Sir Menzies Campbell (North East Fife) (LD): My right hon. Friend will recall that I and my right hon. and hon. Friends at the time were unequivocally opposed to the military invasion. Notwithstanding that fact, I can tell him that I am sympathetic to the view that it

16 Jun 2014 : Column 859

cannot be credibly said that the invasion is the sole cause of the present situation in Iraq, although it is, I think, now generally accepted across the House that it has most certainly made a significant contribution.

May I turn, however, to the issue of Iran, properly raised by the right hon. Member for Blackburn (Mr Straw)? There is no question but that the United States and Iran have different motives, but as the Foreign Secretary acknowledged a moment or two ago, they have common interests, so co-operation between them, even if covert, would be in the interests of us all.

Mr Hague: Well, of course covert co-operation is not something I will speculate about on the Floor of the House; it is not my habit to do so for very good reasons. Of course those common interests with Iran are there in respect of the stability of the entire region. That is very clear, but I stress again that Iran can do a great deal for stability across the whole of the middle east by desisting with a nuclear programme that threatens nuclear proliferation across the region and by ceasing support for sectarian or terrorist groups elsewhere. There is a heavy responsibility on Iran, as well as on all of us to do what we can to improve relations and to get that point across to Iran.

Glenda Jackson (Hampstead and Kilburn) (Lab): The past is always with us. We are urged to learn from our mistakes, and I am delighted to hear that the British Government have learned and that there will be no military incursion in this particular war. May I also add my voice to those that have already been raised to say that the British Government should encourage Iran to think again, to work with America and our allies, and to bring its best efforts to bear on ending what is, in the Foreign Secretary’s own words, a Government of sectarianism and religious intolerance? Surely the way to bring about an inclusive Government in Iraq is to urge the stepping down of Prime Minister Malaki at the earliest possible moment.

Mr Hague: It is not for us—the Government of another nation—to try to pick and choose who will be the Prime Minister in Iraq. After all, we have all said for so long how much we believe in democracy in Iraq, and that choice has to be the product of its own democracy. None the less, we can give it the advice, coming loudly and clearly from this House today, that it needs political unity in Government, in support of the existence of its state and the functions of government, between Sunni and Shi’a groups, with the inclusion of Sunni leaders, as my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) mentioned. We want Iran to encourage that as well. Indeed, one of the points I made to Foreign Minister Zarif of Iran was that it is in Iran’s interest to press for that Sunni inclusion inside Iraq.

Dr Liam Fox (North Somerset) (Con): Sadly, it is inevitable that there will be a heavy loss of life and bloodshed in the region, but it is imperative that ISIL is defeated. Although that must fall to the Governments in the region, primarily Iraq in the first place, where they have identified military capability gaps, we must be sympathetic and help them. The last thing we want to do is to send a message in advance that we have ruled anything out, which could only be of help and comfort to the terrorists.

16 Jun 2014 : Column 860

Mr Hague: ISIL must be defeated, as my right hon. Friend says. I agree with him—I think it is the mood across the whole House—that the prime responsibility rests with Governments in the region, including the Iraqi Government, who have very substantial security forces at their disposal. As I said in my statement, we can provide assistance of various kinds, and other nations are considering other forms of assistance. The United States has said publicly that it is looking at all options. It has the assets and capabilities of the type, scale and location to deliver such assistance if it believes it can do so productively, so we will concentrate on helping in the way that I have set out.

Mr Peter Hain (Neath) (Lab): Given that the Sunni-Shi’a divide is now a fault line in the region and that an almost primeval form of jihadism is driving that on the Sunni side, does the Foreign Secretary agree that it is imperative that ownership of solving this conflict has to be in the region, particularly in Iraq but also in neighbouring Iran, which, as he has implied, could help significantly? I agree with the previous comments that it is imperative that we lose no opportunity to engage Iran, even if it is not up in lights as some formal alliance, which is what has understandably been rejected this morning. It is a key to all of this, does he agree?

Mr Hague: I absolutely agree with the broad thrust of what the right hon. Gentleman is saying. The prime responsibility lies with all the states of the region; they all have a responsibility to improve the way in which they work together, because they are all at risk in various ways. There is no state that has an interest in this instability in Iraq, other than possibly the regime in Damascus. Every established state in the middle east has its interests confronted and threatened by these developments. It is important that they improve their own working together, and we must use our own diplomacy to encourage that. I stress again that that requires a change of policy by Iran as well as every effort on our part to engage Iran.

Alistair Burt (North East Bedfordshire) (Con): It is a pity that we have had to run these two subjects together, because no one should underestimate the extraordinary work that my right hon. Friend has done in relation to raising the issue of preventing sexual violence in conflict to such a level. He fully deserves all the commendation he is getting.

In relation to the issues in the wider middle east, does my right hon. Friend agree that one of the problems is that we are dealing with non-state actors across boundaries with no accountability and a wicked ideology who are taking on individual states that are so consumed with their own internal problems that they cannot yet act together and recognise the scale of the threat? Does he have any sense that states recognise that, and that they will, at some stage, have to work together to kill off both the ideology and the people who are propounding it? In that struggle, we do have a role to play in order to combat a threat that will ultimately arrive on our doorstep.

Mr Hague: I absolutely agree with my right hon. Friend. We have a role to play, and yet the responsibility of the states in the region that he talks about is clear as well. What happened last week has been a huge shock in Baghdad. It is a clear demonstration to them, as I said

16 Jun 2014 : Column 861

earlier, that they need greater political unity. It is also a clear demonstration that unity is needed across the Arab world in order to deal with these threats, working with religious leaders as well as working between national Governments. We will certainly encourage that as well as providing direct assistance of the type that I have described, and providing strong protection for our own national security through our counter-terrorism vigilance and expertise.

Mr Speaker: Noting his fetching white jacket, which is sparkling indeed, I call Mr Mike Gapes.

Mike Gapes (Ilford South) (Lab/Co-op): The Foreign Secretary was a Minister in John Major’s Government, a Government who used military intervention to impose a no-fly zone to protect the Kurds. That policy was continued and enhanced under the Tony Blair Government. We would not have millions of Iraqi Kurds living in peace, prosperity and democracy without the intervention that took place to protect them from Saddam. If we had brought back Saddam or Uday, the Kurds would have suffered in the same way as the rest of the Iraqis are suffering today. Therefore, if the Kurdistan Regional Government request assistance, should we not give such a request sympathetic consideration?

Mr Hague: I agree with the hon. Gentleman about the importance of what we did, in this country, to protect the Kurds. Only a few weeks ago, the Prime Minister of the Kurdistan Regional Government was here. We hear all the time, as he will have heard, the continuing gratitude of the people of that region for what the United Kingdom did.

I am not arguing against all military interventions; I am saying that in this situation, now, in Iraq, we are not planning a military intervention. I am not saying that there will never be any circumstances in the world in which we may need to make a military intervention—far from it. We have had no such request from Kurdistan. Indeed, the forces of the Kurdistan Regional Government have acquitted themselves well in recent days, and they have been an important part of bringing about stability in the northern areas of Iraq. We have not received such a request, and we do not envisage such a request at the moment.

Sir Richard Ottaway (Croydon South) (Con): I am sure that the Foreign Secretary can see the irony of the Iranians floating the idea of co-operation with the United States, albeit indirectly, having gone to such great lengths to get rid of it in 2011. Does he agree that this is the first time in decades that our interests coincide with those of the Iranians? My enemy’s enemy is my friend, so will he take every opportunity to build a rapport with the Iranians, which could have beneficial effects in other areas?

Mr Hague: I will do so, yes. We have overlapping interests, although I am not sure that it is the first time we have done so. We have always had common interests in some of the areas that I mentioned earlier, such as stability in Afghanistan. The current situation does highlight that, and as my right hon. Friend can gather from the conversation I had over the weekend with the

16 Jun 2014 : Column 862

Iranian Foreign Minister, we are making every effort to ensure that we discuss a whole range of issues with the Iranians. I say again that we are looking to them to change some of their approach in the wider region if they really want to be the agents of its stability, rather than its instability.

Angus Robertson (Moray) (SNP): Tony Blair took the UK to war in Iraq because of weapons of mass destruction that never existed. He was rewarded, remarkably, with the post of middle east peace envoy. Given his dangerous and ill-judged comments in the past few days, which were described by the Foreign Secretary’s colleague the Mayor of London as “unhinged”, does the Foreign Secretary agree that Tony Blair should not continue in post as a middle east peace envoy?

Mr Hague: No, I do not agree with that. Nor do I think that the recent events in Iraq should be turned into a proxy debate about Tony Blair and everything that he has ever said or done. The shadow Foreign Secretary is looking rather alarmed about the idea of a proxy debate about Tony Blair. In any case, we have set up an inquiry in this House into the Iraq war, and that inquiry will report in due course. [Hon. Members: “When?”] If the inquiry had been set up when I called for it, it would have reported a long time ago. Hon. Members will have to ask those who were in Government at the time, and who resisted such an inquiry for a long time, about the delay in its reporting.

We can all pass judgment in detail when that report is published, but the issue we must address now is how to deal with this situation. I do not think it would help this situation for Tony Blair to feel that he has to resign from other positions.

John Glen (Salisbury) (Con): Many people in this country will be keen to understand how an estimated 400 British nationals came to be engaged in foreign terrorism in Iraq and Syria. What conversations is the Foreign Secretary having with his colleagues in government to ensure that those individuals will not have the option of returning to the UK—ever?

Mr Hague: We are having many conversations in government and, of course, with other Governments about how to prevent that. As my hon. Friend will understand, if a British national leaves via a third country and ultimately travels to Syria over the border of one of Syria’s neighbours, it is very difficult for us in the UK to know about that. We advise strongly against all travel to Syria and have made it very clear that the Home Secretary will not hesitate to use her powers to withdraw passports and cancel leave to remain in the United Kingdom and that our security forces will make arrests wherever there is the appropriate evidence. People can be absolutely sure that we will be extremely vigilant about this issue.

Mr Bob Ainsworth (Coventry North East) (Lab): In Iraq and Syria and throughout the Muslim world extremists live and dictators survive off the back of the fear and division between Shi’a and Sunni. Those efforts of persuasion that the Foreign Secretary talks about should be aimed not just at political leaders and Governments but at figures of influence on both those sides of Islam. How much effort and influence does he think there is

16 Jun 2014 : Column 863

and how much of a priority do the British Government give to trying to encourage reconciliation and co-operation from religious figures of influence, both Shi’a and Sunni?

Mr Hague: We give that a very high priority, but these events show that we cannot do too much and that we might need to do a lot more over the coming months and years. We give it a high priority and my right hon. and noble Friend Baroness Warsi has done a great deal of work on it as part of her work on freedom of religion, which is also about bringing different religious leaders together. Our embassies across the middle east do a great deal of work as well. The right hon. Gentleman is right that this is not just about political leaders; it is about religious leaders and other leading figures in society in many of the countries concerned. We have insisted all along that the Syrian national coalition must represent religious reconciliation and people of all faiths in Syria. I think the answer is that we do a great deal, but we must acknowledge that more will need to be done.

Penny Mordaunt (Portsmouth North) (Con): I congratulate the Front-Bench team and their counterparts in the Department for International Development and the Ministry of Justice on the work they have done over the past four years to promote women’s rights across the globe. I am saddened that, as momentum behind the issues has grown, some of the media have chosen to belittle the contribution of Angelina Jolie at the recent conference rather than focus on the issues that she cares about. In the light of that, what would my right hon. Friend’s advice be to Bono?

Mr Hague: I hesitate to give advice to Bono, but it is nevertheless important for us to ensure that this work reaches all parts of the world. It is vital work, as my hon. Friend describes. Governments cannot reach all opinion formers everywhere in the world and so the contribution of my co-host at the sexual violence summit, Angelina Jolie, is immense in getting the message across to countries that would never otherwise hear about the work or never necessarily take any interest in the summit that we held. I advise everyone to take full heed of that work and give it full support as that is the only way to tackle some of the worst crimes that we are seeing anywhere in the world.

Meg Munn (Sheffield, Heeley) (Lab/Co-op): The recent advance of ISIS—the Islamic State in Iraq and al-Sham—might have been a shock, but the reality is that hundreds of people have been dying in terrorist attacks in Baghdad and other parts of Iraq for many months. That is a result of the breakdown of the situation and the civil war in Syria. The signal given last summer by this House, and by the United States and the international community, created the space into which ISIS has now pushed forward. What is going to change, and how is the international community going to turn this round?

