HC Deb 16 December 1983 vol 50 cc1298-359

Order for Second Reading read.

9.41 am
Mr. Austin Mitchell (Great Grimsby)

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

I introduce this Bill because we live in a society in which every major party represented in the House is committed to a home-owning democracy, and to extending the spread of home ownership. It is a slow, painful process, but already 60 per cent. of our people own their own homes. That is a lower proportion than in Australia and New Zealand, but it is increasing rapidly. People are far more mobile in a home-owning democracy. Indeed, people change houses more frequently than ever before, and do so on average once every seven years. Therefore, house buying is important, and we can do much to improve the situation of our people if we make it easier, quicker and cheaper, as the Bill seeks to do.

Despite the increasing proportion of home ownership and the increasing number of transfers, house buying is still in the age of the quill pen and it is almost as if people were still paying feudal fealties. It is slow, and certainly far slower than it need be in an age of computerisation and quick access to information. The process is complicated, because the strict compartmentalisation of the professions and organisations involved keeps them all in their separate boxes, attending to their particular activities, and so leaves the house buyer to co-ordinate all the efforts of the separate groups. The solicitors do the conveyancing, and then there are the estate agents, surveyors and building societies. It is up to the purchaser to bring them all together, and to keep them all working in step with one another, and to try to push the whole process along. That is difficult to do, particularly for a new generation of house buyers.

Furthermore, the whole process is fraught, risky and aggravating. It is subject not only to delays but to the risks of breakdown of contract. The most glaring feature of all is that such things need not happen. The whole business could be as easy and straightforward as transferring a car's logbook. It is true that my Bill does not take us the whole way towards such a happy state of affairs. After all, it is not a script written by the Law Society, although we shall no doubt hear some such scripts today. Therefore, I shall not make any extravagant claims.

However, the Bill removes some of the obstacles that prevent us from moving in that direction. The key obstacle and problem is the solicitors' monopoly of conveyancing, or more accurately their monopoly over drawing up the conveyancing document, for which no particular skills are required other than perhaps the ability to write and put names on a standard form. The origins of that monopoly go back to 1804.

I have been deluged by mail on this subject. The overwhelming majority of letters have supported the Bill. However, I have also received letters from solicitors defending their vested interests. One such letter arrived late last night, which beseeched me to vote against my own Bill. In a snide way it said that it would be interesting to know of the origins. It said that it surely had something to do with consumer protection and that the House must have passed a measure for the protection of the consumer that would be abolished by my Bill. Of course, the contrary is true.

The monopoly was conferred in 1804 by the first modern Tory—I suppose—Pitt the Younger, who gave the solicitors the monopoly of drawing up the conveyancing document as a useful quid pro quo for taxation which was being imposed on the profession. It was a convenient way of organising taxation. Therefore, despite the song and dance made about the conveyancing monopoly being a means of protecting the consumer, its origins are strictly fiscal. Indeed, it remained a fiscal measure right into this century.

However, today conveyancing is a monopoly that prevents other people from doing solicitors' work and also prevents solicitors from competing with estate agents, as they do in Scotland. There they have property centres to provide a service to the customer. In addition, the monopoly prevents the development of a comprehensive service to the consumer. Such a comprehensive service would undoubtedly make house buying much easier, quicker and more straightforward by putting the consumer in touch with one organisation which could fulfil—if he so chose — his every need and carry out the whole process, from start to finish, for him. That would make the whole process easier and more straightforward, yet such a development is inhibited by the conveyancing monopoly.

Mr. Nicholas Budgen (Wolverhampton, South-West)

At some stage, will the hon. Gentleman be explaining how the conflicts of interest that will inevitably occur within a multi-purpose body such as a bank or building society—if it fulfils all those functions—are to be dealt with?

Mr. Mitchell

Of course I shall do that, and I hope that the Solicitor-General will too, as I gather that the Government propose to extend the conveyancing monopoly only to building societies. That represents a rather bigger problem. On Second Reading we are dealing with the general principle of the Bill, and not with all the niggling details that will no doubt be raised by the posse of pedants who want to trip up the Bill by using Committee stage tactics.

The development of property centres, which could speed up the whole process, and which could be provided by estate agents, solicitors, computer organisations, or even by building societies, could offer a comprehensive service, or one-stop shopping. This is being prevented by the present monopoly. That monopoly makes change in the system inordinately slow, because solicitors have no stimulus to innovate. The very fact that they have been unable to advertise means that even if they did innovate they could not tell anybody about it, or about how efficient their service is. They must prove their worth by pure and applied pedantry, and show how difficult the job is by the time taken to do it. They are so safe and secure in their monopoly that they do not need to change.

Four years ago, the Benson Royal Commission on Legal Services recommended that solicitors should keep their monopoly of conveyancing. It was a misguided decision, but it was taken because that commission was considering the issue from a strictly professional viewpoint. It was considering it not from the consumers' point of view but from that of how to obtain a better organised profession. It saw the monopoly of conveyancing as forming the basis of that profession. That recommendation was made only as a result of a majority verdict. The recommendation was exactly the opposite of that made by the Hughes Commission on Scottish legal services. The recommendation was made on the basis that a series of changes would take place to improve efficiency and lower costs in conveyancing. Most of the changes have not been made. What stimulus is there to make them without competition?

Mr. Nicholas Baker (Dorset, North)

The Royal Commission said that the consumer was protected by the standards of skill and expertise of the people, whoever they are, who deal with perhaps the most important transaction in a consumer's life. How can the consumer be protected in that vital transaction?

Mr. Mitchell

The best protection for the consumer is competition. Competition will provide a better and more efficient service for the consumer. That is the essence of consumer protection. [HON. MEMBERS: "Never."]

Mr. Dennis Skinner (Bolsover)

That is Tory doctrine.

Mr. Mitchell

In June this year Lord Benson said that, if the profession was as slow to change in the way that he wanted it to change in the next three years as it had been in the past four, it deserved to lose its monopoly. I agree. It deserves to lose it now. No other profession has such a monopoly.

The legal profession is feather-bedded and that has stopped it from developing the full range of legal services that it provides for the community. It is concentrated where the house market is, not where legal services are required. It is not concentrated near the poor or where the problems are. The lack of competition has stopped the profession developing in an entrepreneurial fashion as it has in America.

Mr. John Spence (Ryedale)

Does the hon. Gentleman intend to apply his ideas not only to houses but to flats on long lease and to houses in multi-occupation? The hon. Gentleman keeps mentioning houses, but I do not know the definition of "houses".

Mr. Mitchell

I am advised that the definition in the Bill is satisfactory. If it needs to be tighter, we can use the definition in the Housing Act 1980. That can be debated in Committee.

If the legal profession is saying that solicitors cannot manage or exist without the conveyancing monopoly, it is asking house buyers to subsidise other legal services. That is the reason for the touching picture painted of country solicitors. How can the legal profession justify that? Why should people be asked to subsidise other services provided by the legal profession?

Mr. Barry Porter (Wirral, South)

The hon. Member prayed in aid entrepreneurial activity in the United States. I refer him to the Royal Commission report, which states: We are unanimous that a free-for-all in conveyancing would not be in the public interest, and are reinforced in this view by the information we have received about the practice in many parts of the United States where there is no limitation on the right of any person to undertake conveyancing. On what evidence does the hon. Gentleman suggest that the Amercian system is better than ours?

Mr. Mitchell

On the west coast of America at least conveyancing is much cheaper and quicker than the service provided here by our solicitors.

The important part of the Bill is clause 1 which ends the conveyancing monopoly in respect of domestic property on the land register. There is no definition of that but we could use the Housing Act definition if necessary. I deliberately restricted the Bill to property on the land register because the procedure is easy and straightforward. If complications arise people can turn to a solicitor. Entry on the land register guarantees title. My measure partially eases the monopoly to allow solicitors to adjust to the competition which will undoubtedly come. Solicitors will be able to adjust more gradually than they would if an attempt were made to remove the monopoly at one fell swoop.

Just over 70 per cent. of property in Britain is in areas subject to registration. Not even reference to the land registry shows exactly how much property is unregistered. Probably about half domestic property would be freed from the monopoly.

Mr. Tony Fave11 (Stockport)

Although the land registry may guarantee title, many first-time buyers buy property on a housing estate from a builder. They cannot be sure that the part of the title that they purchase is guaranteed. How will the Bill protect such first-time buyers?

Mr. Mitchell

If problems arise, the builder will have to turn to a solicitor. That is natural, inevitable and desirable.

The proportion of registered land is much lower in country areas than it is in cities and towns. The country solicitor, about whose fate we hear so much, will be less affected by the measure than the urban solicitor. The Bill allows them the opportunity to show that their service is as good as they say it is.

Mr. Patrick Cormack (Staffordshire, South)

I am grateful to the hon. Member for giving way to someone who has come here to be converted, who is not a solicitor and who does not like to see an hon. Member being roughed up. The Achilles heel of the Bill is that, although it asks for financial guarantees from the people empowered to do conveyancing, it does not seem to require a qualification or knowledge of the law, or of the problems to which reference has been made. Is not that a grave deficiency?

Mr. Mitchell

I shall deal with that later. I can assure the hon. Gentleman that in his home town of Grimsby the proportion of registered property is lower than in many other places.

The Bill opens up competition in conveyancing to banks, building societies and licensed conveyancers. Two categories of licence are proposed. The first is for handling money. The second is a restricted licence and does not permit the handling of money. For a full licence it will be necessary to have such insurance or bonding as the Secretary of State may specify.

The Bill's financial provisions ensure that the consumer's money is not endangered. It is up to the Secretary of State to define whether that is done by bonding through an organisation for conveyancing or through collective or individual insurance. I am sure from consultations, that those involved will be able to comply with those requirements, but if they cannot they will not be licensed. The Bill provides for a guarantee of customers' money.

It is argued that educational or professional qualifications should be required. In many practices the work is already done by unqualified people. Solicitors may deny that, but as Mandy Rice-Davies said, they would, wouldn't they? Among my mail from people working in solicitors' offices are several letters telling the same story. One, from a lady who prefers to remain anonymous, states: The fact that I am only employed as a part-time typist in a Solicitor's office but do the whole process of house conveyancing —including the preparation of deeds—without supervision and have done so for 20 years without any transaction at all going wrong would seem to point to strong evidence that it does not take a legal training or even great intelligence to undertake the work.

Mr. Patrick Nicholls (Teignbridge)

Contrary to that view, the Benson report states that 70 per cent. of conveyancing is carried out by solicitors, and the remainder is carried out under the supervision of solicitors. Does the hon. Gentleman accept that I, as an efficient solicitor, would not for one moment justify the work carried out by that lady for so many years? If a firm employs clerks to carry out the written work, an efficient solicitor partner vets the transaction first to ensure that it is straightforward. If the clerk feels that he does not have sufficient expertise to deal with the transaction, he passes it back to the solicitor. Does the hon. Gentleman accept that the whole duty of the solicitor system is that an expert is always at hand? How on earth can the hon. Gentleman claim that that pattern will be repeated if the Bill becomes law?

Mr. Mitchell

The hon. Gentleman is describing the procedure in a perfect solicitor's practice—that is, his practice. Most practices differ widely from that described by him. The evidence presented to the commission by solicitors can be nothing less than what they believe should take place, rather than what does take place.

The letter I was guoting continued: It is only rarely that a conveyancing transaction is out of the ordinary and the fact that more and more land is registered makes the whole process even simpler. It is argued that the Bill should require qualifications. As the essence of the monopoly is the preparation of a document, what qualifications can be prescribed for that? I have a document known as the "Transfer of Whole", which describes the house of Mrs. Judith April Seaton Tench that is being transferred to Mr. Austin Mitchell. Unfortunately, the document has not been filled in. What qualifications could we prescribe for the filling in of that document, apart from a measure of literacy? It would be difficult for the Secretary of State or the Government to prescribe examinations to fulfil that requirement.

The best qualification for doing the job is experience at the job. With the backing and bonding required under the Bill, a conveyancer can provide the same efficient service as a solicitor. Indeed, solicitors themselves do not provide the full range of services that are necessary in most conveyancing transactions. For example, they do not go to see the house on the spot; they do not find out whether the neighbours are obnoxious; whether the neighbours' son has a drum kit that he plays all night; whether the National Coal Board is operating only a field away and so on. Many difficulties can arise, especially between neighbours.

Before the Bill appeared, the Law Society pointed out in its brief to its members in October that to require qualifications would simply replace one monopoly by another, and that that would require a cumbersome framework of regulation. It was right to say that. But when the Bill was published, and did not prescribe qualifications, the Law Society then insisted that it should do so. The Law Society wants it both ways.

The question of qualifications is a matter for the Committee stage. If the Committee wants qualifications prescribed, that can be resolved in Committee. It is unreasonable to begin a detailed examination of the alternatives now. I have opted for what I believe to be a practical, workable, straightforward and simple system —and that is all that is necessary. If anything else is considered necessary, that can be discussed in Committee.

The Committee, if it so wished, could insert provisions for qualifications similar to those in section 22 of the Estate Agents Act 1979. However, we must remember that that requirement for qualifications was never brought into force because of the difficulties of operating that sort of framework.

Clause 2 allows solicitors to advertise. Indeed, they will want to advertise their property services as competition develops.

Clause 3 facilitates the computerisation of local land charge registers and allows interchange at a later date. That can develop only over a long period. It also suggests that pressure should be brought on local authorities to speed up searches. It provides for a rebate of fees where the search is dilatory. We all know that many local authorities can be dilatory in their search procedures, and that that is one important reason why chains build up.

As part of the research for the Bill, I asked the Consumers Association to request searches from 20 local authorities. With one exception, they were chosen at random. The Bill requires that half of the fee should be repaid if the search is not completed within 14 days. Four local authorities replied within the 14 days, and among those were two of the foremost authorities—Sheffield and Great Grimsby. Eight authorities replied before 28 days — after which the whole fee is repayable. One authority replied after 29 days and the other seven — Barking, Blaby, Lambeth, Sedgemoor, Three Rivers and Tunbridge Wells—are still outstanding. Such delays are unreasonable.

The Bill will bring pressure on local authorities to speed up the search process. It is all very well for local authorities to say that people can have recourse to the Ombudsman, but that is an even slower and more difficult process. The only pressure that will speed up the search process is the provision to rebate fees. It is the red light on the dashboard that warns local authorities that there will be a loss of money. Without such a provision, there is no pressure on local authorities to increase their staffing to the level required to provide an efficient service and, at a later date, to computerise the system. I see no reason why the consumer should pay for a dilatory service that costs him both money and time.

Clauses 4 and 5 introduce a simple and effective provision that allows the vendor to commission a survey that will be valid for the purposes of both the purchaser and the building society, as though the building society had commissioned it. It is an important and permissive measure. As this is a conservative House and a conservative country, I did not want to impose change or be dictatorial in my approach. However, I believe this to be a good measure because it amounts to a warrant of fitness for the house.

The vendor will have before him, in black and white, a detailed survey carried out by a professionally qualified person, setting out what is wrong and what is right with the house. That will end the present practice, under which most people buy a house without having it surveyed. Some commission a survey, but if the deal falls through they then have a survey but no house, which is a waste of their money. The building society insists on its own survey, for its own purposes — which appear to be restricted to discovering whether the house will stand up for the 25-year term of the mortgage. That odd and curious system will be put right by the Bill.

The time will come when purchasers will demand such a survey from the vendor. They will be suspicious if a full report is not provided. Purchasers will want an accurate description of the house on which they can rely.

That then is my Bill. It constitutes collectively a major improvement for the house buyer. It will bring down the cost of buying a house. After all, the Law Society says that conveyancing costs have come down 13 per cent. in real terms since the Price Commission reported in 1973 and since competitive tenders began. There is still a long way to go. We could well secure another fall of that scale.

Indeed, despite competitive tenders in some areas of the country the range of competition is often narrow. Again, as part of the research for the Bill, I asked the Consumers Association to find out in two parts of the country which interested me—it has also found the information for other parts of the country — what was the range of competitive tenders. The Consumers Association telephoned and asked 20 solicitors in Grimsby for tenders. Eleven of the 20 were telephoned in November 1983 and were asked to give estimates for the cost of conveyancing — six for a freehold house at an asking price of £38,000, five for a leasehold house at an asking price of £23,000. Of those solicitors, four of the 11 made the point that all the solicitors in the Grimsby area charged about the same amount. They were reluctant to give a quotation although they did so. There was a significant difference in the charges quoted for the £38,000 property, which ranged from £482 to £590, but on the £23,000 house there was no significant variation. The price quoted ranged from £420 to £440. That looks odd, does it not? That is a variation of £20 in competitive tenders for conveyancing work on that house. In Scunthorpe, the prices varied but on average were lower than the charges suggested in Grimsby for the equivalent house.

Competitive tendering is not producing a wide range of bids, particularly in the smaller centres such as Grimsby and Scunthorpe, from which the consumer can choose. There is considerable room for prices to come down and my Bill puts on the pressure to bring them down by the only feasible way—through competition. It takes us into the computer age and allows the development of comprehensive services that can only benefit the consumer.

What stands between the Bill's enactment and the people of this country who want the Bill, who will benefit from the Bill and who will have more efficient services as a result of it is the vested interest of the legal profession, which is here today in a rare display of attendance and participation which is welcome and which we hope will be sustained for the rest of this Parliament. The solicitors are perhaps the Sinn Fein of the legal profession, the political arm of the profession. Indeed, the Law Society is behaving in this matter like the provisional wing of the legal profession. Some hon. Members are here today with a passionate desire to defend something that is completely out of place in this day and age. The way the Law Society has behaved in defending its monopoly brings to the fore the whole issue of the role of professional responsibility and leadership in organisations such as the Law Society.

As I see it, it is the responsibility of leadership to lead, to tell followers what the reality is, to help them to adjust to change when change becomes inevitable and not to demonstrate a backwoods, instinctive, negative reaction to change. The service provided by lawyers is on the whole good. If it is good people will continue to use it when it is competitive but they will use it out of choice and not because they are forced to use it. That is the important point. If the service is that good it will survive. When conveyancing becomes competitive many people will continue to use solicitors. They may have an established relationship with a solicitor and trust him. They may fear legal complications and so will want to use a solicitor.

The important point is that people should use solicitors through choice. When the service provided by solicitors is that good, a responsible leadership should say to its followers, "Let us take the opportunity that the measure provides of a partial adjustment and gradual introduction to competition. Let us take the inoculation to change. Let us offer our experience of the regulation and management of conveyancing. Let us see how in consultation we can improve the Bill."

That is the responsible course. It is a test that the Law Society has failed. By taking this obscurantist, backwoods approach, by setting out from the first to destroy the Bill rather than to improve or change it, by constantly making negative criticisms of the Bill, the Law Society has lost the opportunity to provide a great bonus for the house buyer and has contributed to the demise of this monopoly. The Law Society has brought this monopoly to the forefront of public attention and has produced the reaction we have seen among the public and in the press. The Law Society has guaranteed that the monopoly will go and that it will go because the public want it to go.

This is not a party political measure. It is introduced by a Labour Member which is appropriate because hon. Members change houses more often than most sections of the community and Labour Members in the present political climate tend to change more than most hon. Members. It is not a party political measure, although it was in our manifesto. Competition is a central part of Conservative philosophy and of the Conservative manifesto, and is a declared aim of the Government. It is a measure to which the Liberals and Social Democrats are strongly sympathetic. They believe in the same objectives. Most of all, it is a measure for the people. I am aware that the Bill must have faults. I have not found them, but I am in a sense the proud progenitor. It is difficult for a private Member who is not equipped with the resources and expertise of Government to develop a word-perfect Bill, particularly when the Government are bound to take a superior attitude—the Bill is an amateur effort—and will perhaps today confine themselves to praising the Bill with faint damns. It is even less easy when it is opposed by the Law Society, which is judge and jury in its own case.

