Consumers, Estate Agents and Redress Bill [HL]

My Lords, this has been an interesting debate and I thank my noble friend Lady Wilcox for her opening speech, which set out our approach to the Bill. I also express our gratitude to the Minister for so kindly arranging to brief us with his team last week. It was a helpful meeting and was much appreciated. As my noble friend said, while we support much in this Bill, it is an unusual one and seems to be something of a patchwork of issues and initiatives that the Government have hitherto allowed to fall by the wayside. While estate agency, consumer communication and doorstep selling are all related through the consumer, my fear is that the Bill is something of a reaction to recent events rather than a carefully thought-through, clear and positive statement for the consumer. I shall start with estate agents. The creation of an estate agent redress scheme is broadly welcomed on these Benches, as my noble friend has explained. However, it is clearly an afterthought following the narrow scope of the Housing Act 2004. The noble Lord, Lord Rooker, attempted to add a redress scheme in the course of our debates on that, but was unable to do so due to its scope, so we are pleased to see that such a scheme is being implemented in this Bill. It is a concern that the Bill makes no mention of provisions for those transactions where no estate agent is involved, an issue just referred to by the noble Lord, Lord Razzall. Has the Minister considered extending the Bill to include property developers in order to ensure that there will be redress for consumers who buy direct from developers? If not, perhaps he could explain why that was not considered appropriate. Similarly my noble friend Lady Hanham, and indeed the noble Lord, Lord Razzall, referred to letting agents. Again, we would be grateful if the Minister could respond. Under the Bill, there will be two systems of redress for home buyers: redress relating to home improvement packs and redress regarding estate agency under the Bill itself. Do Her Majesty’s Government plan to press ahead with HIPs? If so, will the redress systems be run by one or a series of different organisations? How will it be possible to ensure consistent standards? I would be grateful if the Minister could explain how he envisages this working. We welcome the requirement for estate agents to keep records—even if, like my noble friend Lady Hanham, we are rather surprised that they do not keep them already—allowing trading standards officers to inspect those records and expanding the circumstances in which the Office of Fair Trading can take regulatory action against estate agents. It is worth pointing out that the vast majority of estate agents are both respectable and regulated by membership of one of the professional bodies. It is the rogues, as always, that need controlling. What we are seeing are clearly moves in theright direction but, having listened to the speeches of my noble friends Lady Oppenheim-Barnes, Lord Caithness and Lady Hanham, perhaps the Minister will respond to the legitimate question that they have raised, which merits close attention, of whether consumer protection in this area should be extended further than the Bill provides. I shall also be interested to hear from the Minister whether the existing £25,000 cap on redress, to which the noble Lord, Lord Borrie, referred, will still exist under the Bill. Having said that, I am sure that consumers will be pleased that the Bill seeks to extend redress in the gas and electricity industries, in postal services in the United Kingdom and, potentially in due course, in the English and Welsh water industries. The new power to make regulations which require providers to belong to a redress scheme is good news for consumers, who can be vulnerable to energy providers in particular, and will, we hope, encourage best practice in the industry. However, there are concerns that additional cost implications may arise fromthe new regulation requirements. I know that the industry, and in particular Postcomm, as well as other interested parties, is concerned about this. I hope the Minister’s response will address this concern. My noble friend Lady Wilcox and the noble Lord, Lord Razzall, have reserved judgment on the merger of the NCC. My noble friend has aptly reminded your Lordships of the Government’s record in the creation of non-departmental public bodies. It is not a promising one. My noble friend Lady Oppenheim-Barnes has expressed specific concerns about the adequacy of staffing for the NCC, and referred to the danger of erosion of the independence of consumer bodies such as the NCC and their effective subjugation to the will of government. Although the noble Lord, Lord Borrie, rejected this, it would be good to hear the Minister’s response. The options for merger set out within the regulatory impact assessment and the wording of the clauses dealing with the merger are, as my noble friend Lady Wilcox said, in need of greater clarification. While the merger is intended in some respects to simplify things for consumers, it creates the potential