ORDERS PROHIBITING UNFIT PERSONS FROM DOING ESTATE AGENCY WORK

HC Deb 05 May 1978 vol 949 cc702-15

Mr. Sainsbury

I beg to move Amendment No. 15, in page 4, leave out lines 13 to 15.

Mr. Deputy Speaker

I understand that it will be convenient to discuss at the same time the following amendments:

No. 21, in page 5, line 7, leave out '(d) and insert '(c)'.

No. 22, in page 5, line 10, leave out 'or paragraph (c)'.

Mr. Sainsbury

Amendments Nos. 21 and 22 are purely consequential on Amendment No. 15, which is designed to remove the Secretary of State's power to prescribe by order further practices as grounds for prohibiting persons from doing estate agency work. Those powers are subject to affirmative resolution, but I suspect that all hon. Members—more particularly those who make up the Opposition at any time—recognise the limitations of that procedure. Sometimes Secretaries of State who might be moved to do things which are not reasonable would find it possible to do so by the affirmative order procedure.

2.45 p.m.

If we are to give such vague and wide powers, even subject to that procedure, we must be sure that it is necessary. Mr. Smith, the great authority on our constitutional and administrative law, warned against Parliament delegating to Ministers the power to make regulations on matters of general principle unless it lays down in the enabling Acts standards delineating the boundaries of the delegate's discretion. In this case, we have no standards and no indication of the sort of matters about which the Secretary of State might wish to bring in orders.

Mr. Smith said that this power should be used only to deal with a dire emergency or an exceptional situation. I am sure that the promoter will not suggest that that should apply to the estate and agency world, but the paragraph starts with the words in the course of estate agency wok". That is a relief, because presumably it means that an estate agent cannot be debarred for his table manners or football hooliganism, but even with that limitation a number of matters could be the subject of directions which I am sure the hon. Member does not intend.

In the near future, when we have a Conservative Secretary of State for the Environment vigorously and effectively promoting the widespread sale of council houses—something that the public want—a doctrinaire Labour-voting estate agent might not wish to co-operate. As the Bill is drafted, it would be within the Secretary of State's power to say that anyone doing that work must take on commissions relating to the sale of council houses.

Mr. John Fraser

The hon. Member does not do himself justice with that example. Behind this matter is the sort of practice that his own profession lists as undesirable. It would certainly be the intention to let the initiative come from the professions and consumers, not from the Secretary of State. That is a bizarre example. Secondly, it should be clear—if not, it can be looked at—that this power is for the protection of consumers.

I hope that the hon. Gentleman will try to deal with some of the real possible problems which his own profession debars, rather than somewhat fantastical ones. If it is necessary to say that this should be only for the protection of consumers, it must be subject to consultation in the first place. We would probably make more constructive progress that way.

Mr. Sainsbury

It is always reassuring to hear such words from a Minister, but we do not know that the Minister of State or the present Secretary of State will be those responsible for administering this legislation. If the Bill were to be enacted, we are fairly confident that they would not be responsible for more than a very short time.

Parliament must have regard, quite properly, to what is being put on the statute book and what may follow from it, including the abuse of far too widely drawn powers. The Minister of State says soothingly that the power will never be used for that purpose, but he did not say that it cannot be used for that purpose. There is nothing in the Bill to prevent its being used for that purpose. Indeed, the opposite situation could operate and a Conservative estate agent could object to something concerning the Community Land Act. Practically every estate agent—whether of any political party or of no political party—objects to that useless piece of legislation. There is nothing in the Bill as drafted to stop this power being used in connection with activities of that kind.

The Minister of State blandly says that there will be consultation. I wish that he were right. However, subsection (5) says: the Secretary of State shall consult the Director and any such bodies representative of persons carrying on estate agency work and of consumers as he thinks fit". The Secretary of State does not have to consult anybody if he does not think fit. The Bill does not say, as the Minister somewhat misleadingly suggested, that the power would be used only at the behest of the institutions. A later amendment of mine suggests that at least the name of the leading institution should be included in the subsection.

