I beg to move, That the clause be read a Second time.

With this it will be convenient to discuss new clause 2—Standards of competence—

‘(1) Section 22 of the Estate Agents Act 1979 (c. 38) (standards of competence) is amended as follows.

(2) For subsections (1) and (2) substitute—

“(1) The Secretary of State will by regulations made by statutory instrument designate any body of persons as an approved body to which people engaged in estate agency work, including both the sale and lettings of residential property, must belong.

(2) The approved bodies must make membership conditional on signing up to rules and codes of conduct, which will—

(a) set minimum standards of training and qualifications required, and

(b) ensure that firms have adequate professional indemnity insurance and, as appropriate, clients money protection insurance.

(3) No order shall be made under subsection (1) unless a draft of it has been laid before, and approved by a resolution of, each House of Parliament.

(4) Before making an order under subsection (1) the Secretary of State must consult—

(a) organisations representing the interests of consumers,

(b) other persons appearing to the Secretary of State to be representative of persons who have an interest in the matter.”’.

I welcome the Minister to his new post. We had a brief word earlier; he has previously covered many of the duties involved, and it is a pleasure to have dealings with him again. I also apologise on behalf of my hon. Friend the Member for Hertford and Stortford (Mr. Prisk). He is abroad on long-standing European business and cannot be present, so I am dealing with this Bill in his place, although I did not take it through Committee.

One of the matters that received a lot of attention in Committee was part 3 of the Bill, which deals with the regulation of estate agency. New clause 1 and the Liberal Democrats’ new clause 2 give us a very good opportunity to have a real discussion on Report today about what the Bill does and does not cover in terms of regulation of the residential market. There are indeed some grey areas, which I shall come to in due course.

The purpose of our new clause is to permit the Secretary of State to amend the definition of estate agency work by statutory instrument, subject to affirmation by both Houses. This follows the amendments that we tabled in Committee to amend the definition of estate agency work in the Estate Agents Act 1979. Clearly, 1979 was a long time ago, and the residential market has moved on a great deal since that legislation was enacted. Indeed, residential lettings, which are not covered by the Bill, have increased by at least a third since then. The purpose of the new clause is therefore to amend the definition of estate agency work in the 1979 Act to take into account direct and off-plan sales by house builders, and to bring residential lettings within its scope. As a result, all those activities would be subject to the new redress and other procedures in the Bill—we welcome them—which would aid consumers.

The Government rejected the Conservative amendments, claiming that they wanted to consult consumers and the industry before deciding whether the law needed amending, and I have no doubt that the Minister will say that today. The idea is that Ministers would in future introduce legislation to deal with that subject. However, the Government have had more than enough time to consider these matters, and there has been more than enough in the way of studies and lobbying from the various groups involved to be able to consider how the residential market should be regulated. The new clause allows us, as I said, to debate the need to update the definition of estate agency work to take into account the rising number of direct sales of houses and the need to include residential lettings so that everyone is covered under the improved redress scheme.

Estate agents are already regulated by a number of Acts. The 1979 Act contains a negative licensing provision whereby an estate agent who has breached the Act’s provisions and/or been convicted of certain criminal offences may be banned. However, that is a negative, after-the-event licensing regime. Section 22 of the 1979 Act contains a provision to regulate the standards of competence for estate agency, but it was never enacted. The Earl of Caithness tried to move an amendment on Third Reading in that regard, but it was not carried.

The Property Misdescriptions Act 1991 made provision for it to be a criminal offence to make false or misleading statements, in written or oral form, about certain matters relating to property. Estate agents were further regulated by the Enterprise Act 2002, which enabled the Office of Fair Trading and trading standards to obtain injunctions to stop estate agents breaching protective legislation, so there is already a considerable amount of legislation surrounding estate agents, who were of course further regulated by the Housing Act 2004. Some 10,000 estate agents are members of the National Association of Estate Agents, but it is estimated that only 66 per cent. of all estate agents are members of that professional body.

At this point, I should declare an interest as one of only four chartered surveyors in the House.

Five.

Ah—my hon. Friend, who is now an Opposition Whip, has pointed out that he, too, is a chartered surveyor. I was of course including him among the four, but I congratulate him not only on being a member of the eminent body of chartered surveyors, but on his promotion to the Opposition Whips’ Bench. It is great to see him there. So there are only five chartered surveyors in the House, and I am delighted to be here.

Perhaps I should say a little more about estate agents and some of the practices that they get up to when I discuss the new clause tabled by the hon. Member for Richmond Park (Susan Kramer), but suffice it to say at this stage that the purpose of our new clause is to update the regulation of estate agents. Although we do not approve of the Liberal Democrats’ proposal for a full licensing scheme, not including the residential letting sector, the direct sales from developers sector and some agency sales via the internet are a considerable lacuna—perhaps the biggest in the Bill. We want to be very clear whether the Bill does cover that latter activity; I hope that the Minister can enlighten us when he replies.

As I said, the rental sector has increased by at least a third since the 1979 Act was passed. The letting sector is huge and if today’s interest rate rises are anything to go by, I suspect that it will become even bigger. Of course, it deals with some of the more vulnerable in our society—those who are less able to defend themselves when things to wrong—so not including it in the Bill seems a huge lacuna. I should be grateful if the Minister enlightened us as to why the Bill does not cover the rental market.

Also on the increase—and also not included in the Bill—is direct sale from developers to consumers. Anybody involved in the housing market, particularly in the south-east, knows that this sector, too, is growing apace. However, it seems that that sector is not to be regulated, either. A lot of people buy houses off-plan directly from developers. They might be first-time buyers, and they probably have not got the expertise genuinely to assess whether the developer in question is selling them a pup, or they are getting the purchase that they envisage from the perhaps rather over-coloured plans. That is the second sector that, in our view, the Bill does not adequately cover, and which new clause 1 would include.

The third sector consists of the various types of organisations—and they do vary—which sell or let houses via the internet. According to a rough estimate that I made the other day, there are at least 100 such organisations offering services in that way. Again, the more vulnerable will be tempted to use their internet search engines to find some form of letting arrangement and to deal with such an agency. They might not have the knowledge to understand whether their transaction is being handled through a true and honest mechanism. For that reason, such activities need in some way to be regulated under the Bill.

Before the Minister replies, I should point out that our new clause would not alter the Bill one iota: all it would do is give the Secretary of State the power to deal with such matters. As the market is developing in a fairly dynamic way, particularly on the internet, it would be very sensible to include this power in the Bill. It might prove to be like section 22 of the 1979 Act, in that it is never used, but given that the House is unlikely, owing to pressure on parliamentary time, to return to the issue of regulating estate agencies for at least five years—perhaps even 10 years, given how this House operates and the sheer volume of legislation that it has to handle—not dealing with this issue now would be a real missed opportunity. I hope that the Minister will think again, even at this late stage, although I do not hold out any particular hopes.

The hon. Member for Richmond Park will move her new clause 2 in a minute, but I hope that it is in order, while I am on my feet, just to say a few words about it now—or would you prefer, Mr. Deputy Speaker, that I deal with it after the hon. Lady has moved it?

No, we are debating both new clauses, so the hon. Gentleman may speak to both now.

Thank you for that guidance, Mr. Deputy Speaker. The hon. Member for Solihull (Lorely Burt) worked very hard and constructively in Committee, along with my hon. Friends, and I understand—for some of the reasons that I have already set out—why she wishes to try to provide a positive regulation scheme for estate agents, although I do not support that. There is considerable legislation covering estate agents already, and there is more in this Bill.

As the hon. Gentleman knows, I have a high regard for him and it is in that spirit that I wish to put a question to him. I was a member of the Committee, although as a Scots Member I would not have dreamt of intervening on matters so vital to England, and I was left with a doubt in my mind. On the one hand, the official Opposition argue about the role of estate agents, and the hon. Gentleman rightly expressed his worries about how often we can address these issues; on the other, they did not seem to be keen on regulation. They seemed to think that market forces would be sufficient. If the hon. Gentleman could clarify that point, I would be very grateful.

I have great regard for the right hon. Gentleman, and the clarity with which he made his intervention demonstrates the quality of the service that he gives to the House on a wide range of issues. I congratulate him on that. He will know that my party’s whole stance is opposition to unnecessary regulation and we believe that it is unnecessary to have wholesale regulation of estate agents. As I have said, there is already a considerable volume of legislation that licenses estate agents. The Bill provides a redress scheme and further penalties, and we would like to see how that works out before jumping in with a sledgehammer to try to make it more difficult for youngsters and others to set up as estate agents.

As a member of the Royal Institution of Chartered Surveyors, I would like to see estate agents operating at the highest possible level. If new clause 2 is accepted, there would still be rogue estate agents, because some of the bright youngsters, who are bright enough to be rogues, will still pass whatever exams or tests might emerge from the licensing scheme. So a licensing scheme of itself would not stop unethical behaviour. It could set a framework and make it easier to deal with rogue estate agents, but it would not stop them. I would like to set up a framework that encouraged everybody to operate to higher standards. I would like all estate agents be members of the RICS or the National Association of Estate Agents, and put that in their windows. Those bodies could then set standards for continuing professional development, training and so on. Just having a licensing scheme would not stop rogue estate agents.

