HC Deb 22 March 1963 vol 674 cc811-911

Order for Second Reading read.

11.10 a.m.

Sir Harry Legge-Bourke (Isle of Ely)

I beg to move, That the Bill be now read a Second time.

This Bill concerns members of a profession and others who provide a service to the public. Probably the best service I can do for the House is to begin by giving some of what I might call the vital statistics of these people. In the First Schedule is listed the names of three chartered and four non-chartered bodies. The Royal Institution of Chartered Surveyors has a membership of about 17,000 people, between 1,500 and 2,000 of whom operate overseas while the remainder, more than 5,000, are actively engaged in estate agency. About 40 per cent. of its total membership is in the public service.

The Chartered Land Agents' Society has 1,300 members, most of whom are concerned with the buying, selling, letting and leasing of land. About 450 of them are in private practice as estate agents. The Chartered Auctioneers' and Estate Agents' Institute has nearly 8,000 qualified members, about 6,000 of them being estate agents. The Incorporated Society of Auctioneers and Landed Property Agents contains about 3,200 estate agents. The Incorporated Association of Architects and Surveyors and the Rating and Valuation Association do not have many estate agents among their members, but they insist on qualifications and codes of conduct along lines similar to the chartered bodies. The Valuers Institution Limited has more than 3,500 estate agent members.

Those figures give a total of about 17,500. All the bodies into which these people are organised support the Bill. I would make it clear that not every member of every body necessarily is absolutely in tune with the policy agreed by the organising representatives of those bodies. There are about 7,000 estate agency businesses in England and Wales, operating from about 10,000 separate offices. Scotland is in a rather different position, as the majority of estate agency is carried out there by solicitors, so that the number of estate agents is much smaller. The Institute of Auctioneers and Appraisers of Scotland has a membership of about 340, the majority of them being mainly concerned with livestock auctioning, although most of them do a small amount of estate agency. I believe that one has a substantial estate agency business in Hawick.

Of the 7,000 businesses in England and Wales, more than three-quarters of them are connected through one or more partners or directors with one or more of the professional bodies I have mentioned. The most accurate assessment I have been able to obtain of the total number of individual people who have accepted the rules of conduct for practising estate agency is between 19,000 and 20,000. It appears that there are about 1,500 firms not attached to any of the bodies I have mentioned. However, many of these people are members of local estate agents' associations, of which there are about 70 throughout the country, and the vast majority of them have joined the other bodies I have mentioned as being in support of the Bill.

When a Bill of this kind comes before the House one of the first questions one is asked is, "Why pick on this particular group of people as the subject for legislation?" Why, indeed, pick on estate agents? One good reason for doing this is because the experience of the best disciplined of these people shows the need for a Bill of this type. Their reasons for this need are based largely on their concern about the abuses which have been happening since 1945.

I will give a few examples, although I am sure that many hon. Members will have too many of their own. I believe that these examples completely refute the rather ludicrous observations made in a letter sent to most hon. Members a few days ago by Mr. Roy Brooks, a partner in a firm—with his father, I think—operating in Gloucester Lodge, London, S.W.7.

The second paragraph of that letter opens with the words: The worst that an independent agent can do is to sell an owner's house better and quicker. If that was the worst an independent agent could do there would be no need for the Bill. This is, perhaps, also the best answer to the equally ludicrous assertions made in an article in the Daily Express this morning.

One of the most notorious cases of all concerns a solicitor who was struck off the register in 1940 for unprofessional conduct and who opened an estate agency in Knightsbridge. In the space of five months, without the authority of the owners, had obtained £21,500 from 71 different people in respect of the same two flats which he let over and over again, each time taking a rake-off of between £250 and £500 for furniture, fittings and fixtures.

Having fraudulently converted the lot he absconded to France, was extradited, got ten years' imprisonment here; and there is nothing to prevent that man, under the law as it stands, from opening up again in estate agency in Britain tomorrow. That is about the worst case that I have come across, although there have been many not-dissimilar cases and hon. Members will be aware of a lot of them.

The hon. Member for Erith and Crayford (Mr. Dodds)—who asks me to apologise for his inability to be here today—has provided me with a copy of a Kent newspaper which, in a recent article, published the details of something that has been happening in Welling. This shows clearly what I am trying to emphasise. Another recent case involved several thousands of pounds, also fraudulently obtained. In this case, 88 people lost more than £20,000 as a result of the activities of an estate agency. The same sort of thing has happened in Bristol—where 47 people lost over £5,500—Rugby, Manchester, Cheam, Rhyl, West-cliff-on-Sea, Sheffield and in many other places. An article, under the heading: Estate Agent for Trial on Fraud Charges in the Kentish Independent stated on 15th March last: Most of the people concerned had given the agency their life savings. That is the point I am particularly emphasising.

One of the worst examples concerned a man, thrice made a bankrupt and thrice convicted of fraud—in Preston, Liverpool and London—who caused 26 people to lose £9,000 in deposits on house purchase. There are many similar cases and the point is that it is not only malice afore- thought that causes these losses to the public. In Bristol, the solicitor acting for the housing committee in a recent case said how unfortunate it was that no professional qualifications were necessary to enable anyone to start an estate agency. In Sheffield, the Assistant Recorder, sentencing a man for fraudulent conversion, said he had found it incredible that an almost illiterate man who had no knowledge of estate agency could not be stopped from setting himself up as an estate agent.

Thus we have before us a situation in which anyone can set up in business as an estate agent without any qualifications and governed by no code of conduct. Despite this he is able to assume business activities in that capacity between prison sentences. It is not surprising that the more reputable sections of the profession want to avoid such outrageous exploitation of the public by a minority. It is not only those bodies I have mentioned and their members who are appalled by the exploitation that goes on. Many of the unattached people feel just as strongly.

It is important to remember that the vast majority of known cases have resulted from the actions of unattached, unqualified and unscrupulous people who have set themselves up in businesses as estate agents. Of the bodies whose names I listed earlier there are only seven known cases since the war in which any of their members have been found guilty in court of offences dealing with estate agency, and not all of those involve financial loss.

The biggest sum of all was comparatively small and did not result in personal gain to the person concerned. Nevertheless, all those people were struck off from membership of their own societies. I hope, therefore, that I have provided the House with sufficient evidence to establish that there is need for some action.

What are the courses we could adopt—

Mr. William Shepherd (Cheadle)

Before my hon. Friend leaves that point, is he able to tell the House what has been the total loss from defalcations by agents over, say, the past ten years?

Sir H. Legge-Bourke

I cannot give an accurate figure. The only figure I have seen mentioned publicly was one in the Sunday Pictorial, a little time ago, when it was stated that £1 million was lost last year. I doubt whether it is as much as that, but I do not think that we should over-emphasise the importance of the total amount lost. What we have to remember is the number of people who have put their small life savings into a house through one of these agents and have lost their all. They get no compensation whatever, so the total sum is relatively unimportant in comparison.

It is quite true that the criminal law ensures that when a man has committed an offence of this kind he can be brought to book and punished, but all too often there is no compensation whatever for those who have lost their money. And how many cases are not brought at all because those who have had these grievous losses would prefer to bear them and grin, rather than face the publicity a criminal case so often means?

Some years ago, the sponsoring bodies seriously examined the possibility of seeking to introduce a licensing system, but found that they had to reject it, not least because of the difficulties of administering any form of qualifying examination under a licensing system, and because of the difficulty of ensuring a gradual improvement in the standards adopted by those practising estate agency. If a Minister were made responsible for licensing, I suggest that there would be a severe risk of severe injustices being done to the individual were an attempt made by an inadequately informed person to have a licence withdrawn or refused—to someone whom, perhaps, he merely disliked.

I am not impressed, either, by the argument that because in some other countries licensing systems are operated it means automatically that a similar system could be introduced satisfactorily here. I am sure that all hon. Members would accept that conditions in Britain have such special features as to make it essential that we should adopt the method most appropriate to our own conditions. That is especially true because of the extraordinary concentrations of population we have, as compared with, say, Canada, where they have a system such as this, which I have examined in detail.

Licensing for the selling of goods may work satisfactorily in this country, but I and the sponsoring bodies think that, from the individual client's point of view, house purchase is essentially a capital transaction. It is, perhaps, the most important capital transaction most individuals ever undertake, and to treat this sort of operation on the same basis as betting shops, dance halls, news-agencies and tobacconists seems to be inadequate.

My right hon. Friend the President of the Board of Trade, whom I approached on this subject, said that his was not the Department to be concerned with house agency. It is essentially a matter for the Home Office, and it is for that Department to advise us on Her Majesty's Government view of the relative merits of licensing and legislation.

Hon. Members may recall that at the beginning of this Session we were all sent a number of documents. The first we had was "The Statutory Registration of Estate Agents," issued by the sponsoring bodies whose names I have already mentioned. At the same time, we had, "Why All Estate Agents Should Be Licensed by Law." These arrived, for me at least, before the Ballot for Private Members' Bills, and of all the challenging documents that one receives before the Ballot, I thought that these dealt with something that had to be dealt with fairly soon.

When I was fortunate enough to succeed in the Ballot and agreed to promote on this Bill, I was very anxious to give both myself and others a further opportunity of considering the relative merits of licensing and registration. I was then unaware of the history in the preparation of this legislation. In November last year, therefore, I had a meeting with those representing the body that had prepared the case for licensing by law—a body which calls itself the National Association of Estate Agents.

I listened very carefully to what the members of that deputation had to say, I undertook to consider the points they made, and promised that I would publish the Bill not less than one month before Second Reading—that is, 22nd February. As I also intended immediately to ask, and did ask, the sponsoring bodies for their views, I asked the members of the Association to refrain, if they possibly could, from too much public advertising in the meantime, so that we should have the chance to regard the matter quite dispassionately.

To ensure that the Title of the Bill should not deny the possibility of licensing being considered, I took steps to extract from the Title, as it then was in draft, the word "registration". That is why that word does not now appear in the Title—originally it was the Estate Agents Registration Bill.

I then examined in the greatest possible detail the merits of licensing and of statutory registration, but the more I went into it the more convinced I became that registration was the proper method. In examining the cases of abuse, it became more and more evident to me that estate agency could be effectively disciplined only if as many as possible of those practising it could be given the maximum amount of responsibility. I was reinforced in this view by the obvious readiness of the vast majority of those practising estate agency under a voluntary code of conduct to undertake this task.

The case of the sponsoring bodies was all the stronger when one compared their record with that of the unattached operators. I discovered, also, that those urging licensing had only organised themselves into an association as recently as March, 1962—last year. Their membership is a small minority of a minority. I see today that a membership figure of 1,000 is claimed. It appeared to me that their reason for proposing licensing was not that they really wanted any control, but simply that they regarded a code of conduct voluntarily entered into by the chartered bodies as being restrictive in what they still regarded as a purely commercial activity.

I accept that the agencies themselves have still very largely to regard estate agency as a commercial matter, but from the clients' point of view it is essentially a capital transaction. In other words, this Association was formed deliberately to resist a Bill involving registration, and whereas those favouring registration had prepared a Bill, those favouring licensing had not done so, although they expressed a readiness to produce a draft Bill after consultation with Her Majesty's Government.

Since the issue of "Why All Estate Agents Should Be Licensed By Law," we have been sent a document by the same body a document called, "Fifty Years of Futility." This reminded me of a parson castigating those who had come to church for not coming sooner. The document repeated the proposal for licensing. We then had the document, "Beware Monopoly" from the same body. I do not propose to go into that one in detail, because a brilliant reply to it has been given in two articles in the Estates Gazette issues of 9th March and 16th March. I hope that all hon. Members who are interested in the rules applied to by the supporting bodies will study those two articles before this Bill goes to Standing Committee, if it does so.

Since then, however, there has been a major change of ground by the opponents of the Bill. They are now urging that there should be no legislation at all until there has been carried out a full inquiry into estate agency throughout the country.

The latest document which hon. Members may have received a few days ago is "The Case Against the Estate Agents Bill." I do not know whether the members of this Association realise it, but they are making the allegation that the Secretary of State will deliberately connive with the Estate Agents Council to delay the establishment of a compensation fund under my Bill by fiddling the fixing of the appointed day. I have studied this latest document with great care, but, frankly, it is so inaccurate that I simply have not the time while introducing the Bill to go into detail on the matter. I hope that hon. Members when they study the document will also study the articles in the Estates Gazette and also my Bill.

The chartered bodies, on the other hand, have been preparing their Bill to provide for registration since as long ago as 1959 and they would have sought to introduce a Bill like this one into Parliament over a year ago had it not been for the fact that the Home Office, without, of course, committing itself to the merits of licensing or registration, decided to consider the draft for registration in detail. This was being done when I took the Bill over. I say this in no way attempting to commit the Home Office, but merely to ensure that hon. Members may be aware of what was happening in anticipation of the Bill. I would make it clear, however, that the Bill in all probability would have been brought before the House in one form or another before the Association which is now opposing the Bill had ever been formed.

Despite all these facts. I have done my best, nevertheless, to honour all the obligations I undertook to the Association when I met its representatives in November. I think it is only right that I should tell the House the response. The Association did not feel able to refrain from public advertising, for I make no complaint about that, but the sponsoring bodies, at my request, have indulged in no advertising whatsoever since I took over the Bill. Certainly, there have been extensive articles in the Estates Gazette, but the sponsoring bodies have had no responsibility for them and, as far as I know, the editor has been acting entirely on his own volition in publishing what has appeared in that journal. I have never met the editor and have never communicated with him. He has been an entirely free agent as far as I am concerned.

I warned the Association, however, that the wording of the Bill had not been finally decided but that as soon as it was completed I would provide the Association with a copy. On the morning of 22nd February, exactly one month before this Second Reading, I rang up Mr. Davis, of the Association, and told him that the Bill was now published and that I was arranging for a copy of it to be taken to him by hand. I suggested that he should consider the Bill in detail and I said that I should he very glad to meet him and his friends when he had had the time to do so.

To my astonishment I read in the Press the next day that he described the Bill as "deceitful". He then gave wide circulation to various documents which were wrong in several respects as to the facts about the Bill. Mr. Davis also gave me an assurance on the telephone about an allegation which he had made in the meantime in various adver- tisements in The Times and the Economist suggesting that the backers of the Bill had refused to meet the independent agents, which I took to be a monstrous reflection on hon. Members who had put their names to the Bill and had left me to carry on the negotiations. He then repeated the advertisement containing the allegation, but he has now shifted his ground to the extent of urging that there should be an independent inquiry into estate agency before any legislation is considered. I leave the House to judge these facts for itself.

I should now like to turn to the actual provisions of the Bill. Under Clause 1, it is proposed to set up an Estate Agents Council. The composition of this body will be somewhat difficult for hon. Members to understand and I realise that the arithmetic is not easy to get right from a reading of the text of the Bill. I suggest that hon. Members in considering the first Clause should link it with the First Schedule.

First, there are four independent people who will have to be nominated by the Secretary of State to represent the public. They must not be practising estate agents or be on the register. There are to be 24 people, eight coming from each of the three chartered bodies. Although I think that as the years go by these figures may have to be altered considerably, I regard them as a reasonable start and as a number which ought to continue for a number of years to allow the council to play itself in.

In addition, for the first three years there will be six people nominated by the Privy Council after consulting the four non-chartered bodies mentioned in paragraph 2 of Schedule 1. A further five places will he available in the first three years for other recognised bodies, and after three years these will be increased to ten places which will be available to all these bodies.

Mr. Ron Ledger (Romford)

Could the hon. Member make clear at this stage whether these appointments will be made at the beginning of the period or does the provision mean what it says and will they be appointed during the period? Could they be appointed after two years?

Sir H. Legge-Bourke

Some of them could be so appointed. If they are, there is provision for an adjustment in the balanced figure.

Mr. Ledger

Where is the figure 5 mentioned in the First Schedule?

Sir H. Legge-Bourke

The hon. Member will find from page iv of the Explanatory Memorandum that during the period the number of registered persons nominated by bodies mentioned in paragraph 1 (c) of Schedule 1, that is the recognised professional bodies other than the chartered bodies, will not exceed five unless more than that number of those bodies have been recognised. This figure is linked very closely to the number of bodies which will have been recognised.

To sum up and to simplify—and I appreciate the difficulty of these figures —when we start there will be four members appointed by the Home Secretary, and possibly including one from Scotland nominated by the Secretary of State. There will be 24 people from the chartered bodies and then there are the six people from the bodies named in paragraph 2 of the First Schedule, plus a possible five from other recognised bodies and finally three people nominated by the Privy Council to represent the unattached agents. This comes to a total of 42 which may possibly be increased.

Mr. F. P. Bishop (Harrow, Central)

I still cannot find the figure 5 which my hon. Friend mentioned. I am looking not at the Explanatory Memorandum, but at the Schedule.

Mr. Roderic Bowen (Cardigan)

It is in paragraph 4 of the First Schedule.

Sir H. Legge-Bourke

Yes, it is in paragraph 4 (2) of that Schedule.

The total of 42 will possibly be increased if there are more recognised bodies than we expect there will be. After a preliminary period we then move to the final set-up in which we still have the four members appointed by the Home Secretary, and possibly the Secretary of State for Scotland. We still have the 24 members from the chartered bodies and the group of 10 who will embody the six, and possibly five, and then four instead of the three to represent the unattached agents. This still gives a total of 42, with a possible increase if other bodies become recog- nised, as I hope they will. Before the two years are over the Estate Agents Council will have to submit a scheme providing for up to four people to represent the unattached agents. This will have to come into force three years after the appointed day.

I should like to give the House one assurance. I propose, in Committee, to move an Amendment to ensure that the Secretary of State for Scotland will nominate at least one member from Scotland. The chartered bodies have already undertaken to their Scottish members to include representatives from Scotland in their nominations in each group. This requirement I shall also seek to write into the Bill.

Examinations under the Bill are covered in general by Clauses 1 (1), 3 (2) and 5 (1), and, no doubt, hon. Members will wish to examine those provisions. They empower the Estate Agents Council to carry out examinations.

Under Clause 4 the Council will maintain an Estates Agents Register, and Clause 5 defines the persons who are qualified to go on to the register. I would make clear at once that there is no intention whatsoever to elbow out those already practising estate agency or to compel them to take a qualifying examination. They will have to come under a code of conduct, but, provided they were practising as estate agents on the day on which the Bill was published, namely, 22nd February, and are prepared to abide by the code of conduct, they can register. This right will be open for a period of two years from the appointed day.

Whatever date one fixes, there is bound sooner or later to be a hard case, and I already know of two. We shall have to consider these hard cases in Committee, but we obviously must not so open the door as to allow a rush of people who have no experience whatsoever to come in just in time. That would defeat the object of the Bill. Whether or not they are practising as estate agents today, all qualified members of the recognised professional bodies will be eligible to come on to the register should they so wish. So will any individual who is not a member of those professional bodies, provided he satisfies conditions as to his good character and professional qualifications. The precedent for this procedure is the Opticians Act, 1958. Those conditions will be decided by the Privy Council, and under Clause 17 {3) the Statutory Instrument containing them will be subject to the negative procedure in either House of Parliament.

Clause 6 goes on to deal with cases where a decision by the Estate Agents Council regarding qualifications is challenged by an applicant. He can appeal to the High Court or, if in Scotland, to the Court of Session, or if he is one of those independent people covered by the two-year rule, he can appeal to the tribunal referred to in Schedule 2.

Clauses 7 and 8 deal with certificates of registration and the removal of names wrongly entered, and the latter will be decided by an investigating committee which is one of the two committees set up under Clause 2. The other committee referred to is the advertising committee to which I shall return in a moment.

