POWER TO OBTAIN INFORMATION AND REQUIRE PRODUCTION OF DOCUMENTS (Hansard, 25 July 1990)

§ The Solicitor-General
I beg to move, That the clause be read a Second time.

§ Mr. Deputy Speaker (Sir Paul Dean)
With this it will be convenient to consider Government new clauses 9 to 13 and Government amendments Nos. 44, 65, 66, 69 and 70.

§ The Solicitor-General
These new clauses and amendments give the Authorised Conveyancing Practitioners Board the powers it needs to exercise proper administration and control over authorised conveyancing practitioners, to preserve assets pending investigation and to provide for an appeal system against its decision, should an aggrieved party wish to appeal.
New clause 8 allows the board to serve a notice on an authorised practitioner requiring him to provide the board with such documents or information as it thinks reasonably necessary in connection with the discharge of any of its functions. New clause 9 allows the board to appoint one of more competent persons to investigate the affairs of the authorised practitioner. New clause 10 creates a general prohibition against disclosure of information received by the board, its staff or an investigator appointed by it in the exercise of their functions under the Bill without the consent of the person from whom the information was obtained or, if they are different, the person to whom it relates. New clause 11 deals with exceptions from restriction on disclosure.
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Amendments Nos. 65, 66, 69 and 70 to schedule 16 are consequential amendments to the Fair Trading Act 1973, the Consumer Credit Act 1974, the Restrictive Trade Practices Act 1976, the Estate Agents Act 1979 and the Competition Act 1980 to allow other regulators to pass information to the board without committing offences under their disclosure regime.
Taken together, the four new clauses and five amendments complement new clauses 12 and 13, which deal with the board's intervention powers. Together, they should provide the board with all the powers it needs to take action to protect the interests of clients and to obtain the evidence necessary to pursue disciplinary proceedings against authorised practitioners. They represent the result of the Lord Chancellor's undertaking during the Lords Report stage, which was conferred by my right hon. and learned Friend the Attorney-General in our Committee stage, to consider further what powers of intervention and investigation the board might need. The Law Society sought to have similar amendments moved in the Lords Committee stage. Its amendments were modelled on its own papers.
In presenting these results of the further consideration which the Committee stage afforded us, I commend the new clauses to the House.

§ Mr. John Fraser (Norwood)
I confirm that we pressed for some, although not all, of the new clauses and amendments in Committee. They are welcome, and I hope that we can make speedy progress with them.

§ Mr. John Greenway (Ryedale)
I have no wish to detain the House, which is faced with a galaxy of amendments and new clauses, or to intrude too much into these proceedings. However, Report stage allows Back-Bench Members to raise concerns. I shall try to be as brief as possible.
I welcome the new clauses, as do many organisations, such as the Law Society, which have been considering extending the availability of conveyancing by authorised practitioners. We all recognise that the Building Societies Act 1986 paved the way for this provision. We are anxious to ensure that there should not be any conflict of interests. I should be grateful if my right hon. and learned Friend could confirm that there will be further consultation on clause 38, which allows the Lord Chancellor to make provision for regulations, after the Bill receives Royal Assent.
One issue causes me great concern. It relates to the potential conflict, not just of interest, but within the role of authorised practitioners who are, in effect, acting as agents for large financial institutions and building societies. It is impossible to regard the issue separately from the general supervision of the financial services industry and the Financial Services Act 1986.
Building societies, insurance companies and banks are generally tied agents of life assurance companies. Polarisation rules mean that, as tied agents, their duty and interest is to the life assurance company, but as conveyancers their interest and duty must be to the client. I must declare an interest as an insurance broker and representative of one of the insurance broking institutions. Independent financial advisers have a duty to the client, not just to the life office. Will my right hon. and learned Friend have particular regard to that? Over the next year 519 or so, we are likely to see further development of the financial services industry regulatory regime. Indeed, the first debate after the recess will be on precisely that subject.
I am concerned that there should be a proper fiduciary relationship, so that each part of any arrangement can be properly costed. The public should have the maximum possible safeguards. The House and the country will have noted that a large insurance company recently bought up 500 estate agency practices and has now effectively withdrawn from that market. A similar event would be a disaster for rural solicitors' practices and for the public whom they serve. There is a risk of small practices closing down because of the loss of conveyancing business only for the institutions to decide that conveyancing is less profitable than they thought. These are important considerations, as these firms would be lost.
I hope that my comments are helpful. Perhaps my right hon. and learned Friend will say that those points have been taken on board.

§ The Solicitor-General
I am grateful to the hon. Member for Norwood (Mr. Fraser) for his welcome and to my hon. Friend the Member for Ryedale (Mr. Greenway) for his contribution. I understand the points that my hon. Friend makes on behalf of independent financial advisers, with whose position I have the greatest sympathy, who are rightly watching the regime that we are creating for authorised conveyancing practitioners to ensure that proper safeguards are provided for clients and for the public as a whole.
The first point that my hon. Friend raised was on consultation. He will have noticed that in the Bill consultation is required statutorily on many points. My right hon. and noble Friend is anxious to consult. Indeed, I have had the opportunity of taking part in the consultation processes with interested parties, including independent financial advisers, to see that the structure that we create on the statutory framework is practical and achieves the objectives and the safeguards that we have set out to achieve, which we are debating today and which we debated in some depth in Committee in relation to this new clause and new clause 88.
My hon. Friend will know that my right hon. Friend the Secretary of State for Trade and Industry and his predecessors have consulted on some interesting possible developments in the financial services framework. They should tie in with what we are discussing today. I hope that those assurances are of assistance to my hon. Friend. I commend the new clause to the House.