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The amendment may be technically defective—I do not think that it is but that is the usual Front-Bench comment when one moves an amendment—but surely we should not miss this opportunity. It will be a long time before we get one again and if the Government are intent on dealing with the problem, why do they not deal with its totality? This is a serious issue. I urge my noble friend to look at this matter, consider whether he can support the principle and, if necessary, deal with the details of an amendment at the next stage—although I hope that he can accept the amendment as it stands.
Lord Borrie: My Lords, perhaps I may surprise the noble Earl by supporting his amendment. It is close to the dinner hour, but I like to create a little surprise on occasion. I do so because in Grand Committee the Minister said that the OFT report of 2004 did not deal with this problem, only with its remit of estate agency as then defined in the Estate Agents Act, which did not include the growing field of lettings and property management. I support the noble Lords, Lord Best and Lord Dubs, in saying that whatever technical difficulties there may be and despite the fact that the OFT did not consider this matter in 2004, a way should be found, either through this amendment or following the Government’s consideration between now and Third Reading, so that this opportunity, as the noble Lord, Lord Dubs, put it, is not missed. There is nothing terribly magical about redress schemes. The scheme that is being proposed in the Bill could easily be extended now, rather than in five, 10 or 20 years, to a related problem in the work of estate agents.
Lord Truscott: My Lords, the amendment would extend the scope of the Estate Agents Act 1979 to include lettings and property management. As I mentioned in Grand Committee, the Estate Agents Act 1979 applies only to those engaged in estate agency work, and the OFT report on estate agents did not consider the case for extending it to cover lettings and property management. Consequently, we do not have the evidence base to extend the provisions of the 1979 Act in this way.
As my noble friend Lord Dubs correctly acknowledged, amending the 1979 Act to cover lettings and property management would be difficult. Its scope is limited to issues specific to the buying and selling of land. This is clear in fundamental definitions contained in the Act, for example, “interests in land”, and from the duties owed by estate agents, such as information to be given to clients. Amending the Act to make it fit for the purpose intended by noble Lords would require a lot of detailed work.
I can assure the noble Lord, Lord Best, and my noble friends Lord Dubs and Lord Borrie that the
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However, given the views expressed in your Lordships’ House this evening, I undertake to consider this matter further.
7.15 pm
The Earl of Caithness: My Lords, first, I thank the Minister for his final sentence. At long last we have a positive response from him and I am grateful. When he was appointed Minister, I was told that he would listen to and understand the House and he has shown exactly those qualities in the past couple of minutes.
I thank the noble Lords, Lord Best and Lord Dubs, for their support. I also thank the noble Lord, Lord Borrie, whose support is quite a change but a very pleasant change. I hope that he will continue to support me—and I will try to support him in future. The noble Lord, Lord Best, mentioned the increase in the lettings market, which is the great justification for my amendment. We have moved on since 1979 and it is time that we looked at this matter. The noble Lord, Lord Dubs, mentioned the technical problems and that point was taken up by the Minister. All I can say to the Minister is that he has a very good team behind him. I remember using such comments when I was a Minister: that a matter was technical, too difficult and that there were other amendments to be made. As soon as we realised that we were going to be beaten in this House, it was wonderful how those difficulties mysteriously evaporated and the Bill was soon in good shape.
As to possible defects in the amendment, I can always remember being told that such problems were not a major issue in this House—it was the principle of the amendment that mattered, and if that was agreed it was up to the Government to ensure that it was technically correct. So I am not worried about that.
Given what the Minister said, it is entirely appropriate that I withdraw the amendment at this stage. If he wishes to discuss it with me and the noble Lords, Lord Best, Lord Dubs, Lord Lee and Lord Borrie, between now and the next stage, I am sure that we would all be delighted to try to fix our schedules to see him. I have no doubt that, having given a commitment, he will fulfil it and we will get a nice government amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 6 [Estate Agents’ Redress Schemes]:
Baroness Wilcox moved Amendment No. 90:
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(1) The Secretary of State must by order require a redress scheme in section 23A to adhere to an approved code of practice.
(2) A code of practice is “approved” if it is administered by or on behalf of the Secretary of State and designated by him as an approved code of practice for the purposes of this section.”
The noble Baroness said: My Lords, I am mindful of the time, so I shall speak quickly on the amendment, because I am sure that the Minister will give me this in two minutes.
We have just heard the persuasive arguments of my noble friend Lord Caithness highlighting some serious concerns about the estate agency industry. Amendments Nos. 90 and 91 represent a possible option, which I hope my noble friend Lord Caithness will be able to support. The weight of his experience would be most welcome.
