HL Deb 14 May 1953 vol 182 cc532-40

3.36 p.m.

Order of the Day for the Second Reading read.

VISCOUNT SIMON

My Lords, this is a Bill which was introduced into the House of Commons by a private Member, my honourable and learned friend Sir Geoffrey Hutchinson, who is one of the Members for Ilford. In the House of Commons it has been received with unanimous approval; I hope that it may receive similar approval in your Lordships' House. The Bill aims at dealing with a difficulty that has arisen because some people are tempted to exploit the anxiety of those who are trying to find a house or a flat. Housing accommodation is so difficult to find that people are prepared to go to any length, and to take any chance, if it is going to result in their getting the flat they want; so a number of ingenious people have hit upon this device. They form a company which is an accommodation agency, and they let it be known that they are in a position to help people who come to them to find a flat. The hopeful citizen goes to this agency, gives his name and address and describes the sort of flat he wants; thereupon, these accommodation agencies will give him to understand that they have just the flat that he needs or, at any rate, that they hope to be able to provide him with a list, and they will register his name. There is one other thing that is added at this stage, that there is a fee for being registered. The result, such is their anxiety to find accommodation, is that a large number of people have been induced to pay the fee to the agency before the agency has done anything at all, and without any sort of guarantee that the agency will provide them with a flat.

Your Lordships will observe that this is quite different from what happens in the case of reputable estate agents. In the first place, the estate agent has a particular property put into his hands by the owner of the property to find a tenant or a purchaser. On the other hand, this is a scheme by which people who want to find property are going to approach the agency. There is, of course, the further and most important distinction, that a respectable agency dealing with the letting of houses or flats does not charge anything until the accommodation is found and the parties have been brought together. The commission then becomes payable, usually on an agreed scale. If your Lordships will look at the Bill you will see that that is what it is designed to do.

Clause 1 (1) provides that any person who, (a) demands or accepts payment of any sum of money in consideration of registering, or undertaking to register, the name or requirements of any person seeking the tenancy of a house…shall be guilty of an offence. In the same way, any person shall be guilty of an offence who: demands or accepts payment of any sum of money in consideration of supplying, or undertaking to supply, to any person addresses or other particulars of houses to let… There is a third class which consists of any person who issues any advertisement, list or other document describing any house as being to let without the authority of the owner of the house or his agent. That provision is inserted because some of these enterprising people are not at all above professing that they have accommodation to dispose of when they have no authority whatever from the owner of the flat to search for a tenant for it. I was told of the case of a young lady who was very anxious to find a flat. She went to one of these agencies; they put down her name and address. They said that they understood the sort of flat she wanted, and then the person conducting the agency said, "Now the fee is three guineas." But the young lady was sensible enough to reply, "Oh no, I do not pay anything until I get a flat,"—which, of course, was quite natural, but was not in accordance with the scheme of operations of the agency.

I have some information here which I am at liberty to give to the House, showing the extent to which this has gone on. I was sent this information and was told that it might be publicly used. In the year 1952–53, the number of agencies in the London area, accepting registration fees, as I have described, was forty. Of these, fifteen have gone out of business of their own accord. Sometimes, people who have paid their money go back, raise a fuss and threaten the people at the agency with exposure, and thereupon the latter give up the enterprise. Seven of these agencies have been prosecuted. Sixteen of them are still operating. It is difficult to estimate the sums of which the public have been defrauded, but earlier in the year, I am told from this Department, an estimate of £100,000 was made, which includes takings of agencies which were charging fees in respect of houses that did not, in fact, exist. The proposal of this Bill, therefore, is to make this a criminal offence.

I do not doubt that, if your Lordships agree, and this measure becomes law, there will not be many prosecutions. The result of the passing of the Bill will be that these people will simply go out of business. Possibly, they will try to devise agencies for something else. There used, I believe, to be matrimonial agencies, which undertook to provide amorous bachelors with a comrade in matrimony of suitable age, suitable appearance and, possibly, more important than either, with a suitable income. All these things are simply cases of exploiting the needs of the public. I hope, therefore, that this Bill may be generally approved. I believe that the Government are going to bless it, and if it is passed it will have the result of knocking these enterprises on the head. The figures I have just given to the House included the information that seven of these agencies have been prosecuted. A prosecution in such a matter is necessarily a very elaborate affair. It is really a prosecution for obtaining money by fraud. What you would have to do would be to prove instances in which people had gone to such an agency, put down their money for registration and then nothing had happened. If you proved a sufficient number of cases, the inference might be drawn that this was obtaining money by fraud. It seems to me that we need a more direct provision than that, and this Bill will hit the nail on the head. I invite your Lordships to join me in that operation. I beg to move that the Bill be now read a second time.