Mr Hague: Clearly we have to do what I set out in my statement. The House of Commons cannot re-fight its earlier decisions. I disagreed with the decision made in the House last August, but we are democratic politicians and we respect the House’s decision on that occasion. If we had voted the other way, would it have sent a sharp message to the Assad regime? Yes it would, but we did

16 Jun 2014 : Column 864

not vote in that way. This House makes the decisions on those matters, and we work within the constraints of that. I have made it clear that we can provide assistance to the Iraqi Government—the United States might be able to provide a great deal of other assistance—while simultaneously stressing that Government’s own heavy responsibility to rise to the challenge in both the security and the political sense.

Dr Julian Huppert (Cambridge) (LD): I was one of the 1 million who marched against the war in Iraq, although we were ignored by the Government of the time. I very much welcome the Foreign Secretary’s comment that he is not planning military intervention by the UK. I and many others will keep track of what happens in that regard. What steps will he take to ensure that Prime Minister Maliki does not use this crisis to try to extend his executive power in inappropriate ways?

Mr Hague: Inclusive politics and a more inclusive political leadership in Iraq would not involve the abuse of power by the Prime Minister of the day, and it would have to include some degree of people not only working together in government but genuinely sharing power. Otherwise, it would not work. It would be built into a broader political unity in Iraq that Sunnis and Kurds would be well consulted and have leadership positions in the political process, but it would be up to them to determine the details of that.

Jeremy Corbyn (Islington North) (Lab): Does the Foreign Secretary accept that the invasion of Iraq in 2003 and the subsequent destruction of all the structures of civil society there have led to this implosion? Does he also accept that the current crisis is being exacerbated by the arms in the region? He has confirmed that there will be no military intervention by Britain or the USA, but what discussions has he had with Saudi Arabia about its influence, its arms supplies and its friendships within the region, and about its actual aims?

Mr Hague: We have had many discussions with states throughout the region, particularly in relation to Syria. We have said that any support, including the non-lethal support from the United Kingdom, should be given to moderate groupings and not to extremists. Indeed, these events underline the importance of that, and it is something that we will always restate to Saudi Arabia and to other states in the region. They are committed to not supporting extremist groups, because those groups ultimately present a threat to them as well as to Iraq and to many people in Syria. On the earlier part of the hon. Gentleman’s question, I think we will have to wait for the report from the inquiry into Iraq. People can argue the case either way in regard to the consequences of the 2003 invasion, but it is worth pointing out that if Iraq had developed a more inclusive politics over recent years and if the Assad regime had not opted to wage war against its own people, the scenario would now be very different, notwithstanding the 2003 invasion.

Sir James Paice (South East Cambridgeshire) (Con): May I take this opportunity to congratulate my right hon. Friend on the leadership that he showed during last week’s conference on preventing sexual violence in conflict? That is a major issue, but it is one that many

16 Jun 2014 : Column 865

people—dare I say it, many men—have avoided addressing. My right hon. Friend deserves congratulation on addressing it. Will he take this opportunity to challenge media commentators who have suggested over the past few days that it is a relatively minor issue compared with the issues of Iraq that we have just been discussing? Does he not agree that, in many ways, they are two sides of the same coin and that the fundamental belief that women are second-class citizens lies at the heart of the use of sexual violence in conflict and at the heart of the beliefs of most of the extreme terrorist organisations?

Mr Hague: My right hon. Friend makes an extremely good point. There are reports from Iraq of sexual violence, and as I mentioned in my statement, in Nigeria extremist terrorist groups are some of the main perpetrators of appalling sexual violence against those in their captivity. This is not only a vital moral issue for the world—we have been right to break the taboo in many parts of the world about discussing it. It is also fundamentally connected to conflict prevention. When mass war-zone rape is committed by one community against another, it becomes dramatically more difficult to prevent conflict between them for decades into the future. I think that in some quarters there is a good deal of ignorance about those matters.

Keith Vaz (Leicester East) (Lab): I join others in congratulating the Foreign Secretary on his role in initiating the conference. My concern is with Iraq and the huge number of people who will now be leaving or attempting to leave because of the current crisis. Many of those people will be at the hands of people traffickers who will exploit them, and they will end up on the borders of Greece and Turkey. What support can we give those countries, and what steps can we take to help authorities in Iraq to stop people leaving?

Mr Hague: As I set out in my statement, we are giving rapid assistance. My right hon. Friend the Secretary of State for International Development authorised that quickly at the weekend, and is ready with further assistance if it becomes necessary. We are already generous donors to many other countries in the region that are dealing with huge refugee flows, particularly Lebanon and Jordan, and through UN agencies we are also assisting with refugee flows in Turkey and the area of the Kurdistan Regional Government. After the United States, Britain is the second most substantial national donor in the world to programmes for refugees in the region, and the right hon. Gentleman can be assured that we will maintain that strong record.

James Morris (Halesowen and Rowley Regis) (Con): Does the Foreign Secretary agree that whatever the historic failings of western policy, we cannot simply stand aside as the viability of the Iraqi state is called into question? Do we not have a responsibility to the Iraqi people to ensure that their country does not descend into all-out sectarian violence, which in any event would be completely against our national interests in the middle east?

Mr Hague: I am certainly not advocating standing aside, and I have set out what we are doing politically and in terms of humanitarian aid and assistance to the

16 Jun 2014 : Column 866

Iraqis. There is no question of our standing aside from such a crisis, but we should be clear—I think we have been clear across the House today—that there is prime responsibility on leaders in the region, including Iraq, to ensure a coherent security and political response. It is within their power to do so, and it is therefore their prime responsibility to do so, with our support where necessary.

Ann Clwyd (Cynon Valley) (Lab): It was a privilege to meet some of the brave women who came to give evidence at the conference last week, particularly those from the Democratic Republic of the Congo. It was ironic, however, that at the same time as the conference was going on, women were being raped in Iraq. There is no doubt from UN reports about the behaviour of ISIS in Iraq, which is threatening sharia law and carrying out extreme sharia law. Will the Foreign Secretary make it clear that people who are found guilty of those crimes will face charges of war crimes and crimes against humanity, and that they will not get away with it?

Mr Hague: It is clear in the declaration on ending sexual violence in conflict, which I put forward and which 155 nations have now signed, that these crimes are to be considered grave breaches of the Geneva conventions. Much of what we are doing, as the right hon. Lady knows, is to make sure that the era of impunity for these things is over, and that prosecutions can take place and that evidence can be more easily gathered. If we do not do that, the problem will get worse in the world over the coming years. I very much agree with the thrust of her question; it is at the very top of the priorities of the preventing sexual violence initiative.

Mr Tobias Ellwood (Bournemouth East) (Con): Would it not be wise for Tony Blair to be a bit more Trappist about this issue, at least until the Chilcot inquiry reports, rather than trying to re-write history by attempting to say that the shambles of an occupation that we saw is somehow not linked to the tragic events that we see today? Is it not the case that in 2003 al-Qaeda was not present in Iraq? A vacuum of governance was caused and that was filled. That is something that, sadly, the Iraqi Prime Minister has failed to meet.

Mr Hague: I will add Tony Blair, with Bono, to the list of people whom I will not advise on what to say during the course of our proceedings. There will be many important lessons that are best looked at when we have all the evidence of the inquiry. We are very clear on what is needed now in Iraq and in neighbouring states to respond to this situation, and for the moment we must focus on encouraging that correct response.

Mr John Denham (Southampton, Itchen) (Lab): Will the Foreign Secretary, with his emphasis on looking to responsibilities within the region, say a little more about the role of Saudi Arabia? Have not few countries done as much as Saudi Arabia to promote a sectarian and deeply conservative brand of Islam right around the world, including in the middle east? It and other conservative Gulf states stay high on the list of diplomatic friends of our Government. If we are to speak truth to power, why do we not challenge those who have helped foster the sectarianism that we now see?

16 Jun 2014 : Column 867

Mr Hague: The position among regional states is a complex one. Saudi Arabia has often acted with us in the past to try to ensure that there is stability in the region, and it is important to bear that in mind. I stress again that I agree with the right hon. Gentleman and many across the House that there is a responsibility on all leading states in the region to improve relations and to try to ensure that religions can co-exist side by side. There is a huge responsibility on Iran in particular, as I mentioned earlier, but of course there is a responsibility on Gulf states and others as well, and we will make that very clear.

Crispin Blunt (Reigate) (Con): In his reply to the shadow Foreign Secretary, my right hon. Friend talked about all those who support Iraq. With Maliki running a sectarian Government, with the Kurds taking the opportunity to seize Kirkuk, which will always be one of the very difficult post-conflict issues to solve, and with the Sunni population turning to this dreadful mediaeval force, is not the problem that, frankly, not many people support the concept of Iraq? Is it not about time that we started pushing for an international conference to bring all the actors together so that we can have a strategy that can lead to an agreed post-Iraq solution?

Mr Hague: I do not exclude at all the need for international conferences to try to bring together all the countries in the region, as well as key players in Iraq. My hon. Friend is right to point to the formidable difficulties facing those who need to work together in Iraq. However, underneath that there is tremendous support among the people of Iraq for the functioning of their country. They have turned out in very large numbers in elections. They have made every effort to participate in their democracy, and I believe that the mass of the people in Iraq want that democracy to succeed. Their leaders, as in any country, need to respond to that and harness that.

Emily Thornberry (Islington South and Finsbury) (Lab): May I ask the right hon. Gentleman about the second part of his statement? Does he share my alarm about the reports of increasing numbers of Tamil asylum refugees being refused asylum status despite entirely credible accounts of their being subjected to rape by the security services? Will he please give an undertaking to the House that the Foreign Office will look again at the country profiles on which the Home Office and the courts rely before making decisions in those cases, particularly highlighting the problems in relation to women being raped?

Mr Hague: There have been major problems of sexual violence in Sri Lanka. I spoke about this to the Sri Lankan media and with the many NGOs that I worked with when I was at the Commonwealth Heads of Government meeting in Sri Lanka in November. In this country we take our responsibilities to asylum seekers very seriously, as the hon. Lady knows, but in a strict and, we hope, fair system. Where there are serious and valid complaints, of course they will be looked at. As she knows, this matter is primarily the Home Secretary’s responsibility, not mine, so either I or a Home Office Minister will write to the hon. Lady about that point.

16 Jun 2014 : Column 868

David Rutley (Macclesfield) (Con): I welcome the Foreign Secretary’s statement. What steps—diplomatic action in particular—are being taken by the UK and other nations to improve the degree of engagement between the Kurdistan Regional Government and the Iraqi Government?

Mr Hague: This is an important issue, as we noted earlier. Through all our diplomatic channels and through my conversations with the relevant leaders, we encourage that co-operation between the Iraqi authorities in Baghdad and the Kurdistan Regional Government. I discussed this at length with the Prime Minister and other Ministers of the KRG a few weeks ago. I discussed it with the Iraqi Foreign Minister just yesterday, and we will continue in that vein.

Paul Flynn (Newport West) (Lab): Did not the vote of 29 August last year prove that the trust of many Members of this House in military action has been deeply undermined by the terrible decision that we took in 2003 to send 179 brave British soldiers to their deaths in Iraq on the basis of untruths and the hubris and vanity of a Prime Minister? Will not that trust be further undermined if the Chilcot report is expurgated—if it omits the full text of the letters from Tony Blair and George Bush—and will it not be seen as an establishment cover-up by politicians and civil servants to guard their reputations?

Mr Hague: I am sure there will be an occasion to debate that report when it is available. The hon. Gentleman and all of us will be able to give our views then. I think it is true that the vote in the House last August was influenced by a loss of trust in the aftermath of the war in Iraq, whatever side we took and whatever we think about that. It was influenced by that, yes, so we have to conduct ourselves in a way that rebuilds trust in Government decisions on these matters. That is what we are constantly seeking to do.

Rehman Chishti (Gillingham and Rainham) (Con): It is said that the international community wants to engage Iran to help resolve the situation in Iraq, but some ask how that can possibly be the case when Iran is supporting terrorism in Lebanon by Hezbollah, supporting Hamas and supporting the horrific regime of President Assad, and when it backed Prime Minister Maliki to cause the mess in Iraq in the first place. Linked to that, what steps are we taking to address the problem that the advanced-level weapons given to the Iraqi army by the international community are ending up in the hands of the extremists?

Mr Hague: The point that my hon. Friend raises is exactly why I have stressed several times that although it is right to engage Iran, which we are doing, we need to see a change in Iranian policies if the Iranians are to promote stability rather than instability in the region. They do support sectarian or terrorist groups and have supported them elsewhere in the region. That is an important policy to change because it creates deep divisions across the middle east, and I again stress that we look to Iran to change those policies.

John McDonnell (Hayes and Harlington) (Lab): I welcome the fact that the Foreign Secretary has said on several occasions that the Government are not planning

16 Jun 2014 : Column 869

any military intervention. Can I be absolutely assured that there will be no military intervention by this Government, or support by this Government for others’ military intervention, without a vote of this House?

On the second part of the Foreign Secretary’s statement, with regard to sexual violence, will he look at reports that women who have come to this country seeking asylum from areas of conflict have been detained in Yarl’s Wool, where they have been subjected to sexual abuse?

