Consumer Rights Bill

Stella Creasy Excerpts

Monday 16th June 2014 Commons Chamber

[Jenny Willott]

We know that consumers in the private rented sector are especially concerned about the fees charged by letting agents, particularly when they are unexpected or unreasonably high. There are calls for a ban on letting agents charging fees to tenants, but I am concerned, as we discussed on the previous debate on Report, that an outright ban would simply increase the pressure on rents. Making agents publish their fees is a better approach, giving consumers the information they want and supporting good letting agents. Such transparency would deter double charging and enable tenants and landlords to shop around, which would encourage agents to offer competitive fees.

The vast majority of letting agents provide a good service to tenants and landlords, but we are determined to tackle the minority of rogue agents who offer a poor service. Although good agents already make information about their fees and charges readily available, the new clause will introduce, for the first time, a financial penalty when an agent fails to display their fees. We are introducing legislation that will require all letting agents and property managers to belong to an approved redress scheme. That will give tenants an effective way to address complaints about fees, as well as, more generally, when the tenant is not happy with the agent’s performance.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

It is a pleasure to see the debate on the Consumer Rights Bill come back to the House because many Members on both sides of the House are concerned about the impact of what the Minister calls unreasonably high fees. In relation to the Government’s proposal and our entirely reasonable new clause, the challenge for us all is to understand quite what damage such fees do to the private rented sector and how we can address those fees to give us a fair market in private rented accommodation.

I welcome the fact that the Government have now understood the case that the Opposition have been making, which is that we cannot ignore—try though the Government have in previous debates—the 9 million people in the private rented sector in this country. In particular, we must understand the impact of agency fees on people’s ability to keep a roof over their head, so it is worth thinking what kind of fees we are talking about. The Minister did not go into much detail, but it is worth reminding Members in the Chamber about the fees.

On average, tenants are forced to pay letting agents about £355 every single time they move. Indeed, some mystery shopping in my constituency has found average fees of £450, and Shelter has identified the eye-watering figure of £700 in total agency fees. Shelter has certainly found that one in seven of those using an agency is charged more than £500 a time, meaning that people have to find £500 every single time they move. That is a considerable sum, before we even consider the deposit and the rent. Such fees are putting huge pressure on people in the private rented sector, particularly in relation to their ability to make ends meet. Shelter’s research shows that 27% of those who have used a letting agency in the past three years have had to borrow or use a loan to pay the fees, and that 17% have had to cut down their spending on basic essentials, such as food or heating, to be able to cover them.

For the first day on Report, we tabled an amendment to recognise that there is a fundamental conflict of interest for an agent to take money from both the tenant and the landlord for the same transaction, and therefore to ban the laying of fees on tenants. In doing so, we were learning from the experience in Scotland. The Minister said, as she has again today, that banning fees will not make it cheaper for tenants, who will just end up paying higher rents through up-front fees.

In responding to our new clause 30, I hope that the Minister will use this opportunity to tell us what she takes from the research done in Scotland, where such a provision was made in 2012, because the research shows that the reverse is true—that there is no evidence that banning agency fees leads to an increase in rents. Indeed, fewer than one in five letting agencies interviewed in Shelter’s research said that it had increased fees to landlords. In fact, taking away the conflict of interest has had no impact on the market, but has done everything to help on the cost of housing.

I note the comments by the Deputy Prime Minister, who has admitted that there is a problem with fees and has said that there is an issue about the length of tenancies. The Opposition have been making those arguments for some time. In relation to the Government new clauses, what is it about our arguments and the evidence—that taking away fees does not increase rents, but makes renting a home more affordable for people—that explains why the Government have not as yet fully come over to our side of the argument.

The Government new clauses include some admirable claims about transparency. We certainly support the idea that it is important for tenants to be aware of the fees that they might be charged. However, I have several questions about how the new clauses are drafted, because it is not clear how they will work in practice. I am sure that the Minister would argue that all her proposed new clauses must work in practice, not just in principle.

One new clause mentions that the description of a fee must be understandable, but will the Minister clarify quite what that means? Will she require agents to break fees down and, for example, to say whether they will charge for a credit check and for an inventory fee, as often happens? In my constituency, I have seen tenants charged a pet fee, so will there be a description of all the fees that might possibly be applied?

What does the Minister mean by “likely to be seen”? We have seen examples of agencies putting a list of their fees in the toilets of their offices for tenants to read. Under the Bill, would that be considered a place where such a list is likely to be seen? What redress would a tenant have if they had not had cause to use the facilities of a letting agency and had therefore not seen the information?

--- Later in debate ---

[Robert Flello (Stoke-on-Trent South) (Lab)]

I came across a case recently in which a tenancy was repeated. All that happened was that a copy of the original agreement was reprinted and sent off to be signed. There was all of about 30 pages of printing, which, even at the most expensive local high street printing outfit, would not amount to anywhere near the couple of hundred pounds that the agency was charging for that simple job.

[Stella Creasy]

My hon. Friend makes an important point about the kind of repeat fees we are seeing, which any legislation must address. More importantly—this relates to the proposals that we have made—I would wager that the landlord was also charged in that transaction for the same amount of photocopying. Fees are clearly being charged when a contract is repeated and that needs to be addressed.

New clause 24 talks about how a fee can be calculated if the amount is not yet known. Will the Minister set out what protection will be available to consumers if they miscalculate the amount based on the information that is provided? How clear does the information of the letting agency have to be?

All the issues that I have raised relate to enforcement. New clause 28 provides the power to impose a £5,000 penalty. It would be very interesting to hear what kind of enforcement process the Minister envisages. We talked in Committee about the cuts to trading standards—the Cinderella service that does not even have enough buttons at the moment to address the many issues the Government expect it to address under the consumer rights legislation.

The Minister talked in passing about the letting agent redress scheme. I must pay tribute to my noble Friend Baroness Hayter, who argued passionately for the redress scheme because of her experience of these issues. It is not clear to the Opposition quite what will happen. Will the Minister therefore set out what she thinks will happen if an agent does not display their fees clearly and what kind of enforcement action will be taken? She talked about issuing civil penalties. Will those penalties go to the tenant who has had to pay £1,300 for the photocopying to be repeated, but who was not told about that when they signed up to the letting agency?

All those questions speak to the fundamental challenge that we are dealing with, which is that information, although welcome, is not enough to deal with the fundamental problem of the impact that excessively high agency fees have on a person’s ability to rent a property. As we said in the previous debate on Report, it is a bit like telling someone who is tied to the train tracks what the timetable is for the trains. The fundamental issue that we have to deal with is the consequence of agents being able to charge tenants such fees.

That is why we tabled new clause 30. I hope that the Minister will recognise that it is an entirely reasonable response to the Government new clauses. New clause 30 would do two things. First, it would require the Government to produce a report on

“the consumer detriment caused to tenants by letting agent fees and the impact this has on the ability of tenants to secure and maintain tenancies”.

I am sure that everybody in the House would welcome such a report, because it would at least give some depth to the conversations that we have all been having about this issue. Secondly, it would commit the Government to taking action to

“prohibit fees that cause detriment to tenants.”

Surely, if fees are pushing people out of their homes and distorting the market in private rented accommodation, it is in the interests of all consumers and, indeed, landlords that we act.