It will be interesting to hear what the Minister thinks, because the Government opposed the new clause in Committee. He also has to answer the question that the right hon. Gentleman poses.

Before the hon. Gentleman leaves this issue, does he agree that someone who intentionally sets out to mislead or even defraud may have all the necessary qualifications? That also applies to solicitors. However, would not a positive licensing system mean that everyone would at least start out with a minimum qualification and understanding of what they are doing? Therefore the likelihood of estate agents acting in ignorance would be reduced and that would be a great benefit to the industry and the customer.

That is a reasonable point, and I partly agree and partly disagree with the hon. Lady. She made my case by talking about rogue solicitors. We generally regard the legal profession as having some of the highest standards of any professional body. However, that does not stop rogue solicitors. We still see the odd court case in which a solicitor is struck off. The solicitor’s body and regulation by Government means that rogue solicitors can be banned.

As for whether the scheme would raise standards, there is already enough legislation for estate agents. The Bill will introduce new redress schemes and penalties and we need to see how that settles down, although I am not saying that we would be opposed to a full licensing scheme for estate agents for ever more. I know that the hon. Lady probably will not agree with me, but I hope that I have given her some reasons why we will not support new clause 2.

I want to encourage estate agents to work to the highest possible standards. We need to ensure that the public are better informed about what the professional bodies—the RICS, the NAEA and the Association of Residential Letting Agents—do and that we strongly advise them to use members of those organisations.

It may be useful for the House to consider some of the ways in which estate agents operate, and the Minister may also wish to do so when he rejects the overall estate agents licensing scheme. As a professional, I am well aware of some of the pitfalls that estate agents can encounter and thus fall short of what they should do. The whole issue of offers is a difficult one and I am not sure that all estate agents handle offers in the most open and transparent way. They may not always report them to their clients as they should or give their client proper advice. They may use offers to wind up the price or fail to report them if they are trying to get a lower price on a house for a friend. The area of offers can be difficult for some less scrupulous estate agents.

I also welcome the Minister to his new job. This debate is my farewell song on these matters, before I start to deal with planes, trains and automobiles, but it has been a privilege to have been associated with this Bill.

We fully support the spirit and intent of new clause 1, although the drafting is somewhat strange, as it does not make it clear that the proposal is meant to apply to the regulation of lettings and direct sales. We know that that is the intention from the debates that we have had, but the text contains none of the relevant language. We also note that the new clause contains very little discussion of timing, and makes no mention of consultation. I associate myself with the various observations that have been made about the lack of adequate regulation for lettings and direct sale, but I shall not repeat arguments that have been expressed in Committee and again today.

The key purpose of new clause 2 is to establish minimum standards of training and qualifications for estate agents, and for people who do estate agency work such as lettings and direct sales. We also want to ensure that firms have adequate professional indemnity insurance and, where appropriate, insurance to protect clients’ money. Any order made under the new clause would need the approval of the House under the affirmative procedure, and the Secretary of State would be required to consult before making any such order.

We touched on these matters in Committee, but in no great depth. Our debate focused on the arguments made by Which?, the various anonymous surveys that it carried out, and its investigations into issues such as offers, valuations and contracts. Those arguments were well set out earlier by the hon. Member for Cotswold (Mr. Clifton-Brown), and the response to the magazine’s inquiries showed that British people do not trust the estate agent industry or believe that they are treated in a way that is always responsible, competent or honest. The fact that the profession is not respected is very significant, and we believe that people’s concerns should be heard and understood.

When we raise the issue of requiring proper training and qualifications, we are always told that that would place an undue burden on the industry and act as a restraint on people entering the profession. However, new clause 2 is supported by Which?, the National Association of Estate Agents, and by Halifax estate agents. The two chartered surveyors in the House will be interested to hear that the new clause’s principle and intention are supported by the Royal Institution of Chartered Surveyors, although it would prefer the provision to be included on the face of the Bill rather than introduced as a statutory instrument.

The argument that the new clause would be onerous and act as a barrier to entry is fallacious. It has been pointed out that good estate agents want a requirement for qualification and training, and that it is those who are not competent who run away from the proposal. In addition, it takes only about six months to meet the present NAEA qualifications: that is hardly a barrier to entry, and the exam is being adapted so that people can do it online, at their own convenience.

People do not have to give up jobs to enrol in a complex school programme. There is a great deal of flexibility, and the NAEA qualification can be provided in an efficient way that fits with people’s general diaries and schedules.

Interestingly enough, the pass rate for the NAEA qualification is about 62 per cent., and the people who want to do lettings do rather worse than that. That means that something like 40 per cent. of the people taking the exam—which is equivalent to national vocational qualification level 3—do not pass and have to do further study to achieve the qualification. That makes it clear that many people go into the estate agency business who simply are not competent. The exam structure focuses on basic law, building construction techniques and valuation techniques. How can a person who does not have mastery of those three disciplines advise people on what is probably the most important investment that they will make in their lives?

The sums of money are very large, and people are bound to lack competence of their own because they are likely to buy a house only once, twice or three times in their lives. It is not surprising, therefore, that they look to estate agents for competence, and new clause 2 would make minimum standards and qualifications a requirement.

It has been claimed, both on the Floor of the House and in Committee, that rogues are not stopped by requiring them to take exams, but exams can prevent incompetence. I do not oppose the redress scheme, because rogues in the industry must be dealt with, but we also have to tackle incompetence. Prevention is better than either cure or punishment in that respect, and we should ensure that the industry meets the standards that the public expect. We would not dream of allowing an unqualified solicitor to draft the language of a contract, or of hiring an unqualified surveyor when we are buying a house. It is beyond belief that anyone would want to use an incompetent estate agent.

I advise the House that we did not discuss these matters in depth in Committee, and that we had no opportunity to divide on them. If the Minister makes a satisfactory response, I shall not press new clause 2 to a Division. However, if the Government do not accept the essence of the proposal, I shall press the proposal to a vote.

If I may say so, I think that the hon. Lady made an excellent contribution to the Committee, but I am puzzled by her assertion that we did not have an opportunity to divide on these matters. If she had wanted a Division in Committee, she could have had one. However, she has moved the debate on today, and seems to be holding the Minister to ransom. Why did she not press the proposals to a Division in Committee?

I thank the right hon. Gentleman. If he remembers, there were many points at issue that day and we were trying to cover a vast amount of ground. It seemed to us that we might get some movement on the issue without having to force the matter to a Division. That did not happen, and it would be good for the House to have an opportunity to make its opinions clear on an issue that is well understood by the public and about which the public care. Members of the House, certainly of my party, would like to have the opportunity to express themselves on the issue, but that decision is in your hands, Mr. Deputy Speaker.

I begin by expressing thanks to the hon. Member for Cotswold (Mr. Clifton-Brown) for his words of welcome and by welcoming him to this brief. I also thank the hon. Member for Richmond Park (Susan Kramer) for her welcome and express good wishes to her in her new responsibilities. I endorse what my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) said about the contribution that she has made to debates on the Bill in recent months.

The hon. Member for Cotswold explained what new clause 1 would do. I must say to him that it would give the Government a very wide power to amend a central concept that underpins the Estate Agents Act 1979. He said in defence of the new clause that it might never be brought into effect, but it would not be sensible for the House to agree a measure if it did not want it to be enacted. The House would need to be comfortable that this was a reasonable measure before it agreed to its introduction. It would represent a large and, I suggest, ill-advised addition to the regulatory burden. There would be little restriction on how the power could be used. All sorts of activities could be brought within the definition of estate agency work if the Government of the day were so minded, albeit with the affirmative parliamentary procedure as a check.

If there were a power to amend the section 1 definition, we would have to consider the implications for other pieces of legislation that rely on that definition such as the Property Misdescriptions Act 1991, the Money Laundering Regulations 2003 and the Proceeds of Crime Act 2002. They all refer back to that definition.

The 1979 Act was intended only to apply to those engaged in estate agency work. The controls imposed by the Act would not all be appropriate to impose on the other categories of commercial organisations that he suggested—lettings agents, property developers or other property professionals. We would also have to rewrite the rest of the 1979 Act to make it compatible with a new definition. For example, if lettings work were included in the definition of estate agency work, as the hon. Member for Cotswold suggested, we would probably also have to amend the definition of an interest in land. And if such a power were to be added, we would in effect have the ability to rewrite large chunks of the Act via secondary legislation. That on its own should give hon. Members pause for thought.

Let me comment on the three categories to which the hon. Member for Cotswold drew attention. He rather unkindly said that the Government were carrying out some reviews as an alternative to action. I suggest to him and to the House that it is right to proceed on the basis of careful thought. The Office of Fair Trading is conducting a market study of the house building industry. The study will allow the OFT to consider the potential competition and consumer concerns in the market and will focus in particular on the delivery of housing and customer satisfaction. It will follow on from Kate Barker’s review of housing supply, which recommended that the house building industry should demonstrate increased levels of customer satisfaction. She also recommended that if progress was not satisfactory, the OFT should conduct a wide review of whether the market was working well for consumers. That study is now under way and is expected to report by the summer of next year. It is right to await the outcome of that work before we decide whether to take legislative action.