Mr Hague: The hon. Gentleman’s second point is a matter for my right hon. Friend the Home Secretary, but I will of course draw it to her attention. We have a clear precedent established about coming to the House, when circumstances permit, in relation to the use of military force. We did that over Syria, even though we were then defeated. The hon. Gentleman is trying to extend that precedent to support for other states taking military action. This House does not govern actions taken by other states. The Government will of course always come to explain our diplomatic posture on all those things.

Mr Ben Wallace (Wyre and Preston North) (Con): In the post-Iraq and post-Afghanistan conferences, and in the Syria peace conferences, Iran was consistently left off the guest list. Does my right hon. Friend not agree that what we are seeing in Iraq is the inevitable outcome of our picking and choosing our regional players and leaving Iran off the guest lists? In future we should learn the lesson and invite all sides to try to resolve these issues, especially those that live closest and suffer the greatest threat through such conflict.

Mr Hague: My hon. Friend must bear in mind that there is also a lesson for those not invited. In the case of the unsuccessful Geneva peace conference that we held earlier this year on Syria, we and others were entirely open to the inclusion of Iran. We only wanted to know that Iran would support the creation of a transitional Government in Syria as a solution to the problem, in the same way that Russia has done through its support for the Geneva 2012 declaration. That was quite a small requirement for adding it to the guest list, but Iran was unable to do that. The effort has to come from Iran as well as from the rest of us.

Caroline Lucas (Brighton, Pavilion) (Green): I congratulate the Foreign Secretary on his important conference last week. However, while I recognise that real progress is being made in conflict zones, it is a very different story when the same survivors of rape make it to UK shores. Will he add to the list of things to raise with the Home Secretary a more systemic concern about our asylum system, which often punishes and humiliates women a second time when they arrive? They are expected to talk to men, often on their own or in front of their children. It really is not a sensitive way forward.

Mr Hague: I will add that to the list, but I hope that the hon. Lady will also bear in mind that the Home Secretary said in her recent announcements on admitting Syrian refugees into the UK that we would give particular priority to people who are vulnerable and at risk of

16 Jun 2014 : Column 870

violence, including sexual violence, so it is clear that the Government are attempting to assist in such cases, but where there is criticism we will examine it and respond to it.

Paul Uppal (Wolverhampton South West) (Con): I take on board my right hon. Friend’s point, made in answer to previous questions, that in the here and now we can cajole through the diplomatic avenues. We can also make it clear to everybody involved that it is in their best interests. But does he agree that actually the real issue is good governance? We have a history in this country, through Northern Ireland—of course, that is a different political prism—of bringing an approach of consensual politics to such matters. This is very similar to corruption: we need to break the cycle. Do not do unto others as has been done unto me.

Mr Hague: My hon. Friend makes an extremely powerful point, and I hope that it will be well heeded far beyond this House.

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): The EU Enlargement Commissioner is scheduled to hold talks with the Turkish President and Foreign Minister. No doubt the capture of Turkish diplomats in Mosul last week will be raised. What discussions has the Foreign Secretary had with the more secular yet Sunni Turkish Government about the security situation in Iraq?

Mr Hague: I regularly discuss the situation in Iraq with the Turkish Foreign Minister, Ahmet Davutoglu, most recently on Saturday, when I expressed our concern about the Turkish nationals who have now been taken hostage by ISIL. We of course hope for their safe return and are consulting closely with Turkey about the whole situation we have been discussing in the House today.

Jason McCartney (Colne Valley) (Con): My right hon. Friend says that he is keeping open the possibility of offering counter-terrorism expertise. Another area in which we have particular expertise is aerial reconnaissance, surveillance and intelligence gathering. Is he therefore keeping open the option of offering Royal Air Force ISTAR—intelligence, surveillance, target acquisition and reconnaissance—assets?

Mr Hague: What my hon. Friend mentions would count as a military intervention, and we are not planning military intervention in Iraq in this situation, as I have made clear; while I have taken care not to rule out the things that could happen in a whole variety of situations in future, I think that I have made that very clear today.

Dan Jarvis (Barnsley Central) (Lab): One of the many worrying aspects of recent events is that the Iraqi army and other security forces do not appear to have performed well. Of course, this is not just about military capability; it has much to do with the political decisions taken by the Iraqi Government. Looking ahead to the end of our operational commitment in Afghanistan at the end of this year, what is the Foreign Secretary doing to satisfy himself that the Afghan national security forces have the confidence and the capability needed to avoid a similar situation in Afghanistan?

16 Jun 2014 : Column 871

Mr Hague: This is a very important question. Of course, every quarter we have an oral statement on Afghanistan, and this will be an important topic for the next one. As the hon. Gentleman knows, we have taken every care to build up and train the Afghan national security forces. They have acquitted themselves very well in conflict in Afghanistan over the past year or two, having led all major operations in recent times themselves. I hope that the new President of Afghanistan, for whom elections took place this weekend, will sign the bilateral security agreement with the United States that will enable all of us to settle how we support the Afghan state in the future. There is further work to be done on this, but the Afghan national security forces are extremely strong and capable.

Robert Halfon (Harlow) (Con): Does my right hon. Friend agree that the removal of Saddam, which, as the hon. Member for Ilford South (Mike Gapes) said, prevented the Kurdish nation from being exterminated, is not the sole cause of the current crisis? Is it not more the problems in Syria, and the weakness and inadequacy of the Iraqi President, that have led to Islamic jihadists launching a campaign from Syria? Does he not also agree that if the crisis gets worse, at some point NATO and the United States will have to intervene militarily to put a lid on the problem and protect the Kurdistan region?

Mr Hague: On the last point, the United States has said that it is examining all options. I think that the necessary support for the Iraqi security forces is much more likely to be given by the United States than by NATO as a whole. My hon. Friend is quite right about many of the other massive contributory factors. Whatever people think, with hindsight, of the merits or otherwise of the 2003 invasion, recent events in Syria and the failure in Iraq to develop a fully inclusive politics have certainly contributed to this situation.

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): Given that the Foreign Secretary now finds himself dealing with a major crisis in Iraq, does he share my regret that the Chilcot inquiry has not published its report? If it had, his foreign policy would benefit from a detailed analysis of events before, during and, critically, after the last Gulf war.

Mr Hague: Yes, in many ways, because I think it was 2006 when, as shadow Foreign Secretary, I first proposed an inquiry on Iraq. I imagine that the hon. Gentleman’s party supported that at the time; I am sure that it did. Perhaps it even called for an inquiry before then. Had the inquiry been established then, rather than being resisted by the then Government for a good two years, we would certainly have had the result by now.

Mr Philip Hollobone (Kettering) (Con): Why does the speed and extent of the success so far of the caliphate forces seem to have taken everyone by surprise?

16 Jun 2014 : Column 872

Mr Hague: I think that it has taken people by surprise, including in Baghdad, because of the failure of Iraqi security forces—large numbers of them—to hold the territory to which they were assigned. That, of course, is very disappointing and alarming, and it underlines the need for the Iraqi security forces to be well led, to work together well, and to be backed by political unity. I think that is the answer to my hon. Friend’s question.

Jonathan Ashworth (Leicester South) (Lab): What discussions were held at the summit with regard to Sri Lanka? In the past 24 hours, a number of my Muslim constituents of Sri Lankan origin have got in touch because they are deeply fearful for the lives of many of their relatives in Sri Lanka, who are under threat from the sectarianism of the extremist Bodu Bala Sena group. What advice does the Foreign Secretary have for my constituents and what pressure can he put on the Sri Lankan Government?

Mr Hague: Of course, we regularly try to put pressure on the Sri Lankan Government. The hon. Gentleman gives me the opportunity to tell the House how much we look to them to prevent sectarian conflict and outrages within Sri Lanka, just as we look to any Government responsible for their own citizens to do the same. The hon. Gentleman will also know that the UK led the way, successfully, at the United Nations Human Rights Council in March to win the vote on setting up an international inquiry into the conflict in Sri Lanka. We are always leading the way on this and I join the hon. Gentleman in reiterating our strong message of concern about these events.

Madam Deputy Speaker (Mrs Eleanor Laing): The prize for patience goes to Mr John Woodcock.

John Woodcock (Barrow and Furness) (Lab/Co-op): Thank you, Madam Deputy Speaker. Whatever the responsibility the UK holds for the current situation in Iraq, there is a clear need to prevent the country from falling into the hands of these extremists. Given the Foreign Secretary’s statement that military intervention may well prove necessary, why has he ruled out any UK participation or military support whatsoever?

Mr Hague: For the reasons I set out in my statement, the prime need is for the leadership in Iraq—in both a security and a political sense—to be able to respond. There is a case for outside support where necessary, but as I said, the assets and capabilities to deliver such military support are much more likely to be possessed by the United States of America. I have set out other areas in which we can help. That is the reasoning for this approach.

Madam Deputy Speaker: We appreciate that that statement took a very long time—longer than usual—but the House is grateful to the Foreign Secretary, as those were two very important issues on which many Members wished to asked questions.

16 Jun 2014 : Column 873

Consumer Rights Bill

[2nd Allocated Day]

Further consideration of Bill, as amended in the Public Bill Committee.

New Clause 24

Duty of letting agents to publicise fees

‘(1) A letting agent must, in accordance with this section, publicise details of the agent’s relevant fees.

(2) The agent must display a list of the fees—

(a) at each of the agent’s premises at which the agent deals face-to-face with persons using or proposing to use services to which the fees relate, and

(b) at a place in each of those premises at which the list is likely to be seen by such persons.

(3) The agent must publish a list of the fees on the agent’s website (if it has a website).

(4) A list of fees displayed or published in accordance with subsection (2) or (3) must include—

(a) a description of each fee that is sufficient to enable a person who is liable to pay it to understand the service or cost that is covered by the fee or the purpose for which it is imposed (as the case may be),

(b) in the case of a fee which tenants are liable to pay, an indication of whether the fee relates to each dwelling-house or each tenant under a tenancy of the dwelling-house, and

(c) the amount of each fee inclusive of any applicable tax or, where the amount of a fee cannot reasonably be determined in advance, a description of how that fee is calculated.

(5) The Secretary of State may by regulations specify—

(a) other ways in which a letting agent must publicise details of the relevant fees charged by the agent;

(b) the details that must be given of fees publicised in that way.’—(Jenny Willott.)

This new Clause requires letting agents to publish a list of their fees and provides for where and how this must be done. The Secretary of State may also make regulations about what must be published and where.

Brought up, and read the First time.

5.22 pm

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott): I beg to move, That the clause be read a Second time.

Mr Speaker: With this it will be convenient to discuss the following:

Government new clause 25—Letting agents to which the duty applies.

Government new clause 26—Fees to which the duty applies.

Government new clause 27—Letting agency work and property management work.

Government new clause 28—Enforcement of the duty.

Government new clause 29—Supplementary provisions.

New clause 30—Letting Agents: Report—

‘Within three months of Royal Assent of this Act, the Secretary of State shall prepare and publish a report, and lay a copy of the report before Parliament, on—

(a) the consumer detriment caused to tenants by letting agent fees and the impact this has on the ability of tenants to secure and maintain tenancies, and

16 Jun 2014 : Column 874

(b) the steps that the government intends to take to prohibit fees that cause detriment to tenants.’

Government amendment 23.

Jenny Willott: We know that consumers in the private rented sector are especially concerned about the fees charged by letting agents, particularly when they are unexpected or unreasonably high. There are calls for a ban on letting agents charging fees to tenants, but I am concerned, as we discussed on the previous debate on Report, that an outright ban would simply increase the pressure on rents. Making agents publish their fees is a better approach, giving consumers the information they want and supporting good letting agents. Such transparency would deter double charging and enable tenants and landlords to shop around, which would encourage agents to offer competitive fees.

The vast majority of letting agents provide a good service to tenants and landlords, but we are determined to tackle the minority of rogue agents who offer a poor service. Although good agents already make information about their fees and charges readily available, the new clause will introduce, for the first time, a financial penalty when an agent fails to display their fees. We are introducing legislation that will require all letting agents and property managers to belong to an approved redress scheme. That will give tenants an effective way to address complaints about fees, as well as, more generally, when the tenant is not happy with the agent’s performance.

Stella Creasy (Walthamstow) (Lab/Co-op): It is a pleasure to see the debate on the Consumer Rights Bill come back to the House because many Members on both sides of the House are concerned about the impact of what the Minister calls unreasonably high fees. In relation to the Government’s proposal and our entirely reasonable new clause, the challenge for us all is to understand quite what damage such fees do to the private rented sector and how we can address those fees to give us a fair market in private rented accommodation.