I hope that the Minister will accept new clause 30 and commit the Government to truly tackling the issues in the private rented sector, including the impact of agency fees. I am sorry that the hon. Member for Brigg and Goole (Andrew Percy) is not here because he, too, has argued that banning agency fees would somehow lead to higher rents. I look forward to the Minister responding to all those tenants in Scotland who have not found the banning of fees to be a negative experience. What does she think we can learn from that experience?

If the Minister does not yet accept the case for banning fees outright, does she accept that there are fees that can be detrimental and that it is appropriate for the Government to intervene? Alternatively, is she simply saying that if a letting agency wants to charge somebody £700 a time to renew their tenancy, it is fine, as long as they have told them about it? I am sure that is not her intention and that she recognises that people do not shop around for a letting agency: they shop around for a property to try to keep a roof above their family’s heads. Because such costs cause detriment to consumers, they are unacceptable. If the Minister does not accept that they cause detriment, I hope that she will at least accept our amendment that would provide that the Government should carry out research on this issue and commit to action if detriment is proved. Nine million people are waiting on the Minister’s every move to see whether they can keep a roof above their heads, not just in 2014 but in 2015 and beyond. Should we win the next election, we will take action if the Government will not do so now.

[Jenny Willott]

The irony of the hon. Lady’s last sentence is astounding, given that the Government are legislating to tackle this issue, but the previous Labour Government did not. The issue has not suddenly arisen in the last three years, and the Government have committed to tackling the minority of rogue landlords, something that her party did not do.

We are taking action to ensure that tenants have proper redress and a fair deal. We recognise that there are real issues with a minority of rogue landlords who do not treat tenants fairly, and that is why we are taking action. Today, we are ensuring transparency and openness on fees so that landlords and tenants can shop around. The hon. Lady mentioned the experience in Scotland and the recent Shelter report on the impact of banning fees. However, concerns have been raised that the Shelter report ignores the widespread non-compliance with the ban in Scotland. I have seen an estimate that some 25% of firms are still charging admin fees for tenants who move in, and a higher proportion are still charging other fees during the tenancy.

As the hon. Lady said, those agents that are complying have got around the fact that they cannot charge fees to tenants by, for example, raising landlords’ fees, but that has had an impact on rents in certain areas. Landlords are not absorbing the increase in fees, but passing it on to tenants through the rent. For example, in Edinburgh, rents went up by more than 5% and in Aberdeen by more than 6%—significantly higher increases than in England and Wales. The evidence is that the introduction of the ban north of the border has had a significant negative impact on tenants.

[Stella Creasy]

Can the Minister clarify that she disputes what Shelter has said—that any increase in rent is not related to the banning of agency fees—or that she has her own research? She is telling a very different story from the evidence of the research conducted by Shelter in Scotland, and the House may be confused by what she is saying as a result.

[Jenny Willott]

I have made it clear that we have concerns about the Shelter report because, for example, it ignores the widespread non-compliance that I mentioned. The evidence on rents is that they have risen faster in Scotland than they have in England and Wales.

The hon. Lady raised some questions about how fees would need to be broken down and what evidence would need to be provided. The regulations will make that clear. For example, a general administration fee would need to be broken down to show exactly what it covered. That information will therefore be available to tenants. The hon. Lady also asked whether repeat fees would be covered, and I can confirm that the fees associated with property management would also be covered, so they would need to be provided and published.

The hon. Lady asked how the provisions would operate. The Bill provides a power, and we will consult on and publish secondary legislation to ensure that the provision is as tight as it can be. We will ensure that information is available to tenants and landlords so that they can make a judgment on the most appropriate agent for their business. The legislation will be enforced by local authorities as they are involved in the licensing of landlords and also have the local knowledge about the agencies in their area. They are in the best place to enforce it and to ensure it is operating in the best interests of tenants.

Finally, we have said that we will review it after a year of operation to see how it is working and to ensure that it has made a difference to tenants. We do not want rents to go up, as that would cause widespread problems for, as the hon. Lady says, the large number of people who rent in the private sector. We want to protect those tenants. We do not want their rents to go up; we want them instead to get a fair deal from agencies and to be able to see what the charges are. We want openness and proper redress in place to ensure they receive a fair deal.

Question put and agreed to.

New clause 24 accordingly read a Second time, and added to the Bill.

New Clause 25

Letting agents to which the duty applies

‘(1) In sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) “letting agent” means a person who engages in letting agency work (whether or not that person engages in other work).

(2) A person is not a letting agent for the purposes of sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) if the person engages in letting agency work in the course of that person’s employment under a contract of employment.

(3) A person is not a letting agent for the purposes of sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) if—

(a) the person is of a description specified in regulations made by the Secretary of State;

(b) the person engages in work of a description specified in regulations made by the Secretary of State.”—(Jenny Willott.)

This new Clause provides that the duty applies to a person who engages in letting agency work. Employees are exempt from the duty. The Secretary of State may make regulations exempting other persons or types of work.

New Clause 26

Fees to which the duty applies

‘(1) In sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) “relevant fees”, in relation to a letting agent, means the fees, charges or penalties (however expressed) payable to the agent by a landlord or tenant—

(a) in respect of letting agency work carried on by the agent,

(b) in respect of property management work carried on by the agent, or

(c) otherwise in connection with—

(i) an assured tenancy of a dwelling-house in England, or

(ii) a dwelling-house in England that is, has been or is proposed to be let under an assured tenancy.

(2) Subsection (1) does not apply to—

(a) the rent payable to a landlord under a tenancy,

(b) any fees, charges or penalties which the letting agent receives from a landlord under a tenancy on behalf of another person,

(c) a tenancy deposit within the meaning of section 212(8) of the Housing Act 2004, or

(d) any fees, charges or penalties of a description specified in regulations made by the Secretary of State.” —(Jenny Willott.)

This new Clause provides that the duty applies to fees payable in respect of letting agency work, property management work and other work done in connection with assured tenancies. The clause provides that certain payments are not fees for the purposes of the duty. The Secretary of State may make regulations to exempt other payments.

New Clause 27

Letting agency work and property management work

‘(1) In sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) “letting agency work” means things done by a person in the course of a business in response to instructions received from—

(a) a person (“a prospective landlord”) seeking to find another person wishing to rent a dwelling-house in England under an assured tenancy and, having found such a person, to grant such a tenancy, or

(b) a person (“a prospective tenant”) seeking to find a dwelling-house in England to rent under an assured tenancy and, having found such a dwelling-house, to obtain such a tenancy of it.

(2) But “letting agency work” does not include any of the following things when done by a person who does nothing else within subsection (1)—

(a) publishing advertisements or disseminating information;

(b) providing a means by which a prospective landlord or a prospective tenant can, in response to an advertisement or dissemination of information, make direct contact with a prospective tenant or a prospective landlord;

(c) providing a means by which a prospective landlord and a prospective tenant can communicate directly with each other.

(3) “Letting agency work” also does not include things done by a local authority.

(4) In sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) “property management work”, in relation to a letting agent, means things done by the agent in the course of a business in response to instructions received from another person where—

(a) that person wishes the agent to arrange services, repairs, maintenance, improvements or insurance in respect of, or to deal with any other aspect of the management of, premises in England on the person’s behalf, and

(b) the premises consist of a dwelling-house let under an assured tenancy.”—(Jenny Willott.)