Amendments Nos. 90 and 91 would establish a code of practice that would provide standards that all estate agents’ redress schemes would have to apply. This is an important distinction: it would not introduce a code of practice for estate agents; rather it would ensure that all estate agents’ redress schemes had to adhere to one set of standards.
My central worry in this Bill is that it opens up avenues for all sorts of redress schemes but does not actively encourage consistency within different schemes. My noble friend Lord Caithness has spoken with great expertise on this matter. However, at this stage, the least that the Government could provide is an assurance that we will not be left with a scenario as a result of this Bill whereby there are many and varied redress schemes, with the best estate agents signing up to the best, most vigorous redress schemes, including penalties that act as deterrents for bad practice, and agents with very little regard to the fairness of their practice, or the welfare of their customers, signing up to schemes that pose no threat and provide no incentive to better practice.
I was pleased to have the opportunity to meet the chief executive of the National Association of Estate Agents, who was clear in saying that while his organisation would welcome licensing, consistency in some form or another was of the utmost importance in the industry today. He has written to me on Amendment No. 90. He stated:
“If there is to be more than one estate agents’ redress scheme, it is critical that they operate in the same way so that the consumers and the industry are not further confused, and so that all estate agents operate on a level playing field”.
The amendment is simple. It would require the DTI to draw up a simple code of practice to which all estate agents’ redress schemes would adhere. It would achieve consistency in the industry and the confidence of the public.
I look forward to the Minister’s response and I hope that it will be positive. I beg to move.
The Earl of Caithness: My Lords, despite my noble friend’s lack of support for me, I support her.
Lord Truscott: My Lords, I shall speak to Amendments Nos. 90 and 91 to Schedule 6. The Government have already spelt out in the Bill the important requirements that they feel estate agents’
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The minimum requirements for approval are set out in paragraphs 2, 4 and 5 of new Schedule 3. In addition, taking into account Amendment No. 92, to which I have just spoken, paragraph 3 of new Schedule 3 specifies that the OFT must have regard to whether the scheme will be in the interests both of scheme members and of potential complainants, and to whether the scheme follows generally accepted principles of best practice in the OFT’s opinion. Paragraph 4 requires the OFT to ensure that a scheme makes satisfactory provision for sharing information with other relevant bodies.
Apart from the requirements set out in the Bill, the OFT can issue any further guidance that it wishes on what it would regard as “satisfactory provision” and what it regards as applicable best practice. It is not clear to us what benefit would be gained from requiring redress schemes to comply with a code of practice in addition to the criteria set by the Government in this Bill and any additional criteria set by the OFT. We are confident that, at this Report stage, the Bill contains all the safeguards that are needed to ensure that only high-quality redress schemes are approved. Although I am sympathetic to the noble Baroness’s amendment, I am not inclined to support it.
Baroness Wilcox: Well, my Lords, there we are. I thought that it was a nice, simple amendment under which the DTI could whip up a code of practice. As that is not going to be, I shall just beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Truscott moved Amendment No. 92:
“(b) such principles as— (i) in the opinion of the OFT constitute generally accepted principles of best practice in relation to consumer redress schemes, and (ii) it is reasonable to regard as applicable to the scheme.”On Question, amendment agreed to.
Lord Lee of Trafford moved Amendment No. 93:
The noble Lord said: My Lords, Amendment No. 93 seeks to raise the penalty from £500 to £3,000. In Committee, the noble Lord, Lord Dubs, sought to raise it to £1,000. We supported that, but wish to go further. We generally favour a light regulatory approach, due to the lack of a recognised standard within estate agency, and we feel that a redress scheme represents this light touch. Where necessary, sanctions and penalties should be tough enough to give teeth and credibility when dealing with the rogue
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Lord Dubs: My Lords, in Committee I moved an amendment suggesting that the figure be raised from £500 to £1,000. The arguments are similar here. The sum of £500 is too small; indeed, it is derisory in relation to the sums of money that are at stake in an estate agency transaction. I would have thought that anything the Minister could do to raise the figure above £500 would be sensible and welcome.
Lord Whitty: My Lords, I support the amendment. As the noble Lord, Lord Lee, says, a fine of £500 is nothing like the detriment that someone would incur were an estate agent to foul up the transaction. If the Minister and the Government are not prepared to accept the amendments of the noble Earl, Lord Caithness, on compulsory licensing, it is important that the leverage that they are prepared to accept via the redress scheme has teeth and is enforceable.
This is a general point of consumer law. In case I have not said this before, although a lot of noble Lords have pointed it out, I declare my interest as chair of the National Consumer Council as is. Across consumer law, the penalties are very low. It is important when we are enhancing consumer law that we set penalties that mean something and which ensure that the system works. I therefore ask the Government to give further consideration to the maximum fine leviable in these circumstances, so that the redress system can achieve what some of us would prefer to have been achieved via a licensing system. But if the redress system is the Government’s preferred mechanism, it has to be made to work. I think that £3,000 is a reasonable stab at a maximum level and will make most estate agents ensure that they are part of a reputable redress scheme.