Clause 10 obliges the Estate Agents Council to draw up and submit to the Privy Council a code of conduct. It is this Clause which causes the greatest concern to the independent agents and those who believe in unfettered and free competition. Both the chartered and supporting bodies have their own professional club rules, so to speak. The effect of these is that disciplinary action can he taken when their members are convicted of crime, go bankrupt, conduct themselves in a manner prejudicial to professional status or to the reputation of their society. Other offences include carrying on professional or commercial activities inconsistent with the membership of their society; if they tout for business—this is one of the most provocative of all the issues—and if they fail to notify a client that if another agent is already appointed they cannot accept instructions direct but only as a sub-agent. Another offence is failing to comply with the required standards of advertising.

I have mentioned some of the most contentious of the things which are covered by the club rules of these chartered bodies. The list is longer than that and, no doubt, hon. Members will wish to deal with it at a later stage of the Bill. Doubtless, there will be those who feel that some of these rules are an infringement of individual liberty that an honest man ought to be allowed to exercise. If all men were honest, I would agree entirely. I would here make clear, however, that I cannot believe that the four independent members appointed by the Home Secretary will simply become passengers on the Estate Agents Council and allow unnecessarily restrictive practices to be included in the code of conduct. Nor do I believe that the Privy Council will be prepared to approve a code of conduct which is objectionable on such grounds.

Let us recognise that by far the most frequent method employed by those who have ended up in court has resulted from unrestricted touting and dishonest advertising. Anyone who reads the daily, weekly and monthly journals, whether national or local, must have seen the ample opportunity that those who do abide by codes of conduct similar to these have, and enjoy those facilities to the full to keep the public informed of properties that are coming into the market.

I should like, however, to draw attention to Clause 10 (1, b). This also is based on the Opticians Act. 1958, and it presupposes that there may he different methods suitable for, say, business transfer agencies, apartment agencies and others than were advisable in the case of ordinary estate agents, I know that both the business transfer agencies and the apartment agencies have been somewhat worried, perhaps by not fully understanding the full import of the word "particular" in Clause 10 (1, b) Both the Estate Agents Council and the Privy Council will obviously take account of this, and in Committee I should like to consider in detail the special needs of each type of agency.

Clause 11 lays down various requirements—

Mr. Charles Curran (Uxbridge)

Before my hon. Friend leaves that point, would he please elaborate a little more on the words: touting for business or as being calculated to attract business unfairly"? Does that mean that limitations will be imposed upon people seeking or soliciting business by means of advertising? What kind of limitations has my hon. Friend in mind?

Sir H. Legge-Bourke

It depends largely on the way in which it is done. It is the "backdoor merchant" who puts his foot in the door when he sees that a property is in the market and bamboozles some good lady, who is perhaps getting on in years and has no idea of the legal niceties of these matters, to sign some document or other and commit herself irrevocably. That is the sort of thing we want to stop. We do not want to narrow the field where an honest person wishes to sell a house perfectly honestly.

So far as advertising is concerned, there are ways, too, in which this can be done. There are times when advertisers have made themselves out to be what they really are not, when they have said that they operate the scale of charges adopted by one of the chartered bodies. They are not members of one of those bodies, and yet their name appears on the letter heading, giving the uninitiated the impression that they are what they really are not.

Dr. Alan Glyn (Clapham)

This question of advertising seems to he a most important division between those who are registered chartered surveyors and those who are unregistered. Is it my hon. Friend's intention more or less to preclude any advertising by a firm which is in conflict with the chartered companies' practices?

Sir H. Legge-Bourke

It is a question of degree and reasonable good sense, and the insurance that the public are not going to be stampeded into doing something which, had proper advertising taken place, they would never have done. That is the object. There is no wish to be unduly restrictive. I am prepared to believe that some of these rules operated now by the chartered bodies will not prove acceptable to the Estate Agents Council, the Minister's representatives upon it, or the Privy Council.

Mr. L. M. Lever (Manchester, Ardwick)

Is the House to be given an opportunity to consider this scheme and the rules laid down in connection with the conduct of the members?

Sir H. Legge-Bourke

There is a big case for doing this, but, on reflection, is this really wise? The advertising of land and buildings is essentially a technical matter. What I believe would be far better would be that we should have this arrangement worked out by real experts rather than by hon. Members who, with the best will in the world, have not the necessary qualifications to do the job as well as it ought to be done. That is one of the reasons that we have brought the Privy Council into this matter, and that is why we feel that it is essential that the Minister should appoint members of the public on to the Estate Agents Council to ensure that the public's point of view is properly looked after, as well as ensuring at the same time that in trying to do that we do not put into it something which is a technical nonsense because we have not taken the right technical advice.

I am anxious to meet the House in every way in this matter. It is one of the biggest bones of contention in the Bill, and in Committee I shall go as far as I reasonably can. But it would be unwise to impose upon the Standing Committee the job of approving the drafting of the code of conduct.

Mr. William Warbey (Ashfield)

The hon. Member is urging that the Bill should go on to the Statute Book. Can he tell me where there is any reasonable definition, either in this Bill or in any other Statute, of the phrase "touting for business"?

Sir H. Legge-Bourke

I should have to check that. I think that everyone knows what it means. I can give a perfect example. If one knows that a property is already going into the market and that it is going to someone else one may try to take it from the other person, and possibly stampede the unfortunate owner into doing it, It also means going around hawking ones wares, as it were, if one is a person who likes doing this and trying to get business by means which are undesirable. That is the important qualification—by means that are undesirable in the best interests of the public.

Clause 11 lays down various requirements regarding the keeping of accounts. Clients' deposits are specifically mentioned as a separate matter. This drafting broadly follows Section 29 of the Solicitors Act, 1957. Section 32 of that Act and its Second Schedule are the basis for Clause 12. This refers to the establishment of a compensation fund. When I first took, over the Bill, the drafting then made it only optional for the establishment of such a fund, very soon formed the opinion, however, that there ought to be a compulsory compensation fund, and I am very grateful to the sponsoring bodies for the ready way in which they have met my request. I am more than astonished, however, at the failure of those opposed to this Bill to recognise this very substantial charge.

There is one thing, I understand, that one cannot do in the field of insurance. One cannot take out a policy against one's own dishonesty, however effectively one may be able to cover the misdeeds of those that one employs. Fidelity bonds have to have three parties. Sometimes this is a complicated process. Although I know that many firms take out fidelity bonds—and I personally warmly applaud them for doing this, and there is nothing in the Bill to prevent them from going on doing it—one of the difficulties about a scheme of that sort is that it has to he tailor-made for each firm. Hon. Members must face this. The premum charge varies from 5s. per cent. to £1 per cent. If we compel the operation of the fidelity bond system, then quite possibly we might find the higher rate being charged on the smaller firms and the lesser rate being charged only on the members of the chartered bodies for example.

I think that this is a point which hon. Members should bear in mind before they finally make up their minds what system of insurance we should adopt. It seems to me essential, however, that a compensation fund should be established, and although I should much have liked to have made it instantaneous on the setting up of the Estate Agents Council, I think that we have to face the problems that arise.

Not least, I think that we must realise that until the two-year period has expired for application to come on to the register by those practising at the date that the Bill was published, no one will know how many registered estate agents there will be, and until this is known it seems to me quite wrong to lay down rates of contribution for such a fund. Hence my decision to give three years to the Estate Agents Council to draw up and submit to the Privy Council a scheme for such a fund—but it must do it. It will probably begin by being up to a maximum of say £100,000. The need for discretion in the use of this fund entirely arises because we have to avoid placing upon the Estate Agents Council the obligation to compensate a claimant who is himself dishonest. Unless we give that power to the Estate Agents Council it would have to fork out even if the man claiming is known to be dishonest.

I now come to the work of the disciplinary committee. It has been erroneously alleged that the Estate Agents Council will have a complete monopoly of power to strike off anyone from the register it cares to strike off. This is totally untrue. The machinery is based on the Architect's Registration Acts, 1931–38, as improved by experience. If a complaint is made to the Estate Agents Council alleging that a registered estate agent has infringed the code of conduct, the Estate Agents Council will pass the case at once to the investigating committee, the investigating committee, if it is satisfied that there is a prima facie case, must then pass that case to the disciplinary committee.

This Committee is set up in accordance with the Second Schedule of the Bill, and the Lord Chancellor will appoint two or more persons who will be barristers-at-law of at least ten years standing. For Scotland a similar provision enables the Lord President of the Court of Session to appoint advocates, and one of these persons will always be the chairman. The Committee may sit in two or more divisions. This is especially important from the Scottish point of view. Any person against whom an order has been made by the disciplinary committee may within three months appeal against the order to the High Court or in Scotland to the Court in Session.

Clause 15 refers particularly to companies and must be read in close conjunction with Clauses 20 and 21. Clause 20 is really the kernel of the whole Bill. A company operating as estate agents cannot register as such, but it is obliged to have only directors who are authorised practitioners. In other words, they must be on the register of estate agents as individuals. In cases where the company's business is only partly concerned with estate agency—Harrods is an obvious example and Hamptons is another—the directors responsible for the conduct of that part of the business must be authorised practitioners and so also must be the manager of any branch. The term "authorised practitioner" is defined in Clause 15 (5).

I wish to draw attention only to one particular point in Clause 16, namely, the exemption in Scotland of lettings for six months or less. This was to meet a special point raised by the Law Society of Scotland, which, I understand, is now satisfied on that count.

Clause 17 I have already referred lo. It concerns the power of the Privy Council to approve, with or without modification rules, schemes or statements made by the Estate Agents Council, and allows for amendment to such rules, schemes or statements to be negotiated by the Estate Agents Council. In Committee I shall be interested to hear what hon. Members have to say about the need to extend the range of those people who could seek to obtain amendments. I think that we may have to widen the field beyond the Estate Agents Council itself.

I should now like to say a word about appeals by professional bodies. Under Clause 3 (7) of the Bill, where the council refuses to grant recognition to a professional body, the body may appeal to a tribunal set up by the Lord Chancellor, or if in Scotland by the Lord President of the Court of Session. Details of this tribunal are given in Schedule 3 of the Bill.

I deeply regret that in what was by and large a brilliant assesment of the Rill the Editor of the Estates Gazette on 2nd March should have suggested that the Lord Chancellor might appoint the presidents of the chartered bodies to serve on the tribunal, and that the Privy Council would be a better tribunal. I have been in touch with the Lord Chancellor who told me that such hearings are not suitable for the Privy Council, and that he certainly would not appoint, nor could he see any successor of his appointing, a president of one of the chartered bodies. His nominees would always include a suitable lawyer to act as chairman, and I think that he may prefer to be as free as possible to include other people with appropriate qualifications, such as for accountancy.

Clause 20 begins by making certain exemptions. These are not intended as loopholes for evasion of the Bill. Solicitors are exempted because they already have their own statutory roll and their own compensation fund. The Institute of Chartered Accountants in England and Wales and Scotland, the Association of Certified Corporate Accountants, the Institute of Chartered Accountants in Ireland and any other accountants recognised under Section 161 (1, a) of the Companies Act, 1948, which deals with those whom the Board of Trade accepts as proper persons to carry out public audits and architects who have their own rules under the 1931 and 1938 Acts are exempted. Save for solicitors in Scotland, all these bodies are forbidden by their own rules to act as estate agents. I know that there are other accountancy bodies, especially the international associations and secretarial bodies, and individuals who are concerned with this Clause, and we shall have very carefully to consider their cases on their merits in Committee.

The Clause then goes on to define exactly what is meant by "carrying on business as an estate agent". I think that what subsection (2) of the Clause means is very well set out in the first paragraph of the Explanatory Memorandum. Perhaps I might read it to the House, because it sets out the situation as clearly as possible: The persons to be treated as carrying on business as practising estate agents, and therefore coming within the scope of the Bill, are those who (i) in connection with the selling or letting of land (including houses) bring together, or take steps to bring together, vendors and prospective purchasers, or lessors and prospective tenants, or act as auctioneers, or negotiate as to the terms of sale or letting etc. with the vendor or the prospective purchaser or tenant and receive payment for doing so; or (ii) hold themselves out as prepared to do any of these things for payment. Those are the people who are caught by the Bill. I should like to say in particular that land agents managing estates for others are not caught as they are employees. Nevertheless, they can all go on the register of estate agents, and I think that they would be strongly advised to do so.

Mr. R. J. Maxwell-Hyslop (Tiverton)

I accept absolutely the advice which the Lord Chancellor gave and to which my hon. Friend referred a few moments ago, but does it bind the Lord Chancellor's successors? If it does not, would it not be a good idea to write it into the Bill?

Sir H. Legge-Bourke

We shall have to wait until we hear what the Government have to say about that, but my belief is that the record of Lord Chancellors down through the ages in their appointments to such tribunals does not give cause for much misgiving. I feel that we should allow him to be as free as possible in picking the people he thinks appropriate at the time.

Clause 22, coupled with the Fourth Schedule, enables the Bill to apply to Northern Ireland only as soon as the Northern Irish Parliament have submitted a prayer to Her Majesty in Council that the Act should be so extended. I understand that the Northern Ireland Government are entirely satisfied with this and will, in all probability, submit such a prayer if we pass the Bill here.

The last Clause, Clause 23, enables different appointed days to be chosen for the coming into force of the various parts of the Bill.

I should have liked to end my speech there, but I must, unfortunately, refer to one matter which arose in the course of the printing of the Bill and which deals with a specific Scottish interest. In my opening remarks, I referred to the Institute of Auctioneers and Appraisers in Scotland. This body, as I have already said, comprises under 350 members, not all of whom do estate agency, and where they do it is but a small proportion of their total business, which is mainly concerned with livestock auctioneering.

Although they can all register as being in practice on 22nd February under the Bill, they are deeply anxious lest the inclusion of Scotland under the provisions of the Bill will lead to the gradual erosion of their association. I have endeavoured to reassure them on this matter—it is not my wish that this should happen—but I am afraid that I have been unsuccessful in doing so. I have, however, given them some very substantial under- takings which I hoped would meet the main ground of their objection.

There would be a separate examination for Scotland. It is my intention to seek to amend the First Schedule so as to ensure that the nominations of the Secretary of State and of the chartered bodies to the Council shall include Scottish representatives in each case. There is also no reason, as I see it, why a separate sub-register for Scotland should not be maintained, even if it involved higher costs, which would mean possibly a higher registration fee for all. Under the Bill as drafted, there is no reason why the Estate Agents Council should not set up a separate committee or board to deal with Scottish matters in addition to the Investigating and Disciplinary Committees.

What I regret I cannot advise the House to do is to name the Institute of Auctioneers and appraisers in Scotland as one of the bodies referred to in paragraph 2 of the First Schedule. My refusal is in no way intended as a reflection on the Institute. My reason quite simply is this. The only grounds for naming any bodies in the First Schedule are when they are either chartered bodies or bodies which have already put into operation a system of qualifying examination and an enforced code of conduct. Unfortunately, the Institute has done neither of these things. Perhaps there has been no need for the Institute to do so because estate agency has been largely conducted by solicitors in Scotland, and there has been only a tiny number of cases of the public being exploited unfairly. Indeed, I know that the Institute's reputation is held high in official quarters as well as in Scotland as a whole.

I find myself on the horns of a rather grievous dilemma. Much as I should like to meet the perfectly understandable desire of this body to leave Scotland out of the Bill altogether, I genuinely dread the consequences of so doing. If Scotland were left out, an immediate complication would arise in connection with those firms of estate agents which operate both sides of the Border. North of the Border there would be no code of conduct and no qualifying examination. South of the Border there would have to be both. Even more I dread the thought of unscrupulous men who are struck off the register in England at once going across the Border and, not only opening up north of the Border, but also from their Scottish offices conducting business South of the Border without let or hindrance, thus penalising those honest people who are prepared to abide by a code of conduct in England.

A further complication arises from the fact that there are about 2,000 members of the Royal Institute of Chartered Surveyors in Scotland. Most of these are local government officers or civil servants. Under the Bill, because they are already fully qualified, they are entitled to apply for registration. What their attitude will he if an attempt is made to take Scotland out of the Bill I do not know, but I suspect that it may be extremely outspoken, for I know that they have in fact helped greatly in obtaining agreement from the Law Society of Scotland and accountancy bodies North of the Border to accept the idea of Scotland being included.

I am very much in the hands of the House over this matter and I am more than anxious to meet its wishes. I would, however, emphasise that, as the main object of the Bill is the prevention rather than the cure of ills, Scotland has the opportunity, which England, alas, has been denied, of taking action in advance to prevent the abuses which have all too often occurred in England from occurring in Scotland. I know that there are some Scots who are prepared to take that risk. I think that they may have underestimated the gravity of it. Nevertheless, rather than lose the Bill for England, Wales and Northern Ireland, I would prefer to exclude Scotland.

I hope that that decision will prove avoidable, for I cannot believe that, with all the special concessions which have been made for Scotland in the Bill and which will be made in Committee, there is any need for the Institute of Auctioneers and Appraisers, or indeed any other body as honourable as that, to fear the consequences of the Bill. Indeed, I believe that it will enhance their reputation, and it would seem to me a pity if a group of under 400 people only marginally concerned in estate agency business were, because of their perfectly honourable and understandable concern for their own Institute, to delay the opportunity of making it impossible for corrupt and wicked men to conduct estate agency work North of the Border, or sometimes even South of the Border, or wherever they liked, for the further exploitation of innocent, honest people. I look forward rather to the day when the Institute has established its own code of conduct and qualifying examination. That will enable it to become a recognised body under the Bill.

I know that I have spoken for a long time, longer than I intended. Even so, I have been able to give only a cursory glance at this complicated and technical Bill. If I may say so to my hon. Friend the Joint Under-Secretary, it is really a departmental Bill, and it ought to be. I shall study all that is said with the utmost care. I am anxious to meet the House in every way I can.

I must, however, say this. I cannot agree to abandoning the principles which are fundamental to the Bill. I must retain a reasonable standard of qualification in the Bill. I must insist upon an enforced and adequate code of conduct. I believe it to be most important, certainly in the earlier years, to ensure that those with the longest experience of operating qualifying examinations and a code of conduct in this field will have a majority on the Council.

The need for the Bill is overwhelming. We are supported by the Royal Institute of British Architects. Another body whose name for the moment I do not remember also supports us. The London County Council backs us. The International Chamber of Trade—there is a letter in the Financial Times this morning giving the firms of terms of its resolution —is fully behind the Bill. At its annual conference in 1962, the Chamber passed a resolution urging a thorough measure of statutory control to ensure competence as well as conduct. We have the open support of the Law Society and I believe that in thousands of homes, defrauded people will wish that we had introduced and passed the Bill many years ago.

In my constituency, in quite a number of the humbler homes, there hangs a little inscription. It came off a calendar once circulated at Christmas time by the Late Bertram Mills, of circus fame. That inscription reads: Home—the place where you can grumble the most and be treated the best. My hope is that the Bill will ensure that in getting a home or selling a home, in letting or hiring a home, people will have no cause to grumble because the treatment which they will have got from estate agents will be what it ought to be.

12.13 p.m.

Mr. G. A. Pargiter (Southall)

I have much pleasure in supporting the Second Reading of the Bill. I have no intention of going into the detail, which has been done so well by the hon. Member for the Isle of Ely (Sir H. Legge-Bourke) in his speech. The hon. Member has spoken forcefully and honestly in favour of something which he profoundly believes to be necessary in the interests of the public, a view which I strongly support.

I am not interested in the creation of what have been alleged by some people to be monopolistic practices. As soon as ever one starts restricting the activities of people, to some extent there will always be those who object to that restriction. If, however, we are to establish a code of conduct in connection with this or any other profession, it must obviously be to some extent restrictive. The important thing which the House has to consider is that it is not unduly restrictive and does not do things which are not in the public interest. That is the aspect of the Bill with which we in the House have to be concerned.

Is there a case to be made that there is a necessity for this profession to be subject to a little more supervision and control than it has been in the past? The case has been adequately made as to the need for this. It is not a need which has suddenly arisen, but is one which has existed over the years. Successive Governments might be charged with failing in their responsibility to the public in not doing something long before this. It should not have been left to a Private Member's Bill, in the protection of the public interest, to do something of the kind that is now proposed.

