ORDERS WARNING AGAINST CONTINUING CERTAIN PRACTICES (Hansard, 5 May 1978)

§ Mr. Ridley
I beg to move Amendment No. 25, in page 5, line 33, leave out Clause 4.
Clause 4 deals with orders warning against continuing with certain practices. I believe that this clause needs a certain amount of inquiry, and that answers must be given by the sponsor or the Government.
The Director General of Fair Trading is given power to condemn any practice in the profession of estate agency, and he will be able to ask persons to desist from carrying out that practice. That is a very wide power. I do not like the idea of the Director specifying which practices are within the law and which are not. I do not like the idea of his deciding that a certain estate agent has not fulfilled his obligations and therefore ultimately can be disqualified from practising.
I think that we should have something much more firm in the Bill so that people will know what is right and what is not. Clause 3(1)(b) does specify which practices are allowed and which are not but they are not spelled out very clearly. Schedule 1 gives a whole list of possible malpractices which are subject to every sort of interpretation and not clearly defined.
Also, I am not sure that I agree with many of them as being undesirable. This is not the moment for a general discussion of Schedule 1, but I have very grave doubts about the type of legislation embodied in Clause 4. I do not adhere to the principle that because someone may have done something wrong—and we all do wrong things from time to time—it is automatically regarded as 716 giving the authorities power to disqualify that person from carrying on his business. This clause gives power to the authorities to remove peoples' right to carry on a trade just because they do something wrong, and this is happening more and more in legislation.
An example of this is the 714 certificate. If someone fails to pay tax on the due date or is what is called a bad taxpayer generally, he is not made to pay up his tax as a result of the commission of his sin, but he is refused the right to continue his job as a labour-only subcontractor.
If one engages in malpractices in estate agency, the proper penalty should be meted out but this does not necessarily mean that the Director should have power to consider that person unfit and therefore strike him off the list of persons qualified to practise. It may be a minor or a major offence which should be prosecuted under the law for fraud, or some other malfeasance.
But it is just too easy a remedy to disqualify a person. We should contrast this with the provisions made available to those in industry who misbehave. If there is a wildcast strike or some thoroughly offensive restrictive practice, nobody would ever suggest that the persons concerned should be immediately stopped from following their employment.
It is too easy with professional people, in order to make them behave, to exert discipline over them by saying "We shall threaten them with removing their right to practise". We should make the punishment fit the crime. But the idea that the Director should have power to outlaw certain practices and to strike people off the list should be checked. Therefore, I do not like the clause, and that is why I have suggested that it be left out.

§ Mr. Moate
I think that I am right in saying that this was the new clause inserted by the hon. Member for Enfield, North (Mr. Davies) in response to strong representations made in Committee. Therefore, it would seem churlish to oppose one of the few concessions that he felt able to make during our earlier proceedings. [An HON. MEMBER: "That is not true."] The Minister says "That is not true."

§ Mr. John Fraser
No, I did not.