If the Bill said that an order would be made only at the request of the institutions, to which the vast majority of the members of the estate agency profession belong, it would be possible to view this far-ranging power in a different light. But the Bill does not say that. The initiative to introduce an order is left with the Secretary of State. It leaves entirely with the Secretary of State the extent to which he shall consult any bodies other than the Director General of Fair Trading who is, anyway, an appointee and I would scarcely have thought he could be regarded as being independent.

The order is to be approved by affirmative resolution and, therefore, will eventually have to come before the House, but it is not impossible that a Secretary of State who behaved unreasonably would be able to get members of his party to support his unreasonable behaviour, particularly in a vote on an affirmative resolution.

As I am conscious that a large number of amendments must be dealt with in a relatively short time, I will not detain the House for long on this. Surely we would need to have, if we are to approve the inclusion of these wide-ranging discretionary powers, clear evidence of why this provision is necessary. Why is it necessary to include it? If something so drastic occurred as to make it necessary, I am sure the House would be prepared to consider further legislation. The House would always be ready to consider legislation proposed from the Back Benches or from the Government Front Bench, whatever Government were in power, if something affecting the protection of consumers buying homes proved to be necessary.

The Bill is all-embracing. Some of us find it too all-embracing. What is delaying its progress at present is the attempt of the hon. Member for Enfield, North (Mr. Davies) to include everything—belt, braces and even sitting down in case they do not work. Unless there is good reason for the inclusion of this subsection, I suggest that we would do without it and that then quicker progress would be made with the Bill.

Mr. John Fraser

As I said, I think that the hon. Gentleman was being a little bizarre in the examples he gave. The purpose of the subsection is this. It is an essential concomitant of the philosophy of not having positive licensing and registration but leaving the regulation of the profession to estate agents themselves. I believe that to be right. The less bureaucracy and interference we have the better.

Secondly, if it is sought to put too much detail into primary legislation—this has been a great mistake, in my view, in the great detail of the Consumer Credit Act—a lack of flexibility emerges which can prove most unfortunate in the future.

Thirdly, I gave an example earlier of the type of practice which could be characterised as undesirable. It would be, for example, the soliciting of a bereaved widow very soon after her husband's death, or the attendance at funerals by estate agents. If it were the general view of estate agents and consumers that were consulted that such practices should be stopped. that could eventually be declared to be an undesirable practice.

I say at once that nothing follows from the fact that such a practice has been listed by the House of Commons as an undesirable practice. That is only a trigger event. There would have to be a representation to the Director General that the undesirable practice was being followed. The Director General would have to be satisfied that there was material in all the circumstances that the carrying on of that practice made the estate agent unfit. The estate agent would have to be given the opportunity to make representations before an order was made and he could even then contest the matter under an appeal system to be set up under the Bill.

Mr. Sainsbury

May I remind the Minister that he said a few moments ago that he wanted to reduce bureaucracy? Let him reflect on what he has just said in the light of that.

Mr. Fraser

That is bizarre. I do not believe that the protection of rights, whether of estate agents or anybody else, by means of an appeals system is bureaucracy. I define that as justice.

Mr. Deputy Speaker

I want to correct something. I thought that the Minister of State was intervening. I did not realise that the hon. Member for Hove (Mr. Sainsbury) had completed his speech. I assume that the House will take it that I have proposed the Question on Amendment No. 15.

Mr. Moate

It was good to hear the Minister declare his belief in the need to reduce bureaucracy and to say that legislation had been too detailed, particularly in consumer affairs.

Mr. John Fraser

I did not say that particularly. I am all in favour of reducing bureaucracy, eliminating forms, and so on. The more we can do that, the better.

Mr. Moate

The Minister referred to the Consumer Credit Act. If he did not say so, most other people would say that in consumer protection matters bureaucracy had gone a little mad. If at this late stage the Minister is asserting his belief in the fact that bureaucracy should be reduced, it is a very welcome repentance. But I do not think that he can escape a great deal of the blame for the mountain of consumer protection legislation which in essence does not contribute much to the protection of the consumer but which imposes tremendous burdens on business which, in turn, means higher costs for the consumer. If that philosophy of cutting down bureaucracy were to express itself in some of the regulatory powers that may be taken under the Bill, it would be welcome.

However, good intentions are one thing; legislation is another. We have often heard splendid statements of intent from the Dispatch Box, but the mountain of legislation, far from getting smaller, has got higher and higher.

