Queen’s Speech

Baroness Hayter of Kentish Town Excerpts

Tuesday 10th June 2014 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the Queen’s Speech demonstrated the Government being dragged, I am afraid reluctantly, into helping consumers to get a fair deal, whether from their elected representatives, from service providers or from business. Our ambitions, by contrast, are greater. It was Labour—indeed, in this House—which saw an extension of the ombudsman scheme from estate agents to letting agents. It was a Labour Government who introduced the legal services and financial services ombudsmen, and regulators’ consumer panels.

However, there is more to do. We must support consumers, the poor and disadvantaged, by repealing those parts of the lobbying Act that gag rather than enhance the work of those who give voice to the voiceless, and by improving the Government’s apology for a statutory register of lobbyists—of which, incidentally, we have failed to see anything so far. Labour, by contrast, would put power in the hands of consumers, be they tenants, borrowers or people troubled by nuisance calls.

Take “generation rent”, where the number of private renters, now 9 million, has surpassed those in social housing for the first time. Private tenants face an insecurity that few of us would tolerate. They are 10 times more likely to move home per year than homeowners, and a third of them moved last year. Yet surely they deserve the same stability as homeowners. So Labour will legislate to make three-year tenancies with predicable rents the norm. This is not rent control; I am old enough to remember that. This is about certainty and fairness.

Tenants are now paying £1,000 a year more than when this Government came into office. That is great for letting agents, but what is unfair is not letting agents’ legitimate business but double charging, when both landlord and tenant pay for the same service. More than 90% of letting agents impose charges on tenants on top of deposits and rent in advance, and charge them high fees for simple tasks such as renewing a contract. Labour will ban letting agents’ fees for tenants, which will save families up to £500.

I congratulate my honourable friends in the other place, Stella Creasy, Hilary Benn and Emma Reynolds, whose efforts on this got the Consumer Minister in the Commons to announce just yesterday that the Government will amend the Consumer Rights Bill to force letting agents to display their fees, with a civil penalty of up to £5,000 to be paid by any agent who fails to do that. That is a welcome move. However, landlords, not tenants, choose the letting agents, so there is still nothing a tenant can do even if the letting agent is double charging.

Movement for Change’s “Home Sweet Home” campaign in Brighton saw tenants who were stuck with broken back doors, broken bedroom windows, or no hot water or heating over Christmas. Such conditions are unacceptable. In addition, we want landlords to put smoke alarms in all rented houses, and we want to reduce deaths from carbon monoxide poisoning. Can the Minister say what the Government’s response is to Consumer Safety International’s call for alternatives to carbon monoxide detector sensors where they have proved unreliable?

We must raise the standards of letting agents. Anyone can set up as an agent, including people with no qualification in landlord and tenant law and, more seriously, people with convictions or even those on the sex offenders’ register. There is not even a requirement for clients’ money to be kept in separate accounts. As I said, thanks to this House we have legislated to require agents to belong to an ombudsman, but the Government held back from enabling repeated poor behaviour to lead to a letting agent being struck off. Will they rethink their refusal over that?

Because individual consumers have little bargaining power when up against business, we will seek to improve the carried-over Consumer Rights Bill, not simply to codify rights but to enhance such rights, to allow for collective redress where consumer law has been breached and to make retailers and service providers signpost access to an ombudsman. Our aim is for consumers to have information, advocacy and redress across all markets. That is good for shoppers but also good for business, as it drives up standards.

Small businesses are already seen as consumers in some areas. The legal services and financial services ombudsmen treat microbusinesses as consumers, as do Ofcom and Ofgem. However, the Government have failed to treat small businesses as consumers in the Consumer Rights Bill, despite calls from the FSB. Will the Government continue to rule out such rights for small businesses?

It is also hard to understand why the Consumer Rights Bill omitted the EU directive on alternative dispute resolution, despite the fact that it has been sitting on the Government’s desk for two years and needs to be introduced next year. Its tardiness will make it difficult for businesses to have time to prepare, to sign up to an ombudsman and to train their staff. Will the Minister tell us when we will see plans to implement the directive and explain why ADR should not be compulsory?

The Government have failed to do much to help charities. They promised that the big society would play a part in the provision of services, but a quarter of public sector outsourcing went to offshore companies, squeezing out UK companies and UK charities. Furthermore, we have only a draft protection of charities Bill in the Queen’s Speech, which means that the Charity Commission is unlikely to get its strengthened powers this Session. We will undertake to work to ensure that voters—in the recall of MPs Bill—get a proper say, that consumers get a better deal, and that charities are helped to do their work.