Baroness Hayter of Kentish Town
Main Page: Baroness Hayter of Kentish Town (Labour - Life peer)Consumer Rights Bill
Baroness Hayter of Kentish Town Excerpts
Baroness Hayter of Kentish Town (Lab)
My Lords, I support Amendment 30, which has been moved by the noble Baroness, Lady Oppenheim-Barnes, which would ensure that regulators did what they are meant to do, which is to protect consumers and promote their interests.
I shall speak also to Amendment 50C, which is in my name and that of my noble friend Lord Stevenson of Balmacara. Our amendment would require statutory regulators to develop proper user or consumer representation on their boards, as well as reviewing annually the consumer experience of their industry, including whether consumers were sufficiently well represented and listened to so that their rights under this and other legislation were protected and, indeed, promoted. It would enable regulators to consider whether a levy might be needed to ensure that the consumer voice was clearly articulated.
Regulators exist in exactly those industries where the consumer cannot get a fair deal on their own behalf, either because of effective monopolies of the sort that we have just heard about or because the nature of the service is so complicated, long-term or specialist, such as in financial services or the law, that clients are in no position to evaluate it or to shop around. Despite this, not all regulators put the consumer, in whose interest they are meant to be working, first—sometimes because of industry capture, sometimes because they work at such a helicopter level that they fail to see the real consumer impact, and sometimes, as the noble Baroness has just said, because something new comes along and they are not feeling it from the grass roots up. Usually, however, it is because they do not embed the end-user’s views in their decision-making. They decide policy without researching the consumer’s experience or the consumer’s views, and they sometimes do not seem to understand the ordinary person who pays the bills. Our amendment would embed the consumer voice in the regulators’ governance, where it should have been from the start.
However, the noble Baroness, Lady Oppenheim-Barnes, has a rather craftier alternative, which is to place a duty on the relevant regulators to uphold the rights of consumers and to raise the possibility, as she has just said, of the fines levied by a regulator being used to compensate consumers for breaches of their rights. Given the £1.1 billion fine levied by the FCA last week, that part of her amendment has a particular attraction.
Without these amendments, the Bill will lack a certain crack of the whip in the hands of regulators. I therefore hope they get support.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)
My Lords, I start by applauding the contribution made by my noble friend Lady Oppenheim-Barnes in promoting consumer rights. She has outlined her concerns and given her views on what the regulators can do to help consumers, reading from her amendment. Given how much impact her work has had, her input will be invaluable in ensuring that we have a better understanding of what needs to be done when we start the implementation phase of this important Bill.
It is, of course, important that consumer rights in regulated sectors, just as in the rest of the economy, are protected and promoted; that consumers are given sufficient information to make informed decisions; that they are aware of how to make complaints and seek resolution to disputes; and that they have suitable representation to secure the best possible outcomes. The noble Baroness raised some important issues with this amendment and in our meeting.
However, I am concerned that this amendment would, first, complicate an already complex legislative and governance framework, through which regulators operate, with a number of new rules and requirements. Rather than helping consumers, it could muddy the waters further and lead to complex, unclear decision-making by regulators.
Secondly, it could perversely duplicate the extremely good work already being done across the consumer landscape. There are already various bodies and organisations fulfilling the objectives of this amendment, which I will explain in more depth shortly. In view of the comments made by the noble Baroness, Lady Hayter, I should add that similar concerns relate to Amendment 50C, although that comes from a slightly different angle and would provide, in some circumstances, for a levy.
We must not overlook the good work that economic regulators have done. As noble Lords may know, economic regulators have a statutory duty to take consumer interests into account. The nature of independent regulation means that consumers are at the heart of what they do, and I am confident that this remains the case. If anything, the tone of what I have heard suggests that regulators have not been vocal enough about how much their work helps consumers, so let me highlight a few examples. Average monthly household spend on telecoms services fell by 2.9% in 2013. In addition to this, satisfaction ratings across key telecoms markets are close to or over 90%. The majority of consumers remain satisfied with their service overall. Complaints about fixed-line and mobile mis-selling have decreased. In fixed-line, they decreased from 1,200 per month in April 2005 to just over 400 in 2013, and mobile mis-selling has also reduced very significantly. There is now more choice than ever for consumers, with at least 13 major suppliers of bundled residential services, 114 fixed-line operators and four mobile operators.
