should be involved in the Bill, and then ask why Postwatch and Energywatch were included. However, she went on to reiterate our concerns about the need to modernise the Estate Agents Act 1979. The hon. Member for Brighton, Kemptown (Dr. Turner), who is sadly not in the Chamber at the moment—[Interruption.] I beg his pardon for having missed him; he has moved from left to right, which is always a welcome direction. He highlighted the need for the Minister to reconsider the issue of positive licensing, and he rightly discussed whether residential lettings should come within the scope of the legislation. We then heard an excellent and comprehensive contribution from my hon. Friend the Member for Mid-Worcestershire (Peter Luff), who is of course the Chairman of the Select Committee on Trade and Industry. He put us all in our place, perhaps teasingly, by reminding us just how much we are trusted by the public—about as much as estate agents and journalists. He stressed that the debate should be about practice, not principle, and he raised a number of particularly good points about the remit, and the cost and quality of services, including railway services. I hope that the Under-Secretary of State for Trade and Industry, the hon. Member for Poplar and Canning Town (Jim Fitzpatrick) will respond to those points. We then heard a contribution from the hon. Member for Crawley (Laura Moffatt), who has consulted her local estate agents; I noticed that they would like the Government to go further in part 3. An excellent, albeit concise, contribution was made by my hon. Friend the Member for Rochford and Southend, East (James Duddridge). He rightly concentrated not on mechanisms, but on the point of view of individual consumers, and the effect that complaints and difficulties of the kind that we have discussed often have on them, particularly those in vulnerable communities. The hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith)—there have been a range of interesting Scottish constituency names tonight—rightly highlighted the current post office closures. He also mentioned the confusion in the energy market about billing, and about whether the market is operating effectively. Last but by no means least, we heard the excellent contribution by my hon. Friend the Member for Northampton, South (Mr. Binley). He raised several important points on behalf of his constituents, but he also raised concerns on behalf of small businesses, and he was absolutely right to do so. If I may say so without embarrassing him, he has experience in that field, and speaks with a passion on the subject, and I always find it enlightening to listen to his contribution. I am grateful to him and other right hon. and hon. Members for their contributions. At the beginning of the debate, my hon. Friend the Member for Rutland and Melton (Alan Duncan) confirmed that although we have reservations about the Bill, we endorse the Government’s aims and many of the measures in the legislation. As the Minister of State mentioned, pressure sales tactics are still catching people out. As a result, it is becoming increasingly clear that people need the same rights in respect of cancelling contracts that result from solicited sales visits as those that they have in relation to unsolicited visits. The current distinction is being exploited by the unscrupulous. Although I always begin from the principle of caveat emptor—buyer beware—in this instance, the evidence justifies a change in the law. We have significant reservations about certain aspects of the Bill and about how the legislation will work in practice. As the debate has shown, there are concerns about the planned merger of watchdogs, the future handling of complaints, and how transparent and effective the new regime may prove to be in practice. There is a strong sense that the Bill is a missed opportunity, to use the words of the hon. Member for Brighton, Kemptown, especially in relation to the regulation of estate agents. I shall address that point further in due course. As hon. Members have said, the first part of the Bill seeks to merge Energywatch, Postwatch and, in time, the Consumer Council for Water, into a new statutory national consumer council. The Minister of State told us at the beginning of the debate that the Government’s purpose is to streamline and strengthen consumer advocacy—a perfectly reasonable aim—but the Government have yet to prove that the new arrangement will strengthen the voice of the consumer. It could well do so, if the merger is implemented effectively and efficiently, but sadly the Government have a pretty dreadful record on merging public bodies. For example, on health care, in my county alone, the Government have merged and remerged strategic health authorities three times in five years, wasting tens of millions of pounds. As my hon. Friend the Member for Rochford and Southend, East said, sometimes we have to fix the problem, not simply rearrange the deckchairs. Given that, and given the points raised by my hon. Friend the Member for Mid-Worcestershire, the Under-Secretary needs to show us, both here and in Committee, that sector-specific skills and experience in postal, energy and water services will not be lost in any merger, or during any transition. In particular, in view of the cuts that the Government are forcing on to the post office network, we will seek a cast-iron guarantee that the abolition of Postwatch will not mean a diminution of public representation at this crucial time. As the Under-Secretary is directly and personally responsible for Royal Mail, his reply to that point needs to be clear and unequivocal. Prior to this debate, serious concern was expressed by the water industry about the inclusion of the Consumer Council for Water in the new organisation, a move that many think premature. Indeed, several Members have echoed that concern today, not least because of the impending price review for water companies. We are encouraged to hear that the Minister of State recognises the problem and is considering constructive proposals for adjusting the merger timetable. We are happy to engage in open and positive debate on whether that should be achieved by bringing forward the price review, or by pushing the merger back, and we approach