It was interesting to hear the Minister's observation on the importance of having general legislation rather than detailed legislation that ties the hands of the Department to too great an extent. Surely the principle of what he is saying is that we should have not general wide-ranging powers in legislation, leaving the details to regulations, but less fiddly laws. We should not have so much interfering bureaucracy, whether it comes in the original statute or the regulations. It is just as bad to have wide regulatory powers in the original legislation and then a flood of regulations. The net effect on the person at the receiving end is much the same, and it might be worse, because regulations will contain much more pernickety detail than the original legislation.

If I could opt for one course or the other, I think that it would be far better to specify as far as possible all the significant matters in the original legislation and not to trust that the secondary Statutory Instruments would do the job more sensibly. However, at present we have to consider the impact of the Bill on the consumer and on the estate agent and not trust the good intentions of future Secretaries of State.

Efforts have been made to reassure us that orders could be enacted only after there had been consultation with the Director General of Fair Trading and other representative bodies. That is clearly provided, but those bodies are selected as the Secretary of State thinks fit. That is not totally reassuring. If we think of other comparable legislation, we can all remember that disputes have taken place between different bodies. There are disputes when individuals claim not to have been consulted. There are disputes when individual groups claim that too much weight has been given to one organisation.

3.0 p.m.

When the regulations are introduced, it is likely that the Secretary of State will say, for example, "I discussed them with the Royal Institute of Chartered Surveyors". Another body will say "We do not believe that our views were properly heard". The House can do little about such disputes. Likewise, individual estate agents may say "You did not listen properly to me. You listened to the large organisations". That is the fundamental problem. That is why it is important to get matters right now.

In an earlier debate we questioned whether extra power was necessary. We questioned whether there was a range of possible unspecified offences that might arise from time to time. The Minister referred to the possibility of high pressure selling tactics being applied to those who have recently been bereaved. If that is a real danger, surely we should be considering it now. If there is the danger of high pressure doorstep selling, surely it should be specified within the Bill. If it is felt that that is a danger, surely there is a duty to prevent it from happening. If it is not considered to be a danger, a hare is being started for us to chase.

A more fundamental point is that the Minister said that the power to prescribe other offences is an essential concomitant of having a Bill that does not seek to license estate agents. I can understand the logic of that. If we are not seeking to lay down minimum standards—

Mr. John Fraser

We are seeking the maximum degree of self-regulation by the profession.

Mr. Moate

I accept that, but that does not alter the argument that I was about to advance. If we are to have no regulatory powers, I suppose that it is sensible to say that there should be a wider range of offences that can be committed. I agree with that as a philosophy because I would much prefer to prescribe the offences and take people to court when they are committed than to provide a licensing system. However, the Bill embodies a potential licensing system and it is not being fair to the House to say that that is an alternative. It would be an alternative if Clause 21 were never exercised.

Mr. John Fraser

We shall come to that

Mr. Moate

I have no doubt we shall. However, we cannot disregard the fact that the Bill has regulatory powers within it. If Clause 21 is to be exercised and if the philosophy of the Bill entails the possibility of laying down codes of conduct, the point that he is making would come under a code and not under offences. It is not true to say that it is not a licensing measure, or that it is a measure that does not impose conditions of entry. It could be and it might be. Judging from the comments made by some organizations, that is what they would like it to be. That is the sort of pressure that we would be under.

If I am right in that respect—and I believe that I am—the argument is lost for having the general power to prescribe other offences that are not criminal offences. Surely it would be generally undesirable to leave in such wide-ranging powers. My hon. Friend the Member for Hove (Mr. Sainsbury) has made a strong case. On the other hand, if we are to be told that Clause 21 is to be dropped and that the regulatory powers are to go, I wholeheartedly agree that that would be a better way of doing things. The hon. Member has not argued that yet. Until we hear that case put forward, I believe that the Bill would be better off without this provision.

Amendment negatived.

Mr. MacKay

I beg to move Amendment No. 19, in page 4, line 38, leave out 'shows' and insert: 'can show that the act was done without his connivance or consent, and'.

Mr. Deputy Speaker

With this we may also discuss Amendment No. 20, in page 4, line 46, after 'him', insert: 'unless he can show that the act was done without his connivance or consent'.

