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Madam Speaker: No, certainly not. Question 36 would have been dealt with had we progressed more speedily. It is very difficult for us to reach question 36, but I have to say that I am very disappointed, not just today but every day, with the lack of progress that is made at Question Time. I should like us to make better progress. I doubt that we could have reached that question, but we might have made a better stab at it if we had made better progress.
Property Letting Agents (Client Money Segregation)
4.20 pm
Mr. Howard Flight (Arundel and South Downs): I beg to move,
- That leave be given to bring in a Bill to require the segregation of client monies collected by letting agents, to be held in designated client money accounts.
The case involved a very decent constituent who was looking after the interests of some elderly neighbours who were visiting family elsewhere. The constituent helped that couple to arrange the letting of their house. She diligently searched out a letting agent who had the Association of Residential Letting Agents cover.. The letting agent went bust in 1995, since when my constituent has been unable to recover the £1,000 owing under the ARLA bonding arrangements. Digging into the case, I discovered that part of the reason for the failure to recover is because there is no simple, clear law requiring the segregation of client money.
The Estate Agents Act 1979 set up a requirement for deposits for buying houses to be segregated when estate agents deal with deposits; the regulations to that were set out in 1981. Letting agents are regulated under the Accommodation Agencies Act 1953. That created three offences, but did not lay down a requirement to hold deposits in segregated client accounts. There was a Government consultation on the Act in 1993. In 1994, there was a parliamentary question. The then Government felt that, in principle at least, the ARLA arrangements should suffice.
The reason why ARLA has not paid out in that constituency case--it can happen quite often--is that the insurance bonding requires clear fraud to have occurred. Police rarely prosecute when letting agents go bust. A letting agent spending a client's money merely on the employment of staff is not sufficient to constitute fraud. Therefore, the ARLA bonding arrangements often do not work.
In 1998, ARLA approached the Minister for Local Government and Housing with proposals for a clear law requiring the segregation of client money into client
accounts, but nothing has resulted from that. Again, it is crucial to crystallise the legal situation. The National Association of Estate Agents is particularly keen that the proposal should become law. Similarly, the Southern Private Landlords Association is keen for that to happen. Citizens advice bureaux point out the huge increase in the number of private tenants--it is up 600,000 and still rising--and to problems over recovery of deposits. They claim that there are unreasonable withholdings of some 50 per cent. of deposits. Therefore, all that is wanted is a simple law to benefit both tenants and landlords.
In October 1998, the Minister for Local Government and Housing called on landlords and agents to set up some form of pilot scheme. Candidly, it is a straightforward issue, not a pilot scheme matter. It is not even a complicated regulatory matter. Clear law, as with analogous situations, is what is wanted.
In the past two years, as the market has increased, there has been a massive increase in the number of letting agents. Analogous to that increase was the increase, in the late 1980s, in the number of estate agents. Currently, however, the lettings market is satiated, and it is often quite difficult to let property. In the next two years, it is likely that many letting agencies will fail, just as many estate agencies failed in 1990-92.
I therefore urge Ministers to deal with the matter in a timely fashion, before many innocent people--including some of my constituents--are damaged because current arrangements cannot operate efficiently without clear law on the matter. We need only simple legislation--which should be passed now--requiring segregated accounts, and arrangements analogous to those established by ARLA, stipulating that letting agents may take money from client accounts only in accordance with letting agreements, such as to cover their own bills, as specified.
Question put and agreed to.
Bill ordered to be brought in by Mr. Howard Flight, Mr. Peter Viggers, Mr. Graham Brady, Miss Julie Kirkbride, Mr. Andrew Tyrie, Mr. John Bercow, Mr. Christopher Fraser and Mrs. Marion Roe.
Mr. Howard Flight accordingly presented a Bill to require the segregation of client monies collected by letting agents, to be held in designated client money accounts: And the same was read the First time; and ordered to be read a Second time on Friday 23 July, and to be printed [Bill 132].
Mr. David Heathcoat-Amory (Wells):
I beg to move amendment No. 40, in page 1, line 24, leave out '£0.5288', and insert '£0.499'.