Nevertheless, it is not the first time that it has been necessary to do in a Private Member's Bill what Governments from time to time have for some reason or other failed to do. The fact that we now have the opportunity of doing something in this direction is a matter in which, I hope, we will receive the help and assistance of the Government in the further stages of the Bill.

Most of us have experience of estate agents of one kind or another. My experiences are rather varied, because I have from time to time lived in different places and sometimes I have sold a house and sometimes bought one. On the occasions when I have been selling, I have not always found it easy to recognise precisely from the estate agent's description the property of which I was disposing. This is not unusual. The house agent, I suppose, thinks that it is part of this job to write up the assets. It is not his job to write them down. In writing them up, however, the object should be to present them fairly.

I was interested, not long ago, when I had a small old cottage to dispose of, and some people came to see it. They said, "Judging from the description and what we have seen previously, we felt that this could not possibly be, at this price, what it is described to be, and we are agreeably surprised to find that it is". That was an occasion when one could commend the agent for what he had done. I thought that the property had been written up quite a bit. I mention that in passing only to show how difficult it is to get the right balance between what an agent should be doing honestly for the seller for whom he is acting and, at the same time, acting responsibly towards the people who might be invited to buy. These aspects are important.

An estate agent's profession must, I suppose, be fairly lucrative. We all know of the practice whereby a house agent who wants to sell a house proceeds to farm it out to a lot of other agents. One finds the practice that they sort of agree to split the commission. One can only assume that the rate of remuneration in those cases is sufficiently high for people to be willing to let somebody else do some work and split the amount of money which they get for it.

How does the person who is selling fix the responsibility in these matters for the article of which he is disposing? It is not unusual for the seller to have to ask a prospective purchaser, "Who is the agent who sent you to me", so little do so many agents do in connection with these matters beyond simply putting a house on their books and circulating it by and large to all and sundry. Some of this may be necessary, but I am satisfied that a good deal of it is not and that it must, obviously, increase the costs of doing this sort of work.

Another thing which must have struck hon. Members more recently is the large and increasing number of people who seem to be engaged in this type of business. One can only assume that it must be lucrative and that there must be considerable opportunities in it.

I know that there is another aspect of an estate agent's duties. Today, many landlords do not want to appear as principals in connection with their property and many estate agents are largely engaged in rent collection, and so on, often acting as a suitable barrier between the landlord and the tenant. That, however, is not the part of the Bill or an aspect of it with which we are concerned. But it does not alter the fact that a person who sets himself up even in that sort of business should have some sort of qualifications to deal with the people for whom he may be acting and for those for whom he acts as a go-between.

It may be argued—representations have been made—that the Bill goes wider than merely dealing with estate agents. To some extent, it affects other professions, such as accountancy, and there are references in the Bill to the position of accountants who may be acting in connection with estate agents. My view is that it is not the intention of the Bill, nor would it be the intention of the House, to use this Measure to act in a restrictive way with regard to other professions—for example, accountants. I am satisfied that this aspect will be properly taken care of in Committee to ensure that nothing like that can happen, so that, provided appropriate representations are made to the Committee, these matters can be suitably adjusted where they affect people beyond the intention of the Bill.

The essence, surely, is that a person who undertakes to sell something for a client should know a good deal about what he is selling. He ought to know enough about the matter to be able to advise his client whether what he is buying is a reputable article. It is not the duty of the agent in this case to hide any defect. It is his duty to call the attention of the seller to the defects which there may be so that there may be an opportunity of putting them right before the article is put on the market.

I am satisfied that reputable agents and people who are qualified in these matters because of their qualifications can know of any defects which there may be and that in their case care is taken to see that an article which is to be sold, a house or a flat or a maisonnette, whatever it may be, is properly represented to the person who is going to purchase it. I know about the liability of the purchaser, that it is his job to see that what he is buying is what it is purported to be, but there is a necessity for a certain amount of honesty between the two sides, between the seller and the buyer, to ensure that what the seller offers is reasonably what it is purported to be.

I am not arguing that, generally speaking, agents do not act properly, but we do know that there are those who do not, and we know, equally, that there is nothing to prevent any person sticking up a board and saying "I am an estate agent" and touting for business in various ways, sometimes quite improper ways, and, as a result, encouraging people to entrust to him business with which he ought not to be entrusted.

Mr. Leslie Hale (Oldham, West)

Has my hon. Friend read through the pages of reputable Sunday journals which publish these advertisements? If so, does he recall any one which calls attention to any defect, except those of Mr. Roy Brooks?

Mr. Pargiter

I think that he has achieved a national reputation in drawing attention to defects and that is not usually applicable generally to other agents. I would accept that that generally is the position, but I am not really arguing that in a particular advertisement a person who is selling a house, and obviously has knowledge of it, should, when putting in the advertisement, draw attention to defects of which he possibly knows. That would be asking too much and really trying to paint the lily.

Mr. Warbey

My hon. Friends says that it would be asking too much, but surely this is the whole point, I should have thought, when we are concerned with the protection of the public. Protection of the public includes protection of the buyer as well as of the seller. Surely people who are collecting fees for the conduct of the selling and buying of a structure should be under an obligation to make sure that the buyer as well as the seller is fully aware of the defects as well as the virtues of the property. Is there anything in this Bill which will ensure that?

Mr. Pargiter

Obviously, it would be very difficult to insert in an advertisement the precise details of what some people might regard as a defect but others would not. It is not always a question of there being something structurally wrong. There may be something in the layout which to some people constitutes a defect, but to others would not. It is difficult to say in that sense that that is a defect. If, however, there should be anything which would ordinarily be regarded as a defect, a major defect in the structure, then it is his duty to disclose it and to disclose it at that stage.

As to the bodies which are concerned here, these people are professionally qualified and are generally required to observe a code of conduct which would not permit knowledgeable concealment of a defect from the buyer, and there is a limitation imposed. Even then that does not always get rid of the unscrupulous person, but what the Bill does provide is that the moment an unscrupulous person gets found out he can be struck off and cannot practise any more.

I admit that this may be to some extent shutting the door afterwards, but in this as in every other profession it is completely impossible to guard against any possible malpractice, and the best possible safeguard is to say to a person engaged in this profession, as it is said to persons in other professions, "If you are guilty of any malpractice you will be struck off the register"—in exactly the same way as in a criminal case the guilty person is punished. That is the greatest possible safeguard.

The Bill provides that there should be a body to consider these matters. This may be a matter for adjustment in Committee. It is provided that there is to be a body which will have the problem of registration and withdrawal of registration, a body constituted for the public good and in the public interest, and I am quite satisfied that by this means the public will be protected to a greater extent than ever before.

It is usual, when a Bill of this kind comes before the House, for hon. Members to draw attention to the things which it does not do and to complain that it does not do this and does not do that. The answer is that the Bill will do a good deal. It may not close every possible loophole, but in Committee it will be possible perhaps to amend it in some way so that it will close other loopholes which may occur to hon. Members and which may be suitably closed, but it would be a sad thing if this attempt to do something for the protection of the public were turned down solely on the ground that it does not do all it might do.

If it goes some distance towards remedying the position and protecting the public, that, I would say, is a good thing. In all my time as a Member of the House I cannot remember a Bill of which it was said on both sides of the House, and by all hon. Members, that it was perfect legislation. What the House usually says is, "The Bill appears to do a good thing and by and large in a given set of circumstances it is the most we can do". I submit that by and large this is as much as we can possibly do at this stage, particularly under the aegis of a Private Member's Bill.

If the Government say that it does not go far enough it is the Government's job to take it over and produce legislation of their own. The Government of the day always have some responsibility for every Act which is in operation. If, after this Measure has been in operation, it is seen that it is not carrying out its objects, then it is the responsibility of the Government to do something about it. If the Government say that the Bill will not achieve its objects and that the objects are desirable it is up to the Government to say what changes should be made. In any case, the Government, successive Governments, have had long enough in all conscience to do something about this. The Government are supposed to be the guardians of the public.

I hope that the Government and the House will say they accept the Bill, even though it may be subject to amendment in Committee. After all, that is the object of a Committee, to improve a Bill, but I hope that the House may be satisfied that here is a genuine Measure for the protection of the public, so that when the public see the name of an estate agent they may know that they can entrust their business to him with a reasonable degree of security, and that if they entrust money to him it will be properly safeguarded.

12.30 p.m.

Mr. William Shepherd (Cheadle)

The House would do well to accept the advice of the hon. Member for Southall (Mr. Pargiter) and give the Bill a Second Reading, but do so with a severely critical attitude.

I ought, first, to declare that I have two interests in connection with the Bill: first, as a property developer; and, secondly, as president of the Manchester branch of the Valuers' Institution and an honorary member of that Institution. But I want to speak as I ought to speak, as a Member of Parliament wishing to do the best possible in this very complex matter.

I congratulate my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) first, upon winning the Ballet, which I have never yet managed to do, and, secondly, upon introducing the Bill, which he did with great skill and energy. I am sure that he was very patient with those who interrupted him.

I agree with my hon. Friend's ultimate conclusion that this is not a suitable Measure for a private Member. I pay tribute to his courage in bringing in the Bill, but that remains true. I doubt whether any Bill which seeks to register a profession is suitable as such. If it is not a profession, but a mixture of a trade and a profession, then it becomes much more complex and even less suitable for a Private Member's Bill.

Sir H. Legge-Bourke

That is how the architects were dealt with—by a Private Member's Bill—promoted, I think, by my hon. Friend the Member for Ayr (Sir T. Moore).

Mr. Shepherd

I think that that is true, but it is undesirable. I also feel that when one gets a mixture of trade and professional activities, as in this case, it becomes exceedingly difficult.

I agree that the only justification for registration is to protect the public, but if a profession draws up its own registra- tion Bill it is not unnatural that its desire to protect the public will be less enthusiastic than its desire to protect itself. This is written large all over the Bill. I have to tell my hon. Friend that this is a bad Bill, because it pays too little regard to the interests of the public and too much regard to the interests of the profession.

I agree that loss by individuals of deposits is a grievous matter—to some people it is completely disastrous—and the House ought to be concerned about a state of affairs which cannot be regarded as satisfactory. But want to say two things about that. First, it is not for one moment justifiable to take the view that this practice is widespread. Secondly, it is not accurate to take the view that the Bill will deal with the protection of the public in anything like a satisfactory manner.

I have dealt with a large number of estate agents and have always found them to be honest people striving to do their job to the best of their ability. I do not deal with the ones who do not strive to the best of their ability. There are some in the estate agency professions, but, by and large, this is a well-ordered activity with people striving to serve their clients to the best of their ability.

I should have thought that by now we had reached a situation where people should not be put at risk through deposits. I seldom pay a deposit, and I object to taking deposits. The only reason why a deposit is taken is to protect the estate agent's commission. I should have thought that it would have been very desirable in the broad interests of the community that we should cease this ridiculous practice because the deposit has no validity.

I could give a deposit to half a dozen people and then say, at the end of the day, "I will n6t purchase the property", and, to my sorrow, people do that to me continuously and it is a very disheartening experience. I very much doubt whether we ought to proceed with a mechanism which puts people to a great deal of inconvenience, subjects certain people to tragic loss and really serves no purpose in securing a sale.

Turning to my general attitude towards the Bill, I have said that in many respects it is a bad Measure, because it inadequately protects the public and seeks to secure very profound advantages for sections of the trade. I thought that my hon. Friend was a little too unkind to the National Association. It has pursued its campaign with great energy and vigour, and, although I am a member of a competing organisation, I pay tribute to what it has done in a relatively short time. When the House is to consider a registration Bill, it is very important that it should have keen regard to the interests of people who are at present outside any form of organisation.

It is very important that we do not ride roughshod over the interests of such people and very desirable that they put forward with vigour the case that they have to deploy. Although there has perhaps been an element of exaggeration in their case, I think they have done well. The House must have regard to the interests of those who are in the business, but are not associated with any of the supporting bodies.

What is the case for control? I believe that the case exists. It is a question whether we go in for a system of licensing, on the one hand, or a system of registration, on the other. This is the issue to which the House should address itself. It is true that estate agency is in many respects a business and that registration would have the effect of taking some of the keenly competitive nature out of it, although even under existing conditions it is fairly competitive and not, as the hon. Member for Southall said, very remunerative.

As one who pays the commission, I feel that on the whole the commission rate is not high enough to sustain the service demanded by vendors and purchasers. But I would say that it is a business, and, therefore, to some extent one might be able to deal with the business activity by licensing. But it is also a profession, and the extent to which it is a profession makes it exceedingly difficult to deal with it by licensing. One has to maintain certain professional standards. How can they be dealt with effectively by a licensing system?

I am licensed by the L.C.C. for some of my other business activities. It sends me a form, and I put my signature at the bottom and send it back with £1. I am supposed to certify that certain apparatus is in good order. I have never filled in the form for the last seven or eight years, but nobody has queried it, and the form goes in and back comes the licence. That is the sort of thing that would happen. One could not expect more from this proposal than is done in any other licensing system. Consequently, I believe that on the whole one must reject the idea of licensing as an effective method of securing good order in this activity.

I turn to the question of registration—

Mr. B. T. Parkin (Paddington, North)

Before the hon. Gentleman leaves that subject, he has just implied that his own registration with the L.C.C. is a formality, which implies, again, that there is nothing in his activities which needs any investigation. Would he accept that the problem which some of us have to face is that this very wide profession deals with areas of property in which certain social problems are involved and different factors apply in different areas, and, therefore, there seems to be room for the intervention of local opinion in insisting upon the type of practitioner and rules for any one area, which may be quite unknown in other parts of the country. Has he thought of it from that point of view?

Mr. Shepherd

I have, but I do not think it is very valid. I do not believe that differential standards in an activity of this kind are to be commended. I do not think that if the hon. Gentleman reflects on it he will think that it has any merit either.

I was saying that we then come to the question of registration, which I would broadly accept. I want, if I may, to give, the House the reason why I think registration is necessary and what I mean by professional status, because I differ from my hon. Friend on this and shall differ from all my hon. Friends and hon. Members opposite who are members of chartered bodies, because I am highly critical of those bodies. They were the people who did not want a compulsory measure to safeguard the loss of deposits. We have had to fight the chartered bodies to secure compulsory protection against loss of deposits.

Sir H. Legge-Bourke

I may have misunderstood what my hon. Friend said, but I would not wish him to give the impression, even inadvertently, of course, that I am a member of any chartered body, or have any connection with such bodies. I can assure him and the House that I have no connection whatsoever with them.

Mr. Shepherd

If I created that impression, I am entirely wrong. Indeed, I paid tribute to the ingenuity of my hon. Friend on this issue. I am saying that these bodies objected to the compulsory provision of a fund from which to reply those who had lost money as a result of defalcations by agents.

I want to explain to the House what I regard as professional status. I do not take the same view as some of my hon. Friends do on this matter. I do not think that knowledge of technical matters, although important, is really the main consideration when determining professional status. What is important in this matter is the professional integrity of the agent, because this is an activity in which the person who lacks the necessary integrity can do great damage to his client and can profit himself considerably at the expense of his client. It is this feature of the matter which, in my opinion, makes it necessary to have some effective form of registration.

What I am about to say will give great offence to some of my hon. Friends and will, of course, annoy many people in the business or profession of estate agency, but it has to be said because a conspiracy of silence will not advantage the profession or the prospects of the Bill. It is a regrettable fact that in the post-war period there has been a serious deterioration in the standards of integrity among some of the larger estate agents. If I wanted to particularise—I am not mentioning names, of course—I would say that this deterioration has been most marked among agents in the West End of London.

Mr. W. M. F. Vane (Westmorland)

Let us have the names.

Mr. Shepherd

Oh, no, I will not mention names.

The fact that this deterioration in standards of integrity among large agents has become accepted is deplorable. If an agent deals in property he is, in my opinion, unsuitable for registration as a professional agent, because if a person goes to an agent with a property that person must be satisfied that the agent will obtain for him the best possible customer irrespective of all other considerations. One wants to feel that if one goes as a buyer the best has not been creamed off before one arrives.

It is not possible for informed persons to take this view of many agents whose names are by no means the least well known in this country, and the reason why I want the Bill is to make certain that those people who go to estate agents can go to a professional man whose professional integrity is undoubted. When I look at Clause 10 I begin to feel some considerable qualms about this aspect of the Bill. Clause 10 is the give-away Clause, because instead of enjoining the Council to defend at all costs, even under the penalty of imprisonment, the professional integrity of the activity, I see that the things laid clown as things which they must not do are touting and certain forms of advertising.

I agree with my hon. Friend that these are considerations of some importance, and I think that there is merit in this provision, but to my mind the most important thing to establish is that if a person goes to an estate agent he can depend entirely upon the professional integrity of that agent and can be certain that he is not getting any double dealing or speculative dealing, or buying-in or buying or selling for nominees.

Mr. Vane

My hon. Friend mentioned touting for business or as being calculated to attract business unfairly as being the sole objects or main objects which the Bill is intended to cover. If he looks at the earlier words of the subsection he will see a reference to disgraceful conduct in a professional respect, and in particular may therein specify as disgraceful".

Mr. Shepherd

I do not quarrel with that. I do not think that I said that these were the only ones specified. I was specifying these two relatively minor items in relation to these important items as an indication of the attitude of mind which has dominated those who produced this Bill.

Sir H. Legge-Bourke

I am very sorry to interrupt my hon. Friend again, but the reason why this was done is quite simple. It was known that these were the two things which were of particular concern to the unattached agents. It was they who had made the biggest song and dance about the rules covering touting and advertising. That is why we particularly mentioned it. It does not mean, of course, that just because we mention them they are as important as disgraceful conduct. Of course they are not.

Mr. Shepherd

I should have thought the unattached agents would be annoyed at having them specified, because they are the offenders in this respect. However, I do not wish to labour the point that these two items are specified, except to say that this is an attitude of mind of those who produced the Bill.

Let me say a little more about the question of dealing whilst one is an agent. It is, I think, one of the most disgraceful activities that one can conceive, and it is damaging in more respects than is apparent at first glance. If, for example, one is a property developer it is often necessary, if one is going into an area with which one is not familiar, to go to an agent and say, "Look here, this is what I want to do. Do you think it will be all right to do so and so? Are the prices right here?" There must be a disclosure by the individual concerned of his intention. It is very important that such disclosure should only be made to persons who are completely impartial. One does not want to have to disclose one's intentions to people who have an interest.

I know of a case—I do not want to quote names, but the facts are completely authenticated—where pressure was put on a developer by a well-known agent. He attempted to force the developer to go into a certain channel for his finance because that agent was connected with that channel. It would have been very disadvantageous to my friend had he allowed himself to be forced into that channel. In my submission, it is vitally important that any registration Bill should ensure the professional integrity of those taking part in this activity, and if we fail to do away with the man who deals through a nominee, with the agents in London who have their own property companies through which they filter their transactions, this Bill will have completely failed in its purpose.

I want to say a word about representation. I was somewhat surprised to read about the representation proposed, because it seems to me that the chartered bodies, who represent about 40 per cent. of the people engaged in this activity, will have a dominant part to play in running the profession. It seems highly inequitable that those who represent 40 per cent. of the people engaged in the profession—[Interruption.] My hon. Friends may disagree with me as to the proportion. These figures have not been determined accurately, but to my knowledge the supporting bodies have roughly 40 per cent., the chartered bodies roughly 40 per cent. and the unattached roughly 20 per cent.

I do not believe that those proportions are very inaccurate. In view of this sort of representation, it seems remarkable that the chartered bodies should have 24 representatives as against six for the supporting bodies. If I am fortunate enough to be on the Committee which deals with the Bill I shall be anxious to see that a radical alteration is made in this representation. It must be made much more equitable than it appears to be at present.

