Levelling-up and Regeneration Bill

Baroness Hayter of Kentish Town Excerpts

Committee stage
Monday 22nd May 2023 Lords Chamber

Debate on whether Clause 213 should stand part of the Bill.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I rise to argue that Clause 213 should not stand part of the Bill, as it has absolutely no place within this Bill. That is partly because it has nothing to do with levelling up or regeneration, but it is also because it gives the Government the right to interfere in the activities of an independent, non-statutory, standard-setting members’ organisation—indeed, a chartered body.

It is strange that, of all the actions being taken around increasing regulation, the target is a respected, self-regulatory body with an independent standards board. I am mystified as to why, if Ministers really want to help the residential sectors—tenants, owners and leaseholders—they are not implementing the report of the noble Lord, Lord Best, on the regulation of property agents which, after enormous work with great detail, has come up with some extraordinarily useful proposals covering areas of considerable consumer detriment. Much work went into that report and I then chaired a group, in full collaboration with the department, developing codes of conduct covering letting and estate agents as well as managing agents.

Indeed, back in 2018, the then Housing Secretary announced measures to professionalise the estate agent market, driving up standards and bringing an end to rogue managing agents. As he said at that time, more than six out of 10 buyers and sellers experienced stress. Therefore, he promised, estate agents would be required to hold a professional qualification, with the Government undertaking to bring this industry up to

“the same professional standards as conveyancers, solicitors and surveyors”.

At that point, the department was really keen on regulating that group of residential agents to bring them up to the quality of surveyors. What a shame that this Bill does not implement the report of the noble Lord, Lord Best, and the commitment given by the department at that stage, which would bring high standards and proper protections to users of all property agents.

Instead, the Bill proposes a statutory power for the Secretary of State to instigate a review of an independent, member-funded, non-statutory body: any time, any place, with no excuse or cause and no threshold for such an intervention. All this comes with no rationale for the interference in such an independent and professional body, whose standards and enforcements are key to the safety of our built environment as well as to the market valuation of property, which has to be free—like interest rates—of any Treasury interference. So what, one might ask, is behind all of this?

RICS was one of the first professional bodies to split off its member representation role from its regulatory function following the Carsberg review, well before the Law Society and the Bar Council did the same. Since then, RICS and its thousands of members abroad has played a vital role in independent standards setting as well as in the enforcement of those high standards. Across the world, regulators and clients depend on RICS standards of ethics and good practice, as well as RICS technical standards. RICS valuers are recognised and admired worldwide and perform a vital service for a swathe of industries. RICS works with Governments, regulators and international standards setters to adopt common, transparent standards. This fuels the influence of UK professionals and business globally, supporting inward investment. About one-fifth of RICS members work outside the UK, many of them in large, global businesses.

It is, perhaps, for this reason that a firm such as Savills worries about the possible end of true independence of RICS and thus a loss of confidence that it is acting in the public, rather than Ministers’, interests. As James Sparrow, CEO of Savills UK, writes:

“A strong and independent RICS remains key for the well-being and effective operation of the real estate sector ... Any actions which have the effect of undermining RICS or compromising its independence as a free-standing professional institution would … be detrimental. ... RICS plays an important role internationally … influencing the development and standards required of the surveying profession globally. Its independence is fundamental to this”.


Indeed, the UK’s global role could well be at risk if RICS and its standards are seen as being supervised by the Government. Self-regulation via a hived-off independent oversight board, chaired by the redoubtable Dame Janet Paraskeva, gives confidence to consumers that standards will not be lowered to satisfy either RICS members or government requirements. It gives confidence to mortgage lenders that a valuation of a property is robust and a figure that they can rely on in considering the security backing to any loan that they give.

--- Later in debate ---

[Earl Howe (Con)]

My Lords, I would simply encourage my noble friend to read my remarks in Hansard. There is no promise in this clause to the effect that the current or a future Secretary of State will initiate a review, but that there should be a power for them to do so. I would encourage my noble friend to reflect on the justification I gave in the terms that I gave it, which is that we are clear that the independence of RICS in operating as it does is not in doubt.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I thank the noble Earls, Lord Caithness and Lord Lytton, the noble Lords, Lord Thurlow and Lord Lucas, and my noble friend Lady Hayman, for their contributions on what I think is a rather significant and important issue. I also thank the Minister; “nice try” is how I would summarise what he has tried to do. Much more serious than that, though, I think he gave the game away.

