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Consumers, Estate Agents and Redress Bill [HL]

Volume 687: debated on Monday 4 December 2006

Second Reading debate resumed.

My Lords, I stay with protection but move from the defence of the realm to the consumer. Unlike my noble friend Lady Oppenheim-Barnes, I shall concentrate exclusively on Part 3, which concerns estate agents and amends the Estate Agents Act 1979. If ever an Act needed updating, that is it. I shall be supported on all sides of the House in what I want to do with the Estate Agents Act 1979, which started as a Private Member’s Bill, promoted by the then Member of Parliament for Oldham Central and Royton and supported by the then Member of Parliament for The Wrekin.

It is a great pleasure that the former MP for Oldham Central and Royton is present. I refer to the Captain of the Yeomen of the Guard, otherwise known as the Government Deputy Chief Whip. The former MP for The Wrekin is none other than the Captain of the Gentlemen-at-Arms, the Government Chief Whip. They introduced the 1977 Bill, which became the 1979 Act, having been taken up by the Government. Under Section 22 of that Act, the Secretary of State may, by regulations made by statutory instrument, make provision for ensuring that persons engaged in estate agency work satisfy minimum standards of competence.

Sadly, Section 22 has never been implemented. Noble Lords who have been Members of the House for some time will know what I am about to say, and I hope that those who are new will support me on it. We last discussed this subject when I moved an amendment on 13 September 2004 to the Housing Bill to license and provide training for estate agents. The Bill that we have in front of us is welcome so far as it goes, but it is only partially welcome in that it does not complete the job. It shuts the stable door after the horse has bolted. When you seek a full redress system and apply to the ombudsman you already have a complaint. I am trying to prevent the complaint in the first place and thereby give greater protection to the consumer. I will be moving amendments in Committee to that effect.

What I want to do is supported by the great majority of estate agents. My profession is not the most renowned in the world; second-hand car dealers, estate agents and politicians all fall into the same category. I very much hope that the mood and the time are now right to upgrade the estate agent. It seems utterly ridiculous that my daughter is going through endless exams to sell £100-worth of shares on the stock market, yet the person who can sell the biggest asset in most people’s lives—their house—is under no obligation to have any qualification or training. When the Minister loses at the next election, he can set up as an estate agent the day after and start a business with no training or qualification. I have no doubt that he will be brilliant at it and absolutely straightforward. Sadly, a lot of people in my profession are not. With the housing market continuing to expand and increase in value, the problem is getting worse. The damage that is being done to people and the amount of money that is being lost can never really be quantified. It is not an exact science. Valuing a house is not the same as valuing a share. Each house can be slightly different, and it all depends on the purchasers at the time. In my experience, there is no doubt that a lot of people are losing money and are not getting a proper service.

Yet this Government, who will not go to that stage, have recently made a hash of introducing home inspection reports. They asked surveyors to get retrained to prepare only part of the home inspection pack: the survey. I spent a lot of money and was retrained, but they consequently pulled the rug on me and various others, including the brother of the noble Lord, Lord Addington, and they did not give us any compensation. They said, “That is just too bad; we have changed our minds”. If you want the surveyor to be qualified, surely it is even more important that the agent is qualified, properly trained and kept up to a high standard.

As I said, I will move amendments in Committee, but that is the gist of my complaint about the Bill. It is okay so far, but it needs improving. This is a wonderful opportunity to address the situation that I know the noble Lord, Lord Davies of Oldham, wanted to address in 1977. He allowed for its provision; let us now put that provision into practice.

My Lords, I welcome this Bill. As far as I can see, there has been an awakening of consumer concern in recent years. I do not propose to follow the noble Earl, Lord Caithness. I am not an expert on estate duty matters; I am just a house owner, and I pay my money and grit my teeth.

I will talk about the other parts of this Bill. When I was in another place, a sizeable amount of my constituency workload was taken up with consumer-related complaints: disputes over whether the local authority or the water company was responsible for water and sewerage; metering of gas and electricity; utilities billing; and the failure to attend timeously to minor concerns, which meant that repeatedly people had to take time off work awaiting the gas man and others. Then there was the more serious problem of disconnection of electricity and gas, which really has a life or death effect on individuals.

In many instances, the intervention of my staff took the form of directing the public to the correct telephone number and telling them who they should speak to and what they should say to them. The combination of several consumer council organisations should provide a single telephone number and a single help point, which could considerably reduce the confusion that exists so that consumers, in a time of need, have such a point of contact. It would be even better if such a national help line number started with 0800, because call centres in recent years have developed the flexibility to direct the complainant, the consumer, to the appropriate area. It is worth putting down markers at this stage that we will want some assurances, probably in Committee, that the specialisation that has been developed in the electricity, gas and postal industries must not be lost when organisations in those industries are combined. The expertise that has been developed by them should be made available to the public with the simplest of keypad exercises.

If that is to happen, it will be necessary in the early stages to fund the new body with the appropriate resources. The early days of Postwatch and Energywatch were bedevilled by the drip-feeding of finance by the Government and I became involved in wrangles in my capacity as the chair of the Trade and Industry Select Committee. Those organisations were several months into the financial year before they knew what Treasury support they would receive. I would like a clear indication that there will be an appropriate programme of funding of the new organisations, the expanded national consumer bodies, for perhaps three to five years.

For example, Energywatch currently deals with some 60,000 complaints per annum. It is anticipated that that figure will rise by 10 per cent this year. Those complaints are resolved within some two months, but Energywatch is worried that when it is left to the companies, they will have three months in which to resolve the problems. If the issues involve billing, disconnection or other large sums of money, it is not unreasonable to assume that they should be dealt with more speedily, particularly if there is no incentive to the companies to address the issue with the kind of urgency that the personal circumstances of many of the complainants will require.

I hope that by Committee we will get an indication of what will be expected of companies. I am worried that there could be a plethora of ombudspersons’ schemes and different arrangements; for example for gas and electricity, even under the umbrella of one company. It should be incumbent, perhaps on the consumer organisation, the company or a regulator such as Ofgem or Postcomm, to provide a model that would facilitate the introduction of such schemes as quickly as possible. I know that there will be a time lag before the new body takes over, but it would be terrible if it did that in a vacuum, without schemes or proposals for the speedy handling of consumer problems.

There are other specific issues relating to vulnerable customers who currently slip through the net. It has been possible for them to highlight their problems through social services, citizens’ advice or their elected representatives. One always feels that we are getting only the tip of the proverbial iceberg with this group; many people need support and assistance—they should be among the highest priorities of the new body— but I am not convinced that that is currently happening.

I have an interest in these matters in so far as I am vice-president of National Energy Action, which is concerned about the operation of Consumer Direct. In response to the consultation document, it said:

“Consumer Direct will need some mechanism to identify and give priority to those complaints and inquiries which have more urgent everyday consequences”.

However, the burden of responsibility for resolving problems and complaints should lie between the company and the customer.

We must not get into the situation in which we have such a comprehensive set of arrangements that the company almost gets off scot-free. One of the achievements of Energywatch was to get some £4 million in compensation from the companies and into the pockets of predominantly poor consumers, who had overpaid, been badly billed and so on.