Ofcom is pushing to make it easier for consumers to switch providers, which is critical for a well functioning telecoms market. Water leaks are down by 40% since the 1990s, so there is a heritage of affordable water bills, with high-quality drinking water and cleaner rivers. Domestic energy bills, while having increased, are still favourable compared to Europe.
Baroness Hayter of Kentish Town
My Lords, Amendment 31 stands in my name and those of the noble Lord, Lord Best, and my noble friend Lord Stevenson of Balmacara.
Rather strangely, as the Bill stands, trading standards officers—who work on behalf of consumers to track down rogue traders, dangerous goods, scams and rip-off merchants—would lose their existing powers to inspect premises, unless they give two working days’ notice of such visits in writing. Because of the outcry over this nonsense when the Bill was in the Commons, the Government have already had to amend it so that officers can still enter without forewarning, either where there is suspicion of malpractice or where evidence might be destroyed. But that is always the case with evidence: it goes walkies when the police or trading standards are anywhere near.
Despite the slight amendment made in the Commons, the requirement for 48 hours’ written notice would still tie the hands of trading standards officers. This new requirement was written into the Bill, despite the fact that there were no calls at all for this change from business, and no evidence that officers misuse their current powers. While it is true that some companies quite liked it once it was suggested, none had demanded it. Meanwhile, enforcement agencies and consumer groups naturally want it removed. If the Government really want to help small businesses ensure that the right people and the right paperwork are ready for a visit, fixing it up by phone to suit the company would be much better than sending two days’ fixed notice by post, with no negotiation over the date. The Bill also does not deal with the difficulty of giving notice to mobile traders.
Even if we win a vote on this amendment, which would remove the need to have 48 hours’ written notice before trading standards could inspect, it does not mean that trading standards officers cannot give notice before they inspect. In fact, they would do so in very many cases. It is good practice to do so, but it would also save trading standards officers’ time: they would not have to go back a second time if the paperwork was not there. However, it makes no sense to give notice to people who are potentially breaking the law of when the enforcers will turn up to check on them. That would hamper the enforcers’ ability to tackle rogue traders, since unannounced visits can act as a deterrent, as well as a source of evidence.
Of course, these very same officers do not have to give notice for food safety: they can have unannounced visits. Ofsted can also make unannounced visits. Just last week we saw the impact of a surprise inspection of Colchester hospital by the Care Quality Commission, which led to major steps to safeguard patients. That might not have happened had the hospital management been given two days’ warning. Why must trading standards replace today’s on-the-spot checks with two days’ written warning? How difficult would it be for the very same officer to have different powers for entering the same premises, depending on which breach they are investigating?
The Government have said that a trading standards officer can always enter premises as a member of the public and see what an ordinary shopper can. However, retailers do not put their untaxed or counterfeit cigarettes on top of the counter or out on the shelves. Unsurprisingly, they are hidden below the counter, where an officer would not be able to look. It is not just consumers and trading standards officers who want the 48-hour requirement removed: small firms also dislike competitors undercutting them by underhand means. Indeed, the Tobacco Retailers’ Alliance—I do not often speak on behalf of anyone to do with tobacco, but it is right on this—has written, saying that it is,
“disappointed … that… the Bill … gives a retailer suspected of selling smuggled tobacco 48 hours’ … warning of having their premises inspected”.
It says that that seems,
“madness ... As legitimate retailers, we do not require any notice of an inspection. You can come in whenever you like”.
It says that the provision plays into the hand of retailers who break the law, allowing them to carry on selling smuggled tobacco after inspections. It urges the Government to remove this provision from the Bill and let inspections be carried out without warning so that they are an effective deterrent to those who sell smuggled tobacco.