for some old-fashioned confusion. Why, as my noble friend Lady Byford asked and the noble Lords, Lord Whitty and Lord Razzall, mentioned, should the public assume that post and energy consumer issues are dealt with by one body, but transport, financial services and, for a while anyway, water dealt with by others? Other noble Lords have expressed their anxiety that the new Consumer Voice should not turn out to be a hotchpotch that takes the wide-ranging expertise of the NCC, merges it with the relatively new experiences of Energywatch and Postwatch and, as a result, fails to give consumers the fair deal they deserve. I hope we can ensure that the new body is as effective as it can be, which is why it is important to highlight the potential pitfalls at an early stage and try to avert them. I hope that we will be able to look in greater detail at the definitions of ““consumer”” and ““consumer matters””, as well as the proposed funding provisions for the new NCC body. I should also like to probe the Minister on the descriptions of vulnerable people and to look at whether those can be refined and clarified. These are all matters that I look forward to addressing in Committee and the subsequent stages of the Bill. I hope I have made it very clear that we are in support of transparent and efficient consumer communications. Yet it is not only the public’s understanding of the role of Consumer Voice that is in need of clarification but the internal processes of its counterpart, Consumer Direct. While Consumer Direct seeks to simplify the complaints system, I have a concern that simplifying it in the way the Bill does could create new complexities. The noble Lord, Lord O’Neill of Clackmannan, referred to the potential for confusion and my noble friend Lady Byford referred to the difficulty that some people will have in accessing support and assistance. We think the new system may seem simple in concept but could be complex for the consumer, being process-driven rather than consumer-driven. I should be grateful if the Minister could inform your Lordships which kind of questions will be answered by Consumer Direct, which will be referenced and by whom. According to Energywatch, consumers are at risk of becoming stranded between the instant advice offered by Consumer Direct and the redress offered by the ombudsman schemes. Again, the noble Lord, Lord O’Neill, has referred to these concerns. It is my understanding—other noble Lords have also referred to this—that where energy is concerned, the ombudsman will begin to investigate a complaint only after three months from the original letter. Is that correct? If so, does the Minister agree that consumers who need more than simple advice, or who cannot wait for the ombudsman to begin, will lose out under the new system? Above everything, as several noble Lords have said, it is vital that the NCC maintains the expertise it has built up as a standalone consumer champion. Importantly too, while we await with interest the details of the merger of Postwatch into Consumer Voice, we recognise that the postal services market is undergoing wide-ranging and rapid change. My noble friend Lady Byford has quite rightly brought the question of post offices, especially but not only rural post offices, to the attention of the House. This is an issue right at the heart of consumer affairs in the postal service. Post offices are the keystone of communities in towns in the countryside and, as we have done in the past, we will seek to ensure that the consumer’s voice is not diminished in this merger. Postwatch, like Energywatch, has been the point of contact for sector-specific expertise since its foundation. There is much work to be done in ensuring that Consumer Voice continues to represent consumers and businesses that depend heavily on the postal services. We are told that the cost of implementation of Consumer Voice is £8.7 million. That assumes some redundancies. Could we please see a detailed breakdown of that figure and know how many redundancies are involved? Ongoing savings for the industry are put at £8.9 million. Again, could we please see a detailed breakdown of this figure? Turning briefly to the matter of doorstep selling, I have one question for the Minister. Most of the goods and services that are the subject of doorstep selling are accompanied by offers of credit. The Consumer Credit Act was passed in the last Session; I suspect that the Minister will confirm that doorstep lending is covered by that legislation rather than the Bill but, in view of the very close relationship between doorstep selling and doorstep lending, can he explain how consumers will understand the difference and how to deal with it? We have had a concise insight into the Bill this afternoon from noble Lords with great expertise in their respective fields. I look forward to analysing it in greater depth in Committee, to supporting measures that we believe to be constructive and to improving those that we believe need improvement, in order to get the very best possible deal for both the consumer and business and, consequently, the industry as a whole.