The Bill may have its imperfections but that does not mean that it should be rejected. It means that the normal course of action on this type of Bill should be followed, that it should be made perfect in Committee. We should agree today the general principle, which is an important principle and a major step forward, and we should go on in Committee to make the Bill perfect. The Government have a responsibility to the measure—not to praise it with faint damns, but a real responsibility.

When a private Member's Bill goes into Committee, the Government normally shepherd, cosset and guide, helping to shape the Bill in the direction that they prefer. The Bill offers a vehicle for the Government to achieve what they want to achieve in respect of competition and of the monopoly of conveyancing. It is the Government's responsibility to see, first, whether the Bill is acceptable to the House, which I think it will be, because it is sensitive to public opinion which demands it, and, secondly, whether it fits in with the general tenor of Government policy, particularly towards competition. If it fulfils both those criteria—the Bill undoubtedly does —the Government have a responsibility to improve the material of the Bill in Committee.

That is what I want the Government to do and what I hope they will do. I hope that they will offer every co-operation in Committee to carry out the improvements that they want. We will be co-operative. The Bill has sponsors from all four major parties.

Apparently, though, that is not what the Government intend to do. For weeks, Ministers have dithered, pulled one way by the vested interests of their legal friends and pulled another by everythng they have said about competition. We have seen for several weeks the smack of firm indecision in Government circles as they have been unable to make up their mind. Yesterday they decided; they decided not to decide.

The Government have decided to go in for what amounts to a confidence trick. I hope that the rumours are incorrect — we shall know later from the SolicitorGeneral—but judging from yesterday's rumours, which is what I am basing myself on, the Government have decided to go in for what amounts to a confidence trick. They are pretending to do something in order to buy off those Conservatives, of whom there are many, who rightly support the measure because they believe that it implements principles that the Government would like to see implemented; in other words, to draw them off and then not do anything.

What is being suggested will not end the monopoly, and without its end we cannot achieve the other changes that are necessary to bring in real competition and bring down the price of conveyancing. Instead, the Government have decided to allow solicitors in building societies, and perhaps in banks, to do conveyancing. Solicitors will still be doing it. There will be no end to the monopoly. Solicitors employed by other people will still be doing the conveyancing. That is not real competition and there can be no effect on prices without the competition that this measure would introduce.

The Government's proposal—if that is what it is—appears to mean only that building societies, without restriction or supervision, will be able to say, "Of course you can have a mortgage"— we are reminded of the Solicitor-General's description of the poor of London—"providing that you do your conveyancing with us, in the same way as you take out your insurance with us." It puts the building societies in too strong a position, without the guarantee of competition among the conveyancers which my Bill proposes. If that is the Solicitor-General's alternative to my measure, then, so far as I can see—we await his words with great anxiety and interest, particularly, I because a lot has gone into this measure —it will not be satisactory. Nor will it do the solicitors any good. In fact, if they will be facing that type of competition from building societies, and if it is to be extended to the whole range of property, registered and unregistered, I expect to see them in the Lobby on my side, voing for the Bill, to put off what will undoubtedly be worse from their point of view, for my measuure at least allows them to adjust to change in a sensible way.

The public will not like the Government's approach either, because it will do nothing for the consumer, nothing for the Government's credibility and nothing to bring down prices. However, it does a lot to get the Government out of the hole they have dug for themselves. Let us be clear: it is a buying-off manoeuvre, not a real change of the kind that the country wants and that the measure proposes. We shall wait to hear exactly what the Government have to say and its time scale, but if the preliminary indications are correct it does not look as though it will be satisfactory.

Few measures in recent times, particularly private Members' Bills, have struck so strong a chord of popular sympathy and support as this Bill. That the public want it is shown not only by the enormous amount of mail that I have received in support of it—the support has been overwhelming, though of course there have been criticisms from solicitors, as was to be expected—but by the Marplan survey commissioned by the Consumers Association. In a survey of 1,400 adults, 46 per cent. thought that the solicitors' monopoly should be ended and only 20 per cent. thought it a good thing. Of 899 house buyers in that sample, 67 per cent. thought that others should be allowed to do conveyancing and only 12 per cent. thought that others should not.

As for the press, every editorial in the national newspapers and every newspaper that has written about the Bill has supported it, a unique chorus of support for a Bill. The Times wrote that the Government would do well to enact the Bill and take the protestations of the solicitors with a pinch of salt". We shall hear from the solicitors today; let us rub in some salt.

The Daily Express wrote: The solicitors' cosy little monopoly has no more justification than the one the Social Services Secretary, Mr. Norman Fowler, is about to end. The Daily Telegraph: Closed shops are not the less to be deplored because the participants are drawn from the middle classes. The Daily Mail: We give wholehearted support to Mr. Austin Mitchell's private member's bill. The Daily Mail today in an editorial headed, "Shameful Tory Surrender", said: what… the Government… have in mind is that … the solicitors' monopoly of conveyancing will be unimpaired … It looks as if Mrs. Thatcher has allowed her populist instincts to be pushed aside in order to placate an interest group which is ridiculously over-represented in the House of Commons and which, in this matter, has been shamelessly self-serving. The Guardian said: The Bill should prove a godsend to house buyers It will. The Daily Mirror: The legal monopoly of house conveyancing is a State supported racket. The Sun—after what it said about me yesterday, this must be the most important source one could find—stated: We know that, as expected, Margaret Thatcher and Norman Tebbit support the Bill. Why is it that so often they seem to be the only top Tories with any idea of what the voters expect of them? Why indeed? Why is it that their resolute approach has failed in the face of the special pleading and the pressure group tactics of the Law Society and in the face of the wrath of the Lord Chancellor? This monopoly is odious, unpopular and contrary to the spirit of the age, and it must go.

The Secretary of State for Social Services said on 28 November: all laws which create a monopoly have to be examined to see whether, under the cloak of public protection, there is not simply too much protection for the seller … We believe that the most important person is the customer. Customers should have the right to make an informed choice and to have more information and lower prices." — [Official Report, 28 November 1983; Vol. 49, c. 437–39.] If that spirit of competition is important in industry—if it is important to opticians—how much more important is it in a property-owning democracy in which 60 per cent. of the people own their own houses, in which they change houses every seven years and in which the house represents the major purchase of their lives?

10.28 am
Sir Walter Clegg (Wyre)

I must begin by declaring an interest, as a member of the quill pen brigade and the posse of pedants and various other vituperative adjectives that have been hurled at my profession this morning. I am a practising solicitor. My firm does a large amount of conveyancing and I am pleased to say, being immodest, that it does it very successfully.

I have another interest to declare as an investor in building societies. Obviously they hope to make a profit as a result of the Bill should it receive a Second Reading and reach the statute book. I am also the chairman of the all-party solicitors' group, which has an obvious interest in the Bill.

We had the usual jolly speech from the hon. Member for Great Grimsby (Mr. Mitchell) taking us at a swift canter through the Bill, and I shall reply to some of the points that he made in criticism of my profession.

Since the hon. Gentleman announced his intention to bring in the Bill there has been considerable publicity about it. I was always aware that politicians and lawyers were not the most popular members of society. Indeed, as Shakespeare said in Henry VI about rebels and their leaders: The first thing we do, let's kill all the lawyers. I have never been one to underestimate the unpopularity of these twin professions, but if I needed convincing of that I needed only to listen to the hon. Member for Great Grimsby and read this morning's Daily Mail. I am sure that if the press had its way all the lawyers in the House of Commons would be merrily rolling in a tumbril from Fleet Street to Tyburn, and I should be in good company, not only with my right hon. and noble Friend the Lord Chancellor and the Prime Minister, who was a member of the Bar, but with sundry other hon. Members of repute.

The Bill has received much publicity. The hon. Member for Great Grimsby is correct in saying that, as many people own their houses, more people have experience of conveyancing transactions, and the trend is bound to grow. The Bill promises that transactions will be cheaper through competition and that it will increase protection for those who wish to buy or sell houses.

It has been assumed that there is no competition within the solicitors' branch of the legal profession. That used to be the position when I commenced practising after the war. Under the system of scales there was effectively no price competition. Nowadays, however, considerable competition exists among legal firms for conveyancing transactions and it is not unusual for firms to be asked for quotations and for prospective clients to shop around. That position arose as a result of the removal of the scales by the Lord Chancellor, and has proved to be of advantage and benefit.

I have been told by the National Association of Conveyancers, whose members are unqualified, that it handles thousands of conveyancing cases, and has done so especially in the past 15 years. To say that we are dealing with a monopoly would be strange. Competition within the so-called monopoly comes from persons who are not members of the legal profession. Does the hon. Member for Great Grimsby expect those people to become registered conveyancers under the Bill, as there seems little incentive for them to do so?

The long title of the Bill states that its aim is to Extend competition and to protect consumers in relation to the provision of services in connection with the transfer of ownership of real property in England and Wales". The Royal Commission on legal services, chaired by Lord Benson, was in no doubt about the importance of protection for clients. The commission stated on page 253 of its report: It follows that it is essential that, in his relationship to a conveyancer, the client should be protected from: (a) dishonesty or carelessness with money; (b) ignorance and incompetence; and (c) a level of charges higher than is fair and reasonable. We must examine the Bill to establish how it deals with those matters. Clause 1 provides for the licensing of two sorts of conveyancer—the restricted conveyancer, who I understand will not handle money, and the full conveyancer, who will. Be the conveyancer restricted or not, he must provide evidence of insurance policies or other security or indemnity for the discharge of any liabilities which he may incur in the course of his business as a conveyancer", as determined by the Secretary of State.

The object of the clause, I assume, is to guard against carelessness, ignorance and incompetence. There is no evidence in the Bill to show that the person acting as a restricted or unrestricted conveyancer need be qualified. The hon. Gentleman's argument is that, given good insurance cover, such a person should be allowed to practise, and that the judge should be the Secretary of State.

A condition of the Law Society's scheme is compulsory insurance cover against negligence. Such insurance is costly. Not only does its policy cover ordinary negligence, but it contains a non-disclosure clause, which is expensive and increases the premium. Even if negligence is not disclosed, the client can obtain compensation.

Mr. Budgen

Has my hon. Friend inquired of Lloyd's how much more expensive it would be for a less qualified conveyancer to insure himself compared with a solicitor?

Sir Walter Clegg

I have not. It would be common sense to provide that anybody insuring against professional negligence would have to produce a track record or to demonstrate some form of professional competence or qualification. It may well prove difficult for a conveyancer under the provisions of the Bill to obtain such insurance if the standard of protection offered is to be the same as the Law Society's scheme. It would be radically unfair if the Secretary of State insisted on anything less from unqualified conveyancers than from solicitors.

A major difficulty with the Bill, to which the hon. Gentleman has not addressed himself, involves dishonesty or carelessness with money. I understand that it is impossible for a person to insure himself against his own dishonesty, and solicitors do not. They have a fund to which they contribute annually to provide compensation against solicitors who default or run away with clients' money.

How on earth would such a system operate for unrestricted conveyancers? I assume that they would have to form groups, and have to prove to the Secretary of State that they had previously run their businesses properly. If they had not previously been conveyancers, how could that be done? The hon. Member for Great Grimsby implied that such matters were nitty gritty issues for Committee. I wish to know how such matters will work in practice, and that is one of my objections to the Bill.

Mr. Ken Weetch (Ipswich)

I have listened to the hon. Gentleman with great respect. Groups of non-solicitor conveyancers throughout the country—one such group conveyed my property when I moved into my constituency, and when I moved subsequently—have a corporate policy covered by an umbrella contract, which insures each of the independent conveyancers against dishonesty and fraud. A corporate insurance policy is negotiated which covers against dishonesty. The insurance provision for independent non-solicitor firms throughout the country is perfectly satisfactory. I have examined the issue.

Sir Walter Clegg

I appreciate that the hon. Gentleman has a long-standing interest in these matters. He has espoused the cause of the non-qualified conveyancer for some time. However, in June or July he said that if there were to be competition some technical qualification would be needed, but that is singularly lacking in the Bill. However, in an untried market, the cost could be substantial and may not lead to the amount of competition about which the hon. Member for Great Grimsby is talking.

Mr. Michael Shersby (Uxbridge)

Will my hon. Friend confirm that the Law Society's scheme cannot be repudiated? What is the cost to the average solicitor of participating in the scheme?

Sir Walter Clegg

My firm has a non-repudiation policy that costs more than £40,000 a year. However, on average, the cost would be £1,000 to £1,500 for each partner.

Mr. Austin Mitchell

That is not just for conveyancing.

Sir Walter Clegg

I did not say that it was, but it covers a solicitor's conveyancing practice.

The Bill would have us say to insurance companies, "You judge whether this man is fit to be a conveyancer." Insurance companies will be asked whether a person should be allowed to hold clients' money. The sums involved can be large in a busy conveyancing practice. The House would not wish to let loose on the public those whose only test of competence has been conducted by an insurance company. The House should set its own standards.

It has been argued frequently that conveyancing is a simple matter which anyone can do without training. If it is that easy, why do we need 730 grammes worth of the Consumers Association's brief for the House of Commons? If the hon. Member for Great Grimsby believes that most of my colleagues have read it, he had better think again.

There is nothing magical or difficult in drawing up the document of transfer, but there is much more to conveyancing than that. It is only part of the service provided by the solicitor. Most solicitors would like their clients to come to them before they buy or sell their houses, when they can advise them of the proper steps to take. If his client is a vendor, the solicitor can begin searches and drawing up contracts so that time is saved. However, often people consult solicitors only after they have bought or sold a house through an estate agent.

Solicitors must ask their clients, "Can you really afford it?" It is surprising how many persuasive estate agents can convince a couple that this is just the house for them. The solicitor must also ask, "How much money will you get for your old house?" If we seem to be a cautious profession, it is because we know that a client needs the money from the sale of his old house before he can buy another. The cost of bridging loans from banks is extremely high. Solicitors must know the law on inheritance and what will happen to the house if the person dies. We also advise on the matrimonial consequences of buying a house in joint names. We must consider mistresses, planning permission and a range of other matters.

Mr. Cormack

No one would have any doubt about my hon. Friend's probity, and everyone would wish to use his firm of solicitors, since it obviously provides a comprehensive and marvellous service, but is that service necessary for the average first-time buyer of a small house on an estate in a constituency such as mine, which has many such estates, where the price is fairly standard, and where the building society has a good rule of thumb on how much it will lend?

Sir Walter legg

In one word, yes. It is a complex issue. There may also be problems with capital transfer tax, although that affects only a minority of clients. I understand that the Bill provides that title will be guaranteed by the Land Registry, because it refers only to registered land. However, from experience, I can tell the hon. Gentleman that problems are caused not so much by bad title as by peripheral matters such as rights of way and restrictive covenants. The Bill also provides that a licensed conveyancer could deal with long registered leaseholds. However, leaseholds represent a minefield of difficulty for solicitors, who must consider the obligations which the tenant will undertake. Only someone trained in the law of leaseholds and their consequences can do that properly.

The Bill's major deficiency is that it provides no test for competence. It could be argued that one does not need the whole of legal training to be able to act as a conveyancer, but the Bill does not even provide for training for conveyancing. I do not know how the Consumers Association, which is the body behind the Bill, could have backed a measure that will inflict on the public people who have no experience of conveyancing. It seems contrary to everything for which that organisation stands.

Mr. Christopher Chope (Southampton, Itchen)

Is my hon. Friend arguing that do-it-yourself conveyancing should be outlawed? If he is not arguing that, should it not be left to the house purchaser to decide whether he wishes to take advantage of the expert service of a solicitor or to have something slightly short of that?

Sir Walter Clegg

Do-it-yourself conveyancing is not outlawed at present. Anyone who wishes to do his conveyancing may do so, but he will not find it as easy as the pamphlet suggests. The object of the Bill is to provide competition, but the House should say that that competition must be competent and trained.

Mr. Toby Jessel (Twickenham)

Does my hon. Friend believe that competent service should be obtainable in future at a rather lower cost? Is it not true that clients who are buying or selling houses are almost compelled by the present system to subsidise the solicitor's other clients? Why should a constituent of mine who wishes to buy or sell a house be forced to subsidise another client—for example, someone getting a divorce? Is not the system inequitable, are not the public right to be concerned about it and does my hon. Friend agree that it should be ended?

Sir Walter Clegg

Everyone is involved in conveyancing and it should certainly be improved. I do not for a moment subscribe to the argument that solicitors use the proceeds of conveyancing to subsidise other part; of their practices. Solicitors who have written to my colleagues saying that that is so do themselves an injustice. No attempt is made to do such a thing in my practice. It would be entirely wrong and I have no patience with that argument.

Mr. Merlyn Rees (Morley and Leeds, South)

This aspect is important to me in making up my mind about the Bill. The hon. Gentleman, as a solicitor in a country area, has spoken in a way that illustrates the wide concerns of a solicitor. I have here a letter from a man who thinks that he is in my constituency, but because of the boundary changes in fact is not. I do not sneer at him for that. It simply shows that he knows the local area and that the Boundary Commission did not. He says that his firm is just about the only solicitors' firm in my part of the city and provides a service which is not one that many of my more distinguished colleagues in the Law Society would take on board, since it is largely a Legal Aid practice. He then gives a list of the work done by that firm and goes on to say that the main point is that the house buyers effectively help to keep this office open so that we can do Legal Aid work at a loss. I believe that solicitor's words. If legal aid work has to be subsidised in that way the Government should do something about the legal aid system, but that is another matter. The point at issue today is that many solicitors clearly use conveyancing to subsidise other work, which means that they must be charging too much for conveyancing.

Sir Walter Clegg

I take the right hon. Gentleman's point and I appreciate the position of the firm to which he refers, but I do not envisage that situation continuing. With the new competitiveness in conveyancing, that will no longer happen. Firms charging high prices will be attacked by other members of the profession, because there is no standard charge. Legal aid perhaps requires more subsidy than it currently receives, but I do not intend to go into that now.

Mr. Budgen

Does my hon. Friend agree that there are now many more new entrants to the profession and that a considerable number of young solicitors are unemployed? Surely that means that where a cartel exists it will inevitably be eaten into by new young solicitors putting up their plates.

Sir Walter Clegg

That is a good point. When young solicitors put up their plates they always want to compete with the more established firms. One of the best ways of doing that now, which was impossible when I was younger, is to undercut the bigger firms. That is why I have stressed that there is already strong competition in the profession.

Mr. Robin Maxwell-Hyslop (Tiverton)

I have received 11 letters from solicitors backing the Law Society and two supporting the Bill. Of the former, 10 use the cross-subsidisation argument which my hon. Friend disowns. Is he disowning it on behalf of the Law Society, as it is clearly not rare?

Sir Walter Clegg

I am not the creature of the Law Society. I am a Member of Parliament and the views that I express are my own. I disagree entirely with those who say that we use conveyancing for cross-subsidisation. If we do, we should not.

Mr. Simon Hughes (Southwark and Bermondsey)

The point has been made to me and to many other hon. Members that, especially in rural areas, if a large part of the income of the practice derives from conveyancing there is less likely to be competition because the chance of several firms surviving in a village or small town is clearly smaller than it is elsewhere. Can the hon. Gentleman tell us the number of firms and the amount and percentage of income involved in cross-subsidisation? I appreciate that the need for a reallocation in relation to legal aid is a different matter, but cross-subsidisation inevitably implies that conveyancing charges are higher than they should be. The hon. Gentleman has not answered that case. If there is substance in the case, does he agree that the present rules of competition in the profession do not protect the public because they do not produce the competitive rates which would otherwise be available?

