Unscrupulous Builders

Stephen Gilbert Excerpts

Wednesday 9th February 2011 Westminster Hall

[Stephen Lloyd]

That is a good point. It is not the conclusion that I have reached, but it is a strong point. The challenge with local government oversight is that it varies a lot around the country. Some local authorities would make it a high priority, while others would not. It is an option, but the conclusion I have drawn is that the Government must start taking steps to look at a licensing proposal.

I am aware that there are already programmes to help regulate the construction industry and mitigate fears, and I do not wish to undermine the valuable work of organisations such as TrustMark and the National House-Building Council. However, those schemes are taken up mainly by large companies that operate at national or regional level, and they are not the problem. The administration and cost involved in registering with such schemes is a natural deterrent to the individuals and small firms that I, and many of my colleagues, want to help. Because the vast majority of substandard work is carried out by individuals or small gangs of rogue builders, the current measures are inadequate.

According to Local Authority Building Control, TrustMark has insufficient funding to deal with the problem. Therefore, we need serious consideration about how to proceed with more effective methods of regulation. The seriousness of the matter is heightened by the well-known target of the illegitimate traders—older people, who are often the most vulnerable in our society. An ageing population coupled with increased home ownership necessitates a Government response.

Between 1981 and 2001, the proportion of the population over 75 years old increased by more than 30%. The number of pensioners living alone increased by 150,000 between 1991 and 2002, and now accounts for 14.4% of all households. That means that there are now more than 5 million pensioner-only households. Let me be clear: MPs in the House know that unscrupulous builders target vulnerable, often elderly, people. That is a growing market, and unless something is done, those builders will have ever more opportunities to rip people off.

Numerous investigations have shown that unscrupulous builders are taking full advantage of the gaps in our legislation and our rising pensioner population. Crooked salespeople are commonly overbearing, persistent and totally unscrupulous. That is a particular problem for older people, as they often live alone and are trapped by such intrusive door-to-door sales techniques. Once a salesperson is in their home, a vulnerable individual has limited means by which to end the transaction. The option of asking someone to leave is not always available to them because many home owners feel too intimidated in that situation to broach things so directly. That may sound absurd, but our experience as Members of Parliament, dealing with a large amount of casework and listening to constituents, who are often elderly, means that we know that they will be too frightened to ask the cowboy builder to leave.

When hard-sell tactics are used, many individuals feel trapped in their homes and have nowhere to retreat, leading to increased pressure and a desire to rid their home of the unwanted guests as quickly as possible, often—crucially—by accepting the service being offered. In fact, there are even reports of people being driven to their bank immediately to draw out large sums of money when faced with threatening demands.

[Stephen Gilbert (St Austell and Newquay) (LD)]

I am grateful to my hon. Friend for securing a debate that is important to constituents from throughout the country and represented by hon. Members on both sides of the Chamber. Does he agree that one way in which we could consider regulating the sector is by extending what we have done with the gas industry to the building industry? The Gas Safe register gives older people confidence that the engineers coming into their home are qualified and professional.

[Stephen Lloyd]

I thank my hon. Friend for his intervention. That is a good idea as long as it is managed properly. My concern is that it might end up a bit like TrustMark. Many people do not know about that scheme and even among those who do know about it, there is some concern that it is not robustly policed. I like the idea, but we have come to the point when we need to introduce licensing. I will explain how I propose that we fund it.

In my judgment and that of many others, none of the current legislation is able sufficiently to protect the public from such threats. I hope that hon. Members will forgive me because I am going to give them a bit of a history lesson. The Pedlars Act 1871—that is a wonderful phrase; “the Pedlars Act”—excludes virtually all callers involving property maintenance and repairs. The cancellation of contract concluded away from business premises section of the consumer protection regulations is an important statutory consumer measure, but it will generally offer little or no protection from criminal practices when the traders’ names and addresses are not known. Large amounts of cash change hands, yet there is no intention of operating in a fair manner. That is absolutely appalling. It is systemic and we simply cannot let it continue. Section 16 of the Theft Act 1968 has left a loophole in legislation, as its definition of theft covers only actions when a person, by deception, dishonestly obtains property belonging to another with the intention of permanently depriving the other of it.

Cowboy builders are fully aware of the flaw in consumer protection and know that as long as they carry out at least some activity, the incident will be classified as a contractual disagreement and therefore not a criminal offence. Prosecution of those perpetrators is very tough, as the necessary evidence is often very difficult to obtain; I could go on and on. That is why the market has been expanding and the actions of those deplorable individuals have got bigger every year. They know the law is an ass.

There is a logistical problem for any witnesses asked to stand up in court and face those who wronged them. That is a particular concern when the victims are already among the most vulnerable. It is another reason why action must be taken to halt the spread of these fraudulent criminals.

I am coming to the end of my speech because I want to give the Minister plenty of time to reply. In raising these issues, I make it absolutely clear that I do not want to cast aspersions on the legitimate business men and women who provide an important and welcome buildings and renovation service to many people up and down the country. In my constituency, a noted builder, Ellis Builders, has given me advice on how I can present and pitch a proposal in a way that will work for legitimate builders. I appreciate the support that its managing director, Derek Godfrey, gave me.

We must consider the possible courses of action open to us and the ways in which we can aid genuine tradesmen and end the scourge of rogue builders. Naturally, a central aspect of any reform would have to be an increase in public awareness. The public must know how to confirm whether the workers being hired are legitimate. One reason why the current voluntary schemes are ineffectual is the lack of public knowledge surrounding programmes such as TrustMark. I believe that to make any significant advance in protecting the well-being of individuals, it is critical that we provide one clear method for assessing the competence of a building tradesman. On that point, I agree with the National Federation of Roofing Contractors and join it in advocating a means of appraisal that will provide confidence that the tradesman or woman in someone’s home is competent, trustworthy and reliable.

There are many ways in which that may be achieved. Successful licensing schemes already operating in Australia and the US could provide a useful starting point for the consultation that surely must follow this debate. However, at such a difficult time for our economy, I appreciate that we must be extremely careful not to overburden a crucial sector of that economy—construction. It is necessary to strike a careful balance. We need to provide regulation and protection for the consumer on the one hand without disproportionately increasing costs or deterring compliance on the other.

It is time to consider seriously a national licensing scheme. The fee need not be too expensive. It could be £500 per annum and tiered, with smaller companies paying less and larger ones more. Any legitimate builder would see that as a worthwhile investment in their business. It would give the public the security of knowing that a builder was licensed. They could say to someone, “Do you have a licence?” If the answer was no, they could say, “You won’t be doing any work in my home.” If the answer was yes, they could open the door. In my judgment, that sum, if it was tiered as well, would be sufficient to fund a licensing body.

We cannot keep sweeping this issue under the carpet. The legitimate building trade—companies of all sizes—deserves more. The public deserve more. We can do more. To misquote the great and one and only Gary Cooper, “It is time to run the cowboys out of town.”