Mr. MacKay

This is a minor but important amendment. I trust that, despite the smiles from the Minister of State, it will be fairly non-controversial, and that we can approve it quickly and move on to the other amendments. Hon. Memb- bers will note that in the Bill the words in question are to the effect that an employer must show that he took such steps as were reasonably practicable to prevent an employee from committing an act which would bring the agent before the Director General or the courts.

This wording is worrying because in many practices there are agents or employees who take on responsibilities even though they do not hold a senior position. We all know that there are malevolent employees who, acting from unfortunate motives, can discredit their employer, the partner or principal in a firm. I do not want to make it easier for the partner, the principal or the manager of an estate agency practice to avoid his responsibilities under the Bill. I seek to ensure that there is no way in which, through the act of a malevolent employee, such a person could be brought before the Director General.

This minor amendment, enabling the person to show that the act was committed without his connivance or consent, is sensible and would clarify the position. It in no way changes the general sense of direction of the clause but simply clarifies the point further. It will be in the interests of everyone.

Mr. John Fraser

The Bill reflects the normal principle of the vicarious liability of an employer for his employee unless the employer can prove that he took reasonably practicable steps to deal with the situation. I know that it is not the intention, but the effect of the amendment is to put a massive and intense burden upon the employer. Not only would he have to prove as a defence that he took reasonably practicable steps; he would have to provide detailed and intricate proof that he was not acting in connivance, in cahoots, with the employee. That would impose a great burden upon him.

I am sure that that was not the intention of the amendment, but it would be the effect of it. The hon. Gentleman would be well advised to withdraw it.

Mr. Mackay

Bearing in mind the Minister's statement, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Sainsbury

I beg to move Amendment No. 23, in page 5, line 12, after 'Director', insert 'the Royal Institution of Chartered Surveyors'.

Mr. Deputy Speaker

With this we may take the following amendments:

No. 24, in page 5, line 12, after after 'bodies', insert 'and persons',

No. 58, in Clause 19, page 22, line 28, after 'bodies, insert 'and persons'.

No. 62, in Clause 21, page 24, line 39, at end insert 'and persons'.

Mr. Sainsbury

I have already declared my interest as a member of the Royal Institution of Chartered Surveyors. Perhaps I should repeat it, as I am specifically asking for this institution to be included by name in the Bill.

I was interested to hear the Minister say—I take it that the promoter shares his view—that maximising the degree of self-regulation was one of the intentions of the Bill. He could have fooled me, in view of the pages of non-self-regulation with which we are landed here. I should have thought that there were easier and more economical ways of maximising self-regulation.

But the fact that we have retained in the Bill Clause 3(1) (d), with its wide-ranging powers for the Secretary of State, subject to affirmative resolution of the House, and the fact that the Minister, in defending the inclusion of the clause, referred to the importance of that power being used really at the behest of the institutions, makes this small amendment very much more desirable and, I hope, acceptable to the promoter or the Minister. Indeed, if at some later stage or in some other place the inclusion of the Incorporated Society of Valuers and Auctioneers, or any other leading institution, were also proposed, I certainly would not oppose that. But I suggest that the Royal Institution of Chartered Surveyors is the leading professional body associated with land and property, and particularly with the training of people who are to engage in that sort of work.

For that reason, it seems to me appropriate that, whatever else the Secretary of State may do when he is using his discretion as to whom he consults, he should, as well as consulting the Director Gen- eral of Fair Trading, consult the Royal Institution of Chartered Surveyors. Let me assure the House—and the Minister, if he is worried on the point—that we would not be establishing a precedent.

The Minister will be familiar, I have no doubt, with the Metropolis Management and Buildings Acts Amendment Act 1878, the centenary of which we shall be justly celebrating this year. I wonder what arrangements, if any, are being made to this effect, while seeking to economise all the time, of course, in public expenditure. That measure was the first to contain statutory recognition of the existence of the institution, and it seems to me that to perpetuate that recognition in the centenary year would be laudable and entirely desirable. I hope, therefore, that the idea will commend itself to the promoter.

Mr. Neubert

My hon. Friend the Member for Hove (Mr. Sainsbury) has spoken to his amendment. I should like briefly to speak to mine. I suspect that his amendment is perhaps not as worthy as mine, in that bodies representative of persons carrying on estate agency work could be taken to include the Royal Institution of Chartered Surveyors.