Sir Walter Clegg

I thought that I had made it clear that there is now considerable competition from both within and outside the profession, as the hon. Member for Ipswich (Mr. Weetch) will confirm. On the matter of increased competition affecting rural practices, I perhaps disagree with some of my colleagues in the profession, as I believe that the country practices are least threatened. If a new breed of licensed conveyancers are let loose I cannot see them going into remote country areas. They will go to places where there are lots of houses. Therefore, I believe that the fears of some of my colleagues are misguided in that respect. It would be quite wrong for the profession to try to sustain the cross-subsidisation theory because it would be thoroughly unfair if people seeking divorces paid less and were subsidised out of the conveyancing fees.

Another innovation in clause 1 would allow banks and building societies to set up conveyancing shops. I shall not comment on the Government's intentions, as I am waiting for Godot in the shape of my hon. and learned Friend the Solicitor-General to tell us what the Government intend to do. [HON. MEMBERS: "Godot never came."] If banks and building societies are allowed to set up their own conveyancing businesses, it seems strange to suggest that there is no conflict of interest between banks and their customers or building societies and their borrowers. It has never seemed to me that the interests of money lenders and borrowers necessarily coincide. Again, this aspect of competition does not greatly worry me as, unlike the hon. Member for Great Grimsby, I cannot imagine licensed conveyancers or solicitors sitting in high street branch offices ready to deal with people as they come in. What is much more likely is that there will be some remote central point to which the house buyer will have to go.

My profession will be capable of standing up to such competition, provided that it is fair, and provided that the banks and building societies are not subsidising their conveyancing from their profits or offering loans to pay the legal fees over the long term, which in the end would cost the client far more at the rates of interest now being charged.

Mr. John Ryman (Blyth Valley)

Before the hon. Gentleman leaves the point about banking and building societies, is not the reality that building societies in particular—the general manager of the Halifax building society said this the other day publicly — are very anxious to get in on the conveyancing business, and that their attraction for potential purchasers is that no cash has to be paid by the purchaser to the building society? Instead, it is all added to the loan and this is repaid over the years, together with the mortgage. This is rather like giving a free refrigerator or a free piece of furniture to potential house buyers as an incentive to buy a particular house. The building society, which is anxious to compete, will dangle this bait in front of potential purchasers and tell them that if they conveyance on credit there will be no need to pay cash on completion of the conveyance.

Sir Walter Clegg

Solicitors' costs can already be paid over a period of time. This is something that we shall have to face. The on-cost will have to be pointed out clearly to the potential client by the building society. I am interested in the Halifax building society, because not only am I a depositor with it, but my firm is an agent for it. It should look at matters carefully to consider who have been its friends over the years in getting deposits for it. [HON. MEMBERS: "Oh!"] Oh yes—why not? We have been taking the humpy all morning. It is time that somebody else did.

Sir Edward Gardner (Fylde)

Is my hon. Friend aware that the Royal Commission on legal services made it clear, from the evidence that it received, that the building societies and banks are not prepared to entrust conveyancing to anyone other than a qualified solicitor?

Sir Walter Clegg

That is true. I cannot see them queuing up to use unqualified or restricted or unrestricted people. They would find it a costly operation.

Mr. Michael Carttiss (Great Yarmouth)

Does my hon. Friend agree that the gravest aspect of the Bill is that it would remove the independent legal adviser from the scene? When a bank or a building society is negotiating a mortgage as well as conveyancing property, the purchaser puts himself lock, stock and barrel into the hands of the moneylenders and does not have an independent legal adviser who sees things at arm's length and whose duty it is to protect his client's interests.

Sir Walter Clegg

I am grateful to my hon. Friend. I could not have put it better myself.

Clause 3 deals with local land charges. On this, I have a common cause with the hon. Member for Great Grimsby —the delay is atrocious. One of my colleagues who practises in London told me that searches can take as long as three months, and although a personal search is time-consuming, if one gets an agent that costs an extra £80. We are in the hands of the local authorities. This may not be the right time, but the hon. Member for Great Grimsby is on to an important point which the Law Society—that wicked creature — has been pursuing with the local authorities over the past year or so. One of the difficulties which the Law Society is up against is the independence of local authorities. No Government Department can control or tell them what to do. This matter must be looked into because it is a source of infinite delay, and delay for which we cannot accept responsibility. We do the searches as soon as we know that there will be a transaction.

Clause 4 is another attempt to speed up the conveyancing transactions. I have some sympathy with the idea that there should be a standard report which the vendor can produce, which can be followed up by the purchaser. That might work quite well for the structural survey, but I am doubtful about the practical consequences of valuation. One is asking a valuer to say that a house is worth, for example, £35,000, but for how long will that house stay at that value, because the market fluctuates up or down as the fashion in districts changes? How long will it be before we have litigation over whether the valuation was correct? If a purchaser puts the house on the market four years later and does not get the price that he paid for it, is he likely to complain?

There will be much trouble getting surveyors to give such valuations, which will extend their liability so far. He can give a valuation on the physical construction value of the house, but not on its total value. Nevertheless, the Bill is a pointer to the way and perhaps we should get together with other professions to try to iron out the non-legal aspects of conveyancing to see whether they can be improved.

Mr. Favell

The problem with clauses 4 and 5 is that if the vendor does not like the first valuation he can go to another surveyor, and possibly a third, fourth or fifth until he does get one that he likes. Under those circumstances, how is the purchaser to know which of the five is the best or the worst? There is the same problem for the business that is lending money on valuation.

Sir Walter Clegg

I am grateful to my hon. Friend for making that point.

The Law Society will permit advertising soon and I welcome that. It is pity that we have not had it more quickly than we have, but we shall have to await the outcome to see what its effect will be. This is an added on-cost and that argument has to be taken into account. We hope that advertising will be productive and attract more business, and that solicitors will welcome it even more.

I have been through the provisions of the Bill and sought to show that in its present form it is not a practical proposition. I do not believe the hon. Member for Great Grimsby when he says that the deficiencies can be put right in Committee. That would be a tremendous task to ask of any Committee. I am loth to comment on the drafting of the Bill by a Back Bencher, because it is a difficult and skilful job to draft or amend legislation. However, The Guardian assured us that the Bill was carefully drafted with the help of the Consumers Association. However, it is sloppily drafted and is incapable of rational change.

I do not ask the House to accept my view, but that of Lord Benson in a letter to The Times on Wednesday l4 December, in which he said: Sir, The House Buyers Bill, which is shortly to be debated in Parliament, is crudely drawn and ill thought-out. The provisions which are necessary for the protection of the public are spelt out either inadequately or not at all, such as the definition of the transactions which are to be encompassed by the Bill; education and training; post-qualification education; protection of clients' money; standard of professional work; discipline; insurance; compensation and many others … But it would be wrong to load the whole, or even the major part, of the blame on the legal profession. Many others involved in the conveyancing process have, for years past, been equally sluggish, including Government departments, local authorities, building societies and others. All of them should work together on a concerted plan. This was examined with care and set out in painstaking detail in the report of the Royal Commission…It would, I suggest, be a convenient starting point for the reforms which are necessary for the public benefit. I could not agree more. That is all that I have to say.

11.11 am
Mr. John Morris (Aberavon)

My hon. Friend the Member for Great Grimsby (Mr. Mitchell) has done a great service by introducing the Bill, which has concentrated wonderfully the minds of those involved in conveyancing. I hope that it will be revealed that it has concentrated wonderfully the various minds within the Government. It would have been good to be a fly on the wall in Wednesday's Cabinet Committee meeting and to watch the battle between those who wanted to conserve at all costs and the militant free marketeers. It would have been even better to be present at yesterday's Cabinet meeting to hear the Lord Chancellor's oratory, in what I understand was a protracted Cabinet discussion.

The Bill has cross-party support. I support its principle., because it was made clear in the election that we would act to help home owners. We said that we would simplify and reduce the cost of house purchase, ending the solicitors' conveyancing monopoly". It is on that main purpose of the Bill — ending the solicitors' monopoly—that we should concentrate today. My hon. Friend quoted the recent utterance by the Secretary of State for Social Services, when he said only last month: all laws which create a monopoly have to be examined to see whether, under the cloak of public protection, there is not simply too much protection for the seller … Customers should have the right to make an informed choice and to have more information and lower prices." — [Official Report, 28 November 1983; Vol. 49, c. 437–39.] I should have thought that few would dissent from that approach. We should concentrate on the interests of the consumer, who is the most important person. His needs and interests should be at the forefront of our minds throughout the debate. Unfortunately, the legal profession starts off at a distinct disadvantage in the House. The House has never warmed to lawyers. I hope that, whatever the feelings of hon. Members on both sides of the House towards the profession to which I am proud to belong, those feelings will not colour their attitudes to this very important issue. I include the large number of solicitors in the House this morning. Some of us are perhaps not always aware that the House sits on Fridays. So be it.

If I thought for one moment that, at the end of the day, whatever is eventually agreed upon would result in a disservice to the consumer or lessen the protection that he needs, I would not support the legislation finally presented to us. There are many criticisms of the Bill. We have heard some already. It is right, as my hon. Friend said, that, whatever criticisms there are, if they are justified, the place to correct them is in Committee. I shall make some myself, but they will not be exhaustive. That is why it needs to be re-emphasised that on Second Reading we are asked to approve the principle.

We are dealing with a billion-pound industry. It is the bulk of many solicitors' incomes. It is a great industry. The question is whether it is meeting today's needs in the best way. Around 1925 there was a spate of property legislation. As the Benson Commission says, the standard textbook, "Emmett on Title", contains references to 400 statutes and 4,700 decided cases. Most transactions may appear, and may be, routine, but to describe them as merely administrative, as they have been described, is neither accurate nor helpful. Many are conducted by unqualified personnel, under supervision I hope. Throughout, the consumer has high protection, certainly in the recourse he has if anything goes wrong. Today we must be careful not to throw out the baby with the bath water.

The buying of a house—indeed, a home—is the most important commercial transaction in the lives of most people, and probably of most of us here today. That transaction involves the acquisition of the family base. In most cases, it involves a liability over many years. It is not like buying a pound of sugar or even a motor car. If we are breaking the monopoly, can we be sure that we are not replacing it with another? Perhaps we are setting up a duopoly, if that is the right grammatical description.

If the banks and building societies do this work, there will have to be amendments to their legislation, too. I am not aware that the banks are keen to do the work. The building societies are divided, although the Halifax has said clearly that it is very interested in it. One point needs to be watched carefully. If the building societies or the banks do the work, there could be a conflict of interest within the responsibility of whoever did the work for the banks or the building societies.

My gut feeling is that the Law Society is being unduly alarmist in its fear of licensed conveyancers. For example, it referred to a conveyancer who failed his conveyancing papers in the solicitors' final examination 12 times, which was not its most telling point. Although I took my conveyancing paper, for some unknown reason, in my Bar final—without being boastful, I passed—I would not dream of doing my own, let alone someone else's, conveyancing. At the end of the day, most people go to solicitors. If I may be so bold as to advise the Law Society, I believe that it has been on the wrong track in its fear of licensed conveyancers. Its real opponents will be the building societies if they are ever minded to take on the work seriously.

The building societies' control of funds, coupled with customer interia and the possibility, to which my hon. Friend the Member for Blyth Valley (Mr. Ryman) referred, of the transfer costs going on to the mortgage, as is done today with carpets, fridges and a host of other things, could deliver the business into the building societies' hands. That is why my gut feeling is that the alarm about licensed conveyancers is misplaced. If the Law Society were to brief its members properly, it would say that its alarm was about competition from the building societies.

Mr. Ivan Lawrence (Burton)

Is not the real problem that, although in theory there will be choice, the very people who are unlikely to choose to go to the more expensive solicitor are those in the poorer sections of society who are buying houses for the first time?

Mr. Morris

That may be so. I am sure that the hon. and learned Gentleman will want to advance that argument during the debate, but it does not affect this stage of my own argument.

I was talking about the possibility of a conflict of interests. Let us suppose that a building society wants to be shot of a customer who is a bad payer, and let us suppose, further, that the same society's officers are looking after the buyer of his property. When it comes to prudent warnings and investigations and inquiries on behalf of the buyer, may there not be a conflict of interest?

In my hon. Friend's worthy and proper attempt to give people freedom to go elsewhere, I wondered why he should want to give this power to banks and building societies. It is not necessary in his attempt to break the monopoly to go this one stage further. My hon. Friend sets out the responsibilities that he believes to be necessary for licensed conveyancers, but this part of the Bill needs a considerable amount of tidying up, especially when we come to discuss their qualifications. It appears from the Bill that any old officer of a bank or building society will be entitled to do the work.

According to the report in The Times today, the Government are likely to suggest going down that road in an attempt to buy off some Conservative supporters of the Bill. But I wonder whether it has been thought out fully. I am passionately concerned about the interests of the customer. If this power is to be transferred from one monopoly to what may turn out to be similar monopoly, I want to be satisfied that there will be no conflict of interests. A moment ago, the hon. and learned Member for Burton (Mr. Lawrence) spoke of the poorer person buying a house. It is he who most needs proper inquiries to be made when the same organisation is acting for both the seller and the buyer and the possibility arises of conflicting interests in seeking to get rid of one customer and acquiring a better one.

Mr. Maxwell-Hyslop

Since the right hon. and learned Gentleman is a barrister, can he tell the House whether at the moment it is unlawful or merely not recommended for a solicitor to represent both vendor and purchaser?

Mr. Morris

I am not sure about the law, but it has been recommended again and again that one firm should not represent both. There have been recent unfortunate cases. One in the south of England springs to mind immediately where there appears to have been a conflict of interests when the work was done by two persons in the same firm. Whether it is good law I cannot say, but it is very good practice, and it has been recommended over the years in guidance notes from the Law Society.

It is important that there should be independent advice. If the source of advice and wisdom is under one roof, there should be adequate safeguards. I do not say that it cannot be done, but there will have to be assurances that if a building society embarks upon this role two different officers with appropriate qualifications look after the respective interests of the seller and the buyer. I refer to this matter merely as a warning to ensure that we do not throw out the baby with the bath water in our concern for increased consumer protection.

Until a few years ago, the building societies insisted on nominating the insurance company to cover a property when granting a mortgage. I believe that that is no longer the practice, but how much difference it has made, in view of customer inertia, I am not too sure.

In my fairly wide reading over the past few weeks, I have become more and more concerned about the need for care in approaching this subject. One of Benson's suggestions which has not been implemented was the idea of a conveyancing standing committee under the aegis of the Law Commission to consider from time to time procedural changes in coveyancing transactions some of which may involve amendment to the substantive law of property. Obviously such a body would include lay members and others involved in the business.

I referred earlier to "Emmett on Title" and the 1925 legislation. As my hon. Friend said, procedurally the age of the quill pen is still with us. The Bill empowers local authorities to convert local land charges to computer operation. Given the poverty of local authorities and the threat of rate capping, I am doubtful whether we shall see quick progress to this end, despite my hon. Friend's good intentions. It may be that the clause is not needed in any event.

The greatest service of all that my hon. Friend has done is to act as a catalyst. Given the need for a fundamental examination of the law of property transfers and adaptation to today's technology, my hon. Friend's achievements may be on a smaller scale compared with the real need to provide a proper basis for the reform of the law of property transfer. That is why the Law Commission should be given the steer and the resources to get on with the job envisaged by Benson.

In following Benson, we must ask ourselves whether the client will be protected, first, from dishonesty or carelessness over money; secondly, from ignorance and incompetence; and thirdly, from a higher level of charges than that which is fair and reasonable.

The Bill makes a very brave attempt, coupled with the power to draft regulations, to meet the first point. The arrangements for meeting any losses may need filling out, since no man can insure against his own dishonesty. The organisation and supervision of those arrangements will need looking at with care. There may be initial problems arising from the size of the pool to be insured.

The second point is concerned with ignorance and incompetence. In my view, the Bill is inadequate to protect the consumer. There is no reference to the qualifications necessary for a licensed conveyancer. The difficulty is that with home transfers there may be hidden dangers. We have to bear in mind domestic rights —matrimonial rights and the rights of those who share the home—joint ownership and the problems of leasehold which, as I understand it, are covered by the Bill. It is people's ignorance of the dangers which causes me some apprehension. I have been asked what would be the standard of care expected from a licensed conveyancer. It is hardly that of a trained and qualified solicitor—that might be said to be too onerous a burden—but if it is not, what practical loss will there be to the consumer and how may he suffer?

The third point concerns the level of charges. Proper insurance and professional supervision may not in practice reduce costs as much as many expect. We simply do not know. However, generally, competition sharpens the minds of competitors, and I am hopeful on this score.

If we are concerned about the costs of house purchase, as I am, we should remember that the Law Society has made three very attractive suggestions. The first is that the 10 per cent. deposit received in a sale might be used as the deposit in the purchase of a new home, thereby avoiding commission and interest. At present it is stuck in one slot in a solicitor's clients' account and it cannot be used for the next step forward. More money has to be found and charges paid for it.

The second suggestion concerns the removal of the mortgage guarantee premium. When a person borrows more than 80 per cent., the cost can be between £75 and £150. In my view, that is a real rip-off. The imagination boggles as to the actuarial basis for that charge, in view of the extreme unlikelihood of insurers being called upon in an inflationary age.

The third suggestion concerns the need for an agreed fixture list to avoid the high cost of chasing fixtures. To that I would add the scandal of the high stamp duty that has to be paid on a modest property. When I bought my first and modest house in London more than 23 years ago, stamp duty was not an issue. A similar property today attracts a considerable amount of duty. Why not abolish it for modest homes worth, say, £40,000 or £50,000? Of course, the cost in London is much higher than in the provinces. People who now buy very modest properties have to pay substantial amounts of stamp duty. If the Government want to reduce the costs of house purchase, this is something that they should seriously consider.

I believe that those are practical suggestions, and would make it cheaper for most people to buy a property. Indeed, it might do more, in terms of costs, than merely abolishing the monopoly. Action on most, if not all, those ideas would require legislation or administrative action, and the ball is well and truly in the Government's court. Despite my hon. Friend's sterling service on a transaction which is so important to every one of us and which is fraught with problems, I believe that the right way to approach the matter is through Government action and Government legislation. It is right for a private Member to initiate legislation, it is right for him to act as a catalyst, and it is right for him to sharpen the minds of Government and those who are involved in industry, but, in view of the limited resources that any private Member has, it is exceedingly difficult for him to bring his proposals in such an area to a conclusion.

So today the House should express its view on the principle that my hon. Friend has canvassed quite properly, and into which he has put so much hard work, and should take cognisance of the warnings about the difficulties. In any event, the Government should recognise the considerable feeling that exists on the issue — some of it, perhaps, misplaced, but most of it, consciously or unconsciously, mindful of the needs of the consumer, as set out by Benson. We need safety, competence and fair charges. None of those can or should be sacrificed. We need reform in the law of property and we need a repetition of that great era of the law of property, 1925. The Government should respond to today's needs, and either amend my hon. Friend's proposals in Committee or present their own proposals. Above all, they should take the necessary action to invigorate and sustain the Law Commission in a fundamental and continuous review of this issue.

11.33 am
The Solicitor-General (Sir Patrick Mayhew)

I warmly congratulate the hon. Member for Grimsby (Mr. Mitchell). He won a high place in the ballot, and he has selected a subject of supreme importance for all our constituents who aspire to own their own homes. As the right hon. and learned Member for Aberavon (Mr. Morris) said, the hon. Gentleman has produced a Bill which has properly attracted a vast amount of attention, and no doubt it will continue to inspire an interesting debate today. As so often happens in the House when we discuss an issue which crosses party considerations and is dealt with on a non-partisan basis, we get debates of the highest order. Perhaps I may be permitted to say that, up to now, the debate is proving no exception to that rule.

