Consumers, Estate Agents and Redress Bill [Lords]

We will discuss the detail in Committee, but obviously, we want to deal with that as expeditiously as possible. The hon. Member for Rutland and Melton asked whether penalty charges should be higher. In the other place, the Government accepted an amendment to double the maximum penalty charge from £500 to £1,000 in response to concerns about the level of the charge. A penalty charge is an on-the-spot fine without any opportunity for estate agents to put their case to an independent adjudicator, so a high penalty charge would not be fair. Ultimately, estate agents can lose their livelihood if they are banned by the OFT for not belonging to a redress scheme. The hon. Gentleman asked whether the Bill covered letting agents, as did other right hon. and hon. Members. As my right hon. Friend the Minister of State explained, the evidence base for the Bill’s provisions is the 2004 OFT report on the estate agency market. Estate agents are governed primarily by the Estate Agents Act 1979, which does not cover letting agents. The Bill amends that Act, so its provisions do not apply to letting agents. The tenancy deposit schemes due to be introduced in April 2007 under the Housing Act 2004 will offer greater protection to people who are at unfair risk of losing their deposits—one of the main sources of consumer detriment in the lettings market—but I acknowledge the point made by the hon. Member for Hertford and Stortford, that amendments may well be tabled in Committee. We look forward to debating them. The hon. Member for Rutland and Melton, who led for the Opposition, expressed concern about the publication of reports, a point also raised by the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith). Although we envisage that the Secretary of State will generally wish to publish a report requested by him from the new NCC, the discretion given by clause 18 not to publish is necessary to deal with particular circumstances, such as when the report contains information that is commercially confidential or price-sensitive. Such information might be necessary to support the recommendations in the report. A requirement for the Secretary of State to publish every report requested by him might have a deterrent effect on external experts, industry or other stakeholders, who might be reluctant to provide information or advice because it might be disclosed. That could inhibit the provision of useful or important information to aid the preparation of the report by the new NCC, to the detriment of the quality of the final report and the subsequent advice provided by the Secretary of State. I hope that that deals with the sceptical comment by the hon. Member for West Aberdeenshire and Kincardine. The hon. Member for Rutland and Melton said that regulators should have a duty to prescribe complaint-handling standards. The position that we have adopted is to give regulators the power to make regulations to prescribe complaint-handling standards that would be binding on regulated providers. We took this approach because we believe that sectoral regulators are best placed to take a view on what is appropriate and necessary within their own sectors. The matter was raised in the other place, and we recognise that this is an important issue. No doubt we will return to it in Committee. My hon. Friend the Member for Aberdeen, South (Miss Begg) asked about the unfair commercial practices directive and whether that would catch sales tactics where the trader does not mention prices. To clarify my right hon. Friend the Minister of State’s earlier point, the unfair commercial practices directive will introduce a general duty for a trader not to treat the consumer unfairly. It will also ban outright certain types of unfair commercial practice, such as aggressive doorstep selling. The hon. Member for Richmond Park raised a similar point when she asked whether the Government would use the measure to tackle companies that charge consumers more if they do not use direct debits. The terms in the contract with the consumer that allow the charge to be imposed could be assessed for fairness under the consumer regulations imposed by the Office of Fair Trading, so it is not necessary for the unfair commercial practices directive to require that. The hon. Member for Mid-Worcestershire and my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) asked about the NCC, and about the fact that it did not have a specific function to look at overpricing in energy and water. The new NCC will be able to examine any market in which it identifies significant consumer detriment. That might include prices in the energy or water sector, although the new NCC must recognise the existence of other consumer bodies, such as the Consumer Council for Water, when exercising its function. My right hon. Friend also asked about complaints that might in future be split between the new national consumer council and Consumer Direct. The first port of call will be Consumer Direct, which can refer consumers to the supplier, or to the redress scheme if the supplier has not resolved the problem to the satisfaction of the consumer. The redress scheme will be able to resolve a complaint and award compensation, where warranted. Energywatch does not have powers to do that. The new NCC will be able to support vulnerable consumers through the process—a question raised by the hon. Members for West Aberdeenshire and Kincardine and for Mid-Worcestershire. The understanding of what constitutes vulnerability is developing all the time and will no doubt become better informed in future. The Bill therefore leaves it to the new council to assist those whom it judges to be unable to progress complaints by themselves. In those circumstances, it would not be sensible to make it a duty.