Consumers, Estate Agents and Redress Bill [Lords]

It is universally agreed in the House that what we want to see in the United Kingdom is the best consumer protection in the world. The Bill goes some way towards that, although there are areas in which we would have liked the Government to go further. I shall deal with those later in my speech. We believe in strong consumer choice and freedom. We believe that information should be accessible so that people can exercise that choice. Conservatives have supported the broad thrust of the Bill, and we welcome this move by the Government. To that end, we have scrutinised the Bill in a positive and constructive way, as have the Liberal Democrats. We tabled more than 45 amendments in the Public Bill Committee alone. The Government have either accepted them or introduced amendments of their own. They introduced 11 as a direct result of that scrutiny. We are pleased by the bipartisan nature of the Government’s conduct of this part of the business. Conservative amendments have improved the Bill both in the Commons and in another place. Our emphasis was on enhancing the accountability of the new National Consumer Council. That has included ensuring that the Minister makes public the reasons behind any approval that the Government give to the NCC to acquire a corporate body. We welcome the announcement that the Minister made in his Third Reading speech of the new chair of the NCC, Lord Whitty. He has come a long way since he was general secretary of the Labour party, and he now has a huge challenge on his hands. We wish him well because we want to make the provisions in the Bill work, especially the combining of all the functions of the consumer council. I welcome the fact that the NCC will have offices in three parts of the United Kingdom—London, Cardiff and Belfast. I just hope that the good citizens of Scotland will not feel left out. I was delighted to follow the right hon. Member for Coatbridge, Chryston and not forgetting the good citizens of Bellshill (Mr. Clarke), but I am surprised that he did not refer to the fact that none of the offices were in Scotland. I hope that his constituents will not feel left out. We have helped consumers by ensuring that best practice in complaints handling is followed by all energy companies. We have ensured that the new NCC better reflects the successful operation and follows the best practice of the existing council. However, on the question of estate agents and supporting consumers, we feel that the Government have been half-hearted in their approach. I know that we had a bit of banter across the Dispatch Box on Report, but the opportunity to look at the regulation and operation of estate agents has been missed. Some of the most vulnerable in our society who get involved only in the letting side of the residential market will feel left out. I am sure that that is a matter that this Government or a Government of a different colour will have to deal with in the future. So the Bill has missed an opportunity in that respect. I welcome what the Minister said today—that those functions laid down in the Estate Agents Act 1979 will be extended to cover activities on the web and direct sales by developers. If those activities were covered by the definition laid down in the 1979 Act, they would be covered by the redress scheme and so on in the Bill. It is a lacuna in the Bill that it does not include the lettings market, especially as it is now becoming such a big sector of the residential market. As my hon. Friend the Member for Rutland and Melton (Alan Duncan) said on Second Reading, the Bill is important for consumers. We all recognise that. It merges key consumer bodies and makes a serious attempt to give consumers greater rights when buying or selling their house. I pay special tribute to the work done in another place by my noble Friend Baroness Wilcox, a former chair of the NCC who is greatly knowledgeable on this subject. I pay tribute, too, to my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) who would be handling the Bill but he cannot be in the Chamber today, as I have already explained. He played a big part in Committee. I pay tribute to all those who have taken part in the Bill’s proceedings. We cannot be proud of every Bill that goes through this place, but we can be proud of this one; it is a major step forward in consumer protection. Consumer protection is best achieved through a spirit of shared responsibility, with the Government, businesses and consumers all working together, although that is not always reflected in reality when businesses fall short of their responsibilities. As the Minister said, it is important that consumers have the means to obtain timely, efficient redress. That is the whole thrust of the Bill. If consumers cannot obtain that redress, we are all failing. It is on the basis of those principles that we approach the Bill. We set out a three-point plan when we began our deliberations on the Bill. The first point was to update the definition of estate agency work to include off-plan sales, internet property intermediaries and direct home sales by house builders. As we all recognise, 28 years have passed since the original legislation came into force, and we have had more than enough discussion about estate agents to understand what is in the Bill and what is, sadly, lacking. Secondly, we want to widen the scope of the Estate Agents Act 1979 to cover lettings and the residential property market and, thirdly, to increase the penalty for rogue estate agents to a maximum of £10,000. A maximum of £5,000 was set in 1979 and the figure has been unchanged since. Our belief is