For the reasons that I have stated, I suggest that it would be advisable to give the Bill a Second Reading. I have tried to point out the Bill's limitations, as I see them. I realise that if a Bill is prepared by people in a trade or profession it will obviously err on the side of safeguarding that profession's interests rather than the public interest. Nevertheless, we should allow the Bill to go to Committee, where it should be subjected to very close scrutiny and substantial amendment. If that can be done I believe that the Bill will do something not only to safeguard the interests of those people who are now unhappily losing deposits, but also to raise the present level of professional standards in this business.

12.53 p.m.

Sir Frank Soskice (Newport)

I ask the House to give the Bill a Second Reading, and hope that we shall be able to come to a conclusion upon it today. I say that because it must be generally accepted, as a result of what has been said not only by the hon. Member for the Isle of Ely (Sir H. Legge-Bourke) but by other hon. Members, that there is need for some control and supervision over the profession or activity of estate agent. The Bill provides that control. The big question raised is whether the sort of supervision that it envisages is the right sort. In that respect, I find myself moving very closely towards what was said by the hon. Member for Cheadle (Mr. Shepherd), in his extremely interesting and informed speech.

The case for the Bill was very forcefully and clearly put by the hon. Member for the Isle of Ely and also by my hon. Friend the Member for Southall (Mr. Pargiter). In those circumstances it is perhaps appropriate that I should express a somewhat conflicting point of view, and the point of view which I wish to put for consideration by the House, and which, I submit, requires serious consideration in Committee, is that which was placed before me by the National Association.

We listened with anguish as the hon. Member for the Isle of Ely described the various stages of the war waged between him and the National Association. I felt that he was easily able to hold his own. I do not take sides in the matter, but I venture to echo what was said by the hon. Member for Cheadle; I, too, regretted the fact that the hon. Member found it necessary to be so scathing at the expense of the Association. Surely, when a Measure of importance is to he discussed in the House, it is a proper function of an outside body to take steps to put before Members who may wish to take part in the debate those considerations which it thinks should be urged either in the public interest or from the point of view of certain sections of the public whom it represents.

The hon. Member criticised some of the Association's representations and some aspects of its conduct. I do not feel that I hold any brief to defend the Association in that respect, save to say that it is not able to stand here in the House and answer the criticisms of the hon. Member. I feel sure that the hon. Member wants us to have that fact in mind in listening to what he said. The Association has taken considerable trouble to put before me, and before almost every other hon. Member, substantial physical material, which I have studied with interest and great profit. I have tried to weigh it up, and to relate it to what seems to me to be required in the public interest.

Both the mover and the seconder of the Bill avowedly wish to place the direc- tion of the registration and formulation of the standards of conduct which the Bill seeks to achieve in the hands of what I may broadly refer to as the chartered bodies and the supporting bodies. The hon. Member for the Isle of Ely, while very fairly saying that he would welcome changes in Committee, felt that this was a principle which he would find it very difficult to depart from. That is a matter on which there is likely to be a considerable conflict of opinion in the House and, later, in Committee.

I start, as did the hon. Member for Cheadle, with the composition of the council. I agree with him that if it is right that the diktat of the chartered and supporting bodies should prevail the composition of the council, with its membership of 24 representatives of chartered bodies and ten representatives of the supporting bodies—

Mr. Shepherd

Six representatives of the supporting bodies.

Sir F. Soskice

—is rightly balanced. It is, however, very strongly weighted in their favour. It is true that the public is represented by four members and outside agents also by four. At first, I thought that they had three representatives and then, when I read the First Schedule, I thought that it was four. At any rate, it is a very small number.

Mr. L. M. Lever

Not more than three.

Sir F. Soskice

It is a very small number, and it is obvious that the view of the chartered and supporting bodies will prevail.

Mr. Shepherd

It is inequitable as between the chartered bodies, on the one hand, and the supporting bodies, on the other. Although they have roughly the same number of people engaged in this activity, one has 24 representatives and the other has only six.

Sir F. Soskice

I quite agree—24 for the chartered bodies and 10 for the supporting bodies. Therefore, when the matter is before the Privy Council the chartered bodies will be in a strong position to present their views with conviction, although the Privy Council will naturally listen to the views expressed by the minority members. It is clear that we start out from the position that this is a chartered bodies' Bill—not in any sinister sense—and that it places the whole profession largely in the discretion of the chartered bodies.

Is it fair to the others? What sort of figures are we dealing with when we consider the provisions for registration? The hon. Member for Cheadle said that he thought they were roughly 20 per cent. unattached as against 80 per cent. attached. Like other hon. Members, I have received a document entitled, "How Many Estate Agents?", which gives a figure of 33 per cent, unattached as against 66 per cent. attached. How is the admission to the register to be calibrated in those circumstances? To see how this is done we have to look at Clause 5.

The Clause, admittedly, entitles to registration all those practising as estate agents on 22nd February, 1963. All existing outside members, therefore, would find their way on to the register. In future unattached members would have to produce two qualifications. They would have to show that they are of good character. No one could possibly quarrel with that. I agreed wholeheartedly with the emphasis which the hon. Member for Cheadle placed on the importance of integrity from the professional point of view. He rated it even more highly than expertise.

Clause 5 (1) also imposes the requirement that there shall be a professional qualification shown by the applicant. I question that and put the point of view that it is perhaps quite unnecessarily restrictive in a large section of activities which will have to be engaged upon by estate agents. I should, nevertheless, not wish to put a one-sided view, and I remind the House that, whatever is the qualification which is imposed under Clause 5, ultimately this House can control it. It has to be a professional qualification, which is "prescribed". When one looks at Clauses 21 and 17 one finds that the professional qualification, whatever it is, which may be laid down, has first to be approved by the Privy Council. Then the order of the Privy Council approving it can be annulled by either House of Parliament.

One contemplates the position that, whatever the qualification, this or the other House will have the final say on it. I accept that the Bill is so built up as to provide an outside arbiter as to what the professional qualification is to be. Nevertheless, is it realistic when one is considering the work which a great many particularly of the unattached agents have to do to require any professional expertise qualification? I see the hon. Member for the Isle of Ely looks a little puzzled when I say that, but I think it quite unrealistic to regard the ordinary sale of fairly low-priced house property as being on the same footing as dealings in large blocks of property.

If one is buying or disposing of a block of office property in Regent Street, and the figure in mind is about £1½ million, clearly the highest expertise in the matter of appropriate pricing and various considerations which affect prices and the various advantages and disadvantages relating to the proposal are essential. It is quite a different thing when we are looking at the ordinary sale by a private individual or a family of a house the price of which may range from £1,500 to £2,500, or £5,000. The householder wants to dispose of the property and is anxious to have a quick and expeditious service. He does not want to be in the position of having two houses on his hands, one he is trying to dispose of and one to which he is committed to buy to replace it.

The householder wants to get the best price possible and he wants the transaction to go through quickly with the minimum of delay. Is there much professional expertise required on the part of the agent who deals in that sort of property? Obviously, he must be able to advise his client in the matter of price. I suggest that the best way of learning about what the price of a house ought to be in an area in which one lives, is to live and work in the district. Perhaps it is in the next street to the street in which one's office is. One works in that district and knows the people and what they are ready to offer. To say that one must have a qualification as a developer to deal with that sort of property I should have thought would be unrealistic.

The Bill, I suppose, will prescribe a professional qualification as a sine qua non for the agent being taken on the register if he is unattached. Is that in the public interest? I respectfully put the point of view that it is not. I should have thought that sort of house exchange as has been said by the National Association approximates much more nearly to the ordinary commercial transaction. The hon. Member for Isle of Ely said that that was an inappropriate description, because when a person buys or sells a house and is a person of modest circumstances he is undertaking a capital transaction which is of the first importance to him; but the two are perfectly consistent.

There is a very large turnover of houses which will be increasing and the individual vendor or purchaser naturally regards the transaction as of first class importance from his point of view. Nevertheless, one would have thought that the ordinary business methods by which property of various types is quickly disposed of or acquired would be perfectly appropriate in a case of that sort.

Clause 10, which was severely criticised by the hon. Member for Cheadle, provides that certain codes of conduct are to be drawn up. I have looked at codes of conduct of the existing bodies and I have before me the charter and bye-laws of the Royal Institution of Chartered Surveyors, 1958. One looks at pages 32 and 33 which deal with discipline and rules of conduct. At random, I read, in paragraph 7: No member shall offer any financial inducement to secure instructions. Paragraph 9, broadly speaking, is designed to prevent one agent trying to obtain instructions in relation to a transaction for which already an existing agent has been instructed. It is, broadly, designed to see that only one agent is on the job. I have been given examples by perfectly reputable people of the sort of thing which might well be prevented if that sort of rule were embodied in a scheme prepared under Clause 10. The hon. Member referred to some contemplated provisions which were fairly close to these and I suppose that in various forms when the scheme is prepared they would ultimately be evolved.

Sir H. Legge-Bourke

I wish to correct the right hon. and learned Member by saying that they were not contemplated. The ones I listed are already in various codes of conduct. I am not insisting that all of them should be in the code of the Estate Agents' Council.

Sir F. Soskice

They are in various existing codes and I suppose that in different forms they would find their way into the scheme under Clause 10. Would this sort of thing be allowed? A letter written to me reads: A few agents are willing to lend the deposit on further purchase to the owner whose funds are still tied up in the first property. The agent will invariably lend free of interest for the brief period necessary because such service helps him to secure the selling instructions on the first house—but only, of course, if he can publicise the fact that he gives such facilities, so that the business secured is extra business. I put it to the House that that is not necessarily an undesirable practice. It is a perfectly honourable practice.

The agent offers the would-be vendor certain facilities to enable him to purchase another house. What is wrong in that? This code of conduct would almost certainly prevent it. If the codes of conduct are laid down by the chartered bodies it is to be apprehended that, unless they are subject to severe criticism by someone, and they may not be subject to severe criticism—for the reason the hon. Member pointed out, in a perfectly bona fide way in his speech, they will not be subject to control by this House—that sort of thing, which is a perfectly harmless transaction which would greatly assist the vendor and the purchaser, would be prevented.

I give another example from another letter I have received from a very reputable person who, I believe, is known to the hon. Member for Isle of Ely. This examples is given: A few years ago a London business man was desirous of obtaining a house in one of two roads in a certain area some 20 miles from the centre of London. He was actively in touch with the most prominent local estate agent, who was a member of a chartered institute. For 12 months the search was in vain, as apparently no one living in those two roads wished to move. The London business man then asked a firm of independent estate agents, known for their integrity and speedy service, for their help. They at once wrote personally to each resident of those two roads saying that a London business man was seeking a house in their road and he undertook to visit them within 24 hours of the independent agent receiving a phone call. The London business man secured his house within the first 24 hours. The writer says: This activity on behalf of the public is surely a valuable service". I suggest that he is right in saying that. What is wrong in it? If we are dealing with a matter in which, obviously, professional expertise of a high quality is required, that is one thing, but if we are dealing with small property disposal, I feel that that sort of expertise is quite supererogatory. It would be a great pity if the chartered bodies, having the predominant say in the formulation of the rules, were in a position virtually to outlaw all that sort of practice which may be of great help to the public.

Turning to the question of discipline, agree at once that the foot-in-the-door canvasser should be strongly discouraged. I think that the whole House agrees that that sort of person can be a positive nuisance. But it is necessary to try to distinguish between practices which constitute healthy, vigorous and sometimes even cut-throat competition by reputable estate agents, on the one hand, and these undesirable practices, on the other, which, I agree, that the Bill, if it is properly operated, should bring to an end.

I have not a great deal more to say about the Bill, except that the fees have been open to criticism. The hon. Member for Cheadle thought that they were too low. Other people think that they are too high. But what is desirable is that whatever the fees which are ultimately charged, they should be fair. The Bill does not provide for any outside consideration of what the scale of fees should be.

Mr. Hale

Can my right hon. and learned Friend help me on one point? I have spent the last few days bellowing like a young bullock over the vales of Yorkshire, "Labour believes in equality of opportunity." What happens to the intelligent son of a working man who wants to sell property or to acquire some professional status? The Oldham Corporation, which is a Labour body, refuses to pay for legal training. What is to be the prospect of the young man in the village who wishes to try to serve the community in this way?

Sir F. Soskice

The answer is that if Clause 5 (1) remains unamended he will be kept out. One of my criticisms is that there are a great many young men who, for one reason or another, are not in a position to obtain professional qualifications, and yet the chartered bodies, under the terms of the Bill, would, in effect, be able—subject to the ultimate views expressed in the House—to say that that sort of young man should be kept out. When the matter comes before the House, if a Prayer is put down to annul a particular prescribed qualification, the House will be able to express a different view, but it may not do.

Sir H. Legge-Bourke

I am very interested in this part of the right hon. and learned Gentleman's argument. Is he arguing the case for having two categories of estate agent, one to deal with properties up to a certain size and one to deal with other properties? I should like to know what is his constructive proposal.

Sir F. Soskice

That is a very relevant and pertinent question. I will go no further than to say that it should not be necessary, at any rate in all cases, for there to be a professional expertise qualification laid down as indispensable before one can get on the register. I am merely echoing what was said by the hon. Member for Cheadle: a person who can show that his professional probity is beyond question should have a hope of being on the register and the young men mentioned by my hon. Friend should not necessarily be kept off it.

That is the feeling of general criticism which I have of the Bill—that it is too weighted in favour of the chartered bodies and to a lesser extent the supporting bodies, and that the public interest and the point of view of the purchaser and vendor, particularly of small properties, is not adequately safeguarded by the Bill. Incidentally, I have seen it reported that nearly 40 per cent. of householders in this country either own their own houses, or are buying them. That is a very high figure. I do not know whether it is right.

The hon. Member for the Isle of Ely said that they have four representatives on the council. I put it to him that that is not enough. I go further and I raise the question whether it is possible by a readjustment of the membership of the council to achieve the proper balance and whether it is not necessary—this is a point put by the National Association—that there should be substituted for the particular type of registration something more akin to licensing. Licensing can take very many different forms. Possibly there could be licensing for which a public department—the Board of Trade has been mentioned—was responsible.

Mr. L. M. Lever

Or the courts.

Sir F. Soskice

Whether it would be a matter for the petty sessional court to adjudicate on each case, I do not know. We should have to work out a system of licensing, but if it were made the responsibility of a public department we should have a guarantee that the point of view of the ordinary purchaser and vendor of property would be properly safeguarded. This would have to be very carefully considered, but I agree that it goes directly counter to what the hon. Member said was his fundamental position from which he would not budge unless he were voted down.

The much-defamed Association has put before us a document Fifty years of Futility. It has this relevance, at any rate—that on page 2 it points out that in 1935 a Select Committee of the House of Lords was set up—I hope that this is accurate; I have not checked it— to inquire into the present law relating to auctioneers, house agents and valuers licences and to report whether any alterations in the law are required. The document continues: The Committee reported that:—

  1. (a) Licences should be issued by the Commissioners of Customs and Excise to applicants who had obtained a Certificate granted by a Petty Sessional Court.
  2. (b) Applications to the Court must be accompanied by references as to character and financial status.
  3. (c) Licences might be endorsed, cancelled or suspended before expiry on conviction for any offence in connection with the exercise of the profession of auctioneer, house agent or valuer."
It is not a new or startling proposition, but a proposition which has been carefully considered and which has some respectable endorsement. That is apart from the fact that it is a system which is operated in some other countries, notably, I think, New South Wales and some of the States of the United States. Hon. Members may say that these are countries in which conditions are different, but one is much nearer home territory when one is considering a Select Committee of one of the two Houses of Parliament.

Therefore, I part from the Bill with the question mark which I place against it, whether, fundamentally, its approach is right and whether, in Committee, we should not substitute something more akin to licensing with a view to securing what is essential, namely, proper control and supervision of the activity of house agents. There are other criticisms which I could make and which would take a long time to make in detail, but other hon. Members wish to speak and I will content myself with that broad criticism.

I hope that the general purposes of the Bill will be achieved, but I very seriously question whether it is rightly tilted; whether we are doing, right in putting the administration substantially, subject to supervision by the Privy Council, in the hands primarily of the chartered bodies, with the assistance of the supporting bodies; whether we are not being unfair to outside agents, and whether we are not neglecting the interests of persons whom they are to a large extent designed to assist; and whether the Bill, though good in intent, nevertheless suffers from serious defects which I hope we shall put right later by changes in Committee.

Mr. Bishop

Before the right hon. and learned Gentleman sits down, will he deal with this point? He began his speech by saying that he thought that the Bill should have a Second Reading. I wondered, at the end of his speech, whether he was still of that opinion. Does he really think that the criticisms he made could possibly be put right in Standing Committee?

Sir F. Soskice

I think that they could be put right. I am certainly in favour of the Bill having a Second Reading, but I think that we would have to consider very drastic changes in Committee. I feel quite confident that by making the appropriate alterations we could put the Bill into better shape and make it better adapted to do what it is intended to do.

1.20 p.m.

Sir Colin Thornton-Kemsley (North Angus and Mearns)

Mr. Deputy-Speaker, I am grateful to you for having called me, because I am by profession a chartered surveyor and I practise still as a chartered surveyor. Further—I think that I ought to divulge this interest, in view of what my hon. Friend the Member for Cheadle (Mr. Shepherd) said, though until he spoke I had not thought it was relevant—I happen to direct two public property companies. Perhaps I may refer to that aspect of the matter a little later when dealing with what my hon. Friend said.

Let me say straight away that my hon. Friend the Member for Cheadle has apologised to me for the fact that he has had to leave. He has an important engagement in his constituency this afternoon. I think he is to open a new school. Therefore, he has had to leave, which all of us regret, because I am sure that we all enjoyed his speech.

I am sure that all of us are grateful that the right hon. and learned Member for Newport (Sir F. Soskice) has indicated that, in his view, the Bill ought to be given a Second Reading. I am sure that he is right. I should like, however, to deal with one thing he said. To paraphrase what he said, it was that estate agency in many of its manifestations is, after all, a commercial activity and it would be wrong to take statutory powers to seek to impose professional standards upon such a commercial activity.

Sir F. Soskice

I am sorry if I did not make myself quite clear. I did not quite say that. I said that some part of it was a commercial activity, that is to say, the disposal of small house property. I differentiated that from dealings in large-scale property units. I think that I gave the example of a block of offices in Regent Street. I drew that distinction.

Sir C. Thornton-Kemsley

I am much obliged. I intend to deal largely with the smaller transactions, because those are mainly the ones which have brought about the necessity for the Bill. I still do not agree with the right hon. and learned Gentleman that the sale of a house, even a small house, is an entirely commercial transaction. After all, an estate agent who sets up as somebody who is capable of selling property of that kind must have a working knowledge of the law of property. He has to know a good deal about the law of landlord and tenant. He certainly has to know about building construction, because one of the things that he is asked to do right at the beginning is to give advice to the vendor, who is his client, as to what price he should ask for the property. When he inspects the property, he has to be very careful that he has spotted any inherent structural defects. He has to be able to assess the cost of remedying any defect so that he will know that the purchaser ought to allow a proper sum for putting the defect right. It may be dry rot. It may be woodworm in the roof timbers or in the floor timbers, something quite serious which would not be apparent to somebody without that expertise. He has to be prepared to advise his client that the purchaser will give a lesser sum than the vendor might have desired, because the purchaser has to make good these defects.

Mr. Hale

Does not this apply with much more force to builders? Why is it that a man without any professional qualification or charter can build a house? Why do we say that selling a house involves a tremendous degree of recondite acumen which is not available to the man who collects rents and who has collected rents for years and rendered a tremendous service to the village by providing a property service but who from now on is to be prevented from selling one of the houses?

Sir C. Thornton-Kemsley

I certainly did not say that the business of selling a house requires a tremendous degree of acumen. I simply said that the man who sets up to be an estate agent has to have a good working knowledge of certain aspects of the law of property, of building construction, and so on. Whether builders should be registered is an entirely different question, and, much as I should like to debate that subject with the hon. Gentleman, this is not the proper occasion to do so. I am saying that the vendor, who is the estate agent's client, requires advice on price. To be able to give this, an estate agent must have a knowledge of local values, an ability to assess the cost of carrying out work, and so on.