I welcome the fact that the Government have now understood the case that the Opposition have been making, which is that we cannot ignore—try though the Government have in previous debates—the 9 million people in the private rented sector in this country. In particular, we must understand the impact of agency fees on people’s ability to keep a roof over their head, so it is worth thinking what kind of fees we are talking about. The Minister did not go into much detail, but it is worth reminding Members in the Chamber about the fees.

On average, tenants are forced to pay letting agents about £355 every single time they move. Indeed, some mystery shopping in my constituency has found average fees of £450, and Shelter has identified the eye-watering figure of £700 in total agency fees. Shelter has certainly found that one in seven of those using an agency is charged more than £500 a time, meaning that people have to find £500 every single time they move. That is a considerable sum, before we even consider the deposit and the rent. Such fees are putting huge pressure on people in the private rented sector, particularly in relation to their ability to make ends meet. Shelter’s research shows that 27% of those who have used a letting agency in the past three years have had to borrow or use a loan

16 Jun 2014 : Column 875

to pay the fees, and that 17% have had to cut down their spending on basic essentials, such as food or heating, to be able to cover them.

For the first day on Report, we tabled an amendment to recognise that there is a fundamental conflict of interest for an agent to take money from both the tenant and the landlord for the same transaction, and therefore to ban the laying of fees on tenants. In doing so, we were learning from the experience in Scotland. The Minister said, as she has again today, that banning fees will not make it cheaper for tenants, who will just end up paying higher rents through up-front fees.

In responding to our new clause 30, I hope that the Minister will use this opportunity to tell us what she takes from the research done in Scotland, where such a provision was made in 2012, because the research shows that the reverse is true—that there is no evidence that banning agency fees leads to an increase in rents. Indeed, fewer than one in five letting agencies interviewed in Shelter’s research said that it had increased fees to landlords. In fact, taking away the conflict of interest has had no impact on the market, but has done everything to help on the cost of housing.

I note the comments by the Deputy Prime Minister, who has admitted that there is a problem with fees and has said that there is an issue about the length of tenancies. The Opposition have been making those arguments for some time. In relation to the Government new clauses, what is it about our arguments and the evidence—that taking away fees does not increase rents, but makes renting a home more affordable for people—that explains why the Government have not as yet fully come over to our side of the argument.

The Government new clauses include some admirable claims about transparency. We certainly support the idea that it is important for tenants to be aware of the fees that they might be charged. However, I have several questions about how the new clauses are drafted, because it is not clear how they will work in practice. I am sure that the Minister would argue that all her proposed new clauses must work in practice, not just in principle.

One new clause mentions that the description of a fee must be understandable, but will the Minister clarify quite what that means? Will she require agents to break fees down and, for example, to say whether they will charge for a credit check and for an inventory fee, as often happens? In my constituency, I have seen tenants charged a pet fee, so will there be a description of all the fees that might possibly be applied?

What does the Minister mean by “likely to be seen”? We have seen examples of agencies putting a list of their fees in the toilets of their offices for tenants to read. Under the Bill, would that be considered a place where such a list is likely to be seen? What redress would a tenant have if they had not had cause to use the facilities of a letting agency and had therefore not seen the information?

5.30 pm

Most crucially, fees are often charged not just when a tenancy is first signed, but when it is repeated. What will the Minister do about the repeat application of fees? She will recall that, in the last debate on Report, we discussed a tenant who had tweeted us live to say that they had been charged £1,300 to change the names on a

16 Jun 2014 : Column 876

tenancy. The Government new clauses do not recognise that fees are applied not just when a tenancy is started, but when it is renewed.

Robert Flello (Stoke-on-Trent South) (Lab): I came across a case recently in which a tenancy was repeated. All that happened was that a copy of the original agreement was reprinted and sent off to be signed. There was all of about 30 pages of printing, which, even at the most expensive local high street printing outfit, would not amount to anywhere near the couple of hundred pounds that the agency was charging for that simple job.

Stella Creasy: My hon. Friend makes an important point about the kind of repeat fees we are seeing, which any legislation must address. More importantly—this relates to the proposals that we have made—I would wager that the landlord was also charged in that transaction for the same amount of photocopying. Fees are clearly being charged when a contract is repeated and that needs to be addressed.

New clause 24 talks about how a fee can be calculated if the amount is not yet known. Will the Minister set out what protection will be available to consumers if they miscalculate the amount based on the information that is provided? How clear does the information of the letting agency have to be?

All the issues that I have raised relate to enforcement. New clause 28 provides the power to impose a £5,000 penalty. It would be very interesting to hear what kind of enforcement process the Minister envisages. We talked in Committee about the cuts to trading standards—the Cinderella service that does not even have enough buttons at the moment to address the many issues the Government expect it to address under the consumer rights legislation.

The Minister talked in passing about the letting agent redress scheme. I must pay tribute to my noble Friend Baroness Hayter, who argued passionately for the redress scheme because of her experience of these issues. It is not clear to the Opposition quite what will happen. Will the Minister therefore set out what she thinks will happen if an agent does not display their fees clearly and what kind of enforcement action will be taken? She talked about issuing civil penalties. Will those penalties go to the tenant who has had to pay £1,300 for the photocopying to be repeated, but who was not told about that when they signed up to the letting agency?

All those questions speak to the fundamental challenge that we are dealing with, which is that information, although welcome, is not enough to deal with the fundamental problem of the impact that excessively high agency fees have on a person’s ability to rent a property. As we said in the previous debate on Report, it is a bit like telling someone who is tied to the train tracks what the timetable is for the trains. The fundamental issue that we have to deal with is the consequence of agents being able to charge tenants such fees.

That is why we tabled new clause 30. I hope that the Minister will recognise that it is an entirely reasonable response to the Government new clauses. New clause 30 would do two things. First, it would require the Government to produce a report on

“the consumer detriment caused to tenants by letting agent fees and the impact this has on the ability of tenants to secure and maintain tenancies”.

16 Jun 2014 : Column 877

I am sure that everybody in the House would welcome such a report, because it would at least give some depth to the conversations that we have all been having about this issue. Secondly, it would commit the Government to taking action to

“prohibit fees that cause detriment to tenants.”

Surely, if fees are pushing people out of their homes and distorting the market in private rented accommodation, it is in the interests of all consumers and, indeed, landlords that we act.

I hope that the Minister will accept new clause 30 and commit the Government to truly tackling the issues in the private rented sector, including the impact of agency fees. I am sorry that the hon. Member for Brigg and Goole (Andrew Percy) is not here because he, too, has argued that banning agency fees would somehow lead to higher rents. I look forward to the Minister responding to all those tenants in Scotland who have not found the banning of fees to be a negative experience. What does she think we can learn from that experience?

If the Minister does not yet accept the case for banning fees outright, does she accept that there are fees that can be detrimental and that it is appropriate for the Government to intervene? Alternatively, is she simply saying that if a letting agency wants to charge somebody £700 a time to renew their tenancy, it is fine, as long as they have told them about it? I am sure that is not her intention and that she recognises that people do not shop around for a letting agency: they shop around for a property to try to keep a roof above their family’s heads. Because such costs cause detriment to consumers, they are unacceptable. If the Minister does not accept that they cause detriment, I hope that she will at least accept our amendment that would provide that the Government should carry out research on this issue and commit to action if detriment is proved. Nine million people are waiting on the Minister’s every move to see whether they can keep a roof above their heads, not just in 2014 but in 2015 and beyond. Should we win the next election, we will take action if the Government will not do so now.

Jenny Willott: The irony of the hon. Lady’s last sentence is astounding, given that the Government are legislating to tackle this issue, but the previous Labour Government did not. The issue has not suddenly arisen in the last three years, and the Government have committed to tackling the minority of rogue landlords, something that her party did not do.

We are taking action to ensure that tenants have proper redress and a fair deal. We recognise that there are real issues with a minority of rogue landlords who do not treat tenants fairly, and that is why we are taking action. Today, we are ensuring transparency and openness on fees so that landlords and tenants can shop around. The hon. Lady mentioned the experience in Scotland and the recent Shelter report on the impact of banning fees. However, concerns have been raised that the Shelter report ignores the widespread non-compliance with the ban in Scotland. I have seen an estimate that some 25% of firms are still charging admin fees for tenants who move in, and a higher proportion are still charging other fees during the tenancy.

As the hon. Lady said, those agents that are complying have got around the fact that they cannot charge fees to tenants by, for example, raising landlords’ fees, but that

16 Jun 2014 : Column 878

has had an impact on rents in certain areas. Landlords are not absorbing the increase in fees, but passing it on to tenants through the rent. For example, in Edinburgh, rents went up by more than 5% and in Aberdeen by more than 6%—significantly higher increases than in England and Wales. The evidence is that the introduction of the ban north of the border has had a significant negative impact on tenants.

Stella Creasy: Can the Minister clarify that she disputes what Shelter has said—that any increase in rent is not related to the banning of agency fees—or that she has her own research? She is telling a very different story from the evidence of the research conducted by Shelter in Scotland, and the House may be confused by what she is saying as a result.

Jenny Willott: I have made it clear that we have concerns about the Shelter report because, for example, it ignores the widespread non-compliance that I mentioned. The evidence on rents is that they have risen faster in Scotland than they have in England and Wales.

The hon. Lady raised some questions about how fees would need to be broken down and what evidence would need to be provided. The regulations will make that clear. For example, a general administration fee would need to be broken down to show exactly what it covered. That information will therefore be available to tenants. The hon. Lady also asked whether repeat fees would be covered, and I can confirm that the fees associated with property management would also be covered, so they would need to be provided and published.

The hon. Lady asked how the provisions would operate. The Bill provides a power, and we will consult on and publish secondary legislation to ensure that the provision is as tight as it can be. We will ensure that information is available to tenants and landlords so that they can make a judgment on the most appropriate agent for their business. The legislation will be enforced by local authorities as they are involved in the licensing of landlords and also have the local knowledge about the agencies in their area. They are in the best place to enforce it and to ensure it is operating in the best interests of tenants.

Finally, we have said that we will review it after a year of operation to see how it is working and to ensure that it has made a difference to tenants. We do not want rents to go up, as that would cause widespread problems for, as the hon. Lady says, the large number of people who rent in the private sector. We want to protect those tenants. We do not want their rents to go up; we want them instead to get a fair deal from agencies and to be able to see what the charges are. We want openness and proper redress in place to ensure they receive a fair deal.

Question put and agreed to.

New clause 24 accordingly read a Second time, and added to the Bill.

New Clause 25

Letting agents to which the duty applies

‘(1) In sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) “letting agent” means a person who engages in letting agency work (whether or not that person engages in other work).

16 Jun 2014 : Column 879

(2) A person is not a letting agent for the purposes of sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) if the person engages in letting agency work in the course of that person’s employment under a contract of employment.

(3) A person is not a letting agent for the purposes of sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) if—

(a) the person is of a description specified in regulations made by the Secretary of State;

(b) the person engages in work of a description specified in regulations made by the Secretary of State.”—(Jenny Willott.)

This new Clause provides that the duty applies to a person who engages in letting agency work. Employees are exempt from the duty. The Secretary of State may make regulations exempting other persons or types of work.

New Clause 26

Fees to which the duty applies

‘(1) In sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) “relevant fees”, in relation to a letting agent, means the fees, charges or penalties (however expressed) payable to the agent by a landlord or tenant—

(a) in respect of letting agency work carried on by the agent,

(b) in respect of property management work carried on by the agent, or

(c) otherwise in connection with—

(i) an assured tenancy of a dwelling-house in England, or

(ii) a dwelling-house in England that is, has been or is proposed to be let under an assured tenancy.

(2) Subsection (1) does not apply to—

(a) the rent payable to a landlord under a tenancy,

(b) any fees, charges or penalties which the letting agent receives from a landlord under a tenancy on behalf of another person,

(c) a tenancy deposit within the meaning of section 212(8) of the Housing Act 2004, or

(d) any fees, charges or penalties of a description specified in regulations made by the Secretary of State.” —(Jenny Willott.)

This new Clause provides that the duty applies to fees payable in respect of letting agency work, property management work and other work done in connection with assured tenancies. The clause provides that certain payments are not fees for the purposes of the duty. The Secretary of State may make regulations to exempt other payments.

New Clause 27

Letting agency work and property management work

‘(1) In sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) “letting agency work” means things done by a person in the course of a business in response to instructions received from—

16 Jun 2014 : Column 880

(a) a person (“a prospective landlord”) seeking to find another person wishing to rent a dwelling-house in England under an assured tenancy and, having found such a person, to grant such a tenancy, or

(b) a person (“a prospective tenant”) seeking to find a dwelling-house in England to rent under an assured tenancy and, having found such a dwelling-house, to obtain such a tenancy of it.