Baroness Neville-Rolfe
I thank the noble Baroness for her intervention. We believe that the amendment put forward clearly defines the term “routine inspection” for the purpose of this power of entry. We clearly set out the exemptions in the Bill and I commend both our proposed amendments to try to clarify the circumstances, and the review within two years that I have offered, in response to the concerns that have been expressed about exactly how this will work. The powers and safeguards strike the right balance. It is an important area; the notice provision is strongly supported, particularly by the small business sector—not so much by big business—which we all care about because of the huge contribution that it makes to our economy. I ask the noble Baroness to withdraw her amendment.
Baroness Hayter of Kentish Town
I think the House knows that at the moment, no notice is needed in writing 48 hours before. The Government clearly made the wrong call, so they changed it a bit in the Commons by adding, “Well, unless the evidence is going to be lost”. They have now made more changes to say, “Well, routine inspections will be all right”; and now at the very last moment, we hear, “Well, there is going to be a review in two years’ time”. It sounds to me as if the Government know that this is wrong. The noble Lord, Lord Best, had it right: the Government should knock it out. They should not have put it there and it is not a way forward. There is no evidence that trading standards has misused its current powers; it will give notice because it is easier for it to do so. Ofsted does not have to define in law why it has made an emergency inspection without notice. The problem is the uncertainty: that if people are going to have to show that they had reasonable evidence or that they have fulfilled one of these requirements, there will be uncertainty, lack of clarity and fewer visits. I doubt that that is what the Government really want. I beg to test the opinion of the House.
Baroness Neville-Rolfe
My Lords, with this amendment we turn our attention to Schedule 8 and focus on some other aspects of competition law.
Effective competition is good for the consumer, and this part of the Bill reforms the regime for private actions to give businesses and consumers redress where they have been harmed by anti-competitive practices. However, the current private actions regime is not delivering the redress to consumers or SMEs that we would like. Therefore, Schedule 8 reforms the existing regime. As part of those reforms, the Government recognise that business may want to offer redress voluntarily, so the Bill provides for the Competition and Markets Authority to approve redress schemes.
It is imperative that, for the business to make use of redress schemes, we strike the right balance in incentivising business and providing redress to consumers. This amendment allows for the CMA to approve an outline of a redress scheme when the CMA finds a breach of competition law. That removes the requirement for a business to submit a complete scheme at that time. That change is being made to prevent businesses being deterred from putting forward a scheme at an early stage. Businesses are concerned about disclosing information while still under investigation and the costs of setting up a scheme which may ultimately not be approved by the CMA.
If the CMA approves the outline redress scheme, it will be able to impose a deadline by which the business must have complied with conditions necessary to set up the full scheme. Once the full scheme has been created, the amendment allows the CMA to withdraw its approval of the scheme if it has not complied with the conditions. It also enables a revised scheme to be considered. I beg to move.
Baroness Hayter of Kentish Town
My Lords, we support the intention of this amendment. I know that it has been brought to the attention of BIS that Which?, certainly, is worried that the wording would not have the effect it wants. It looks as if the CMA will be bound into a pre-approved school and cannot object to it later because of the inability to revoke pre-approval once given. This is technical and not for tonight; if between now and Third Reading the Government’s lawyers concur with Which? that the wording is not quite right, perhaps we could bring it back and help it at that stage.
Baroness Neville-Rolfe
My Lords, I am grateful to the noble Baroness. I was aware that Which? had expressed some concerns during the course of today. The amendment actually flowed from the work of the private actions working group, which involved different stakeholders on this Bill. We have had discussions with Which? and we are happy with the form of the amendment. I can brief the noble Baroness separately if she wishes, but I do move the amendment.
“Insurance cover for money received or held by lettings agents in the course of business
(1) Subject to the provisions of this section, a person may not accept money from another person (“T”) in the course of lettings and property managing agency work unless there are in force authorised arrangements under which, in the event of his failing to account for such money to the person entitled to it, his liability will be made good by another.