In all these things, in order satisfactorily to perform the commercial activity of selling a house, an estate agent has to exercise a professional skill in relation to his client. The professional bodies, including the three chartered bodies and the four bodies listed in paragraph 2 of Schedule 1, all have standards of competency which are tested by examination and standards of conduct which are laid down in codes of practice and by which all their members have to abide. It is these safeguards to the public—this is the essential point—which the sponsors of the Bill wish to see extended to all estate agents.

I am glad that my hon. Friend the Member for Cheadle admitted the need for control and accepted, as I think that most of us would accept, the method of registration as being the appropriate one in this case. My hon. Friend deplored the decline in professional integrity since the war. If that were true, I, too, would deplore it. There has been an enormous increase in the sale of properties and in the services which are required of professional men and estate agents since the war. I suppose it is inevitable that, with this larger body of practitioners, there would be some who would not exercise that high standard of professional integrity which we would all wish to see them observe in their professional work. It may be true that this is found particularly in the West End of London. It is deplorable if it is true.

The way to deal with this kind of thing might be to amend Clause 10 in the Committee. It would be entirely appropriate for the Estate Agents Council, once it is appointed, to frame a code of conduct and to write into that code, if it thinks it desirable, such provisions as it may think necessary to restrict or control the activities of estate agents who deal in property.

Those of us who are engaged as chartered surveyors or as members of any of the recognised professional bodies have to be scrupulously careful about these things. I have told the House that I help to direct two property companies. I cannot remember any occasion when my firm has sold a client's property to either of my companies. I am sure that there has been no such occasion. Certainly, if an occasion should ever arise when one of the companies with which I am connected wished to acquire a property which my firm bad been instructed to sell, we would naturally tell the client all about it and what steps were being taken to ensure that a proper price was being obtained, because, after all, we are acting all the time for the vendor.

If abuses do arise—and I deplore them if they do—it would be entirely proper for a code of conduct to be drawn up by the Estate Agents Council to provide against them. In this connection, my hon. Friend the Member for Cheadle said that the Bill paid too much regard to the interests of the profession. I would remind him that it follows two quite recent precedents; that of the Opticians Act, 1958, and the Professions (Supplementary to Medicine) Act, 1960. It follows closely the precedents under those two Acts, in particular in entrusting to the professions the responsibility for administration, education and discipline of members of the professions, for such people have themselves been living with these problems—subject, of course, to appropriate safeguard by way of appeal.

That is probably the best answer to hon. Members who want to see some alteration in the weightage accorded to the recognised professional bodies on the Estate Agents Council, both initially and in its final stage, as set out in Schedule 1. We may want to consider that matter closely in Committee, but the basic factor should be that the professional bodies, which have been living with these problems and which know all about them, are the proper people to deal with it. After all, they have their codes of practice, they know the problems and difficulties and I believe that they should form a majority on the proposed Estate Agents Council.

It has been suggested to me that the Bill in effect creates a closed shop. That is not true for anyone who is practising on the date the Bill was introduced—22nd February, 1963—because they qualify under Clause 5 (2) so there can be no question of a closed shop being created in the initial period since, as I say, entry is open to all estate agents practising on that date. However, after that date anyone can get on to the register, whether or not he is a member of a recognised professional body, provided he fulfils certain conditions as to character and qualifications laid down by the Estate Agents Council and approved by the Privy Council. Moreover, Clause 17 (3) provides that these rules are subject to negative Resolution of either House of Parliament.

There is another important safeguard against chartered bodies creating or seeking to create a closed shop. Any organisation may apply for recognition as a recognised professional body under Clause 3 (2) if it …is of good standing and requires…the standard of competence requisite for proper practice… for all its members. If recognition is withheld it may appeal to a tribunal appointed by the Lord Chancellor or, in Scotland, the Lord President of the Court of Session.

For the protection of the public a man may not practice medicine or the law, he may not dispense medical prescriptions or drive a public service vehicle unless he has passed a test of competence. To require that new entrants to a business or profession, such as estate agency, should in the public interest satisfy such conditions as to character and professional competence as may be prescribed by the Estate Agents Council and approved by the Privy Council can no more be described as imposing a closed shop as can those other examples, pro bono publico.

Mr. John Brewis (Galloway)

What would my hon. Friend envisage to be the standard of competence for estate agents? How would the examination compare with, say, the examination taken by chartered surveyors?

Sir C. Thornton-Kemsley

It could not be that high. We had to work for years for our chartered surveyors final examinations. Whether or not it would be at the level of the intermediate examination I would not know; this is something for the Estate Agents Council to consider, but I would be very surprised if it was anything like the final examination for chartered surveyors.

That intervention brings me to another question I have been asked as to why the Bill includes Scotland. I have been told that there have been virtually no abuses of the kind the Bill seeks to remedy in Scotland and that there is no strong demand for the Bill in Scotland. There would be administrative difficulties in having all these regulations, codes and registers south of the Border if nothing of the kind existed north of the Border. There would be difficulties because, as has been said, many firms have offices in Scotland as well as in England while others do business on both sides of the Border.

I do not think that I am divulging any secret, since I have been in these negotiations for a long time, when I say that in the early days of the discussions about the Bill—the need for such a Measure and so on; and we are going back four or five years—it was not then intended to include Scotland. Scotland was brought in because the 2,000 members of the Royal Institution of Chartered Surveyors practising in Scotland made the strongest possible representations that Scotland should be brought in. They envisaged that some of the "wide" boys who would be prevented from carrying on their nefarious practices in London, Manchester and elsewhere might go north and start up in Glasgow, Edinburgh and so on. Thus they wanted it to be a United Kingdom Bill.

A number of chartered land agents practise in Scotland. They and the Scottish Chartered Surveyors have been negotiating with the Law Society of Scotland and the Institute of Chartered Accountants in Scotland regarding the work of estate agencies and they, too, were concerned that Scotland should be included. When my right hon. and Learned Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) was speaking—

Sir H. Legge-Bourke

Just hon. Member, not hon. and learned.

Sir C. Thornton-Kemsley

I hope, then, that I am only a little premature in describing him as my right hon. Friend.

In any case, when he was speaking I thought that I would say something about the Institute of Auctioneers and Appraisers in Scotland, a body I know well because it was founded by a very old friend of mine, the late Provost Howie, who was a highly respected auctioneer in my home village in Kincardineshire. This body is greatly respected in Scotland, and it is highly thought of by the Department of Agriculture. It consists very largely of livestock auctioneers, and many of its members come within the Bill because of the inclusion of auctioneers in Clause 20. I am informed by its law agents that it has 51 corporate members—firms—and 282 individual members.

I say in all sincerity that in my view that body has much to gain and little to lose by qualifying, as it easily can do, as a recognised professional body in terms of Clause 3 (2). It has at present no qualifying examination and no code of conduct, so that it would be quite out of the question for it to be included amongst those bodies that have, and which would come within paragraph 2 of Schedule 1. However, that does not prevent it from qualifying in due course as the only recognised professional body operating solely in Scotland, and I sincerely think that therein lies its true interest.

There are certain Amendments that we in Scotland must ask for. I have discussed these with my hon. Friend, and I am very glad to have had his assurance on these points today. Let me briefly recapitulate them. First, we must be more specific in paragraph 1 of Schedule 1 in stating that a certain number of people must be appointed from amongst Scottish members—one of the four members appointed should be appointed by the Secretary of State for Scotland, and one of each of the eight representatives of the three chartered bodies should be practising professionally in Scotland. That we must insist upon.

There must be Scottish examinations, because if we are to have tests of competency, it is no use having an Engish test of competency, because in England the land laws, the conditions, the phraseology and the rest are quite different from those over the Border. If we have Scottish examinations, we must have a Scottish board to set the examinations, adjudicate on them, give information about them to the Council, and so on. There should be, not a separate Estate Agents Council but a separate register on which all estate agents practising in Scotland may be able to enrol.

I am glad that my hon. Friend said that in principle there could not be objection to any of those things, and that he was looking at them most closely with a view to making Amendments in Committee himself. I hope that between now and the Committee stage, the three professional bodies will apply themselves urgently to these four matters, with the advice of their Scottish members, with a view to framing Amendments so that we may be sure the Bill will meet the needs and wishes of those practising in Scotland.

Some of my hon. Friends want Scotland excluded from the Bill, but I do not think that that would accord with Scotland's true interest. I hope that my hon. Friend, to whom all in the profession are immensely indebted for the terrifically hard work he has put in on this Bill, and for his sincerity, will feel able to accept Amendments on the lines suggested, and so avoid any action that might be taken on Report or at some later stage to have Scotland excluded.

I was horrified to realise last night that I have been in practice as a chartered surveyor for very nearly 40 years. My mind goes back to the days graphically described in the Estates Gazette recently: A board would appear on a property at 10 in the morning, and by tea time the last agent on the scene had difficulty in finding an uncovered space for his own announcement so he probably nailed it over the first man's. The entire estate profession acquired public odium, because anyone minded to sell his house found himself inundated with telephone calls, visits from men with the manner of a freelance reporter smelling out a peer's mistress, and letters promising an immediate sale at more than the asking price the first agent had advised. That this position, that redounded to nobody's credit and was a great nuisance to everyone, has been cleared up is due largely to the unremitting efforts of the recognised professional bodies and to the painstaking work on the ground of the members of a host of independent local associations formed of decent men—sometimes belonging to one of the professional bodies and sometimes not belonging to any of them—who have set themselves against this sort of exploitation of the public and have succeeded, at least, in containing what was formerly an undignified and indecent free-for-all.

There was, in the days I have in mind—I am talking of 1924 and thereabouts—a tremendous cleavage between what was then the Auctioneers' Institute, now a highly respected chartered body, and those who worked in commercial concerns and were, therefore, not able to become members of that body. In 1924, the independent men formed the Incorporated Society of Auctioneers and Landed Property Agents, which now has over 3,000 estate-agent members. Those two organisations were once bitterly opposed. They, and indeed all the seven recognised professional bodies, have been working for years on this Bill—I was told yesterday that the three chartered bodies have been working at it for seven years—and have been greatly helped by the advice of the Home Office. All these bodies are in complete harmony as to the need for the Bill and as to its provisions, and they have an overwhelming mandate from their members to seek the help of Parliament in putting their whole house in order.

1.48 p.m.

Mr. Roderic Bowen (Cardigan)

I support the Bill. It is a good Bill as it stands. There are one or two important matters that need to be adjusted in Committee, but I certainly do not share the view of the right hon. and learned Member for Newport (Sir F. Soskice) that it needs to be virtually unscrambled in Committee. I have looked at the Bill from the public point of view, in the sense that I have asked myself how far it will lead to the greater protection of, and better service to the public from the people engaged in these activities. That has been my main concern.

My other concern has been to look at the Bill from the point of view of those, other than the public, who are to be immediately affected by its operation. Is it fair, for example, to those bodies which are not recognised professional bodies in the terms of the Bill, that is, the independent bodies? This is important not only from the point of view of the bodies themselves, but from the point of view of their individual members, because their admission or non-admission to the register will depend, in part at least, upon these independent bodies receiving recognition if they are so entitled.

I have looked at the Bill also from the point of view of whether its terms are fair to those who should be admitted to the register initially and in relation to what happens to those who seek admission at subsequent times. I have also considered whether the Bill is fair in its provisions relating to disciplinary action and the opportunity for review and appeal.

First, from the point of view of the protection of the public, I believe from personal observation when having to deal in another capacity with matters of this kind, that the House and the country should be considerably concerned about what is happening in estate agency activities among small groups of unscrupulous people who take advantage of persons who unfortunately are in a particularly gullible category. The victims of the operations of fraudulent estate agents are nearly always people who are already oppressed by great domestic and personal problems and possibly are not as astute in smelling out dishonest activities as they otherwise would be.

It is difficult to judge the extent of these operations. We hear about the court cases and the prosecutions, but there can be no question that for every court case and every matter brought before the public in one form or another there are thousands of cases in which people for their own personal reasons have not taken any public action. How far does the Bill help in this direction? I think that the setting up of a register in itself will be a help. I have considered whether this matter could be dealt with more effectively by a system of licensing and I have come to the conclusion that the form set out in the Bill would be more effective.

We should not deceive ourselves in one respect. The fact that we establish a licensing system or a register will not do away with dishonest activities whether by people who are on the register or by people who are not. These activities will continue to some extent, but the provisions of the Bill will go a substantial way towards curbing them. If a person is not on the register, then, quite apart from any other conduct in which he may indulge, he will commit a criminal offence if he engages in estate agency activities. This will catch out a number of people before they have been able to gather their victims together. This is a valuable service.

As for those who are on the register and who engage in dishonest activities, the Bill will be of help in determining their future conduct. They will be removed from the register and will be curbed to that extent, and the fact that they will be under the aegis of a disciplinary body at an early stage may well prevent their being able to enlarge their activities and claim more victims as they can do at present. Therefore, without exaggerating the protection to the public which the Bill will give, I am certain that it is a step in the right direction.

Mr. Hale

I agree with what the hon. and learned Member for Cardigan (Mr. Bowen) has just said, and it has been put fairly by the hon. Member for the Isle of Ely (Sir H. Legge-Bourke), but over all the years during which I have been a Member the House keeps on producing all sorts of propositions to protect the public whereas a comprehensive insurance system applied to every citizen would meet the case. As the hon. and learned Member knows, the Criminal Injuries (Compensation) Bill is to come up for Second Reading next week to try to compensate the victims of one sort or another of accident or crime. Why not cover the whole lot rather on the lines of the war damage system and not use this proposition as an argument for creating another closed profession?

Mr. Bowen

I am interested in the intervention. If there were a comprehensive compensation system for all who were victims of fraud in any circumstances—

Mr. Hale

Or violence.

Mr. Bowen

Or violence.

Mr. Hale

Or accident, why not?

Mr. Bowen

I refuse to be drawn into considering that, and I doubt whether I should be in order if I did so, but at least we are now considering a step in the right direction. This is one of the reasons why I think a registration system as introduced in the Bill is better than a licensing system. A compensation fund will be much more easily run wider the system envisaged in the Bill as will also the application of a disciplinary court.

There is another aspect of the Bill which does not appeal to me anything like as strongly as the first. It arises from the question whether the Bill protects the public not only from the point of view of the machinations of dishonest people, but from the point of view of providing for reasonable competence in those who are entitled to hold themselves out as estate agents.

Some people point out that the Bill provides that no one should go on the register after the transitional period if he does not possess a professional qualification and they say that it is quite wrong to cut out from future admission to the register those who do not possess a professional qualification. I should have thought that the correct attitude towards this problem would be to occupy a half-way house. People now will get on the register who will have no professional qualification at all. That is a necessary, fair and reasonable transitional provision. The same thing happened with doctors many years ago. The question arises whether it is reasonable to require a professional qualification from those wishing to be admitted to the register in future.

The point has been made about young people being admitted to the register. I see no reason why a minimum qualification should not be required of those who want to enter this profession. I do not believe that if this matter is properly handled it should debar young people who start life without any particular advantage. It certainly is not my wish in supporting the Bill that estate agency should be confined to those with substantial academic or professional qualifications or to those who, for social reasons, happen to be happily placed in the matter of entry into a well-established firm.

Mr. Ledger

Surely the Bill does not prevent a person practising without qualifications. If he gets on to the register he can appoint an unqualified manager to a branch office unless—and this is where the Bill is discriminating—the firm is a corporate body or limited company. They are forbidden to do this.

Mr. Bowen

The person on the register will be responsible for the activities of the unqualified person, and whether or not the name of the qualified person remains on the register will depend on how he carries out that responsibility.

Mr. Hale

He also fixes how much money he gets. He has a very wide opportunity.

Mr. Bowen

I should like to return to the point that I was attempting to deal with. It would be most unfortunate if, when the Council came to consider the standard of professional qualifications required, an attempt were made to have the same standard as that adopted by the chartered bodies at the moment. That would be a great mistake. On the other hand, I do not think that it would be an unreasonable burden upon young people wanting to enter this profession to have to go through an examination of a practical kind and one which they could take at the same time as they were pursuing their training or were engaging in employment of this nature.

I deprecate any attempt to create a standard which would require expensive articles or expensive courses or anything of that kind. I do not think that is what is in mind. Certainly, the powers under Clause 17 (3) should be invoked if the council should attempt to operate in that direction.

The same applies to some extent in relation to Clause 10 concerning the disciplinary aspect. I believe that the Council, when it comes to consider the scheme, would be making a great mistake if it attempted automatically to place upon the persons on this register the identical standards of code as are at present operated by the chartered bodies.

It is not a question of having different standards of honesty or anything of that kind. It is a question of considering different types of operation. There should be elasticity in dealing with the code which is to come into existence, bearing in mind that it is going to cover a far wider range of activities than is normally covered by chartered bodies. That applies, in particular, to advertising and accountancy. In matters such as dishonesty and bankruptcy, rules of that kind should clearly be universal.

I look at the Bill particularly from the point of view of whether it protects those who are at present engaged as estate agents or who might be. It is quite clear, for example, that for bodies which are not at present recognised professional bodies within the terms of the Bill there is a perfectly fair procedure for them to he placed in the category of recognised professional bodies. If they are refused recognition they have the right of appeal to the Lord Chancellor's tribunal, which is dealt with in Schedule 3, and ultimately they have the right of appeal on a point of law to the High Court. That depends upon the adoption, which I am assuming, of Sections 9 and 10 of the Tribunals and Inquiries (Evd.) Act, 1958.

In my view, there is adequate protection assuming that the Council refuses to put a person's name on the register. That is particularly well covered from the point of view of those who are in the two-year transitional period and who apply to go on the register and are refused. They have a right if their case is heard by the Council. If their application is rejected they have the right to go to the Lord Chancellor's tribunal, and to the High Court on a point of law.

Mr. L. M. Lever

Where does the Bill say that?

Mr. Bowen

In Clause 5 (2).

The position is that if a person makes application, his case has to be considered by the Council, and the Bill provides that it should be considered by the Council as a whole and not by a committee. If the application is rejected by the Council, the applicant has the right to appear before what I call, for the sake of abbreviation, the Lord Chancellor's tribunal. If the application is turned down by the Lord Chancellor's tribunal, the position is as follows: under Section 10 of the Tribunals and Inquiries (Evidence) Act, 1958, the Lord Chancellor has power to provide that there shall be an appeal to the High Court, either by way of case stated or otherwise, on a point of law.

Mr. Lever

There is nothing to that effect in the Bill.

Mr. Bowen

I do not think that there can be any doubt that the powers under Section 10 of the 1958 Act would be invoked, and it is quite clear that if they are invoked the further step of an appeal, limited to a point of law, would exist.

I have examined the matter from the point of view of discipline also, and it is quite clear that there is an appeal from the disciplinary committee to the High Court, not only on a point of law but on the full merit in relation to the disciplinary order made by the disciplinary committee. Therefore, I believe there are reasonable safeguards from the point of view of the body which is not now in the position of a professional recognised body, from the point of view of a person who is on the register or who has been removed from the register, and from the point of view of someone who is subjected to discipline under the provisions of this Bill.

I want to touch on two points in respect of which I think the Bill could be improved. Clause 11 is very valuable. Again, it is one which would be difficult to operate if one were confining one's activities to estate agency in relation to a licensing system. It deals with the keeping of accounts. There is one aspect of the matter which should be dealt with in Committee. It will be seen that subsection (1, c) of the Clause refers to the granting of certificates by a recognised body of accountants.

Mr. Hale

Somebody else being put out of business!

Mr. Bowen

The position at the moment is not satisfactory in this sense. Let me give an illustration. Clause 21 (1) deals with those who are the recognised accountants for this purpose. It says that a recognised body of accountants', means any of the following… and then a list is given.

