Consumers, Estate Agents and Redress Bill [HL]

My Lords, I commend the Bill to noble Lords and very much welcome the positive remarks that have just been delivered by the noble Baroness, Lady Wilcox, particularly with regard to the estate agents redress scheme, which will cover estate agents generally rather than some two-thirds of them. I also welcome her positive remarks about the National Consumer Council. It has not always been thus from the Conservative Party. Soon after the Conservative Party, under Mr Edward Heath, was elected in 1970, it carried out its pledge to abolish the then Consumer Council, which had been set up less than eight years earlier. That was an unfortunate destructive act, because the Consumer Council had established itself as an authoritative and considered voice for the consumer, whose interests were so often neglected and ignored by other interests, represented by the CBI, the trade unions and the Government. The Labour Party opposed the abolition of the Consumer Council, and one of its first acts on resuming power in 1974 was to create the present National Consumer Council, as the noble Baroness has recognised, to look after the interest of consumers in general and—I emphasise this point because it was emphasised at the time—the interests of less affluent consumers in particular. The first chairman was later a Member of this House, who is sadly now deceased; Lord Young of Dartington. When the noble Baroness, Lady Thatcher, became Prime Minister, she allowed the National Consumer Council to continue. Mind you, she did abolish the Price Commission, which also protected consumers, but the National Consumer Council continued. Two of its later chairmen now grace the Conservative Benches in this House; the noble Baroness, Lady Wilcox, who has just spoken, and the noble Baroness, Lady Oppenheim-Barnes, who will speak next. The former Labour Minister, my noble friend Lord Whitty, who will be speaking later in the debate, is the current chairman. The 30-plus years of the National Consumer Council have been years of outstanding, productive effort in making the case so often for stronger consumer protection in many fields, and makingthat case on the basis of through research. That has always been regarded as essential. This Bill has to take account of the fact that a number of industries have been privatised or deregulated, and various specialised, particular consumer representational bodies have been created. It makes sense in the Bill—although the noble Baroness has raised some perfectly pertinent questions about ensuring that no little bit gets lost sight of when they are merged—that Energywatch, Postwatch and others should be merged with the National Consumer Council. I was rather astonished, however, not by what the noble Baroness, Lady Wilcox, said today, but what she said a week ago, on 27 November. I see no basis for the noble Baroness asserting in the debate on the gracious Speech that the National Consumer Council is now set to be ““another government mouthpiece””. I hope that she will reconsider that point, because it is far from the mark. The National Consumer Council will continue to be, and is intended to be, independent. Anything else would be of no use to Her Majesty’s Government—whether Labour, Conservative or any other. I have noticed over the years that the National Consumer Council has overlapped somewhat with the Office of Fair Trading in giving information, advice and education to consumers. Both it and the DTI have been engaged in Consumer Direct, the valuable telephone and online consumer advice service. It does not matter too much if there is some overlap of that kind. High-pressure salesmanship has plagued consumers in various ways for many years. A deterrent against high-pressure salesmanship on the doorstep and in your own home has been the statutory cooling-off period, which gives the right to cancel contracts. But that right has not been available if the consumer has expressly requested or solicited the visit. Therefore, I welcome Clause 58 of the Bill, which extends consumer rights to cancel when home visits have been solicited by the consumer. Surely, that is right. Whenever a consumer is visited at home, there is a risk of undue pressure to sign up to some sales proposition simply to get rid of the persistent and, no doubt, endlessly talking salesman. After all, you can hardly walk out of your own home like you can from a shop. It must be the lawyer in me that points out that the additional consumer protection in Clause 58 comes under the heading ““Miscellaneous and general””. I suggest to the Minister that some of us might consider what other matters might be put into that part of the Bill. The Minister will recall that earlier this year, when the final touches were being put on the Bill, a most unfortunate incident took place that has been rippling for many weeks—the collapse of Farepak. That company had taken some £40 million in small amounts from less affluent consumers who sought to save to buy Christmas presents. It was suggested that the company should have been required by law to ring-fence those consumer savings instead of being able to misuse those savings on all sort of extraneous premises. I am thinking of solicitors’ client accounts. I am also thinking of estate agents—given that they will receive a lot of knocking in this Bill—whose must hold deposits in separate accounts. It is not unknown that such a law should be required. At Second Reading, I confine myself to asking whether the Minister has considered, or whether he will consider, a new legal requirement on such saving schemes to protect consumer money. Would not Part 4 of the Bill be an appropriate vehicle? Part 3, to amend the Estate Agents Act 1979, is one of the most important parts of the Bill. Clause 52 requires all estate agents to participate in a redress scheme. The 1979 Act was passed into law when I was Director-General of Fair Trading, and my office was given the power to ban estate agents from acting in the manner to which I have referred in certain circumstances. It is a type of negative licensing system and has frequently been used when, for example, an estate agent is convicted of defrauding customers by stealing deposits paid on a house purchase. There are already broad powers to ban estate agents who are considered to be unfit to practise, but I welcome the extended powers in this Bill. The Office of Fair Trading’s local agents are the trading standards officers in local authority departments. The Bill gives them additional powers which no doubt some lawyers in the Liberal Democrat Party will want to watch with great care. On the face of it, such provisions would make the banning powers under the Estate Agents Act more useful. Many estate agents have belonged to a redress scheme administered by the Ombudsman for Estate Agents and his staff, who work under the supervision of its council. The current chairman is the noble Baroness, Lady Shephard of Northwold, who sits on the Opposition Benches, although she is not in her place today. I was a member of the council for the estate agents’ ombudsman in its early years in the 1990s, under the chairmanship of someone from our Benches—the noble Baroness, Lady Mallalieu. The Ombudsman for Estate Agents has done the immensely useful job of investigating complaints and granting—at any rate modest—compensation where appropriate. In theory, the compensation can be up to a maximum of £25,000 but I do not think that it has reached anywhere near that figure in any case. Unfortunately, a large number of estate agents—roughly one third of the total—have declined to join and the Government’s proposals are intended to fill that obvious deficiency. The Government know that only too well, because it is the basis for the changes in the Bill. The Bill does not specify that estate agents must join the present Ombudsman for Estate Agents scheme but if that scheme’s record, constitution and so on pass muster—or might do so with change—it may become the approved scheme for the Office of Fair Trading and the Secretary of State. Having a number of schemes competing, no doubt, to provide the best service for customers, would seem a rather odd system of adjudication in this country. I do not think that it occurs in ombudsman schemes in insurance, banking and so on. There is much to commend in the Bill. The House will, when we are in Committee, fulfil its usual and useful role of making detailed improvements.