(2) In this section T is any person who seeks residential accommodation which is to let or who has a tenancy of, or other right or permission to occupy, residential premises; and a “relevant payment” means any sum of money which is received from T in the circumstances described in subsection (1).
(3) In this section “lettings agency work” has the same meaning as in section 83 of the Enterprise and Regulatory Reform Act 2013 (redress schemes: lettings agency work) and a “lettings agent” is a person who engages in lettings agency work.
(4) In this section “property management work” has the same meaning as in section 84 of the Enterprise and Regulatory Reform Act 2013 and a “property managing agent” is a person who engages in property managing work.
(5) The Secretary of State may by regulations made by statutory instrument, which shall be subject to annulment in pursuance of a resolution of either House of Parliament—
(a) specify any persons or classes of persons to whom subsection (1) does not apply;(b) specify arrangements which are authorised for the purposes of this section including arrangements to which an enforcement authority nominated for the purpose by the Secretary of State or any other person so nominated is a party;(c) specify the terms and conditions upon which any payment is to be made under such arrangements and any circumstances in which the right to any such payment may be excluded or modified;(d) provide that any limit on any such payment is to be not less than a specified amount; and(e) require a person providing authorised arrangements covering any person carrying on lettings agency work to issue a certificate in a form specified in the regulations certifying that arrangements complying with the regulations have been made with respect to that person.(6) Every guarantee entered into by a person (in this subsection referred to as “the insurer”) who provides authorised arrangements covering a lettings agent shall insure for the benefit of every person from whom the lettings agent has received a relevant payment as if—
(a) the guarantee were contained in a contract made by the insurer with every such person;(b) except in Scotland, that contract were under seal; and(c) where the guarantee is given by two or more insurers, they have bound themselves jointly and severally.”
Baroness Hayter of Kentish Town
Amendment 44 stands in the name of my noble friend Lord Stevenson and myself and is about client money protection. It would require every letting agent to have the money they hold either belonging to the tenant, because it is being paid by way of advanced rent, or belonging to a landlord in that it concerns rents received but not yet handed on, to be protected, so that even if the letting agent were to disappear or go bankrupt, such money would be safe and available to the tenant or the landlord. This is something that is required of lawyers, of other professionals and of estate agents, who hold money belonging to others. It is what is needed for rents collected by letting agents on behalf of landlords. It is not their money, and it should be held separately in a protected client account.
It is no small issue. We know of at least 500 cases of letting agents taking money from tenants as a holding fee, but then not letting them move in and keeping the money. This autumn we saw an agent, Mr Glasson, jailed for 21 months because he unlawfully and dishonestly kept rents and deposits; Mr Jackson of Suffolk Lettings stole £70,000 from landlords; and another letting agent, Mr Farrer, stole £17,000 in rents and deposits. This money was neither paid back to tenants nor passed on to landlords. Shirley Player was jailed for stealing £400,000 in this way.
This is money that is not going into the housing market. It is depriving landlords of their income, and tenants of their security. Amendment 44 is supported by landlords as much as it is by tenants. It is backed by the National Landlords Association, the Royal Institute of Chartered Surveyors, the British Property Federation, the Association of Managing Agents, the Association of Letting Agents, the Property Ombudsman, Ombudsman Services, Crisis and Shelter. It was also recommended by the CLG Select Committee in the other place. As David Cox, who leads ARLA, said, client money protection,
“is fundamental for tenants and landlords to ensure they have peace of mind should an agent go bust or take off with their funds”.—[Official Report, 3/11/14; col. GC 594.]
Similarly, a director of Kinleigh Folkard and Hayward said that it should be compulsory for all agents to subscribe to a client money protection scheme. Again, Savills urged the Government to make it compulsory for letting agents to have client money protection. It said that millions of pounds of consumers’ money is being paid to letting agents, despite the fact that,
“anyone can open a letting agency unregulated and with no checks on their bona fides”. —[Official Report, 3/11/14; col. GC 594.]