Some of the briefing materials we have received were based on a rather ill considered and opportunistic report from the Public Accounts Committee. From time to time, the PAC parachutes opportunistically into areas about which it knows, by and large, very little, and makes simple, trite accusations, such as, “Nobody knows who Postwatch is”. However, the number of complaints that Postwatch has highlighted has increased dramatically since it was established. I refer to highlighting the shortcomings of Royal Mail and the 16 million pieces that are lost, the delays and the bad performance. I have to say that performance is improving dramatically even as we speak, and I hope that over the Christmas period there will be a great improvement, year on year, in terms of delivery. Postwatch has been something of a victim of its own success. The number of complaints it has to deal with means that its expenditure has gone up. I must reflect the opinion expressed earlier in this debate: I hope that integrating the various consumer bodies is not a cost-cutting exercise. We must retain the specialised skills in the staff, separate the functions of the company from the regulator and, as has already been said, secure the considerable policy development expertise vested within the National Consumer Council. If we can get that, we will see an improvement.

I have certain misgivings about the role of the regulator in this process. I was always very suspicious when the regulator—Ofgem, the old electricity body—seemed to have the Electricity Consumers Council in its back pocket and worked in its offices. They should have been physically separated. The regulator’s responsibilities are different in some respects from those of consumer protection, although that is contained in its powers.

I must raise a question, which may be regarded as mischievous but it is not irrelevant. Is the proposal to bring together the consumer councils good and worth while? Why did we not include the consumer panels for Ofcom and for financial services?

My noble friend Lord Borrie mentioned Farepak, which could not, of course, be covered by such provisions because a financial service is involved. There is an interface between general consumer matters and financial matters. I suppose that happened because it is part of the Treasury and this is predominantly a DTI Bill. Once the Treasury has a Bill within its clutches, it—like the Jesuits and seven year-old children—never lets it go.

I shall make just one or two final points because I realise that I am taking up rather a lot of time. We have seen the integration of the Scottish, Irish and Welsh councils but we have not had any assurance about what is to happen to the English regions. As a Scot, I am concerned that a kind of creeping and irrelevant English nationalism is taking place at the expense of English regionalism, which is very important when it comes to issues such as this. In a number of instances, the water and postal companies, and certainly the energy companies, are still predominantly regionally based, and that should be given some consideration.

Lastly, I make a small plea for Scotland. The Scottish Parliament has considerable legislative powers, which neither of the two other Assemblies—if the Irish one is established—has. They need a passing reference or a clause in the legislation. In a very fair and reasonable letter to a number of us today, Douglas Sinclair, the chair of the Scottish Consumer Council, suggested that some provision should be made for the regional Parliament in Scotland so that it can be given its proper place in the legislation. That could be one of the tidying-up issues that we consider in Committee.

I am happy with the Bill in most respects. It has great potential. I, for one, am more than happy to give it my support today and to give it a fair wind in Committee if we can iron out some of those kinks.

My Lords, I read with great interest the Written Statement of 20 November made by the Secretary of State for Trade and Industry on the Bill. From it, I learnt that the Government,

“are committed to a robust and effective consumer and competition regime”.—[Official Report, 20/11/06; col. WS 15.]

I am sure that we all share that aim. It was followed by a short paragraph explaining the importance of consumers in achieving the aim and another paraphrasing the contents of the Bill. The fourth paragraph summarised events relating to doorstep selling and led into the remainder of the Statement, which consisted of seven further paragraphs, all on estate agents. Those are all important matters but, in my contribution, I shall leave the subject of estate agents aside and concentrate on the National Consumer Council, which I think is more controversial. The noble Lord, Lord O’Neill of Clackmannan, explained why he has reservations, and some of his comments will be very much reflected in my contribution.

Citizens Advice welcomes the Bill but it wants much stronger powers, particularly in relation to the regulators and the Government. The present consumer councils are worried that their expertise may be lost in a large cross-sector body, which is exactly what the noble Lord, Lord O’Neill, has just said.

I am uneasy that another overarching body is being set up under these proposals, bringing organisations together and saving money in the process. The Gershon review has resulted in genuine savings in quite a few areas, with which we are all familiar. However, at what point will the drive for savings start to adversely affect the effectiveness of the bodies that are being established? My noble friends Lady Wilcox and Lady Oppenheim-Barnes both voiced their concerns, particularly about how the new body will be financed. I accept that this is a DTI matter, and perhaps the DTI manages its money better, but one remembers the launch of Natural England only a month ago. On the day it was launched with a full flurry, Defra said that its funding would be cut by £12 million, which was a big concern to that body. So I hope that, when the Minister responds, he will be able to reassure us on the financial side.

Energywatch, the consumer watchdog for gas and electricity, has written with a number of highly pertinent questions. The most important is probably whether consumers will have easy access to an improved service. I caution the Government against travelling any further along the road of using only phone or internet access. Listening to a tinny recording of Mozart for 40 minutes is not easy access. The advice to “go on our website” is, for many people, not possible to follow, but unfortunately there seems to be a strong correlation between those without internet access and those who have serious problems with their power supplier. Again, I would be grateful for some comment from the Minister.

Energywatch wants to know whether there will be more support to the most vulnerable complainants. Moreover, it has pointed out that, although under the “joined-up” NCC the complainant will be able to receive immediate advice from Consumer Direct, nobody will act on their behalf for three months, as the noble Lord, Lord O’Neill, said. Many of those families cannot wait three months, and we need to address that issue. If you have just received a bill that is five times the normal amount, if you have spent three hours on separate occasions and a lot of money in a phone box, and if you are threatened with disconnection, you do not want to have to wait three months before someone acts on your behalf.

I have asked around and find that Energywatch is well thought of. If it considers a complaint to be well founded, it contacts the supplier, whose response to the customer is virtually immediate. In my book, an effective watchdog is one that has an effect on suppliers. How do the Government propose to ensure that the amalgamated body loses none of the touch of the constituent parts? If savings are to be made, what elements of those constituent parts will be reduced or cut altogether? I hope that the Minister will enlighten us on the detail as the Bill progresses.

My main concern with the Bill is the proposal to toss Postwatch into the pot to be known as the National Consumer Council even though the Water Council is to be excepted for the moment. Of the elements vital to life, light, heat and power are more important than post, but water is more important still. The water watchdog may be included at some time in the future but not at present. I would be glad if the Minister would tell us why, because that seems to be an odd omission.

The Post Office is an issue on which I have spoken in the House very solidly for the past six or seven years. Post Office services reflect the changes that are taking place in our society. We are moving fast from a position in which most people went to the Post Office for something most months to one where those with money for mobile phones and the bills they bring, home computers and virus scans, internet access and the associated costs of training and connection no longer need the Post Office. They pay their bills by phone, they e-mail friends and family instead of writing letters and they send presents using online services. Many of those people have several bank accounts and, should they require any form of state aid or subsidy, they will have no problem in supplying the details needed for automated payment. They are also well paid and do not need to worry about paying bills only when there are sufficient funds to do so. They rarely use cash and the money that they owe does not interfere with their normal banking experiences.

Unfortunately, as the noble Lord, Lord O’Neill, suggested, there are several million people, many of them elderly, who do not share this modern way of life. They are either totally dependent on the state or have only a small income topped up by tax credits and various benefits. Not for them the generous overdraft facilities, the personal loans and the larger mortgages. The banks do not want their custom. In particular, they do not want their overdraft.