We have also committed to undertake a wider property review to examine regulations and redress across a range of sectors, including lettings and whether further steps are needed. That review will be led by my right hon. Friend the Secretary of State for Communities and Local Government. Officials are drawing up the terms of reference for that work and looking at the timing, but it is expected to start in the summer.

In Committee, the Minister’s predecessor alluded to the property review. It is not clear whether the property review will include park homes and the plots that they sit on. Currently, property does not include such facilities, so they are not protected, because estate agency applies to property. Will that be looked at in the review? If the Minister wants more information, I am happy to write to him.

The hon. Gentleman is welcome to write to me. As I say, officials are drawing up the terms of reference for that work. If the hon. Gentleman wants to make a contribution to reflections on that, I will make sure that his letter is taken into account.

As for internet-based estate agency, the OFT issued guidance in September 2005 on the types of activity carried out by internet property retailers that are likely to lead to their falling within the definition of estate agency work under the 1979 Act. Where activities over the net fall within the meaning of estate agency work under the 1979 Act, internet property retailers will be required to be members of redress schemes.

My right hon. Friend the Member for Makerfield (Mr. McCartney) explained in Committee the reasons why we have not sought to change the definition of estate agency in this Bill. We have already taken action to deal with some of the problems in the lettings sector. The tenancy deposit scheme, which was introduced in April, has improved the rights of tenants by ensuring that deposits cannot be withheld unfairly. The Housing Act 2004 gave new rights to vulnerable tenants by requiring landlords who manage houses of multiple occupation to be licensed. We have committed to looking closely at the lettings sector as part of the wider property review.

We need to look carefully at the evidence, make sure that we have the evidence that we need and then consider recommendations from the reviews that have been put in train before deciding what next steps are necessary. It is also important that major changes of the kind envisaged in the new clause are made by Parliament through primary legislation rather than the broad power proposed in new clause 1.

The Minister is dealing with the matter in a reasonable way, and much of what he said I expected him to say. New clause 2, which was tabled by the Liberal Democrats, contains two important aspects that we have not yet discussed. It is relevant to discuss it now. One is the issue of professional indemnity for estate agents. If they do not have professional indemnity, one must rely solely on the redress scheme. The Government ought to think about that.

On Second Reading in the other place, a great deal of discussion was had on the Farepak debacle and the whole issue of holding other people’s money. There will be a number of activities in which estate agents hold people’s money. It will not be long before we have a scandalous case of a rogue estate agent holding a client’s money and disappearing with it. I wonder whether the Government could give some thought to that.

Let me turn to new clause 2; I have not yet started to address the points made by the hon. Member for Richmond Park, and I am happy now to do so. I know that there was a substantial debate on the issue in Committee.

We have made it clear throughout the passage of the Bill that we want to raise standards in estate agency. By requiring membership of redress schemes for all estate agents, this Bill gives estate agents the incentive to raise their own standards to avoid being investigated by an ombudsman. Businesses will be able to judge for themselves what training is needed to ensure that staff deliver a good service. If they do not make it clear to staff that best practice standards are expected and train staff accordingly, they will know that they are likely to face costly payouts in due course. That is a pretty effective way of concentrating the minds of those involved.

In response to the case that the hon. Lady presented to the House, it would be a mistake to force all estate agents to belong to an industry body and then give that body, or bodies, free rein to decide the standards of conduct estate agents should adhere to and the training they require. The hon. Lady pointed out that her proposal has the support of the National Association of Estate Agents, which does not surprise me. The NAEA is a reputable organisation and does tremendous work promoting higher standards in the industry, but it is not a regulator. It would be unwise and confusing to give it a regulatory function in addition to the role it already fulfils.

The Minister will know from reading the new clause that it includes no mention of that organisation. I gave the NAEA as an example of an organisation that provides a qualification, which is not onerous but is recognised. It demonstrates the fact that many people who go on to become estate agents cannot reach that standard and thus cannot meet the test of competence. That is today’s world.

If the hon. Lady does not have in mind an industry body for the performance of that role, which body would it be? The debate in Committee focused on the idea that it should be an industry body, so as an important rejoinder I underline the dangers attached to the route she suggests.

I accept that the discussion would be slightly different if another kind of body was involved, but the approach in the Bill is right. It is based on the work of the Office of Fair Trading. The Bill gives force to recommendations based on evidence provided by the OFT, whose study showed that the best incentive for raising standards is the threat of being taken before a redress scheme. I agree with some of the points made by the hon. Member for Cotswold; the real danger is from rogue estate agents whose problem is not competence but honesty. They know exactly what the rules are but they also know how to get round them. Handing over control to an industry body would simply restrict entry to the profession with no guarantee of getting rid of the rogues, as the hon. Gentleman said. The clear advice from the OFT was that the cost of putting up barriers to entry, which would also be likely to raise prices for consumers, would outweigh the benefits of that approach.

We are confident that requiring estate agents to belong to approved redress schemes will improve standards in the industry. We are also strengthening the enforcement powers in the Estate Agents Act 1979 so that the Bill ensures that breaches of statutory undertakings and enforcement orders under the Enterprise Act 2002, as well as the commission of specified criminal offences, can result in an investigation of an estate agent’s fitness to practise, which will enable enforcers to deal more effectively with agents who rip off their customers, and take them out of the market.

New clause 2 highlights issues about professional indemnity insurance and the handling of customers’ funds, and I shall comment on both. Estate agents would be unwise to trade without a minimum level of professional indemnity insurance, which is a condition of membership of the National Association of Estate Agents. It is also a condition of membership of the existing voluntary redress schemes for estate agents; for example, the ombudsman scheme for estate agents requires firms to have minimum cover of £100,000 and the surveyor ombudsman scheme requires members to have cover of at least £250,000. The Bill will require estate agents to belong to such schemes.

Will the Minister clarify what may have been my misreading of the Bill? Does it say anywhere in the measure that a requirement of joining a redress scheme is adequate indemnity insurance and insurance protection for clients’ money? Did I miss that?

The hon. Lady knows the answer. No, she did not miss it. There is no mandatory requirement in the Bill, because if the level were set too high it could operate as a barrier to market entry. I emphasise again the importance of not erecting unnecessary barriers as the impact would be to raise prices for consumers, which would be unhelpful. Nevertheless, such a requirement is a feature of the two schemes I mentioned.

A few moments ago, the Minister said he thought it would be unwise for a company to practise without such insurance. Is he comfortable with an environment in which companies are supported in their continued existence when—in his view—their practice is unwise? We need an answer to that important question for the industry.

I am comfortable that the market will be able to work effectively in the framework we are implementing and that it will be able to deliver services that meet the needs of customers. The balance we have struck in the Bill is the right one.

The hon. Member for Cotswold referred to clients’ cash, which is mentioned in the new clause, too. However, it is often solicitors rather than estate agents who handle clients' money when they are buying or selling a property. Estate agents who handle money have to comply with the requirements of the 1979 Act and with the Estate Agents (Accounts) Regulations 1981. Non-compliance is an offence that can lead to prosecution in a magistrates court. Thanks to the Bill, it would be open to the consumer to seek redress for any problems they experienced with an estate agent who was handling their money, so a legislative requirement is not needed.

The debate has raised two major difficulties with the scheme proposed by the hon. Member for Richmond Park (Susan Kramer). The first, which has already been mentioned, is the question of who will carry out the training. We have already seen the difficulties that arose when the Government tried to get their scheme for home inspectors off the ground, so the training would probably be left to one of the existing bodies. The second real difficulty, which has not been covered in the debate, relates to the training that would be required. As chartered surveyors, my hon. Friend the Member for Newbury (Mr. Benyon) and I know that it takes four years to train for that profession, and part of the training is a year’s experience actually doing the job. The hon. Lady’s proposal for a six-month training course would not include any training on the job, which is one of the best ways of learning how to become an estate agent.

The hon. Gentleman speaks from extensive experience and I am happy to draw attention to his expertise and that of his four chartered surveyor colleagues in the House.

I hope that my reply offered some comfort to the hon. Gentleman and the hon. Member for Richmond Park, and I thank all those who contributed to the debate. The Government remain of the view that ensuring that all estate agents belong to a redress scheme, alongside tightening up the available enforcement powers, is the right approach. On that basis, I hope Members will feel able to withdraw the proposal, but if not, I urge my hon. Friends and others to vote against it.

It looks as though the Government are not acceding to my new clause. I therefore ask to put it to the vote.

Question put, That the clause be read a Second time:—

The House proceeded to a Division.

I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.

I beg to move amendment No. 1, page 12, line 38, at end insert—

‘( ) If the Secretary of State gives such consent, the Secretary of State must publish a notice stating that consent has been given and specifying the reasons for giving consent.’