Mr. Lawrence

Would it not only be a courtesy, but a better earnest of the good intentions of the Bill if its promoter were good enough to be present, not only during the speech of his party's Front Bench spokesman but when the Solicitor-General is making his response?

The Solicitor-General

I cannot believe that his absence is through any discourtesy to the House.

I hope that it will help the House if, on behalf of the Lord Chancellor and the Government, I tell the Hose now — it is a somewhat unusual stage, I know, for a Minister to intervene—about our thinking on the Bill and also about our proposals for the objectives which it seeks to achieve.

I followed with interest and admiration the speech of the right hon. and learned Member for Aberavon and I particularly noted his views about the need for action by the Government. There was much in his speech with which I agreed, and I shall come to that later.

If we read the long title of the Bill, we see that we are on solid common ground with the sponsors of the Bill. It says that the purpose of the Bill is to Extend competition and to protect consumers in relation to the provision of services in connection with the transfer of ownership of real property in England and Wales". I am glad to say that it is now well known, from our deeds as well as our words, that the Government think that competition is beneficial. To whom? It is beneficial to the public, whom all Governments must serve.

We see nothing in the craft of conveyancing to cause that principle not to apply. Lack of competition with a conveyancing practice acts just as insidiously to induce unnecessarily high charges and indifferent service as lack of competition with a greengrocer. That is why my noble and learned Friend the Lord Chancellor, in his first term of office, abolished the fixed scales by which, up till then, solicitors had calculated their conveyancing fees merely by reference to the value of the property conveyed. He thereby made possible and encouraged price competition. The process has since gone further, and we believe that it should now go further still. I shall come back to that matter later. The hon. Member for Great Grimsby said that he had found scant evidence of competition in Grimsby. Against that, we must put the evidence of the Benson commission, which in 1981 showed substantial and significant competition.

The Bill's promoter is equally right to recognise the need to secure protection for the public when they use the service of conveyancers. That is common ground between both sides of the House today, and I particularly noted the importance which the right hon. and learned Member for Aberavon attached to it. As has been said more than once, buying a house is probably the most expensive and momentous personal transaction that any of us and our constituents undertake. If it goes wrong, it can cause disaster and misery—perhaps even years later, when the person responsible is no longer available.

A person can do his own conveyancing at his own risk, but most people think that it is safer to pay someone who has expertise to do it. It would be perfectly possible to take a position of the purest laissez-faire and to hold that it is up to the customer to take what risks he likes and to shop wisely, to say that there should be no control over who holds himself out as an expert and that we should let unfettered competition thrive, but none of us, I think, with constituents to serve would go for that. Indeed, so far no one has done so, and I doubt whether anybody will.

The Bill focuses on important matters and the issue is, then, how best to achieve competition that is compatible with adequate safeguards for house buyers who are not sufficiently expert to be able to safeguard themselves. I know that the sponsors of the Bill agree with that proposition. It is not an easy issue to resolve. As the House knows, the way in which we have gone about it in England and Wales in the past 170 years or so has been to prohibit unqualified persons from doing such work, or from drawing or preparing for reward any instrument of transfer, or charge. By that means, Parliament has excluded everyone, except barristers, solicitors and notaries public.

Parliament introduced that rule because of the muddle and incompetence of lay conveyancers at the end of the 19th century, which must have been quite something. I note the point that the hon. Member for Great Grimsby made about it, but I think he will concede that that was the real reason for the rule.

Mr. Budgen

It was at the end of the 18th century—

The Solicitor-General

It was the 19th century, because the Stamp Bill was enacted in 1804.

Mr. Budgen

—or at the beginning of the 19th century.

The Solicitor-General

Perhaps Parliament reacted a good deal more rapidly then than it does now. However, I am rather doubtful about that. I am quite prepared to fall out with anybody on any issue, but I think that there are more important issues before us today.

We have maintained that restriction because we and our predecessors have believed it to be the best way of protecting the public. Of course, the fact that it has survived for so long is no reason for it to continue to survive, if its true function has now become the protection not of the public but of the practitioners. That would, indeed, be a closed shop. However, I do not believe that it has become that.

I should not dream of suggesting that our present arrangements represent the only practical means by which a degree of protection can be afforded to the public. Of course they do not. The scheme in clause 1 provides an alternative, but, for the reasons which I shall explain, the Government consider that its protection is insufficient and unfair. We believe that it is not better but inferior to the protection given by our present arrangements. Equally, however, we think that the degree of competition provided by our present arrangements is unduly restricted. I shall explain how we think that it should be extended and what steps we intend to take.

First, as to the merits of abandoning our present qualification arrangements, may I ask the House to recall the circumstances in which the Benson commission was set up in 1976? The then Prime Minister referred to the fact that great public anxiety had been expressed about the organisation and practices of the legal profession, and accordingly among the matters referred to the Royal Commission were the rules which prevent persons who are neither banisters nor solicitors from undertaking conveyancing and other legal business on behalf of other persons. That is a quotation from the commission's terms of reference.

The hon. Member for Great Grimsby said that the Royal Commission was asked to consider such matters not from the point of view of the consumer, but professionally, from the point of view of the profession's organisation. However, that is not a sustainable argument. The commission was asked to inquire whether changes were desirable in the public interest.

The commission covered the rules which prevent persons who are neither banisters nor solicitors from undertaking conveyancing. Therefore, its members were appointed slap on the question whether those rules were in the public interest. The commission reported in 1979. My hon. Friend the Member for Wyre (Sir W. Clegg) reminded us of its conclusions. It considered conveyancing in some detail, having received a large volume of evidence on the subject from both laymen and lawyers in this country and abroad. The commission found that, although the process of conveyancing had been made less complex by land registration, the benefits of that had been largely offset by the increased importance and intricacy of the law relating to landlord and tenant, to planning, taxation and the matrimonial home. Those are matters to which the right hon. and learned Member for Aberavon has just given proper weight.

The need to protect the public from incompetence led a clear majority of the commission to recommend that the restrictions should not be relaxed. Indeed, it recommended that they should be strengthened by excluding notaries public from those perrnitted to undertake conveyancing and extending the restrictions to cover the contract of sale. It looked particularly at the suggestion that there should be a limited class of conveyancers, restricted to undertaking domestic conveyancing and subject to certain constraints. It made the following general comment on those who advocated abolition of the present restrictions.

It said that abolition tended to underestimate the number and frequency of difficulties which may be encountered unexpectedly in any conveyancing transaction, domestic or otherwise, and which required the advice and skills of a qualified practitioner". The commission then referred to matters which the right hon. and learned Member for Aberavon mentioned.

It said: It was argued that a licensed conveyancer in doubt or difficulty could seek the advice of a solicitor or barrister. Such a precaution would, however, be effective only if a problem were seen to require expert advice and the advice was taken and we consider that there would be insufficient protection in any such arrangement. The commission then dealt with the suggestion that one could define certain types of domestic conveyancing that are unlikely to attract difficulties. It said: Registered conveyancing is usually given as an example. This argument does no more than repeat the argument in the preceding paragraph … We are satisfied by all the evidence given to us that any form of conveyancing, whether described as domestic, registered or in any other way, may give rise to difficulties apparent only to the expert. In any case which may be specified, ancillary problems may arise and strict control will be needed over the handling of client's money. We should take a heavy burden on ourselves if. without finding answers and solutions to the problems and obstacles that defeated the Royal Commission, which sat for three years and was appointed on those terms of reference, we said that surely a way could be found, and that it could not be beyond the wit of man, so we should make a change despite those recommendations.

Mr. Stephen Ross (Isle of Wight)

If I remember rightly, the commission had 13 members, at least five of whom signed a minority report which did not go along with the comments the Solicitor-General is making. They thought that there could be a change.

The Solicitor-General

I have already acknowledged that the Royal Commission found by a majority of about two to one. It was not unanimous. The commission said that a licensing system would be unable to provide the level of positive control required, particularly in respect of standards of competence and ethical conduct. That point has already been dwelt upon. The result of the Bill would be effectively to reject those findings and conclusions. I must advise the House that if it adopts the Bill's principle and argument it will be doing a very unsafe thing.

I deal now with the sufficiency of present competition.

Given our objective of ensuring the maximum possible degree of competition that is consistent with consumer protection, we are faced with three main options: first, to develop competition between solicitors in private practice; secondly, to enable solicitors employed by organisations such as banks and building societies to undertake the work; or, thirdly, to widen the field of conveyancers still more by establishing some form of licensing system to permit non-solicitors to do it.

As to the first proposition, competition between solicitors has improved considerably in recent years. Since the Lord Chancellor's abolition of the scales, surveys by the Law Society and the Consumers Association show that solicitors' charges have been falling in real terms. Recent initiatives by the Law Society have also helped competition. The Law Society has devised a form of estimate to enable proper comparisons of charges to be made so that people can shop around. Its decision to relax restrictions on individual advertising is also a significant step in the right direction.

Today we have discussed whether the advertising of individual charges should be permitted. I am sure that it is right to leave it, in the first instance, to the profession to consider changing its practice rules. The Law Society has that under consideration. I have already expressed our views on the licence provision. The proposed system cannot provide the necessary protection.

The remaining option of extending conveyancing rights to employed solicitors offers a serviceable means by which a further element of competition can be injected. We therefore intend to introduce our own legislation where necessary to extend the right of conveyancing, not just of registered land, but of all land, to solicitors employed by, for example, building societies and banks, subject to safeguards.

There are potential dangers in allowing solicitors employed by building societies and banks to act for both employer and borrower. It is essential that the borrower's interest should not be prejudiced by a conflict between the solicitor's duty to the borrower and his duty to his employer. Such conflict can arise if, for instance, a borrower seeks advice about the form of mortgage that he should have or if the lender wants to impose special conditions on a loan. We are conscious of the fact that Benson recommended against permitting solicitors employed by lenders to act for borrowers as well because of the potential conflict of interest.

We think that before we legislate it is necessary to consult interested parties on how the potential conflicts might be overcome. For example, we could provide that employed solicitors owe a primary duty to the consumer. That could be enforced by the Law Society's conduct commitee. We could provide that the use of a building society's solicitor should not be made a condition of a loan. We could provide that where costs are spread over the life of a mortgage the true cost and rate of interest should be disclosed. We should investigate all those possibilities.

Mr. Budgen

If a solicitor were acting for both the lender and the borrower, how could he owe a higher duty to one side than to the other?

The Solicitor-General

That problem is capable of being overcome by specific legislative provision. One could say that if a solicitor was invited by a building society to advise the borrower of the terms on which money was to be lent, he must place the interests of the borrower above those of the building society. It is a difficult matter, which must be investigated, but I believe that it is possible to overcome the conflict of interests. The possibilities must be investigated before legislation.

Mr. Jesse!

Will costs be reduced by ending cross-subsidisation? Can my hon. and learned Friend satisfy the House about the urgency with which the matter will be treated? Will he set a time limit on consultation to ensure that it is not interminable? Does he intend to bring forward legislation soon?

The Solicitor-General

Competition almost always reduces costs and I would expect the same in this instance. That is our hope. We believe that competition can be increased without prejudicing consumer protectin. We intend to proceed promptly so as not to delay the introduction of the additional competition that I have mentioned.

Mr. Bowen Wells (Hertford and Stortford)

Will my hon. and learned Friend spell out what he said about extending the ability of solicitors to operate in building societies, banks and other like institutions? That is important if we are to have more competition. What does my hon. and learned Friend have in mind when referring to other institutions?

The Solicitor-General

We are satisfied that it is possible and proper to legislate in respect of solicitors employed by building societies. That will need legislation. We think that it is right that solicitors employed by banks should be able to convey. Our mind is not closed to the possibility of solicitors employed by other institutions being permitted to convey, but in some cases there could be an insuperable conflict of interests. We shall investigate the possibilities.

Mr. Cormack

Am I right in thinking that those who act within building societies and banks must be qualified solicitors? Many solicitors delegate conveyancing functions to managing clerks. Will it not create a strange situation, since one could guarantee being looked after by a solicitor only by going to a building society or a bank?

The Solicitor-General

My hon. Friend is the victim of an amusing misunderstanding. It is not possible for anyone to effect a conveyance, whether it is of non-registered land or a transfer of registered land, unless he is a solicitor. Delegation of preparatory work is a matter for the individual office.

Mr. Alan Williams (Swansea, West)

How can any statute ensure that the normal human instinct of looking after one's future employment will not prevail? If a solicitor is employed by a building society, his future is dependent on that building society. It will not matter what is done in terms of imposing a statutory duty—human nature will prevail.

The Solicitor-General

That observation does less than justice to the conscientiousness of solicitors and to the effect of the rules on professional conduct by which the legal profession is governed. Such matters need to be examined, but I believe that they are capable of being overcome without prejudice to the proper protection of the consumer. It is possible for a solicitor to ask himself, "Is there, or is there not, a conflict of interest if I act in the conveyance of a house both for the lender and for the borrower?" That ability is not held to have been abused.

It is important that the changes do not permit unfair competition. We intend to ensure that that does not happen. In particular, there must be no question of borrowers' prospects of securing a loan being affected in any way by their choice of a solicitor in private practice or one employed by the building society. The Director General of Fair Trading will ensure that competition is fair.

We intend to do more than that. We want house buying to be made simpler and cheaper for the public. The Benson commission identified a number of sectors where reform could achieve that by simplificaion of the law, of records, of procedure and of documents. The commission recommended that a standing committee should be established to examine suggestions for the simplification of land law and conveyancing. The Law Commission, as part of its continuing programme of law reform, already considers many aspects of the substantive law involved.

Further consideration can be given to the process of conveyancing as a whole, with a view to simplifying practice and procedure wherever possible. We have decided to set up a special committee, under the auspices of the Law Commission, to examine the various proposals and to ensure that work in many different areas is co-ordinated and the whole question kept under review. We intend that the committee should come forward with recommendations which, if they provide for the cheapening and simplificaion of conveyancing and house purchasing for the ordinary member of the public, we shall be anxious to debate.

The Law Society supports that, as the right hon. and learned Member for Aberavon said. It suggests that the committee should consider not only the key issues such as whether there could be a parallel profession of licensed conveyancers as a viable alternative to our present arrangements, but specific ideas such as those referred to by the right hon. and learned Gentleman, which appear generally attractive to the Government.

We intend, therefore, to consult on these matters by this and other means. I am confident that that consultation will bear valuable fruit.

Mr. Rob Hayward (Kingswood)

How long will it take?

The Solicitor-General

If I knew that I should not need to consult. There is a commitment to legislate in the particular sense that I have described. Further legislation must depend on the setting up of the committee and the speed with which it can come forward with proposals. We intend to move as promptly as we can, consistent with the protection of the public.

Mr. Simon Hughes

Will the Solicitor-General assure us that the proposals will be dealt with with far greater speed than many other recommendations from the Law Commission? Many of its recommendations, not only on legal services but on other matters, have not been brought to the House. We need to be satisfied not only that the consultation process will be brief, but that the Government consider it their duty to bring the commission's proposals to the House within a short time of their publication.

The Solicitor-General

On Wednesday I moved the Second Reading of the Occupiers' Liability Bill, which followed exactly the lines of a Law Commission report. We wish to proceed quickly on these matters, and I am a great admirer of the Law Commission.

Mr. Alan Williams

The Solicitor-General has put forward a peculiar proposition—that it is not possible to put a terminal date on the consultations because if he does they will not be proper consultations. How does he reconcile that with the statement on regional policy by the Secretary of State for Trade and Industry earlier this week, when he put a clear terminal date on consultation and swore to the House that the consultation would be genuine?

The Solicitor-General

There are many ways of going about these matters. We could adopt the jurisprudence of the White Queen and give the verdict for execution first and listen to the evidence later. On the other hand. we could consult those recommended by the Benson commission about what steps should be taken.

I ask the House to trust the Government. We are not reluctant to encourage competition. I have made it clear that there is nothing in the craft of conveyancing to lead us to depart from our principles on competition. I hope that we will be trusted to get on with this matter as quickly as it is safe and prudent to do.

I hope that the hon. Member for Great Grimsby will forgive me if I do not go through the remaining clauses. They have been covered by my hon. Friend the Member for Wyre, and I should be unjustifiably trespassing—

Mr. Austin Mitchell

I am not sure whether the Solicitor-General is speaking on behalf of the Law Society or the Government. The Government published a White Paper on the Benson commission four weeks ago, perhaps prompted by the Bill, which made no mention of maintaining the monopoly on conveyancing. Now the Minister tells us that, after agonising deliberations in Cabinet, the monopoly is to be maintained. The Government hold out no hope of allowing conveyancers to compete with solicitors. Without such competition there can be no reduction in prices and no development of the services provided for the consumer. I find the Solicitor-General's reply disappointing.

In referring me to the points made by the hon. Member for Wyre (Sir W. Clegg), is the Solicitor-General accepting everything that the Law Society says about the Bill? Do not the Government have a view? Cannot they take the Bill as a vehicle and reshape it to achieve competition? The Solicitor-General appears to be relying on the Benson commission's recommendations on conveyancers, but opposing its recommendations on building societies.

The Solicitor-General

It is always a mistake to try to take a short cut, even with the aim of sparing the time of the House. Each of the subsequent clauses after clause 1, which is the principal clause. contains material which is objectionable to the point of being impossible to amend in Committee.

Clause 2 would override the Law Society's practice rules, which prohibit solicitors from advertising for conveyancing. We agree that the Law Society should review those restrictions, but legislation at this stage would not be appropriate. It is important that the profession should be self-governing. If it were to abuse that position and act contrary to the public interest, the Government would have a responsibility to act, but that has not arisen.

Clause 3 seeks to improve the local land charge system. We are all aware of the criticisms about the time some local authorities take to respond to inquiries. However, when delay occurs it is not usually attributable to the searchers of the local land charges registered, because local authorities also answer a wide range of supplementary inquiries in accordance with arrangements negotiated between various associations and the Law Society. They cover such matters as building regulations, road schemes and planning proposals. The need for several departments within a local authority to contribute to the inquiry sometimes leads to delay. Official searches can invariably be dealt with quickly. It is a matter of convenience that they are usually given at the same time as replies to other inquiries, but they could be given separately and sooner. Therefore, the clause is directed at the wrong target.

Clauses 4 and 5 seek to reduce the time taken between offer and contract and the costs to prospective purchasers of commissioning surveys on properties which they do not eventually buy. They wish to make it possible for a purchaser to rely on a survey provided by the vendor. The Government have serious doubts about these clauses. The main reason why purchasers commission surveys is common prudence. Who would want to buy a house on the strength of a vendor's survey when he may have commissioned a number of unfavourable surveys before obtaining one that satisfied him? Why should building societies have to take that risk, which would tend to weaken the value of the security given to loans? That would be to the disadvantage of borrowers generally.

I very much dislike having had to speak so discouragingly of a Bill which seeks to serve the purposes which we all share — purposes which, by our past actions, we have implemented and which we intend by future actions—and they will be taken promptly—to implement further. The Bill's objectives are congenial to the Government but the ability to achieve competition is qualified by the need to achieve protection for the public. I regret to say that, on that point, the Bill fails beyond redemption.

I regret that I must advise the House that if it supported the Bill it would do no service to its constituents to whom it owes a duty to provide proper standards of safety.

Mr. Deputy Speaker (Mr. Ernest Armstrong)

I remind the House that more than half the time available has been taken up by four speeches. I appeal to both lawyers and non-lawyers to be exceedingly brief. I have a long list of hon. Members who wish to put very different points of view to the House.