It is distressing that someone who is forced into seeking state aid can be compelled to have it paid into a bank account only for that bank to remove a large part of that money to service a small overdraft. The threatened closure of the Post Office card account will mean that many people who have solely their state pension will be able to access it only through a bank account and will run into banking rules with banking-scale charges. Already one bank has imposed current account charges for customers with less than £1,500 either on deposit or as a minimum monthly input.

Over the months, I have listened to some rather weasel words from various Ministers when I have raised the question of post offices and how people can access money that is due to them. I am extremely concerned about the long-term banking accounts that may be withdrawn. Do people perhaps not know that there are 2 to 3 million people out there who cannot afford to allow anyone to take money automatically from their little store? The winter heating allowance was brought in when officials realised that many elderly people were cold because they simply had no money for extra fuel.

Can the Minister tell us how many people who pay their energy bills by direct debit reach the end of the financial year owing the energy supplier money? A very quick straw poll at the weekend gave me to understand that more people, like me, find that the supplier had taken more money than was required. Paying by direct debit may earn a small discount on the basic price of the fuel but, if you are on a small fixed weekly income, you cannot afford to pay one penny more than you need to, even if you get a little extra back at the end of the year.

People on low incomes still prefer to deal in cash. They prefer to walk to the local post office to draw it out over the counter. In rural areas, the nearest bank may be more than walking distance away. Many customers are suspicious of banks. So what right do the Government have to dictate that those who have paid their stamps over the years should access their money only through a bank account? Do they not realise the problems that some people have in getting one? Was there any discussion of the possible repercussions of refusing straightforward access to cash?

The closure of these post offices represents a large number of urban and rural communities that have lost their heart, thousands of people who have lost their support system and yet more who are now further socially isolated. I wish this new body well, but I hope that, through my small, humble contribution today, it will realise that a whole swathe of people cannot access services in the way that the Government would perhaps wish just because it would save them money. In the Committee days ahead, we must give serious consideration to ensuring that we are inclusive. In her excellent opening speech, my noble friend Lady Wilcox said that we must defend the most vulnerable in our society. I am worried that we may fail them if we do not really look at the Bill in Committee.

My Lords, I declare a fairly obvious interest as the chair of the National Consumer Council. I am pleased to follow two distinguished former bearers of that office: the noble Baroness, Lady Wilcox, on the opposition Front Bench in her first legislative outing—along with my noble friend Lord Truscott—and the noble Baroness, Lady Oppenheim-Barnes.

I welcome this overall approach—the consumer voice project—and the new landscape of consumer protection. I also support the more specific proposals on doorstep selling and, largely, the estate agent provisions, although I accept some of the points made by the noble Earl, Lord Caithness, on tightening them up. I shall concentrate largely on the overall structure of Part 1.

I support the broad structure. There is a single first-stop shop with Consumer Direct; comprehensive coverage of ombudsman, dispute-resolution and redress systems—not necessarily all in one scheme, but covering the regulated sectors; and the single policy and advocacy body, incorporating the NCC, Postwatch and Energywatch into what is called “new NCC”. That structure—cross-sectoral, learning from each other, and shifting the focus to areas of greatest consumer detriment over time—seems sensible. Making Consumer Direct the single, first telephone number in everybody’s minds for all consumer complaints also seems sensible. The proposal has great flexibility benefits. It ensures good systems of dispute resolution and redress in the regulated sectors, both benefiting consumers and putting pressure on, in particular, the energy companies to deal with complaints and advice rather better than they have in the past. One of my concerns is that the powers of the regulators to ensure that those standards are kept are weak.

The new advocacy body, the new NCC, will enable intervention in priority areas in the way that the NCC has done in the past. The noble Baroness referred to that as “guerrilla” action, which is a fair comment in many ways. The NCC has developed into a centre of excellence over the past 30 years, and we need to maintain that. We are aware of its good reports and examples: the Minister referred to the Consumer Credit Act, and later this week we will discuss the Legal Services Bill, which also originated from pressure from the NCC. In the past couple of weeks, we have had the home credit system referred to the competition authorities. We have also used the super-complaint procedure in relation to garages and our resources in relation to identity theft and food quality. There is a range of different areas of potential consumer detriment. We have also made a beginning in relation to public services in Scotland and England, where we have regarded the role of the consumer of public services as of equal importance to that in the private sector. Our colleagues in the Scottish Consumer Council took the lead in identifying the latest consumer scandal, Farepak, as a serious issue. We can build on this, and therefore the general approach of the Bill is appropriate.

However, I have concerns about a number of areas that require clarification. I hope that the Minister can satisfy me on them, if not today, then later during the passage of the Bill. The first is perhaps a bit aspirational: it would have been better if the cross-sectoral approach had applied to all sectors. The noble Baroness, Lady Byford, referred to water, which at least is in on a contingency basis for a later stage, but other areas with statutory provisions are not in the Bill—for example, transport is an area of great consumer concern, but does not feature in the Bill, presumably because the Department for Transport did not want it to. That is not appropriate when we are trying to create something to cover all areas of consumer detriment.

I also have some problems about the transition, in particular in relation to complaints and queries that currently go to Energywatch and Postwatch. Part of the strategy that the Government have adopted, which I support, is to compel companies to adopt better ways of dealing with complainants and their queries. That particularly applies in relation to energy companies. The powers in the Bill to permit regulators to force them to do so are not only a bit weak but will also take time to have full effect. We need to know what will happen to that sort of complaint in the interim. Having an improved ombudsman system and better redress puts pressure on the companies to get things right first time, which is the objective of this policy, but these provisions will take time to have effect and we need to make sure that that is covered.

The existing ombudsman system in the energy sector is not up to scratch for the job that is envisaged in this approach. There is a delay of three months because the ombudsman cannot intervene until the company has been given that long to sort a matter out. For many consumers in a difficult situation, that is pretty late in the process, so this needs tightening up. In Committee, we need to look more closely at what proportion of the complaints that are currently going to Energywatch and Postwatch will effectively be dealt with by Consumer Direct and what kinds of complaints will come to the new, expanded National Consumer Council and whether they are complex issues or involve potential disconnection or other emergency situations.

Like other noble Lords, I am concerned about the independence of the new body. I was extremely pleased to hear the Minister mention in his introduction that this body will be independent. That is very important. The current NCC was set up by the Government 30-odd years ago as a limited company and has never been in statute. In some ways, that makes it exceptionally vulnerable, because any Government could come along and abolish it without recourse to Parliament. Indeed, that has been suggested on occasion. However, it also gave the NCC great flexibility. I hope that that flexibility is maintained in the new structure. Provisions on the Secretary of State’s directions and reporting will need to be subject to serious scrutiny as we proceed.

Flexibility is needed because we need to shift from one sector to another. What is most detrimental to consumers today may change tomorrow, next year, and in five or 10 years’ time. Indeed, the issues on which we should focus now are not the traditional ones but those that arise in the public sector. The importance of the consumer role in public service relates, as the Government have recognised, to the changes that they are introducing in health, social housing and education. Those changes, although they may improve choice, at least on a one-off basis, do not engage the consumer on an ongoing basis in the way that we want in respect of both public and private services in future.