What is anomalous is this. These are the accountants, recognised by the chartered bodies, and that creates a suspicion of advertisement so far as the chartered bodies are concerned. This is a matter which could easily be dealt with. Those bodies which are at present covered by the Bill are set out in Section 161 (1, a) of the Companies Act, 1948, as being qualified for appointment as company auditors.

The strange thing is this, that if one looks at Section 161 there is also a paragraph (b) which sets out those people who are qualified for appointment as auditors of a company but who do not come within paragraph (a). It seems utterly absurd that people who are in the (b) category should be qualified under the Companies Act and not qualified under the terms of this Bill. That is one of the matters which should be dealt with in Committee.

The other matter is in many ways more fundamental, and that is the constitution of the Council. Reference has been made to the numbers. It is quite clear that the Council is weighted heavily in favour of the chartered bodies. I think that there is an argument for saying that in the initial stages those bodies which have already been applying a system of discipline and those bodies which have already been operating a system of qualifications will be of considerable help to a council of this kind. Their guidance and experience would be of considerable value.

I am disturbed about writing into the Bill something which will give in perpetuity, unless it is subsequently altered by Parliament, virtually complete control to the bodies which happen at present in 1963 to be recognised professional bodies. I think that this matter could be dealt with quite simply in Committee. One way of dealing with it, at least in part, would be under Clause 3 (11). If any recognised body for the purpose of the Bill may become a chartered body, it would be invidious that it should not share in the representation which is now in the Bill in respect of existing chartered bodies.

Mr. Will Owen (Morpeth)

If that view is acceptable to the promoters of the Bill, in so far as they have fixed a limit of 42 members, then we are inhibited in meeting the view that the hon. and learned Gentleman is now expressing.

Mr. Bowen

No. That is the very point that we should have to deal with in Committee. There may be an argument for saying that during the transitional period the council should be made up in a certain way, but after the transitional period the Council could be constituted in a different way. I have given one illustration—I am sorry if I did not make it clear—by the Amendment of Clause 3 (11), which deals with the question of a chartered body ceasing to exist or to chartered bodies amalgamating, but does not envisage the possibility of a new chartered body being created. I think, for example, that greater representation in the future might well be given to recognised bodies other than the ones which are at present set out.

I should make it quite clear that I do not want to drive anybody into either a chartered body or a recognised body. I think it highly desirable, in their own interests, that they should be in such a body, but if there are people who want to be "lone wolves" I think that they should be given adequate protection in the Bill, or any other Bill, and they should be represented on the Council according to their numbers. If, for the sake of argument, the "lone wolves", who chose to remain outside either the chartered bodies or one of the other recognised bodies, were extremely numerous, it is only right that they should have a proper voice in the control of the Council which is to exercise supervision over their activities as estate agents.

Dr. Glyn

I think that the hon. and learned Gentleman has hit the crux of the whole thing in the point that he has raised. Would he advocate what I would call proportional representation as between the chartered and the unchartered?

Mr. Bowen

As a member for the last twenty-five years of the Proportional Representation Society, I welcome a new recruit.

I do not think that I can really deal with this in a Second Reading speech. What is needed, I believe, is to amend the provisions in relation to the Council so as to see, first, in the transitional stages, that there is the assistance of those who have experience and knowledge of these matters, and, secondly, alter the transitional stages, that all those who are affected by the Bill are represented on the Council, and that the representation reflects their strength.

Mr. Ledger

There is a difficulty about the transitional period. If there are to be changes during the transitional period, which could be up to three years, and other people brought into the Council, presumably the code of conduct could come into operation during the first three months, and if it is as restrictive as some of us think likely, many other people will disappear from business.

Mr. Bowen

That point has some validity in it to this extent. It may be said that the chartered bodies will be able to set up a code of conduct to suit their own book. I would say that those rules can be altered by the Council when it has the proper representation upon it. Secondly, those rules have to be approved by Privy Council. Thirdly, those rules can be annulled by this House. So it is not quite right to say that those persons who are not now within a chartered body will be completely at the mercy of the majority of the Council, that being a chartered body majority.

Mr. Ian Percival (Southport)

If the hon. and learned Gentleman was suggesting that the rules of conduct can be annulled by this House, I would say with respect that that is not correct. Clause 17 (3) applies only to Clause 5 (1) and not to Clauses 9, 10 or 11. The code of conduct comes only under Clause 10.

Mr. Bowen

I speak subject to correction, but it is certainly my impression that under Clause 17 (3) The power of the Privy Council to make orders under this section. applies to anything that is submitted to the Privy Council. I should have thought that if the Council is submitting a scheme which includes in it disciplinary provisions, the Privy Council has the right to annul any portion of the scheme submitted, including that which deals with the disciplinary provisions. The Standing Committee would have to look further into that point, but it is clearly my impression that the disciplinary code as part of the scheme would be subject to review by the Privy Council and could ultimately be subject to annulment by this House.

Mr. David Weitzman (Stoke Newington and Hackney, North)

The hon. and learned Gentleman says that it can be annulled by the House, but, clearly, it cannot be amended by the House.

Mr. Bowen

That is correct. It can be annulled. That applies to most procedures dealing with matters of this kind.

I welcome the Bill wholeheartedly. I think that if the main provisions of the Bill operate they will prevent a considerable amount of human suffering by people who need our protection. I hope that some of the matters that I have mentioned and which have been mentioned by other hon. Members can be cleared up in Committee. The principal provisions of the Bill would do a great deal to protect gullible members of the public and be of considerable social importance.

2.20 p.m.

The Joint Under-Secretary of State for the Home Department (Mr. C. M. Woodhouse)

I am aware that a number of hon. Members still wish to take part in the debate, but it might be convenient if I intervened at this stage to speak on behalf of the Government as briefly as this complex Bill allows. I cannot begin without joining in the congratulations to my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) both on his success in the Ballot and in his choice of subject for the Bill. I should also like to congratulate him on the obvious and sincere depth of sympathetic feeling with which he addressed the House and on the very comprehensive grasp which he showed of the problems which arise in connection with the Bill. We have only to look at the Bill itself, which is a thick one for a Private Member's Bill, to realise the complexity of the subject with which he has attempted to deal.

The question of statutory control of estate agents is not new. It has been considered in this House before, and I agree that it is right that the House should give further consideration to it now. The first proposals for statutory control of estate agents came before the House forty years ago in another Private Member's Bill but, unfortunately, on that occasion and on subsequent occasions before the last war when other Bills on the same subject were introduced in the House it did not prove possible to make much progress with them because the estate agents themselves were unable to agree on the best method of control.

I am sure that hon. Members will agree that in imposing statutory control of a professional or semi-professional body of men, it is obviously of the highest importance that the majority of the leading members of the profession should be in agreement on the fundamental principles which they are to be called upon to operate. Fortunately, on this occasion, as we have heard, all the long-established professional bodies—I use those words carefully because they do not cover the entire occupation of estate agents—whose members are concerned with estate agency have agreed on the proposals put forward in the Bill. This is a welcome advance on the previous situation with which the House has been faced, although, as hon. Members know, it does not take us the whole way.

The House will be aware—and my hon. Friend the Member for the Isle of Ely referred to this—that certain of the professional bodies to which I have referred have had proposals of this kind under consideration for a long time and have revised their thinking on them from time to time. A year or more ago, they approached the Home Office with a draft Bill, as my hon. Friend said. I think it important that I should con- firm what he said, namely, that the Government decided that it would be desirable for assistance to be given to the professional bodies with a view to enabling them to clarify and improve the details of the Bill so that if and when it came before the House an undue or unnecessary amount of time would not be taken in amending it in Committee.

Mr. Owen

In the light of the hon. Gentleman's interpretation of what transpired then and the help given, will he say whether the Government are underwriting the present Bill?

Mr. Woodhouse

I am coming to that point. It was in order to clarify the Government's position that I said that we decided it would be desirable to give assistance to the bodies concerned but made it clear to them that we did so on the understanding from the beginning that the Government retained an open mind on the basic principles of the Bill. This is what I have to confirm to the House now. The discussions which took place at that time were entered into without prejudice to the Government's attitude either on the details of the Bill or on the principle of registration, which is the fundamental provision in it. I know that my hon. Friend the Member for the Isle of Ely will confirm that that is a correct statement of the Government's position.

Of course, the Government would welcome a Bill for the control of estate agents which was agreed by estate agents generally. This debate has served to show, and will I think continue to serve to show, how far the proposals in this Bill are generally acceptable, but, meantime, the Government's attitude remains one of neutrality until the House has made up its mind.

Therefore, it is my object not to speak either in favour or against the Bill as it stands but rather to draw hon. Members' attention to certain points, implications and consequences of the Bill to which I think they would wish to give special consideration. As I have said, the Bill is supported by all the long-established professional bodies concerned with estate agency, but, as has been made clear—it was particularly mentioned by my hon. Friend the Member for the Isle of Ely and by the right hon. and learned Member for Newport (Sir F. Soskice) whose speech I was unfortunately unable to hear; he was aware of the reasons for that and I am sure that he will forgive me just as I forgive him for not being able to hear my speech—there are some estate agents who are not members of those bodies and who are not happy about the form of control proposed in the Bill.

The recently formed National Association of Estate Agents, which represents some of those independent agents, has informed my right hon. Friend that it does not support these proposals. However, it does not dispute that some form of control is necessary in order to protect the public from unscrupulous people who set up in business as estate agents and whose activities have already received in this debate the criticism which they richly deserve.

This is the view which the Government whole-heartedly endorses, and I think that every hon. Member who has taken part in the debate—I am not sure about some of those who have interjected in the debate without having made a speech in it—has agreed that some form of control is needed. As is the case in many occupations in which quick gains can be made by unprincipled people, it is undenied that some rogues have infiltrated into estate agency. The post-war housing shortage has, unfortunately, given them special opportunities for doing so without having any regard for ethical behaviour. I think that every hon. Member could add to the examples which have been quoted in the House. But, of course, the vast majority of estate agents are as indignant at these activities as we are. Therefore, we are agreed that action should be taken to prevent unscrupulous agents from robbing the public and bringing estate agency as a whole into disrepute.

The difference of opinion which has arisen and which has been expressed particularly by the National Association is concerned not with the need for control but with the form which the control should take. As my hon. Friend the Member for Cheadle (Mr. Shepherd), said this is the fundamental point to which the House must address itself.

The main proposals of the Bill are first, for a system of registration; secondly, for an Estate Agents Council, which would keep the register and have disciplinary powers; and thirdly, for a compensation fund which could be called upon where registered agents failed to meet their obligations. In other words, the proposal is to control estate agents in much the same way as architects, dentists and other professions are controlled under statutes dealing with those professions.

As we have heard, however—and the case was particularly well put by the right hon. and learned Member for Newport, although I did not get the impression that he was aligning himself wholeheartedly behind the case—some of the estate agents who do not belong to the professional bodies prefer a system of control based on licensing by an independent authority coupled with insurance bonding or fidelity bonding to safeguard the public against financial loss.

It would be right, in parenthesis, at this point for me to point out that the rôle of the Government would be quite different according to the system adopted. In a registration system, there would be a very small rôle for the Home Office or any other Government Department to play as defined in the Schedules to the Bill. In a licensing system, however, some Government Department, which would not necessarily be the Home Office, would have a considerable and, perhaps, one might say, decisive rôle in the operation of the scheme. The House would want to consider carefully the respective merits of these different proposals. The right hon. and learned Member for Newport made a fair point when he showed that the balance of argument is by no means absolutely decisive in one direction rather than another, which makes the task we are considering by no means an easy one.

In attempting to decide what kind of control of estate agents there should be, the obvious starting point for us to take is the object for which the control is being established. The Bill is based on the assumption that what is needed is to provide for two things: first, the elimination of fraudulent estate agents, and secondly, ensuring that registered estate agents are competent in their own business.

On the other hand, the proposals for licensing estate agents are based, I understand, on the view that the main need is simply to protect the public against fraud. Those who prefer licensing take the view that estate agency is primarily a commercial activity for which it is not necessary to have a test of competence based on theoretical knowledge and examinations.

It is true that the National Association, in its memorandum—which was among the large quantities of literature which, I am sure, all hon. Members have received— entitled "Why all estate agents should be licensed by law", has included in its alternative scheme a provision to the effect that a person applying for a licence must satisfy the licensing authority that he is a suitable person to practise as an estate agent, by evidence either of competence, experience or character. Beyond that phrase, however, the pamphlet does not tell us anything more about how this test is to be applied or on what basis.

Obviously, as the hon. Member for Southall (Mr. Pargiter) rightly emphasised, competence is desirable in any business activity and customers are liable to suffer in any business activity if the person who purports to be their expert adviser is not a competent expert. My hon. Friend the Member for the Isle of Ely referred to the financial importance to most people of a transaction involving property; he said that it was very often the most important financial undertaking which most people ever undertook. The question is whether a sufficient degree of competence for estate agents could be secured by a system of licensing or whether it is necessary for this purpose to have some form of control such as the Bill proposes.

The House has heard arguments on both sides. Those in favour of registration have hitherto been more emphatic, although the right hon. and learned Member for Newport cogently put the arguments from the other point of view.

Mr. R. W. Sorensen (Leyton)

Do I take it that if the Bill goes to Committee, it is capable of being so amended that there can be licensing in place of registration?

Mr. Woodhouse

In Committee, anything might happen. The first thing is to give the Bill a Second Reading.

Mr. Hale

The Joint Under-Secretary has misunderstood the important question put by my hon. Friend which arises on other matters. Is the Short Title so drawn as to exclude some of the Amendments that might be desired? There might be reason for not giving the Bill a Second Reading if it is not capable of being amended on these lines.

Sir H. Legge-Bourke

Perhaps I might help. I believe that the hon. Member for Oldham, West (Mr. Hale) did not hear my opening remarks.

Mr. Hale

I am sorry, I missed the first five minutes.

Sir H. Legge-Bourke

In the course of my opening remarks, I said that it was at my request that the word "registration" was deliberately left out of the Title to facilitate discussion of the whole question of licensing.

Mr. Hale

I am obliged.

Mr. Woodhouse

I also am obliged to my hon. Friend. I was about to make exactly the same point. From the moment I first studied the Bill, my understanding was that it could be amended in Committee in the sense which has just been indicated.

If it were to be agreed by the House that the laying down of a standard of competence for estate agents is to be required, there is a case for saying that the best way of ensuring that is to put the matter in the hands of estate agents themselves in the way that the Bill proposes. There are, however, other possible ways of achieving the same result, such as requiring estate agents to be registered if they wish to use the title "Estate agent" or some other prescribed title. Although I mention this as a possibility, I am inclined to be doubtful whether it would commend itself to the House or be really satisfactory, because there would then seem to be opportunities for people to set up in this business under some other title than the prescribed title which would not be subject to control but which might well lead the public to suppose that expert assistance of the kind expected of an estate agent was being offered.

If the House should come to the conclusion that there should be some control of estate agents as regards competence, and that such control would best be achieved by a system of registration, it would still want to satisfy itself of the details of the system proposed in the Bill. For instance, we should ask ourselves whether the mischief caused by incompetent estate agents is so great as would justify going as far as is proposed in Clause 15 of the Bill, which is a strong Clause. That Clause would prevent anyone from doing any of the things which come within the scope of Clause 20 unless he is a registered agent.

It will not have escaped the notice of the House that Clause 20 is so drafted as to catch the performance, even on one single occasion, of any of the actions referred to in it if payment is received for doing it. On the other hand, the entitlement to registration of those already practising as estate agents under Clause 5 will apply only to persons who are carrying on business on the appointed day. It follows that those who undertake only occasionally the kind of function concerned—for instance, shopkeepers and even funeral undertakers, as we were told—would not be able after the Bill came into effect to continue to act in this way without being registered, nor would they be entitled automatically to registration as being in business as estate agents at that time. I am sure that points such as these have been carefully considered by my hon. Friend the Member for the Isle of Ely and by those who have sponsored the Bill, but I think it right to draw the attention of the House to the effect which these Clauses would have.

Another point which has to be considered if it should be accepted that there must be some control of the competence of estate agents is what the standard of competence should be. In this connection, Clause 5 is relevant. It provides that persons who are not members of the recognised professional bodies must, in order to obtain registration, satisfy such conditions as to his character and professional qualifications as may be prescribed, The standard of the examination to be set them is a matter to be determined by the Estate Agents Council. Some apprehension has already been expressed, and I think it may find more expression, that the Council might be tempted to set its sights too high in exercising this dis- cretion, though the hon. and learned Gentleman the Member for Cardigan (Mr. Bowen) assured the House that in his view the standard set would not be as high as those of the professional bodies themselves. I think I understood that to be his point.

Mr. Bowen


Mr. Woodhouse

His hope.

Clause 1, which sets up the body to be called the Estate Agents Council, defines its function inter alia as securing adequate standards of competence". Of course, here the key word one must look at is the word "adequate". I am sure it would not be the intention of the Council—I gather this from what my hon. Friend the Member for the Isle of Ely has said, and it has been said by others who are in touch with the sponsoring bodies—to set a standard of examination comparable to that required for some of the other professions, especially the so-called learned professions, which are controlled by similar Statutes.

There are, of course, some safeguards, and the hon. and learned Gentleman the Member for Cardigan referred to some of them. The two which I think are most important in this context are, first, that the rules drawn up by the Council under Clause 5 must be approved by the Privy Council; and secondly, that the rules would be subject to annulment by resolution of either House, though, as the hon. Gentleman the Member for Stoke Newington and Hackney, North (Mr. Weitzman) pointed out, the House could annul them, it could not amend them. These are, clearly, points which will have to be very carefully considered at later stages of the Bill if it is given a Second Reading.

There has also been expressed some apprehension about the requirements to be included in the code of conduct which the Council is empowered to draw up under Clause 10. My hon. Friend the Member for the Isle of Ely rightly admitted that this was the subject of greatest concern to the independent estate agents. Here again the House might well think it not unreasonable to allow estate agents to do some things by way of competitive practice which might not be allowed to members of professional bodies. The Clause as drafted specifically provides for the prevention of touting for business and of an estate agent giving publicity to his activities. If I understood my hon. Friend aright, he referred here in both cases to the precedents in the Opticians Act, 1958. I think I quote him correctly. But that Act does not actually use the words "touting for business" or "particular methods of giving publicity to activities". I think the House would, therefore, want to consider very carefully whether requirements of this kind can be considered as reasonable in relation to the carrying on of a business by estate agents.

While I am on the subject of the rules and the code of conduct and the safeguards, I think I might also refer to a point which has been made more than once in the debate concerning the provision in paragraph 2 of Part I of the Third Schedule empowering my noble Friend the Lord Chancellor to set up a tribunal to determine appeals. It has been suggested that this provision might not be satisfactory. My hon. Friend told the House that he had consulted the Lord Chancellor, as, of course, I have also, and I should like to say that my hon. Friend was perfectly right in rebutting the suggestion that as the Bill gives the Lord Chancellor no guidance, except that he should appoint two or more persons, he might possibly or would be able to nominate any person he might choose to be a member of the tribunal, and that he might even regard the presidents of the three chartered bodies as suitable for appointment to a tribunal which had to decide whether another body should be "recognised".

This suggestion has in fact been made, and I have the authority of my noble Friend the Lord Chancellor to say that he would not regard a president of one of the chartered bodies as suitable for appointment to the tribunal. He would contemplate that such a tribunal would always include a suitable lawyer who would act as chairman, and he would not appoint to the tribunal anyone whose background made it likely that he would take a particular view of issues which the tribunal would have to decide, and he has further said that he feels confident that any successor to his office would take a similar view. I hope the House will feel that that is a sufficient undertaking to make it unnecessary to write any more specific legislative provision into the Bill to safeguard against that particular unreal danger which was raised at one point.