The amendment relates to the National Consumer Council’s voluntary activities functions in this part of the Bill. Clause 22 provides for the new council to acquire an interest in a company, subject to the consent of the Secretary of State. In Committee, an amendment was tabled by the hon. Member for Hertford and Stortford (Mr. Prisk) which would have provided that the Secretary of State should publish the reasons for any approval given to a request by the new NCC to acquire an interest in a body corporate.

We accepted the amendment in principle, as that is entirely in line with the Government’s commitment to transparency and openness in their dealings with the new council, and we committed to table an amendment along those lines. This amendment honours that commitment. It ensures that any consent given by the Secretary of State to a proposal by the new council to acquire an interest in a company, and the reasons for that decision, are publicly available and open to public scrutiny. I am glad to commend the amendment to the House.

I thank the Minister for accepting the principle that my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) put across in Committee and for tabling the Government amendment, which incorporates what was discussed there. The new NCC must be independent, and it was important to seek from the Government an assurance that there are satisfactory management and audit oversight provisions to ensure that public money is well spent. I am sure that the Minister agrees with that. The power in the original clause was wide, and there was concern over the lack of a specific mechanism to prevent the NCC from incurring significant losses on a particular business venture. We have seen that with certain educational institutions that go out into business ventures abroad. Specifically, the amendment ensures that the reasons behind any consent given by the Secretary of State will be in the public domain, thus ensuring accountability and transparency. Again, I thank the Minister for tabling it.

Amendment agreed to.

Clause 29

Disclosure of information

I beg to move amendment No. 8, page 16,  line 43, leave out subsection (4).

The CBI has significant concerns relating to the protection of commercially sensitive information under the Bill. Under clause 24, the NCC is given wide-ranging powers to obtain information from a number of bodies, including the Office of Fair Trading and various sectoral regulators, as well as businesses. The only limitation seems to be that the information must be required for the purposes of exercising the council’s functions. I am sure that the House can begin to see that the purpose of the amendment is to protect sensitive commercial information that has been demanded from a company under the powers in the Bill from reaching the public domain and thus, perhaps, some commercial competitors.

The provisions in the Bill on disclosure of such information are contained in clause 29 and are complex. They are linked to part 9 of the Enterprise Act 2002, which includes clear safeguards against the release of consumer and competition information which has been provided to public authorities. Such safeguards were seen as essential in building business support for, and confidence in, the new enforcement regime that was established under 2002 Act. That legislation struck a careful balance between the need for enforcement authorities to seek and obtain sensitive information in the effective discharge of their functions while protecting commercial information from disclosure except under specific and deliberately narrow gateways.

The council will need to have regard to the considerations in section 244 of the 2002 Act before disclosure. Those include the need to exclude from disclosure, as far as is practicable, commercial information which the authority thinks might significantly harm the company’s legitimate business interests. However, the underlying presumption against disclosure under part 9 will not, by virtue of clause 29(4), apply to the NCC. We do not understand the justification for not applying that presumption, which is deemed necessary to prevent the release of business information by public authorities, to the council. There is a risk that commercially sensitive information could find its way into the public domain and thus to competitors. The amendment would ensure that part 9 safeguards applied to the new NCC.

The amendment would remove a necessary provision and I will therefore resist it. It is necessary for technical reasons and I hope that I can at least outline them, as I understand the concerns that the hon. Member for Cotswold (Mr. Clifton-Brown) has about clause 29(4).

Clause 29 deals with the disclosure of information by the new NCC. The new council has important functions, which are designed to serve the interests of consumers, including—under clauses 10 and 19—the provision of information. It is important that we achieve a balance between the new council being able to discharge its statutory functions and ensuring that it respects the confidentiality of the information that it has obtained.

In creating the new council, we need to ensure that it can deal with not only the issues that span consumer interests generally, but the specific sectoral issues in the gas, electricity, and postal services markets. The current National Consumer Council does not exercise statutory functions and is therefore not subject to the general information disclosure provisions in the Enterprise Act 2002. Energywatch and Postwatch are subject to the specific information disclosure regimes in the Utilities Act 2000 and the Postal Services Act 2000 respectively, which apply to those bodies and to the regulators.

In bringing together the statutory consumer bodies in the energy and postal services sectors—and in providing for the possible inclusion of the consumer body for water too, following consultation next year—we have set out a single information disclosure regime for the new council instead of subjecting it to separate information regimes, depending on the source of the information. That would have resulted in complex and perhaps even unworkable provisions.

The existing gateways in the Enterprise Act 2002 provide for disclosure of information by public bodies in the exercise of their functions and to facilitate the exercise of functions by another public body. However, the new council has several functions of publishing reports or information, and they are listed in clause 29(4). We concluded that, when the function was to publish information, the disclosure involved could not be said to

“facilitate the exercise of the function”.

The publication or disclosure was itself the function and so did not fit the structure of the existing part 9 of the 2002 Act.

Consequently, the regime in part 9 did not deal effectively with protecting confidential information in such cases. Subsections (5) and (6) were therefore inserted in clause 29 to provide protection. They require the council to consult the individual or business to which the information relates and to have regard to the principles in section 244 of the 2002 Act, which apply to disclosure under part 9. Those are: the public interest, the necessity for disclosure, and the need to exclude from disclosure information which might significantly harm the individual or business to which it relates.

Those provisions draw on the existing models in the gas, electricity and postal services sectors. For example, section 19 of the Utilities Act 2000 applies to publication of information by Energywatch In each case, the general disclosure regime in the legislation is disapplied and special provision is made for the function of publication.

So, to give protection to business and personal information, we have included subsections (5) and (6) in clause 29, and made it clear in clause 29(4) that the prohibition on disclosure in part 9 of the Enterprise Act 2002 does not apply. The result is proper safeguards, including consultation with individuals or businesses to which the information relates, before disclosure can be made in exercising the council’s functions under which information may be published.

I thank the Minister for giving way. This is a technical matter, as he says, and the official Opposition do not dispute the need for one disclosure regime for the various bodies brought together in the Bill. That is entirely understandable. What is not understandable, however, is why the careful balance established in section 244 of the Enterprise Act 2002, relating to disclosure by public bodies, has been moved in this way. There is an important balance to be struck in regard to what information is disclosed by public bodies that obtain sensitive information. We want to question carefully why that balance—which has been altered by the Bill to make it easier for the public bodies covered by the Bill to disclose that information—has been disturbed.

It is for technical reasons. Part 9 of the Enterprise Act cannot merely be applied here. Part 9 works when information is provided by a body in pursuit of its functions, but legally that does not work when the body in question—in this case, the new council—has a specific function to provide information. That is the rather technical distinction. That is why there are separate provisions in clause 29(5) and (6), which provide safeguards in the specific circumstances, and in the context, of the new council’s functions. I believe that those safeguards will be effective, and that they will deal with the hon. Gentleman’s concerns.

I am not entirely satisfied with the Minister’s explanation, but this is a highly technical matter. Perhaps we need to leave it for now, rather than pressing the matter to a Division, but with the reservation that we might well want to revisit it on another occasion, perhaps in the course of a wider debate relating to the disclosure of information by public bodies.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 43

Standards for handling complaints

I beg to move amendment No. 9, page 26, line 33, at end insert—

‘(10) When making regulations under this section the regulator must have regard to—

(a) the needs of both domestic and non-domestic consumers; and

(b) such principles as—

(i) in the opinion of the regulator constitute generally accepted principles of best practice in relation to handling of consumer complaints, and

(ii) it is reasonable to regard as applicable to these regulations.’.

The amendment has been tabled in my name and that of my hon. Friend the Member for Richmond Park (Susan Kramer). We have bundled two issues into this amendment: the application of the regulations to small enterprises, and the principle of best practice in the handling of complaints. Paragraph (a) is relevant to small businesses. Although it is clear that the general definition of “consumer” in clause 3 includes businesses—or non-domestic consumers, which could include small voluntary groups, and so on—there is still a gap in clause 43. Subsections (2) and (3) say that complaint-handling standards can be restricted so that they do not cover all relevant customers. In other words, Ofgem, or whoever, could say that these regulations apply only to natural persons. The amendment seeks to require their interests to be considered without reopening the wider business/consumer debate.

The Minister might say that this argument is irrelevant because clause 44 includes requirements to consult, but that is not quite right. The requirement to consult applies only to those likely to be affected by the new regulations. If the complaint-handling standards apply only to private individuals, one would have to consult people representing those consumers—the energy supply companies and so on—but one would not necessarily have to consult small businesses, because they would arguably not be affected by the regulations.

The standard defence at this point is that businesses do not necessarily need protection as consumers. Indeed, consumers often need protecting from businesses. However, that argument is flawed. Why should a village shop or a charity have to be an expert in all the services that they consume? Ed Wilson of Energywatch makes the point that redress is available for small businesses and other non-domestic consumers in telecoms but not in energy. The Bill provides an opportunity to improve the situation for those consumers.