We are talking about vast amounts of money. It is estimated that perhaps £2.7 billion is held at any one time—in other words, rents collected but not yet paid on to a landlord. We want every letting agent to maintain a segregated client bank account for such client money, with written confirmation from the bank that all money in that account is the client’s, and—importantly—that the bank is not entitled to combine that account with any other account, nor exercise any right to offset money in the client account, because any sum has been owed to the bank by the agent.
There is also client money protection insurance. That would ensure that when an agent fails to manage a client account properly, the landlord can claim against the scheme, because the largest losses are where a letting agent goes into liquidation and the client account has been emptied by the agent. Ombudsmen cannot help in those circumstances; it is simply no good making an award against a bankrupt agency. We know, for example, that when the London Housing Solutions agency went into administration, 100 landlords were left without the rents that had already been paid over by their tenants, but which never reached them. Amendment 44 would require letting agents to have appropriate client money protection to safeguard both landlords and tenants.
I think that the Government were convinced by our argument, and by the representations of RICS, landlords and everyone else in Committee. However, instead of saying, “Yes, this is the right thing to do”, and making letting agents the same as estate agents—which, as it happens, hold very little money—the Government have said, “Well, let’s get letting agents to say whether they have client money protection”. That is in Amendments 44A, 44B and 44C, that the Government have tabled. But that is an absolute damp squib. Any letting agent that already has client money protection already tells you that. They do not need this Bill to make it known; they boast about it. The problem is not the people who have got client money protection, it is the letting agents who have not got it.
The Government amendments would, I am afraid, add nothing, and they would not help tenants at all, because tenants cannot shop around to find a different letting agent. The landlord does at least have some choice, so at the point they choose the letting agent, they can see whether they have client money protection; but they cannot keep on checking on it after that. The tenant has absolutely no ability to shop around. They have to pay the rent to the letting agent selected by the landlord, with absolutely no guarantee that the rent will actually reach the landlord.
The Minister has said in Committee that the client money protection that we have been urging could,
“make it difficult to encourage landlords to invest in properties”.—[Official Report, 3/11/14; col. GC 600.]
But it would have completely the opposite effect. It is the security given to landlords by client money protection that will encourage them to invest, knowing that all rents that are being made over to the letting agent by tenants are safe and sound.
This amendment is wanted by tenants, by landlords, and by reliable agents. I beg to move.
Baroness Neville-Rolfe
My Lords, I listened carefully to the debate we had on this issue in Committee, and to the points made today by the noble Baroness, Lady Hayter. I remain concerned that requiring letting agencies to belong to a client money protection scheme would introduce significant costs into this sector, which could have implications for rent levels and the availability of affordable rental properties.
Requiring agents to pay to belong to a client money protection scheme is forcing honest agents to buy insurance against themselves being fraudulent—something the vast majority of agents are not. Let me explain. There are two main reasons why a landlord or tenant could lose money that is held by a letting agent: the first, as already mentioned, is that the agent is fraudulent; the second is that the agent has gone bankrupt.
While I agree that an agent will not always know that they are about to go under, client money held in registered client accounts agreed in advance with the bank will be protected and returned to the client, rather than used to settle the agent’s debt. This is standard business practice and is not expensive. Good agents can therefore protect their client’s money without having to join expensive third-party insurance arrangements. These arrangements would be expensive. I am aware that good agents may do this already and that deposits must already be protected by law, but they are not as complex and expensive as they would be as a result of this amendment.
Baroness Hayter of Kentish Town
The Minister clearly did not hear what I said: tenants cannot choose the letting agent. They cannot shop around. It is the landlord who chooses the letting agent. There is absolutely nothing that they can do to choose a letting agent—to whom they are going to pay their rent—who has client money protection. I find that extraordinary. The landlords, the tenants and the professional bodies all want this amendment. The current system is not working. Letting agents are going bust, leaving landlords without their money. I cannot believe that that is what this House, or indeed the Government, really want. I wish to test the opinion of the House.
“Protection of consumer interests in the housing sector
Schedule (Protection of consumer interests in the housing sector) has effect.”