I turn now to the other main provision of the Bill which is for the setting up of a compensation fund. The provision of such a fund is regarded by some estate agents, as we have heard, or read in the literature which has been sent to us, as not being the best method of protecting the public against dishonesty. Reference has been made in the literature we have all received to the practice for which there are precedents in other Commonwealth countries to insurance bonding of estate agents. Reference has also been made in this debate to the comparative merits of these two schemes, and to the fact that the compensation scheme as proposed in the Bill will inevitably not become effective for some time after the Bill comes into effect. None the less, I must say that I feel that the provision of a compensation fund does greatly enhance the value of the proposals now before us, and I am glad that the sponsors of the Bill did decide in the course of the discussions and preparations of the Bill to include it.

Lastly I turn to the difficult question of Scotland. Clause 16 of the Bill contains an exemption for lettings in Scotland not exceeding six months in duration. I think the House might well feel that it would be inequitable and perhaps, to say the least, difficult, to administer such an exemption in relation to Scotland alone, if it did not apply to England and Wales. The exemption would in any case seem to leave a dangerous loophole for unscrupulous agents who might disguise their businesses as being concerned with lettings for six months or less, and there is also the difficulty, to which reference has been made, of the estate agents whose businesses straddle the Border. If the Bill is given a Second Reading I feel that this exemption would require very careful consideration in the Standing Committee.

There are other difficulties in connection with Scotland to which my hon. Friend frankly referred, and to which my hon. Friend the Member for North Angus and Mearns (Sir C. Thornton-Kemsley) also drew attention. There is one of them in particular to which I might refer, though perhaps the majority of them might be left to be dealt with in Committee.

My hon. Friend the Member for the Isle of Ely mentioned his intention to seek amendment of paragraph 1 of Part I of the First Schedule so as to require the nomination by each of the nominating bodies of one person representative of Scotland. I can say on behalf of my right hon. Friend that if the Bill is given a Second Reading he, for his part, would not object to an Amendment at a later stage requiring that one of the four persons to be nominated by him should be representative of Scotland.

These are some of the important issues, though by no means all, to which I believe the House will want to give very careful attention before deciding to give the Bill a Second Reading, and which, if the Bill is given a Second Reading, will need further consideration in Committee.

I shall not attempt to influence the House in its decision on this issue, but, in conclusion, I should like to say that if the Measure is given a Second Reading, I would undertake, although I must reserve the Government's decision on some of its details, that the Government would continue to give assistance to make sure that the Bill is put on the Statute Book in a practicable and satisfactory form.

2.52 p.m.

Mr. L. M. Lever (Manchester, Ardwick)

The hour is getting late and I have waited patiently to make my contribution along with others who still hope to catch Mr. Speaker's eye.

The Bill is timely in that the country has been waiting for it a long time. As to intention, it is not before time that some protection was intended to be conferred on the public.

As the hon. Member for the Isle of Ely (Sir H. Legge-Bourke) proceeded with his speech one felt that the spirit of conciliation, reasonableness and justice emphasised the common view on both sides of the House. However, while the intention is good, it is very doubtful whether the Bill either reflects or will achieve the intentions that he has in mind.

I am glad to be able to say something on this subject, not that I am a member of the National Association of Estate Agents. It came into existence just over a year ago, and has made a move in the right direction by establishing a code of conduct. Any step in that direction is to be applauded. From my knowledge of that body, I can say that it consists of responsible persons and is endeavouring honourably and faithfully to make its contribution towards an agreed form of protection for the public.

The difficulty about estate agents has arisen mainly only in the post-war period. As I have said, I am not a member of the National Association, nor am I a member of the learned bodies to which reference has been made, which are being given over-weighted representation in the Estate Agents Council. I speak as a solicitor of thirty-six years' standing in constant contact with the public, and I must say that since 1945 the situation in regard to estate agents has deteriorated.

The overwhelming mass of estate agents, whether members of the learned societies or professional bodies or independent agents, unquestionably are honourable. While the Bill will try to regularise the position, it will not achieve, or not achieve quickly, the very necessary results that we want. Many estate agents are very honest, but quite a few are not. Many of these estate agents often see the client and ask for a deposit, and, while the deposit would be recoverable on some form of receipt, the estate agent often not only gets the deposit, but induces the client to sign a binding contract. Very often, because of uncertainty about mortgage arrangements and lack of knowledge, it is difficult for people to go forward with the purchase, and they inevitably have to lose their deposit.

There have been a few cases, including in recent weeks, of estate agents who have defrauded the public and gone bankrupt. All the uncertainty about the profession or business makes it necessary for all the professional bodies and the independent agents to get together and try to devise satisfactory protection for the public.

Turning to the proposals, I believe that, from the point of view of satisfying the public mind registration would not be as good as licensing. I feel that every time an estate agent has to apply for a licence the public would know about it. That is not all. Under the registration system, once admitted, it is admission once and for all until one is found out. Under a licensing system one has the opportunity to deal with agents on an annual basis, and it seems to me that the incentive to be good would be greater if peoole had to be licensed annually than if they were put on a register once and for all until their misdeeds were discovered. I would emphasise that point.

Mr. Humphrey Atkins (Merton and Morden)

Surely the hon. Member is riot suggesting that in order to get a licence once a year an estate agent would have to prove that he had been good. The agent would get it automatically unless a complaint had been lodged against him. Therefore, I do not see why it would be easier to strike off a bad estate agent under a licensing system than under a registration system.

Mr. Lever

It would be a more public act than if one were registered automatically for good until found out. If one had to apply for the licence to a petty sessional court or the Board of Trade, the court, by means of the local police force and in other ways, would be conversant with the general conduct of the applicant, and the Board of Trade would also be alive to the situation. Even on the matter of registration. I cannot but emphasise that the weight of representation is on the side of professional bodies. I think that that has been made perfectly clear today.

Mr. Vane

Would the hon. Gentleman prefer the same rule to apply to solicitors?

Mr. Lever

We are dealing now with estate agents. I know perfectly well that if I became irrelevant, Mr. Speaker would rule me out of order, and I would rather defer to the wishes of the House from a point of order point of view than be led up the garden by the hon. Member for Westmorland (Mr. Vane).

Mr. W. R. van Straubenzee (Wokingham)

Can I, perhaps, assist the hon. Gentleman?

Mr. Lever

Please do not assist me at all.

Even if we have a system of registration, quite clearly we have got to be fair and the professional bodies must make allowances for the number of members which each organisation has. After all, what does, the Bill say? It says not only that there will automatically be registered those who are in the professional bodies, but that all those who are independent estate agents—if they apply—as at a certain date, within two years. If they are honourable enough to be admitted according to their calling, then they should be honourable enough to be elected as members of the Estate Agents Council. Therefore, I think that if the Bill gets a Second Reading today we shall have to look at the position very drastically in Committee. I must say that the hon. Member for the Isle of Ely seemed most amenable when these points were put. He even suggested that he was prepared to move an Amendment in Committee to his own Bill. That shows a good spirit.

Sir H. Legge-Bourke

The reason why I did not get the drafting altered before Second Reading more than I did was because of my undertaking to the National Association to get the Bill out a month before Second Reading.

Mr. Lever

I am grateful to the hon. Gentleman.

There is another point of discrimination. When a member of a professional body applies for registration and is refused he has the right to appeal to the High Court. On the other hand, a person who is not a member of a professional body has to go to a tribunal appointed by the Lord Chancellor. In spite of what the hon. and learned Member for Cardigan (Mr. Bowen) said when I pressed him on the point, he seemed to think that if a person was not satisfied with the tribunal on a point of law, he could go to the High Court if the Lord Chancellor specified that anybody going to a tribunal should have the statutory right of further appeal to the High Court.

There is a discrimination here between the treatment of those who are members of a professional body and who are treated as first-class citizens of the estate agents, and others who are not, who, indeed, would appear to be second-class citizens, in regard to the treatment which they are to receive. I think, quite frankly—and I have the greatest respect for the courts of this country—that anybody who is turned down should have the right to go to the High Court if he is dissatisfied either with the decision of the registration council or the licensing authority whichever becomes the authority.

I am very worried about the question of compensation, because, really, what does the Bill do? It says that we are to have registered professional bodies and that we are to have those who are not members of a professional body but who are in bona fide business on a certain date and who can apply within two years to become members. Therefore, we are to have this uncertainty concerning the treatment of customers by estate agents during the next two years, and, in addition, we have this difficulty of a compensation fund being established at some remote period of years.

But the Bill does not say when it will be established. Clause 12 says: Before the expiration of the period of three years beginning with the appointed day"— and no one knows when that is— the Estate Agents Council shall draw up and submit to the Privy Council a scheme providing for the establishment, maintenance and administration by the Estate Agents Council of a fund out of which grants may, where the Estate Agents Council thinks fit, be made for the purpose of relieving or mitigating loss"— not covering loss but mitigating loss— caused by the dishonesty of a practising estate agent…". All that the Council has to do is to draw up a scheme within three years. Let us consider the disparities of the situation. The Bill is intended to protect the public, but how will it do so? Any of those who are registered within two years—whether or not they are professional bodies—will be able to inflict whatever financial suffering they care to upon the public without any scheme having been provided, and without the members of the public having any hope of compensation. The question whether or not a person continues as a member of a registered body is a matter for his own discretion and dignity. We have heard of the man who went off with £21,000. That could happen in the case of somebody who was registered. He might say to himself, "I am going off with £21,000. I do not care whether I am registered or not. I am going abroad, beyond the reach of the law."

What is his poor victim to do? Will he be any better off by virtue of the fact that the person who has gone off with his money will be struck off the register? That will not help him. The whole Bill should operate immediately, and not upon the basis of compensation being paid within three or five years. As we see, Clause 23 (2) says: This Act shall come into operation on such day as the Secretary of State may by order made by statutory instrument appoint, and different days may be appointed for different provisions. This means that after the Council has presented the scheme for consideration by the Privy Council, if the scheme is approved there is no knowing when it will be implemented. For a period of at least three years the public will be as badly off as they are at present, without the Bill.

It is clear that if the Bill is given a Second Reading it will have to be drastically altered in Committee, and invested with a sense of urgency that it does not now possess.

Mr. Warbey

I have been listening to my hon. Friend with great care. He seems to have been describing the Bill as one that does not protect the public interest, or the interest of honest businessmen. Does he think that this thoroughly bad egg can be turned into a new-laid one in Committee?

Mr. Hale

Perhaps it is an independent financial deterrent.

Mr. Lever

I have high hopes of amending the Bill in Committee in order to achieve certain desirable results. If we had no Bill it would mean that unless the Government ceased to be neutral and changed the law to protect the public we should have to wait a long time, by way of a Private Member's Bill, before we had an opportunity of chewing over something that might be turned to the public good. We must also remember that if the various professional and independent estate agents' bodies concerned can get together to discuss the problem it may well be that the Bill will emerge from Committee as something which will afford the public immediate protection.

If that happens it will mean that the activities of a small minority of agents who, in the past, have been living on forfeited deposits will be prevented, and the public will have the assurance that the business of estate agents is on a proper basis. That is what the National Association of Estate Agents has been endeavouring to do, even as late as 1962. Having said that, I express the hope that the Government will take a lead in this matter, instead of sitting on the fence.

3.10 p.m.

Sir Cyril Black (Wimbledon)

I wish to give support in general terms to the Second Reading of the Bill and to add my congratulations to those already expressed from both sides of the House to my hon. Friend the Member for Isle of Ely (Sir H. Legge-Bourke) for the way in which he introduced the Bill to the House.

I am particularly glad, as other hon. Members have been, that he did so in such reasonable and conciliatory terms because, even if it were not obvious to us before, having listened to the debate so far I find it quite obvious that there are many matters in connection with the Bill which will need to be carefully considered in Committee if, as I hope, it gets a Second Reading.

It is entirely reasonable and proper for the promoter to have made clear that while, naturally, he stands by the few basic principles and assumptions of the Bill, he is anxious so far as possible to meet the different and conflicting points of view which have been advanced.

It is perhaps incumbent upon me to declare an interest which may be within the knowledge of hon. Members. For over forty years I have been a member of the estate agents' and surveyors' profession. During nearly the whole of that period I have been a member, and subsequently a fellow, of two of the chartered bodies referred to in the Bill. One thing which has emerged from the debate, with all the conflicting views expressed on matters of detail, is that there is a public evil at present involving the security of the savings of the public in quite a widespread degree which needs the attention of this House by legislation.

Even if the Bill does not meet all the points of view which have been expressed and others which may be held by hon. Members who have not yet spoken, it gives an opportunity—possibly the only opportunity we may have for a long time—in Committee to hammer out something which will command both the general support of this House and the general support of people engaged in the profession so that we can protect the public in the way in which I think every hon. Member who has spoken up to the moment has admitted that the public needs protection.

Although I did not agree with one point made by the hon. Member for Manchester, Ardwick (Mr. L. M. Lever)—I have a strong preference for registration rather than licensing—I very much agree with much of what he said, and I think the promoter would agree also, to the effect that the more sense of urgency we can get into this matter, particularly on the establishment of a compensation fund, the better it will be for the public interest.

I want to say a word or two about the position of unattached agents. That is a matter which goes to the whole root of the trouble. I happen to be a member of two of the chartered bodies, but I hope, notwithstanding that fact, that I can bring some freedom from bias and prejudice to a consideration of this problem. I am quite prepared to recognise, as I am sure all the sponsors of the Bill would recognise, that the vast majority of unattached agents, in the same way as the vast majority of members of the older professional bodies are men who are carrying on an honest business to the best of their ability and competency and that they are just as disturbed by appalling cases of the public being despoiled and robbed as are all the members of the chartered bodies.

I therefore hope that we can approach the matter from the standpoint of viewing the unattached agents not as being people who are on the other side of the table from us in the consideration of this matter, but as being people who have a legitimate interest in the maintenance of their businesses and who are concerned, with us, in seeing that the public get adequate protection. Let us therefore see whether it is possible, at any rate to some extent, to allay the worst of their apprehensions and to see whether some of the points of view which they have advanced can be met.

Last week, I received a deputation from certain unattached agents in my constituency. I was anxious to hear what they said. I think that possibly to some extent I was successful in allaying some of their apprehensions about the proposals of the Bill, and they were good enough to say to me that there were two main points about which they were concerned and about whch they were anxious that I should say a word or two in the debate if, Mr. Deputy-Speaker, I were successful in catching your eye. Both those points have been mentioned, and I will refer to them again only briefly.

The first relates to representation on the Estate Agents Council, to which a number of hon. Members on both sides of the House have referred. I can see the arguments here on both sides as, of course, can other hon. Members. I am bound to say that those bodies which have had thirty or forty or more years' experience of operating a code of professional conduct, and of requiring a degree of professional competency from their members, start out with a knowledge in this field which in the very nature of the case cannot be possessed by the unattached agent.

I think, therefore, that they start in the position of being able, without arrogance, to claim that they can possibly —and certainly in the early stages of this matter—make a contribution to the work of the council based on their long experience of these matters, which cannot be made to the same extent by men in the profession of equal honesty and equal sincerity of purpose but who, nevertheless, have had no experience of operating a scheme of this kind.

On the other hand, that is not to say that the representation in the Bill should be regarded as the last word in the matter. Clearly, this is something which it would be proper to examine in Committee if, as I hope, the Bill gets a Second Reading. Nor is it the promoter's view—I do not think that he has ever suggested it—that this representation must stand for all time, whatever may happen in the future. It is clear that in the future the number of people in the profession who belong to the chartered bodies or to the other societies or to the unattached agents may well change and that new professional bodies may come into being. I think that it is foolish in connection with any problem of this kind to suggest that the composition of the council with which we start cannot possibly be changed at any future time to meet changing circumstances. If that point can be made clear it will do something, I think, to help in this matter.

The other matter on which the unattached agents are concerned is that of the control of advertising, of conduct and of professional competency. I am sure that, in this matter at any rate, I am speaking for the unattached agents when I say that they recognise that there are certain rules of conduct involving all the ordinary matters of honesty, integrity, truthfulness, sincerity of purpose and regard for the public interest which they are just as anxious to maintain as are the members of the professional bodies. It is only fair and right that that should be said.

I do not think that what I am now going to say is out of line with what I understand to be the view of the promoter of the Bill. Although I think that it is obviously necessary and an essential part of any scheme that there should be some control in these matters, it by no means follows that it would be right that the degree of control to be applied in the case of agents' who are merely engaged in estate agency relating to the sale of comparatively small houses, where the professional element involved in the work they are undertaking is at a minimum, should be similar to or as rigorous as the control which exists in the case of people who belong, for instance, to the Royal Institution of Chartered Surveyors, who are expected by the public, and properly expected, to be competent, experienced and trained in a very much wider branch and range of professional work than is the case with most of the unattached estate agents.

It would be helpful if it could be made quite clear that it is not proposed to apply the full rigour of the conditions which exist in the case of the chartered bodies to the much more limited type of professional work, if professional work it be, upon which these agents are engaged If the unattached agents could be given some encouragement and reassurance on those two matters, although perhaps the views that they have put forward might not be completely met, because obviously all these matters have to contain an element of compromise on both sides, it might go a long way towards creating an atmosphere in which some of the apprehensions about the Bill could be disposed of.

I honestly believe that no one among the older bodies wants to interfere unwarrantably or unnecessarily with the unattached agents. Nor do I think that we want to interfere with any proper and reasonable competition upon which they may be engaged which cannot be said to be definitely unworthy of the kind of business with which we are concerned, and which cannot be argued to be contrary to the public interest. Standards there must be. Conditions are essential.

My hon. Friend the promoter is quite right in making them an essential part of the whole scheme, but I do not think that the full rigour of the conditions of the chartered bodies should necessarily be regarded as reasonably applicable in the case of the unattached agents. If that could be made clear, we might get some understanding and good will from them.

Mr. Ledger

How can this possibly be made clear by the sponsors of the Bill when it is an elected Council of these bodies which will draw up the code of conduct? The sponsors of the Bill have not any idea what code of conduct will be drawn up, so how can they give any assurances?

Sir C. Black

I do not think that the task is all that difficult. I have already said that, in my view, there are these two main points on which, if possible, we want to establish some degree of understanding with the unattached agents. I do not see why it should not be possible to come to some agreement. For instance, it may even be possible to insert in the Bill what the conditions are to be. I do not know. I have not considered what is the best way of doing that. Usually, if there is a will to do something by legislation, a way can be found of securing that objective.

Mr. Ledger

The other way round, too.

Sir C. Black

I do not think that it is by any means impossible to go at any rate some way to meet that case.

Mr. Warbey

Would the hon. Member himself give a description of what he means by "unworthy conduct"? Would he, for example, regard it as unworthy for an agent like Mr. Roy Brooks to introduce a little political homily into his advertisements, as Mr. Cuthbertson does into his gardening advertisements?

Sir C. Black

I would be unwise to be led into the by-path of expressing a view on the propriety of advertisements which I do not normally study, so I hope that the hon. Member will agree that that is a more suitable matter for consideration in Committee.

I have indicated in broad terms what I think most people would regard as unprofessional and unsuitable conduct and I do not think that I can be expected at this stage to define that more narrowly. I have necessarily devoted most of my speech to considering the position of the unattached agents. I speak as one who does not belong to their group, but who has some sympathy with the difficulties they feel about the Bill. I hope that it might be possible for them to reconsider their attitude to the Measure.

As I said at the beginning of my remarks, there has been general agreement expressed today that some legislation on this subject is necessary. No hon. Member has suggested that the Bill should not have a Second Reading. I hope that it will, so that the matters raised today can be adequately debated in Committee.

3.26 p.m.

Mr. R. W. Sorensen (Leyton)

I agree with a large measure of the homilies and reflections of the hon. Member for Wimbledon (Sir C. Black), although I would remind him that if all the proposals he is endorsing were adopted by way of Amendment in Committee very little of the Bill would be left, apart from the mere carcase. At the same time, I would like to assure the hon. Member for the Isle of Ely (Sir H. Legge-Bourke) that I appreciate his sincerity, the ability with which he explained the details of a complex situation and that I also appreciate that the promoters of the Bill behind the scenes are animated by the best motives.

