Committee stage in the Lords
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- If there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes. Clause 52 [Membership of redress schemes]:
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The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Truscott)Non-affiliated- Quote
- moved Amendment No. 124:
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Lord Lee of TraffordLiberal Democrat- Quote
- moved Amendment No. 125:
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Lord De MauleyConservative- Quote
- This is one in a series of amendments that would convert the word “may” to “must” or “shall”. It would change the Bill so that the Secretary of State would be required to issue an order for all estate agents to belong to a redress scheme. This is complementary to our argument for a single code of practice for all redress schemes, so we are pleased to offer our support.
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- Lord TruscottNon-affiliated
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- The purpose of the Bill as regards redress schemes is to authorise the Secretary of State to make it compulsory for those carrying out estate agency work, as defined in Section 1 of the 1979 Act, in relation to residential property to join a redress scheme. However, as the Bill makes clear, before making an order the Secretary of State must first be satisfied that all persons who are to be subject to the duty to join a scheme will be eligible to join a suitable approved scheme. The intention is that the industry itself will submit a scheme or schemes for approval. However, it is possible that no such scheme would be approved, in which case a scheme would be administered by or on behalf of the Secretary of State. In those circumstances, it would not be appropriate for the Secretary of State to be under an obligation to make an order from the outset.
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- Lord Lee of TraffordLiberal Democrat
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- Given what the Minister has said, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.
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- Lord Lee of TraffordLiberal Democrat
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- moved Amendment No. 126:
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- Lord TruscottNon-affiliated
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- I am grateful to the noble Lord, Lord Lee of Trafford, for bringing forward these amendments. The amendments to Schedule 6 seek to extend the scope of the redress provisions to lettings work and property developers who sell properties direct to consumers. Some of this was covered yesterday in Committee, and I do not propose to go over the same ground. As I said then, the Government have already taken steps to improve the regulation of the lettings sector. However, we will continue to monitor the operation of the private rented sector and the property sector more generally to determine whether there is a market failure that should be addressed by legislation. I understand the concern that those who buy a property from a property developer should have the same protections as those who buy a property from an estate agent. However, it is felt that the issues in these markets are different, and we need to consider the evidence carefully to ensure that the same solution is appropriate. The Government are keen to see comprehensive redress arrangements for all those involved in the home buying and selling process, including property developers. We are aware that there are concerns about quality standards in the completion of new homes. It was one of the issues addressed by Kate Barker in her review of the issues underlying the supply of housing in the UK and affecting the functioning of the housing market. The report recommended that the housebuilding industry must demonstrate increased levels of customer satisfaction and that, if progress was unsatisfactory, or if customer satisfaction levels did not rise substantially by 2007, the OFT should conduct a wide-ranging review of whether the market for new housing was working well for consumers. The OFT is keeping open the option of a review, as recommended by Kate Barker. It is currently assessing the industry’s actions in response to that recommendation, and the Department for Communities and Local Government is continuing to monitor the industry’s work aimed at improving quality standards in the completion of new homes more generally and providing better protection to consumers. The Bill implements the recommendations of OFT reports based on issues relating to the estate agency market. The Government are looking at how redress should be made available across the whole property sector in the medium term. I can assure the noble Lord that the Government will take action in other areas, as necessary, when an evidence-based assessment has been made. In addition, I should point out that the Bill makes it clear that there is nothing to prevent an approved redress scheme dealing with other types of complaints on a voluntary basis.
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- Lord Lee of TraffordLiberal Democrat
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- I am sorry that the Minister is not more supportive of our amendments, but I hear what he has to say. In the circumstances, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendments Nos. 127 and 128 not moved.]
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- Lord Lee of TraffordLiberal Democrat
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- moved Amendment No. 129:
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Lord BorrieLabour- Quote
- I shall comment on Amendment No. 131. The noble Lord, Lord Lee of Trafford, explained that the £500 penalty laid down is inadequate and that a reference to the OFT could result in a more serious restraint of some sort on the estate agent concerned. However, one effect of the noble Lord’s amendment would be to deprive trading standards officers of their powers to impose a penalty. Trading standards officers are local authority officials with expert local knowledge of their part of the country, and it would be a pity if their role was excluded. I do not support Amendment No. 131 in so far as it excludes trading standards officers. I should declare an interest as a former president of the Trading Standards Institute and a current vice-president.