On a related point that goes a little beyond the amendment’s scope, it seems from clause 49(3)(b) that business or other non-domestic consumers will have access to redress schemes. Lord Truscott confirmed that in the Grand Committee in the Lords on 9 January. He also said that business suppliers will not have to join redress schemes. I would be grateful if the Minister clarified that and the suggestion that the new Department for Business, Enterprise and Regulatory Reform is minded to include businesses with 10 employees or fewer within the redress provisions. Approximately 96 per cent. of small businesses would be covered by that and it would be a welcome step. It does not appear to require any change to the text. Is it the Government’s intention to include other non-domestic consumers such as those that I outlined?

On complaint-handling standards, the other part of the amendment would ensure that the regulations were governed by “principles of best practice”, the language used in clause 49 for redress schemes. That matters because clause 49(1) was toughened up to say that the regulator “must” have regard to those, in the face of objections from Ofgem. It therefore matters that the regulations are as good and effective as they can possibly be; otherwise we might end up with weak standards. We would argue that it is even more important to get best practice standards for complaint handling than it is for redress schemes as we are relying on the energy companies to fill the gap left by the abolition of Energywatch and so on.

Part of the reason for the difference is the series of concessions from the Government during the course of proceedings on the Bill. Those were very welcome. The language on redress schemes in clause 49 was upgraded from “good” to “best practice” in the Grand Committee in the Lords, and in Committee in the Commons the Government upgraded the requirements for the regulator to prescribe standards for complaint handling from a “may” to a “must”. In a speech that the then Minister for Trade, the right hon. Member for Makerfield (Mr. McCartney), made to the National Consumer Council on 21 May, he said that he would

“not settle until we have a consumer regime which is the best—not just amongst the best”.

It is difficult to square that with not wanting best practice to be the standard for complaint handling. I therefore urge the Government to accept the amendment.

I listened to the hon. Lady’s case with interest, but the procedures that a regulator needs to follow in making regulations prescribing the standards to be met for complaint handling by regulated service providers, as set out in clause 44, are sufficiently robust. There is a requirement on a regulator to consult widely by conducting research to obtain and then take into consideration the views of a representative sample of persons likely to be affected by the regulations, and publicising the proposals in full detail to bring them to the attention of those likely to be affected, which is to a rather wider audience. In addition, the Bill provides that the regulations to be made are to be subject to the consent of the Secretary of State. Those requirements will mean that full and proper consideration will be given to proposed standards before a final decision is made by a regulator. The consultation requirement in the clause will enable all interested parties to contribute their ideas and advice on the complaint-handling standards which should be adopted, including any views on where best practice lies. It will be an open process, rather than the more restricted one about which the hon. Lady, understandably, expressed concern.

The prescribed standards will relate to the handling of complaints that are made to the regulated service providers by consumers of their services. The Bill sets out in clause 42(1) the regulated gas, electricity and postal services providers that will be subject to the new complaint-handling standards.

As for which users and customers will be covered by the standards, that is at the discretion of the regulator and can include small businesses if the regulator determines that it is appropriate that they should come within the scope. On the question of the criteria for approval of redress schemes as opposed to complaint-handling schemes, the processes are quite different. For redress schemes, it is the regulated service providers that can establish schemes and seek the approval of the regulator. Key criteria for approval are set out in clause 49, where the regulator is obliged to have regard to generally accepted principles of best practice.

The regulator is not obliged to consult on the approval criteria for the redress schemes, but is so obliged for the schemes on complaint handling. For complaint handling, it is the regulator who takes the initiative. Clause 44 obliges the regulator to consult, so there are different processes. That is the reason for the different approach that we have taken.

I hope that that explanation has provided some reassurances to the hon. Lady and that she will feel able to withdraw the amendment. If not, I will ask my hon. Friends to oppose it.

I am grateful to the Minister for his comments. I am somewhat reassured, particularly following his comments on the process of consultation and on the coverage in respect of small businesses. In the light of that, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 44

Requirements for making regulations under section 43

I beg to move amendment No. 2, page 27, line 10, at end insert—

‘( ) The requirements of subsection (1) may be satisfied by action taken before the commencement of this section or the passing of this Act.’.

With this it will be convenient to discuss Government amendment No. 3.

These amendments relate to clauses 44 and 47, and the new redress and complaint-handling provisions to be introduced in the energy and postal services sectors, and potentially in the water sector after consultation in 2008. Those elements of the new framework for consumer representation and redress are important to the new arrangements in the Bill. A direct consequence of those new provisions is that regulated providers in the energy and postal services sectors, and potentially water, will be required to take full and proper responsibility for handling complaints from consumers of their services.

As an incentive for industry to take complaint-handling seriously—we have just had a short debate about the importance of those processes—the Bill places a requirement on the regulators to make regulations prescribing standards for complaint handling which will be binding on regulated providers in those sectors. Where a regulated service provider has not been able to resolve a complaint to the satisfaction of the consumer, the availability of redress schemes will ensure that consumers will benefit from the certainty of resolution of a complaint, and the award of compensation where appropriate.

We are working closely with representatives of the key organisations concerned to ensure that we achieve a smooth transition to the new framework which maximises benefits to consumers, and minimises the uncertainty for staff in the existing organisations. We expect that the new sectoral redress schemes will be established by industry and approved by the relevant regulators. In parallel, regulators will also be considering how to introduce the new standards for complaint handling.

We are discussing with industry and industry representatives how to make the transition to the new arrangements. The timetable for delivering the different aspects of the new framework will be challenging, and work on the detailed aspects of that must start immediately.

As the Minister said, this is a new amendment that addresses clause 44, which was also amended in Committee. The clause requires that all energy and postal suppliers operate an approved complaint-handling scheme. Subsection (1) places a number of requirements on regulators, such as those to undertake appropriate research and to consult

“a representative sample of persons likely to be affected”.

Regulators must comply with the requirements before making regulations to prescribe complaint-handling procedures under clause 43.

We support the requirement to ensure that effective complaint-handling procedures are in place and recognise that there is a need to consult. However, it is surprising that the Government have only now realised that such an amendment is necessary. The Government’s intention of introducing the new arrangements within a year of the Bill receiving Royal Assent might be too ambitious—the Minister said in moving the amendment that the time scale is challenging. Can he reassure us further that the Government will be able to address matters in time for Royal Assent, which I assume will be in a year’s time?

Government amendment No. 3 is also a new amendment. It relates to clause 47 provisions on the membership of the redress scheme. The clause ensures that all suppliers are members of an approved redress scheme. The redress scheme provisions in subsection (4) place an obligation on the Secretary of State to consult before making an order to require that regulated providers in the energy and postal service sectors belong to a redress scheme.

We support the requirement to ensure that all providers are members of an approved redress scheme and recognise that there is a need to consult. However, we are again surprised that the Government have only now realised that it is necessary to introduce such an amendment. I appreciate that the Minister, like me, was not present during earlier proceedings, but there is a lack of joined-up government and forward thinking. I press the Minister to say whether the timetable to achieve the provisions contained in the two amendments is achievable.

The amendments are an example of forward thinking, rather than of the absence of forward thinking. Where it is our intention to introduce the new arrangements within a year of the Bill receiving Royal Assent, we want to maximise the benefits to consumers and minimise uncertainty for staff in the existing organisations. Both of those considerations suggest that it is right to meet the challenging timetable that we have set, and I think that we can do that.

Because of the time constraints on the implementation timetable, it would be helpful for us and the regulators to be able to consult before Royal Assent. That is why we have tabled these amendments. To do so is a prudent step. We do not want to jeopardise the achievement of this challenging timetable. The hon. Gentleman will agree that, from the point of view of consumers but also of staff, it is helpful not to waste time on this issue. The amendments will help us to resolve it quickly, and I hope that he feels able to support them on that basis.

Amendment agreed to.

Clause 47

Membership of redress scheme

Amendment made: No. 3, in page 28, line 8, at end insert—

‘( ) The requirements of subsection (4) may be satisfied by consultation undertaken before the commencement of this section or the passing of this Act.’.—[Mr. Timms.]

Order for Third Reading read.

I beg to move, That the Bill be now read the Third time.

Having come to the Bill rather late in its life—like the hon. Member for Cotswold (Mr. Clifton-Brown), but unlike the hon. Member for Richmond Park (Susan Kramer)—I am particularly grateful to my right hon. Friend the Member for Makerfield (Mr. McCartney), and my parliamentary neighbour, my hon. Friend the Member for Poplar and Canning Town (Jim Fitzpatrick), for their skilful and assiduous handling of the Bill on Second Reading and in Committee. Let me also thank all those other Members—including my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke), who is in his place—who served on the Public Bill Committee.

We are committed to a robust and effective consumer regime, and this Bill is one of a series of measures to create confident and empowered consumers. By next year, the Consumer Credit Act 2006, the unfair commercial practices directive and this Bill will all be in force, thereby improving the lives of consumers. Major stakeholders and consumer groups have broadly welcomed the Bill, and the broad consensus on its major elements has been reflected in the debates in this House. However, the Bill has also been improved by amendments made here, and I want to thank all those who took part for the constructive debate on these measures.