Another issue to which my noble friend Lord O'Neill referred is devolution. The existing National Consumer Council was a pre-devolution devolution. It worked pretty well; the Scottish and Welsh councils have operated very effectively. It is important that that is sustained through the Bill. The constitutional provisions are there. There will be separate councils for Scotland and for Wales; they will have separate offices; they will be appointed in consultation with the Scottish and Welsh Executives. But the following part seems to limit their role to being just advisory to the main national council. That is not what happens at the moment and it should not happen in future.

Those bodies operate substantially in the Scottish and Welsh context, in civic society and with Scottish and Welsh business, but also, crucially, with the devolved powers in Scotland and Wales to the Assembly and Parliament and local government. For example, much of the best work of the Scottish Consumer Council has been done in conjunction with the Scottish Executive in improving consumer representation in Scotland. That facility needs to be retained and the drafting does not completely reflect that role.

Noble Lords would expect me to mention sustainability, especially since the Stern report. One contribution to changing attitudes and approaches to climate change must be to allow and encourage consumers to make greener choices about the goods that they purchase. Sustainability is placed as a duty on the new National Consumer Council, but that duty is not very strongly worded compared with some other provisions in recent legislation. I would like that to be addressed in Committee.

I do not expect an answer from the Minister on my final point, which is about funding, because no Minister will ever give an answer on that. I certainly do not expect an answer on quantifiable funding, because my noble friend is sitting next to the Treasury Minister. There is a somewhat confusing position on the overall structure of funding because part of it depends on direct grant in aid from the department. Other parts of the pre-existing NCC and its Scottish and Welsh equivalents depend on project funding from other departments. Now, a big chunk will be based on the levy raised from energy and post companies. That will enable us to move attention into those areas and for those areas to benefit from generic consumer interest, such as the example given by the noble Baroness, Lady Byford, of post offices in rural areas—we will be able to consider the issue in a somewhat broader context. I am sure that she will agree that we need to address the totality of services available to people in rural areas and some of our more deprived suburbs. If funding is too ring-fenced, there will be too great a rigidity in what the body can do. On the other hand, we do not want to lose what the existing bodies can do in those two regulated sectors.

I strongly support the general thrust of the Bill. I emphasise the areas of concern that we will need to address as it proceeds. It is a good Bill. It will need some filling out and I am sure that in subsequent stages the House will fully engage in that process. I am sure that my noble friend can answer some of my concerns tonight, but I certainly do not expect him to answer them all.

My Lords, I shall confine what I have to say to Part 3; that is, the estate agents’ compulsory redress scheme. During the passage of the Housing Act 2004, which brought into being the legislation governing home information packs, we had considerable discussion on whether estate agents should be more strictly regulated. As he has already said, my noble friend Lord Caithness—I supported him from the Front Bench—introduced various amendments to ensure that anyone in practice as an estate agent was qualified, registered with an approved body, trained and professionally competent. Although we believed that it was important that anyone charged with producing home information packs was covered in that way, we also wanted to widen that to estate agents’ work in general.

That was resisted by the Government, the Minister then being the noble Lord, Lord Rooker. He introduced his own amendments, which resulted in a provision for the Secretary of State to make an order to require an estate agent to be a member of an approved redress scheme, but only for the purposes of complaints about home information packs. The Bill implements those provisions, which we supported, but extends them to the generality of estate agents’ work.

I make clear that I support the redress scheme. But, as the Minister acknowledged when he opened the debate, the buying and selling of property is one of the most stressful undertakings in which any of us are involved. It is also without doubt the most expensive and life-affecting decision. It can be carried out with confidence only if those who are professionally charged with the sale and purchase of residential properties have impeccable integrity, knowledge and professional competence.

Unlike in most other countries, there are currently no restrictions on operating as an estate agent in the United Kingdom. As my noble friend Lord Caithness pointed out, the Minister, when he no longer occupies that Bench, could, if he wanted, become an estate agent tomorrow, because anyone can set up an estate agency business with no experience, no qualifications, no insurance and without belonging to a professional body—so without the necessity of having to abide by any rules or codes of conduct.

The limited measures in the Bill today are, as the Minister said, based on the recommendations of the Office of Fair Trading report of 2004. Apart from the redress scheme, they also include a requirement for estate agents to keep records—one would have thought that that had been done a little while ago—to give access to officials from the Office of Fair Trading and the trading standards office and enable the Office of Fair Trading to consider the fitness of someone to practise. The latter two provisions would presumably arise as a result of a complaint and therefore, as with redress, would occur post hoc—after an event. They would not prevent something happening.

While I have no particular objections to the provisions in this part, I simply do not believe that they go anything like far enough, and nor does the National Association of Estate Agents, which might be expected to be pulling back from this as far as it could. However, a professional body which represents more than 10,000 estate agents in this country would support it being compulsory for anyone practising as an estate agent to be a member of an industry regulatory body such as its own or the Royal Institution of Chartered Surveyors, which has already introduced a technical qualification for estate agents as a minimum entry requirement.

If the professional bodies see the need for there to be a legislative requirement to ensure that there is compliance across the profession on high standards, I simply do not understand why the Government balk at that.

The current negative licensing regime, under which anyone can set up as an estate agent, even if the Office of Fair Trading can ban them in extremis, is completely insufficient. Estate agents these days are more often than not handling properties worth hundreds of thousands, and in London many millions, of pounds. They charge tens of thousands of pounds in fees and handle similar sums for the Chancellor’s stamp duty. They give advice to buyers and purchasers alike. Most are capable, some are not. Most will, by sheer weight of competition, have to act with propriety and competence. Some will not. When they do not, the loss to the person who owns or is trying to buy property could be catastrophic. After the event, compensation is not enough on its own. We really should be looking at methods of prevention.

Finally, the redress scheme relates only to residential properties. It does not include residential lettings. This is probably because these measures amend the Estate Agents Act 1979, which did not include residential lettings. The Bill will be an excellent opportunity to redress that problem, too. Although noble Lords would not think it, judging by the amount we deal with, opportunities for legislation come seldom, and it is unlikely that the concerns that I and other speakers have expressed today and which are not addressed in the Bill will be considered again for a very long time. I hope that we may be able to consider some of these issues during the passage of the Bill.

My Lords, I apologise for speaking in the gap. I did not put my name down to speak because I thought the debate would go on for rather longer and I would not have time to stay for the winding-up speeches.

I want to discuss two Welsh issues. My noble friend Lord O’Neill has discussed Scottish issues, and my noble friend Lord Whitty glanced at the issues that I want to discuss. The first is the remit of the new Welsh Consumer Council, which is defined in the Bill as a “territorial committee”—language that is not much appreciated west of the Severn, but let us leave that aside—of the new National Consumer Council. The purpose of this committee is,

“the provision of advice and information to the Council about consumer matters affecting the area for which the committee is established”.

This does not reflect the policy development role exercised by the current Welsh Consumer Council. I know that a further subsection allows the National Consumer Council to delegate and to devolve other functions to the new Welsh Consumer Council, but I believe that my noble friend would be right to consider that the core functions defined in the Bill for the National Consumer Council, so far as they affect Wales, should be part of the remit of the Welsh Consumer Council and should therefore be put into the Bill as such.

The second issue is the relationship between Welsh Ministers and the National Assembly for Wales, which is a devolved issue. The Bill requires the National Consumer Council, rather than the new Welsh Consumer Council, to send a copy of its forward work programme to Welsh Ministers. All that is a step back from the current devolved issue, and I very much hope that the Minister will take it upon himself to reconsider the clauses and to see whether we cannot do better than this in Committee.