12.9 pm

Mr. Ken Weetch (Ipswich)

I shall be as brief as I possibly can. I particularly appreciated the speech of the hon. Member for Wyre (Sir W. Clegg), who is a practising solicitor. I listened to him as a practitioner with great interest and respect.

This is a debating chamber; therefore, I wish to take the debate some steps further basing my remarks on what the Solicitor-General had to say. I wish to comment on the proposals that he put forward. I support the Bill—I am one of its sponsors. I regard it as an important opportunity for a breakthrough on behalf of the owner occupier. I do so for two fundamental reasons.

First, the reform of house transfer is long overdue. To underline that I can quote no better authority than the chief general manager of the Halifax building society, who said: There is now 60 per cent. house ownership in this country and procedures have not changed much since the overhaul of the law in 1925 when the figure was 10 per cent. Home buyers are entitled to more competitive and cost effective service. The cost of buying and selling is far too high. Secondly, the Bill is significant because it seeks to bring to bear on the whole process of house transfer more competition and freedom of choice. I believe that because of expensive restrictive practices—the current structure of conveyancing being one and there are others—the cost of moving house in Britain today is nothing short of a scandal. The Bill offers a series of measures which aim at constructive reform but, as in all Bills before the House, some parts of it appeal while others do not. What I should like the Government to grasp is that the whole system of house transfer, including conveyancing, valuation, survey, registry and local searches, needs a complete overhaul. I impress on the Minister that if we wait for the professions to bring about these improvements, we will wait for ever. Despite the crying need for reform, the professions over the years have moved with disciplined lethargy.

The most important part of the Bill is clause 1, which seeks to amend section 22 of the Solicitors Act 1974. It aims at breaking what the general public understand to be the solicitors' monopoly of conveyancing and it seeks to do so in terms of registered property.

I should like to take up the point made by the hon. Member for Wyre when he was trying to define the nature of the solicitors' monopoly. Here we must choose our words carefully. The "monopoly" applies to only one small part of the conveyancing transaction. In simple terms, any person in Britain can do his or her own conveyancing if he or she so wishes. Monopoly does not cover do-it-yourself either on purchase or on sale. Neither does the monopoly cover conveyancing for sale. If one wishes to employ someone to conveyance a house for sale for fee, gain or reward, one can do so and there is no monopoly provision. But in house purchase the position is different. Section 22 of the 1974 Act says that the transfer of the deed in the purchase operation can be done only by certain people. In practice it means that commercial preparation of the deed is confined to a solicitor. Thus the "monopoly" bears only a limited meaning, but it has been sufficient over the years, through skilful promotion and scare stories from Chancery lane, for conveyancing to be the virtual province of solicitors.

The root of the restrictive practice is to load down the conveyancing of registered property which, although it must be done with care, is high grade clerical and administrative work, with an expensive legal qualification. As time goes on and as compulsory land registration becomes more complete, so the qualification restriction on registered property becomes more and more bogus.

The present position is also hypocritical. I have scores of letters in my constituency office to say that in many solicitors' offices unqualified and often unsupervised clerks do the job. There is no high-powered solicitor wrestling with esoteric complexities on the client's behalf but a clerk sending out standard forms with standard questions ritually eliciting standard and usually evasive answers. It is what Michael Joseph in his book called the "conveyancing fraud", and what a fraud it is.

The net result has been serious. First, it has led to prices that are far too high for the work done. My researches over the years have revealed that conveyancing charges on both sale and purchase are now around I per cent. of the purchase or sale price. If one buys and sells at £40,000, the conveyancing cost alone on sale and purchase is £800. That is not a conveyancing fee; I consider it to be daylight robbery. Conveyancing law may be an ass but it is an ass that knows how to charge. In the second place it has prevented many competitors other than solicitors from entering the arena and having a beneficial effect on costs. Last but not least, for many years it has prevented the emergence of improved technical and adminitrative procedures. The monopoly feather-bedding has meant a vested professional interest in things as they are, ensuring that the managerial revolution has passed conveyancing by.

But not only is the present framework inefficient and expensive; it is offensive in a free society. If the consumer wishes to use a solicitor, then so be it. But it is quite another thing when a piece of legislation says, "You will use a solicitor whether you like it or not." In a democratic society that should not be the case.

The Government have a high moral tone when pointing to restrictive practices in trade unions. I should like to see the Government adopt the same moral tone when the restrictive practitioners are in striped suits. From the supply side of conveyancing services, if a non-solicitor conveyancing firm—there are some good ones up and down the country, firms which I have used myself for my own conveyancing business when I have moved house; I do not wish on anyone else what I am not prepared to do myself—wishes to offer a more cost-effective service, it faces being hauled before the court on a criminal charge. Trying to reduce prices opens a firm to a criminal charge of breaking the monopoly, not from the police but from those well-known purveyors of freedom, the Law Society. I am delighted to say that many of its recent prosecutions have been dismal failures, but the fact that in 1983 it can bring charges in court against competitors is a complete disgrace.

The sponsors of the Bill have performed a service for the owner occupier in bringing these ideas forward. The building societies have taken a good deal of stick during the debate. The Government's response to the Bill has been botched. I mean no disrespect to the SolicitorGeneral—I respect his performances in the House—but this is a rushed and ill-thought-out response from the Government. I do not believe that they have thoroughly considered the consequences. The Government have made a hurried response to get themselves out of a political difficulty. They have had to try to reach a balanced position between the clamour of the public for reform and an overbearing solicitors' lobby behind the scenes. In trying to make that response, the Government have responded in an unsatisfactory way.

One of the key proposals is that a building society could, if it wished, offer the service, and I believe that to be a sound approach. But if one says that even inside the building society a solicitor must do it, one is simply removing the restrictive practice from the solicitors' office to under the building society roof. The Government have made no effective change; the monopoly still stands, the restrictive practice is still there and costs will not come down. We have had a plethora of words from the Solicitor-General but we have had nothing of substance. The Government, in response to overwhelming popular support for the Bill, have reached for their feather duster and done nothing.

The other category of people to have received a lot of stick are the non-solicitor conveyancers. They figured in the major piece of legislation that reformed the position this century. In other words, the conveyancer was part of section 118 of the Land Registration Act 1925, the pillar legislation on which much of the reform stands. The conveyancer was in that legislation in 1925, but subsequently, by Acts of Parliament forced through the House by solicitors, the conveyancer was eliminated. We should not forget that he was there at one time and had a respectable place in the situation.

The hon. Member for Wyre asked why, if there was a monopoly, non-solicitor conveyancers were competing. There appears to be a paradox in that, and indeed there is. The only part that is a monopoly is the preparation of the standard transfer deed. Conveyancing firms often farm that part of the process out to a solicitor, so the monopoly is being broken every day of the week by people in banks and building societies, with the active connivance of solicitors.

I am also willing to concede that non-solicitor conveyancers vary a good deal— some are good and some are rubbish—so I agree that some people who are conveyancing property outside solicitors' offices need regulation. The point remains that the monopoly, because it is unsatisfactory and is being broken every day of the week, must be reformed so that we regularise the procedures. As things are, with more holes than a fisherman's net in those procedures, we have the most unsatisfactory system of all, and the Solicitor-General is doing nothing to remedy it.

It is impossible for the Law Society to police this monopoly because, as time goes on, more and more people will break it in view of their dissatisfaction with high prices. Some of those who are breaking it are undesirables, I concede, but at the end of the day we need reform to regularise the position, and we must ensure that we have a sensible basis of reform.

Mr. Lawrence

Can the hon. Gentleman point to any provision in the Bill that will oblige the unsatisfactory, non-solicitor conveyancer to register?

Mr. Weetch

That is a significant intervention and I admit, in answering the hon. and learned Gentleman, that had I been drafting the Bill my approach would have been different. While I believe that there should be more competition, I do not feel that it should go so wide. There should have been a clause in the measure laying down minimum qualifications. Although I am one of the sponsors, I should be willing in Committee to move an amendment to that effect because I believe that that part of the Bill is unsatisfactory.

The Bill is about a number of things: first, it is about freedom of choice; secondly, it is about having more competition; thirdly, it is about bringing down costs for the owner occupier; and fourthly, it is about creating a more mobile society. If we are to achieve all those objectives, conveyancing must be set free. We should widen, under proper regulation, the category of persons who can do it.

The Conservatives were elected in 1979 and again in 1983 on a platform of more competition. Their response today has been totally unsatisfactory. Unless the Government can come up with some alternative, not only the Bill but the cause of the owner occupier who wants to move at reasonable cost will have been in vain. I beg the Government to think again.

12.27 pm
Mr. John Page (Harrow, West)

I came to the House this morning with the intention, as my intervention will show later, of opposing the Bill, but I thought that it would be reluctant opposition. I was not impressed by the speech of the hon. Member for Great Grimsby (Mr. Mitchell), and the only speech in favour of the measure that I found persuasive—that of the hon. Member for Ipswich (Mr. Weetch)—made me feel that he did not have too much confidence in its drafting.

We are discussing what is called the solicitors' monopoly. I wonder whether dentists have a monopoly in drawing teeth; there are plenty of dentists to visit and there is freedom of choice. I understand from inquiries that I made in my constituency and elsewhere in the last week or two that people genuinely telephone different solicitors' firms to obtain quotations on the cost of conveyancing properities, though I accept that there are many fringe activities, as my hon. Friend the Member for Wyre (Sir W. Clegg) pointed out.

I also hoped from the hype that the Bill received in the press that it contained measures on gazumping, but I gather that it has nothing to do with that subject. It would perhaps achieve a speeding up in the process because only one surveyor's report would need to be used. I hope that the Solicitor-General will haul in the strong feeling that exists that something must be done about gazumping. I suggest that when the sale of a house reaches the subject-to-contract stage, each party should have to put down a deposit of, say, 1 per cent. which would be forfeited by one side should the sale not go through.

The proposers of the Bill have got the wrong end of the stick and they have taken the wrong route to achieve their objectives. They should have gone for an element of self-regulation for house conveyancers. To obtain a full conveyancer's licence, a person must satisfy the Director of Fair Trading that he has an insurance policy or some form of indemnity. The Secretary of State will be left with the task of putting some meat on to the carcase provided by the Bill. He may do so by order or otherwise. The carcase is so small, and there is so much meat to be put on it, that it would be ridiculous to expect such matters to be dealt with in Committee. Does the hon. Member for Great Grimsby believe that it is more difficult to convey a house than to insure it? Surely the conveyancing side is more complicated. To insure is more simple than to convey.

The proposers of the Bill have missed a magnificent opportunity. They could have followed the Insurance Brokers (Registration) Act 1977, known nationally and internationally as the Page Act, which is perfectly well tried, was brilliantly conceived and is economical. The Act covers many of the points raised by Lord Benson. All that the proposers needed to do was to read the brilliant Act, comprising 30 sections, and wherever it says "insurance broker" insert the word "conveyancer". The Bill should provide for the registration of conveyancers, for the regulation of their professional standards and for purposes connected therewith. The establishment of a conveyancers' registration council would be self-regulatory, without requiring one additional civil servant. The Bill should include provision for a conveyancers' register, qualifications for registration, a list of bodies corporate which are carrying on business as conveyancers —building societies, banks and so on—appeals against refusal to register or enrol, approval of educational institutions and qualifications, supervision of educational institutions and qualifying examinations and the publication of a register and list. Such matters are too extensive to be dealt with in Committee. What about regulations of conduct, a code of conduct, requirements for carrying on business, professional indemnity, preliminary investigation of disciplinary cases, a disciplinary committee, erasure from the register for crimes or unprofessional conduct and for appeals in disciplinary and other cases? The Bill is so thin and inadequate that it does not attempt to deal seriously with such important subjects. Had the proposers of the Bill followed my sensible route — I would not even have charged them a fee—[Interruption.] I have no interest to declare except of a proprietorial nature for an excellent and wise Act. The Bill in its present form is not worthy of a Second Reading.

I have the greatest regard and respect for my hon. and learned Friend the Solicitor-General, but I am not very happy with what he said earlier. I shall now turn my speech upside down as I have strong reasons for disapproving of banks and building societies undertaking conveyancing work for their clients. When the ordinary house purchaser goes shaking, with sweating hands, to his bank to ask for a bridging loan or help with a mortgage, and the bank manager says, "We have Miss Jones in the outer office who will do all the conveyancing for you", will the purchaser say, "How much is it? Can I get a quotation from a solicitor, and will she look after my interests completely?" I must be careful not to offend the banking fraternity because of my personal position, so I must not mention the fact that mistakes can be made in accounts. It would not be ridiculous to say that banks acting as trustees usually—I have some experience of it—charge much more than do solicitors.

I regret to say that I am even more worried about the building societies. As the right hon. and learned Member for Aberavon (Mr. Morris) said in a wise, illuminating, clear and persuasive speech, building societies have slightly opened their closed shop of the insurance companies which they allow borrowers to use. I did not know that it had opened, although I have been working on it for the past 23 years. Unfortunately, the constituent who used to raise this matter with me has moved elsewhere, so I do not now receive his annual letter. In trying to break a monopoly, we may be creating two new closed shops. I hope that my hon. and learned Friend will make the terms of reference of the proposed inquiry so wide that he will not be caught on any embarrassing hooks. It should be a wide-ranging examination of the matters that have been discussed so interestingly this morning.

I came here today with second thoughts about the wisdom of not supporting the Bill. The more that I heard this morning, especially from my hon. Friend the Member for Wyre, the more I believe that it would be better to accelerate the changes inside the profession regarding those who carry out the registration. It might be better to retain matters as they are, but in a slightly higher gear.

12.37 pm
Mr. Simon Hughes (Southwark and Bermondsey)

I declare my interest, which is primarily that I am sticking my neck out. As a barrister, the risk of coming out on the side of the sponsors of the Bill is that I may alienate myself from solicitors who have large conveyancing practices. However, I am prepared to take the risk.

The duty of the lawyer is to serve the public. The legal profession is a service industry, and the test of every lawyer—solicitor, barrister or otherwise—is to do a job that the public desperately needs to be done with the competence and expertise that training and experience can produce. It is clear that many solicitors do not believe that conveyancing always requires the solicitor's experience and competence to perform. There have been many examples—no doubt many hon. Members have received letters from solicitors—which show that it is wrong and unprincipled, especially with this Government's attitude, to guarantee the solicitors' monopoly.

I quote briefly from two letters to show that it is not only non-solicitors who suggest that the law needs substantial amendment. The first states: I am not alone in the view that its existence"— that is, the monopoly— is not only a scandal but also a humiliation to a large number of solicitors who expect to survive because people choose to use their services and are not compelled to. Moreover, I believe that freed from the monopoly many solicitors would seek to offer a wide service in the house transfer market, as they do in Scotland, and would be more than able to hold their own against non-legal competition. The letter ends: So get to it and persuade some Thatcherites of the beauty of free competition. Another solicitor, who lives in my constituency, also wrote to me. The Southwark and Bermondsey area is not overpopulated by solicitors. Indeed, there is a dearth of legal services to meet the needs of people in the inner city. He said: I should like to place on record that at least this member"— of the Law Society disagrees with the Council's policy and considers the response of the Society which appeared in the Gazette on 9 November an unconvincing and unconstructive response to a state of affairs that cries out for change. First, therefore, it is not true that solicitors unanimously believe that conveyancing should remain with their profession. It is fundamentally important that qualified solicitors and lawyers adapt their services to the changing needs of people requiring their services and that they release in theory, as they do in practice, those tasks that are easily performed, do not need a lawyer's experience and qualifications and are daily carried out by non-solicitors employed in occupations dealing with those matters. We all know that much conveyancing work is carried out by non-solicitors. Indeed, the majority—probably 80 per cent.—of all conveyancing involves no solicitor's activity at all.

Mr. Porter

The hon. Gentleman may not have heard the earlier part of the debate. The Royal Commission found that 70 per cent. of conveyancing was carried out by solicitors. Moreover, no one has suggested that change is not needed. The change required, however, is that described by my hon. and learned Friend the Solicitor-General — a fundamental change in property law and practice.

Mr. Hughes

I shall deal with that in a moment. Certainly, the commission found that there was an element of solicitor involvement in the cases to which the hon. Gentleman refers. We know that in practice, however, the solicitor's involvement may be minimal in supervising competent, experienced and non-legally qualified people who carry out the conveyancing work. The solicitor plays a cursory, occasional supervisory role to ensure that the job is being done and is completed on time. So long as the work is being done properly, solicitors do not need to become further involved.

Those of us in the Opposition who believe that the monopoly needs to be broken base our view on three premises. First, we share the view of those who write in the terms that I have quoted. We believe that solicitors who are doing a good job and are competitive in performing the kind of service that is readily available to the public will hold their own.

Secondly, it is not sufficient to retain, as the Solicitor-General proposed in the Government's response simply a variation of monopoly—that is, retention of the work by solicitors alone whether they practise in solictors' firms or elsewhere in building societies, banks or other institutions. Clearly, however, that requires investigation as "other institutions" could cover a wide area and might thus be a matter of interest to us. Nevertheless, it need not be solicitors alone who do the job, partly because so many other legal services are needed but are not at present being carried out. For example, in many areas—usually areas which also suffer a dearth of doctors, dentists and other services—welfare rights are increasingly important for a large number of people, given the volume of social security legislation, employment legislation, tribunals, and so on. Legal advice is often required on all those matters.

It is important that the legal profession adapts to take on the role that it is not yet fulfilling — that of performing the functions that people are asking of it, but are finding inadequately met. The legal profession is adaptable enough, although it often does not evidence itself as being so, to be able to convert to do the new work that legislation requires of it. The profession generally need not fear, although rural solicitors may often be justified in this concern, that it would lose a substantial amount of its work and have nothing to replace it.

At the moment much conveyancing work subsidises other work. That point has not been defended by Conservative Members. That is unjustifiable, and I hope that all hon. Members accept that. Solicitors in small country practices depend on conveyancing and have built that up as a substantial part of their practice to keep going. The other services that they provide are supported by conveyancing. There must be parallel reform of legal aid provision and other civil work to eliminate that need. However, that is not the argument today.

The hon. Member for Wirral, South (Mr. Porter) made the point that, in the interests of the public, we need a fundamental review of the way in which conveyancing and property law applies. We are left with an enormous body of legislation, largely dating from 1925, much of which retains practices that are no longer the easiest or the most obvious method for a quick and efficient transfer. For example, we need to accelerate registration of land, to regulate gazumping practices and to provide conditional contracts to deal with that point. There are a whole range of necessary reforms. The Bill seeks to establish the principle — this is why I support it — that it is unnecessary for a solicitor, with his legal experience, to deal with the often straightforward task of conveyancing.

Some criticisms have been made of the drafting of the Bill. My support for it does not extend to suggesting that it should go through unamended or that it does not need much additional work and safeguards to be built in. As the hon. Member for Ipswich (Mr. Weetch) said, there are things that need to be put into the Bill in the interests of the consumer, which is one of the criteria in the long title.

As it is drafted, the Bill deals with the conveyancing of the house. We all know that conveyancing is also done on leasehold property such as flats, and property with tenants or sub-tenants or licensees, all of which involve much more substantial problems. If we are to license people who are not practised in the legal profession and do not have solicitors' experience and legal qualifications, it would be right as a first stage to do so only for the categories of property that do not suffer these inevitable complications. If one is concerned with a flat in a block, or a property with licensees and sub-tenants and complicated lesser interests in land, it might be proper for that to be retained for the legal profession.