Taking the clauses in reverse order, the Bill contains an important power to extend cooling-off and cancellation rights to solicited sales visits. We hope to consult on the revised regulations governing doorstep selling later this year. They will make the law simpler and clearer for consumers and businesses alike. I particularly look forward to the extra protection that will be given to vulnerable consumers.

I am grateful to the Minister for giving way, especially as he was in full flow. On Report, I asked whether the provisions dealing with so-called solicited calls would cover estate agents, and whether there would be a cooling-off period in that regard. I should be grateful if the Minister answered that question at some point in his speech.

I am happy to do so, and I apologise for omitting to do so when I replied in the earlier debate. The new regulations will apply to all contracts for goods and services entered into at home, with some exceptions. We will consult this year on the proposals, and without wishing to pre-empt the results, I would expect the new cancellation rights to apply to contracts with estate agents, if they are entered into at the consumer’s home in the way that the hon. Gentleman outlined.

The Bill also fulfils the Government’s commitment to require estate agents to belong to a redress scheme, and it strengthens the regulation of estate agents in a number of respects. For example, they will be required to keep adequate records of their dealings with a client for a period of six years. The Bill will bring about the creation of the new national consumer council, which will be a strong and powerful advocate for consumers across all sectors. The new body will be able to represent energy and postal services consumers even more effectively than the existing arrangements. We will consult next year on whether the water sector should be brought within the fold.

For the first time, the Bill introduces compulsory redress schemes in the energy and postal services markets. On the consumer voice part of the Bill, let me update the House on a number of significant developments. First, I would like to make an announcement about the chair of the new National Consumer Council, which is an important position. The chair will require considerable skill to lead the new body during the transition from the framework in this Bill to the realisation of a stronger, more effective advocate for the consumer interest. I am very pleased to announce that Lord Whitty will chair the new National Consumer Council once it is established. As hon. Members will know, he leads the existing council, and so will provide important experience and continuity during the transitional period.

Secondly, I can inform the House that the new National Consumer Council will be permitted to establish its central office in London, with its national offices in Glasgow, Cardiff and Belfast. I gave approval to the London location as one of my last acts as Chief Secretary to the Treasury, in recognition of the need to retain the expertise of the staff in the existing organisations, all of which are based in London. A London location will also enable key staff to be located close to the council’s stakeholders. In determining its final structure, the new council will be required to take into account the recommendations of the Lyons review and the Government’s objective of locating jobs outside the south-east when possible.

Thirdly, my Department is today launching a consultation on the scope of the redress schemes proposed to be established in the energy and postal services sectors as a result of the measures in the Bill. The consultation invites views about whether all regulated providers in the gas, electricity and postal services sectors should be required to become members of a redress scheme; whether domestic consumers and—to pick up the point made on Report by the hon. Member for Solihull (Lorely Burt)—the smallest businesses are the right groups of consumers to have access to the schemes; and whether the schemes should handle all types of complaints from those consumers. Those developments set us well on the way to creating the new National Consumer Council, and I am glad to be able to make these announcements just as the Bill completes its passage through this House.

In conclusion, the Government believe that the measures in the Bill will make a real difference to millions of consumers across the UK. We want consumers to be effectively represented; to be empowered with the right information to get the right deal; and to have access to redress when things go wrong. We also want rogues and villains to be removed from the market. We believe that the measures in this Bill will be effective in achieving those goals, and so I commend the Bill to the House.

I had the pleasure of serving on the Public Bill Committee, which did a very good job. I welcome my right hon. Friend the Minister to his new duties. He has done an excellent job in every ministerial post that he has had and I know that he will add to his new role responsibilities for inter-faith matters, on which I am sure he will also do a fine job.

I was influenced to become a member of the Committee because of the interest that I had expressed in the House, not least on Second Reading, on what I thought was happening in the energy industry. I felt then and still feel that consumers are entitled to a much louder voice than hitherto. I accept that now that the Bill has been in Committee and on Report consumers can be assured that it will go a long way towards allowing their views to be expressed, their concerns articulated and often—frankly speaking—their anger to be expressed as well.

I had in mind on Second Reading what I regarded as the disgraceful behaviour of the energy companies, especially the gas and electricity ones, who steadfastly refused to pass on to consumers, especially vulnerable consumers, the reductions in wholesale prices, even though increases were passed on with little delay. The hon. Member for Richmond Park (Susan Kramer) made the point several times in Committee that it was not surprising that the problems facing vulnerable consumers should be so much on our minds, and our aim has always been to ensure that complaints receive an urgent and positive response. In that regard, I pay special tribute to Energywatch, which has been doing an outstanding job. I hope that the Minister will be able to assure the House that its contribution and expertise will be copied by the new NCC.

Some people face remarkable difficulties with fuel poverty. Energywatch was able to deal with 86 per cent. of the complaints that it received in 35 days, whereas the department of the energy supply ombudsman took the view that 95 per cent. of complaints did not come under his terms of reference. We want complaints to be dealt with and registered promptly, and responses to them must recognise the needs of those impoverished and vulnerable people who are very much in our minds.

In Committee, I expressed my doubts as to whether suppliers should hold information arising from complaints, and I noted that the expected accountability was not in place. My right hon. Friend the Member for Makerfield (Mr. McCartney) used to be the Minister for Trade, Investment and Foreign Affairs, and he did a fine job of piloting the Bill through the Committee. He wrote to me about these matters, as follows:

“I explained during the debate that I believe that the provision you sought—the desirability of which does not appear to be disputed on any side—is already included in the Bill as currently drafted. Schedule 5 inserts new sections into each of the Gas Act 1986, the Electricity Act 1989, and the Postal Services Act 2000. These require OFGEM and Postcomm respectively to collect data regarding compliance with the complaint handling standards prescribed under clause 43 of the Bill.”

I welcome that clarification, which I think will satisfy those who worried that the Bill placed more emphasis on redress than on the handling of complaints.

This is an extremely important Bill. Some of my constituents live in high flats and believe that, in very cold winters, they have not been getting the heating that they are entitled to expect. They felt that their complaints were not being taken seriously and that most energy companies were demonstrating a greed that they found unacceptable. They very much welcome the accountability and transparency that the Bill will bring to these matters.

I am not the only Lanarkshire MP to be critical of the approach adopted by the energy companies, although they have made some progress since debates began on the Bill. I hope that others who have fought on these matters will share my belief that the message that the Bill sends out is that Parliament accepts that it has responsibilities to consumers. They are responsibilities that we intend to discharge. We have set in the Bill a mechanism by which we can oversee exactly what is taking place. It will make it as easy as possible to gain access to the people who can deal with complaints. In that spirit, I congratulate my right hon. Friend the Minister and the Government on introducing the Bill and wish them all the success that my constituents would expect.

It is universally agreed in the House that what we want in the United Kingdom is the best consumer protection in the world. The Bill goes some way towards that, although there are areas in which we would have liked the Government to go further. I shall deal with those later in my speech.

We believe in strong consumer choice and freedom. We believe that information should be accessible so that people can exercise that choice. Conservatives have supported the broad thrust of the Bill, and we welcome this move by the Government. To that end, we have scrutinised the Bill in a positive and constructive way, as have the Liberal Democrats. We tabled more than 45 amendments in the Public Bill Committee alone. The Government have either accepted them or introduced amendments of their own. They introduced 11 as a direct result of that scrutiny.

We are pleased by the bipartisan nature of the Government’s conduct of this part of the business. Conservative amendments have improved the Bill both in the Commons and in another place. Our emphasis was on enhancing the accountability of the new National Consumer Council. That has included ensuring that the Minister makes public the reasons behind any approval that the Government give to the NCC to acquire a corporate body.

We welcome the announcement that the Minister made in his Third Reading speech of the new chair of the NCC, Lord Whitty. He has come a long way since he was general secretary of the Labour party, and he now has a huge challenge on his hands. We wish him well because we want to make the provisions in the Bill work, especially the combining of all the functions of the consumer council.

I welcome the fact that the NCC will have offices in three parts of the United Kingdom—London, Cardiff and Belfast. I just hope that the good citizens of Scotland will not feel left out. I was delighted to follow the right hon. Member for Coatbridge, Chryston and not forgetting the good citizens of Bellshill (Mr. Clarke), but I am surprised that he did not refer to the fact that none of the offices was in Scotland. I hope that his constituents will not feel left out.

We have helped consumers by ensuring that best practice in complaints handling is followed by all energy companies. We have ensured that the new NCC better reflects the successful operation and follows the best practice of the existing council. However, on the question of estate agents and supporting consumers, we feel that the Government have been half-hearted in their approach. I know that we had a bit of banter across the Dispatch Box on Report, but the opportunity to look at the regulation and operation of estate agents has been missed. Some of the most vulnerable in our society who get involved only in the letting side of the residential market will feel left out. I am sure that that is a matter that this Government or a Government of a different colour will have to deal with in the future. So the Bill has missed an opportunity in that respect.

I welcome what the Minister said today—that those functions laid down in the Estate Agents Act 1979 will be extended to cover activities on the web and direct sales by developers. If those activities were covered by the definition laid down in the 1979 Act, they would be covered by the redress scheme and so on in the Bill. It is a lacuna in the Bill that it does not include the lettings market, especially as it is now becoming such a big sector of the residential market.