My Lords, it is a very strange experience for me to respond to the Bill at Second Reading on behalf of the Liberal Democrats because, for the past eight years since I have been doing this, I have been looking to my left to see the noble Baroness, Lady Miller, and to my right to see the noble Lord, Lord Sainsbury; so this is a new experience. I welcome the noble Baroness and the Minister to their new appointments, and I look forward to the inevitable jousting between us.

I declare an interest in that I sit on the board of directors of a public company that has estates and managing agencies among its subsidiaries.

The subject matter of the Bill is rather like apple pie and motherhood. Listening to all the speeches and reading the representations that we have all received, there is no doubt that everyone is struggling, because none of us can be against improved consumer protection, better regulation of estate agencies or further controls on doorstep selling. Everyone is struggling to ask the same thing: all this is a very good idea but, when we get to the detail of it, are the Government going about it in the right way? No one wants to say that because everyone is worried that people will say that they are against consumer protection or the better regulation of estate agencies. That, in substance, is what everyone on all sides of the House has been saying this afternoon. Is it not time for the Government to pause and, as the Bill passes through this House and we discuss it in Committee and on Report, to ask themselves whether the perfectly acceptable and welcome aspirations in the Bill are really being fulfilled by its content?

The creation of the new National Consumer Council has had a seven-year gestation, starting with the 1999 White Paper wonderfully entitled Modern Markets: Confident Consumers. It was obviously a good idea, following that White Paper, to bring all consumer bodies under one watchdog, but the lengthy time lag since 1999 rather gives the game away. The DTI’s lead attempt to bring consumer watchdogs under one umbrella has failed, because only the DTI bodies are signing up to the new National Consumer Council. It is possible that the water watchdogs may join later—indeed, we have all been lobbied to try to ensure that that does not happen until 2010—but the rail, air and telecom watchdogs, as well as the financial services watchdog, as the Minister’s noble friend had indicated, have refused to sign up to the DTI’s plans. The existing bodies, Energywatch and Postwatch will be abolished, the existing National Consumer Council will be become the new National Consumer Council, and the existing Consumer Direct role will be significantly extended, with ombudsman schemes in place for energy and post. If, however, you have a consumer problem with the railways, the air services, telecommunications and financial services, there will be no change to the existing arrangements.

In his opening remarks, the Minister said that the existing system was fragmented. If you have an energy or a post problem at the moment, you call Energywatch or Postwatch and they deal with it. After the Bill is passed, and assuming that it is passed in its existing form, the consumer will initially contact Consumer Direct, after which there are five different lines of possible redress to which they could be directed: Consumer Direct, the various ombudsman schemes, the new National Consumer Council, Postwatch or Ofgem—hardly a simplification.

This, as various noble Lords on both sides of the House have indicated, comes at a time of continuing threat to the post office network and significantly increasing energy prices, and there is a danger that opposition and co-ordinator responses in the face of these challenges will be muzzled by a long period of uncertainty and unnecessary upheaval. In substance, there is a significant argument for merging all existing bodies to provide simplicity for the consumer, but that is not what is happening. We are getting simply the merger of two existing major bodies—Postwatch and the energy bodies. If the argument has now been lost for one consumer council, one of two things will happen. Either a lot of the expertise in Postwatch and the energy watchdog will be lost through redundancies and staff leaving, or if that does not happen, bearing in mind that there will not be one consumer watchdog, what is the point of doing it in the first place?

I turn now to the estate agency provisions. We are all well aware of the myriad unfortunate practices by rogue estate agents which bring the estate agency profession into disrepute. I shall take just two obvious ones: what is called “managing expectations”, where an estate agent invents a lower offer which actually was never made so that the vendor thinks that the higher offer he or she has received looks rather good; and the practice which I believe is known in the West End as “simmering”, where documents relating to similar properties are doctored in order to persuade buyers to pay more for the property they are seeking to buy than it is actually worth. There are many other such practices by rogue estate agents and no doubt something should be done about those.

But looking at the proposals being brought forward by the Government, it is clear that only very limited changes are to be made to the existing legislation. In summary, the Bill requires estate agents to belong to a redress scheme for the purposes of all complaints relating to estate agency work involving residential property. The Bill requires estate agents to make and keep records, including records of offer letters, for a period of six years. It will give the Office of Fair Trading and trading standards officers additional powers when they require access to premises to look at the production of records and so forth, and it expands the circumstances in which the Office of Fair Trading can consider the fitness of an estate agent to practise, and consequently to take regulatory action against him.

However, the Bill does not include any of the following: a requirement for estate agents to have a qualification, a point touched on by the noble Baroness; a requirement for estate agents to have any experience; a direct requirement for estate agents to follow a code of conduct, although that probably would be included in the rules of an approved redress scheme; a requirement for estate agents to be members of a professional body; or any protection for customers engaging in rental or property management contracts, a point touched on by the noble Baroness, Lady Hanham. I suspect that the Bill does not include that for the reasons she gave in her speech. If the Government are not going to take any of the more radical steps outlined in lobby material, letters from representative bodies we have received and points already made by a number of noble Lords today, why does the legislation not simply extend the existing ombudsman scheme?

The noble Lord, Lord Borrie, gave the game away in his speech. On matters such as these we all listen to the noble Lord above almost everyone else. After all the heat and detail of this legislation, the most likely result will be that the DTI will approve the ombudsman scheme as the standard for redress, in which case do we really need the complication we see in the Bill? Why not start from there rather than add the significant potential for further complexity with little practical result?

My Lords, in answer to the question put by the noble Lord, it is in order to get universal adherence to the code instead of adherence of only about two-thirds of estate agents.

My Lords, I appreciate that, but the point is that if the Bill goes through in its present form, unless the ombudsman scheme is the one uniformly adopted for redress we will have several schemes being approved. Surely, as the noble Lord, Lord Borrie, indicated, it would be better for the existing ombudsman scheme to be the one approved by the DTI and with which everybody will comply?

I shall touch on two further points. I mentioned that the noble Baroness referred to letting arrangements. As she indicated, there will not be many opportunities for legislation on this topic. While I know that the inclusion of provisions on residential letting would not necessarily fit that easily into the framework of the Bill, there is no reason in principle why the practices that need to be regulated, and which apply equally to residential selling, should not also apply to residential letting. As the Bill passes through this House and another place, I hope that the Government will take the opportunity to address that.

The second point of detail I want to mention is one that nobody has referred to: the Government need to reflect on the case of new-build properties. Many of them are sold directly by the main developers in this country and not through estate agents. The developer will put up a show house on the site and will employ Sharon or Tracy to sell properties from that show house. However, all the practices deemed necessary to enshrine under protection in this Bill apply equally to residential developers, but I do not think they are currently caught by the provisions because they are not estate agents. The Government need to look at that.

In conclusion, this is a well-meaning Bill, but in the case of consumer protection it seems to have been emasculated by rather typical Whitehall turf wars, and in the case of estate agents, while it is high in aspiration, it is handicapped by timidity.

