Consumers, Estate Agents and Redress Bill [Lords]

If the hon. Lady does not have in mind an industry body for the performance of that role, which body would it be? The debate in Committee focused on the idea that it should be an industry body, so as an important rejoinder I underline the dangers attached to the route she suggests. I accept that the discussion would be slightly different if another kind of body was involved, but the approach in the Bill is right. It is based on the work of the Office of Fair Trading. The Bill gives force to recommendations based on evidence provided by the OFT, whose study showed that the best incentive for raising standards is the threat of being taken before a redress scheme. I agree with some of the points made by the hon. Member for Cotswold; the real danger is from rogue estate agents whose problem is not competence but honesty. They know exactly what the rules are but they also know how to get round them. Handing over control to an industry body would simply restrict entry to the profession with no guarantee of getting rid of the rogues, as the hon. Gentleman said. The clear advice from the OFT was that the cost of putting up barriers to entry, which would also be likely to raise prices for consumers, would outweigh the benefits of that approach. We are confident that requiring estate agents to belong to approved redress schemes will improve standards in the industry. We are also strengthening the enforcement powers in the Estate Agents Act 1979 so that the Bill ensures that breaches of statutory undertakings and enforcement orders under the Enterprise Act 2002, as well as the commission of specified criminal offences, can result in an investigation of an estate agent’s fitness to practise, which will enable enforcers to deal more effectively with agents who rip off their customers, and take them out of the market. New clause 2 highlights issues about professional indemnity insurance and the handling of customers’ funds, and I shall comment on both. Estate agents would be unwise to trade without a minimum level of professional indemnity insurance, which is a condition of membership of the National Association of Estate Agents. It is also a condition of membership of the existing voluntary redress schemes for estate agents; for example, the ombudsman scheme for estate agents requires firms to have minimum cover of £100,000 and the surveyor ombudsman scheme requires members to have cover of at least £250,000. The Bill will require estate agents to belong to such schemes.