In all our discussions we have assumed that the three principal bodies are the Royal Institution of Chartered Surveyors, the Institution of Valuers and Auctioneers and the National Association of Estate Agents. The three of them comprise, we are told, 70 per cent. of the profession. My amendment seeks to include in the consultation those who comprise the 30 per cent. not represented by those institutions, and for whom provision is not made in the Bill.

It seems reasonable that in any matter affecting their livelihood, individual estate agents who, for reasons of their own, choose not to be members of the association should be involved in any consultations that the Minister might undertake.

In Committee, the hon. Gentleman indicated the difficulty of consulting individuals. However, all that I seek to ensure is that that point of view, which would be different from the institutional point of view, would be represented in any consultations that the Minister might have under this clause.

3.15 p.m.

Mr. John Fraser

It would be quite inconceivable not to consult the Royal Institution, but it would be a little unfortunate to name one of the very reputable professional bodies without naming the others. It is not usual to do it in legislation. But I give the absolute assurance that it would be totally inconceivable not to consult it.

Secondly, as I explained in Committee, there is a difficulty about consulting representatives of those who for one reason or another object to joining any body which is representative of them.

I should like to consider widening the consultation provisions so that the Secretary of State is required to consult other persons. The words "think fit" appear so that the consultation process is not justifiable. It is not capable of being tested in the courts. It remains a House of Commons matter.

I shall not reopen the debates that we had last week on another Bill, but that is the reason why the words appear. I suppose that we could substitute such bodies or persons as appear to him to be representative of the profession and the consumers", although when we come to the unattached agents there is a real problem. But I shall certainly consider an amendment elsewhere to include consultation with persons as well as bodies. I hope that that meets the thinking behind the amendment.

Mr. Moate

I wish to comment briefly on the two amendments because they raise a matter of considerable importance. With regard to whether we should specify the Royal Institution of Chartered Surveyors, I feel that it would be invidious to select one organisation, no matter how august or distinguished it might be. As I said earlier, it is often disputes between different bodies which cause as much difficulty and argument about the consultation process as whether there has been any consultation. So I am inclined to accept the view expressed by the Minister that the term any such bodies representative of persons must include the Royal Institution of Chartered Surveyors as well as the other well-known estate agents' organisations.

The danger occurs, of course, when other organisations come into existence as soon as institutional arrangements come into being. The individuals who do not wish to band together nevertheless form some consultative body so that their viewpoint can be heard, and sometimes they are not given the voice which they should have in ministerial circles.

However, I am much more concerned with this problem of individuals. I welcome what the Minister said about consulting persons generally, recognising the difficulty that this creates. I go back to my previous experience on the Insurance Brokers (Registration) Act where the strong organisations asked for legislation but where one got the distinct impression that several thousands outside who were not substantial enough or were not members of these large organisations did not have their voice heard.

The Minister used the word "difficulty". It is difficult to consult such people. However, I do not think that we can dodge the problem because of that. If Parliament chooses to provide regulatory powers which we argue are dependent on the good will of the practitioners themselves, it is incumbent upon us to discover whether the majority truly want the legislation and not just the establishment. I feel very strongly that we should devise some sort of machinery—it may be that it comes down simply to extensive advertising in the national Press—so that we can secure the views of the individual practitioners and not just those of the large organisations and those who happen to read the trade journals.

Mr. John Fraser

This often arises on consultation. Although one cannot define exactly how it is done, in practice we meet the problem, and on Second Reading I gave the House the undertaking that we would institutionalise the arrangements for consultation with unattached agents to meet exactly that point.

Mr. Moate

That is a helpful assurance. In view of it, I shall not detain the House any longer, other than to say that it did not work with the insurance brokers. If it had done, I do not think that we should have had that legislation. It seems that the Government Departments, especially the Department of Trade, find ways of consulting large numbers of small greengrocers and others, and they ought to be able to find some way of communicating with all small practising estate agents who are not attached to any of the significant bodies. However, I place on record by appreciation of the sentiments expressed by the Minister, and I hope that the Government generally will always follow that precept.

Mr. Sainsbury

In the light of the Minister's very firm assurances I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.