Consumers, Estate Agents and Redress Bill [HL]

My Lords, it is a pleasure to speak in this debate, especially as it is my first legislative task in my new role as shadow spokesperson on DTI matters. I congratulate the Minister on his new post and welcome him to his place in what is a first for us both. I am sure that he will join me in welcoming in the European Union another first: the recent appointment of a dedicated commissioner for consumer protection, Mrs Meglena Kuneva of Bulgaria. I am sure we all look forward to meeting and listening to her. I declare an interest as the former chair of the National Consumer Council, as the current president of the National Federation of Consumer Groups and the vice-president of the Trading Standards Institute. I am delighted to open the batting under this brief in a field with which I am familiar. We had the opportunity to debate the Bill in your Lordships' House a week ago today, albeit with a lighter touch. I am pleased to have the opportunity to spend a little more time reflecting on its provisions and implications. As we have heard, the Consumers, Estate Agents and Redress Bill exists as a result of a DTI White Paper, A Fair Deal for All—Extending Competitive Markets: Empowered Consumers, Successful Business, the OFT’s two-year report on estate agency, and various DTI consultations. I shall address the three main areas of the Bill: the merger of the NCC, Postwatch, Energywatch, the Irish postal services committee and the Welsh and Scottish consumer councils; the new provisions for solicited sales; and the proposed amendments to the 1979 Act. While I am in favour of any plans to improve consumer understanding and create a more transparent system of complaint and redress, I am concerned by the Government’s proposed method of doing it. One needs only to point to Natural England as an example of the creation of a non-departmental public body from previously independent bodies—it is now over-budget and understaffed—to feel some trepidation at the proposals before us. We are already being lobbied by single-issue and consumer groups which are expressing anxiety about the new body, Consumer Voice. During its 31 years of existence, the NCC has been a low-cost guerrilla force for consumer affairs. It is vital that such a body, funded by and yet independent of government, is not turned into a large, process-led home for government policy. The National Consumer Council has always been consumer driven. It has driven improvements in consumer affairs worldwide. Since its establishment by the noble Baroness, Lady Williams of Crosby, when she was on the Labour Benches in another place, it has provided the benchmark for consumer protection. It has been largely left alone by successive governments of every hue. So I was concerned to read in paragraph 2.108 on page 31 of the regulatory impact assessment that as a result of the merger there is, "““a concern that the particular circumstances of individual sectors will be overlooked, particularly where a broadly based body tries to adopt general policies””." Given that Her Majesty's Government are clearly aware of the potential pitfalls of a broad merger such as this, can the Minister inform noble Lords how plans for the new consumer voice are going to be set to safeguard the National Consumer Council’s precious independence and independent policy development? Indeed, the NCC has raised concerns about the proposed merger. It is concerned about the precise function of the devolved elements of the new NCC and how those bodies will operate in devolved institutions. Can the Minister shed some light on that? In its briefing to me, the NCC has been keen to ensure that advocacy, redress and advice should be provided by specialist organisations. Can the Minister, in the light of the regulatory impact assessment’s concerns, assure noble Lords that that vital specialist advice will not be lost? It is vital that this merger is not merely treated as a cost-cutting exercise. I was concerned to read in the regulatory impact assessment that the DTI hopes to make savings on the complaints procedures by cutting complaints. It is a common myth of the public sector that complaints are a negative component of consumer relations. In fact, the opposite is true: complaints systems are the most effective representation of the needs and wishes of consumers. Companies such as Marks & Spencer or Tesco, which measure their footfall and measure the amount of complaints that they get against that footfall, value them highly as they are the route to improving customer service and the quality of the product. I hope that the Minister can reassure noble Lords that cost-cutting will not be a priority over consumer service. The Conservative Party wholly supports increasing consumer confidence and capability. We believe that that is best achieved by working hand in hand with good business. Through sharing responsibility, customers and provider relationships are strengthened and we on these Benches would welcome any Government’s commitment to make Britain the best country in the world for consumers by 2008, as this Government have done. On present form, that seems unlikely; our British consumers are dangerously in debt; the figure stands today at more than £1 trillion. Why have the Government not taken notice of those warning signals? In addition, 56 