Consumer Rights Bill

Debate between Lord Palmer of Childs Hill and Baroness Hayter of Kentish Town

Monday 3rd November 2014 Grand Committee

[Baroness Hayter of Kentish Town]

My Lords, Amendment 81D would require letting agents to have appropriate client money protection in place, which in itself would mean that they would need to have established client account audits and proper procedures. About £2.7 billion is held by letting agents at any one time, so this would be a rather important consumer protection.

Finally, Amendment 81C would extend the existing consumer protection measures for estate agents to letting agents. Most importantly, it would empower the CMA to close letting or managing agents that have acted improperly. It would therefore stop the present, rather stupid situation in which an estate agent banned today can set up as a letting agent tomorrow. This was something that the CLG Select Committee recommended. It wanted letting and managing agents to be subject to the same regulation as estate agents, and that is what this amendment would do.

I know that Ministers have suggested that there is in effect a sort of back-door banning at the moment, in that now that every letting agent must be a member of a redress scheme and if a poorly performing letting agent was turned down by all three recognised schemes, that would effectively debar the letting agent from operating. However, this misses two important facts. One is that the three redress schemes, though they will co-operate by not taking on an agent debarred by another of the three, can only act on complaints brought to them by landlords or tenants. As we know, many people dissatisfied with the service never complain. So these redress schemes only see the tip of the iceberg, as both the two established ones acknowledge. The third one is really yet to get going. So the intelligence for their veto on a business is pretty minimal. They do not have access to information from the police, trading standards or insolvency practitioners, so they are working on a tiny aspect of the whole scene.

There is a second problem. The state is effectively contracting out this enforcement to three private companies with no requirement that they abide by the regulator’s code, are properly qualified for this role or have ever been authorised to be front-line enforcers. They have been authorised by the CLG simply as adjudicators, not as law enforcement officers. Yet without this amendment they are the only organisations able to stop a rogue letting agent from trading. I beg to move.

[Lord Palmer of Childs Hill (LD)]

My Lords, I will talk to Amendment 81D and in doing so I declare an interest as a director of the Property Redress Scheme Advisory Council. I support what the noble Baroness, Lady Hayter, said, and want to add briefly to her detailed comments.

The noble Baroness spoke about the £2.7 billion estimated to be held in clients’ funds. I might add that this was calculated by the industry as the amount that letting agents will be holding in tenants’ deposits and one month’s rent. That was how it was calculated; it seems a fairly sensible estimate. So, there is £2.7 billion in clients’ funds, some of which is at risk. There are already clients’ money protection schemes run by some of the organisations described by the noble Baroness. However, if the letting agent is not covered for client money protection both the landlords and the tenants stand to lose their money. If it is not one of the estate agents or one of these big organisation schemes, which are not compulsory other than for the members of that organisation, these tenants and landlords—it is both—would lose their money. The amendment is designed to protect both parties in the event that an agent goes bust or misappropriates the clients’ funds, as it covers any losses through the actions of the letting agent.

The consumer protection offered by this amendment would be financed by the industry itself and would not need the financial backing that the Government currently provide—I am not sure that the noble Baroness mentioned that point but I thought I should highlight it. At the moment it is a voluntary protection, and it works for a lot of the industry. There are forces in play which could protect the moneys owed to the landlord or tenant if something goes wrong with the letting agent. However, there are many letting agents which are not a part of such an organisation. There are two voluntary schemes that I know of, one of which was mentioned by the noble Baroness. All this amendment seeks to do is to protect the very people who are most at risk: a landlord or tenant using a letting agent which is not part of a larger organisation. This would turn a voluntary scheme into a compulsory scheme overseen in the way the noble Baroness described. If we ever got to a vote on this, I would support it.

Police Reform and Social Responsibility Bill

Debate between Lord Palmer of Childs Hill and Baroness Hayter of Kentish Town

Thursday 14th July 2011 Lords Chamber

[Lord Palmer of Childs Hill]

My name is attached to the amendment and I thank the noble Baroness, Lady Finlay, for tabling it. I, too, attended Monday’s seminar. Also present was the Deputy Mayor of London, who was most appreciative of the scheme in that it would add to the ammunition which the authorities have in dealing with drunkenness.

I do not think that any other speaker has yet said that the issue is not about anti-drinking but is about anti-drunkenness. That is what sobriety means in this instance. I am still a councillor in the London Borough of Barnet where there is a lot of drunkenness on the streets. Not all of it is youth drunkenness, but it is drunkenness. We have tried various ways of stopping it. For instance, in the ward of Cricklewood that I represent, there is an anti-street-drinking order. That helps the police to enforce measures against drunkenness. We tried to apply the order in another area of my ward. The local authority has not supported that but the police have done so.

Although that is not specifically to do with the amendment in front of us, I mention it because I believe that those who enforce the law, whether magistrates or the police, must have as many armaments as possible to use with caution to ensure that our streets are safe and pleasant for society to live in. Too often, in the urban environment in which I live many people—not all of them young—are drunk on the streets and throw down their beer cans and bottles. Perhaps with this amendment we can help in some way. The noble Baroness, Lady Finlay, has done us a great service because whether or not the amendment is adopted, the Government have highlighted the fact that they are aware of the problem and have said that tests will be carried out. I thank the noble Baroness for bringing the matter before us.

[Baroness Hayter of Kentish Town]

My Lords, I add a few words in welcoming the amendment and urging the Government to respond positively to it. When I was a magistrate, I would have loved the possibility of this rehabilitation order to monitor ongoing alcohol consumption. As the noble Lord, Lord Palmer, suggested, it is one of a range of possibilities, but to have had this in one’s toolbox, as I gather the phrase is, would have been an enormous advantage.

As has been made clear, the amendment allows the magistrate this power only if alcohol caused or contributed to the offence—in answer to the noble Lord, Lord Imbert, I say that it is the magistrate who will take that decision—and if the offender has a propensity to misuse alcohol and is willing to comply with the requirement. As I argued in Committee, help with alcohol misuse should also be available but, as the noble Baroness, Lady Finlay, has said, we must consider the victims in assessing this possibility.

Most of what we now call domestic abuse, but when I was growing up we used to call wife-battering, is alcohol-fuelled. Violence on the streets, whether against property or against people, would undoubtedly be less without the addition of drunkenness. When are we going to do what the ordinary decent people who walk around our streets want us to do, which is to reduce alcohol-related disruption that affects their lives? That is the question that we have to answer.

As the previous speaker said, this is not anti-alcohol. Indeed, I should declare an interest that last night I was at the parliamentary beer dinner. I was very grateful that we had not reached this amendment by then. I am not against the consumption of alcohol but I am very much against the consumption of excessive amounts of it that then damages the people concerned or, in the light of this amendment, damages the life and well-being of others.

This is an enabling measure and does not require the courts to impose it. It is an opportunity for someone with the propensity to misuse alcohol in a way that damages others to have a period of sobriety—with help available, I hope—thus improving their own family lives as well as the well-being of others. I urge support for this.