My Lords, this has been an interesting debate and I thank my noble friend Lady Wilcox for her opening speech, which set out our approach to the Bill. I also express our gratitude to the Minister for so kindly arranging to brief us with his team last week. It was a helpful meeting and was much appreciated. As my noble friend said, while we support much in this Bill, it is an unusual one and seems to be something of a patchwork of issues and initiatives that the Government have hitherto allowed to fall by the wayside. While estate agency, consumer communication and doorstep selling are all related through the consumer, my fear is that the Bill is something of a reaction to recent events rather than a carefully thought-through, clear and positive statement for the consumer.

I shall start with estate agents. The creation of an estate agent redress scheme is broadly welcomed on these Benches, as my noble friend has explained. However, it is clearly an afterthought following the narrow scope of the Housing Act 2004. The noble Lord, Lord Rooker, attempted to add a redress scheme in the course of our debates on that, but was unable to do so due to its scope, so we are pleased to see that such a scheme is being implemented in this Bill.

It is a concern that the Bill makes no mention of provisions for those transactions where no estate agent is involved, an issue just referred to by the noble Lord, Lord Razzall. Has the Minister considered extending the Bill to include property developers in order to ensure that there will be redress for consumers who buy direct from developers? If not, perhaps he could explain why that was not considered appropriate. Similarly my noble friend Lady Hanham, and indeed the noble Lord, Lord Razzall, referred to letting agents. Again, we would be grateful if the Minister could respond.

Under the Bill, there will be two systems of redress for home buyers: redress relating to home improvement packs and redress regarding estate agency under the Bill itself. Do Her Majesty’s Government plan to press ahead with HIPs? If so, will the redress systems be run by one or a series of different organisations? How will it be possible to ensure consistent standards? I would be grateful if the Minister could explain how he envisages this working.

We welcome the requirement for estate agents to keep records—even if, like my noble friend Lady Hanham, we are rather surprised that they do not keep them already—allowing trading standards officers to inspect those records and expanding the circumstances in which the Office of Fair Trading can take regulatory action against estate agents. It is worth pointing out that the vast majority of estate agents are both respectable and regulated by membership of one of the professional bodies. It is the rogues, as always, that need controlling.

What we are seeing are clearly moves in the right direction but, having listened to the speeches of my noble friends Lady Oppenheim-Barnes, Lord Caithness and Lady Hanham, perhaps the Minister will respond to the legitimate question that they have raised, which merits close attention, of whether consumer protection in this area should be extended further than the Bill provides. I shall also be interested to hear from the Minister whether the existing £25,000 cap on redress, to which the noble Lord, Lord Borrie, referred, will still exist under the Bill.

Having said that, I am sure that consumers will be pleased that the Bill seeks to extend redress in the gas and electricity industries, in postal services in the United Kingdom and, potentially in due course, in the English and Welsh water industries. The new power to make regulations which require providers to belong to a redress scheme is good news for consumers, who can be vulnerable to energy providers in particular, and will, we hope, encourage best practice in the industry. However, there are concerns that additional cost implications may arise from the new regulation requirements. I know that the industry, and in particular Postcomm, as well as other interested parties, is concerned about this. I hope the Minister’s response will address this concern.

My noble friend Lady Wilcox and the noble Lord, Lord Razzall, have reserved judgment on the merger of the NCC. My noble friend has aptly reminded your Lordships of the Government’s record in the creation of non-departmental public bodies. It is not a promising one. My noble friend Lady Oppenheim-Barnes has expressed specific concerns about the adequacy of staffing for the NCC, and referred to the danger of erosion of the independence of consumer bodies such as the NCC and their effective subjugation to the will of government. Although the noble Lord, Lord Borrie, rejected this, it would be good to hear the Minister’s response. The options for merger set out within the regulatory impact assessment and the wording of the clauses dealing with the merger are, as my noble friend Lady Wilcox said, in need of greater clarification.

While the merger is intended in some respects to simplify things for consumers, it creates the potential for some old-fashioned confusion. Why, as my noble friend Lady Byford asked and the noble Lords, Lord Whitty and Lord Razzall, mentioned, should the public assume that post and energy consumer issues are dealt with by one body, but transport, financial services and, for a while anyway, water dealt with by others? Other noble Lords have expressed their anxiety that the new Consumer Voice should not turn out to be a hotchpotch that takes the wide-ranging expertise of the NCC, merges it with the relatively new experiences of Energywatch and Postwatch and, as a result, fails to give consumers the fair deal they deserve.

I hope we can ensure that the new body is as effective as it can be, which is why it is important to highlight the potential pitfalls at an early stage and try to avert them. I hope that we will be able to look in greater detail at the definitions of “consumer” and “consumer matters”, as well as the proposed funding provisions for the new NCC body. I should also like to probe the Minister on the descriptions of vulnerable people and to look at whether those can be refined and clarified. These are all matters that I look forward to addressing in Committee and the subsequent stages of the Bill.

I hope I have made it very clear that we are in support of transparent and efficient consumer communications. Yet it is not only the public’s understanding of the role of Consumer Voice that is in need of clarification but the internal processes of its counterpart, Consumer Direct. While Consumer Direct seeks to simplify the complaints system, I have a concern that simplifying it in the way the Bill does could create new complexities. The noble Lord, Lord O’Neill of Clackmannan, referred to the potential for confusion and my noble friend Lady Byford referred to the difficulty that some people will have in accessing support and assistance. We think the new system may seem simple in concept but could be complex for the consumer, being process-driven rather than consumer-driven. I should be grateful if the Minister could inform your Lordships which kind of questions will be answered by Consumer Direct, which will be referenced and by whom.

According to Energywatch, consumers are at risk of becoming stranded between the instant advice offered by Consumer Direct and the redress offered by the ombudsman schemes. Again, the noble Lord, Lord O’Neill, has referred to these concerns. It is my understanding—other noble Lords have also referred to this—that where energy is concerned, the ombudsman will begin to investigate a complaint only after three months from the original letter. Is that correct? If so, does the Minister agree that consumers who need more than simple advice, or who cannot wait for the ombudsman to begin, will lose out under the new system?

Above everything, as several noble Lords have said, it is vital that the NCC maintains the expertise it has built up as a standalone consumer champion. Importantly too, while we await with interest the details of the merger of Postwatch into Consumer Voice, we recognise that the postal services market is undergoing wide-ranging and rapid change. My noble friend Lady Byford has quite rightly brought the question of post offices, especially but not only rural post offices, to the attention of the House. This is an issue right at the heart of consumer affairs in the postal service. Post offices are the keystone of communities in towns in the countryside and, as we have done in the past, we will seek to ensure that the consumer’s voice is not diminished in this merger. Postwatch, like Energywatch, has been the point of contact for sector-specific expertise since its foundation. There is much work to be done in ensuring that Consumer Voice continues to represent consumers and businesses that depend heavily on the postal services.

We are told that the cost of implementation of Consumer Voice is £8.7 million. That assumes some redundancies. Could we please see a detailed breakdown of that figure and know how many redundancies are involved? Ongoing savings for the industry are put at £8.9 million. Again, could we please see a detailed breakdown of this figure?

Turning briefly to the matter of doorstep selling, I have one question for the Minister. Most of the goods and services that are the subject of doorstep selling are accompanied by offers of credit. The Consumer Credit Act was passed in the last Session; I suspect that the Minister will confirm that doorstep lending is covered by that legislation rather than the Bill but, in view of the very close relationship between doorstep selling and doorstep lending, can he explain how consumers will understand the difference and how to deal with it?

