My Lords, when we discussed this issue in Committee the Government gave four reasons for rejecting the proposal made by the noble Baroness, Lady Hayter. These reasons were as follows. First, bringing letting agents under regulation would increase costs for consumers and reduce the choice and availability of accommodation on offer to tenants. Secondly, letting agents are already subject to consumer protection legislation. Thirdly, consumers who are charged unreasonable fees can seek help from trading standards officers. Fourthly, around half of all agents belong to a voluntary scheme that sets standards and offers redress. None of these reasons stands up well to any kind of examination. The fact that half of all agents belong to a voluntary scheme is not a reason for failing to address the fact that half do not.
The fact that consumers who are charged unreasonable fees can seek help from trading standards officers is one of those facts that are true in theory but of no help in practice. Even if consumers knew about this recourse—and I am sure that they do not—it is well known that trading standards officers are overstretched and underresourced. This is an illusory comfort to ripped-off or abused consumers. That letting agents are already subject to consumer protection is another true, but comfortless, fact that relies, again, on action by trading standards officers—action that is unlikely to bring significant relief, if any at all.
However, the first reason the Minister gave in Committee for rejecting the amendment in the name of the noble Baroness, Lady Hayter, is the one on which the Government seemed then to rely most, and which at first glance appeared to have some merit—that is, that the amendment before us again would increase costs to consumers and reduce the choice and availability of accommodation on offer to tenants. This argument was challenged by the noble Lord, Lord Lucas, and the Minister subsequently wrote to the noble Lord to set out the evidence—or, rather, grounds—for this argument.
These grounds amounted to an estimate, as the noble Baroness, Lady Hayter, has already mentioned, of an additional annual cost to a letting agent of around £800. It is very hard to see that an additional cost of £800 would drive any letting agent out of business. The Government have produced no evidence of their assertion that it might do so. Even if it did—which is not only unproven but unlikely to be provable—it does not follow that rental properties would be taken off the market or that costs would be passed directly on to the tenant. The Government have produced no evidence to show that letting agents who are members of the voluntary scheme charge more than those who are not. In many cases, the reverse is likely to be the case.
Even if all the Government’s assertions in this area were true and evidenced, their position would amount to saying that they were content to have serious abuses in the marketplace because the abusers could not afford to pay to become non-abusers. This is not an attractive or coherent proposition and it is especially unattractive when one considers the analysis of cost benefit produced by RICS, among others, which gave evidence of a beneficial financial outcome for implementing the proposals. All in all, and exactly as in Committee, it is hard to understand why on earth the Government have opposed this measure. It stops significant abuse, it is easy to do, it has almost universal industry support and it has long-term financial benefits.
I strongly support the amendment in the name of the noble Baroness, Lady Hayter, and very much hope that the Government will be able to give it the sympathetic consideration it deserves.