Baroness Hayter of Kentish Town
My Lords, Amendment 44ZA seeks to bring some trust into the overheated housing market and to ensure that tenants are treated fairly. We start with the simple proposition that estate agents should not charge both buyers and sellers for the same service and that letting agents should not charge landlords and tenants for the same thing. That sounds obvious. An estate agent surely can have only the seller or the buyer as his client, not both. It is unethical, not simply being paid twice for the same job but to have a conflict of interest since the seller wants the highest price and the buyer the lowest. The estate agent is selected and paid by the seller to represent his interest. It is therefore indefensible to take money from the buyer and de facto have him also as a client and owe him a duty of care. The amendment would therefore outlaw a contract which allowed agents to charge both buyer and seller or indeed both landlord and tenant.
It is particularly important to deal with estate agents as they are not covered by the Government’s own amendments requiring letting agents to disclose their fees. Furthermore, with instances of estate agents charging buyers up to 2.5% of the house price, that is thousands of pounds not going into the housing market but to those who prey on its consumers. These rip-off charges—and there is no other word for them—which exploit buyers and tenants and breach the client relationship with a vendor or with a landlord must be stopped. We know that the Minister has serious concerns about double charging as she said so in Committee. However, instead of doing something about it, she worried about what she called “unjustified new burdens” and the risk of damaging this important industry. It was unclear whether she was referring to the estate agency industry or to housing. However, it can surely only help the housing market if agents are trusted and act ethically.
The second part of Amendment 44ZA would ban letting agents from taking a finder’s fee from tenants. This is a new and growing—and I think unacceptable—practice. Again, as we mentioned in the earlier amendments, letting agents are chosen by and work for landlords who are seeking tenants. The client is therefore the landlord to whom by contract and law obligations and duties are owed. The letting agent is paid by the landlord to find a tenant though often does other things such as collecting the deposit, handing over keys and collecting rent. It is done on behalf of the landlord who pays for the service. However, what we are now seeing, especially where young people are desperate to find somewhere to live, is that potential tenants are being charged by the letting agent to show them a flat. Alex Hilton, the director of Generation Rent, says that a ban on the “abusive practice” of charging fees to tenants is long overdue. He says:
“Tenants are being milked by agents taking advantage of a housing market that’s failing to provide enough homes”.
It is bad business where one person has a duty of care to both sides of a contract. Whose interests, after all, are they then representing? Traditionally, it has been the landlord, but once money has been taken from a potential tenant, there is surely an obligation to that tenant, who under the Bill will have rights because they have paid for a service. However, there is a clear conflict of interest for the agent. Under the Bill, tenants will get these new consumer rights if they pay an agent, so it is hard to see how the agent can square that with the obligation he has to his original client, the landlord.
We have no problem with letting agents charging tenants for an individual service, such as obtaining the credit reference for a landlord to accept them. However, letting agents should not be paid twice for the same work. Furthermore, just when we are keen for more landlords to enter this market and provide more accommodation—but where tenants, needless to say, have fixed amounts to spend on their housing—a chunk of money out that is going to neither the landlord nor the tenant is being leeched of the housing market if letting agents are charging this extra amount to the tenant.
Scotland made charges to tenants, other than for rent and deposits, illegal in 2012, so letting agents can no longer charge tenants, since when this Government have tried to argue that this meant increased rents in Scotland. One study, admittedly from an estate agent, purported to show this. However, that study by LSL Property Services, which claimed that a 2.3% a year increase in Scottish rents had proved that that was because of the ban on fees to tenants, did not actually prove that—partly because that figure was only marginally higher than that same organisation’s own figures for the increase in rents in England and Wales, but even more because the Scottish figure was lower than for the north-west of England. Furthermore, the Scottish increase started a whole year after the ban on fees to tenants, which suggests that other factors were at play.