per cent of women and 43 per cent of men admit to Christmas debt caused by poor financial planning and, in the first three months of this year, there were as many insolvencies in this country as there were in the whole of 1997. Yet the Government seem to be oblivious, and we have heard of no engagement with this state of affairs from their Benches. Something is going very wrong, and we are a long way off this Government’s commitment. We are in debt and we are going the wrong way. On estate agents, it is important to face the facts. Last Monday, the Minister stated that 21 per cent of sellers and 23 per cent of buyers experienced problems with their estate agents. However, a different set of figures is much higher; a Which? survey showed that 70 per cent of consumers believe that agents give misleading information about properties and 90 per cent believed that their estate agents cannot usually be trusted. That paints a very different picture and a very bad one; it is very important to get these facts right.It is important because approximately 1.8 million people buy or sell a house every year. As the Minister has said, for most people it is the largest transaction that they will ever make, and there is a fantastic opportunity in this Bill to improve confidence for the consumer. There is a real distrust surrounding estate agents. I wonder why, given that 70 per cent of all estate agents are already signed up to voluntary regulation and have codes of practice and qualifications under the NAEA and the RICS. There is real ambition within the industry to raise standards and, therefore, its reputation. The NAEA and the RICS warmly welcome the creation of a statutory ombudsman and redress scheme. I, as do the trade bodies, wish the scheme great success. However, we remain concerned that redress will not adequately deter malpractice. I was concerned in my reading of the Bill that in reality redress will be a mere safety net and will not act as a deterrent. Noble Lords will be well aware that England does not have a positive licensing scheme for estate agents. Anyone can set up as an estate agent without any proven experience or aptitude. It is important that the redress scheme is tied closely to existing regulations. In light of that, the extension of the powers of the OFT in holding estate agents to account under a redress scheme is a welcome addition, but I am anxious that it may not go far enough. There are certain caveats in the Bill that I am concerned about. In new Section 23A, to be added to the 1979 Act under Schedule 6 to this Bill, it will be possible not only for the Secretary of State to limit the types of complaint that may be made under a redress scheme, but to limit the type of people who can make a complaint. I was as surprised to read this as I was to discover in the Explanatory Notes that a redress order, "““may apply to all who engage in estate agency work, or only to specified descriptions of them, and may exclude certain types of estate agency work””." I understood that the Bill would apply to all consumers in the estate agency market. I hope that the Minister will be able to reassure myself and other noble Lords that the Bill will do more than provide a smokescreen for an industry that is in serious need of a standard redress system. I should be grateful if the Minister could describe in detail what form a redress scheme will take. Is it likely that there will be more than one scheme? If so, how will consumers be reassured that both schemes are of the same high standard? I understand that the OFT will have the power to create a redress scheme without the approval of the Secretary of State, and that the Secretary of State will have the power to create his own scheme which will not need approval from the OFT. I am concerned about how consistency between the two potential schemes will be achieved so that they are transparent and inspire confidence in consumers seeking redress. It would be ironic were this Bill to champion transparency at the first point of contact with consumers, in Consumer Direct, only to create confusion in the very system that is set to provide redress for consumers where the initial stages fail to help. On solicited sales, ““doorstep selling””, while the new provision for solicited sales, introducing a cooling-off period equating to the consumer rights for unsolicited sales, is the right direction of travel, I have concerns about the implications for small off-premises traders such as plumbers and electricians and the possible impact on consumers. Can the Minister reassure me that a new cooling-off period for all solicited sales will not result in, for example, a plumber refusing to fix a broken boiler until the cooling-off period has been completed to avoid the consequences of a customer changing their mind? If this were to happen, how ironic it would be that we had supported a Bill that sought to improve consumer service in the watchdogs, but had worsened it on the ground. While there is much that is positive about the Bill, I remain cautious about the detail of many of these proposals pending answers from the Minister on structuring, costs and the detail of transition proposals in the following stages of the Bill. These Benches are committed to creating confident consumers. Where we believe that the Bill will achieve that, we will certainly support it.