This new Clause defines letting agency work and property management work. It provides that letting agency work does not include publishing advertisements, enabling landlords and tenants to communicate directly with one another or things done by a local authority.

New Clause 28

Enforcement of the duty

‘(1) The Secretary of State may by regulations—

(a) impose functions on a local authority in connection with the enforcement of the duty in section (Duty of letting agents to publicise fees);

(b) make provision for civil penalties to be imposed in respect of a breach of that duty.

(2) Regulations under subsection (1)(b) may provide for the amount of a civil penalty to be determined by the person imposing it, subject to subsection (3).

(3) The amount of a civil penalty that a person may impose by virtue of regulations under subsection (1)(b) may not exceed £5,000 for each breach of the duty in section (Duty of letting agents to publicise fees).

(4) The Secretary of State may by regulations amend the figure for the time being specified in subsection (3).

(5) Regulations under subsection (1)(b) must make provision about the procedure for imposing a civil penalty and, in particular, must require a person imposing a penalty to give the person on whom it is imposed a written notice stating—

(a) the amount of the penalty,

(b) the reasons for imposing it, and

(c) the date by which and manner in which it is to be paid.

(6) Regulations under subsection (1)(b)—

(a) may give a person on whom a civil penalty is imposed a right to request a review of the decision to impose the penalty, and

(b) must give such a person a right to appeal against the decision to the First-tier Tribunal.

(7) Regulations under subsection (1)(b) must, in particular, specify the grounds on which a person may appeal against a decision to impose a civil penalty, which must include the grounds—

(a) that the decision was based on an error of fact,

(b) that the decision was wrong in law, and

(c) that the decision was unreasonable (including that the amount of the penalty is unreasonable).

(8) Regulations under subsection (1)(b) may, in particular—

(a) specify the time within which a person must request a review of, or appeal against, a decision to impose a civil penalty;

(b) require a person to request a review before appealing;

(c) specify the grounds on which a person may request a review;

(d) make provision about the procedure for a review;

(e) make further provision about reviews and appeals (including provision as to the powers available on a review or appeal).

(9) Regulations under subsection (1)(b) may make provision about the recovery of a civil penalty, including—

(a) provision for the person by whom it is imposed to recover the penalty as a civil debt;

(b) provision for the penalty to be recoverable, on the order of a court, as if payable under a court order.

(10) Sums received by a local authority under regulations under this section may be used by the authority for the purposes of any of its functions.

(11) A local authority on whom functions are conferred by regulations under this section must have regard to any guidance issued by the Secretary of State about—

(a) compliance by letting agents with the duty in section (Duty of letting agents to publicise fees);

(b) the exercise of those functions.” —(Jenny Willott.)

This new Clause enables the Secretary of State to make regulations about enforcement of the duty. The penalty for non-compliance will be a civil penalty of up to £5,000. The regulations must provide for a right of appeal against the penalty to the First-tier Tribunal.

New Clause 29

Supplementary provisions

‘(1) In sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions)—

“assured tenancy” means a tenancy which is an assured tenancy for the purposes of the Housing Act 1988 except where—

(a) the landlord is a private registered provider of social housing, or

(b) the tenancy is a long lease;

“dwelling-house” may be a house or part of a house;

“landlord” includes a person who proposes to be a landlord under a tenancy and a person who has ceased to be a landlord under a tenancy because the tenancy has come to an end;

“long lease” means a lease which—

(c) is a long lease for the purposes of Chapter 1 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993, or

(d) in the case of a shared ownership lease (within the meaning given by section 7(7) of that Act), would be a lease within paragraph (a) of this definition if the tenant’s total share (within the meaning given by that section) were 100%;

“tenant” includes a person who proposes to be a tenant under a tenancy and a person who has ceased to be a tenant under a tenancy because the tenancy has come to an end.

(2) In sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) “local authority” means—

(a) a county council in England,

(b) a district council,

(c) a London borough council,

(d) the Common Council of the City of London in its capacity as local authority, or

(e) the Council of the Isles of Scilly.

(3) References in sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) to a tenancy include a proposed tenancy and a tenancy that has come to an end.

(4) References in sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) to anything which is payable, or which a person is liable to pay, to a letting agent include anything that the letting agent claims a person is liable to pay, regardless of whether the person is in fact liable to pay it.

(5) Regulations under sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) are to be made by statutory instrument.

(6) A statutory instrument containing (whether alone or with other provision)—

(a) the first regulations to be made under section (Enforcement of the duty)(1)(b), or

(b) regulations under section (Enforcement of the duty)(4),

is not to be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.

(7) A statutory instrument containing regulations under sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) other than one to which subsection (6) applies is subject to annulment in pursuance of a resolution of either House of Parliament.

(8) Regulations under sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions)—

(a) may make different provision for different purposes;

(b) may make provision generally or in relation to specific cases.

(9) Regulations under sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) may include incidental, supplementary, consequential, transitional, transitory or saving provision.”—(Jenny Willott.)

This new Clause provides definitions of the terms used in the new clauses and sets out the procedures for making regulations.

Brought up, read the First and Second time, and added to the Bill.

New Clause 30

Letting Agents: Report

Within three months of Royal Assent of this Act, the Secretary of State shall prepare and publish a report, and lay a copy of the report before Parliament, on—

(a) the consumer detriment caused to tenants by letting agent fees and the impact this has on the ability of tenants to secure and maintain tenancies, and

(b) the steps that the government intends to take to prohibit fees that cause detriment to tenants.”—(Stella Creasy.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

--- Later in debate ---

Consumer contract terms which may be regarded as unfair

[Stella Creasy]

I beg to move amendment 1, page 51, line 9, at end insert—

“1A A term which requires a consumer to pay a charge for, or be liable for, an element of a good or service that another party has also been charged for in the course of the same transaction.”

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss the following:

Amendment 2, page 51, line 15, at end insert—

“2A A term which relies upon any bill of sale, as defined in section 3 (Construction of Act) of the Bills of Sale Act (1878) Amendment Act 1882, to reduce the level of consumer protection in relation to contracts concerning consumer credit.”

Amendment 3, page 51, line 18, at end insert—

“3A A term that directly causes financial detriment to the consumer such that it can reasonably be seen to alter the capacity of the consumer to pay the costs of the contract, where the contract is for a financial service.”

Amendment 4, page 53, line 2, at end insert—

“20A A term which either—

(a) requires or encourages a consumer to contract third party services without informing them of their right to seek independent advice; or

(b) seeks to limit a consumer’s access to independent advice regarding third party contracts where there is a potential conflict of interest for the third party involved.”

Amendment 19, page 53, line 2, at the end insert—

“20A A term which has the object or effect of permitting a trader to block, restrict or otherwise hinder the access of a consumer to any lawful electronic communications network or electronic communications service on the basis of an unreasonable or unusual definition of ‘internet access’, ‘data’, ‘webaccess’ or similar word or phrase. Nothing in this prohibition shall affect filters for the purpose of child protection. Electronic communications network or electronic communication service shall have the same meaning as in the Communications Act 2003.”

Amendment (a) to amendment 19,  after “trader”, insert

“engaged in the provision of fixed broadband internet access or mobile internet services.”