Madam Speaker:
With this, it will be convenient to discuss the following amendments: No. 41, in page 1, line 26, leave out '£0.4721', and insert '£0.4355'.
No. 42, in page 2, line 2, leave out '£0.5021', and insert '£0.4557'.
Mr. Heathcoat-Amory:
The amendments seek to bring the massive increase in road fuel taxes back into line with the retail price index. Since the general election, the Government have increased the rate of annual increase in road fuel tax--the so-called escalator--from 5 per cent. above the rate of inflation to 6 per cent. above the rate of inflation. Additionally, they have sneaked in an extra Budget, and a further increase. Moreover, they have loaded further increases on to some fuels, above what one might have assumed to be the 6 per cent. limit.
Diesel fuel has been singled out. This year, VAT on diesel has been increased not by 6 per cent., but, in cash terms, by almost 12 per cent. That increase, in a single year, is simply staggering. It is a tremendous and enduring burden for all those driving diesel cars and, most particularly, for the road haulage industry, which relies almost entirely on diesel fuel.
The Government have replaced the environmental justification for fuel taxation--which does exist at lower levels and for more moderate increases--by a crude tax and cash grab. It is part of the relentless increase in business and personal taxation that we have seen in the past three Budgets. Annually, fuel duties now net a staggering £25 billion, and that is rising steeply.
The Government have ceased even to attempt to justify that huge annual tax escalator on environmental grounds. In the Budget debates, we asked Ministers how they justified the increase on grounds of global warming, or otherwise, but they simply backed away from the issue entirely. I am not surprised, because the Government's own publication on climate change shows that this is a ridiculously expensive and inefficient way of achieving moderate reductions in carbon dioxide emissions. Compared with other reductions which are attainable in the domestic sector and other business sectors, this is not the right way to go about reducing carbon dioxide. The same reductions could be achieved at a fraction of the cost.
Most remarkably, the Government seem entirely unaware of the scale of the increases that they have put through. The Chief Secretary told the House on 21 April:
The figure was checked by "Energy Trends", an official index of the energy sector, and the House of Commons Library helpfully confirmed that the figure of 13p a litre was correct. The Library confirmed also that it had no idea how the Chief Secretary had calculated his figure.
We took this matter up with the Chief Secretary, but he failed or refused to admit his error, until a parliamentary answer from the ever-helpful Economic Secretary referred to the correct figure and the right source. It is now confirmed by the Treasury that the price of diesel rose between the election and that April date by 13p a litre.
In a sense, it does not matter that it took so long for the Government to admit the truth, because everyone else knew the truth. Motorists, particularly rural motorists, all knew the truth. Ministers in their Government cars may be insulated from the increases. They do not have to fill up their own tanks, and they are becoming increasingly out of touch with the needs of motorists, particularly those in isolated areas. Now, about 85 per cent. of the cost of fuel is represented by taxation. A forecourt or petrol station is now a massive tax office for the Government.
It is not just the private motorist who knows the truth and must bear the daily burden--the road haulage industry knows it. The industry warned the Government before the Budget. Its representatives gave the Government the facts and figures, explained their case with great patience and showed the Government that the industry would be made uncompetitive in European terms by the annual increase. Their case was dismissed and entirely ignored by the Government.
We now have the most expensive diesel in Europe, with a cost that is far higher than our continental neighbours. There is no way that the haulage industry can avoid this tax. Lorries do not drive around for fun, and there is no way in which they can avoid using diesel or avoid the tax. The haulage industry either has to absorb this extra tax burden, or pass it on. The burden is enormous. Nearly a third of the costs of running a heavy goods vehicle is represented by fuel costs. If a company has to absorb those costs, it could be put out of business--or certainly be made uncompetitive. If it passes on the costs, that raises the price of all goods which must be transported by road.
"The truth is that the price of a litre of diesel has risen by 7p since the general election."--[Official Report, 21 April 1999; Vol. 329, c. 929.]
It was immediately pointed out that the Automobile Association had calculated that the increase in diesel prices since the election was not 7p, but more than 13p a litre--nearly twice what the Chief Secretary had admitted to.
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