(2) But “letting agency work” does not include any of the following things when done by a person who does nothing else within subsection (1)—

(a) publishing advertisements or disseminating information;

(b) providing a means by which a prospective landlord or a prospective tenant can, in response to an advertisement or dissemination of information, make direct contact with a prospective tenant or a prospective landlord;

(c) providing a means by which a prospective landlord and a prospective tenant can communicate directly with each other.

(3) “Letting agency work” also does not include things done by a local authority.

(4) In sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) “property management work”, in relation to a letting agent, means things done by the agent in the course of a business in response to instructions received from another person where—

(a) that person wishes the agent to arrange services, repairs, maintenance, improvements or insurance in respect of, or to deal with any other aspect of the management of, premises in England on the person’s behalf, and

(b) the premises consist of a dwelling-house let under an assured tenancy.”—(Jenny Willott.)

This new Clause defines letting agency work and property management work. It provides that letting agency work does not include publishing advertisements, enabling landlords and tenants to communicate directly with one another or things done by a local authority.

New Clause 28

Enforcement of the duty

‘(1) The Secretary of State may by regulations—

(a) impose functions on a local authority in connection with the enforcement of the duty in section (Duty of letting agents to publicise fees);

(b) make provision for civil penalties to be imposed in respect of a breach of that duty.

(2) Regulations under subsection (1)(b) may provide for the amount of a civil penalty to be determined by the person imposing it, subject to subsection (3).

(3) The amount of a civil penalty that a person may impose by virtue of regulations under subsection (1)(b) may not exceed £5,000 for each breach of the duty in section (Duty of letting agents to publicise fees).

(4) The Secretary of State may by regulations amend the figure for the time being specified in subsection (3).

(5) Regulations under subsection (1)(b) must make provision about the procedure for imposing a civil penalty and, in particular, must require a person imposing a penalty to give the person on whom it is imposed a written notice stating—

(a) the amount of the penalty,

(b) the reasons for imposing it, and

(c) the date by which and manner in which it is to be paid.

(6) Regulations under subsection (1)(b)—

(a) may give a person on whom a civil penalty is imposed a right to request a review of the decision to impose the penalty, and

16 Jun 2014 : Column 881

(b) must give such a person a right to appeal against the decision to the First-tier Tribunal.

(7) Regulations under subsection (1)(b) must, in particular, specify the grounds on which a person may appeal against a decision to impose a civil penalty, which must include the grounds—

(a) that the decision was based on an error of fact,

(b) that the decision was wrong in law, and

(c) that the decision was unreasonable (including that the amount of the penalty is unreasonable).

(8) Regulations under subsection (1)(b) may, in particular—

(a) specify the time within which a person must request a review of, or appeal against, a decision to impose a civil penalty;

(b) require a person to request a review before appealing;

(c) specify the grounds on which a person may request a review;

(d) make provision about the procedure for a review;

(e) make further provision about reviews and appeals (including provision as to the powers available on a review or appeal).

(9) Regulations under subsection (1)(b) may make provision about the recovery of a civil penalty, including—

(a) provision for the person by whom it is imposed to recover the penalty as a civil debt;

(b) provision for the penalty to be recoverable, on the order of a court, as if payable under a court order.

(10) Sums received by a local authority under regulations under this section may be used by the authority for the purposes of any of its functions.

(11) A local authority on whom functions are conferred by regulations under this section must have regard to any guidance issued by the Secretary of State about—

(a) compliance by letting agents with the duty in section (Duty of letting agents to publicise fees);

(b) the exercise of those functions.” —(Jenny Willott.)

This new Clause enables the Secretary of State to make regulations about enforcement of the duty. The penalty for non-compliance will be a civil penalty of up to £5,000. The regulations must provide for a right of appeal against the penalty to the First-tier Tribunal.

New Clause 29

Supplementary provisions

‘(1) In sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions)—

“assured tenancy” means a tenancy which is an assured tenancy for the purposes of the Housing Act 1988 except where—

(a) the landlord is a private registered provider of social housing, or(b) the tenancy is a long lease;

“dwelling-house” may be a house or part of a house;

“landlord” includes a person who proposes to be a landlord under a tenancy and a person who has ceased to be a landlord under a tenancy because the tenancy has come to an end;

“long lease” means a lease which—

(c) is a long lease for the purposes of Chapter 1 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993, or(d) in the case of a shared ownership lease (within the meaning given by section 7(7) of that Act), would be a lease within paragraph (a) of this definition if the tenant’s total share (within the meaning given by that section) were 100%;

16 Jun 2014 : Column 882

“tenant” includes a person who proposes to be a tenant under a tenancy and a person who has ceased to be a tenant under a tenancy because the tenancy has come to an end.

(2) In sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) “local authority” means—

(a) a county council in England,

(b) a district council,

(c) a London borough council,

(d) the Common Council of the City of London in its capacity as local authority, or

(e) the Council of the Isles of Scilly.

(3) References in sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) to a tenancy include a proposed tenancy and a tenancy that has come to an end.

(4) References in sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) to anything which is payable, or which a person is liable to pay, to a letting agent include anything that the letting agent claims a person is liable to pay, regardless of whether the person is in fact liable to pay it.

(5) Regulations under sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) are to be made by statutory instrument.

(6) A statutory instrument containing (whether alone or with other provision)—

(a) the first regulations to be made under section (Enforcement of the duty)(1)(b), or

(b) regulations under section (Enforcement of the duty)(4),

is not to be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.

(7) A statutory instrument containing regulations under sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) other than one to which subsection (6) applies is subject to annulment in pursuance of a resolution of either House of Parliament.

(8) Regulations under sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions)—

(a) may make different provision for different purposes;

(b) may make provision generally or in relation to specific cases.

(9) Regulations under sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) may include incidental, supplementary, consequential, transitional, transitory or saving provision.”—(Jenny Willott.)

This new Clause provides definitions of the terms used in the new clauses and sets out the procedures for making regulations.

Brought up, read the First and Second time, and added to the Bill.

16 Jun 2014 : Column 883

New Clause 30

Letting Agents: Report

Within three months of Royal Assent of this Act, the Secretary of State shall prepare and publish a report, and lay a copy of the report before Parliament, on—

(a) the consumer detriment caused to tenants by letting agent fees and the impact this has on the ability of tenants to secure and maintain tenancies, and

(b) the steps that the government intends to take to prohibit fees that cause detriment to tenants.”—(Stella Creasy.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

The House divided:

Ayes 204, Noes 259.

Division No. 4]

[

5.42 pm

AYES

Abbott, Ms Diane

Abrahams, Debbie

Ainsworth, rh Mr Bob

Alexander, rh Mr Douglas

Alexander, Heidi

Ali, Rushanara

Allen, Mr Graham

Ashworth, Jonathan

Bailey, Mr Adrian

Bain, Mr William

Barron, rh Kevin

Beckett, rh Margaret

Begg, Dame Anne

Benn, rh Hilary

Benton, Mr Joe

Berger, Luciana

Betts, Mr Clive

Blackman-Woods, Roberta

Blomfield, Paul

Blunkett, rh Mr David

Bradshaw, rh Mr Ben

Brennan, Kevin

Brown, Lyn

Bryant, Chris

Buck, Ms Karen

Burnham, rh Andy

Byrne, rh Mr Liam

Campbell, rh Mr Alan

Campbell, Mr Ronnie

Caton, Martin

Champion, Sarah

Chapman, Jenny

Clarke, rh Mr Tom

Clwyd, rh Ann

Coaker, Vernon

Cooper, Rosie

Cooper, rh Yvette

Corbyn, Jeremy

Crausby, Mr David

Creagh, Mary

Creasy, Stella

Cruddas, Jon

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Dakin, Nic

Danczuk, Simon

David, Wayne

Davies, Geraint

Denham, rh Mr John

Dobbin, Jim

Docherty, Thomas

Donohoe, Mr Brian H.

Doran, Mr Frank

Doyle, Gemma

Dromey, Jack

Dugher, Michael

Eagle, Ms Angela

Eagle, Maria

Edwards, Jonathan

Efford, Clive

Elliott, Julie

Ellman, Mrs Louise

Engel, Natascha

Esterson, Bill

Evans, Chris

Farrelly, Paul

Field, rh Mr Frank

Fitzpatrick, Jim

Flello, Robert

Flint, rh Caroline

Flynn, Paul

Fovargue, Yvonne

Francis, Dr Hywel

Gapes, Mike

Gardiner, Barry

Glass, Pat

Glindon, Mrs Mary

Goodman, Helen

Green, Kate

Greenwood, Lilian

Griffith, Nia

Gwynne, Andrew

Hain, rh Mr Peter

Hamilton, Mr David

Hamilton, Fabian

Hanson, rh Mr David

Harris, Mr Tom

Havard, Mr Dai

Healey, rh John

Hendrick, Mark

Hepburn, Mr Stephen

Heyes, David

Hillier, Meg

Hilling, Julie

Hodge, rh Margaret

Hodgson, Mrs Sharon

Hollobone, Mr Philip

Hood, Mr Jim

Howarth, rh Mr George

Hunt, Tristram

Irranca-Davies, Huw

James, Mrs Siân C.

Jamieson, Cathy

Jarvis, Dan

Johnson, rh Alan

Johnson, Diana

Jones, Graham

Jones, Susan Elan

Kane, Mike

Kaufman, rh Sir Gerald

Keeley, Barbara

Kendall, Liz

Khan, rh Sadiq

Lammy, rh Mr David

Lavery, Ian

Lazarowicz, Mark

Leslie, Chris

Lewell-Buck, Mrs Emma

Lewis, Mr Ivan

Llwyd, rh Mr Elfyn

Love, Mr Andrew

Lucas, Caroline

Lucas, Ian

Mahmood, Shabana

Mann, John

McCabe, Steve

McCarthy, Kerry

McDonagh, Siobhain

McDonald, Andy

McDonnell, John

McFadden, rh Mr Pat

McGovern, Alison

McGovern, Jim

McGuire, rh Mrs Anne

McKechin, Ann

McKenzie, Mr Iain

McKinnell, Catherine

Meacher, rh Mr Michael

Mearns, Ian

Miliband, rh Edward

Miller, Andrew

Mitchell, Austin

Moon, Mrs Madeleine

Morden, Jessica

Morrice, Graeme

(Livingston)

Morris, Grahame M.

(Easington)

Mudie, Mr George

Munn, Meg

Murphy, rh Paul

Murray, Ian

Onwurah, Chi

Owen, Albert

Pearce, Teresa

Perkins, Toby

Phillipson, Bridget

Pound, Stephen

Powell, Lucy

Qureshi, Yasmin

Raynsford, rh Mr Nick

Reed, Mr Steve

Reeves, Rachel

Reynolds, Emma

Reynolds, Jonathan

Riordan, Mrs Linda

Robertson, John

Robinson, Mr Geoffrey

Rotheram, Steve

Ruane, Chris

Ruddock, rh Dame Joan

Sawford, Andy

Seabeck, Alison

Shannon, Jim

Sharma, Mr Virendra

Sheerman, Mr Barry

Sheridan, Jim

Shuker, Gavin

Skinner, Mr Dennis

Slaughter, Mr Andy

Smith, rh Mr Andrew

Smith, Nick

Smith, Owen

Spellar, rh Mr John

Straw, rh Mr Jack

Sutcliffe, Mr Gerry

Tami, Mark

Thomas, Mr Gareth

Thornberry, Emily

Timms, rh Stephen

Trickett, Jon

Turner, Karl

Twigg, Derek

Twigg, Stephen

Umunna, Mr Chuka

Vaz, rh Keith

Vaz, Valerie

Watson, Mr Tom

Whitehead, Dr Alan

Williamson, Chris

Wilson, Phil

Winnick, Mr David

Winterton, rh Ms Rosie

Woodcock, John

Wright, David

Tellers for the Ayes:

Tom Blenkinsop

and

Stephen Doughty

NOES

Adams, Nigel

Afriyie, Adam

Andrew, Stuart

Arbuthnot, rh Mr James

Bacon, Mr Richard

Baker, Norman

Baker, Steve

Barclay, Stephen

Beith, rh Sir Alan

Bellingham, Mr Henry

Benyon, Richard

Beresford, Sir Paul

Berry, Jake

Bingham, Andrew

Birtwistle, Gordon

Blackwood, Nicola

Blunt, Crispin

Boles, Nick

Bone, Mr Peter

Bradley, Karen

Brady, Mr Graham

Brake, rh Tom

Bray, Angie

Brazier, Mr Julian

Brine, Steve

Brokenshire, James

Brooke, Annette

Browne, Mr Jeremy

Bruce, Fiona

Buckland, Mr Robert

Burns, Conor

Burns, rh Mr Simon

Burstow, rh Paul

Burt, rh Alistair

Byles, Dan

Cable, rh Vince

Cairns, Alun

Campbell, rh Sir Menzies

Carmichael, rh Mr Alistair

Carmichael, Neil

Carswell, Mr Douglas

Chishti, Rehman

Chope, Mr Christopher

Clarke, rh Mr Kenneth

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Cox, Mr Geoffrey

Crabb, Stephen

Crockart, Mike

Crouch, Tracey

Davey, rh Mr Edward

Davies, Glyn

Davies, Philip

Davis, rh Mr David

de Bois, Nick

Dinenage, Caroline

Djanogly, Mr Jonathan

Dorries, Nadine

Doyle-Price, Jackie

Duddridge, James

Duncan, rh Mr Alan

Duncan Smith, rh Mr Iain

Ellis, Michael

Ellison, Jane

Elphicke, Charlie

Evans, Graham

Evennett, Mr David

Fallon, rh Michael

Farron, Tim

Featherstone, Lynne

Field, Mark

Foster, rh Mr Don

Fox, rh Dr Liam

Francois, rh Mr Mark

Freer, Mike

Fullbrook, Lorraine

Fuller, Richard

Gale, Sir Roger

Garnier, Sir Edward

Garnier, Mark

Glen, John

Goldsmith, Zac

Graham, Richard

Gray, Mr James

Grayling, rh Chris

Greening, rh Justine

Grieve, rh Mr Dominic

Gyimah, Mr Sam

Halfon, Robert

Hames, Duncan

Hammond, Stephen

Hancock, Matthew

Hands, rh Greg

Harper, Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Haselhurst, rh Sir Alan

Heald, Oliver

Heath, Mr David

Heaton-Harris, Chris

Hemming, John

Henderson, Gordon

Hendry, Charles

Hinds, Damian

Hoban, Mr Mark

Hollingbery, George

Holloway, Mr Adam

Hopkins, Kris

Horwood, Martin

Howell, John

Hughes, rh Simon

Hunt, rh Mr Jeremy

Hunter, Mark

Hurd, Mr Nick

Jackson, Mr Stewart

James, Margot

Javid, rh Sajid

Jenrick, Robert

Johnson, Gareth

Johnson, Joseph

Jones, Andrew

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kelly, Chris

Knight, rh Sir Greg

Kwarteng, Kwasi

Lancaster, Mark

Lansley, rh Mr Andrew

Laws, rh Mr David

Leadsom, Andrea

Lee, Dr Phillip

Leslie, Charlotte

Letwin, rh Mr Oliver

Lewis, Brandon

Lidington, rh Mr David

Lopresti, Jack

Loughton, Tim

Luff, Sir Peter

Lumley, Karen

Main, Mrs Anne

Maynard, Paul

McCartney, Jason

McCartney, Karl

McIntosh, Miss Anne

McLoughlin, rh Mr Patrick

McPartland, Stephen

Menzies, Mark

Metcalfe, Stephen

Miller, rh Maria

Mills, Nigel

Milton, Anne

Mitchell, rh Mr Andrew

Mordaunt, Penny

Morgan, rh Nicky

Morris, Anne Marie

Morris, James

Mowat, David

Murray, Sheryll

Neill, Robert

Newmark, Mr Brooks

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

O'Brien, rh Mr Stephen

Offord, Dr Matthew

Ollerenshaw, Eric

Opperman, Guy

Ottaway, rh Sir Richard

Parish, Neil

Patel, Priti

Paterson, rh Mr Owen

Pawsey, Mark

Penning, rh Mike

Penrose, John

Perry, Claire

Phillips, Stephen

Pincher, Christopher

Poulter, Dr Daniel

Prisk, Mr Mark

Pugh, John

Raab, Mr Dominic

Randall, rh Sir John

Reckless, Mark

Redwood, rh Mr John

Rees-Mogg, Jacob

Reevell, Simon

Rifkind, rh Sir Malcolm

Robathan, rh Mr Andrew

Robertson, Mr Laurence

Rogerson, Dan

Rosindell, Andrew

Rudd, Amber

Ruffley, Mr David

Russell, Sir Bob

Sanders, Mr Adrian

Sandys, Laura

Scott, Mr Lee

Selous, Andrew

Shapps, rh Grant

Sharma, Alok

Shelbrooke, Alec

Skidmore, Chris

Smith, Chloe

Smith, Henry

Smith, Julian

Smith, Sir Robert

Soames, rh Sir Nicholas

Soubry, Anna

Spelman, rh Mrs Caroline

Stanley, rh Sir John

Stevenson, John

Stewart, Bob

Stewart, Iain

Stewart, Rory

Streeter, Mr Gary

Stride, Mel

Stuart, Mr Graham

Stunell, rh Sir Andrew

Sturdy, Julian

Swales, Ian

Swayne, rh Mr Desmond

Syms, Mr Robert

Teather, Sarah

Thornton, Mike

Thurso, John

Timpson, Mr Edward

Tomlinson, Justin

Truss, Elizabeth

Turner, Mr Andrew

Tyrie, Mr Andrew

Uppal, Paul

Vaizey, Mr Edward

Vara, Mr Shailesh

Vickers, Martin

Villiers, rh Mrs Theresa

Walker, Mr Charles

Walker, Mr Robin

Wallace, Mr Ben

Ward, Mr David

Watkinson, Dame Angela

Webb, Steve

Wharton, James

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, Mr John

Wiggin, Bill

Williams, Stephen

Williamson, Gavin

Willott, Jenny

Wilson, Mr Rob

Wollaston, Dr Sarah

Wright, Jeremy

Wright, Simon

Yeo, Mr Tim

Young, rh Sir George

Tellers for the Noes:

Gavin Barwell

and

Harriett Baldwin

Question accordingly negatived.

16 Jun 2014 : Column 884

16 Jun 2014 : Column 885

16 Jun 2014 : Column 886

Schedule 2

Consumer contract terms which may be regarded as unfair

Stella Creasy: I beg to move amendment 1, page 51, line 9, at end insert—

“1A A term which requires a consumer to pay a charge for, or be liable for, an element of a good or service that another party has also been charged for in the course of the same transaction.”

Madam Deputy Speaker (Mrs Eleanor Laing): With this it will be convenient to discuss the following:

Amendment 2, page 51, line 15, at end insert—

“2A A term which relies upon any bill of sale, as defined in section 3 (Construction of Act) of the Bills of Sale Act (1878) Amendment Act 1882, to reduce the level of consumer protection in relation to contracts concerning consumer credit.”

Amendment 3, page 51, line 18, at end insert—

“3A A term that directly causes financial detriment to the consumer such that it can reasonably be seen to alter the capacity of the consumer to pay the costs of the contract, where the contract is for a financial service.”

16 Jun 2014 : Column 887

Amendment 4, page 53, line 2, at end insert—

“20A A term which either—

(a) requires or encourages a consumer to contract third party services without informing them of their right to seek independent advice; or

(b) seeks to limit a consumer’s access to independent advice regarding third party contracts where there is a potential conflict of interest for the third party involved.”

Amendment 19, page 53, line 2, at the end insert—

“20A A term which has the object or effect of permitting a trader to block, restrict or otherwise hinder the access of a consumer to any lawful electronic communications network or electronic communications service on the basis of an unreasonable or unusual definition of ‘internet access’, ‘data’, ‘webaccess’ or similar word or phrase. Nothing in this prohibition shall affect filters for the purpose of child protection. Electronic communications network or electronic communication service shall have the same meaning as in the Communications Act 2003.”

Amendment (a) to amendment 19,  after “trader”, insert

“engaged in the provision of fixed broadband internet access or mobile internet services.”

Stella Creasy: I shall speak to all the amendments in the group, which are about unfair contract terms. Unfairness is such a central concept to British values, I will wager, that it provides an apt discussion point for this week alone. All the amendments deal with where a market is stacked against one party and, we would argue, both miss out as a result. When service providers exploit a lack of information or collude to distort behaviour, it is not just the public who are badly treated: competition is stifled, creativity and innovation are weakened and, above all, the consumer is ripped off. The amendments thus reflect some of the problems affecting markets that we see in Britain and deal with what more could be done to make a stronger consumer rights framework that would give the public the tools to be able to prevent rather than have to deal with the problems that come from these distorted behaviours. There are four different issues, but we consider them all to be part of the conflicts of interest that cause detriment to the consumer.

Amendment 1 refers to what we call “double charging”, and particularly the behaviour of estate agents. We all know that buying a house is one of the biggest costs any of us will face in our lifetime. An English man or woman’s home is their castle, but it is often a very expensive one. The cost of buying a house has gone up so substantially in my constituency that it is now 30% more than it was a year ago—a source of extreme concern for many. Indeed, we know that the average home is worth eight times the average wage and that it can take 20 years for a family to save for a deposit. A million homes were bought in the UK last year, and prices have risen across the country by 8%, even if they have not risen as much as in some of our London areas. That is why the Governor of the Bank of England has warned that the biggest risk to the economy stems from the fact that people are getting mortgages—sometimes four or more times their salaries—that they cannot sustain. Housing is indeed a bubble underpinning our economy and leaving it in an incredibly precarious position.

The Government’s housing Bill will provide 15,000 houses, but people in my constituency know that we need to double that and then some, which is why

16 Jun 2014 : Column 888

Labour are proposing to build 200,000 houses, getting us closer to where we need to get to in order to deal with the pressures that people are experiencing. This amendment speaks, too, to some of the other charges that people face when buying a property. We may disagree about how many houses need to be built, but I am sure we would all want the housing property market to be as fair and open as possible so that it does not involve more expenses that mean people needing an even higher mortgage or an even higher level of debt—particularly in the form of the personal loans that people are taking out to pay the sort of fees necessary when they start ownership of a new property.

The amendment would deal with what the property ombudsman has called an “emerging commercial practice”—one that means that people such as estate agents, who benefit from the increase in demand for housing by exploiting the pressure on the country’s housing supply, reap the benefits. The practice involves a contract that we believe is ripping off consumers—both buyers and sellers—and therefore needs addressing. It is called “double charging” if the estate agent applies a fee to both the buyer and the seller of a property on the same transaction.

Let me explain the problem for the benefit of Members who have not yet observed the practice in their constituencies. It often results from the process of “sale by informal tender”. House owners are asked to accept sealed bids for their properties. Increasingly, estate agents are then charging successful bidders a “finder’s fee”, which, in some cases, is between 2% and 2.5% of the property fee plus VAT. According to the Consumers Association, an estate agent’s commission should normally be between 1% and 2%. Moreover, sellers themselves are paying to market their properties. Buyers must find the cost of the additional fee in order to bid.

6 pm

When I challenged estate agents at Douglas Allen in Walthamstow about their behaviour, they admitted openly that they expected buyers to factor the introductory fee into their offers. Sellers do not benefit from the fee that is being offered. They do not gain the benefit of the additional sum that the buyers are paying for their asset—not the estate agent’s asset—but the estate agent does. That the sellers are paying for the privilege of the marketing of their houses in that way only compounds the scam that is affecting too many people in our country.

Andy McDonald (Middlesbrough) (Lab): Is not the ability to charge two parties to a potential transaction nothing less than a direct conflict of interests? It should not be possible to owe a duty to a buyer and a seller in equal measure. An agent has one client, and it must remain that way.

Stella Creasy: My hon. Friend is entirely right. Let me give an example of the way in which this conflict of interests operates in practice. The example was given to us by a young first-time buyer who, because of her restricted ability to buy a property in the area where she wanted to live, accepted that she would have to take part in a “sale by tender” arrangement, and that she would have to pay an introductory fee of 2.5% of the sale price of the property. She made an offer of £258,000 for a house that was well within the guide price, and therefore committed herself to paying about £6,000 in

16 Jun 2014 : Column 889

fees to the estate agent. Her offer was accepted as the highest offer in the sealed-bid process. She then contacted us to say that her offer had not been accepted by the seller, and the agent was putting pressure on her to up her offer to £262,000. If she did not do so, the property would be put back on the market for another “sale by tender” exercise, because the seller wanted more. That was despite the fact that she was the one who had committed herself to paying the fee that the estate agent wanted to charge.

Some Members may think that that is an indication of the overheated London housing market, and the fact that house prices in my constituency have risen by 30% reflects that overheating. However, we are hearing about examples of double charging throughout the country. In the north-west, for instance, a gentleman who tried to buy a house for £45,000 was told that, as well as finding the £45,000 and the fee for the conveyancing, he would have to find £2,880 in order to pay the introductory fee to the estate agent. In the south-west, an estate agent wanted an introductory fee of nearly £6,000 plus VAT from someone who wanted to buy a house for £296,000. I must stress that the sellers of the properties, who do not benefit from the additional £6,000, are also paying a fee for the service.

The Minister had admitted that double charging is a potentially worrying emerging trend which seems to be on the increase, but at every stage in the Bill when we have sought to outlaw this conflict of interests, the Government have voted against our attempts, although the property ombudsman has agreed that the new approach to selling properties

“can also potentially disadvantage the seller. He”—

or she—

“will no doubt have to agree to accept only prospective buyers that follow the agent’s agreement with those prospective buyers and if a prospective buyer declines to submit to paying the fee, he”—

or she—

“will be out of the picture and the seller will have lost an opportunity to sell his house.”