§ Mr. Moate
I do not think that the Whip could have said it, because I understand that Whips do not speak. At any rate, somebody said that it was not true. However, we have not had many concessions. Had we had more concessions, I think that we should have got through the proceedings rather more quickly than we are doing. Nevertheless, this was a concession.
I certainly do not oppose the principle of the clause, but that does not mean that we should not question in detail whether the hon. Gentleman has met the views that were expressed in Committee. Unless I have misunderstood the clause—the hon. Gentleman will correct me if I have—it does not seem to go very far to help the House.
The principle of the clause was that we should avoid the full rigours of the law as applied by the Director General of Fair Trading being applied immediately. We urged that, in effect, there should be a warning notice. We argued that if the Director General construed that a person had been guilty of some malpractice under a whole range of possible offences—sex discrimination, racial discrimination, violence, fraud or on any other grounds that could give cause for an order to be made—it would be wrong to issue an order immediately. We suggested that there should be a period of possibly 30 days before the order came into effect. The suggestion was that we need not apply the full rigours of the law if the individual concerned gave an undertaking that the practice which was decreed as unreasonable would cease. That was our request and requirement.
Does the clause carry out that request? It does not. The clause provides: (a) in the course of estate agency work any person has engaged in such a practice as is referred to in section 3(1)(d) above". It is limited to Clause 3(1)(d). That is the regulatory power—something for the future—which we discussed earlier. I understood that to be the fall-back provision—the power of the Secretary of State in future to designate undesirable practices which we were not yet able to specify. So far from it helping us, it is a rider to the fall-back power which might never be used, unless, contrary to what we were told before, it is to be exercised soon and is to cover all kinds 718 of offence about which we have not been told.
If we are to limit the clause to future practices of which we have no knowledge at present, what is the use of it? Am I right in saying that the Director General would not be able to use Clause 4 to issue a warning notice for other offences, such as sex discrimination, racial discrimination, fraud, violence or any of the other matters specified in the clause? In Commitee there was no question of relating it to this future regulatory power of the Secretary of State.
3.30 p.m.
It is essential that the warning provision should apply to all estate agents' practices and to make it unnecessary for the Director General to issue an order unless an estate agent is totally obdurate and determined to persist in a practice which is deemed to be undesirable. Only in those circumstances should an order be made. This restrictive clause in no way goes towards meeting that general philosophy. I say that that philosophy is right.
I am worried about how extensive are the powers of the Director General. I am sure that it will represent a great burden to the individual estate agent since he must look over his shoulder all the time at these penalties and provisions. If that is so, it must be right to limit the powers of discretion of a bureaucratic Director General so that he is obliged to take preliminary steps by giving a warning notice before he tries to apply the full rigours of the law.

§ Mr. Ridley
My hon. Friend has a greater knowledge of the Bill than I since he was a member of the Committee. As I read the clause, if an estate agent were to sell a house to a member of the National Front and the Director General were to outlaw that transaction as being racialist, the estate agent could be put on a proscribed list. The width of the powers is without bound. Does my hon. Friend feel that we should seek to grant such power?

§ Mr. Moate
I agree. We sought to argue that in a case such as my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) described, the Director General could not apply an order immediately to ban that person 719 from carrying on the business of estate agency because he had sold or failed to sell a house to somebody whom other people did not happen to like. I understood that the promoter of the Bill said that he would try to meet that objection. I thought that he would ensure that the Director General gave a warning first to the estate agent to desist from such practices.
This would be an offence under Clause 3(1)(b), not under Clause 3(1)(d). If I have a greater knowledge of the Bill than my hon. Friend the Member for Cirencester and Tewkesbury, that does not make me feel any happier. In fact it becomes depressing after a time. I do not believe that the promoter has met the objections. I cannot think why. It must be logical to apply a warning notice. It is a sensible system which applies in other legislation. It should be applied to all offences under the Bill, and yet the hon. Member has sought to limit it. He owes the House, particularly those who sat on the Committee, an explanation of why he has not carried out the intention that I thought he declared in Committee.
A subsequent reading of the clause does not make the situation any better. Clause 3(1)(b) refers to a practice of which we have no knowledge because it has to be specified under Clause 3(1)(d). What is the point of that? I hope that the Minister will say whether Clause 3(1)(d) is likely to be implemented in the near future. I understood him to say that it was a fall-back provision for the future. If it is as remote as that, it makes Clause 4 even more remote. It does not help us to provide a more sensible system of regulations. We were hoping for more sane and sensible powers. The clause does not go nearly as far as I understood the promoter of the Bill intended. I thought that he was going to help us. I do not think that he has.

§ Mr. Arthur Jones (Daventry)
My hon. Friends the Members for Cirencester and Tewkesbury (Mr. Ridley) and Faversham (Mr. Moate) have been modest in their criticism of the clause and its effects. I would not have thought that it is a responsibility that is welcomed by the Director General of Fair Trading or the Secretary of State. I am sure that they would not want responsibility for making the type of judgment which they are re- 720 quired to make under this clause and the reference back to it to Clause 3(1)(d).
My knowledge is limited, but I do not recall a precedent for a Bill to require decisions of this kind to be taken by a Director General of Fair Trading or within a Government Department and announced by a Secretary of State. It seems to me to be a wide-sweeping, unregulated and unwarranted power, and I cannot think that anybody will want the responsibility for it, because the character of the practices that will invoke this severe restriction against someone practising as an estate agent, whether the offence is civil or criminal, whether it is a matter of personal misbehaviour of some sort, is undefined.

