Consumer Rights Bill

Debate between Stella Creasy and John Stevenson

Tuesday 13th May 2014 Commons Chamber

[Stella Creasy]

Our presumption is that the fees would then be taken on by the landlord and taken as part of the tenancy agreement. Our approach would resolve the problems we are seeing for tenants and the conflict of interest over whom the agent would act for. Our proposal is about making sure we deal with that conflict, particularly how for landlords and for tenants it creates a series of perverse incentives whereby both can be charged for the same service.

[John Stevenson (Carlisle) (Con)]

The problem is that if the letting agency loses an income it will seek to get it from elsewhere, so it is likely to increase its charges to the landlord. The landlord will then seek to recover that money, and from whom will the landlord seek to recover it? From the tenant.

[Stella Creasy]

I simply do not accept the picture the hon. Gentleman is painting. Scotland has banned fees on tenants, and the experience there has been an increase in the number of letting agents and no effect on the rents people are paying. The evidence shows that, as with the payday lenders, when we give tenants the muscle to remove this fee, the market shapes up. We have not seen an increase in the fees that tenants are facing; nor have we seen an exit from the market. Some of the fears the hon. Gentleman might have, which I understand, are not well founded, because a lot of the fees tenants are being asked to pay are not indicative of a service being provided; they are indicative of a profit-making machine. We are trying to deal with the detriment caused by the ability of agents to charge fees to two parties at the same time. By making this a fee for the landlord, it is clear whose interest the agent is acting in.

As I say, we have dealt with the particular issue here, because we have listened to the landlords and letting agents who have expressed concerns about tenants who may not be what they seem. In that instance, there would be a case for being able to charge a fee to the tenant which would be refunded, but the alternative of letting this practice continue and seeing the kind of fees that we are seeing, and therefore the problems that are being caused, is also unsustainable. I hope that Government Members, particularly those who have now recognised there is a problem with the fees in themselves, will go that stage further and recognise that there is a problem with this form of double-charging, support our proposals and learn from the experience in Scotland on this issue.

As I am conscious of the time, I shall move on; I appreciate that there are a number of Members who wish to speak in this debate. I am sure that the hon. Member for East Hampshire, who has made many useful contributions this afternoon, will get to speak in the following debate.

I briefly want to speak to amendment 6. It may come as a surprise to some to see the Government resisting the work of the Federation of Small Businesses, which is trying to help small businesses that are struggling with their consumer contracts. Members in this House may have first-hand experience of that, as we are, after all, small businesses and will have dealt with business-to-business contracts, and many may not realise that they have different levels of consumer protection as a result.

The FSB has recently published a report on small businesses which points out that it makes much more sense to give micro-businesses the same consumer protection as private individuals. After all, it is unreasonable to expect a micro-business to have the same level of legal qualification and expertise to deal with a contract as that of a larger body, and that is what amendment 6 addresses. I note that the FSB has given its support to this amendment. I was surprised when the Minister said earlier that the FSB did not support giving consumer rights to businesses. That has not been the briefing that we have had from it; indeed, it supports this amendment. Will the Minister set out when she expects to give small businesses the kind of consumer protection they need, because it will be one fewer worry for them?

I wish now to touch on some of the other new clauses. New clause 14 deals with Ofcom and switching. We certainly think this is a good idea, and we wish to see the Government following it through. I am sorry that the hon. Member for Shipley (Philip Davies) was not here earlier when we were debating new clause 3 and new schedule 1 and making it easier for consumers to be able to switch. We recognise that there are problems. It is unusual for the UK, by comparison with other nations, to have this issue, and it will be interesting to know whether the Minister is considering it.

I look forward to the hon. Member for Shipley making his case for new clause 13. I certainly agree that transparency is important. The laws governing animal welfare at slaughter, at both EU and UK level, require animals to be stunned before slaughter, but they make an exemption to that requirement for religious slaughter, which is carried out by members of the Jewish and Muslim communities.

We are concerned about whether this amendment has a significant effect on animal welfare and implications beyond that. In particular, we must ensure that our laws strike the right balance between concern for animal welfare, which many of us have, transparency for consumers and respect for the traditions of different businesses and different communities. We also recognise that a lot of work has already been done on this matter in the European Union, and it would be sensible to learn some of the lessons on the wider issues such as how goods and foods are labelled. It will be interesting to hear the hon. Gentleman’s views on that—perhaps not on Europe but on the research that is being done.

I am sure that the hon. Gentleman would not want to make a law that caused confusion in this area rather than clarity. He focuses on halal and kosher food, but the Opposition believe that respect implies an active attitude towards others rather than a passive attitude, and certainly our position is to seek proper engagement with all faith groups before we move forward on such a measure.

Let me turn now to new clause 15, which has been tabled by the hon. Member for Foyle (Mark Durkan). We supported it in Committee and would support it again. It is an incredibly important amendment and I urge Members to listen to what the hon. Gentleman has to say. We do not believe it is acceptable to leave it to consumers to know whether they have a death trap in their house.

Finally, I want to say a bit about Government amendments 14 to 20 and the very welcome U-turn that seems to have been made. In Committee, we were concerned that consumers could be left waiting many months for a refund, but the Minister suggested that the Government believed there were potential disadvantages of introducing a time limit that outweighed the benefits that such a change could bring. We suggested 30 days in which to get a refund, so I am absolutely delighted that the Government have gone one stage further and said that people should get their money back in 14 days. That gives me great hope that while the Minister may be saying “computer says no” at the moment to some of the things that we have been talking about today and in Committee, we will see further concessions in due course. We shall welcome them accordingly.