Meanwhile, Shelter commissioned two independent reports, by Rettie & Co and by BDRC Continental, which found that landlords in Scotland were no more likely to have increased rents since 2012, when the ban on letting agents charging tenants was introduced, than landlords elsewhere in the UK. Indeed, fewer than one in five agents had increased their fees, even to landlords, while 70% of landlords had not noticed any increase in their fees paid to letting agents.
There is an issue of principle here. The renter is not the consumer of letting agents’ services and has no contractual relationship with the agent. The renter cannot shop around or negotiate on price. These fees must stop.
Finally, I turn to Amendment 50E in this group, which would help protect tenants against retaliatory eviction—that is, having made a complaint about their landlord, being evicted under a Section 21 notice, which does not require the landlord to give any reason. We do not seek to outlaw Section 21 altogether but to stop it being used to stop tenants getting necessary repairs done. Our amendment would require the Government to issue guidance on how tenants can be protected from such retaliatory evictions. Sadly, Citizens Advice and tenants cite far too many cases of retaliatory eviction or threats of it for this simply to be a rare occurrence. As the Observer reported yesterday, when a tenant told the landlord,
“our shower was dangerous, his response was to evict us”.
Shelter says that about 200,000 people a year—about 2% of renters—are subject to revenge evictions. In preparing its report on creating a better private rented sector, the all-party parliamentary group heard from witnesses of fears that inhibited tenants from expressing concerns, because these sorts of evictions, sadly, are not illegal.
The Government undertook to outlaw revenge evictions and ensure that tenants could not face losing their homes simply because they asked for essential repairs to be made. The Government have given their backing in principle to a Private Member’s Bill in the other House to stop rogue landlords who, rather than meet their legal duty to keep properties up to standard and get rid of safety hazards, instead evict tenants who complain. As the Communities Minister, Stephen Williams, acknowledged, there is a “minority of spiteful landlords”. He said that he wanted to ensure that hardworking tenants are,
“not afraid to ask for better standards in their homes”.
We concur with those views. If the Government want to see progress, Amendment 50E is a natural first step. I beg to move.
Earl Cathcart (Con)
My Lords, I will confine my remarks to Amendment 50E:
“Protection of tenants against retaliatory eviction”.
As a landlord in the private rented sector, I am firmly against any landlord who engages in such practices as retaliatory eviction. In my 30 years or so of being a landlord, I have never had to resort to issuing—or come close to issuing—a Section 21 notice.
I have three points to make. First, the definition of a retaliatory eviction in this amendment is too broad. It would create massive uncertainty about what is and what is not an unreasonable eviction. A much clearer definition is needed that makes it abundantly clear that it does not include failure to pay rent or committing frequent anti-social behaviour, to give just two examples.
Secondly, we are being asked to agree to this amendment without knowing the extent of the problem. Responding to a Question, my honourable friend Brandon Lewis, the Housing Minister, said that the Government did not hold data on the extent of the problem, and nor did anybody else. That was true until Shelter conducted a YouGov poll that found that just 1% of private sector tenants had been evicted or served with a notice to evict in the last year because they complained to their council about a problem with their home that was not their responsibility. Only 7% of tenancies are ended by landlords, mostly because they need to take possession in order to sell or to move into the property themselves or to undertake refurbishment—or because the tenants are not paying their rent or are committing frequent anti-social behaviour.
My third point is that there are already existing laws in place that give tenants all the protection that they need. In June, the Competition and Markets Authority issued guidance on the relationship between landlords and tenants. This guidance states that, under the terms of the Unfair Trading Regulations 2008, derived from the Consumer Protection Act, it is a breach of these in the case of,
“any commercial practice that, in the context of the particular circumstances, intimidates or exploits consumers such as to restrict (or be likely to restrict) their ability to make free or informed choices in relation to a product, and which cause or are likely to cause the average consumer to take a different transactional decision. These are known as aggressive practices”.
In the examples of what constitutes aggressive practices, the guidance includes,
“threatening the tenant with eviction to dissuade them from exercising rights they have under the tenancy agreement or in law, for example where they wish to make a complaint to a local authority about the condition of the property, or seek damages for disrepair”.