§ Mr. John Fraser
I do not want to respond on the question of paragraph (d). We have debated that and it would be unfair to go back on that now. The precedent of these powers lies in the Consumer Credit Act, and although that refers to the Secretary of State, there is an elaborate appeals procedure. Although the appeal is to the Secretary of State, it is heard by a tribunal appointed under the appeal provisions. I believe therefore that there is adequate protection.

§ Mr. Jones
I am not sure that I share the Minister's complacency. As a practising estate agent and a member of the Incorporated Society of Valuers and Auctioneers, I find it difficult in my dealings with residential property to know just which decisions are likely to be taken by those who have the responsibility for determining what is fair trading under the Bill. The easiest thing in the world is to say that the provision will be generously applied, or that it will ensure fair treatment. The fact is, however, that a statutory requirement is being imposed and as far as I can see there are no safeguards for the individual.

§ Mr. Nicholas Fairbairn (Kinross and West Perthshire)
Does my hon. Friend appreciate that I was slightly horrified by the comparatively kind reaction that he made to the Minister's intervention? The Minister is saying that a person will be judged by a tribunal that is set up by another Department of State on criteria which no one knows anything about.

§ Mr. Jones
Perhaps I did not use the extravagant language that the Minister's 721 reply warranted. The answer may be that I am incapable of using it.
It is most disturbing that these powers should be created with regard to the handling of residential property. This provision is, after all, only to deal with a minor problem, but its magnitude is being developed in a way that is quite unjustified by the circumstances of estate practice. There is no indication of what is involved in personal terms or in terms of a practice generally. The powers being taken would deny a person the right to earn a living. One would think that the Government would be most cautious about introducing powers of that nature unless the reasons for invoking them were clearly defined.
This is entirely unacceptable. I agree with my hon. Friend the Member for Faversham (Mr. Moate). Let there be some system of warning or of giving guidance of people so that they may have some idea of what lies behind the Bill's provisions. For a Private Member's Bill to be enlarged in this way and to give the Government of the day or the Director General of Fair Trading these massive powers is unprecedented. I support the criticism that has been made of those powers.

§ Mr. Bendall
These powers are very wide and cause me concern. At a time when we hear that the Government are trying to help the small business man, it would appear that by widening these powers they could be crucifying the small business man. The estate agent is acting as an agent—we tend to forget this—for somebody who has given him instructions. Are we now to assume that it is not all right for an estate agent, when he receives instructions from a client, to sell to an immigrant or a member of the National Front? If somebody comes to an estate agent and says that he refuses to sell to an immigrant, it appears that the estate agent may now be in trouble, whereas it should be the person who is selling the house who is in trouble. These points need clarifying. I can imagine estate agents having to qualify and put into writing matters which may go against the spirit of the Race Relations Act in any event.

§ Mr. Fairbairn
I am extremely disturbed by the clause. I entirely support the amendment to exclude it. The Minis- 722 ter should not assume that because this is a comparatively minor Bill and that there is some minor precedent in another apparently decent Act, namely the Consumer Credit Act, it is unobjectionable. The principle of it is totally objectionable.

§ Mr. John Fraser
Perhaps I ought to explain. Clause 4 was placed in the Bill in response to the requests of Members of the Committee. It is a mitigating clause. The allegation that might be made against the clause is that it is not mitigating enough. That is an argument for further changing it to provide warnings in all circumstances but is not an argument for taking it out. It was an attempt to meet some of the legitimate criticisms. It is a fair argument to say that the warning procedures should apply to other matters also, but it is not a fair criticism to say that it is a reason for taking the clause out.