The Earl of Caithness: My Lords, I supported the noble Lord, Lord Dubs, in Committee and I support the noble Lord, Lord Lee, now.
Lord Truscott: My Lords, this amendment seeks to increase the maximum amount of a penalty charge notice from £500 to £3,000. As noble Lords will remember, we discussed penalty charges in Grand Committee. As I said then, there needs to be a balance between the fine being a significant sum and our recognising that this is a fine that can be imposed on the spot with very little due process involved. We think that £3,000 goes far beyond what is reasonable for an on-the-spot fine and that a fine of that level would be appropriate to impose only after proceedings before a magistrates’ court.
In addition, in a magistrates’ court, the magistrate can exercise judicial discretion on the level of the fine, taking into account the circumstances of the case, whereas under a fixed-penalty scheme there is no scope for the exercise of discretion, and it would be unfair in principle to set a fixed penalty at such a high
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The maximum for a penalty charge notice under the Housing Act 2004 is £500. It seems sensible for the penalty charge regime under this Bill to be consistent with the regime under the Housing Act, which is why we believe that £500 would be reasonable here, too. Of course, an estate agent could be subject to more than one notice, each up to a maximum of £500.
Another important point is that, although £500 may not appear at first glance to be a significant sum for estate agents, that does not ring true when we consider that a 2005 Key Note market report on estate agents found that 25 per cent of estate agency businesses did not make a profit in 2003-04. Also, many estate agency businesses are small and medium-sized enterprises. The OFT report quotes the Council of Mortgage Lenders research that found that 60 per cent of estate agents in England and Wales are small independent firms which tend to operate one office or a handful of offices in a local area.
We may be willing to consider raising the penalty charge in an amendment perhaps along the lines suggested by my noble friend Lord Dubs in Committee. I hope that, in the light of that suggestion, the noble Lord, Lord Lee of Trafford, will feel inclined to beg leave to withdraw the amendment.
The Earl of Caithness: My Lords, the Minister said that it would be unfair to set a limit of £3,000 for an on-the-spot fine. However, I heard him say nothing that justified that. Perhaps he could address that problem in writing to me.
Lord Lee of Trafford: My Lords, I am reassured by the support that I have had on this amendment from the noble Lord, Lord Dubs, from the noble Earl, Lord Caithness, and in particular from the noble Lord, Lord Whitty, as well as from the Which? organisation. I am somewhat surprised by what was said about the relative financial success of estate agents. I would have thought that, in the present buoyant market, the vast majority of them were doing very nicely indeed. Nevertheless, in all the circumstances and having heard what the Minister said, I am at this stage happy to beg leave to withdraw the amendment, although I suggest that we will come to this again at Third Reading.
Amendment, by leave, withdrawn.
Lord Truscott moved Amendment No. 94:
On Question, amendment agreed to.
Lord Truscott moved Amendment No. 95:
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In the Title, line 4, leave out “suppliers and provision requiring certain suppliers” and insert “providers; to make provision requiring certain providers”
On Question, amendment agreed to.
Business
Lord Evans of Temple Guiting: My Lords, I point out that the Question for Short Debate is now the last business today. The time limit will be 90, not 60, minutes and the limit for Back-Benchers’ contributions is therefore nine minutes.
Sudan: Darfur
7.30 pm
Lord Alton of Liverpool asked Her Majesty’s Government what steps they are taking, along with international partners, to secure peace in Darfur.
The noble Lord said: My Lords, I make no apology for asking the House to return again to the situation in Darfur. The only thing to have changed since my visit there in October 2004 has been the exponential increase in the number of fatalities. It is estimated that as many as 400,000 people have now died as a result of the attacks, and more than 2.5 million people have been driven from their homes and now require international assistance. There is documented evidence of rape and enforced disappearances, and 90 per cent of the villages in Darfur have been razed to the ground. The genocide has been orchestrated and perpetrated by the Sudanese Government-backed Janjaweed militia.
The All-Party Group on Sudan, of which I am an officer, has documented these atrocities on a daily basis. Many of your Lordships recently attended the excellent briefings provided by the BBC World Service, sponsored by the all-party group. During that briefing, reference was made to the fragile situation in the south and the deteriorating situation in the east. My noble friend Lady Cox, who will speak later, has just returned from Sudan and will talk about the interaction of the situation in Darfur with the unfolding events elsewhere in Sudan. I am grateful to her and to other noble Lords for bringing their considerable expertise to tonight’s debate.
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