[Stella Creasy]

I shall speak to all the amendments in the group, which are about unfair contract terms. Unfairness is such a central concept to British values, I will wager, that it provides an apt discussion point for this week alone. All the amendments deal with where a market is stacked against one party and, we would argue, both miss out as a result. When service providers exploit a lack of information or collude to distort behaviour, it is not just the public who are badly treated: competition is stifled, creativity and innovation are weakened and, above all, the consumer is ripped off. The amendments thus reflect some of the problems affecting markets that we see in Britain and deal with what more could be done to make a stronger consumer rights framework that would give the public the tools to be able to prevent rather than have to deal with the problems that come from these distorted behaviours. There are four different issues, but we consider them all to be part of the conflicts of interest that cause detriment to the consumer.

Amendment 1 refers to what we call “double charging”, and particularly the behaviour of estate agents. We all know that buying a house is one of the biggest costs any of us will face in our lifetime. An English man or woman’s home is their castle, but it is often a very expensive one. The cost of buying a house has gone up so substantially in my constituency that it is now 30% more than it was a year ago—a source of extreme concern for many. Indeed, we know that the average home is worth eight times the average wage and that it can take 20 years for a family to save for a deposit. A million homes were bought in the UK last year, and prices have risen across the country by 8%, even if they have not risen as much as in some of our London areas. That is why the Governor of the Bank of England has warned that the biggest risk to the economy stems from the fact that people are getting mortgages—sometimes four or more times their salaries—that they cannot sustain. Housing is indeed a bubble underpinning our economy and leaving it in an incredibly precarious position.

The Government’s housing Bill will provide 15,000 houses, but people in my constituency know that we need to double that and then some, which is why Labour are proposing to build 200,000 houses, getting us closer to where we need to get to in order to deal with the pressures that people are experiencing. This amendment speaks, too, to some of the other charges that people face when buying a property. We may disagree about how many houses need to be built, but I am sure we would all want the housing property market to be as fair and open as possible so that it does not involve more expenses that mean people needing an even higher mortgage or an even higher level of debt—particularly in the form of the personal loans that people are taking out to pay the sort of fees necessary when they start ownership of a new property.

The amendment would deal with what the property ombudsman has called an “emerging commercial practice”—one that means that people such as estate agents, who benefit from the increase in demand for housing by exploiting the pressure on the country’s housing supply, reap the benefits. The practice involves a contract that we believe is ripping off consumers—both buyers and sellers—and therefore needs addressing. It is called “double charging” if the estate agent applies a fee to both the buyer and the seller of a property on the same transaction.

Let me explain the problem for the benefit of Members who have not yet observed the practice in their constituencies. It often results from the process of “sale by informal tender”. House owners are asked to accept sealed bids for their properties. Increasingly, estate agents are then charging successful bidders a “finder’s fee”, which, in some cases, is between 2% and 2.5% of the property fee plus VAT. According to the Consumers Association, an estate agent’s commission should normally be between 1% and 2%. Moreover, sellers themselves are paying to market their properties. Buyers must find the cost of the additional fee in order to bid.

--- Later in debate ---

[Andy McDonald (Middlesbrough) (Lab)]

Is not the ability to charge two parties to a potential transaction nothing less than a direct conflict of interests? It should not be possible to owe a duty to a buyer and a seller in equal measure. An agent has one client, and it must remain that way.

[Stella Creasy]

My hon. Friend is entirely right. Let me give an example of the way in which this conflict of interests operates in practice. The example was given to us by a young first-time buyer who, because of her restricted ability to buy a property in the area where she wanted to live, accepted that she would have to take part in a “sale by tender” arrangement, and that she would have to pay an introductory fee of 2.5% of the sale price of the property. She made an offer of £258,000 for a house that was well within the guide price, and therefore committed herself to paying about £6,000 in fees to the estate agent. Her offer was accepted as the highest offer in the sealed-bid process. She then contacted us to say that her offer had not been accepted by the seller, and the agent was putting pressure on her to up her offer to £262,000. If she did not do so, the property would be put back on the market for another “sale by tender” exercise, because the seller wanted more. That was despite the fact that she was the one who had committed herself to paying the fee that the estate agent wanted to charge.

Some Members may think that that is an indication of the overheated London housing market, and the fact that house prices in my constituency have risen by 30% reflects that overheating. However, we are hearing about examples of double charging throughout the country. In the north-west, for instance, a gentleman who tried to buy a house for £45,000 was told that, as well as finding the £45,000 and the fee for the conveyancing, he would have to find £2,880 in order to pay the introductory fee to the estate agent. In the south-west, an estate agent wanted an introductory fee of nearly £6,000 plus VAT from someone who wanted to buy a house for £296,000. I must stress that the sellers of the properties, who do not benefit from the additional £6,000, are also paying a fee for the service.

The Minister had admitted that double charging is a potentially worrying emerging trend which seems to be on the increase, but at every stage in the Bill when we have sought to outlaw this conflict of interests, the Government have voted against our attempts, although the property ombudsman has agreed that the new approach to selling properties

“can also potentially disadvantage the seller. He”—

or she—

“will no doubt have to agree to accept only prospective buyers that follow the agent’s agreement with those prospective buyers and if a prospective buyer declines to submit to paying the fee, he”—

or she—

“will be out of the picture and the seller will have lost an opportunity to sell his house.”

That is what the property ombudsman has told us about the practice.

[Robert Flello]

No doubt the Minister will say that this is an issue of the market, that other estate agents will not do this, and that it will all come out in the wash. The point is, however, that someone who goes out and looks for a house and then finds the one that he wants cannot choose the agent who is dealing with the property. That is why it is so crucial for us to sort this out now, rather than waiting until every single estate agent does the same, as though the market will somehow adjust itself.

[Stella Creasy]

My hon. Friend has raised an important point. I admit that I have been deeply concerned about campaigning on this issue and for our proposals, because I think that it is a bit like telling turkeys how to avoid Christmas. The more we make it clear to estate agents that the Government are currently letting them get away with this behaviour, the more they will engage in it. Indeed, I am sad to report that since February, when we began expressing concern about double charging, an increasing number of estate agent chains throughout the country have been using “sale by tender” processes involving the introductory fee. I must emphasise that we are objecting not to sale by tender per se, but to the fact that people are being charged a fee to be introduced to a property. That is what is causing such concern.

When I first observed that Douglas Allen in Walthamstow was engaging in the practice, I thought that perhaps we had just one rogue estate agent. I hoped that when Phil and Kirstie came to Walthamstow recently to film “Location, Location, Location”, they would take a dim view of it, but I am sorry to say that we are now hearing of cases at Your Move, Ellis and Co. and Reeds Rains. A number of estate agents are picking up the idea that applying such fees is acceptable behaviour, and the damage that that is doing to the interests of both sellers and buyers is growing.

There is a question for us here. We can see that the practice is distorting the housing market. If we want a free and fair market, these conflicts of interests must be resolved, so that sellers can be confident that buyers are always acting in their interests, and buyers can be confident that when they participate in a bid such as this, it is taken seriously. Should we act, or should we wait until the damage to consumers’ interests becomes worse? We tabled amendment 1 in order to make charging two parties a fee to the same transaction a term in a contract that can be challenged on the basis that it is unfair. We believe—as does the property ombudsman—that such charges are indeed unfair, and should be open to challenge.

