Draft Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018 Draft Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2018

Catherine West Excerpts

Tuesday 12th June 2018 General Committees

[John Healey]

If the hon. Gentleman reads Lords Hansard from 17 March 2016, he will see that my colleague Baroness Hayter of Kentish Town, who led for Labour on the Housing and Planning Bill—as the Minister mentioned, that contains the parental provisions for the draft regulations—in pressing the case for a compulsory scheme rather than the existing voluntary scheme, cited several examples of property agents pocketing money, from landlords as well as renters, and going missing. Baroness Hayter cited six or seven obvious, recent cases, but there is a track record of hundreds of such cases in recent years, which underlines the case for the draft regulations. I encourage him to look at that debate, although the Minister may well give him other examples.

I was diverted before I had started. The Minister has introduced two draft regulations, so will she confirm which four housing regulations she will repeal? It is important for the Committee, before it approves the draft regulations, to understand the consequences for provisions or protections in other fields. If she cannot do that, will she confirm whether the Government’s policy of two out, one in for regulations, which has been their policy for several years, is still in place or whether it has been dumped?

As the Minister said, the draft regulations derive from the Housing and Planning Act 2016, which was given Royal Assent in May 2016. I happen to have led from the Front Bench the opposition, inside and outside Parliament, to that Bill. The draft regulations are, in many ways, a ghost from the past. This debate reminds me of many of the debates we had during the long proceedings on that long Bill. I am reminded, too, of the 19 defeats the Government suffered on it—double the total number of defeats on all the Bills in the previous Session. Of course, that does not count the concessions that the Government made during proceedings on the Bill, which led us to withdraw amendments that we might otherwise have pressed to votes that we might well have won.

That is the background to the draft regulations. Pressed by Labour, both in the Public Bill Committee in this place and in Committee and on Report in the other place, the Government were prepared to talk and to consider this issue further, so, although it very well might have done, it did not register as defeat No. 20.

[Catherine West (Hornsey and Wood Green) (Lab)]

Does my right hon. Friend agree that the Bill was pretty poorly put together from the start? If the Government had discussed things in more detail from the start, it might have been improved.

[The Chair]

Order. We do not need the hon. Lady’s rereading of the original Bill. We are considering the statutory instruments in front of us today, not the Bill itself. Perhaps the shadow Minister will return to that subject.

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[John Healey]

I have never understood why my really talented hon. Friend hides himself away in the Whips Office. He has quite clearly demonstrated how effective he would be speaking from the Front Bench, rather than simply sitting on the Front Bench.

That was perhaps a rather long preamble. What I really want to say is that the Opposition welcome these regulations, because they cover the ground that we urged on the Government previously. In a way, they make good a gap. Solicitors, other professionals and even estate agents are required to have money protection schemes in place. We have a mandatory money protection scheme in place for renters’ tenancy deposits. The regulations are well overdue, and they are welcome because of that. Many of the better firms in the industry have backed this for some time. The Association of Residential Letting Agents, the British Property Federation, the Association of Residential Managing Agents, the ombudsman and the Housing, Communities and Local Government Committee have, for some time, all been of the view—as have the Opposition—that this is a necessary step.

In the end, the principled case for these regulations is surely that there is no real market in letting agents for renters. Renters cannot shop around for their letting agent, because they do not choose the letting agent who is responsible for the home that they rent and live in, or for the home that they want to rent; that decision is for the landlord. People have no choice about that, because they choose the property and not the letting agent. The draft regulations are a well overdue and welcome recognition of that fundamental point.

[Catherine West]

Does my right hon. Friend agree that we have a large number of cowboys in the industry? There is no other way of putting it.

[John Healey]

We do. I have been known to describe some parts of the private rented sector as the wild west, to pick up on her analogy. The draft regulations are narrow; they are a welcome but small step in a market that may leave the majority of renters satisfied at the moment, but that contains some significant rough or rogue practice. The measures will, in a small way, help to make the market fairer and better for landlords and tenants. One of the important secondary arguments in favour of these regulations is that they will clearly benefit landlords as well as tenants.

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[Mrs Wheeler]

No, I will carry on. Who will enforce the regulations? Trading standards will be responsible. More importantly, the Secretary of State will nominate a lead authority in trading standards for areas that get into difficulty with existing trading standards. That is common practice, and that is what is happening in the Tenant Fees Bill that is going through the House.

[Catherine West]

The Minister is being generous with interventions. Will she clarify whether local authorities will have extra resources to carry out their trading standards duties?

[Mrs Wheeler]

As the hon. Lady knows—we have also made a great point of this in the Tenant Fees Bill—the £5,000 fine and the £30,000 fine will remain with councils, and we expect councils to be able to fund services because of such fines coming in.