We have had a concise insight into the Bill this afternoon from noble Lords with great expertise in their respective fields. I look forward to analysing it in greater depth in Committee, to supporting measures that we believe to be constructive and to improving those that we believe need improvement, in order to get the very best possible deal for both the consumer and business and, consequently, the industry as a whole.

My Lords, I have greatly enjoyed the highly constructive debate that we have had today and I am grateful for the many incisive contributions that have been made. I welcome the noble Baroness, Lady Wilcox, to her position on the Opposition Front Bench and thank her for her acute observations. I will try my best to answer as many of the questions that were raised as possible. It may be more appropriate for some of them to be dealt with in Committee but I shall do my best in the time available.

At the outset, the noble Baroness, Lady Wilcox, referred to indebtedness in society. The Government are looking at this matter with the cross-government approach set out in the Tackling Over-indebtedness Action Plan 2004. A number of associated activities deal with this area, including implementing the new Consumer Credit Act 2006 by looking at illegal moneylending, loan shark pilots and various other initiatives. It is fair to say, though, that the vast majority of credit contracts are honoured, and it is only a minority who get into trouble. The principal drivers of personal insolvencies are obviously economic.

It is also interesting to look at some of the statistics. Sound domestic economic fundamentals have underpinned the growth in personal debt, but when we look at, for example, average mortgage rates, which were 5.22 per cent in September compared with 11 per cent between 1979 and 1997, mortgage holders have been saved approximately £4,000 a year on average. That is all underpinned by low interest rates delivered by greater macroeconomic stability, which have ensured that households are paying a significantly smaller part of their income in interest. We are now in a situation where unsecured consumer credit is growing at its slowest rate for 12 years.

A number of noble Lords referred to the proposals for setting up Consumer Voice and to queries about whether it is just a cost-cutting exercise. The noble Baroness, Lady Wilcox, referred to that issue, as did my noble friend Lord O’Neill of Clackmannan and the noble Baroness, Lady Byford, among others. Although it is true that there will be net cost savings of around £8.9 million per annum, it is not a cost-cutting exercise. There will be savings from shared central functions, but not a reduction in those functions. Government funding will not be reduced.

A number of noble Lords referred to the retention of sectoral expertise. I assure your Lordships’ House that this is an integral part of our reforms. The new NCC will need to ensure that it is an effective advocate for consumers in all markets, and therefore that it has at its disposal sufficient sectoral expertise.

The noble Lord, Lord De Mauley, asked how many staff will be made redundant. We are not prescribing the exact structure of the new body in terms of staffing levels. That will be determined in conjunction with the existing consumer bodies to ensure that the new body is fit for purpose and able to undertake its new functions effectively and efficiently. The KPMG analysis itself did not assume any reduction in the number of complaints from the 2005-06 level, a point referred to by the noble Baroness, Lady Wilcox. In practice, we anticipate that the number of complaints being resolved outside the company will fall, due to the cost of the onward referral of complaints to the redress scheme.

With regard to estate agents’ redress, the noble Baroness, Lady Wilcox, questioned the number of non-frivolous complaints that may go forward to an estate agent and the number of complaints that will be dealt with. The view on the Government’s side is that residential issues are at present widely defined, which will exclude certain types of complaint so that the number of complaints will be defined in such a way that only the borderline cases for further consideration will be excluded. All legitimate complaints concerning any acts or omissions committed by someone in the course of estate agency work affecting sellers and buyers of a residential property will be covered.

A number of noble Lords spoke of the scope of the devolved Administrations, including the noble Baroness, Lady Wilcox, and my noble friends Lord O’Neill and Lord Whitty. It is the position that the new National Consumer Council will operate across Great Britain and in respect of postal services in Northern Ireland, but there will be no carve-outs. The new NCC is empowered by the Bill to represent consumer interests in all markets, including public services. In practice, the new NCC will need to take account of the existence of other sectoral consumer bodies.

The Consumer Council for Water will be merged with the new NCC, and a new redress scheme for water consumers in England and Wales will be established. The Government have announced that the position of CC Water will be reviewed in 2008 after public consultation. However, the Bill requires the new National Consumer Council to set up a Scottish Consumer Council and a Welsh Consumer Council, which will replicate the current arrangements. Those bodies will have their own chairs and members appointed by the Secretary of State after consulting the Scottish and Welsh Ministers as appropriate, so there will be an effective voice for the Scottish Consumer Council and the Welsh Consumer Council referred to by noble Lords, including my noble friend Lord Whitty.

The noble Baronesses, Lady Wilcox and Lady Oppenheim-Barnes, and my noble friend Lord Whitty asked about the independence of the NCC. I assure your Lordships that the new NCC will be an independent statutory body, underpinned by statutory functions that will enable the new body to conduct research, make inquiries, undertake investigations and make reports and representations to any party. The new body is empowered to determine its own work programme.

On that point, my Lords, the Bill clearly states that the new National Consumer Council will investigate and then report to the relevant government department, not to the public. When the noble Lord is as old and wise as I am, he will know that each department has its own fish to fry. It is not at all the same thing as first making this type of report public and then reporting to a Minister for consumer affairs who has an overall view of the situation. That is what I am concerned about.

My Lords, I am grateful to the noble Baroness for that. She made a point earlier about there being no Minister for consumer affairs. There is currently such a Minister; it is my right honourable friend Ian McCartney, Minister of State at the DTI with responsibility for consumer affairs. The point she has raised in her intervention is a valid one, and something we ought to look at in Committee.

On redress schemes generally, the ones that are established are there to resolve complaints where service providers have not been able to do so and award compensation and redress to consumers where appropriate. Consumers with a complaint should initially approach the service provider in the first instance. If needed, consumers would then be able to use the Consumer Direct service as a source of impartial advice and assistance to help. In the event that a supplier could not provide a satisfactory response to their complaint, the consumer would be signposted to the relevant redress scheme to investigate the complaint on their behalf.

The point was made by the noble Lord, Lord Razzall, about having one ombudsman scheme. The fact is that under the Bill we are leaving it to industry to come forward and seek approval of suitable redress schemes, in the plural, so the situation could be that several schemes are approved. It is also the case that the approved schemes will have to conform to minimum standards. Such standards will pay due regard to best-practice principles for redress schemes.

Doorstep lending has been raised by a number of noble Lords, including my noble friend Lord Borrie and the noble Baroness, Lady Oppenheim-Barnes. Currently, it is a criminal offence for lenders to agree a credit agreement in an unsolicited visit to a consumer’s home. Consumers already have a cooling-off period for credit agreements agreed in their home. We will consider the regulations on doorstep lending in the Bill on doorstep lending when we draft the new regulations. Consumer credit legislation already requires lenders to give borrowers details of their cancellation rights, and the proposed consumer credit directive, if agreed in its present form, will extend those rights. It would not make sense to change the present provisions until the outcome of negotiations on the directive is clear. The Consumer Credit Act 2006, which we are in the process of implementing, already has a number of requirements on post-contract transparency in the form of statements and notices that need to be sent to consumers.

My noble friend Lord Borrie and the noble Lord, Lord De Mauley, among others, referred to doorstep lending. From a consumer’s perspective, the changes we are making to doorstep selling and the current consumer credit legislation will mean that consumers will be clear on their rights. The consumer credit legislation already requires lenders to give borrowers details of their cancellation rights.