Moved, That the Bill be now read 2a.—(Viscount Simon.)

3.46 p.m.

LORD SILKIN

My Lords, as the noble and learned Viscount has said, this Bill received unanimous support in another place. Indeed, it was received with a certain amount of enthusiasm. It is perfectly true that every public need, especially amongst the poorer and more inexperienced section of the community, creates a set of vultures who batten upon the knowledge of it. Cases of the kind which the noble Viscount mentioned are very sad, because it is self-evident that in a great many instances even the relatively small sum of three guineas is beyond the means of the individuals concerned, and they pay it only in the hope and the confident belief that, as the result of their paying out such a sum, they will be provided very quickly with accommodation. Therefore, every Member of this House will desire that a measure of this kind should be passed as quickly as possible, with a view to preventing these frauds on the poorer section of the public.

But, it is necessary, of course, to scrutinise this Bill—that, after all, is what we are here for—and it struck me that perhaps this Bill went rather wider than was necessary for the purpose for which it has been designed. The noble and learned Viscount referred to the case of a young lady who went to an agent and refused to pay the three guineas until she got a flat. She was, apparently, willing to pay three guineas if she got a flat. It is true that in the normal cases the procedure is that a person goes to an agent and states his or her requirements, and pays no fee, either at the time or at any later time, by way of remuneration to the agent. The fee is normally paid by the owner of the premises. That is the normal procedure. But it is by no means the invariable procedure.

There is no reason why I should not go to an agent and say, "These are my requirements: will you do your best to find me the accommodation I need, and I will pay you a fee for doing so." That is a procedure which, while by no means common, is sometimes carried out. Of course, in large transactions, as the noble and learned Viscount will know as well as I do, frequently both sides appoint their own agents. That is to say, both the buyer and the seller have agents, and each side pays his own agent. And, of course, if we were dealing with reputable agents, members of some body such as the Institution of Chartered Surveyors, this Bill would be wholly unnecessary. There would be no reason why it should not be left to every agent to make his own arrangements with his clients, in the knowledge that if an agent does charge a fee for giving information about possible premises to let, it will be a bona fide list, and that every address given will be one which it is possible for a prospective tenant or purchaser to acquire. The reason why these rather stringent and exceptional measures are proposed, as the noble and learned Viscount has said, is that there are a number of agents—not a great many—who have adopted the devices of which he has spoken to defraud the public. But it seemed to me that in attempting to deal with this we were going rather wider than is really necessary.

VISCOUNT SIMON

My Lords, I quite follow what the noble Lord says, but the case which he wishes to leave alone is not covered by this Bill. If the noble Lord will look at the provision, he will see that it is a provision which punishes somebody for demanding or accepting payment of any sum of money in consideration of registering the name or requirements of any person seeking the tenancy of a house. That is the thing to be stopped. It is quite all right if a person tells somebody who wants a flat that if he finds one, he expects the person looking for a flat: to pay a fee. But that is not the demanding of a sum of money in consideration of registration, which is the point about this Bill.

LORD SILKIN

My Lords, paragraph (b) says: demands or accepts payment of any sum of money in consideration of supplying, or undertaking to supply, to any person addresses or other particulars of houses to let;" Even if they are genuine addresses, and even if by the agent's supplying these addresses the applicant secures accommodation, that seems to me to go a little wide. While that is not a reason for rejecting the Bill, it is a reason, as I hope the House will agree, for looking at it, and perhaps we may have another word about it in Committee.

