Enterprise and Regulatory Reform Bill

Baroness Brinton Excerpts

Wednesday 16th January 2013 Grand Committee

[Baroness Brinton]

My Lords, I certainly will not rehearse the arguments—in fact I have torn up half of what I was going to say after the excellent opening speech of the noble Baroness, Lady Hayter, on this particular amendment. But I want to report particularly that when the Liberal Democrats debated our policy paper, Decent Homes for All, we heard of some very personal examples from members that I found profoundly shocking. They included one letting agent who had taken on a policy of no single parents at all, even if they were offering a three-month deposit as a guarantee and even if they were happy to provide—which I would not have been—a separate guarantor. This particular letting agent had just decided that single parents, mainly mothers, were no good. This parent, in particular, had no form of redress at all to that.

What is in front of us today is an utterly reasonable way of getting that redress. I am grateful to the noble Baroness, Lady Howe, and the noble Lord, Lord Deben, for making the point that this is actually much more about redress and consumer rights. It is rare to see an amendment that is so widely supported not only from within the House of Lords but also in another place by various people, including Mark Prisk, Annette Brooke and others from the government side. I hope that even if the Minister cannot give us an instant answer today he will be able to engage in discussion with those who have spoken in the debate on this amendment prior to getting to Report stage.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)]

My Lords, it may not surprise my noble friend Lord Deben that I do indeed have some speaking notes, but I also hope that I can attempt at least to answer the questions that have been raised this afternoon by noble Lords. I know that these issues have been raised before, and I have considered carefully the amendments, arguments and indeed endorsements of the noble Baroness, Lady Hayter, for regulating the letting sector, particularly the ones that were mentioned this afternoon. She raises a very important issue.

I fully recognise the noble Baroness’s commitment in championing the interests of consumers in this area and take her concerns very seriously. It is helpful that she has brought it up in the context of this Bill. I note and respect the intervention of my noble friend Lord Deben in this respect as well. I know that the Housing Minister is aware of these concerns but I will raise them with him for further consideration. It is clear from the speech from the noble Baroness, Lady Hayter, that he—Mark Prisk, my honourable friend in another place—is aware of the issues that she has mentioned.

The noble Baroness, Lady Hayter, raised the issue in terms of a need for a mandatory redress to protect consumers, particularly those who are the most vulnerable. The Government are indeed keen to promote a greater use of redress but, understandably, want to avoid increased costs which might fall on landlords and tenants which a new mandatory regime would bring. While the Government acknowledge that poor practice exists in some parts of the letting sector, Ministers believe that new regulation would be disproportionate and would drive some businesses from the market. This would increase costs for consumers and reduce the choice and availability of accommodation on offer to tenants.

I can reassure noble Lords that letting and management agents are already subject to consumer protection legislation. For example, the Consumer Protection from Unfair Trading Regulations 2008 protect against giving false or misleading information, not acting with the standard of care and skill that is in accordance with honest market practice or claiming falsely to be a member of a professional body or approved redress scheme. The Unfair Terms in Consumer Contracts Regulations 1999 provide protection against unfair contract clauses, particularly where they are hidden in the small print.

Consumers who are treated unfairly or are charged unreasonable fees by an agent can seek help from their local trading standards officers, who have civil and criminal enforcement powers. The Office of Fair Trading has been investigating practices in the lettings sector and will be producing a report shortly including recommendations on how enforcement bodies can work to raise standards. We look forward to considering its report and recommendations. I hope that this particular point will go some way to reassuring the noble Baroness on the points that she has raised.

In addition to the protection offered by the consumer protection legislation, it is estimated that around half of all agents belong to voluntary schemes which set standards and offer redress if things go wrong. We invited industry bodies to work with us to improve the quality and coverage of self-regulation and in 2010 we endorsed the industry-led SAFEagent scheme. SAFEagent is designed to help consumers understand the benefits of using agents with Client Money Protection, by developing an easy to recognise logo. We are aware of the need for consumer awareness and also the importance of ensuring that vulnerable people are well informed, and indeed are advised as to what to do and where to go for help.

We have also published top tips for both landlords and tenants setting out the benefits of using an agent that belongs to SAFE agent or one of the professional bodies offering the right protections. We will continue to work with Citizens Advice and other bodies to ensure appropriate information is available. Citizens Advice provides help and advice on lettings over the telephone, online and face to face. In the light of these existing schemes and the consumer protection legislation in place, we have no current plans to introduce further statutory regulation. We are, however, keen to do everything possible to ensure that consumers are well informed and empowered to exercise their rights.

I was grateful for the intervention from my noble friend Lady Gardner who spoke most eloquently on the issue of the regulation of managing agents. I am aware that several issues have been brought to the Housing Minister’s attention in relation to letting agencies and residential leasehold and I am certain that managing agents are part of this. I am sure he is aware of your ongoing interest in this matter, but I will also inform him of the comments you made today. These are important issues to raise—as has been pointed out by the noble Baroness, Lady Gardner, there is a shortage of 300,000 houses in the UK. The letting of some of these properties must be effected fairly and consistently.

I hope that the noble Baroness, Lady Hayter, is reassured and will therefore be prepared to withdraw these amendments.