This comes at a time when there is widespread concern about the estate agent industry, full stop. I accept that it may be another “British value” to complain about estate agents, just as people complain about traffic wardens and, indeed, politicians. We all recognise that we are not immune to that moment in the pub on a Friday night. However, we know that there are serious concerns because of the nature of the housing market. I have been contacted by people who have been told by estate agents that they cannot have access to the lists of housing for sale unless they commit themselves to taking out a mortgage through them, or using their financial advisers or lawyers. That is another clear conflict of interests for the seller.

We need a tough regulatory regime to ensure that we have a fair housing market in England and Wales. We continue to be concerned about the fact that the Government have delegated the monitoring of all estate agents in England and Wales to Powys county council’s trading standards body. A Welsh rural council has been charged with the task of examining the behaviour of nearly half a million estate agents. It should be taking account of the blatant and rampant exploitation of the demand for housing that these charges represent, but when people affected by them have contacted Powys, they have been met with indifference about whether it should be dealing with the issue. The council took over only in April—this may be a new moment—but it is clear that we need to take stronger action before the situation gets out of control.

[Helen Goodman (Bishop Auckland) (Lab)]

My hon. Friend is highlighting the way in which the Government have contracted out different aspects of trading standards to various local authorities. Has she looked into the number of houses that have been for sale in Powys, and considered how experience in Powys can possibly inform an intelligent approach to the London housing market, which is totally different?

[Stella Creasy]

I think that there is genuine concern about whether Powys county council is equipped for the task. This is not necessarily just about its trading standards: after all, this is a council that has gone through three cabinets in as many months, and has had problems with the setting of its budget. Some have suggested that it needs to put its own house in order before putting our house sales in order. Certainly, double charging is a great example of the sort of problem that we would expect an effective regulator to be able to deal with. There is a clear conflict of interests. The fees being charged are clearly causing detriment to consumers.

I welcome the fact that the Minister has met the property ombudsman since we raised this issue with her, but I note that as yet there is no evidence of any progress in resolving this matter. As my hon. Friend the Member for Stoke-on-Trent South (Robert Flello) pointed out, the number of agents using double charging in contracts is escalating. Many of my constituents who have been hit by these contracts have asked whether their lawyers can challenge them. I ask the Minister to accept this amendment and give consumers the opportunity to challenge these sorts of contracts, and to give them the legal protection that enables them to say, “This is fundamentally unfair and it infringes my rights”, and, indeed, to give sellers the opportunity to challenge them. Under these contracts, buyers and sellers are told that they cannot communicate with each other; otherwise, the offer that has been made is void. A seller may therefore be unaware of an offer that somebody wishes to make for their property, and that has to be cut back because the buyer must also include the fee. I was surprised to hear from the estate agents in Walthamstow that they always achieve 102% of the asking price of their properties, and 2% was, perhaps unsurprisingly, the fee they were charging people to buy their houses. “Who would have thunk it”—who would have thought that there would be such a close correlation?

I hope the Minister will accept that there is a genuine issue here that needs to be dealt with, and the sooner, the better. We know the pressures on our housing market are not going to go away any time soon, but although we might argue about the numbers of houses that need to be built, we can surely all agree that this is a conflict of interests that needs to be addressed. If, again, the Minister will not accept this amendment and this course of action, I hope she will set out how she will take action on this issue herself, so house buyers across the country do not have to find the extra thousands of pounds just to pay the nice fat fee for the agent.

The other amendments we have tabled in this group also address challenges we believe are creating problems in our economy, in particular through these conflicts of interest. Amendments 2, 3 and 4 relate to conflicts of interest around services, in particular debt management and log book loans. The Minister will know of the Opposition’s concern about the personal debt bubble that underpins much of our economy, and in particular the number of people who are over-indebted. We know from the Money Advice Service that 9 million people in our country are already over-indebted, and half of these families live on incomes of under £20,000. This fragile situation has arisen despite our having had for more than five years the lowest interest rates in 300 years. It is likely that interest rates will start to rise, and personal debt may well rise at the same time—after all, wages are still not keeping pace with prices—so it is all the more important that people can access credit, debt advice and debt management services in an affordable fashion.

Amendment 2 deals with the problems caused by log book loans. Members who served on the Committee will be familiar with the Opposition’s determination to reform this outdated and outmoded form of credit. There are widespread problems: more than 1,000 consumers complained about these loans to the Office of Fair Trading, and they were complaining about losses of over £1.5 million. Many of them come from the fact that these loans are based on bill of sale agreements, a Victorian type of contract that does not include modern consumer protection. Again, the Government have repeatedly voted against our proposals to reform bill of sale agreements and therefore end this outdated and quirky practice that is causing so much detriment. The Minister stated that there may well be an argument for updating the legislation, but that this is not the Bill to do it in. Those of us who saw from the title of the Bill that it was about consumer rights and protecting consumer interests were, of course, rather concerned by that, but let me point her to the concerns of the Financial Conduct Authority and Citizens Advice, which also want to see bill of sale agreements reformed.

Christopher Woolard, director of policy, risk and research at the FCA, states:

“People who use logbook loans are often in difficult circumstances with few other borrowing options…Logbook lenders have borrowers over a barrel. People don’t realise their car can be seized if they fall behind in repayments, with lenders often forcing borrowers to pay large amounts to keep their vehicle when they can’t afford to.”

Gillian Guy, chief executive of Citizens Advice, argues:

“The logbook industry is still in the dark ages and has been getting away with lawless practices.”

Its own analysis of log book loan cases found that 14% had experienced harsh debt collection practices, almost a third were not treated fairly or appropriately by the lender, and nearly 20% had not understood the terms of the loan clearly.

It is inexcusable to leave this outmoded form of credit arrangement available for lenders to use, and for them to exploit people in this way, particularly as we know that increasing numbers of people are going to need consumer credit in the years ahead because of the debts they have. We cannot understand why the Minister will not make progress on this issue. I believe she does understand that log book loans need to be reformed and that the case we are making—that bill of sale agreements have no place in a modern consumer protection landscape—so why does she feel that that should not be part of this Bill? We urge her to look very closely at our amendment, which would simply bring bill of sale agreements under modern consumer protection laws and, again, give consumers the right to challenge any agreement that does not uphold those laws. Indeed, it would be a sad indictment of all the work she has done on the other parts of the Bill and all the consumer protection laws in them if she were to say there would be a get-out clause in other respects.

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[Andy McDonald]

Does my hon. Friend share my concern that the Ministry of Defence has approved a particular policy under the banner of PAX that prescribes a single point of reference for legal advice and does not give members of our armed forces freedom of choice in that respect? Is it not reprehensible that we are in that situation?

[Stella Creasy]

My hon. Friend has just illustrated why I believe him to be the expert on this issue. I hope that he will contribute to the debate to explain why this concern about independent advice is so important. He is right about upholding the need for independent advice.