that it no longer represents a real penalty for rogue estate agents. We recognise that following the Government’s farcical efforts to introduce home information packs, they will be more wary of regulation for the housing market, but as I have explained, it is important in respect of the lettings market where there are some vulnerable people. Estate agents would have largely policed HIPs, and although we have regulated HIPs we have not yet completely regulated the estate agents who will administer them. There seems to be a certain irony in that. We differ from the Government in 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 an unhappy consumer. In the first instance, redress should be sought from the company from which goods or services were purchased. Effective complaints procedures at that stage would ensure that more complaints were resolved at the outset, which is surely a desirable objective. That would reduce rather than increase 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, yet there is little on the subject in the Bill. Existing redress schemes vary greatly, from granting intermediate 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 and creates an opportunity for supplier companies to avoid resolving complaints quickly, knowing that the process may turn out to be too long and drawn-out for the consumer to bother pursuing things further. As Members of Parliament, we all know that unless our constituents instruct us to pursue complicated and time-consuming matters on their behalf, they tend to be deterred; they say that it is all too difficult and just go away. It would be unfortunate if that were an inadvertent effect of the Bill. Conservative Members believe that companies should have in place effective internal complaints procedures to deal with consumers quickly. As my hon. Friend the Member for Rutland and Melton has pointed out, a similar model already exists in the financial services sector. The Financial Services Authority requires that membership of the financial ombudsman service is dependent on an organisation’s having an appropriate and effective internal complaint-handling function. We hope that a similar system will be replicated by the NCC and the bodies it looks after. Initially, the Government made only a small concession towards that approach when the issue was raised in another place. The phrase they introduced in clause 49 was deliberately vague; they required regulators only to"““have regard to…such principles as…the generally accepted principles of best practice””." That is far from specific and far from instructive. Through guidance to the NCC, we hope that the Government can help to resolve this issue. We are pleased that they have finally accepted the arguments we made in Committee and introduced seven amendments to make it compulsory for regulators to set standards of best practice. 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 it and the Government to be transparent and accountable. That is a laudable 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 reports shall be produced, it has discretion to publish. I think that, in this day of openness, there should, on the whole, be a presumption that the NCC should publish all reports unless, as we discussed previously on Report, they are commercially sensitive. When the Government ask the NCC to report on specific matters, the Secretary of State chooses whether the public ever get to see what the NCC has to say. This is a serious matter of public accountability and 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 very taxpayers who fund it. As I have said, we believe that all reports produced by the NCC, unless they cover commercially sensitive information, should be automatically available to the public. That need not be a cost issue, as has been claimed. The documents could simply be made available via the NCC’s website—a very simple matter these days. The Minister in the other place argued against that suggestion by claiming that not all such reports would be ““of interest to consumers””, but I fail to see how reports from a public body set up to look after consumers’ interests would not be of relevance and interest to consumers. I fail to work out what bizarre leap of logic produced this decision. It is not up to the Government to decide whether the reports are of interest to the consumer; it is up to consumers to decide whether they want to see the reports. If they are published on the website, they will be able to exercise just that choice. It seems a bizarre decision. It seems that the Government wish to use the NCC partially for their own purpose, 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 of whether the relationship between the Government and the NCC is sufficiently transparent. Conservative Members believe that it is essential that all such reports are published and that the NCC is perceived to be genuinely independent from the Government. For years the NCC has been funded by the Government, but it has been unhindered in choosing for itself the focus of the work that it undertakes and then reporting on it as it wished. I hope that the Minister will agree that this is a better way to continue in the interests of empowering consumers. We have had lengthy debates that have thoroughly examined the Bill, most of whose aims we thoroughly applaud. We hope that the NCC and the supplementary provisions in the Bill—for example, on solicited and unsolicited protection for the consumer in part 3—that we have hardly discussed today will work out well in practice. We commend the Government for having brought the Bill before the House, and we will not oppose it.