That is what the property ombudsman has told us about the practice.

Robert Flello: No doubt the Minister will say that this is an issue of the market, that other estate agents will not do this, and that it will all come out in the wash. The point is, however, that someone who goes out and looks for a house and then finds the one that he wants cannot choose the agent who is dealing with the property. That is why it is so crucial for us to sort this out now, rather than waiting until every single estate agent does the same, as though the market will somehow adjust itself.

Stella Creasy: My hon. Friend has raised an important point. I admit that I have been deeply concerned about campaigning on this issue and for our proposals, because I think that it is a bit like telling turkeys how to avoid Christmas. The more we make it clear to estate agents that the Government are currently letting them get away with this behaviour, the more they will engage in it. Indeed, I am sad to report that since February, when we began expressing concern about double charging, an increasing number of estate agent chains throughout

16 Jun 2014 : Column 890

the country have been using “sale by tender” processes involving the introductory fee. I must emphasise that we are objecting not to sale by tender per se, but to the fact that people are being charged a fee to be introduced to a property. That is what is causing such concern.

When I first observed that Douglas Allen in Walthamstow was engaging in the practice, I thought that perhaps we had just one rogue estate agent. I hoped that when Phil and Kirstie came to Walthamstow recently to film “Location, Location, Location”, they would take a dim view of it, but I am sorry to say that we are now hearing of cases at Your Move, Ellis and Co. and Reeds Rains. A number of estate agents are picking up the idea that applying such fees is acceptable behaviour, and the damage that that is doing to the interests of both sellers and buyers is growing.

There is a question for us here. We can see that the practice is distorting the housing market. If we want a free and fair market, these conflicts of interests must be resolved, so that sellers can be confident that buyers are always acting in their interests, and buyers can be confident that when they participate in a bid such as this, it is taken seriously. Should we act, or should we wait until the damage to consumers’ interests becomes worse? We tabled amendment 1 in order to make charging two parties a fee to the same transaction a term in a contract that can be challenged on the basis that it is unfair. We believe—as does the property ombudsman—that such charges are indeed unfair, and should be open to challenge.

This comes at a time when there is widespread concern about the estate agent industry, full stop. I accept that it may be another “British value” to complain about estate agents, just as people complain about traffic wardens and, indeed, politicians. We all recognise that we are not immune to that moment in the pub on a Friday night. However, we know that there are serious concerns because of the nature of the housing market. I have been contacted by people who have been told by estate agents that they cannot have access to the lists of housing for sale unless they commit themselves to taking out a mortgage through them, or using their financial advisers or lawyers. That is another clear conflict of interests for the seller.

We need a tough regulatory regime to ensure that we have a fair housing market in England and Wales. We continue to be concerned about the fact that the Government have delegated the monitoring of all estate agents in England and Wales to Powys county council’s trading standards body. A Welsh rural council has been charged with the task of examining the behaviour of nearly half a million estate agents. It should be taking account of the blatant and rampant exploitation of the demand for housing that these charges represent, but when people affected by them have contacted Powys, they have been met with indifference about whether it should be dealing with the issue. The council took over only in April—this may be a new moment—but it is clear that we need to take stronger action before the situation gets out of control.

Helen Goodman (Bishop Auckland) (Lab): My hon. Friend is highlighting the way in which the Government have contracted out different aspects of trading standards to various local authorities. Has she looked into the number of houses that have been for sale in Powys, and

16 Jun 2014 : Column 891

considered how experience in Powys can possibly inform an intelligent approach to the London housing market, which is totally different?

Stella Creasy: I think that there is genuine concern about whether Powys county council is equipped for the task. This is not necessarily just about its trading standards: after all, this is a council that has gone through three cabinets in as many months, and has had problems with the setting of its budget. Some have suggested that it needs to put its own house in order before putting our house sales in order. Certainly, double charging is a great example of the sort of problem that we would expect an effective regulator to be able to deal with. There is a clear conflict of interests. The fees being charged are clearly causing detriment to consumers.

I welcome the fact that the Minister has met the property ombudsman since we raised this issue with her, but I note that as yet there is no evidence of any progress in resolving this matter. As my hon. Friend the Member for Stoke-on-Trent South (Robert Flello) pointed out, the number of agents using double charging in contracts is escalating. Many of my constituents who have been hit by these contracts have asked whether their lawyers can challenge them. I ask the Minister to accept this amendment and give consumers the opportunity to challenge these sorts of contracts, and to give them the legal protection that enables them to say, “This is fundamentally unfair and it infringes my rights”, and, indeed, to give sellers the opportunity to challenge them. Under these contracts, buyers and sellers are told that they cannot communicate with each other; otherwise, the offer that has been made is void. A seller may therefore be unaware of an offer that somebody wishes to make for their property, and that has to be cut back because the buyer must also include the fee. I was surprised to hear from the estate agents in Walthamstow that they always achieve 102% of the asking price of their properties, and 2% was, perhaps unsurprisingly, the fee they were charging people to buy their houses. “Who would have thunk it”—who would have thought that there would be such a close correlation?

I hope the Minister will accept that there is a genuine issue here that needs to be dealt with, and the sooner, the better. We know the pressures on our housing market are not going to go away any time soon, but although we might argue about the numbers of houses that need to be built, we can surely all agree that this is a conflict of interests that needs to be addressed. If, again, the Minister will not accept this amendment and this course of action, I hope she will set out how she will take action on this issue herself, so house buyers across the country do not have to find the extra thousands of pounds just to pay the nice fat fee for the agent.

The other amendments we have tabled in this group also address challenges we believe are creating problems in our economy, in particular through these conflicts of interest. Amendments 2, 3 and 4 relate to conflicts of interest around services, in particular debt management and log book loans. The Minister will know of the Opposition’s concern about the personal debt bubble that underpins much of our economy, and in particular the number of people who are over-indebted. We know from the Money Advice Service that 9 million people in our country are already over-indebted, and half of these families live on incomes of under £20,000. This

16 Jun 2014 : Column 892

fragile situation has arisen despite our having had for more than five years the lowest interest rates in 300 years. It is likely that interest rates will start to rise, and personal debt may well rise at the same time—after all, wages are still not keeping pace with prices—so it is all the more important that people can access credit, debt advice and debt management services in an affordable fashion.

Amendment 2 deals with the problems caused by log book loans. Members who served on the Committee will be familiar with the Opposition’s determination to reform this outdated and outmoded form of credit. There are widespread problems: more than 1,000 consumers complained about these loans to the Office of Fair Trading, and they were complaining about losses of over £1.5 million. Many of them come from the fact that these loans are based on bill of sale agreements, a Victorian type of contract that does not include modern consumer protection. Again, the Government have repeatedly voted against our proposals to reform bill of sale agreements and therefore end this outdated and quirky practice that is causing so much detriment. The Minister stated that there may well be an argument for updating the legislation, but that this is not the Bill to do it in. Those of us who saw from the title of the Bill that it was about consumer rights and protecting consumer interests were, of course, rather concerned by that, but let me point her to the concerns of the Financial Conduct Authority and Citizens Advice, which also want to see bill of sale agreements reformed.

Christopher Woolard, director of policy, risk and research at the FCA, states:

“People who use logbook loans are often in difficult circumstances with few other borrowing options…Logbook lenders have borrowers over a barrel. People don’t realise their car can be seized if they fall behind in repayments, with lenders often forcing borrowers to pay large amounts to keep their vehicle when they can’t afford to.”

Gillian Guy, chief executive of Citizens Advice, argues:

“The logbook industry is still in the dark ages and has been getting away with lawless practices.”

Its own analysis of log book loan cases found that 14% had experienced harsh debt collection practices, almost a third were not treated fairly or appropriately by the lender, and nearly 20% had not understood the terms of the loan clearly.

It is inexcusable to leave this outmoded form of credit arrangement available for lenders to use, and for them to exploit people in this way, particularly as we know that increasing numbers of people are going to need consumer credit in the years ahead because of the debts they have. We cannot understand why the Minister will not make progress on this issue. I believe she does understand that log book loans need to be reformed and that the case we are making—that bill of sale agreements have no place in a modern consumer protection landscape—so why does she feel that that should not be part of this Bill? We urge her to look very closely at our amendment, which would simply bring bill of sale agreements under modern consumer protection laws and, again, give consumers the right to challenge any agreement that does not uphold those laws. Indeed, it would be a sad indictment of all the work she has done on the other parts of the Bill and all the consumer protection laws in them if she were to say there would be a get-out clause in other respects.

16 Jun 2014 : Column 893

6.15 pm

Amendment 3 also speaks to our wish to deal with the consumer credit landscape, and in particular consumer credit contracts that are designed to push people into debt as a way of propagating a service. Payday lenders are a case in point. Pushing people into debt is part of how they continue to make money and is part of the way in which the contract is structured, but we see that also with other financial agreements, particularly around debt management fees. Some 7% of British adults report struggling to get to pay day because of the debt management repayment plan fees they have undertaken to pay. Of the 50% of the public who struggle to get to pay day, for a third of them it is debt repayment that is causing the problem. Getting the structure of the debt repayment and the debt management system right is therefore vital for those who are in difficulty.

There are already 2.5 million people in debt management plans, and that is a conservative estimate. The fact that people are able to charge fees that are sometimes up to 50% of the amount a debtor pays only compounds the length of time for which the person is in debt. Just as with payday lenders lending to people at a rate of interest that more or less guarantees they will have to come back and take out another loan, we believe that it should be challengeable in court if somebody gives a debtor a debt management plan that would prolong their debt.

Let me give an example. StepChange offers a free debt management plan. It talks about a client who owes £30,000. When they were in a debt management plan they paid almost £6,000 extra in fees, which would extend the length of time they were in debt by 18 months compared with a StepChange-organised debt plan.

Amendment 3 would make any contract for a financial service open to challenge if it is likely to push an individual into debt. I am sure people would recognise that there is a conflict of interests in that. If something is supposed to help someone’s financial situation but actually does the reverse because there is a financial incentive for the company involved, how can that be a fair term for a contract?

Amendment 4 deals with another conflict of interest and we believe it would be beneficial to consumers to have the ability to challenge that in court. I pay tribute to my hon. Friend the Member for Middlesbrough (Andy McDonald) who is an expert on this issue. The cost of taking legal action can be prohibitive, but if people might struggle financially to claim compensation following an accident or unfair dismissal from work, legal expenses insurance can help cover the cost of making a claim, and it therefore makes legal action accessible to more people. Legal expenses insurance is often sold as an add-on in insurance contracts. One of the challenges, however, is whether the company concerned can act in the interests of the consumer when that legal insurance is used: as an insurance company has to pay out to cover the cost of legal fees, it may be in their interests for those legal fees to be as minimal as possible, but that may not be in the interests of the client. That may determine the nature of the legal advice given and action taken.

We believe it is important that consumers are able to access independent advice in dealing with issues around legal insurance and whether there is an inadvertent conflict of interests. We therefore believe consumers

16 Jun 2014 : Column 894

should have the right to get independent advice before being sold such policies, so they know the consequences for their legal cover if they take out a policy. We also believe it should be an unfair contract term to sell a consumer a contract for a service that limits their access to independent advice.

Andy McDonald: Does my hon. Friend share my concern that the Ministry of Defence has approved a particular policy under the banner of PAX that prescribes a single point of reference for legal advice and does not give members of our armed forces freedom of choice in that respect? Is it not reprehensible that we are in that situation?

Stella Creasy: My hon. Friend has just illustrated why I believe him to be the expert on this issue. I hope that he will contribute to the debate to explain why this concern about independent advice is so important. He is right about upholding the need for independent advice.

I am conscious that other Members wish to speak in this debate, so let me say a little about net neutrality, and our amendment to amendment 19. I recognise that this is a new and evolving debate. Our discussions have ranged from the Victorian bill of sale to the contemporary net neutrality, both of which reflect this stress over conflicts of interest. For those Members of this House who have not yet had the chance to watch the viral videos about net neutrality, let me explain the concern. Net neutrality is the principle that internet service providers and Governments should treat all data on the internet equally. They should not discriminate or charge by user, content, site, platform, or application. In layman’s terms that means that, whether we are looking at iPlayer, Sky on the Go or Netflix, there would be equal access to services. There would be no speed differential in accessing them.