Likewise, evicting a tenant as a punishment for a complaint is unfair practice, as the Competition and Markets Authority recognises. In either case, a Section 21 notice should not be enforced by the courts.
What is needed is not more law, but better information for tenants to understand their rights. Simply put, there is already ample protection for tenants, as I have tried to explain. In too many cases, they do not know that it exists.
Baroness Neville-Rolfe
What I was going to say is that the wash-up is a little above my pay grade. However, I note the point made by the noble Lord and I can confirm that we are supportive of that Bill on the terms that I have set out.
Baroness Hayter of Kentish Town
My Lords, my noble friend has made a good suggestion but it seems to me that the response could have been, “Let us have the debate in the Commons on Friday”, so that it could either come back here at Third Reading with the correct wording or, indeed, when this Bill goes back to the other place, as it has to do. I think that we have retaliatory eviction in the pocket; one way or another, we look forward to seeing it before May.
I do not understand some of the Government’s responses. Their idea is that this legislation could put off new providers. I do not know about everyone else’s high street, but we have quite enough in the way of estate agents and letting agents. The notion that they will not be set up because we legislate for them to provide decent treatment for tenants and landlords, and indeed for buyers and sellers, is not one that I accept. I thank the noble Baroness, Lady Bakewell, for her support because there we have it from a real consumer who went to a letting agent and saw what happened. Basically, you keep on paying but you are not sure what it is that you are paying for.
Our amendment would do two things. It would stop estate agents from charging sellers and buyers for the same service and it would stop letting agents from charging tenants what they have already charged landlords for. I wish to test the opinion of the House.
Baroness Neville-Rolfe
My Lords, I would like to end by thanking the noble Baroness, Lady Hayter, for retabling this important amendment, which seeks to ensure that students in receipt of student support funding can access the dispute resolution scheme run by the Office of the Independent Adjudicator for Higher Education—the OIA. In Committee, the noble Baroness set out a cogent case for ensuring that higher education students receiving public support should have access to this valuable service. We listened carefully to those concerns. As the noble Baroness pointed out, the 2011 higher education White Paper, Students at the Heart of the System, had already set out our intention to require that all higher education students receiving public support should have access to external dispute resolution. This was part of a wider package of measures aimed at developing a new regulatory framework across higher education that required legislation to implement it.
Increasingly, there are new and different providers offering higher education, not just the traditional university sector. Currently, students at these newer higher education providers do not always have the right to take their unresolved complaints to the OIA. A handful of alternative providers have so far voluntarily joined the OIA’s complaints handling scheme. However, we think that all higher education students receiving student support should be able to access this service, and the only way to achieve this is by requiring it in legislation. We have now tabled a government amendment to enable a much wider group of students in future to have access to the OIA’s complaint handling scheme. In practical terms, it means that full and part-time higher education students in receipt of student support and studying at alternative providers and further education colleges in England and Wales will be able to bring a complaint to the OIA.
In future, these students will be able to ask the OIA to look at unresolved student complaints on issues such as an institution failing to deliver courses as advertised or courses that are not fit for purpose; misleading or untrue information about a course; and complaints about teaching and facilities, bullying and harassment and welfare issues. We should also expect to see an improvement in complaint handling arrangements at those institutions required to join the OIA scheme. A major part of the OIA’s role is also to spread good practice in complaint handling more generally. I beg to move.
Baroness Hayter of Kentish Town
My Lords, it is a genuine pleasure to thank the Minister for responding to the amendment that we tabled in Committee and improving the language somewhat from our draft. We are delighted by that. She may, however, be amused to learn that just yesterday, Which? published a new report. It is entitled A Degree of Value: Value for Money from the Student Perspective, and it calls for all higher education students to have access to the OIA. The report was published yesterday; students are going to get it in about 30 seconds’ time. I am not sure whether Which? will claim the credit, but it is nice that it will seem a quick win for it. We are delighted, and I know that the adjudicator is also very pleased that this will treat all students in the same way. I thank the Minister and we look forward to that being enacted.