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- Lord TruscottNon-affiliated
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- I am grateful to the noble Lord, Lord Lee of Trafford, and my noble friend Lord Borrie for their insightful contributions. Amendments Nos. 129 and 130 go over ground that we covered when we discussed Amendments Nos. 126 and 127, so I do not intend to repeat myself. Amendments Nos. 131, 132 and 137 remove the penalty charge regime for non-membership of redress schemes. However, it would make the Bill out of step with the Housing Act. More importantly it would take away one important weapon in the armoury of trading standards officers, to which my noble friend Lord Borrie referred. I think the intention of these amendments, if I read them rightly, is to ensure that an estate agent who is not a member of a redress scheme is referred to the OFT straightaway. The paragraphs of new Section 23B, which the amendment omits, place enforcement officers under a duty to notify the OFT if they believe that an estate agent is not a member of a scheme. However, when a trading standards enforcement officer finds out that an estate agent is not a member of a scheme, he or she can also issue a penalty charge notice and, as I mentioned at our previous sitting, can continue to issue notices. I do not think that the figure of the penalty notice is the most important element because that can be issued several times over and eventually lead to the banning of the estate agent. That provides a mechanism for giving immediate punishment and an incentive to comply. At the end of the day, we want compliance. Penalty charges also provide an intermediate step from the ultimate sanction of being banned from practising, as I mentioned. There are around 12,000 estate agency offices in the UK and only one Office of Fair Trading. If a penalty charge notice makes an estate agent join a redress scheme quickly, that frees up the OFT to focus on the persistent offenders who refuse to join a scheme and who deserve to be banned. Of course, the OFT can still consider cases where an estate agent has joined a scheme after being issued with a penalty charge notice if the circumstances warrant it. If these measures are to be taken seriously, it is important that they are enforceable. Taking away one of the intermediate and more proportionate means of punishing non-membership puts unreasonable pressure on the OFT, which may delay or prevent it tackling other serious instances of misconduct by estate agents. This is not what the Government are seeking to achieve. I hope that that clarifies matters.
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The Earl of CaithnessConservative- Quote
- Perhaps I can ask the Minister for help in regard to later stages of the Bill. On the previous two amendments he said that he would not repeat what he said yesterday. That shows how bad the groupings have been and, therefore, how disjointed our discussions have been. It is a pity that the noble Lord, Lord Dubs, is not present. Yesterday we talked about increased fines and bringing in letting agents and we have done so again on these amendments. It has been very difficult to have a consistent discussion on one aspect. I ask that the groupings are a little better on Report, please.
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- Lord TruscottNon-affiliated
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- I thank the noble Earl for that intervention. We shall certainly look at the groupings for the next stage and ensure that we have a proper debate. It is also difficult when a debate is spread over several days, as it becomes somewhat disjointed. I shall certainly take up the points he raises.
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- Lord Lee of TraffordLiberal Democrat
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- In the circumstances, I withdraw the amendment. Amendment, by leave, withdrawn. [Amendments Nos. 130 to 138 not moved.] Schedule 6 agreed to. Clause 53 [Duty to keep records]:
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Baroness WilcoxConservative- Quote
- moved Amendment No. 139:
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- Lord TruscottNon-affiliated
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- These clauses relate to the duty to keep records, and the consequences of an estate agent failing to produce information requested by an enforcement officer. Amendment No. 139 would remove the ability of the Secretary of State to provide for how and where records should be kept in regulations. Subsection (4) already gives the Secretary of State power to make regulations prescribing what sort of information should be kept by estate agents. Subsection (6) simply allows regulations also to cover where and how records should be kept. To answer one of the points of the noble Baroness, Lady Wilcox, the policy aim is for a local authority trading standards officer to be able to visit the local estate agency branch which handled a property transaction and check the records immediately. We do not want trading standards officers to have to travel to where a central database is held in order to check records. In addition, we want to set out in regulations that these records can either be in hard copy or held electronically but must be accessible from the local branch. In practice, individual property transaction files are generally held locally. Regulations will help ensure that inspections by trading standards officers are targeted to the benefit of businesses and enforcers alike. Removing lines 29 to 31 may create uncertainty among estate agents about what they have to do to comply with this duty and may also place a greater burden on trading standards officers if the place where records are to be held cannot be specified in regulations. To answer the second point of the noble Baroness, Lady Wilcox, about the amendment to Clause 57, subsection (1) of new Section 11A allows a court to make an order under this section if a person, “has failed to do something that he is required to do”, under the sections referred to. It therefore follows that subsection (2) requires the defaulter, “to do the thing that”, he failed to do. I am sure that the amendment was intended to be helpful and to try and improve the drafting of the Bill, but we are confident that parliamentary counsel’s drafting is quite sound.