In America, some broadband and internet providers have been exploring the idea of charging companies different rates for providing their services. That means that they could offer access to some websites at a faster rate than others, and therefore change the way in which consumers access them. The fear is that that would create a two-tier internet, because it will limit the number of sites that consumers can access with ease, and the number of companies that can access and operate services equally. In particular, if large companies were to use their financial muscle, or their internet provision, to restrict access to their competitors or to new entrants to the market, it could limit creativity and innovation in the provision of services. An internet without net neutrality moves huge market power to those who are the gatekeepers to our online services. It is little wonder that 100 companies, including Google, Facebook, Twitter and Amazon, have expressed concern about this issue. Indeed, “father of the internet” Tim Berners-Lee, who was rather unfairly described as a web developer recently, has argued that there is a real concern. He says:

“Unless we have an open, neutral internet we can rely on without worrying about what’s happening at the back door, we can’t have open government, good democracy, good healthcare, connected communities and diversity of culture. It’s not naive to think we can have that, but it is naive to think we can just sit back and get it.”

We welcome the amendment that has been tabled by the hon. Member for Shipley (Philip Davies), but we are concerned that the way in which it has been drafted may

16 Jun 2014 : Column 895

inadvertently imply that those sites that are providing pay-per-view services, such as Netflix, would be required also to provide access to some of their competitors, and I am sure that that was not what he intended. We have tabled a clarifying amendment to make it clear that we are talking about those services that provide access to the internet, rather than content.

It would be useful to hear from the Minister about what discussions she has had with her colleagues on the issue of net neutrality and about what action she is taking to ensure that consumers’ interests in the operation of net architecture are being upheld so that we do not have the concerns and challenges experienced by America. In particular, does she feel that existing protocols are strong enough to protect the interests of consumers and avoid competition issues between content providers, and has she done an assessment of the impact on consumers in the UK of a possible two-tier internet?

We have here some very different but interlinked issues around conflicts of interest, freedom of markets and consumer interest, and an effective piece of consumer rights legislation should provide consumers with the tools with which they can mount a challenge to any of them. We hope the Minister will accept our amendments in the spirit in which they are intended, which is about applying clarity in what is meant to the list of unfair contract terms that would give consumers the right to challenge issues in court. I therefore hope that the House will support them accordingly.

Philip Davies (Shipley) (Con): I seek to restrict myself to speaking to amendment 19, which I tabled. I am grateful to the hon. Member for Walthamstow (Stella Creasy) for what she said and for her general support for the thrust of my amendment. In the spirit of that cross-party co-operation, I should also make it clear that I am perfectly happy to support her amendment to my amendment. It is not my intention to press my amendment to a Division, but if the hon. Lady decides to press hers, I will of course support her, because her amendment does exactly what I intended my own to do. I hope that it will not come to that, because I hope that the Minister will make it clear that the Government accept there is an issue, understand it and say that they will do something to resolve it. If that is the case, I hope that the hon. Lady will withdraw her amendment, but we should wait to hear what the Minister has to say before we make any decisions along those lines.

Over the past 30 years, competition in the telecommunications industry has gone from a monopoly, through a duopoly to what is widely regarded now as one of the greatest success stories of privatisation, with the UK having one of the most vibrant and competitive markets in the world.

Additionally, the internet has become an essential part of our national infrastructure, transforming the way we work, play, gather information, communicate and trade. The internet provides the underlying infrastructure for many thousands of businesses and has slashed the cost of global communication.

In 2010, the Government, through the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey), said that they were supportive of open internet, which I hope is still the case. The reality is that some major fixed-line internet

16 Jun 2014 : Column 896

service providers and mobile network operators have not participated with the major industry-level agreement towards meeting that objective.

The success of the internet is based on global interoperability—the ability for anyone to interact with any legal internet site anywhere in the world. That has created new opportunities, businesses and jobs, while also reducing costs for consumers. I hope that both sides of the House will agree that an open internet is vital for the future economic, social and political health of our nation. New services are coming online at an incredible rate, and it is important that this vibrant sector is able to develop as society becomes more mobile and people’s habits change.

It is vital that organisations controlling access to the internet do not abuse their position by discriminating against legal services, data, traffic and content for commercial or political purposes, and from a protectionist perspective. Although telecommunications providers should be allowed to use certain traffic management techniques to manage the integrity of their network, it should not be at the detriment of rival services purely for anti-competitive reasons.

Over the past year, I have been made aware of increasing evidence that certain internet service providers are undertaking various marketing and operational practices that are distorting a competitive market, creating consumer harm, hurting a number of specific internet industries and stifling innovation. The activity includes blocking internet services that compete with their own on purely commercial grounds; not communicating to customers clearly at the point of sale that they offer only restricted access to the internet; and refusing to participate in the Government-supported pan-industry code of practice, which seeks to uphold open internet principles and which has been signed by some of the largest players, including BT, O2, Sky and 3. I believe that that verges on mis-selling. The lack of transparency and clarity that has persisted in the market has allowed consumers to be deceived by the practice of selling internet access when in fact significant parts of the internet cannot be accessed under the terms and conditions of some price plans.

It seems like the voluntary ways of ensuring greater transparency in providing internet and telephony services have failed. There have been clear examples where certain operators, particularly in the mobile sectors, have misled their consumers by claiming to offer internet access, or UK internet, when some legal internet services are not available within the package that has been provided. In other cases, the small print—when I say small print I mean it, as one would need binoculars to see some of the terms and conditions—outlines extra costs that the consumer would face if they dared to use the internet they have paid for to access services that compete with their provider’s own.

The fact that any operator is able to offer a product advertised with “internet access” and only have to clarify this policy in the small print is unacceptable. Unknowing customers who use popular services such as Skype, WhatsApps or Viber could see their service suspended but continue to be held responsible for paying their bills. That lack of transparency and clarity on these issues is totally unfair to these unknowing customers, and it continues, as consumers are in many cases unable to leverage competitive pressure because it is difficult to

16 Jun 2014 : Column 897

understand whether or not certain traffic types are allowed, blocked or just charged additionally. Ofcom’s consumer guide on internet traffic management from 2013 outlined the fact that consumers were not aware about traffic management practices undertaken by internet service providers and whether such practices would affect specific internet services that they used. How can consumers make an effective and informed choice if they are not fully aware of the practices of their internet service provider or mobile provider, and the potential of those practices to inhibit certain services?

6.30 pm

Dr Julian Huppert (Cambridge) (LD): The record will show that the hon. Member for Shipley (Philip Davies) and I do not agree on many issues, but on this one I agree with him completely and utterly. He and I are supporters of the Internet Telephony Service Providers Association, which has had many concerns about abuses in this area. Does he agree that we are talking not just about transparency, but about setting a fundamental rule that such bias simply cannot be allowed? Does he agree that we should support net neutrality throughout and not simply tell people when it is being broken?

Philip Davies: It is a red-letter day for me when the hon. Members for Cambridge (Dr Huppert) and for Walthamstow agree with me. I could not have envisaged such cross-party support, and if the Minister is able to withstand that I will be disappointed. We have a political consensus, of which I am usually very suspicious. I agree with the hon. Gentleman that the principle of net neutrality is the most important point. It is not simply a question of transparency; transparency is the minimum that people can expect. With my amendment, I am trying to ensure that we have net neutrality and truly open access to the internet, and to put an end to protectionist and restrictive practices that are against consumers’ interests.

I am referring to services including voice over IP, which is similar to Skype. Voice over IP allows consumers significantly to reduce their phone bills by using voice over the internet, instead of their mobile provider’s phone minutes and messaging services that use mobile data rather than text. It is especially important for consumers that that market works efficiently given Ofcom’s research finding that a quarter of the UK’s poorest households are mobile-only and are wholly beholden to mobile operators’ tariffs to enable them to access crucial services.

It seems perfectly reasonable to me that if a consumer signs a mobile phone contract that offers internet access, he or she should be entitled to use any legal internet service that they deem fit, not just the parts of the internet that suit their mobile phone company. I hope that hon. Members understand that customers who buy a mobile phone package rarely have the time or inclination to read through all the minutiae in the small print, even if they have the foresight to imagine all the services that they might want to use over the two-year life of their contract. Surely, customers have the right to expect that an internet service will do what it says on the tin. Consumers should, therefore, be able to rely on statutory consumer protection regulations to protect them from such abusive practices.

16 Jun 2014 : Column 898

Given the rapid evolution of the internet, I do not think that it would be wise for Parliament to attempt to define everything that the internet is and does for the future, but I am convinced that the current unfettered ability of telecommunications providers, whether they be internet service providers or mobile operators, to decide what customers can and cannot access is harmful to consumers and to the wider economy. As I have outlined, those practices not only create significant consumer harm but stifle competition—for example, in the market for non-geographic and international calls—which leads to exorbitant prices and discourages new entrants to the market.

There is also concern surrounding future innovation and economic growth. If innovators have no certainty that networks will carry their services, particularly if they rival products offered by the networks, companies will be less likely to invest in new services because the return on investment will be unpredictable. How can a provider who wants to build a mobile app have any certainty that the mobile network operator will not block his rival service and/or make it extremely opaque at the point of sale whether consumers can actually access those services? Such things should be of great concern to us, because they will stifle growth in a sector that is incredibly important to the future prosperity of the country.

When I asked representatives from Ofcom about the matter during a Select Committee on Culture, Media and Sport hearing last summer, there was an acceptance that some undesirable blocking was being undertaken by certain mobile operators around specific internet services, and that more needed to be done to ensure that telecommunications providers were transparent and up front with their customers. Ed Richards, the Ofcom chief executive, outlined the industry voluntary code on the transparency of information given to consumers about traffic management practices. I have grave concerns about whether the information that providers are supplying to their customers is helping in any way, shape or form. Ofcom’s research in September 2013 demonstrated that consumers were not aware about traffic management practices when making their purchasing decisions.

Together with the internet code around transparency, the industry has created a voluntary self-regulatory code on maintaining the open internet. I believe that the code is a good one, and it will be an effective tool for protecting consumers and businesses. The significant problem is that some major providers are yet to sign up, nearly two years after the launch of the initiative. Given that there is no obligation on UK telecommunication providers in that area, those providers that are transparent and allow access to services could easily change their minds tomorrow and not be subject to any action.

Therefore, I think it is time that the House recognised that unless more action is taken, certain industry players will continue to use clever marketing tactics and rely on the lack of consumer understanding to mislead their customers, distort the market and damage new and innovative internet services that threaten their own products. That is why I have proposed amendment 19, which would protect consumers from the practices that I have described. The amendment would ensure that anyone selling internet access, or using any similar term, will not be able to rely on any unreasonable or unusual definition of that term to restrict their customers’ access to legal parts of the internet.

16 Jun 2014 : Column 899

I have made it clear, and I am grateful to the hon. Member for Walthamstow for doing the same, that I do not seek in any way to limit the ability of internet service providers to block access to sites for the purposes of child protection. Nor would my amendment prevent internet service providers from offering age-related content blocks where customers request them. I certainly would not want to do anything to change that. That is why I would be happy to support the hon. Lady’s amendment if she seeks to divide the House.

Amendment 19 would give customers confidence that when they sign a two-year contract that offers internet access, they will get full internet access and will not be left with a contract that they cannot get out of that does not do what they thought it would when they signed up to it. It is essential to preserve and protect consumer access to the legal internet. We cannot allow internet service providers to decide for themselves, based on their own commercial interests, what customers can and cannot access while still marketing their service as internet access.

The protection offered by amendment 19 would benefit all consumers, but it would also spur innovation, growth and job creation in a sector that is vital for the future prosperity of the country. Therefore, I urge hon. Members to support my amendment or the amendment tabled by the hon. Member for Walthamstow. I hope that we will not have to press the matter to a Division, because I hope that the Minister will understand the strength of the case that we have made and reaffirm that the Government will deliver on open internet access. If she is not prepared to do that, I hope that the hon. Member for Walthamstow will press her amendment to a vote, which I would support.

Helen Goodman: I would like to congratulate you, Madam Deputy Speaker, on your recent damehood. I know that a knighthood is a real thing, but I am not sure whether a damehood is a thing. However, it is a very well deserved recognition of your excellent service to the House over many years, and I am sure that all hon. Members were delighted to hear the news.

This is a marvellous occasion for another reason. It is wonderful to be in the Chamber in agreement with my hon. Friend the Member for Walthamstow (Stella Creasy) and the hon. Members for Shipley (Philip Davies) and for Cambridge (Dr Huppert). That is a fantastic coalition, and it shows what a beacon of free speech the House of Commons is, because that principle has motivated everybody to get involved in the debate. I believe that the principle of net neutrality is the principle of free speech in the modern world. My hon. Friend set out a clear and cogent case for amendment (a) to amendment 19, and the hon. Member for Shipley proposed amendment 19 comprehensively. I shadow the Minister with responsibility for communications and creative industries, the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Wantage (Mr Vaizey), and I hope that the Minister at the Dispatch Box, the Under-Secretary of State for Business, Innovation and Skills, has had some conversations with him since, in many ways, this issue falls into his bailiwick.