I am conscious that other Members wish to speak in this debate, so let me say a little about net neutrality, and our amendment to amendment 19. I recognise that this is a new and evolving debate. Our discussions have ranged from the Victorian bill of sale to the contemporary net neutrality, both of which reflect this stress over conflicts of interest. For those Members of this House who have not yet had the chance to watch the viral videos about net neutrality, let me explain the concern. Net neutrality is the principle that internet service providers and Governments should treat all data on the internet equally. They should not discriminate or charge by user, content, site, platform, or application. In layman’s terms that means that, whether we are looking at iPlayer, Sky on the Go or Netflix, there would be equal access to services. There would be no speed differential in accessing them.

In America, some broadband and internet providers have been exploring the idea of charging companies different rates for providing their services. That means that they could offer access to some websites at a faster rate than others, and therefore change the way in which consumers access them. The fear is that that would create a two-tier internet, because it will limit the number of sites that consumers can access with ease, and the number of companies that can access and operate services equally. In particular, if large companies were to use their financial muscle, or their internet provision, to restrict access to their competitors or to new entrants to the market, it could limit creativity and innovation in the provision of services. An internet without net neutrality moves huge market power to those who are the gatekeepers to our online services. It is little wonder that 100 companies, including Google, Facebook, Twitter and Amazon, have expressed concern about this issue. Indeed, “father of the internet” Tim Berners-Lee, who was rather unfairly described as a web developer recently, has argued that there is a real concern. He says:

“Unless we have an open, neutral internet we can rely on without worrying about what’s happening at the back door, we can’t have open government, good democracy, good healthcare, connected communities and diversity of culture. It’s not naive to think we can have that, but it is naive to think we can just sit back and get it.”

We welcome the amendment that has been tabled by the hon. Member for Shipley (Philip Davies), but we are concerned that the way in which it has been drafted may inadvertently imply that those sites that are providing pay-per-view services, such as Netflix, would be required also to provide access to some of their competitors, and I am sure that that was not what he intended. We have tabled a clarifying amendment to make it clear that we are talking about those services that provide access to the internet, rather than content.

It would be useful to hear from the Minister about what discussions she has had with her colleagues on the issue of net neutrality and about what action she is taking to ensure that consumers’ interests in the operation of net architecture are being upheld so that we do not have the concerns and challenges experienced by America. In particular, does she feel that existing protocols are strong enough to protect the interests of consumers and avoid competition issues between content providers, and has she done an assessment of the impact on consumers in the UK of a possible two-tier internet?

We have here some very different but interlinked issues around conflicts of interest, freedom of markets and consumer interest, and an effective piece of consumer rights legislation should provide consumers with the tools with which they can mount a challenge to any of them. We hope the Minister will accept our amendments in the spirit in which they are intended, which is about applying clarity in what is meant to the list of unfair contract terms that would give consumers the right to challenge issues in court. I therefore hope that the House will support them accordingly.

[Philip Davies (Shipley) (Con)]

I seek to restrict myself to speaking to amendment 19, which I tabled. I am grateful to the hon. Member for Walthamstow (Stella Creasy) for what she said and for her general support for the thrust of my amendment. In the spirit of that cross-party co-operation, I should also make it clear that I am perfectly happy to support her amendment to my amendment. It is not my intention to press my amendment to a Division, but if the hon. Lady decides to press hers, I will of course support her, because her amendment does exactly what I intended my own to do. I hope that it will not come to that, because I hope that the Minister will make it clear that the Government accept there is an issue, understand it and say that they will do something to resolve it. If that is the case, I hope that the hon. Lady will withdraw her amendment, but we should wait to hear what the Minister has to say before we make any decisions along those lines.

Over the past 30 years, competition in the telecommunications industry has gone from a monopoly, through a duopoly to what is widely regarded now as one of the greatest success stories of privatisation, with the UK having one of the most vibrant and competitive markets in the world.

Additionally, the internet has become an essential part of our national infrastructure, transforming the way we work, play, gather information, communicate and trade. The internet provides the underlying infrastructure for many thousands of businesses and has slashed the cost of global communication.

In 2010, the Government, through the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey), said that they were supportive of open internet, which I hope is still the case. The reality is that some major fixed-line internet service providers and mobile network operators have not participated with the major industry-level agreement towards meeting that objective.

The success of the internet is based on global interoperability—the ability for anyone to interact with any legal internet site anywhere in the world. That has created new opportunities, businesses and jobs, while also reducing costs for consumers. I hope that both sides of the House will agree that an open internet is vital for the future economic, social and political health of our nation. New services are coming online at an incredible rate, and it is important that this vibrant sector is able to develop as society becomes more mobile and people’s habits change.

It is vital that organisations controlling access to the internet do not abuse their position by discriminating against legal services, data, traffic and content for commercial or political purposes, and from a protectionist perspective. Although telecommunications providers should be allowed to use certain traffic management techniques to manage the integrity of their network, it should not be at the detriment of rival services purely for anti-competitive reasons.

Over the past year, I have been made aware of increasing evidence that certain internet service providers are undertaking various marketing and operational practices that are distorting a competitive market, creating consumer harm, hurting a number of specific internet industries and stifling innovation. The activity includes blocking internet services that compete with their own on purely commercial grounds; not communicating to customers clearly at the point of sale that they offer only restricted access to the internet; and refusing to participate in the Government-supported pan-industry code of practice, which seeks to uphold open internet principles and which has been signed by some of the largest players, including BT, O2, Sky and 3. I believe that that verges on mis-selling. The lack of transparency and clarity that has persisted in the market has allowed consumers to be deceived by the practice of selling internet access when in fact significant parts of the internet cannot be accessed under the terms and conditions of some price plans.

It seems like the voluntary ways of ensuring greater transparency in providing internet and telephony services have failed. There have been clear examples where certain operators, particularly in the mobile sectors, have misled their consumers by claiming to offer internet access, or UK internet, when some legal internet services are not available within the package that has been provided. In other cases, the small print—when I say small print I mean it, as one would need binoculars to see some of the terms and conditions—outlines extra costs that the consumer would face if they dared to use the internet they have paid for to access services that compete with their provider’s own.

The fact that any operator is able to offer a product advertised with “internet access” and only have to clarify this policy in the small print is unacceptable. Unknowing customers who use popular services such as Skype, WhatsApps or Viber could see their service suspended but continue to be held responsible for paying their bills. That lack of transparency and clarity on these issues is totally unfair to these unknowing customers, and it continues, as consumers are in many cases unable to leverage competitive pressure because it is difficult to understand whether or not certain traffic types are allowed, blocked or just charged additionally. Ofcom’s consumer guide on internet traffic management from 2013 outlined the fact that consumers were not aware about traffic management practices undertaken by internet service providers and whether such practices would affect specific internet services that they used. How can consumers make an effective and informed choice if they are not fully aware of the practices of their internet service provider or mobile provider, and the potential of those practices to inhibit certain services?

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[Jenny Willott]

That responsibility has only just been transferred to the FCA, and it is working with credit companies that must register with it. I believe that those companies start registering on 1 October, which gives them time to ensure that they comply with the regulations. From that date, therefore, the FCA will start to process licence applications. At the moment it is a little premature to answer the hon. Lady’s question, but the issue will be raised later in the year and I am sure she will ask Ministers at that point.

There are concerns about the way logbook loans operate and their impact on consumers. Consumers will be far better protected under the FCA regime than under the old system. Logbook loan providers are now required to meet the standards that the FCA expects of lenders, including making thorough affordability checks and providing adequate pre-contractual explanations to consumers. They are also subject to the FCA’s high-level principles, which include the overarching requirement to “treat customers fairly”.