As my hon. Friend the Member for Rutland and Melton (Alan Duncan) said on Second Reading, the Bill is important for consumers. We all recognise that. It merges key consumer bodies and makes a serious attempt to give consumers greater rights when buying or selling their house. I pay special tribute to the work done in another place by my noble Friend Baroness Wilcox, a former chair of the NCC who is greatly knowledgeable on this subject. I pay tribute, too, to my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) who would be handling the Bill. He cannot be in the Chamber today, as I have already explained. He played a big part in Committee. I pay tribute to all those who have taken part in the Bill’s proceedings. We cannot be proud of every Bill that goes through this place, but we can be proud of this one; it is a major step forward in consumer protection.

Consumer protection is best achieved through a spirit of shared responsibility, with the Government, businesses and consumers all working together, although that is not always reflected in reality when businesses fall short of their responsibilities. As the Minister said, it is important that consumers have the means to obtain timely, efficient redress. That is the whole thrust of the Bill. If consumers cannot obtain that redress, we are all failing. It is on the basis of those principles that we approach the Bill.

We set out a three-point plan when we began our deliberations on the Bill. The first point was to update the definition of estate agency work to include off-plan sales, internet property intermediaries and direct home sales by house builders. As we all recognise, 28 years have passed since the original legislation came into force, and we have had more than enough discussion about estate agents to understand what is in the Bill and what is, sadly, lacking. Secondly, we want to widen the scope of the Estate Agents Act 1979 to cover lettings and the residential property market and, thirdly, to increase the penalty for rogue estate agents to a maximum of £10,000. A maximum of £5,000 was set in 1979 and the figure has been unchanged since. Our belief is that it no longer represents a real penalty for rogue estate agents.

We recognise that following the Government’s farcical efforts to introduce home information packs, they will be more wary of regulation for the housing market, but as I have explained, it is important in respect of the lettings market where there are some vulnerable people. Estate agents would have largely policed HIPs, and although we have regulated HIPs we have not yet completely regulated the estate agents who will administer them. There seems to be a certain irony in that.

We differ from the Government in how best to ensure that complaints are dealt with quickly and effectively. Redress schemes are at the heart of the Bill, yet they are the last resort of an unhappy consumer. In the first instance, redress should be sought from the company from which goods or services were purchased. Effective complaints procedures at that stage would ensure that more complaints were resolved at the outset, which is surely a desirable objective. That would reduce rather than increase the burden on the new NCC and make for better satisfied consumers, too. Good internal complaints procedures are the best way to protect and empower consumers, yet there is little on the subject in the Bill.

Existing redress schemes vary greatly, from granting intermediate access to insisting on a three-month wait before the consumer can invoke the services of the ombudsman. Three months is a long time to wait and creates an opportunity for supplier companies to avoid resolving complaints quickly, knowing that the process may turn out to be too long and drawn-out for the consumer to bother pursuing things further. As Members of Parliament, we all know that unless our constituents instruct us to pursue complicated and time-consuming matters on their behalf, they tend to be deterred; they say that it is all too difficult and just go away. It would be unfortunate if that were an inadvertent effect of the Bill.

Conservative Members believe that companies should have in place effective internal complaints procedures to deal with consumers quickly. As my hon. Friend the Member for Rutland and Melton has pointed out, a similar model already exists in the financial services sector. The Financial Services Authority requires that membership of the financial ombudsman service is dependent on an organisation’s having an appropriate and effective internal complaint-handling function. We hope that a similar system will be replicated by the NCC and the bodies it looks after.

Initially, the Government made only a small concession towards that approach when the issue was raised in another place. The phrase they introduced in clause 49 was deliberately vague; they required regulators only to

“have regard to…such principles as…the generally accepted principles of best practice”.

That is far from specific and far from instructive. Through guidance to the NCC, we hope that the Government can help to resolve this issue. We are pleased that they have finally accepted the arguments we made in Committee and introduced seven amendments to make it compulsory for regulators to set standards of best practice.

Our third area of disquiet concerns the independence of the new National Consumer Council. The Government have said that they want the new NCC to be independent and for the relationship between it and the Government to be transparent and accountable. That is a laudable aim, but I fear that the text of the Bill reveals a rather different approach. Clauses 17 to 19 concern reports and advice that the NCC may produce on consumer matters. In each of the circumstances described in the Bill, there is discretion as to whether the reports are made publicly available. When the NCC itself determines that the reports shall be produced, it has discretion to publish. I think that, in this day of openness, there should, on the whole, be a presumption that the NCC should publish all reports unless, as we discussed previously on Report, they are commercially sensitive.

When the Government ask the NCC to report on specific matters, the Secretary of State chooses whether the public ever get to see what the NCC has to say. This is a serious matter of public accountability and transparency for the consumer. The NCC will receive public funding, but the reports that it provides to the Government are not necessarily, so it seems, to be made available to the very taxpayers who fund it.

As I have said, we believe that all reports produced by the NCC, unless they cover commercially sensitive information, should be automatically available to the public. That need not be a cost issue, as has been claimed. The documents could simply be made available via the NCC’s website—a very simple matter these days. The Minister in the other place argued against that suggestion by claiming that not all such reports would be “of interest to consumers”, but I fail to see how reports from a public body set up to look after consumers’ interests would not be of relevance and interest to consumers. I fail to work out what bizarre leap of logic produced this decision. It is not up to the Government to decide whether the reports are of interest to the consumer; it is up to consumers to decide whether they want to see the reports. If they are published on the website, they will be able to exercise just that choice. It seems a bizarre decision.

It seems that the Government wish to use the NCC partially for their own purpose, or, at least, that could be the perception. The fact that the NCC will not have the right to publish its own reports goes to the heart of the question of whether the relationship between the Government and the NCC is sufficiently transparent. Conservative Members believe that it is essential that all such reports are published and that the NCC is perceived to be genuinely independent from the Government.

For years the NCC has been funded by the Government, but it has been unhindered in choosing for itself the focus of the work that it undertakes and then reporting on it as it wished. I hope that the Minister will agree that this is a better way to continue in the interests of empowering consumers.

We have had lengthy debates that have thoroughly examined the Bill, most of whose aims we thoroughly applaud. We hope that the NCC and the supplementary provisions in the Bill—for example, on solicited and unsolicited protection for the consumer in part 3—that we have hardly discussed today will work out well in practice. We commend the Government for having brought the Bill before the House, and we will not oppose it.

We very much support the concept behind the Bill. The debates on it have been a fascinating exercise in constructive cross-party exchange. As a result of the Bill, we can say that consumers will be better protected than they are today.

I pay tribute to those who have supported us and helped us to understand aspects of the Bill and to try to find ways to improve it. Which? has been mentioned. I would like to mention the National Association of Estate Agents, the Royal Institution of Chartered Surveyors and a number of others that have made particular efforts to make sure that we are well informed. Their information and proposals have always been constructive.

Today we sound the death knell, in a sense, for Energywatch and Postwatch, but both organisations have played an extraordinary role in supporting and protecting consumers, thanks to the way they have handled complaints and investigated underlying issues. An excellent example was given by the right hon. Member for Coatbridge—he has given me leave not to attempt to pronounce the rest of his constituency name. [Interruption.] Others are more able to pronounce it than I am. The work that those organisations have done to try to expose the issues surrounding energy pricing has earned them the gratitude of a large number of consumers, especially those who are most vulnerable. In many ways, those organisations have set a standard for complaint handling against which the new National Consumer Council and the whole system that has been set up under the Bill will in effect be judged. This is an opportunity for us all to pay tribute to the many individuals who have been so dedicated and have been involved in that process.

I pay tribute to my hon. Friend the Member for Solihull (Lorely Burt), who has supported me on the first piece of legislation that I have attempted to take through the House and who has brought so much wisdom and expertise to the issue. From the Lords, I would like to mention Baroness Miller of Chilthorne Domer and—perhaps this is slightly unusual—Lord Caithness, who sits on the Conservative Benches, but who has been quite an ally in working on the estate agent language, even if he was not necessarily supported by his own party. We value his contribution.

I appreciated the positive and constructive approach taken by the right hon. Member for Makerfield (Mr. McCartney). It was a pleasure to be able to raise an issue and get a straight answer and to feel that the issues that we raised were understood and taken seriously. The atmosphere that he created and the way in which he took the Bill forward have allowed this to be a constructive process and I greatly appreciate that.

The Government gave way on a number of issues and made a number of improvements in the course of our debates. I will touch on a few of them. In the end, they strengthened the language on sustainable development as a principle of which the new council must take note in exercising its functions. We appreciate that, even though we wish the Government had gone further, given the importance of establishing that in this era. There were many occasions when instructions to the NCC were couched in the language of “may” rather than “must”. We appreciate that there was at least one occasion when the shift from “may” was towards “must”. I am talking about the measure to require the regulator to prescribe standards for complaint handling. There was clearly a switch in the presumption of what the activity and focus of the NCC should be and we appreciated that.