A major objection to the Bill is that the safeguards that are in part provided by subsections in clauses 1, 3 and 4, in particular, do not go far enough. I accept that, but the Bill allows us to hang on the licence, which would be the prerequisite for one of the two categories of people able to do conveyancing, a set of conditions. They are set out in clause 1(2) and (3). The hon. Member for Harrow, West (Mr. Page) said that there should be a list of qualifications and conditions, such as those in his Act on a different profession, and that his Act could be adapted to provide the list of protections that the consumer would need.

We should be happy to accept amendments to the Bill that would set preconditions to registration before anybody is allowed to carry out conveyancing. There would need to be a condition as to competence and ethics, or professional standards. We would need to make sure that the insurance cover provisions were adequate. There is the problem of insuring against one's own default or fraud. One needs to make sure that categories of building societies, banks or other institutions could generically, as it were, be said to have fulfilled those requirements if they had given the relevant undertakings, and their professional rules governed them in an appropriate way. It needs to be made clear that, for example, if one issues a licence to a company that company is of sufficient validity and standing for the consumer to have confidence in it.

Those are conditions to the principle that the consumers will be able to inquire who is entitled to convey his land or property. Provided that the consumers see that there is a list certified and authorised by the Director General of Fair Trading, they will be satisfied by that reassurance. Perhaps the double licence provision is inappropriate. The consumer might be muddled by seeing two categories of licence. I accept that entirely. All that the consumer would want to know was that there was a licence that governed any person or company that would be permitted, after the check by the Director General of Fair Trading, to act as a conveyancer.

A provision for a compensation fund would also have to be inserted into the Bill. There might be a defect in the activities of someone who was not sufficiently insured. For example, in motor injury cases, when an accident is caused by someone who subsequently disappears, the Motor Insurers Bureau provides an indemnity scheme. A fund should be set up to assist and make sure that the individual does not suffer. All those who had a licence would have to contribute. They would have to pay, as solicitors, barristers and members of any other profession do at the moment, towards that indemnity fund, which would protect the public.

Such amendments are needed to protect the public. The Solicitor-General's response, which, if anything, was to buy off those who want action now, was unsatisfactory. He proposed, first, that there should be a consultation period, which is proper. That is how the Government should react. However, we have not had an assurance about how long that would take. We are concerned about that.

Secondly, the hon. and learned Gentleman said that a committee of the Law Commission would be set up. That is good as long as the committee's recommendations come before the House and we have an early opportunity to debate them. One of the problems has been that much of the law reform work done diligently and extremely competently by the Law Commission has been neglected by the House. That is a shame.

Thirdly, the Solicitor-General proposed a transfer to other solicitors in building societies, banks and other institutions. The hon. Member for Harrow, West is right to say that if one asked the consumer where he or she would find the best value for money and service, the answer would not be, "In the building societies and the banks." Perhaps they are the appropriate people to provide the service, but there is the danger not only that they would not provide the most competitive and best-priced service, but that there would be a conflict of interests, which the Solicitor-General did not deal with adequately. That would be a matter of great concern to the consumer. I cannot accept that someone who went to a solicitor employed by a building society would be satisfied that he would act always in the interests of the consumer—the client — as opposed to his employer — the building society. The same would apply to a bank.

The consumer needs to know that he is getting a service at the best value and has a choice of the range of people to perform it. My contention is that in many cases that does not involve a solicitor's experience, competence and professionalism, which could be used for the many other tasks in legal service and support.

We should support the Bill. We should amend it sufficiently to meet the properly voiced concerns of those who want to ensure that the consumer is protected. If we fail, we can await new legislation, but if we succeed we shall have reform now, which is often better than reform later.

12.55 pm
Sir Ian Percival (Southport)

I, too, have an interest to declare as a member of the Bar, but I do not regard myself as in any way speaking to defend a vested interest. As at present drafted, the Bill would be more likely to make work for the Bar than to reduce it.

As I have to catch a train at 1.30 and as many other hon. Members wish to intervene, I shall confine myself to three topics, and I shall not try to string them together.

Hon. Members have all talked about consumer protection. One consideration that we all have in common is that buying a house is of enormous importance to the purchaser and that, however we legislate, we must ensure that we provide consumer protection. The worst thing that we can do for the consumer is to allow the belief to go out from the House that the conveyance even of registered title is, as it has been described in some newspapers, a "doddle". It is not a doddle. Some conveyances are very easy. The difficulty is discovering which are the easy ones. Someone has to do some very cautious and skilled work to ensure that it is easy and that it only consists of the completion of a form.

My second fear arises directly from what my hon. and learned Friend the Solicitor-General said. One of the effects that the debate has had on me is that I am infinitely more worried now about extending the right to convey to banks and building societies than ever before. I do not like the thought of someone who has to get a bridging loan from his bank having the bank say, "And we will do the conveyancing as well." The more I think of both sides of the argument, the more I think that far from providing consumer protection we may in fact put consumers in an invidious position.

My third comment arises from a point made so often in the debate and made again just now by the hon. Member for Southwark and Bermondsey (Mr. Hughes). My complaint about the other provisions in the Bill dealing with the qualifications for conveyancers is that they contain no reference to competence. If we establish a category of persons who can put up a notice saying "Licensed conveyancers", they are given a cachet of respectability. People will be led to believe that they have been licensed by the Government to do this work, so they must be all right. The only protection provided in the Bill at present is that if the licensed conveyancer makes a mess of the work, at least his client's claim will be met. That is not kind of protection that I want to see for the consumer.

I am thinking about the buyer of a house. He is engaged in a transaction of tremendous importance to him. He has found the house that he can afford. He wants that house. He does not want a good claim against someone for losing him the home by making a mess of the conveyancing.

I have many other comments on the Bill, but they are of lesser importance. To me, those three considerations are fundamental objections to the Bill. They are so fundamental as not to lend themselves to correction in Committee. If I did not have a train to catch, I should be in the Lobby against the Bill.

12.59 pm
Mr. Paddy Ashdown (Yeovil)

I have to confess that it is with some diffidence that I seek to intervene in this debate, not just because in the end I shall oppose my hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes), despite his eloquent and powerful speech, but also because I am almost alone among those hon. Members who have taken part in the debate, with the exception of the hon. Member for Great Grimsby (Mr. Mitchell), in having no connection with the legal profession. Despite having moved house no fewer than 20 times in my life, before studying the Bill and its consequences I had only a hazy idea of the complexities and difficulties of conveyancing.

The hon. Member for Staffordshire, South (Mr. Cormack) said that he started his approach to the Bill and came into the Chamber today with an open mind, ready to be persuaded. Originally, I was entirely sympathetic to the aims of the Bill, and I remain entirely sympathetic to its aims. Indeed, I had to reply to numerous letters from solicitors before seeing the Bill on 5 December, when it first appeared which, may I say, was somewhat late. However, before seeing it, I had to reply to letters from solicitors in my constituency, and I said that I thought that the general aim of the Bill was very worthwhile. In my judgment, there is a desperate need to break the monopoly that we have heard about this morning. There is also a desperate need for the fresh and invigorating winds of competition to blow through some of the dusty corridors and the dusty minds that are expressed from those corridors.

That general sympathy for the Bill — perhaps even enthusiasm—greatly increased when I heard the reaction of the Law Society. I am a non-conformist and one who prefers to sit on these Benches than on the Conservative Benches, and the spectacle of a powerful organisation such as the Law Society wildly overreacting before it even saw the text of the Bill encouraged my enthusiasm for the general principle. It is perhaps even further encouraged by the considerable ranks of those who oppose the Bill, many of whom have turned up today, and perhaps even by the Government's evident lack of resolution over how to act, as the hon. Member for Great Grimsby said.

However, we are here to decide and to vote, not just on the general principles of the Bill and its aims but on its details. When I saw the Bill, I did some research and had discussions with a wide range of people — not just solicitors, I hasten to add. The flaws in the Bill became apparent. We must make a judgment. However much I support the aims of the Bill, which are clearly set out in its first lines, to extend competition and protect consumers. the question is: is the Bill likely to fulfil its aims? Regretfully, I have had to come to the conclusion that in at least one of those two aims, the protection of the consumer, it fails. Then we have to decide whether the Bill is so flawed that it cannot be amended in Committee. Again, regretfully, I have had to decide that it is so flawed that amendment in Committee would be difficult to achieve.

Let me give my reasons for saying that. I shall take the Bill in chronological order. It is interesting that the points get more important as one goes deeper into the Bill. The hon. Member for Great Grimsby said that there was a safeguard in that the Bill would involve only registered land. If one takes the gradualist view, that is a safeguard. However, it seems to me to be inevitable that it will create two classes of people who can sell their houses—those who have registered land, and those who have not. I represent a rural constituency, where the vast majority of the property is unregistered. So the people whom I represent will not enjoy the benefits that the Bill may offer. It is not desirable to have a two-tier system. In some areas the Bill goes too far, but here it does not go far enough. If we are to break the monopoly, we want to extend the advantages to everyone and extend the cheaper conveyancing that the Bill might provide to people in my area and in other rural areas. So in that sense the Bill does not go far enough.

I should like a change that encompassed all conveyancing and gave equal opportunities to both registered and unregistered property. I accept, of course, that the inclusion simply of registered property may be an impetus to the registration of further property, but I very much doubt whether that will come about quickly, even with that impetus.

It is odd that the Bill refers only to housing. I do not know whether it also covers flats. It is significant that it does not provide for the conveyancing of land. That is an important drawback. I should like reform to exend across the whole of conveyancing.

More important is the question of qualification. Should we be content with conveyancers without the appropriate skills or qualifications? The only qualification required in the Bill is the ability to take out an insurance policy. If we are to change the system, we must set up a training mechanism.

Mr. Porter

Such machinery exists already. It is called the Law Society.

Mr. Ashdown

I am about to deal with that. We must have a governing body. That is another major flaw in the Bill. A governing body needs to do two important things. First, if we are to set up a conveyancing system as proposed it will have to have an interface with solicitors doing the same work. Without the safeguard and standing that a governing body would give conveyancers, solicitors will not be happy or confident when dealing with conveyancers. They will not conduct financial negotiations or place deposits over the phone as they do today. That lack of confidence will not speed up conveyancing, but delay it.

Secondly, a governing body could provide assurance on standards and protection for the consumer. The Bill sets out to protect the consumer, but in the absence of the proper mechanism that protection will not be effective.

It is important to know whether a compensation fund is proposed. What about conveyancers who take out an insurance policy but then break its terms? How will the consumer be treated in that case? If the insurance policy conditions are not met, will the client suffer or will the Government underwrite the loss?

Mr. Austin Mitchell

The hon. Member is presenting an interesting amalgam of briefs from the Law Society and the Consumers Association. His mixture of arguments from all sides is shoddy. All his doubts can be cleared up by amendment in Committee. The hon. Gentleman's concern about insurance can be answered because the Secretary of State will make the necessary provisions for that insurance and if a conveyancer does not have insurance or a bond he will not be able to practise.

Mr. Ashdown

I wanted to examine the Bill from both sides with an open mind and come to a conclusion. I believe the Bill to be so flawed in almost every clause that it cannot be amended satisfactorily in Committee. That is why I am against the Bill, although I support the principle behind it.

There is a deep inequality in clause 2 which allows conveyancers to advertise in a way in which solicitors doing the same work cannot. That is an inequality that worries me.

Although I concur with the spirit of clause 3(3), which encourages local authorities to speed up the process of searches and so on, I have some doubt as to whether, as drafted, it is workable. I agree that the Bill could do something profoundly useful. It could help to extend competition. Perhaps it has already done that—as the hon. Member for Great Grimsby said—in that it has encouraged the Law Society already to make several significant moves. However, in the last analysis I must conclude that it will not protect the consumer as it claims to do, and cannot be reasonably amended to achieve that aim.

I welcome the Bill. It has stimulated a necessary debate both inside and outside the House. I pay tribute to the hon. Member for Great Grimsby. My diffidence about discussing legal matters when the House is predominantly full of members of the legal profession only makes me full of admiration for the hon. Gentleman. He has done both the subject and the House a great service. Reluctantly, however, I must conclude that the Bill is too flawed and provides insufficient safeguards in some areas. I shall therefore have to oppose it.

1.10 pm.

Mr. Bowen Wells (Hertford and Stortford)

I very much welcome the attention that the Government have given the Bill and the statement of my hon. and learned Friend the Solicitor-General. He said that it was the Government's aim to introduce a system that would make house buying simpler and cheaper. It also needs to be more speedy and efficient. On Second Reading, we are concerned not with the body of the Bill, but simply with the long title. If hon. Members agree with the long title, they will give the Bill a Second Reading.

Essentially, we are dealing with an important human problem that is becoming bigger and bigger as more people buy their own homes. The Conservative party stands for home ownership and is extending it with all the means known to it. It is therefore our responsibility to new home owners to ensure that they can buy and sell their houses in a way that does not involve them in the long, bitter and frustrating exercise that is now becoming ever more prevalent—the house buyers' chain. That chain is a nightmare that confronts almost all those who buy or sell houses. Sometimes chains can involve as many as 13 or 14 people. Tremendous co-ordination is needed, and if one person pulls out, the whole chain collapses. An enormous amount of time is being spent unnecessarily by expert solicitors and others in trying to get the system to work.

It is essential that the House should find a means—in consultation with all the professions involved — of ending that great delay, and the awful frustration and bitterness. I introduced my ten-minute Bill in May 1983, and it predated this Bill. Before then, we did a survey of the effects of the system. It was on the BBC programme "You and Yours". We heard many terrible tales of financial loss and bitter disappointment at being unable to sell, which went on for months and even years. We also heard much about the cost of bridging loans and the interest charges involved. Sometimes defenceless people were involved, such as the elderly, who were bewildered by what was happening. No one explained to them how they could get out of the problem, and they were not helped by the current situation in all the professions.

Mr. Greg Knight (Derby, North)

How will the length of those housing chains be shortened by the creation of a registered conveyancer? Is not the problem that the person at the end of the chain often cannot sell? If he cannot do so, there will be a long chain causing delay for others, regardless of who does the conveyancing.

Mr. Wells

I was about to deal with that point. It is common ground amoung most of those who have studied the problem that the way to minimise conveyancing chains —they can never be eliminated—is to ensure that an enforceable contract is entered into between the two parties at the earliest possible moment. If that analysis is right, we must make the necessary changes—mostly in practice rather than in law—to get the two parties into an enforceable contract, and that is the aim of the Bill. That is the basis from which the hon. Member for Great Grimsby (Mr. Mitchell) and I begin.

The subject-to-contract system, which was supported by the Benson commission, and also the committee set up by the Lord Chancellor to investigate gazumping and conveyancing chains, has many merits. However, it must be changed so that contracts are exchanged as quickly as possible. One possible way to do that, which is permissible under present law, is to require a deposit to be put down between the two parties which is forfeit if the deal does not go through. I want that practice to be encouraged by solicitors, estate agents and building societies.

How can we achieve exchange of contracts at an earlier stage? The 1973 Law Commission report spoke about the necessity for the vendor to prepare his house for sale. Before he puts his house on the market, he should institute local authority searches so that they are available at an early stage of the transaction and no time is lost. He should find the guarantee for any timber treatment; he should obtain the title deeds or land registry number; he should prepare the contract of sale and answer the standard inquiries that will come from the purchaser's solicitor.

I am sorry that my hon. and learned Friend the Solicitor-General did not look with favour on clause 4, which deals with surveys. I believe it necessary to prepare a house for sale with a survey available so that a purchaser and a building society can use that survey for their different purposes. The survey will show that the house is in good condition or, if it is not in good condition, it will fairly and properly state that. After all, any other product sold in Britain must be shown to be in proper condition before it is bought. That is the objective of the clause, and I ask my hon. and learned Friend seriously to consider including such a provision when he introduces legislation.

Estate agents have not been mentioned this morning, but that is another profession which desperately needs to reform its practices. It is wrong that estate agents should charge sometimes double the fee charged by a solicitor simply for throwing a couple of keys across a table and telling the customer to go and look at a house. That is wholly irresponsible.

The purchaser must also prepare himself to buy a house. He must obtain a statement from whoever lends him the money, or from his bank if he is fortunate enough to have sufficient funds. By doing so, when he puts himself forward as a buyer he can prove that he is genuinely able to purchase the house.

Mr. Nicholls

Does my hon. Friend accept that the main problem in a conveyancing chain is that most people must sell their houses before they can buy another house? It does not matter what reforms are introduced; no one should advise that person to enter into a contractual relationship quickly. Whatever else the reforms that my hon. Friend proposes may achieve, they cannot possibly speed up that process.

Mr. Wells

My idea is that the process for the person selling his house will be very much shortened. Therefore, by carrying out the practices that I have outlined, the length of the chain will be very much shorter. The chain will not then be so onerous.

I should like to say why, although I have a great respect for the solicitors' profession, we must find a way to break the monopoly. We propose in the Bill for it to be eliminated only in a narrow way, on registered land. In my ten-minute Bill I said that it had to be done on houses being sold for a second time. We have found that the monopoly has meant that solicitors have failed to introduce the reforms which favour the house buyer and house purchaser. Unless someone else comes forward and offers the house buyer and house purchaser a better and quicker service, I do not believe that solicitors will take on board the necessity for them to reform the system. I believe that it is the solicitors who will reform the system and that they will do it well once they allow themselves to do so.

When I ask solicitors why they do not reform the system they say, "It is not our responsibility. It is not our responsibility that the searches take so long or that the surveyors survey houses two, three, four or five times. It is no one's fault, but it is certainly not the solicitors' fault that this process has built up." The only way that I cart see to make solicitors put their clients' interests first is to ensure that they know that, if they do not do it, somebody else will.

A solicitor who began in practice in 1925 wrote to me and said that he supports us utterly. He said that when he began in practice solicitors acted for both sides of the transaction, that they provided the money, they drew the mortgage deed and they completed the sale of a house in under three weeks. He said that he was now ashamed to say that in his practice, as he leaves it, it takes more than three and a half months. He is saying that as a solicitor he is ashamed of the service that his profession now gives the house buyer and the house purchaser. That is what I want to see reformed and moved ahead. If, with the aid of my hon. and learned Friend the Solicitor-General, we can persuade solicitors to take seriously reform of house purchase and sale, and ensure that they serve the public., the introduction of the Bill will have had a good effect.

I am not convinced that the Solicitor-General and his Government colleagues can produce the answers we need in the time we need them. My hon. and learned Friend was unable, first, to give us a date by which he could introduce the Bill to which he referred, and, secondly, he did not know for how long the Law Commission committee would sit. Such committees sit for a long time. The Benson commission reported in 1979. The Law Commission committee on gazumping and house building chains to which I referred reported in 1973. We have not yet seen a reform of the system.

Are we to allow this whole change to seep into the dusty corridors of the Law Commission, the Attorney-General's Department and the Lord Chancellor's Department? Unlike his predecessor, F. E. Smith, my noble Friend the Lord Chancellor seems bent on trying to prevent the introduction of changes which would benefit his own legal profession and which would benefit the 60 per cent., 70 per cent. and 80 per cent. of people in this country who will be home owners.

Reform is necessary and urgent. I ask the House to vote for the Bill at this stage and work hard in Committee to produce a measure in which we can all have confidence.

1.25 pm
Mr. John Ryman (Blyth Valley)

As the hour is relatively late, it may be helpful if I deal with some points that have not emerged in the debate so far rather than repeat points that have already been made, however eloquently and sincerely, by hon. Members on both sides of the House.

I am concerned about the timetable for the legislation that the Government envisage. My understanding is that they agree that reform is necessary, that they understand that the crux of the matter is the protection of the house purchaser, that they appreciate the dilemma of the solicitors' monopoly and that, in the interests of the public, they are willing to act. However, I understood the Solicitor-General to say, in effect, "We shall act at some time in the future. We cannot be more precise than that now because widespread consultations will have to take place with all interested parties and organisations."