The next thing I should like the noble and learned Viscount to look at is subsection (3) of Clause 1, which reads: A person being a solicitor shall not be guilty of an offence under this section by reason of his demanding or accepting payment of any remuneration in respect of business done by him as such. I should have thought that was self-evident. If a solicitor demands or receives payment "in respect of business done by him" as a solicitor, of course he is not committing an offence. I should like to know why these words are included in the Bill. Why not put in a provision about barristers, or engineers, or members of any other profession, to say that so long as they are doing work as members of their professions they are not committing an offence? It may be that there is more in this than I can see at the moment. There ought to be a clear reason for putting in a provision of this kind, but I do not see it.

Lastly, I find that this Bill shall cease to have effect on the thirty-first day of December, nineteen hundred and fifty-seven. Is it contemplated that by that time all these rogues will have gone out of business, that there will be none left and that this Bill will be no longer necessary, or is it contemplated that the housing shortage will be met? What is the reason for this? I hope the true reason is that by that time we should have had an opportunity of looking at the profession of estate agent as a whole. What is fundamentally wrong about this profession is that anybody without the slightest qualifications or capital can set up business as an estate agent and lead the public to believe he has qualifications for carrying out that business. The real evil goes far wider than the picking up of odd guineas for registration. It is within my own experience that a number of these agents are entrusted with the sale of houses and effect sales, subject to contract, and receive a deposit of 10 per cent. Often the receipt of that deposit is a much more important thing, from their point of view, than effecting the sale. They hold this money as a stake, and if the contract is completed they have to account for it. I have known cases where estate agents have not accounted for it. For that and other reasons I had hoped that we should take steps to secure that people who become estate agents have some kind of professional qualification.

The Royal Institution of Chartered Surveyors is a most reputable body and if one sees that a firm is a member of the Institution, one can rest assured that one is in pretty safe hands. I myself should never object to paying over a deposit to a firm which was a member of the Institution, but the public are not to be expected to know that. I had hoped that the reason why this measure is made a temporary one is that, in the years between now and the date when the measure expires, whichever Government is in a position to do it would undertake to deal with the whole question of estate agencies, giving the public the protection of providing that people in this profession are properly qualified. I hope the noble and learned Viscount will not feel that these remarks are in any degree hostile: they are designed to help. I believe that there is a need for this Bill and we, for our part, will do everything we can, subject, as have said, to examination of the Bill, to assist in bringing it into law at the earliest possible moment.

3.58 p.m.

LORD MANCROFT

My Lords, there are few happier circumstances in human affairs than finding oneself in the position of repaying a debt without undergoing personal inconvenience to oneself. I am in that happy position to-day. Several times I have attempted to persuade your Lordships to accept private legislation of my own invention. On these occasions I have been sensible enough to enlist the help of the noble and learned Viscount, Lord Simon. I have not always been successful, except when I have taken the noble Viscount's advice. Now I am in the happy position of repaying him for the kindness and help which he so willingly gave me by telling him, on behalf of Her Majesty's Government, that I am able to accept his Bill mostly warmly; and I thank him very much for the trouble he has taken in bringing it forward. Both the noble Viscount, Lord Simon, and the noble Lord, Lord Silkin, have discussed the matter in some detail, and I think little need be said by me, particularly in view of the heavy Order Paper which lies ahead of us. I was happy to hear the noble Lord, Lord Silkin, mention the reputable estate agent, because I know that there has been a certain amount of disquiet among reputable estate agents that they maybe in some way embroiled in this Bill. As the noble Lord explained, that is not the case.

I understood that the Bill was to be a temporary one, until 1957, for the first two reasons given by the noble Lord, Lord Silkin. The noble and learned Viscount. Lord Simon, like myself and many others, does not like to put on the Statute Book in the form of permanent legislation an enactment which clearly is designed to meet only a temporary need. The other thought which may possibly be behind the Bill is that the noble Viscount, like myself, has the utmost confidence in the ability of the Minister of Housing to deal with the whole of our housing problems well before that date. The noble Lord, Lord Silkin, has put forward a different idea, but I think it was a fly, and I do not know whether the fish is going to rise. I was surprised to hear him say that this Bill might be an opening card for an inquiry into the whole of the estate agency business. That is something the noble Lord must settle with the noble Viscount, Lord Simon. I would not dare intervene. I will content myself by repeating that the Government welcome the Bill in principle, thank the noble Viscount for bringing it forward and cordially recom- mend your Lordships to give it a Second Reading.

On Question, Bill read 2a, and committed to a Committee of the Whole House.