Enterprise and Regulatory Reform Bill

John Healey Excerpts

Tuesday 16th April 2013 Commons Chamber

[Jo Swinson]

I thank the hon. Gentleman for his kind offer. No doubt, his Committee’s work on this matter will be of great value to the Government when we put together the consultation and work out how to deliver the framework—it will not be a single scheme; there could be a variety of schemes—to ensure that tenants have access to redress.

The Government intend to introduce the secondary legislation as soon as reasonably possible, but it is right that this be an order-making power, because it will give us the flexibility that comes from consultation and the due processes of policy making and scrutiny.

[John Healey (Wentworth and Dearne) (Lab)]

The Lords amendment tabled by Baroness Hayter simply extended the estate agents system of regulation, which has been in place for more than 30 years, to letting and managing agents. It includes a redress scheme, but goes wider, including to cover some of the concerns that the hon. Member for Worthing West (Sir Peter Bottomley) has raised. Why do the Government not simply accept that amendment?

[Jo Swinson]

The right hon. Gentleman raises a good point, but there is also a good answer. The Government are proposing an amendment in lieu of Lords amendment 40, which, as he said, subjects letting and management agents to the Estate Agents Act 1979. The amendment made to the Bill at present would not properly achieve the effect of requiring redress. It would impose undue regulatory burdens by making such provision much broader. The requirements of the 1979 Act are rightly onerous, because purchasing a house is something that people might do only once or twice in their lifetimes and it involves a huge sum of money. There is therefore a strong case for significant levels of regulation, which is not made in quite the same way for letting agents, where redress is the most important element.

[John Healey]

rose—

[Jo Swinson]

If the right hon. Gentleman is unsatisfied when I have finished answering his intervention, he may have another bite of the cherry. The Government’s other concern about Lords amendment 40 is that it does not work with the devolution settlement, because the 1979 Act is a piece of UK-wide legislation, whereas housing and letting issues are devolved to the devolved Administrations. The amendment would therefore cause a significant difficulty with them. I presume that is an inadvertent effect of the amendment on the part of its movers in the other place; none the less, we would not want it to make it into the Bill.

[John Healey]

I am somewhat disturbed by that response and the suggestion that the homes that people buy are somehow more important than other people’s homes. We are dealing with people’s homes. Almost 9 million households now rent in the private sector, which includes 1 million families with children. They require some assurance—some security and basic rights in the market that they do not have at the moment—which a redress scheme on its own will not provide.

[Jo Swinson]

I understand what the right hon. Gentleman says; we may have to agree to disagree on this matter. He is absolutely right to highlight the fact that we are dealing with people’s homes, which is why this measure is so important. Incidentally, it is also something that his party did not see fit to introduce in 13 years in government. This Government are righting the situation by making amendments to ensure that there is a redress scheme. Indeed, when the Lords amendment we are discussing was introduced in the other place, that is the argument that was made and that is what was said was most important. I agree that a redress scheme is important to ensure that where there is a problem, tenants can have an avenue for redress.

Indeed, such a scheme has two functions, because it is not just about ensuring that when somebody has a problem, they can get redress. The very fact that agents have to sign up to redress schemes is in itself a driver of behaviour to ensure less wrongdoing in the first place. More widely, residential leasehold matters are being taken forward separately by the Department for Communities and Local Government in the round tables it is conducting. The noble Lady Baroness Gardner of Parkes raised that issue in the other place.

I hope I have been able to outline the Government’s position on the Lords amendments and provide some reassurance to Members of this House.

--- Later in debate ---

[Mr Umunna]

I entirely agree. This is one of the aspects of the debate on health and safety that I find particularly frustrating. While we must of course retain a balance, we must also be clear about the fact that protecting people at work and keeping them safe is not a matter of red tape. It is a matter of safety at work.

Lords amendment 40, to which the Government have tabled their own amendment, relates to estate agents. It represents a welcome U-turn by the Government, who have backed Labour’s proposals to give greater protection to tenants and landlords by forcing letting agents to join a scheme to deal with complaints. It is a victory for tenants and landlords who rely on agents to rent, or care for, their property in a market described as the wild west by the industry itself.

I would like to take this opportunity to thank all the organisations across the sector who have worked with us to secure this change in position from the Government. Tenants and landlords have for too long had little protection, and have been bewildered as to why it has taken so long for the Government to recognise the need for change. Until this eleventh-hour U-turn, the Government seemed out of touch and isolated on this issue. It is good that they have changed position, recognising the need for a proper complaints system for all consumers. However, we are disappointed that the Government have not gone further, having rejected other parts of Baroness Hayter’s amendment.

[John Healey]

I am grateful to my hon. Friend for that slight qualification, but he may be in danger of overstating the extent of the U-turn. There are growing problems of unjustified, unfair, upfront fees, misleading advertisements, repairs not being done and visits not being made. This is a step in the right direction, but it is a small step, and will prove insufficient to deal with a market that is not functioning properly and fairly in the interests of tenants or landlords.

[Mr Umunna]

There must be some telepathy going on here, because I was about to go on to say that it is important to note that the majority of the sector see the Government’s amendment today as a first step, not a last word.