[Stella Creasy]

I know the Minister has logbook loans companies in her constituency. Given what she is saying, why will she not support our amendment, which simply states that all borrowers should be treated equally and be able to have modern consumer contracts—the sorts of things she mentioned with the FCA? Why leave a loophole for bill of sale agreements?

[Jenny Willott]

If the hon. Lady gives me a chance I will come to that point.

As the hon. Member for Makerfield (Yvonne Fovargue) highlighted, logbook loans have been defined by the FCA as “higher risk activities”. As such, they will be in the first phase to require the full authorisation I mentioned, and they will face closer supervision and higher regulatory costs as a result. The Government have also ensured that the FCA has a wide enforcement toolkit to take action wherever its binding rules are breached. For example, there is no limit on the fines it can levy, and—crucially—it can force firms to provide redress to customers. It also has flexible rule-making powers, so if it finds further problems, it will not hesitate to take action. Indeed, the FCA has said that it is

“putting logbook lenders on notice”

because it is concerned about that issue. Furthermore, the FCA’s new rules give it

“the power to tackle any firm found not putting customers’ interests first”.

Treasury Ministers have asked the Law Commission to look at how best to reform the Bills of Sale Act 1878. As the hon. Members for Walthamstow and for Makerfield mentioned, the legislation underpinning logbook loans is extremely old, lengthy and complex, and the Government believe that the Law Commission is best placed to undertake a thorough assessment of how to bring it up to date. The hon. Member for Makerfield raised concerns about how long the process might take and suggested that it had been kicked into the long grass. I would like to reassure her that the Law Commission has responded favourably to the Treasury’s request for the review, and will confirm its work programme in the near future .

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We continue to believe that regulation as proposed by the European Commission is unhelpful as it is too prescriptive and inflexible. Indeed, regulation may be unable to keep up with the pace of change of technology and may even have unintended consequences, such as higher consumer bills. I will ensure that the responsible Minister is made aware of the strong feeling across the House in this debate and the fact that Members on both sides spoke in support of this. However, I hope that I have reassured hon. Members that the Government understand that there can be issues in this area and that we are working with both UK regulators and within the EU to tackle this, and I hope that the hon. Member for Walthamstow will withdraw amendment 1.

[Stella Creasy]

I add my congratulations, Madam Deputy Speaker, to those of other hon. Members. Indeed, there is nothing like a dame. [Interruption.] Come on, somebody had to say it.

I do not know where to start with what the Minister has just set out. Loophole after loophole seems to be being built into this legislation, with the proviso that someone else will pick up the pieces. The Minister hopes that it will be various other regulators, but it is clearly the consumer who will be ripped off instead. I can see from the face of the hon. Member for Shipley (Philip Davies) that he too was disappointed, and I fear that it is time rather than intent that will mean we cannot make much progress today. I urge the Minister to watch the John Oliver video that is going round the interweb, if only to understand the real concern about net neutrality. I certainly hope that our colleagues in the other place will make some progress on this. The idea that at point of sale we can defend such a fundamental principle as free speech does not cut the mustard.

On debt management companies and log book loans, the Minister refers to the Financial Conduct Authority, leaving it to pick up the pieces from legislation that is antiquated and outdated, which at some unspecified time the Law Commission may look into. It is not good enough. We know that millions of people are in debt to such legal loan sharks. We know that the debt management industry is profiting as debt in this country goes up, not down. The right thing to do would be to get the consumer credit landscape to work for that problem, rather than to ask somebody else to deal with it, whether that is the Financial Conduct Authority or the Law Commission.

Again, this is the Consumer Rights Bill. A bill of sale is a consumer contract. There is no justification in the modern world for leaving them in place. The Minister is fond of saying that the Labour Government had 13 years to do something about it. That Government were on the verge of outlawing bill of sale agreements. I hope the Minister will change her mind.

The amendment that we must press to a vote is amendment 1 for those Members who were not here earlier to hear about estate agents charging both the buyer and the seller a fee. The Minister accepts that there is a concern. We are talking about fees of thousands of pounds for our constituents to buy a property—a fee that distorts the price that a seller will get. Yet again, the Minister calls for a loophole to be written in and calls for the property ombudsman to monitor the situation, when it is clearly a conflict of interest for an estate agent to act for both the buyer and the seller at the same time.

Our constituents will rightly ask us what we are doing when we see these clear breaches of contract law taking place. Simply saying, as the Minister does, “Well, we’re going to monitor the number of complaints” is a green light for estate agents to undertake such practices. That is compounded by the fact that all estate agents in most of our constituencies are monitored from a rural Welsh constituency by Powys county council. It cannot understand how these half a million people are behaving, or how we reached the stage when a fee of thousands of pounds could be applied. There is complacency about a clear rip-off that our constituents are facing. [Interruption.]

The Minister of State, Department for Work and Pensions, the right hon. Member for Hemel Hempstead (Mike Penning) says, “Get on with it.” There are people in my constituency paying £6,000 or £7,000 as a fee. The Minister says we had 13 years. The present Government have had four years. We have given an example of how they could do something about it. The Government are failing to make progress, yet again, and all our constituents miss out. I fear for the Minister when one of his constituents comes to him with one of those contracts, under which they are paying £6,000 or £7,000 to an estate agent as a fee to buy a property under sale of tender, and he justifies doing nothing about it.

This Bill is an opportunity to make progress. We on the Opposition Benches—[Interruption.] The Minister comments that I was in diapers when he became an MP, but I am old enough to recognise when there is a rip-off to be dealt with—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. Will the hon. Lady sit down, please. Minister, I hope you did not say that. You have just entered the Chamber and you have been shouting since you sat down. It is not in order to speak to any hon. Member at the Dispatch Box. Members need to calm down a bit, please.

[Stella Creasy]

Thank you, Madam Deputy Speaker. I was about to wind up.

I know that house buying arouses a lot of passion, but it arouses even more passion when people get ripped off by an estate agent. It is clear that the Government do not support an amendment that would make progress in tackling the problem, which occurs across the country. They are all noise and no action. The Opposition want to see action on estate agents who are ripping people off. I hope Members on the Government Benches who have seen it in their constituency and who fear the impact that it is having on the price of houses will join us in the Lobby in voting for amendment 1.

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[Stella Creasy]

It is fascinating finally to come to the end of consideration of the Bill in this Chamber.

[Jim Shannon (Strangford) (DUP)]

On a point of order, Madam Deputy Speaker. I stand to be corrected, but I thought that those who wanted to speak on Third Reading did so before the shadow spokesperson. Am I wrong?

[Madam Deputy Speaker (Dame Dawn Primarolo)]

You are wrong, yes. The Minister opens Third Reading, and the Opposition Front Bencher responds; we then hear from other participants. If we have enough time, and it is relevant to do so, we then hear the wind-ups. Do not worry—I will not forget you.

[Stella Creasy]

I am on tenterhooks to hear what the hon. Member for Strangford (Jim Shannon) has to say. Thanks to our consideration of the Bill, I am aware of my right to a return and a repeat performance if I do not think the skill and service is satisfactory; he should be aware of that.