The Benson commission reported in October 1979—there was a short Adjournment debate on 5 November of that year—and, in effect, after hearing representations from many quarters, recommended the strengthening of the solicitors' monopoly, but also recommended that certain steps should be taken by the Law Society to improve the situation, which everybody acknowledged was unsatisfactory. I disclose an interest as a member of the legal profession, though not of the solicitors' branch. The Law Society has only itself to blame for being under fire and subject to severe criticism by the general public for not moving sufficiently fast since 1979 to put its house in order.

It ill-becomes me to criticise any solicitor. I shall not do so, although the temptation is sometimes strong. They are an honourable group of men and women who perform sterling service for the community, but, like all professions, they contain some bad apples. I am reminded of Dr. Johnson's remark that, while he did not wish to speak ill of a certain gentleman, he believed that he was an attorney.

If the Law Society cannot move with expedition to protect the interests of the buyer, it cannot be surprised that the Government should intervene on behalf of the public —and "public" in this context means the public who buy and sell houses—and solicitors cannot be surprised that there is an overwhelming desire, as reflected in the representations that hon. Members have received from their constituents, for reform in this sphere.

Mr. Nicholls

Will the hon. Gentleman accept that many solicitors, like myself, feel aggrieved that the Law Society has not given greater backing to solicitors to enable them to be competitive? Will he further accept that solicitors who have tried to price their work competitively — and inevitably have priced their work lower than some of their colleagues— have often found that they are not the most popular solicitors with the Law Society? Does he feel that if that were not the position solicitors might now have a rather better press than they have?

Mr. Ryman

It is tempting, but it is not for me to comment on the internal politics of the solicitors' profession with respect to the Law Society. Since the Lord Chancellor abolished fixed fees for conveyancing several years ago, the Law Society has had ample time in which to make adjustments, bearing in mind the evident desire of the property-owning public to have a swift, speedy and competent conveyancing service. Solicitors, as is reflected in one's correspondence, are unpopular and sometimes their lack of popularity is based on a misunderstanding of the profession, perhaps by aggrieved litigants or persons who do not understand the intricacies of the legal world. Sooner or later—what I am about to say may be outside the scope of the debate — we must examine the solicitors' branch of the legal profession to ascertain whether the Government should introduce provisions to give the public greater protection when they wish to raise matters against solicitors. The Benson commission investigated this matter in detail.

A well-publicised recent case illustrated the fact that the Law Society's machinery for dealing with its members is unsatisfactory in many respects. The "Lay Observers' Report" also illustrated the fact that general dissatisfaction exists among the public as to their remedies against solicitors in several areas including conveyancing. It is difficult, expensive and time consuming, as we all know, to get an action for negligence on its feet. The Law Society will not commence disciplinary proceedings if litigation is pending, even if the complaint is of a disciplinary nature.

The layman, rightly or wrongly, often thinks that lawyers are making decisions about other lawyers and therefore he considers that he is not getting a fair deal. Such legitimate criticisms can be made of solicitors, but those criticisms are not relevant to the debate. The essence of the debate is to establish what is the best machinery for providing an efficient, competent and cheap conveyancing service.

The proposers of the Bill have a laudable and high-principled objective in mind, but the principal question is whether the Bill satisfies the need to protect the consumer. I am most concerned about the licensed conveyancer and whether sufficient protection will exist for the public, bearing in mind that the Bill contains no criterion of competence or experience.

I believe that conveyancing is not easy. The experience of the courts at every level is of innumerable problems, some of which were decided in the Court of Appeal as recently as the last summer term. Grave difficulties can arise in cases where solicitors have advised on conveyancing matters. An obvious example is the section 35 case where a young married couple buy a house for the first time, the marriage subsequently fails, the parties separate and long before divorce proceedings take place grave difficulties are incurred in the sale of the matrimonial home and the distribution of the proceeds of sale. The Court of Appeal heard two cases recently where vastly experienced solicitors got it all wrong. In one case the lay client's husband had to seek legal remedies against the solicitors who were acting for him. When the Bill's opponents say that they are worried about the lack of qualifications of licensed conveyancers, one could reply with some justification that some competent and experienced solicitors get it wrong.

It is unfair to say that the legal profession is lethargic in reforming itself. The legal profession has taken many steps to reform itself, and I know of no other profession that has voluntarily reduced its fees, abolished the two thirds rule and abolished the practice of sending juniors with silks out on different circuits. Although those criticisms are unfair, I fully understand why they are made. Lawyers have always been unpopular and are easy prey for those who wish to criticise them.

I am not impressed by the concept of insurance policies. If the young couple that I described wish to buy a house, but something goes wrong with the sale, they do not want financial compensation in four years' time. They want their house. They may have built all their plans around the house purchase—the marriage, the purchase of furniture and giving notice at their previous accommodation. It is no solution to tell them, "You will be all right because you have an insurance policy under which you can take action and, unless the case is settled, you will get judgment in two or three years' time."

It is no solution to say to a widow who does not receive damages under the Fatal Accidents Act 1976 arising from the death of her husband at work, because her negligent solicitor was statutorily banned and did not issue the proceedings in time, "In six or seven years' time when the matter has been settled you will receive damages." She needs money immediately to keep herself and her children. Insurance has been taken out of perspective in this debate because, apart from the fact that insurance is not available for fraud or dishonesty, it can never be adequate compensation for losing the house that one wishes to purchase.

It has been said, although it is denied strongly —I suspect inaccurately—by solicitors, that the conveyancing side of the profession pays for the less remunerative side. The hon. Member for Wyre (Sir W. Clegg), who is an experienced solicitor and chairman of the all-party solicitors' group, said that that was not the practice in his firm and that he deplored it. My experience is that if many firms did not do conveyancing they would suffer enormous financial setbacks and would probably go out of business. Since the debate was advertised I have received letters from two firms of solicitors which said that if the Bill was passed they would probably go out of business. They were saying, by implication, that the conveyancing side of their practice subsidised the litigation and probate department.

That is an admission by solicitors that they are overcharging for conveyancing. It is not consistent with any other proposition. It is no use saying that litigation does not pay well enough and that the legal aid fund does not provide enough money for crime and matrimonial work. Charging more for conveyancing is not the answer. Solicitors must organise their practice in such a way as to make it a viable economic proposition consistent with providing a comprehensive legal service to the public whom they serve. It is no use solicitors saying that they cannot afford to do without a large slice of conveyancing. The answer may lie in the increasing tendency for smaller firms to amalgamate with larger ones in an effort to reduce overheads, which may or may not be a good thing.

Mr. Porter

We do not deny that some firms argue that they need the conveyancing work to remain in business, but my hon. Friend the Member for Wyre (Sir W. Clegg) made it clear that that was not our argument against the Bill. We agree entirely that solicitors should organise their affairs so that one side of the practice does not have to subsidise another.

Mr. Ryman

The hon. Gentleman may not use that as an argument against the Bill, but I understand that the Law Society does. I shall not dwell further on that, however, as there is clearly some dispute about the evidence.

Having talked frequently to solicitors over many years, I have noticed a kind of forensic sneer at litigation— "Oh, no! We do not touch crime. Litigation is just a shop window for our conveyancing and probate." It is implicit in the conduct of many solicitors that the staple diet of the firm is commercial and conveyancing work and, unless it is a specialist firm, litigation is an ancillary service as a shop window for the more lucrative conveyancing work. I am sure that the hon. Gentleman has met many professional colleagues who sneer at crime and litigation as rather infra dig and a class of work tolerated only as an ancillary to more lucrative work.

There is thus considerable evidence, and it is implicit in the correspondence that many hon. Members have received, that if the Bill were passed or the Government produced similar but more comprehensive legislation solicitors would suffer considerable financial hardship. The solicitors will have to accept that, because it is in the interests of the consumer and the public that the conveyancing system should be arranged in such a way that, although solicitors must make reasonable profits, the public cannot be expected to pay over the odds simply to keep solicitors in business.

Solicitors must recognise their prime duty to the public. In this context, that means the people who buy and sell houses. It is no use solicitors constantly coming along with hard luck stories, making one's heart bleed for them and saying that if their monopoly is broken they will go to the wall. I am sure that responsible solicitors do not take that attitude. The amalgamation of firms to share overheads is evidence of efforts to find a sensible solution. One appreciates the difficulties. Overheads are enormous, especially in the London area, and I fully appreciate that, with increasing overheads, VAT and so on, many solicitors have grave difficulties. However, that is irrelevant. We are not here to protect the vested interest of either branches of the legal profession. In my part of the legal profession we have given concession after concession voluntarily and without interference or persuasion by the Government, because we considered that it was our duty to do so and that it was in the public interest. I suggest that the solicitors should do the same thing.

Another point that has often been mentioned, although I shall not dwell on it at great length—[Horn. MEMBERS: "Hear, hear."] I am sorry to be taking so long. That timetable suggested by the Government does not give us any prospect of early reform in this branch of the law, and particularly in respect of banks and building societies. I have been interested in building societies for a long time. In March 1976, totally unsuccessfully, I introduced a private Member's Bill to reform the building societies, and they still need reforming.

As I understand it, the building societies and banks now want to enter the conveyancing business in a big way. This will require comprehensive legislation not only through this Bill, but through reform of building societies. I have with me a slim volume, with which I am sure the Solicitor-General is familiar, called "Wurtzburg and Mills on Building Society Law" by John Mills QC, and it is the leading textbook on building society law. It is obvious that if the Bill, or something like it from the Government, is enacted reform of building society law will be essential, because under the present building society legislation the building societies have no power to do conveyancing.

Similarly, reform of banking law is also essential. I do not wish to criticise the individual wording of the Bill, because that would be grossly unfair. I am talking about the principle of the Bill and the spirit behind it. If one looks at the matter objectively, however, one sees that the difficulty for the supporters of the Bill is that they have not considered the implications of the Bill on building societies and banks. The Government's suggestion is that they should introduce a comprehensive package. What makes me suspicious of the Government's suggestion is that we do not know how long this will take, and experience has shown that when committees and commissions are set up there is interminable and inordinate delay. That is what worries me.

The Solicitor-General has been frank enough to say that he cannot give us a timetable for when these events will occur. I want to know from somebody — and the Chamber is full of solicitors today — why the Law Society has done nothing since October 1979 to reform itself on conveyancing. If it has done something, what has it done? I understand from friends in the Law Society that some attempts have been made on reform, but four years have passed and what has it done? The Law Society cannot complain if we reform it, when it has been sitting around for four year discussing the problem and got nowhere.

The Solicitor-General

The hon. Gentleman has unintentionally put an inaccurate gloss on what I was saying about time. I said that we intended to move promptly on consultation with the committee associated with the Law Commission, to which I was referring. We intend to move promptly because we do not wish to delay the legislation which we intend to introduce. That is different from the impression which the hon. Gentleman has given us on this important matter.

Mr. Ryman

I am grateful for the Solicitor-General's intervention. If I inadvertently gave an inaccurate impression, I apologise. I am grateful to the hon. and learned Gentleman for putting the matter right. The House and the country will be reassured that the Government intend to move promptly on the matter. Nevertheless, one wants to know how prompt that will be, although I appreciate that it is difficult to predict. However, I am sure that the hon. and learned Gentleman's reassurance will be of considerable comfort to many of those with experience of reports from commissions and committees, with no action being taken even years later. It is obvious, in view of the assurance given by the Solicitor-General on behalf of the Government, that after the matter has been considered things will move much more speedily on this occasion.

Hon. Members on both sides of the House have been worried about competence. If I want to have my teeth done, I go to a dentist, who can drill the holes, rather than to a carpenter, who can also drill holes. It is no consolation to me when I hear people say about the Bill, "More fool he if he does not consult a solicitor about the conveyance of the house. If he consults a licensed conveyancer, he has only his just deserts, so no blame can be attached." That is a false point. There is a duty on the Government and Parliament to protect people from themselves to some extent and from their own folly. It would cause chaos in the conveyancing system if a lot of incompetent, negligent and tardy people ran around attempting to do conveyancing and getting people wrong titles or making serious mistakes.

The sponsors of the Bill should address their minds to this matter. The difficulty that they have is in deciding what amendment in Committee could deal with a test of competence for a licensed conveyancer. They may find that that is an insuperable objection. No test has been put in the Bill and no argument has been put forward by the sponsors—my hon. Friend the Member for Ipswich (Mr. Weetch) went out of his way to say that he would prefer to see a clause to that effect in the Bill—to provide for the competence of the licensed conveyancer. That will worry hon. Members in all parts of the House who have not made up their minds on which way to vote. It certainly worries members of the public.

Several Hon. Members


Mr. Deputy Speaker (Mr. Harold Walker)

Order. I remind the House of the earlier appeal for brief speeches. Speeches that are over long are made only at the expense of the rights of other hon. Members.

1.53 pm
Mr. Richard Tracey (Surbiton)

I am grateful, as a non-lawyer, to be called to speak in this important debate. I hope that as a non-lawyer, with respect, I shall be briefer than some of the lawyers we have heard.

As a journalist, I admire the work of the hon. Member for Great Grimsby (Mr. Mitchell) in winning the column inches battle in this controversy. He was helped by Mr. Jimmy Young's former legal eagle, Mr. Tench of the Consumers Association. From the press coverage that has been sent to me and the coverage that I have noticed, it seems that the hon. Gentleman definitely won that battle.

I hope that what might come out of the debate is that the representatives of the Law Society, both Members of Parliament who are present and those in the Strangers' Gallery, will convey to the Law Society the tone of the debate and the need for real reforms and real urgency in this important matter of conveyancing. They might also convey to the Law Society the fact that it does not always work, when lobbying hon. Members, to write extremely long letters, four, five or six pages long, some of which are rather offensive to the work of the House.

The protection of the consumer is paramount. At the end of the day the house buyer is more concerned about the security of his title than about the bill that he has to pay. He may have to pay a fairly large sum to be certain that his title is secure. I am surprised that a body such as the Consumers Association should put a radical idea before the House, through the hon. Member for Great Grimsby, but one which in the end will not properly protect the house buyer.

We have heard the view of the hon. Member for Great Grimsby that solicitors are pedants. What he is really saying is that they are extremely careful. They are paid by the public to be careful in their investigations to ensure that they are not stampeded into advising clients to sign documents which in the end may be dangerous to the security of their title.

We have heard references to various groups. The building societies and the banks have been talked about as one of the main vehicles through which conveyancers will work. We have also heard that the protection of the consumer would be provided by insurance. Before I accepted all these arguments I felt that I should undertake some research with the bodies mentioned.

I first took up the matter with the Building Societies Association. Apparently the Halifax building society would welcome what the hon. Member for Great Grimsby proposes. However, in answering my request to it the Building Societies Association quoted what it told the Benson commission: Persons undertaking conveyancing for the public should be properly trained, have practical experience, have insurance available against losses sustained by their clients through their negligence or fraud and be subject to discipline in the event of misconduct … The Commission will immediately appreciate that these four conditions are currently satisfied by solicitors who normally perform their duties to societies' satisfaction … any new breed of conveyancers should meet the foregoing four points. The association tells me that it finds clause 1 inadequate, clause 4 inappropriate, and clause 5 unfair to building society directors, and that clause 3 does not solve the problem of preliminary inquiries. I think that we can conclude that the building societies as a body are not very happy with this legislation.

Mr. Ryman

What does it say about clause 2? Surely it says something.

Mr. Tracey

It says that clause 2 does not directly concern it.

My next inquiry was to the Committee of London Clearing Banks. Again we hear that the banks would be a vehicle for the new form of conveyancers. That committee also told me what it had put to the Benson commission: Banks attach considerable value to the availability of a solicitor's undertaking and they consider that the absence of such an undertaking or some other totally satisfactory security in lieu thereof will lead both to an increase in the costs and in the time taken, if only because Banks would normally wish to take legal mortgages and instruct their own solicitors in instances when at present they may not feel the need to do so. One of the complaints from the Committee of London Clearing Banks is that it was not consulted about the Bill in advance.

Apparently insurance would be the saviour of a house buyer who found himself in a mess. However, the British Insurance Association, representing insurance companies, says: from the soundings we have taken within the insurance market, it seems unlikely that any insurer would be prepared to offer cover for what would be regarded as a new 'profession' on the basis of premium rates charged to the established and traditional professions.' I see little evidence that the vehicles mentioned by the hon. Member for Great Grimsby will be available. It is clear to me that many of those good ideas would founder when investigated fully. I am glad that, spurred on by this private Member's Bill — we must accept that the Government have been spurred on—we now have the announcement this morning from my hon. and learned Friend the Solicitor-General that the Government will ask the Law Commission and others to look more deeply into the matter. However, I have to agree with those who have said that the lack of a statement on timing is unsatisfactory. If the building socities and banks were to become involved, employing solicitors as we have heard, there would be a real problem of conflict. A man who works for two clients, but is employed by the same master, would surely have to give his loyalty to the organisation that is paying him. That matter will have to be seriously considered in the investigations that take place and in the consultations that will take place through the Law Society.

The Law Society should, and probably will, be spurred on by what has been said in this debate. Indeed, it would be foolish not to find ways to relax its rules about advertising and about solicitors publicising their services and charges, thereby allowing clients to shop around rnore realistically for legal services.

Moreover, I take the view that the Government should seriously consider reforms in the present machinery for registering land. Only just over 25 per cent. of land is registered, and that is an appalling state of affairs. I accept the problems of paying for more civil servants to do work, but it would represent a real reform and help to oil the wheels, making it much more reasonable for people to secure services from solicitors, and to secure those services far more quickly.

I was not impressed by the suggestions made this morning by the hon. Member for Great Grimsby. In my opinion, the protection of the consumer must be paramount in our considerations here. I should like to quote Professor Dahrendorf, who was a member of the Benson commission. He said: in practice … it is quite clear that those who buy and sell houses would wish to be protected from errors and fraud. Whoever advises them, therefore, will have to be bound by pretty strict rules, by professional rules. This could undoubtedly be a separate and specialised profession, but Professor Dahrendorf says: why create a new profession if there is one which has the skill and experience to do what needs to be done? I believe that the way forward is by means of reforms through the machinery of the Law Society. Therefore, we should not vote today to redesign that wheel.

2.4 pm

Mr. D. N. Campbell-Savours (Workington)

I rise to intervene briefly in the debate, if only because my two pins will not hold me in a vertical position for long. However, I congratulate my hon. Friend the Member for Great Grimsby (Mr. Mitchell) on introducing a Bill which is excellent in many ways, although flawed in one part.

Mr. Deputy Speaker

Order. If it is more convenient for the hon. Gentleman to make his speech sitting down, it is within the power of the House to grant him permission to do so.

Mr. Campbell-Savours

It is very kind of you to offer, Mr. Deputy Speaker, but I think that I would show some disrespect to the House if I took advantage of that opportunity.

During the passage of the Competition Bill 1980, I moved an amendment in Committee which was very much in line with the objectives set by my hon. Friend. It sought to break down what many of us regard as a restrictive, and certainly anti-competitive practice. We set out our case in detail against the solicitors' monopoly. I recall that the Government's response was very similar to that given today. Equally, the representations made by the Law Society were not so different.

Because this debate has received more national attention than my amendment, the Law Society has now set about publishing innumerable briefs to sway public opinion and Members of Parliament. However, on the earlier occasion, its representations only went as far as meeting me in the Lobby to tell me that I was wrong. I insisted that I was right and said that I would press the case again in the future. I did so. Earlier today I saw a former Solicitor-General on the Conservative Back Benches. He answered, on behalf of the Government, the questions that I tabled then about the monopoly. The response that he gave was very little different from that given in Committee or again today.