The noble Baroness, Lady Oppenheim-Barnes, mentioned consumer education. The NCC is responsible for consumer education and will continue to be. The OFT has a role to support Consumer Direct in consumer education. Consumer Direct was rolled out nationally earlier this year—a year ahead of schedule—and provides advice on all consumer issues. We are exploring with the OFT whether to run an awareness campaign on the implementation of the new doorstep selling regulations expected to come in in April 2008.

In response to a question raised by the noble Baroness, Lady Oppenheim-Barnes, the Office of Fair Trading has a function under the Enterprise Act 2002 of publishing educational material or carrying out other educational activities for consumers. The Bill provides for the new National Consumer Council the function of facilitating consumer education which complements the role of the Office of Fair Trading.

My noble friends Lord O’Neill, Lord Borrie and Lord Whitty and the noble Baroness, Lady Oppenheim-Barnes, among others, spoke about Farepak. One cannot observe the Farepak saga without having a great deal of sympathy for those who, as a result of the company’s collapse, have lost money that they have saved and understandably feel badly let down. The circumstances of the collapse will be properly investigated by the DTI’s Companies Investigation Branch. The administrators will in due course report to the Secretary of State on the fitness or otherwise of the directors of Farepak.

The question was raised about whether the Bill should include some provisions to cover such cases. The Government are working very closely with the administrators, the Family Fund people and all those who are dealing with this difficult situation. My right honourable friend the Minister of State for Trade, Investment and Foreign Affairs met the chief executive of the Office of Fair Trading on 8 November; he asked that the OFT work with the Financial Services Authority and DTI officials to look at the regulatory framework in which Farepak operated and consider options to address any issues raised. A report will be made to him at the earliest opportunity and we will then be able to take a view on what action is required. However, I can assure noble Lords that we will take the necessary steps as expeditiously as possible to learn the lessons from the Farepak saga and to ensure, if at all possible, that there is no recurrence of this disturbing situation.

The noble Baroness, Lady Oppenheim-Barnes, spoke about the full range of the new consumer body’s remit not extending to Northern Ireland. The General Consumer Council for Northern Ireland already covers all sectors, including utilities, other than postal services. That is why the remit of the new National Consumer Council extends to Northern Ireland only in respect of postal services.

The noble Earl, Lord Caithness, the noble Baroness, Lady Hanham, and the noble Lord, Lord Razzall, spoke about the regulation of estate agents and whether they should be qualified. Estate agents are currently regulated by the Estate Agents Act 1979, which lays down the duties agents owe to clients and to third parties. It gives the OFT the power ultimately to prohibit those persons it considers unfit to carry on estate agents’ work. In addition, the Enterprise Act 2002 and local authority trading standards services can require an estate agent to change aspects of his conduct when the agent breaches specified consumer protection measures. Estate agents are also covered by the Property Misdescriptions Act 1991. However, following on from the studies and consultations that have taken place, we do not believe that licensing would in practice improve consumer protection as the evidence suggests that most estate agents who were subsequently banned had no criminal history and consequently would have been able to obtain a licence. Misconduct has appeared to be the result of a lack of integrity by individuals rather than a consequence of a lack of qualifications or knowledge of the law. That is the Government’s position.

I was asked about Consumer Direct. The new NCC will continue to carry out the sectoral functions currently undertaken by sectoral consumer bodies including Post Office monitoring and help for customers facing disconnection from energy supplies. I have dealt with questions on the budget.

A number of noble Lords spoke about vulnerable consumers. The Bill allows for the new NCC to determine for itself how to assess and categorise vulnerable people for these purposes. The Bill also enables the new NCC to act on behalf of consumers who become vulnerable through disconnection of their gas or electricity supply.

I was asked why the Ofcom Consumer Panel and the Financial Services Consumer Panel were not consulted. We consulted on their inclusion in January to April of this year. The majority of responses agreed that the panels had a different role to that of other statutory consumer bodies such as Energywatch and Postwatch and that both roles were important and were maintained by the proposals. There will be a consumer advice line for people to ring—it will be an 0800 number, a point raised by my noble friend Lord O’Neill. Arrangements will be simpler—a point made by the noble Lord, Lord Razzall—and consumers should be able to contact Consumer Direct directly for complaints rather than first finding out the correct body to contact.

The three-month period refers to the time allowed for companies to resolve complaints. The new council has a duty to act on behalf of vulnerable consumers without having to wait.

The noble Baroness, Lady Byford, spoke about post offices. People can still get their money from post offices and will continue to have the option to do so. The Post Office card account contract ends in 2010.

A number of noble Lords asked why all the consumer bodies were not being merged into one consumer advocacy body. I have already mentioned the Financial Services Consumer Panel and the Ofcom Consumer Panel. There are special reasons why water and transport were not included. With respect to water, the consumer representation has only recently been reformed. Similarly, with respect to transport, the Air Transport Users Council is a division of the sectoral regulator, the Civil Aviation Authority, so it was not thought appropriate to incorporate that at this stage.

There are four reasons for not including lettings. The Bill amends the Estate Agents Act 1979, hence its provisions do not apply to letting agents. Tenancy deposit schemes, however, are to be introduced in April 2007 under the Housing Act 2004. The Government support voluntary self-regulation of letting agents. Agents who are members of the Association of Residential Letting Agents, the Royal Institution of Chartered Surveyors and other groups have provided financial support to the national approved letting scheme. However, we will continue to monitor the operation of the lettings market. Approved redress schemes dealing with complaints about letting agents on a voluntary basis can already operate, but that would be a matter for the scheme administrators. The OEA has recently started dealing with complaints about letting.

My Lords, the Minister said early on in his speech that all transactions between sellers and buyers would be caught. Does that cover the point of the noble Lord, Lord Razzall, about developers?

My Lords, it depends on the definition of estate agents. Where estate agents are involved in selling property and can be defined as estate agents, the Bill will cover them. My understanding is that where they are simply selling property directly, not involving all the other activities of estate agents, they will not be covered by the Bill.

My Lords, I apologise for interrupting the Minister’s flow—I know that it is getting late. I was making rather a different point; I am grateful to the noble Earl for intervening. It is accepted that many big residential developers do not use estate agencies. I was asking the Government to find a mechanism to ensure that the Sharons and Traceys, sitting in their show house in Berkshire or Northumberland, are regulated in some way. It is nothing to do with their being estate agents; it is just that what they could get up to could be just as bad as the practices of rogue estate agents.

My Lords, it depends on the definition of the law and whether the activities in which they are involved can be defined as those of estate agents. I was not implying that they were employing other estate agents as intermediaries; what matters is the definition of their activities. We can perhaps return to that matter in Committee.

The noble Lord, Lord De Mauley, mentioned the current cap of £25,000. The cap is not imposed by government; it is up to industry to propose details of schemes, including compensation.

I shall study Hansard and write to noble Lords on questions which were not covered in my winding-up speech. As I said earlier, some details are more appropriately dealt with in Committee. In summary, the Bill will create a heavyweight champion for consumers, give enforcers the tools they need to get rid of rogue estate agents, and strengthen consumer rights and redress.

On Question, Bill read a second time, and committed to a Grand Committee.