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- Baroness WilcoxConservative
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- I thank the Minister for that reply. I still think that this is micro-management at the greatest level. However, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 53 agreed to. Clauses 54 to 56 agreed to. Clause 57 [Failure to produce information]: [Amendment No. 140 not moved.] Clause 57 agreed to. Clause 58 [Contracts concluded away from business premises]:
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- Baroness WilcoxConservative
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- moved Amendment No. 141:
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- Lord TruscottNon-affiliated
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- This clause relates to contracts concluded away from business premises—namely, doorstep selling. The amendment would give the Secretary of State the power to provide for exceptions when he makes regulations giving consumers the right to cancel a contract entered into during a solicited visit to a consumer’s home or workplace. I do not believe there is a need for this clause to be amended to enable exemptions to be made in doorstep-selling regulations, because Clause 59(3) already does this. It includes provision for any regulations made under the Bill to apply generally or to be subject to exemptions and to make different provisions for different cases. In addition, as noble Lords will be aware, we will consult on the draft doorstep-selling regulations, including any exemptions—and including the ones mentioned by the noble Baroness, Lady Wilcox—this year. The existing doorstep-selling regulations already make different provisions for the effect of cancellation in some cases, such as the supply of perishable goods, goods to meet an emergency, or those already incorporated into the land when the consumer is obliged to pay for the goods and services in connection with their supply. Although I cannot say what exemptions or exceptions there might be at this time, I assure the noble Baroness that we will consult on the possible exemptions. On the opposition of the noble Baroness, Lady Wilcox, to Clause 58 standing part of the Bill, consumers have from 1987 been able to cancel a contract they have agreed with a trader in their home, on their doorstep or at their place of work within seven days, but only when the trader’s visit was not at their request. That is where the trader has knocked on their door unexpectedly or arrived following an unsolicited phone call. Consumers were given this right after all EU countries agreed the doorstep selling directive in 1985, because traders can catch consumers unawares and unprepared for a sales pitch. A surprise visit can also mean that the consumer is unable to shop around to compare the quality and price of the offer. It was therefore thought necessary to provide consumers with the safeguard of a cooling-off period to give them an opportunity to consider the offer carefully.
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- Baroness WilcoxConservative
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- I thank the Minister for that full answer. I understand that my point about plumbers, electricians and so on will be more broadly covered, mindful of the issues to which he referred. I look forward to seeing how that shakes out. I am not sure if the Minister said whether it would be possible to have sight of the 12 regulations that the Government were thinking of drawing up. Perhaps I will wait and see how he responds to me after this stage. I am sure that I, my colleagues and the Liberal Democrats will receive letters from the Minister on some of the points that we have not yet been able to cover. I thank the Minister for covering my points today. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 58 agreed to. Clause 59 [Orders and regulations]: [Amendment No. 142 not moved.]
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- Lord TruscottNon-affiliated
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- moved Amendment No. 143:
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- Lord TruscottNon-affiliated
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- moved Amendment No. 146:
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- Lord TruscottNon-affiliated
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- moved Amendments Nos. 148 to 151:
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- Lord TruscottNon-affiliated
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- moved Amendment No. 152:
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- Lord TruscottNon-affiliated
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- moved Amendment No. 153:
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- Lord TruscottNon-affiliated
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- moved Amendment No. 154:
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