The Solicitor-General said, in effect, that the Government intended—as my hon. Friend the Member for Bolsover (Mr. Skinner) said—to leave the matter in a pigeon-hole and to use the mechanism of yet one more inquiry and committee to delay introducing a measure which the public want. The public demand what the hon. Member for Hertford and Stortford (Mr. Wells) referred to as urgent action. There is an obligation on the House to pass the Bill, if only to ensure that it has the opportunity of being debated fully in Committee. There is nothing that has been said that cannot be dealt with in Committee. For the hon. Member for Yeovil (Mr. Ashdown) and other hon. Members to use that sort of excuse is to demean this House.

Amendments can be made in Committee, and indeed the matters that I wish to comment on can also be dealt with upstairs. The part to which I object most strongly is clause 1(a) relating to building societies and banks. I oppose the extension of the right to convey to those organisations, because they will not act in the spirit of what the public want. They may well set out further to restrict the practice, by increasing prices and costs to the consumer.

Building societies may be highly competitive in what they offer the investor, but they are never competitive in what they offer the borrower. When someone walks into a building society to ask for a mortgage, he does not ask what the building society's interest rate is. The borrower is interested only in finding out whether a mortgage is available. Therefore, we cannot talk as if the competition between building societies to offer services to borrowers is crucial to the debate. If a building society says that a mortgage is available but that it wants to retain the right to convey the property, the borrower will accept the offer, irrespective of the interest rate and the charge paid to the building society's conveyancer.

The building society will be in an even better position now, because it will be able to say to the borrower, "Furthermore, we are able to extend the payment for the act of conveyance over 25 years by simply adding it to the mortgage." The mortgagor will believe that the offer of extended credit on the conveyance costs is worth more than the benefit that might be gained from going to a solicitor, who may be cheaper than the building society. The same applies to the banks. They already offer services at uncompetitive rates. The banks charge double for the act of probate, for example. The precedent is set and therefore I firmly oppose any measure to give the building societies and the banks conveyancing trade and the chance to damage the interests of our constituents.

I heard the Government's objectives with sadness. The Bill which the Solicitor-General said he intended to introduce will cause the difficulties which I have just described. The hon. and learned Gentleman says that there must be some form of liberalisation, but that he wishes to extend the right to building socieities in a way which will further restrict competition and cause anti-competitive practice, although it is not covered by the Competition Act 1980.

We should take the opportunity of going into the Lobby, supporting the Bill and removing mistakes in the Bill in Committee. If we did that we would fully serve the public interest.

2.12 pm
Mr. Austin Mitchell

With the leave of the House, I should like to reply to the debate. We have had an interesting and important debate in which the subject has been well ventilated. I am disappointed at the Government's reaction. The House Buyers Bill is a simple and straightforward measure. The misunderstanding arises from its simplicity. Much has been left to the Secretary of State's discretion. That must be so because it concerns matters which must be decided by Government. It is not for a Back Bencher to ordain such matters.

The Bill is criticised for being imprecise. That is wrong-headed. If the Bill had been too precise with an elaborate framework of control hon. Members would have criticised it for being too detailed and long. The Bill is right to give discretion to the Secretary of State.

The Bill commands strong support outside the House and if the Bill is rejected its supporters will be disgruntled and disappointed. They will have a sense of betrayal and believe that Parliament is not defending their interests or improving their lot. They will believe that once again Parliament is discussing issues remote from their lives and aspirations.

The Bill proposes a sensible way of making the conveyancing business cheaper, quicker and more straightforward. The Solicitor-General proposed as the acceptable face of a vested interest a scheme that will not improve competition more than marginally. His ideas will not bring down prices because they will not create genuine open competition. The development of new institutions will not take place because his proposal maintains professional segregation. It maintains the solicitors' monopoly of conveyancing. That was the whole objective of the Bill. Nor will it allow the attainment of the other objectives that were so brusquely and unreasonably dismissed by the Solicitor-General.

Reform is to be postponed to the Ides of Mayhew. There is no timetable for adequate and speedy reform. That is disappointing, and shows that the Government, despite their slow and agonising deliberations, and despite the mountains of labour, have laid before us today a half-dead mouse. The Lord Chancellor has, effectively, triumphed—Rumpole's last case of a battle in Cabinet has led to this decision. After constant rumours that the Government would take action, they have proposed an unsatisfactory measure. It is unsatisfactory for anyone who believes in competition — as I do, and as the Government tell us they do—and it is unsatisfactory for anyone who wants to help the house buyer.

On our calculations, a majority of Members are in favour of the Bill. Some Government supporters may have been bought off or talked off by an exaggerated version of what the Government propose. Therefore, our majority has been undercut, which is a shoddy manoeuvre. It does not defeat the Bill, but undercuts its support by an unsatisfactory compromise measure.

In those circumstances, the Bill's proposers have two choices. First, they can say thank you to the Government for what they have been offered—but the Government have not offered enough for us to take that course. Had their offer been just a little more generous, had they shown a greater sensitivity towards the intentions of the Bill, had they taken a more reasonable attitude, we would have withdrawn the Bill or amended it in Committee. That cannot now be because the Solicitor-General has not held out adequate hope. That is a bitter disappointment for me, after all the work that has been done. Therefore, I have no alternative but to take the second choice and call for a closure of the debate.

It is wholly unreasonable of the Government, who could have amended a perfectly workable Bill in Committee, to carry out such a manoeuvre against it. If the Government had seriously wished to achieve the purposes of the Bill, to which the Solicitor-General paid lip service, they would have allowed the Bill to proceed to Committee.

The supporters of the Bill and public opinion in favour of it have been cheated by a squalid manoeuvre. We may lose the skirmish, but we will not lose the battle. The monopoly may be retained for a brief period, but it cannot prevail. The problems have been highlighted, and there is a chorus of anger against a monopoly. We have begun something today which, although it will not be completed by the Solicitor-General, will certainly be pursued.

Mr. Weetch

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 100, Noes 14.

Division No. 110] [2.18 pm
Ashdown, Paddy Hayes, J.
Ashton, Joe Haynes, Frank
Atkinson, N. (Tottenham) Hayward, Robert
Bagier, Gordon A. T, Healey, Rt Hon Denis
Banks, Robert (Harrogate) Heathcoat-Amory, David
Banks, Tony (Newham NW) Hogg, N. (C'nauld & Kilsyth)
Barron, Kevin Howarth, Alan (Stratf'd-on-A)
Bennett, A. (Dent'n & Red'sh) Howarth, Gerald (Cannock)
Biggs-Davison. Sir John Hoyle, Douglas
Body, Richard Hughes, Mark (Durham)
Brown, Gordon (D'f'mline E) Jessel, Toby
Callaghan, Rt Hon J. Jones, Robert (W Herts)
Campbell-Savours, Dale Knowles, Michael
Cartwright, John Leighton, Ronald
Chope, Christopher McNamara, Kevin
Clay, Robert McWilliam, John
Cocks, Rt Hon M. (Bristol S.) Madden, Max
Cohen, Harry Marek, Dr John
Cook, Frank (Stockton North) Maxwell-Hyslop, Robin
Cormack, Patrick Michie, William
Cox, Thomas (Tooting) Mikardo, Ian
Davis, Terry (B'ham, H'ge H'l) Millan, Rt Hon Bruce
Deakins, Eric Mitchell, Austin (G't Grimsby)
Dobson, Frank Morris, Rt Hon J. (Aberavon)
Dubs, Alfred Murphy, Christopher
Dykes, Hugh Ottaway, Richard
Edwards, R. (W'hampt'n SE) Owen, Rt Hon Dr David
Field, Frank (Birkenhead) Prescott, John
Fields, T. (L'pool Broad Gn) Raffan, Keith
Finsberg, Geoffrey Rees, Rt Hon M. (Leeds S)
Flannery, Martin Richardson, Ms Jo
Fraser, J. (Norwood) Roberts, Ernest (Hackney N)
Freud, Clement Robinson, G. (Coventry NW)
Garrett, W. E. Ross, Stephen (Isle of Wight)
Gilbert, Rt Hon Dr John Ryder, Richard
Gilmour, Rt Hon Sir Ian Sedgemore, Brian
Golding, John Shepherd, Richard (Aldridge)
Goodhart, Sir Philip Shore, Rt Hon Peter
Gould, Bryan Short, Mrs R.(W'hampt'n NE)
Hamilton, W. W. (Central Fife) Silkin, Rt Hon J.
Harman, Ms Harriet Silvester, Fred
Harrison, Rt Hon Walter Skinner, Dennis
Hart, Rt Hon Dame Judith Smith, C.(Isl'fon S & F'bury)
Snape, Peter Williams, Rt Hon A.
Soley, Clive Winnick, David
Spearing, Nigel Wood, Timothy
Steel, Rt Hon David Woodall, Alec
Tinn, James Wrigglesworth, Ian
Varley, Rt Hon Eric G.
Warden, Gareth (Gower) Tellers for the Ayes:
Wareing, Robert Mr. Bowen Wells and
Weetch, Ken Mr. Tom Clarke
Bendall, Vivian Page, John (Harrow W)
Braine, Sir Bernard Ridsdale, Sir Julian
Brinton, Tim Shepherd, Colin (Hereford)
Butterfill, John Stewart, Andrew (Sherwood)
Clark, Dr Michael (Rochford) Terlezki, Stefan
Hawkins, C. (High Peak)
Heddle, John Tellers for the Noes:
Lewis, Sir Kenneth (Stamf'd) Mr. Richard Alexander and
Morris, M. (N'hampton, S) Mr. John Whitfield

Question accordingly agreed to.

Question put accordingly, That the Bill be now react a Second time:—

The House divided: Ayes 96, Noes 76.

Division No. 111] [2.30 pm
Ashton, Joe Jones, Robert (W Herts)
Atkinson, N. (Tottenham) Knowles, Michael
Bagier, Gordon A. T. Leighton, Ronald
Banks, Robert (Harrogate) McNamara, Kevin
Banks, Tony (Newham NW) McWilliam, John
Barron, Kevin Madden, Max
Bennett, A. (Dent'n & Red'sh) Maples, John
Body, Richard Marek, Dr John
Brown, Gordon (D'f'mline E) Maxwell-Hyslop, Robin
Callaghan, Rt Hon J. Meacher, Michael
Campbell-Savours, Dale Michie, William
Cartwright, John Mikardo, Ian
Chope, Christopher Millan, Rt Hon Bruce
Clay, Robert Mitchell, Austin (G't Grimsby)
Cocks, Rt Hon M. (Bristol S.) Morris, Rt Hon J. (Aberavon)
Cohen, Harry Murphy, Christopher
Cook, Frank (Stockton North) Ottaway, Richard
Cormack, Patrick Owen, Rt Hon Dr David
Cox, Thomas (Tooting) Raffan, Keith
Davis, Terry (B'ham, H'ge H'l) Rees, Rt Hon M. (Leeds S)
Deakins, Eric Richardson, Ms Jo
Dobson, Frank Roberts, Ernest (Hackney N)
Dubs, Alfred Robinson, G. (Coventry NW)
Dykes, Hugh Ross, Stephen (Isle of Wight)
Edwards, R. (W'hampt'n SE) Ryder, Richard
Field, Frank (Birkenhead) Sedgemore, Brian
Flannery, Martin Shepherd, Richard (Aldridge)
Forman, Nigel Shore, Rt Hon Peter
Freud, Clement Short, Mrs R.(W'hampt'n NE)
Garrett, W. E. Silkin, Rt Hon J.
Gilbert, Rt Hon Dr John Silvester, Fred
Gilmour, Rt Hon Sir Ian Sims, Roger
Golding, John Skinner, Dennis
Goodhart, Sir Philip Smith, C.(Isl'ton S & F'bury)
Gould, Bryan Snape, Peter
Hamilton, W. W. (Central Fife) Soley, Clive
Harman, Ms Harriet Spearing, Nigel
Harrison, Rt Hon Walter Steel, Rt Hon David
Hart, Rt Hon Dame Judith Tinn, James
Hayes, J. Varley, Rt Hon Eric G.
Haynes, Frank Wardell, Gareth (Gower)
Healey, Rt Hon Denis Wareing, Robert
Heathcoat-Amory, David Weetch, Ken
Hogg, N. (C'nauld & Kilsyth) Williams, Rt Hon A.
Howarth, Alan (Stratf'd-on-A) Winnick, David
Howarth, Gerald (Cannock) Wrigglesworth, Ian
Hoyle, Douglas
Hughes, Mark (Durham) Tellers for the Ayes:
Hughes, Simon (Southwark) Mr. Bowen Wells and
Jessel, Toby Mr. Tom Clarke
Ashdown, Paddy Macfarlane, Neil
Atkinson, David (B'm'th E) McNair-Wilson, P. (New F'st)
Baldry, Anthony Major, John
Bendall, Vivian Malins, Humfrey
Berry, Sir Anthony Mather, Carol
Biggs-Davison, Sir John Mayhew, Sir Patrick
Boscawen, Hon Robert Mellor, David
Bowden, A. (Brighton K'to'n) Miscampbell, Norman
Bowden, Gerald (Dulwich) Morris, M. (N'hampton, S)
Braine, Sir Bernard Neubert, Michael
Brinton, Tim Page, John (Harrow W)
Brittan, Rt Hon Leon Porter, Barry
Buck, Sir Antony Price, Sir David
Budgen, Nick Proctor, K. Harvey
Butterfill, John Rees, Rt Hon Peter (Dover)
Clark, Dr Michael (Rochford) Renton, Tim
Clegg, Sir Walter Ridsdale, Sir Julian
Cope, John Robinson, Mark (N'port W)
Dover, Denshore Rossi, Sir Hugh
Eyre, Reginald Rumbold, Mrs Angela
Farr, John Shepherd, Colin (Hereford)
Fox, Marcus Smith, Sir Dudley (Warwick)
Gardner, Sir Edward (Fylde) Steen, Anthony
Garel-Jones, Tristan Stewart, Andrew (Sherwood)
Glyn, Dr Alan Tapsell, Peter
Goodlad, Alastair Taylor, John (Solihull)
Grant, Sir Anthony Temple-Morris, Peter
Ground, Patrick Terlezki, Stefan
Hawkins, C. (High Peak) Thomas, Rt Hon Peter
Heddle, John Thorne, Neil (Ilford S)
Hickmet, Richard Tracey, Richard
Hind, Kenneth van Straubenzee, Sir W.
Howard, Michael Viggers, Peter
Hunt, David (Wirral) Wakeham, Rt Hon John
Kershaw, Sir Anthony Waller, Gary
Knight, Gregory (Derby N) Wood, Timothy
Lawrence, Ivan
Lester, Jim Tellers for the Noes:
Lewis, Sir Kenneth (Stamf'd) Mr. Richard Alexander and
Lyell, Nicholas Mr. John Whitfield

Question accordingly agreed to.

Bill read a Second time.

Bill committed to a Standing Committee pursuant Standing Order No. 42 (Committal of Bills).

Mr. Dennis Skinner (Bolsover)

On a point of order, Mr. Deputy Speaker. Bearing in mind that a Committee will shortly be set up to consider the Bill, may we have an assurance through you that the appropriate body setting up that Committee will not put too many lawyers on it to slice its throat?

Mr Deputy Speaker (Mr. Harold Walker)

As the hon. Gentleman knows, the Committee of Selection will put its recommendations to the House and the matter will be for the House to decide.

Mr. Peter Snape (West Bromwich, East)

On a point of order, Mr. Deputy Speaker. The House will be aware of the detailed submissions made about the Bill by the legal profession in the past week. The surprising thing about those submissions— I make no complaint about this—was that they were all free. This must be the only occasion on which any hon. Member has received free advice from the legal profession.

My point of order is this. Hon. Members on both sides will be aware of the pressure and of some of the subtle and not subtle arm-twisting that has taken place to persuade hon. Members, especially those in the legal profession, to vote against the excellent Bill introduced by my hon. Friend the Member for Great Grimsby (Mr. Mitchell). Will you rule that if any attempt were made to discipline any hon. Member who is a member of the legal profession for voting in favour of my hon. Friend's Bill such action would be a breach of the privilege of the House and you would refer it to the appropriate Committee?

Mr Deputy Speaker

The point raised by the hon. Gentleman sounds very similar in substance to the matter raised earlier with Mr. Speaker, on which Mr. Speaker gave a ruling on 12 December at c. 685 of the Official Report.

Mr. Frank Dobson (Holborn and St. Pancras)

Further to that point of order, Mr. Deputy Speaker. It was my understanding that Mr. Speaker ruled that there was no interest that would disbar an hon. Member who belonged either to the Law Society or the Bar from taking part in the discussions or voting in the Division on this matter, but the point that my hon. Friend the Member for West Bromwich, East (Mr. Snape) was raising—I wish to follow him in raising it as I probably represent more lawyers than any other hon. Member — is that considerable pressure has been brought to bear on individual hon. Members who belong to the Law Society to vote what might be described as the Law Society party line.

The Law Society, or part of it, at one stage circulated a letter saying that it hoped that as many hon. Members as possible who supported my hon. Friend's Bill would be stopped from coming to the House. My hon. Friend the Member for West Bromwich, East is seeking a ruling, not necessarily today, but from Mr. Speaker, that any effort by the Law Society to bring pressure to bear on solicitor Members would be a clear breach of the privileges of the House.

Mr. Deputy Speaker

If the hon. Gentleman is right in his allegations, the procedure is that he should write to Mr. Speaker outlining the allegations, before raising the matter on the Floor of the House. If he has substantive to evidence to support his allegations, he should follow the correct procedure.

Mr. Peter Shore (Bethnal Green and Stepney)

Further to that point of order, Mr. Deputy Speaker. The House has made an important decision by the Division, and I think that it is normal in these circumstances to have a statement of the Minister's attitude to the Bill, about what facilities he and his colleagues are prepared to make available to my hon. Friend in bringing forward his measure and about what we can expect from the Government, including, one would hope, their pledge that there will be no attempt to frustrate what is clearly the will of the majority of the House of Commons.

Mr. Deputy Speaker

No doubt these matters can be pursued in the Committee that will be set up.

Mr. Kevin McNamara (Kingston upon Hull, North)

Further to that point of order, Mr. Deputy Speaker. It is normal on occasions when the Government's advice has been disregarded by the House for the responsible Minister to make a statement about the Government's intentions, following the decision of the House. The Solicitor-General, who spoke for the Government in the debate, is present in the Chamber and the least that the House can expect is a clear statement of the Government's intentions from him—

Mr. Deputy Speaker

Order. I have serious doubts as to whether that is normal procedure, as the normal procedure is for the matter now to be referred to a Standing Committee where such points can doubtless, with the permission of the Chairman, be raised.

Mr. McNamara

Further to that point of order, Mr. Deputy Speaker. I am sorry to pursue this matter, but you will recall that in the time of the Administration of my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan), when the Government's advice was disregarded, the Minister of the day was expected to make a statement. As that was a minority Government, on various occasions, regrettably, the Government were defeated, and on one occasion when they should have been they were not. When that happened, the Minister of the day who was responsible for the proceedings got up and, out of courtesy to the House, stated what the Government's intentions were. It is a gross discourtesy for the House when the Solicitor-General, who was present in the debate—

Mr. Deputy Speaker


Mr. McNamara

—does not get up—

Mr. Deputy Speaker

Order. I must remind the hon. Gentleman and the House that we have been discussing a private Member's Bill on private Members day and it is not usual, every time that a private Member's Bill is accorded a Second Reading on a Division, for the Government to make a statement. Indeed, that would be most unusual.