We and others, including the Conservatives, were particularly concerned that the penalties that were initially to be levied on an estate agent who refused to join a redress scheme were so paltry as to be almost pitiful and ineffective. The penalty was set initially at £500. The Government moved that to £1,000, which is an improvement. The Conservatives called for £3,000. We wished to have scope for a penalty as high as £10,000 to be levied, particularly for multiple offenders who whenever they are challenged simply keep refusing to do as they are supposed to do and join a redress scheme. At least there was some movement in the right direction. As the Minister will be aware, the context is that the typical fee for an estate agent from the sale of a property is £3,000. We think that the penalty should at least bear some relation to the earnings from carrying out a transaction not covered by the redress scheme.

I am sorry to interrupt the hon. Lady’s constructive contribution, but does she agree that, as the average sale fee is about £3,000, a maximum penalty set at that amount will be wholly inadequate because it will not deter an estate agent from conducting shoddy business? The penalty should have been several times that amount.

I can only agree with the hon. Gentleman. That was our position, but his Front-Bench colleagues stuck at £3,000. There was scope for more agreement on that point. If we had had free votes on several issues, we would have seen a stronger outcome in several clauses.

I have remaining worries as we conclude our proceedings on the Bill. I fully appreciate that the Government mean well, but there has been much discussion about how to handle complaints made by vulnerable consumers and how to ensure that they are able to get adequate compensation and a satisfactory resolution of their problems. The right hon. Member for Makerfield made it clear that he wanted the definition of a vulnerable consumer to be flexible and wide. He gave the example of a widow who might be grieving and thus unable to cope with resolving a problem with an energy company, the Royal Mail or a company covered by the Bill. His example was good, but when we pressed the Government on the way vulnerable consumers would be identified—when we moved into the arena of implementation—it became apparent that almost no thought had been given to the matter. The Government might have put themselves into a box from which they will be unable to deliver.

The NCC will receive information on consumers via the consumer voice—over the telephone. If someone calls with a problem regarding an energy bill, it will be likely that the energy company’s records will show whether that person is in receipt of benefits, or on a special tariff that might indicate vulnerability. However, many people will not be on benefits or a special tariff, yet will be vulnerable. In addition, the process will certainly not cover the kind of example cited by the right hon. Member for Makerfield. There will be no special tariff for a grieving widow who is in an especially difficult period of her life. If someone calls the NCC with a problem about the postal service, there will be no existing track record to reveal whether that person is vulnerable.

When I raised such points before, I was told that questions would be asked during the telephone conversation to expose whether the individual was vulnerable. Do we really think that someone will say on the telephone, “Excuse me, but do you have a low IQ or are you vulnerable?”, “Have you recently been diagnosed with depression by a doctor?”, “Is your schizophrenia particularly active at the moment?” or, “Have you lost someone in the family so that you are unable to cope with complex paperwork?”? It will be almost impossible to elicit the information necessary over the telephone. I have asked many times what mechanisms will be used to try to identify vulnerable consumers, but I am still waiting for an answer. I hope that the Minister will take that point on board.

We are very concerned about the timing of the abolition of Postwatch. The Minister will be aware that 2,500 post offices will be closed over the next 18 months. Postwatch will play an essential part in enabling residents throughout the country to be consulted so that they can raise points to influence whether a closure goes through. Postwatch has a regional structure, whereas the new NCC does not. I should be grateful if the Minister confirmed the verbal assurances we have been given that Postwatch will be left largely intact until the closure process is completed. Is the Minister aware that members of Postwatch, whose role is so critical, will inevitably be distracted by whether they are about to receive a redundancy notice. Morale will be undermined, and in this critical period it will be hard to achieve the focus necessary to protect consumers and ensure that their voices are heard in the closure of their local post offices, which will have broad consequences for them and their communities.

We want stronger assurances from the Minister that small businesses will be recognised. The NCC can pay attention to small businesses, but nothing requires it to do so. Many small businesses fear that, over time, they will be lost in the distractions of the many other activities in which the NCC will be involved.

We have today debated residential lettings, direct sales and off-plan sales. I join the hon. Member for Cotswold (Mr. Clifton-Brown) in regretting the fact that the Bill does not address the issues far more powerfully. We are glad that a review is under way. It is focusing on lettings rather than direct or off-plan sales, whereas we believe it could have dealt with the whole problem. All that the review offers at the moment is delay, with no assurance that action will follow.

A great opportunity has been missed to require training and qualifications for estate agents. I cannot understand why our proposals have been ignored. I have not heard a coherent argument against such a basic framework for individuals who affect the most important spending decision families make. How can we enact a Bill on estate agents without at least requiring them—

Order. I remind the hon. Lady that we are debating what is in the Bill, rather than what has been omitted.

I shall close by asking the Minister to ensure that the Bill’s implementation is closely monitored. The Bill sets up a sequence of redress schemes, which, as the hon. Member for the Cotswold eloquently pointed out, are designed to deal with the problem after it has arisen. Consumers are unlikely to pursue a complaint to redress unless the process is easy, positive and offers encouragement. The Minister will have seen the energy supply ombudsman’s forms, which are not easy to complete with the detail necessary to pursue a complaint. We suspect that most redress schemes will refuse to provide a deadlock letter enabling consumers to pursue their complaint for at least three months—a long and delayed process. Ultimately, it is easier for people to drop out of the system.

Ofgem is reviewing the work of the energy supply ombudsman, but a minimal number of complaints survive to the point of redress. We know that Energywatch is about to disappear, but, as the Minister will know, in the past six months it handled about 32,000 complaints; in the same period, the energy supply ombudsman handled 321. Scaling up now to deal with a greater number of complaints means that the process will have to be closely monitored. Strangely enough, even though Energywatch has no power to deliver compensation, the average compensation achieved by it was £125 per case. The ombudsman, who has all the power, delivered only £80, on average.

If we can have assurances about monitoring and review, that will greatly aid my confidence and that of my colleagues in supporting the Bill. I thank you, Madam Deputy Speaker, for the opportunity.

With the leave of the House, I welcome the brief debate that we have had. I am grateful to my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) for his generous remarks, his contribution to the debates in the Public Bill Committee and this afternoon, and the welcome that he expressed for provisions in the Bill. He is right to pay tribute, as did the hon. Member for Richmond Park (Susan Kramer)—

I am extremely grateful for my right hon. Friend’s kind remarks. In response to the hon. Member for Cotswold (Mr. Clifton-Brown) who led for the Opposition, may I say that if there is a discussion about the location of offices, new offices, especially pursuing policies that we welcome, will be very welcome in Coatbridge, Chryston and Bellshill.

I am grateful to my right hon. Friend for that intervention. He was rather unfairly chided by the hon. Member for Cotswold (Mr. Clifton-Brown). I said—rather quickly, perhaps, but I did say it—that there would be an office in Glasgow, as well as in the other locations that were mentioned.

My right hon. Friend was right to pay tribute to the work of Energywatch and to remind the House again of the importance of serving vulnerable consumers well. The hon. Member for Richmond Park also rightly drew attention to the importance of the work of Postwatch. I agree with her about the importance of those arrangements during the current closure programme. I was the Minister with responsibility for post offices during the urban reinvention programme so I know very well how important the work of Postwatch has been in that context. I can give the hon. Lady and the House the reassurance that those arrangements will continue until the end of the programme. We certainly will maintain the expertise in the energy and postal sectors that has been so valuable to us and to the country.

I welcome the constructive character of the debate, reflected in the remarks of the hon. Member for Cotswold just now. I am grateful to him for his welcome for the appointment of the chair of the new National Consumer Council. We have explored some disagreements this afternoon, and some of them were set out again in his speech and that of the hon. Lady. I am happy to join both hon. Members in their tributes to their hon. Friends in this place and the other place for the contributions to the debate.

Towards the end of her speech, the hon. Member for Richmond Park raised an important point. We all know from our constituency work that it is difficult to succeed with the ombudsman. She quoted figures from the compensation attained by Energywatch. It would be a tragedy if the Bill led to a weakening of consumer protection, if the ombudsman redress schemes did not work properly. Will the Minister continuously monitor that?

I am happy to give both hon. Members the assurance that we will do so, and to reaffirm that the new council will continue to carry out the central functions currently undertaken by the sectoral bodies. We do not want to lose any of the success that has been achieved.

In response to the specific point about publication of reports, it will be at the discretion of the Secretary of State whether to publish reports that he or she has commissioned from the new council. That allows for the preservation of confidentiality, if need be, but the council is free to publish its own reports.

I can confirm that we will monitor implementation. On the point about the level of the penalty for estate agents, we envisage the cap set in the Bill. I remind the House that it will be possible to consider the fitness of an estate agent to continue to practise, and a prohibition order may be made against such an agent, banning them from doing estate agency work. The sanctions are potentially much more severe than simply the level of the penalty.

The Bill provides a significant boost for consumers, strengthening their position, as Members across the House have recognised, and I commend it to the House.

Question put and agreed to.

Bill accordingly read the Third time, and passed, with amendments.