My Lords, it is a very strange experience for me to respond to the Bill at Second Reading on behalf of the Liberal Democrats because, for the past eight years since I have been doing this, I have been looking to my left to see the noble Baroness, Lady Miller, and to my right to see the noble Lord, Lord Sainsbury; so this is a new experience. I welcome the noble Baroness and the Minister to their new appointments, and I look forward to the inevitable jousting between us.
I declare an interest in that I sit on the board of directors of a public company that has estates and managing agencies among its subsidiaries.
The subject matter of the Bill is rather like apple pie and motherhood. Listening to all the speeches and reading the representations that we have all received, there is no doubt that everyone is struggling, because none of us can be against improved consumer protection, better regulation of estate agencies or further controls on doorstep selling. Everyone is struggling to ask the same thing: all this is a very good idea but, when we get to the detail of it, are the Government going about it in the right way? No one wants to say that because everyone is worried that people will say that they are against consumer protection or the better regulation of estate agencies. That, in substance, is what everyone on all sides of the House has been saying this afternoon. Is it not time for the Government to pause and, as the Bill passes through this House and we discuss it in Committee and on Report, to ask themselves whether the perfectly acceptable and welcome aspirations in the Bill are really being fulfilled by its content?
The creation of the new National Consumer Council has had a seven-year gestation, starting with the 1999 White Paper wonderfully entitled Modern Markets: Confident Consumers. It was obviously a good idea, following that White Paper, to bring all consumer bodies under one watchdog, but the lengthy time lag since 1999 rather gives the game away. The DTI’s lead attempt to bring consumer watchdogs under one umbrella has failed, because only the DTI bodies are signing up to the new National Consumer Council. It is possible that the water watchdogs may join later—indeed, we have all been lobbied to try to ensure that that does not happen until 2010—but the rail, air and telecom watchdogs, as well as the financial services watchdog, as the Minister’s noble friend had indicated, have refused to sign up to the DTI’s plans. The existing bodies Energywatch and Postwatch will be abolished, the existing National Consumer Council will be become the new National Consumer Council, and the existing Consumer Direct role will be significantly extended, with ombudsman schemes in place for energy and post. If, however, you have a consumer problem with the railways, the air services, telecommunications and financial services, there will be no change to the existing arrangements.
In his opening remarks, the Minister said that the existing system was fragmented. If you have an energy or a post problem at the moment, you call Energywatch or Postwatch and they deal with it. After the Bill is passed, and assuming that it is passed in its existing form, the consumer will initially contact Consumer Direct, after which there are five different lines of possible redress to which they could be directed: Consumer Direct, the various ombudsman schemes, the new National Consumer Council, Postwatch or Ofgem—hardly a simplification.
This, as various noble Lords on both sides of the House have indicated, comes at a time of continuing threat to the post office network and significantly increasing energy prices, and there is a danger that opposition and co-ordinator responses in the face of these challenges will be muzzled by a long period of uncertainty and unnecessary upheaval. In substance, there is a significant argument for merging all existing bodies to provide simplicity for the consumer, but that is not what is happening. We are getting simply the merger of two existing major bodies—Postwatch and the energy bodies. If the argument has now been lost for one consumer council, one of two things will happen. Either a lot of the expertise in Postwatch and the energy watchdog will be lost through redundancies and staff leaving, or if that does not happen, bearing in mind that there will not be one consumer watchdog, what is the point of doing it in the first place?
I turn now to the estate agency provisions. We are all well aware of the myriad unfortunate practices by rogue estate agents which bring the estate agency profession into disrepute. I shall take just two obvious ones: what is called ““managing expectations””, where an estate agent invents a lower offer which actually was never made so that the vendor thinks that the higher offer he or she has received looks rather good; and the practice which I believe is known in the West End as ““simmering””, where documents relating to similar properties are doctored in order to persuade buyers to pay more for the property they are seeking to buy than it is actually worth. There are many other such practices by rogue estate agents and no doubt something should be done about those.
But looking at the proposals being brought forward by the Government, it is clear that only very limited changes are to be made to the existing legislation. In summary, the Bill requires estate agents to belong to a redress scheme for the purposes of all complaints relating to estate agency work involving residential property. The Bill requires estate agents to make and keep records, including records of offer letters, for a period of six years. It will give the Office of Fair Trading and trading standards officers additional powers when they require access to premises to look at the production of records and so forth, and it expands the circumstances in which the Office of Fair Trading can consider the fitness of an estate agent to practise, and consequently to take regulatory action against him.
However, the Bill does not include any of the following: a requirement for estate agents to have a qualification, a point touched on by the noble Baroness; a requirement for estate agents to have any experience; a direct requirement for estate agents to follow a code of conduct, although that probably would be included in the rules of an approved redress scheme; a requirement for estate agents to be members of a professional body; or any protection for customers engaging in rental or property management contracts, a point touched on by the noble Baroness, Lady Hanham. I suspect that the Bill does not include that for the reasons she gave in her speech. If the Government are not going to take any of the more radical steps outlined in lobby material, letters from representative bodies we have received and points already made by a number of noble Lords today, why does the legislation not simply extend the existing ombudsman scheme?
The noble Lord, Lord Borrie, gave the game away in his speech. On matters such as these we all listen to the noble Lord above almost everyone else. After all the heat and detail of this legislation, the most likely result will be that the DTI will approve the ombudsman scheme as the standard for redress, in which case do we really need the complication we see in the Bill? Why not start from there rather than add the significant potential for further complexity with little practical result?
Consumers, Estate Agents and Redress Bill [HL]
Proceeding contribution from
Lord Razzall
(Liberal Democrat)
in the House of Lords on Monday, 4 December 2006.
It occurred during Debate on bills on Consumers, Estate Agents and Redress Bill [HL].
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687 c1004-6 
Session
2006-07
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House of Lords chamber
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2023-12-15 12:39:07 +0000
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