Consumers, Estate Agents and Redress Bill [Lords]

I also welcome the Minister to his new job. This debate is my farewell song on these matters, before I start to deal with planes, trains and automobiles, but it has been a privilege to have been associated with this Bill. We fully support the spirit and intent of new clause 1, although the drafting is somewhat strange, as it does not make it clear that the proposal is meant to apply to the regulation of lettings and direct sales. We know that that is the intention from the debates that we have had, but the text contains none of the relevant language. We also note that the new clause contains very little discussion of timing, and makes no mention of consultation. I associate myself with the various observations that have been made about the lack of adequate regulation for lettings and direct sale, but I shall not repeat arguments that have been expressed in Committee and again today. The key purpose of new clause 2 is to establish minimum standards of training and qualifications for estate agents, and for people who do estate agency work such as lettings and direct sales. We also want to ensure that firms have adequate professional indemnity insurance and, where appropriate, insurance to protect clients’ money. Any order made under the new clause would need the approval of the House under the affirmative procedure, and the Secretary of State would be required to consult before making any such order. We touched on these matters in Committee, but in no great depth. Our debate focused on the arguments made by Which?, the various anonymous surveys that it carried out, and its investigations into issues such as offers, valuations and contracts. Those arguments were well set out earlier by the hon. Member for Cotswold (Mr. Clifton-Brown), and the response to the magazine’s inquiries showed that British people do not trust the estate agent industry or believe that they are treated in a way that is always responsible, competent or honest. The fact that the profession is not respected is very significant, and we believe that people’s concerns should be heard and understood. When we raise the issue of requiring proper training and qualifications, we are always told that that would place an undue burden on the industry and act as a restraint on people entering the profession. However, new clause 2 is supported by Which?, the National Association of Estate Agents, and by Halifax estate agents. The two chartered surveyors in the House will be interested to hear that the new clause’s principle and intention are supported by the Royal Institution of Chartered Surveyors, although it would prefer the provision to be included on the face of the Bill rather than introduced as a statutory instrument. The argument that the new clause would be onerous and act as a barrier to entry is fallacious. It has been pointed out that good estate agents want a requirement for qualification and training, and that it is those who are not competent who run away from the proposal. In addition, it takes only about six months to meet the present NAEA qualifications: that is hardly a barrier to entry, and the exam is being adapted so that people can do it online, at their own convenience. People do not have to give up jobs to enrol in a complex school programme. There is a great deal of flexibility, and the NAEA qualification can be provided in an efficient way that fits with people’s general diaries and schedules. Interestingly enough, the pass rate for the NAEA qualification is about 62 per cent., and the people who want to do lettings do rather worse than that. That means that something like 40 per cent. of the people taking the exam—which is equivalent to national vocational qualification level 3—do not pass and have to do further study to achieve the qualification. That makes it clear that many people go into the estate agency business who simply are not competent. The exam structure focuses on basic law, building construction techniques and valuation techniques. How can a person who does not have mastery of those three disciplines advise people on what is probably the most important investment that they will make in their lives? The sums of money are very large, and people are bound to lack competence of their own because they are likely to buy a house only once, twice or three times in their lives. It is not surprising, therefore, that they look to estate agents for competence, and new clause 2 would make minimum standards and qualifications a requirement. It has been claimed, both on the Floor of the House and in Committee, that rogues are not stopped by requiring them to take exams, but exams can prevent incompetence. I do not oppose the redress scheme, because rogues in the industry must be dealt with, but we also have to tackle incompetence. Prevention is better than either cure or punishment in that respect, and we should ensure that the industry meets the standards that the public expect. We would not dream of allowing an unqualified solicitor to draft the language of a contract, or of hiring an unqualified surveyor when we are buying a house. It is beyond belief that anyone would want to use an incompetent estate agent. I advise the House that we did not discuss these matters in depth in Committee, and that we had no opportunity to divide on them. If the Minister makes a satisfactory response, I shall not press new clause 2 to a Division. However, if the Government do not accept the essence of the proposal, I shall press the proposal to a vote.