No one doubts that any endeavour to raise the integrity standards, honour, competence and efficiency of any calling or profession should receive our encouragement and support. At the same time, I must confess that I have some disquiet about certain parts of the Bill. I have no particular interest in this matter beyond that of its effect on my constituents. Although I own a house—I did not get it through a house agent and nor have I the slightest desire to dispose of it; I am not likely to want to do so in my lifetime—I will, therefore, probably not have any personal contact with an estate agent from the house-purchase point of view.

However, I am well aware that many of my constituents, and people throughout the country, have suffered from the unscrupulous minority of house agents. My disquiet arises because, m essence, the Bill deals with the middle man the person who is concerned with exchanging houses, and I cannot for the life of me see, if this Bill passes, why one should not make similar proposals about commodities other than houses. After all, a house is a commodity, and just as one buys or sells a house one buys and sells a car. Much the same could be said for other commodities and the protection of the public as has been said about property transactions. Similar arguments could be applied to the buying and selling of cars, meat, clothes, refrigerators and a host of other articles.

Is house agency work a profession or an occupation? I cannot see any fundamental difference between the buying and selling of houses and the buying and selling of other commodities. In other words, I would not classify this kind of transaction as a vocation. If it is a vocation then the buying and selling of motor cars and other commodities should also be such. I draw a great distinction between a profession and an avocation, a calling, an employment and so on. That is not to say that professional men are not involved in these transactions. Professional men are, no doubt, involved in the buying and selling of cars and other commodities, but the fundamental fact is that the buying or selling of any commodity is not of itself a professional undertaking.

I agree that there may come a stage when, like those concerns with which the hon. Member for Wimbledon, who has now left the Chamber, is connected, the undertakings in which one happens to be engaged are so vast and comprehensive that one may begin to ascend to the height of a profession. For instance, I presume that banking began in a very simple sort of way and divided into two sections represented by pawnbroking on one extreme and the Bank of England on the other. The two have a historical connection. One would apply to the bumble avocation of pawnbroking restrictions and rules very different from those one would apply to the Big Five, or the Bank of England itself. Therefore, one might well put into one category the small properties and the transactions connected with them, and into quite a different category the vast estates controlled by certain agencies. In any case, we do well to rid our minds of the idea that we are here dealing with a profession, as such, rather than with an avocation, an occupation, a calling or an employment.

I am very well aware that this is not so in all parts of the world. I remember on one occasion when I had a lecture tour in America I met a man on the campus of the university at which I was to lecture. I asked him the way and he replied in perfect English. I presumed that he was English, but he turned out to be a Turk who had never been in England at all. When I rather facetiously suggested to him that degrees might be given in ice-cream making, he replied that such degrees were given. Evidently, therefore, in some parts of the world such activities are raised to the level of professions, but we are wise not to do that in this country.

I believe that the proposal in this Bill to hand to a private body the very great responsibility of controlling and limiting all those in the avocation of house agency, develops a principle that needs very careful scrutiny. Some monopolies have some use. Public monopolies often have a very great use, and so have some private monopolies, but when we propose a monopoly like this, under which a certain number of corporate bodies inside the proposed registration council will often be able to control all those in the calling or avocation, we are getting on to very dangerous ground indeed.

Moreover, as has been pointed out already, the proposed composition of the registration council is open to very severe criticism. As far as I can tell, of the thirty members of the Council only about three or four would, at the outset, represent possibly as much as 30 per cent. of the practising house agents. A distinction must be drawn between those who are only indirectly or passively house agents and those who are actively engaged in house agency—

Mr. Ledger

There is no guarantee in this Bill that for a period of three years there will be any representation of the unattached agents. They can be brought in during the period of the first three years, and the sponsors of the Bill have agreed that that is so. There is no guarantee.

Mr. Sorensen

I appreciate that point and I was corning to it. I largely endorse what has been said.

With the kind of private monopoly proposed in the Bill, one is in danger of minimising the legitimate competition that should take place in the private sphere of social life. Among the members of this avocation, there may be some who have imaginative ideas about the development of their occupation which would not meet with the approval of the more substantial "big boys". In these circumstances of this private monopoly, it is likely that there would be an inclination to press up the prices of houses precisely because the more imaginative enterprises might be excluded.

Reference has been made already to advertising. I agree that there are some forms of advertising, not necessarily in connection with this commodity but with others, which are deplorable in every sense. But in an allegedly free market it seems to me highly appropriate to allow certain kinds of advertising which can introduce the public to commodities which thereby are cheaper in price than they would be if the advertising did not take place. Any restriction therefore on the legitimate advertising of this commodity might be injurious to the general good, for all the while in these matters, although we are concerned with improving the status of those who earn their living, whether at a high or a low level, we must bear in mind that the main interest is that of the public itself. I submit again the point for consideration in Committee, if the Bill is given a Second Reading, that any attempt to limit what I have called the more imaginative and flexible kind of development in this sphere might be so dangerous as to cause the Council itself to be in the position, by restricting the field, of putting up the prices of houses to the detriment of the public.

I entirely endorse the remarks of those who have drawn attention to the lack of any immediate safeguards for those who have suffered loss not only through fraud but also through gross negligence. I do not see why there should not be introduced into the Bill a requirement to establish immediately some kind of comprehensive fund to which all house agents must subscribe against the liability of disaster or severe loss on the part of innocent clients.

In summing up, I urge that further consideration should be given to the question of licensing by independent public authorities annually rather than by registration. It seems to me that then we should place the onus on the Government, or a Government Department, to see that proper practices shall be pursued by those engaged in this trade. Rather than it should be left to a private monopoly it would be far better to bring in the Government in some way or another to ensure that proper standards of rectitude are observed. Far better this than to leave it, however desirable that might be in other respects, to a particular private monopoly.

I urge the necessity to place an obligation upon agents to ensure against the result of fraud. I hope also that in considering the Bill means will be found by which the operations of agents do not lead to heavy costs to those who engage them to sell or buy houses. These costs, I understand, can amount to as much as £300 on a relatively small property. If this is not relevant to the Bill, I think it is at least worthy of expression at this moment.

I admit that in this highly complex and technical matter I feel like one of the babes in the woods. I listened to those who are more expert in the matter with great interest. I thoroughly appreciate their motives and intentions, but I urge upon the hon. Member for the Isle of Ely and those who support him that they should have second thoughts on some of the points which I and others have raised in the debate.

3.39 p.m.

Mr. W. M. F. Vane (Westmorland)

The House has spent almost the whole of this Friday Sitting in discussing a very important Private Member's Bill, the need for which has been expressed by all hon. Members who have spoken, on both sides of the House, even if some of them have criticised certain of its provisions. It is always a difficult task to try to frame legislation to protect the public and yet at the same time make sure that we are not harming or restricting unjustifiably honest and competent people who are trying to earn their living by carrying out some business in a way which no one could possibly criticise.

Mr. Warbey

The hon. Gentleman said that hon. Members in all parts of the House had indicated that there was a need for this Bill. I want to make it quite clear that there are Members on this side of the House who think there is a need for a Bill, but not for this Bill. We think it a thoroughly bad Bill.

Mr. Vane

Luckily, I do not think all hon. Members think it a thoroughly bad Bill.

It is in the tradition of the House of Commons that we should consider problems like these, and it is in that manner that we have been doing so today. It is also in the House of Commons tradition, as I know from experience, for a Parliamentary Secretary to come to the Box with an "open mind" and walk the Friday tightrope. I think my hon. Friend the Joint Under-Secretary did it very skilfully. I thought he was coming down on one side rather than on the other. I wish that he had. I shall not be the first Member to express the view that this subject is of sufficient importance for the Government to have played a much larger part than they have done. It is not too late for them yet to help this Bill on its way through the House. It would probably be easier to meet many of the representations that hon. Members have made, and also the fears which have been expressed from outside, if the Government did leave the tightrope and come down definitely on one side.

Here I must express my personal interest. When I was young I qualified as a member of two of the chartered bodies, although I never practised long enough to become a fellow of either, and such experience as I had was not, in the main, on the estate agency side. I was very pleased to hear from my hon. Friend the Member for Wimbledon (Sir C. Black), who is very senior in the profession compared with any level that I ever reached, that there is not a "we and they" between the members of the established societies and the many who are outside.

I met a man the other day who is now conducting an estate agency business in a way of which he can be justifiably proud. He spent the larger part of his life in a bank. He wanted to change his professsion in middle age. He had some experience of the market in his own district. It would have been difficult for him to serve his articles and pass examinations. It would probably have been hard on his family had he done so. I am sure he would have liked to have become a member of one of the associations. But he had a fear, which I am sure is shared, though quite unjustifiably, by many people, that the feeling and spirit behind this Bill are such as to make things easier for the members of the older-established societies and harder for those like him who are not members.

I do not wish to say anything which would make the right hon and learned Member for Newport (Sir F. Soskice) say that I am being scathing about an association which is objecting to this Bill, but I feel that too much emphasis has been put on their fears and too little emphasis on the general need for some regulation in the profession by means of a Bill such as this which, in spite of what the hon. Member for Ashfield (Mr. Warbey) has said, is appreciated in all quarters of the House.

My hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke), explaining the provisions of the Bill, showed clearly the principles on which he thinks it hinges. He made the good point that during the initial stages of setting up and getting this register to work there is a good case that members of the associations, who have for long had experience of operating a code of conduct and also of working a system of competitive examinations, should play a major part. What may happen in the years ahead is quite different. But there is no doubt that there is value in having had that experience.

There is, too, a value in the Royal Charter. Some hon. Members have spoken as if there is no difference in this country between associations which have been awarded a Royal Charter and others. It indicates a certain standing and a certain knowledge and experience which is valued everywhere. At the moment only certain societies are listed as having a charter, and I hope that from time to time others will be added to the list. Certainly this is not a Bill in which the closed shop principle plays any extravagant part.

Mr. Bishop

Is there any provision at all in the Bill which would enable any change to take place in the control which is established over the chartered bodies?

Mr. Vane

As the Bill is at present drafted, there is no way of amending the figures in the Schedule except by legislation. But I am sure my hon. Friend has not got a closed mind on that point. I think he indicated that fact earlier, although he made clear certain principles which he thought were important. There was criticism of the length of time that this Bill had been on the stocks or in the minds of the professions. I do not think that is a legitimate criticism. Preparation for legislation is difficult, and I have heard it said that Governments take long enough to prepare legislation even after some important Commission has made clear recommendations and demonstrated the need for some Bill. In the circumstances I would not have thought that the time taken showed any uncertainty in the minds of the sponsoring societies. Let me say again that there is no hostility within the societies towards those outside who conduct their businesses in the way that we would like all businesses to be conducted.

Here I must say that it is a little unreasonable that we should have been bombarded with quite so much literature from one quarter, although everyone is entitled to make what representations to this House he thinks fit, if he feels that his interests are likely to be affected by legislation. I wonder whether there would have been quite so many references to these societies during the debate if other societies had followed the same tactics and flooded hon. Members with paper.

Mr. Ledger

I assure the hon. Gentleman that we do not appreciate the fact that we have been deprived of information because the sponsors of the Bill apparently asked for the various bodies not to give out information and not to advertise. We wish they had. We should have liked to have had much more information.

Mr. Vane

If the hon. Gentleman will support the Bill in the Lobby today, I am sure that he will find that there is plenty of information available before the Committee stage. The numbers of any society are unimportant. It has been said that the numbers in this society were not very high. If there were 20 or if there were 10 it would still be important for us to to consider their interests.

I feel that the real difference between them and the other bodies is whether or not the transactions we are considering are more commercial or more professional. I do not think that it is possible for us to say that they are entirely one or the other. Whereas much work carried out by chartered surveyors is entirely professional, house agency is a sort of hybrid function.

I would not go so far as the right hon. and learned Gentleman who suggested that it would be possible for local estate agents to conduct their businesses adequately from knowledge of the market in their own districts only. I do not know whether he would think that the same rules apply to local solicitors. Although it is very important to have knowledge of the local market, the fact remains that it is difficult to draw a line, and I am sure that if he consulted district valuers he would find difficulties that they run into when a person of very limited training finds himself involved in other transactions, compulsory acquisition, for example.

I do not want the House to think that the sponsoring bodies are advocating any sort of closed shop, or that there is any validity in the suggestion that they are wanting to put the independent man out of business—far from it. There are some hon. Members opposite who say that the door is so wide open at present that many people will find their names on the register whose standards and competence generally barely reach the level that we all have in mind.

On the question of advertising and touting, the word "touting" in the estate agents' jargon means touting for clients and not trying to sell a property which they have been asked to dispose of. If it is not a proper word to remain in the Bill, I am sure that with help my hon. Friend can probably find another. It was suggested that by the code of the older established societies someone wishing to sell a property was limited to asking one agent to do his business and none other. That is not true. An owner of property can instruct as many agents as he likes, but what is wrong is for other agents to solicit his business when he has already instructed one agent. That is something against which we must always set our faces.

Again, it is difficult to draw a line with regard to advertising. Different types of advertising are probably appropriate to different sorts of business. I have often thought that some of the names of the firms in the West End take up too much space on the board and that advertising the firm is, perhaps, more in the minds of those who put up the board than advertising the property. A certain amount of advertising is clearly necessary, especially when it is in the interests of achieving a quick sale. But that is not always in the interest of the client. That must be considered. On the other hand, I do not think the sort of advertising illustrating a fleet of six motor cars—

Mr. Dudley Williams (Exeter)

What does my hon. Friend mean by a "quick sale"?

Mr. Vane

It all depends. If my hon. Friend wants to go abroad in a hurry, and to pocket the money quickly, he may think that it is to his advantage to take a lower price and pocket it the same day or the next day rather than wait a little for something better.

The suggestion that house agency is 90 different from other property transactions does not entirely hold water. They merge the one into the other. We should accept the fact that what we are dealing with is largely a hybrid function. The commercial element may be bigger in many other property transactions, but, none the less, I would say that it is not exclusive.

Integrity is not the only thing that a client wants. Obviously he wants to be able to rely on the integrity of his professional man, but he wants to know that he is competent, too. This is where we come to the difficulty which arises when a licensing system is suggested as an alternative to a register. I believe that no one has yet been able to suggest ways whereby a licensing system can be operated which will ensure certain standards of competence. We are not asking here that the examination should be so very high, but I think that when a client asks for professional advice of this kind he is entitled to expect that the rudiments of town planning legislation, and so on, are familiar to the professional man over and above a knowledge of the local market. That does not lead towards a closed shop, and, although there may be certain words in the Bill which we think should be changed in Committee, none the less, there is the ultimate protection of the Privy Council and of this House, which is surely about as much as we can offer.

My hon. Friend the Member for Cheadle (Mr. Shepherd), who claimed to be a member of a professional society—although he entered at the level of president, and unlike my hon. Friend who entered at the level of office boy and took preliminary examinations—spoke of the practice of transactions through nominees and of irregular relations with property companies. A client who is ill done by would have, at present, a right of redress against the person who sold his property other than at the best price, and even criminal proceedings could follow. If a member of one of the bodies supporting a code of conduct is found to have conducted his business in this way and is turned out of his society, all that he does is to rub the word "chartered" off the plate on the door and continues business next day. There will be a safeguard against this sort of practice under the Bill because he will not just be able to rub the word "chartered" off his plate; he will have to give up the business.

It was also said that the defects of properties were not sufficiently frequently put in the forefront of advertisements. We do not often see the defects of anything which somebody tries to sell put in the forefront of advertisements. I agree, however, that the descriptions of many properties on the market could well be more precisely and more accurately phrased than at present. This is something that we would like to see. It is the standard of the worst that pulls the others down. There is, perhaps, scope, as in the Weights and Measures Bill, for including a precise definition of "a stone's throw" and "two minutes' walk", which are the loose phrases which we often see.

With regard to licensing as against registration, two arguments have been put forward. One is that licensing is reviewed annually and, therefore, is really a test of competence and, secondly, it is more independent than the Council and the register which the Bill proposes. I do not think that it is so.

I have already said that a licensing system is one under which it is difficult to maintain standards of competence, and if we look into the workings of a licensing system, whether carried out by the Board of Trade or by any other Department, I do not see that it is any real safeguard. The man who keeps the register will be a relatively junior official—I do not say that he is not as honest or as intelligent as anybody here—and he will be extremely remote from the professional world. I would think that a Council such as is envisaged in the Bill, with the Privy Council, as it were, standing behind it, was something that this House could properly support.

A case has been made for the Bill, subject to a relatively small number of Amendments, which my hon. Friend the Member for the Isle of Ely has said he is willing to consider. It will be a big step forward. It will be in the public interest, as an article in The Times today bears out. It is supported by the Building

Societies Association, which, surely, has as close a connection with the world of property as anybody else. We are proposing to add something to the law of the land. Ours is not like the law of the Medes and Persians, to which changes cannot be made; and when improvements are required, surely our successors will make them. I commend the Bill to the House.

3.58 p.m.

Mr. William Warbey (Ashfield)

This is a thoroughly bad Bill. It is a dishonest Bill, because, while it sets out to pretend to protect the public interest, it is in reality concerned mainly with the creation of a closed shop.

If I thought that the Bill really protected the public against such practices as the collection of fees by persons who merely enter a name and address in a register, convey that name and address to somebody else and then charge £100 and more for doing that service, as, for example, has been done to me—I do not complain; that is the normal business practice in the estate agency profession; if the Bill cannot protect the public against that kind of thing and if people cannot be protected against speculative property dealing, which is the nub of the racket which is now taking place, in which a number of estate agents are engaged, I must say—

Sir H. Legge-Bourke

rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The House divided: Ayes 54, Noes 6.

Division No. 76.] AYES [4.0 p.m.
Allason, James Jenkins, Robert (Dulwich) Russell, Ronald
Atkins, Humphrey Jones, Arthur (Northants, S.) Sharples, Richard
Awbery, Stan (Bristol, Central) Langford-Holt, sir John Short, Edward
Batsford, Brian Leavey, J. A. Skeffington, Arthur
Bell, Ronald Lever, L. M. (Ardwick) Soskice, Rt. Hon. Sir Frank
Black, Sir Cyril Lipton, Marcus Stewart, Michael (Fulham)
Bottomley, Rt. Hon. A. G. Lucas-Tooth, Sir Hugh Studholme, Sir Henry
Bourne-Arton, A. MacColl, James Talbot, John E.
Brewis, John Marsh, Richard Thatcher, Mrs. Margaret
Campbell, Gordon (Moray & Nairn) Mitchison, G. R. Thornton-Kemsley, Sir Colin
Chataway, Christopher Moore, Sir Thomas (Ayr) van Straubenzee, W. R.
Clark, Henry (Antrim, N.) Mott-Radclyffe, Sir Charles Vane, W. M. F.
Courtney, Cdr. Anthony Moyle, Arthur Wells, William (Walsall, N.)
Doughty, Charles Orr-Ewing C. Ian Wigg, George
Ede, Rt, Hon. C. Page, John (Harrow, West) Williams, Dudley (Exeter)
Goodhart, Philip Pannel Norman (Kirkdale) Woodhouse, C. M.
Hornsby-Smith, Rt. Hon. Dame P. Pym, Francis
Hughes Hallett, Vice-Admiral John Rawlinson, Sir Peter TELLERS FOR THE AYES:
Irving, Sydney (Dartford) Rees-Davies, W. R. Sir. H. Legge-Bourke and
Mr. Bowen.
Deer, George Owen, Will
Edelman, Maurice Sorensen, R. W. TELLERS FOR THE NOES:
Ledger, Ron Warbey, William Mr. Hale and Mr. Brockway.

Whereupon Mr. SPEAKER declared that the Question was not decided in the Affirmative, because it was not supported by the majority prescribed by Standing Order No. 30 (Majority for Closure).

It being after Four o'clock, the debate stood adjourned.

Debate to be resumed upon Friday next.