§ Mr. Fairbairn
I am even more astonished by that reply from the Minister than with that which he gave earlier. If it is a mitigating clause, let us understand what it says. It relates to any person in the course of estate agency work". That means from dawn to dusk, whatever he is doing. It means taking lunch with a client. He may be engaged in any practice. He may be smoking a cigarette, not wearing a seat belt, talking to a Scotsman, joining the Scottish National Party, voting Labour or Liberal, or any of these other obscenities. If he is a Labour Secretary of State, he may be indulging in estate agency work, which such a Minister may find to be an offensive concept. That is a sufficient reason for declaring an estate agent not to be allowed to carry on the job that he wants to do.
That it is a Private Member's Bill and is what the Minister calls a mitigating concept does not alter the fact that it is offensive for Parliament to legislate on that sort of principle and it is against any form of human right and concept of legislation that this Parliament has ever understood to be correct. The Bill is saying that the Minister shall have, by arbitrary decision—or on advice, if he cares to put it that way, by some Godforsaken tribunal of his creation—the power to say that the conduct or behaviour of a person on one occasion is a 723 reason for him to declare that that person shall no longer be entitled to do his job. I find that offensive. Have the Government not passed legislation providing that people should be warned about what behaviour shall be regarded as reason for dismissal from a job with one employer? That is not the same as being deprived for ever from carrying out that job with any employer.
3.45 p.m.
The Government are saying that a porter, for example, may be sacked by one employer but would be entitled to be employed by any other employer, but that they shall have the say whether one man shall for ever be dismissed from employment in his job by any employer. That is an offensive, evil and fundamental wrong to appear in any Act.
I hope that the Government will understand that just because this is a comparatively minor measure, the extent of its frightfulness must not be misunderstood. I hope that they will agree to remove so offensive a statutory provision. If it has a mother, a father, a brother or a sister in another Act, that is no reason to have another illegitimate child.

§ Mr. Bryan Davies
Most of the contributions from Conservative Members would have been directed more appropriately to Clause 3, because Clause 4 is a genuine attempt to meet a desire expressed in Committee for a half-way house by which appropriate warning could be given by the Director General in order not to trigger off action that is specified in Clause 3.
The extent of the amendment in Committee was restricted, but there was a clearly expressed view from both sides that some warning system should be incorporated in the Bill, and this is what Clause 4 seeks to achieve. If the clause is taken out of the Bill, it will offer estate agents less opportunity for discussion and consultation with the Director General.

§ Mr. Ridley
It is clearly a great personal tragedy for me that Clause 3 was discussed when I had to be out of the Chamber. If I can find such great fault with Clause 4, which is designed to mitigate Clause 3, what would I have 724 thought if I had been present in the discussion of Clause 3, which must be even more offensive than Clause 4? I very much dislike the powers in Clause 4 to make orders specifying practices, at present unheard of, that could force people eventually to be deprived of the right to pursue their livelihood. If this is mitigation, I am astounded.
The fact that the clause includes a gentle tap on the shoulder and a warning to desist gives me no joy. The power itself is contained in Clause 3. If it were not for my ignorance that my hon. Friends, doing noble work in Committee, had striven to have a similar provision included in the Bill, I should feel like dividing the House.

§ Mr. Moate
A great deal of importance should be attached to the claim that this is a mitigating clause. It appears so, but the fact that it relates to the least significant offence signifies that it does not meet the intentions of the Committee or the intention of the mover of the amendment. Does that not cast doubts even on the good intentions of the promoter of the Bill in proposing such a limited clause of this kind?

§ Mr. Ridley
I understand that in Saudi Arabia, if one is convicted of theft, normally one's right hand is cut off to make sure that one cannot commit the offence again. I suppose that it would be a mitigating factor if it were said that, instead of cutting off the thief's right hand, we would cut off his left hand. To that extent this is a mitigating clause.
In ignorance of what took place in Committee—and we owe a great debt to those who served on the Committee and have clearly highlighted many important defects in the shall not seek to press the amendment. However, if it were seen fit in another place to remove Clause 3, it would no longer be necessary to mitigate it; and perhaps their Lordships could also drop Clause 4. Clearly, one has not aimed high enough at the target here. Both clauses should be removed but it would be wrong to remove this one without also removing Clause 3.