I did not talk about EWS1, quite deliberately, at the introduction of this because I thought it would put the Government on the wrong foot. I felt that that was not a debate we should get into. I must declare an interest, as I live in a cladded building, so I was very involved from day one with the issue of cladding. I remember EWS1 and I remember before that. I remember when the threshold was 18 metres, which affected where I live. The Government asked RICS whether it would say a building was safe below, I think, 14 metres. RICS felt it could not, in all seriousness, give that assurance. I, as a consumer and a resident of a tall building, was reassured that a standard setter—a surveying organisation—did not give in to the Government and did not say that a building would be safe when it was not.

I deliberately did not use that at the beginning of this debate because I did not want to start a ding-dong about something in the past that I thought the Government had got wrong at the time. They were trying to put together a package, which was very complicated after Grenfell. There was the matter of how much money would go towards the buildings that would be affected, and that would come out of a £6 billion fund that was not there at the time. I understand the Government were having difficulties, but it is giving the game away that the Minister has mentioned that, because it is a row that happened then.

RICS may have been completely wrong—it could have been absolutely safe. It could have said that all these buildings under 14 metres that are cladded are absolutely safe. RICS could have been absolutely wrong, and the Government could have been right to ask them to sign off the form. I think we were on Advice Note 14 at the time, so we have been through a lot of these. I, as the consumer, would prefer an independent organisation, even if it is wrong, to tell me whether my dwelling house is safe, rather than the Government, who obviously had a vested interest because of the amount of money they were going to put into it. I was not going to raise that issue, because I thought it was going back. I do think this has given a lot away.

The noble Earl, Lord Caithness, has asked why we need this, because the Government can do it anyway. The Minister has said that the Government have no powers to do anything; even if they set up an inquiry and it proved everything, they still cannot do anything. So the only thing it does is give a chill factor, a threat factor. I think it was the noble Lord, Lord Thurlow, who called it the sword of Damocles. We have had this from the Government before; twice, I have had to deal with it. I dealt with it once before I was in this House, when I chaired the Legal Services Consumer Panel. At that stage, the coalition Government tried to make us—the consumer panel and the Legal Services Board itself—put our websites on GOV.UK. That may not sound very serious, but for an independent regulator of lawyers, it was seen as a real threat to the independence of regulating lawyers. We fought the Government off and just refused to do it.

We then had it again during the passage of the Bill on the mutual recognition of professional qualifications, when the noble Lord, Lord Grimstone, was the Minister. The Government were trying to take a power over the regulators to decide whether they should, for example, accept nurses, vets and other professionals as part of a trade deal, so they would have been regulating the recognition of the qualifications of people coming here from another country as part of a trade deal. We saw off the noble Lord, Lord Grimstone, at the time, and the Bill was much changed, as he admits. We wrote into that Bill a clause saying that the regulators must remain independent of government. So, here we have the itchy fingers of government trying to tell independent regulators what to do. The Minister says there is no power to intervene, and so there is no interference—but the threat is a power to intervene.

I am not going to answer all the points that have been made, because I think they speak for themselves. The Government will understand the unease around the Committee about this proposal. I do not think they have made any argument for the need for this. Frankly, if the Government intervened in every organisation that had gone a bit awry, we would have them looking at the CBI at the moment, which is another important institution in civic society. It is going through much more of a meltdown than anything poor old RICS did, but I assume that the Government are not going to try to interfere in any chartered institute or anything else, or just an independent organisation that has had some troubles.

I do not think the Government have answered how this clause is going to promote the levelling-up agenda. Indeed, if there is any loss of confidence in surveyors, it will do exactly the opposite. The Minister has failed to give assurances that it will not be used as a big stick to make RICS do their bidding in the future.

I am delighted that the Minister has reported, finally, that there will be a meeting between his oppo in the Commons and the chief executive of RICS. It is a bit late, frankly, when we already have a clause in a Bill—I am not going to push it to a vote now, so within a minute or two it will be in the Bill—to have a meeting. We need this self-regulation; that is the right way for independent regulation. I think the Committee and the Minister will not be surprised by me saying that I will return with an amendment to delete the clause on Report.

Clause 213 agreed.