the subject with an open mind. There has certainly been no collusion, contrary to what the hon. Member for Richmond Park might assume. The reality is that we try to take a positive approach and to have an open mind on the subject. On part 2 of the Bill, which concerns redress schemes, I should first say that we were pleased that the Government accepted amendments from Conservatives peers in the other place. The amendments have improved the legislation; for example, complaints by gas consumers will now be investigated prior to any disconnection of supply, and not afterwards, as is the case at present. That change will resolve a long-standing grievance of many consumers. We want that constructive approach to the Bill to continue in the Commons. My hon. Friend the Member for Rutland and Melton pointed out that there is a clear need to improve companies’ internal complaints handling. As he said, the Government’s wish to improve redress schemes should be matched by good internal complaints procedures. World-class businesses already ensure that, because they recognise the benefit for them and their customers. In the other place, the Government were willing to make only a small concession on that point, in clause 49; yet as we have heard today, there is a good case for effective complaint handling to be a pre-requisite of redress scheme membership. I hope that the Under-Secretary is prepared to reconsider the issue, both in his reply and in Committee. Today’s debate highlighted an important concern about the relationship between the National Consumer Council and Whitehall. The existing council has, to date, enjoyed an arm’s length relationship with the Government, and that has enabled it to develop a reputation for objectivity and a certain independent authority. That detached position is vital if consumer representation is to remain effective within Whitehall. The arrangement set out in the Bill may reduce that independence. Members on both sides of the House raised questions about the new financial arrangements and the lack of transparency in the NCC’s proposed research and advocacy functions. If a new, larger council is to retain its objectivity, it is essential that it remain, and is seen to remain, detached from undue ministerial influence. I therefore urge the Under-Secretary to address that issue directly in his reply, and to set out clearly the nature of the proposed relationship, particularly between the Secretary of State and the new council. In his opening speech, the Minister of State spoke about the need to crack down on rogue estate agents. Sadly—and this does not bring me any comfort— the truth is that the Government have failed to match their rhetoric with action. While we welcome the measures to require estate agents to belong to an approved redress scheme, as well as the minor increase in powers for the Office of Fair Trading, that is as far as the Government are prepared to go. For many people, including the public and estate agents, those changes are inadequate. While most agents are competent and professional, a notable minority have been able to trade in an unacceptable manner. Sometimes it is a question of ethics, but sometimes it is a question of competence. For example, a Which? magazine investigation in 2005 showed that estate agency valuations may vary wildly, sometimes by up to £125,000. On some occasions, agents deliberately withheld or misrepresented offers. As a result, according to the Consumers Association, 70 per cent. of people think estate agents frequently give misleading information about properties. Part of the legislative problem is that the original law dates back over 28 years. The Government’s amendments to the Estate Agents Act 1979 merely tinker at the edges, and an overhaul is needed. We are therefore calling for the 1979 Act to be modernised by the Bill, and for a significant increase in the maximum fine to deter rogue agents. First, the definition of estate agency work must be extended. It should include recent trends such as off-plan sales and direct sales by house builders, which were rare in 1979 but are now commonplace, and are not covered by the law. Secondly, residential lettings must be incorporated into the regulations. Estate agencies, as we have heard, handle millions of such lettings and, according to the National Association of Estate Agents, problems with lettings are one of the main sources of complaints made against its members and against agents generally. As the Bill stands, that activity would not be covered, to the bemusement of millions of our constituents. At the beginning of the debate, the Minister of State spoke about a committee and a review, but he did not give a commitment to legislate. We shall therefore seek to press amendments to correct that omission, and I hope that we can work on a cross-party basis to improve the legislation. Those changes and the increase in fines will help home buyers, and assist the industry in cleaning up its act. Given that it is 28 years since the last piece of legislation in this area, I hope that we will not have to wait a similar period before we introduce new laws. However, I want to work with the Ministers to make sure that we achieve a positive outcome. There are many provisions in the Bill that will indeed help consumers in the utilities and residential property markets. While the Opposition have concerns about the practicalities, we have a long-standing commitment to the principle of informed consumer choice and effective advocacy, so we wish to improve the Bill, not to damage it. The Ministers enjoy the rough and tumble of party political banter, and so do I, but sometimes it is a distraction. All too often, it is used as an excuse for pushing legislation through the House unimproved. On this occasion, Members on both sides of the House have a genuine opportunity to scrutinise, amend and improve the Bill so that it will have a lasting impact on millions of consumers and house buyers. That collaborative approach will not please the press, who always love a row, but if Ministers are prepared to consider amendments on their merits, we are prepared to engage in proper parliamentary scrutiny of the Bill, which will not only be good for consumers, but will reflect well on the House.