My Lords, I rise to argue that Clause 213 should not stand part of the Bill, as it has absolutely no place within this Bill. That is partly because it has nothing to do with levelling up or regeneration, but it is also because it gives the Government the right to interfere in the activities of an independent, non-statutory, standard-setting members’ organisation—indeed, a chartered body.
It is strange that, of all the actions being taken around increasing regulation, the target is a respected, self-regulatory body with an independent standards board. I am mystified as to why, if Ministers really want to help the residential sectors—tenants, owners and leaseholders—they are not implementing the report of the noble Lord, Lord Best, on the regulation of property agents which, after enormous work with great detail, has come up with some extraordinarily useful proposals covering areas of considerable consumer detriment. Much work went into that report and I then chaired a group, in full collaboration with the department, developing codes of conduct covering letting and estate agents as well as managing agents.
Indeed, back in 2018, the then Housing Secretary announced measures to professionalise the estate agent market, driving up standards and bringing an end to rogue managing agents. As he said at that time, more than six out of 10 buyers and sellers experienced stress. Therefore, he promised, estate agents would be required to hold a professional qualification, with the Government undertaking to bring this industry up to
“the same professional standards as conveyancers, solicitors and surveyors”.
At that point, the department was really keen on regulating that group of residential agents to bring them up to the quality of surveyors. What a shame that this Bill does not implement the report of the noble Lord, Lord Best, and the commitment given by the department at that stage, which would bring high standards and proper protections to users of all property agents.
Instead, the Bill proposes a statutory power for the Secretary of State to instigate a review of an independent, member-funded, non-statutory body: any time, any place, with no excuse or cause and no threshold for such an intervention. All this comes with no rationale for the interference in such an independent and professional body, whose standards and enforcements are key to the safety of our built environment as well as to the market valuation of property, which has to be free—like interest rates—of any Treasury interference. So what, one might ask, is behind all of this?
RICS was one of the first professional bodies to split off its member representation role from its regulatory function following the Carsberg review, well before the Law Society and the Bar Council did the same. Since then, RICS and its thousands of members abroad has played a vital role in independent standards setting as well as in the enforcement of those high standards. Across the world, regulators and clients depend on
RICS standards of ethics and good practice, as well as RICS technical standards. RICS valuers are recognised and admired worldwide and perform a vital service for a swathe of industries. RICS works with Governments, regulators and international standards setters to adopt common, transparent standards. This fuels the influence of UK professionals and business globally, supporting inward investment. About one-fifth of RICS members work outside the UK, many of them in large, global businesses.
It is, perhaps, for this reason that a firm such as Savills worries about the possible end of true independence of RICS and thus a loss of confidence that it is acting in the public, rather than Ministers’, interests. As James Sparrow, CEO of Savills UK, writes:
“A strong and independent RICS remains key for the well-being and effective operation of the real estate sector ... Any actions which have the effect of undermining RICS or compromising its independence as a free-standing professional institution would … be detrimental. ... RICS plays an important role internationally … influencing the development and standards required of the surveying profession globally. Its independence is fundamental to this”.
Indeed, the UK’s global role could well be at risk if RICS and its standards are seen as being supervised by the Government. Self-regulation via a hived-off independent oversight board, chaired by the redoubtable Dame Janet Paraskeva, gives confidence to consumers that standards will not be lowered to satisfy either RICS members or government requirements. It gives confidence to mortgage lenders that a valuation of a property is robust and a figure that they can rely on in considering the security backing to any loan that they give.
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As one of the big lenders said to me, “We’re lenders, not surveyors. We’re not the experts on this, so it is important that we can trust valuations, and having an independent body is important for consistency and reliability. As a lender, we rely on a surveyor whose qualifications and standards are independent, free from any arm-twisting that is not evidence based. The Government are also not RICS-qualified; it is not for them to make decisions in this area. We need independence of standard setting”.
RICS, which operates under a Royal Charter for public advantage, produces what is known as the Red Book Global Standards, which sets out standards relied on by the industry, market regulators—the PRA and the FCA—and the public. Its work underpins confidence in the property and construction markets.
Not only have the Government given no good reason for this clause but—at least as of last Friday—the Commons Minister, despite a promise, had failed to meet RICS to discuss the issue, with its vital perceived independence and reputation possibly affected. Also, the singling out of just one body smacks to me of a hybrid Bill: that is, a public Bill with private elements, one that affects a particular private interest, different from the interests of similar bodies, effectively picking out just one organisation in a way that is injurious to it.
Surveying is not a protected title. The profession does not have any reserved functions and nor does it exercise any statutory powers. RICS holds no monopoly
and other bodies also set building standards, so claiming it is a class of one does seem to stretch the definition. Moreover, as a hybrid Bill, the party affected would have the opportunity to put its views to Parliament, not just to a Minister.
However, the real issue is that this clause is unnecessary. RICS asked the noble Lord, Lord Bichard, to review its structure and working, and has made many adjustments in the light of his report. Recommendation 14 of the report called for a similar independent review every five years to be laid before Parliament. In fact, however, RICS, valuing that suggestion and the help provided by the noble Lord, Lord Bichard, has decided to do just that—to have another independent review—after every three years, not five. The first will be in 2025. This seems timely and sensible, and enables a report to Parliament, independent of the Government of the day.
The concern about the extraordinary power in Clause 213 that allows a Minister—with no particular evidence or reason, and at any time—to set up an inquiry into RICS is that there is very little, if anything, in terms of a threshold. It does not say, for example, if there are complaints, if the markets are uneasy about it, if it seems to have failed consumers or if it fails to undertake valuations properly. There is no reason given for allowing the Secretary of State—who was here just a few minutes ago but has left now—to decide, at any time, to set up an inquiry into RICS.
There is no threshold to be covered. Yet the very threat of that presents a chilling factor to RICS, as even the launch of such an inquiry—being at any time, rather than at a fixed time, as the noble Lord, Lord Bichard, said—could severely damage the reputation of RICS at home and abroad, for no good reason. The Minister will know that his colleagues at the Department for Business and Trade are busy negotiating agreements to promote our service sector, something that I see a lot of in my role of chairing our International Agreements Committee. Again and again, Ministers say to us that one of the UK’s greatest strengths is its service sector. Part of that is the financial sector, but a large part of it is surveying. Along with architecture, it is a key part of our service sector and a major part of our exports. That sector should be supported, not undermined.
The Government have made out no case for Clause 213. It is unnecessary and an unjustified interference in an independent, professional standards-setting body. In a way, just the threat of a review could exercise a chill factor over a chartered institute which works in the public interest. The clause will do nothing to promote the aim of levelling up and it is a wasted opportunity, when the mischief of residential agency could have been regulated along the lines set out by the noble Lord, Lord Best. It is an unnecessary clause and, potentially, a harmful disruptor. It has no place in the Bill and this clause should not stand part.