Whereas poppadoms are not to be shared, I have feedback—the breakfast of champions, as it was once called—to share on the Bill and whether it works. Does it pass the Ronseal test—does it do what it says on the tin? The Bill says that it is there to

“Amend the law relating to the rights of consumers and protection of their interests”.

Certainly, as I hope I have just displayed, during our consideration of the Bill we learned what our rights will be: we will have the right to have legislation written with reasonable care and skill, and provided at a reasonable time and price to us all. The rights of our consumers—our constituents—to remedy and redress when they feel that we are not providing that are somewhat limited. That is why they rely on us as Opposition Members to hold the Government to account. However, our role is not simply to intervene, or identify injustice as it affects our constituents, but to act on it. That is what we have tried to do in proceedings on the Bill.

At the heart of this is the question of rights. Does the Bill give consumers the rights that they need if they are to act for themselves? That has been our central concern. In that, we were influenced by the words of the Mayor of London—who knows what else he will be in future?—who once said:

“The dreadful truth is that when people come to see their MP, they have run out of better ideas.”

If the Bill had been well written, it would have given people rights that would have meant that they did not have to come to us, their MPs, with such regularity with all the stories of consumer detriment that we heard about during proceedings on the Bill. A really robust Consumer Rights Bill would empower the British public, giving them the rights and the confidence that they need to be able to choose the goods and services that they desire. Under that test, the public could demand a refund on the Bill, for as we saw only today, loophole after loophole remains, and it is consumers who will have to pay the price.

The Minister talks of a consumer toolkit, but that toolkit has a blunt Stanley knife and a broken hammer in it. Time and again, throughout consideration of the Bill, the Government have failed to grasp how giving the public access to the information, advocacy and redress that they need to shape services to meet desired outcomes would be a better idea, in terms of dealing with markets and services when the odds are stacked against them. Indeed, one of the things we have not done so far is set out what a market that is not working looks like or what the problems are.

In setting out our concerns on Third Reading, let me be clear about where our amendments came from. We need to recognise that a market is not working when information is not flowing freely between actors, whether they be consumers or businesses, such that they are not able to make informed choices. A market is not working when companies use their advantage to crowd out new competitors, collude on prices or, indeed, create a monopoly. Such a market may also result in unintended consequences because of the behaviour of others. The result is always the same: consumers miss out when markets do not work.

We have attempted to amend the Bill in this House and I am sure my colleagues in the other place will continue to do so in order to address some of those problems. Many markets in the UK do not meet the metrics of success whereby information flows freely and there is competition on creativity and innovation—not exploitation of captured consumers who have little option but to pay over the odds—and where the reasonable care and skill test can truly be applied.

At every stage of this Bill, colleagues throughout the House have raised issues that reflect those concerns about markets, including ticket touting, rip-off estate agent fees, copycat websites, logbook loans, product recall and even net neutrality. Every example involved scams and sharp practices, yet this Bill will not make progress in protecting the interests of consumers. As we have consistently been told by the Minister, that is outside the scope of the Bill and a matter for the mysterious implementation group, whose inner workings are still a secret to many of us.

At every single turn, the Minister has claimed that someone or something else can act. She has said that so often that we think it would be worth renaming the Bill the “computer says no” Bill. That may be an effective phrase for coalition government, but it is also a recipe to rip off consumers.

Despite the Minister’s best efforts to tell us, “There’s nothing to see here,” it has become clear during the course of our work that this Bill reaches far beyond how easy it is for any of us to return a jumper with a hole in it. We know there is much more to consider with regard to how the Bill will impact on the public sector. The Minister has still not clarified which services are covered, preferring to tell us only that most NHS care, state-funded education and law enforcement services are not covered. Of course, given that tuition fees, personal care payments and child care vouchers are covered, it would seem that this Bill is less a case of, “computer says no,” and more one of, “Yeah, but no, but yeah.” It has certainly felt like we have been asking questions of the sphinx at times, because we have had to find the right question in order to get the right answer for our constituents. The risk is that the Bill will devour all those who fail to solve its riddle.

In fear of yet again being cast into the pit of despair, may I again ask the Minister to clarify, with a yes or no answer, whether the following contracts are covered? Is the BBC licence fee covered? Given the recent comments of the Secretary of State for Culture, Media and Sport, surely that is an apposite and important point to clarify. Before the Bill goes to the other place, it would be incredibly helpful if the Minister could clarify whether it also covers parking permits and prescriptions.

Understanding this minefield and the impact it will have on consumers of public services now falls to our colleagues in the Lords. Given the evidence that we are a nation of silent sufferers—in particular, many elderly users of care services fear that they cannot complain—the fact the Minister is devolving getting this right to the Cabinet Office, as she declared on the first day on Report, simply will not stand. We put her on notice that we will not let public service users experience a two-tier system because she could not define what clause 2 does.

The Minister may sigh again and point to the long gestation of this Bill, including the Labour Government’s original 2009 White Paper on a new deal for consumers. We generally agree that there is a need to update the fundamental principles enshrined in the Sale of Goods Act 1979. That was published shortly after I was born—which, as the Minister of State, Department for Work and Pensions, the right hon. Member for Hemel Hempstead (Mike Penning), who is no longer in his place, would say, was, “A long time ago.”

It is certainly time for an update, which is why we will not oppose this Bill’s Third Reading, but it is also time for clarity, which the Bill does not yet deliver. I hope the Minister will not think it churlish of me to say that we welcome the fact that some of our proposals have been considered and, indeed, adopted. When the issue of speedier refunds was first raised, there seemed little hope of progress, but having had our call for a time limit of 30 days batted away, we were delighted with the Government’s amendment making 14 days the cut-off for consumers to get their money back. There have also been announcements on copycat websites and letting agent fees as the Bill has progressed. Those things have been encouraging and we wait with bated breath to see on what else the Minister will come full circle.

Like the Minister, I want to put on record my gratitude to the members of the Business, Innovation and Skills Committee and the members of the Bill Committee for playing their part. Having received during the course of our deliberations a marriage proposal, hair-dressing advice, loft-conversion concerns and a lecture in socialist ideology, as well as the opportunity to hear passionate debates on issues such as electrical safety, public service reform and data protection, I believe we have given much for our colleagues in the other place to ruminate. I also want to put on record my personal thanks to the Clerks of the Public Bill Office, who have been kind and generous with their time in drafting amendments and new clauses. However mean the Minister may wish to be about those amendments and new clauses, we certainly think they have made a difference.

As the Bill goes to the other place, let me say again what a missed opportunity it has been. Major consumer reforms come along very rarely—as the Minister of State, Department for Work and Pensions, the right hon. Member for Hemel Hempstead, would point out, I am now of a certain age. I fear there is little hope of a return, a refund or a repeat performance for our constituents if we get this wrong. They will not want to wait another 35 years. I have every confidence that the noble Lords will continue our work on issues such as letting agent fees, debt management, access to data, advocacy, trading standards and redress, and that they will also finally pin down the magicians of the implementation group and the mysterious work of ombudsman services.

Britain can do better. We will not oppose the Bill, but instead send it to the other place and ask it to continue our efforts to improve this Bill so that it can live up to the bold sales pitch of protecting consumer interests. If that does not happen, I for one will encourage the British public to exercise their right to a return at the ballot box in 2015 and finally cast out a Government who are clearly not fit for purpose.