As amended (in the Standing Committee), considered.
Interests In Residential Property
I beg to move amendment No 1, in page 3, line 15, at end insert:
Clause 2 defines a disposal of residential property in terms of a sum of capital money, a sum of capital passing hands. This may leave a possible loophole where there is a sale of a mixed business and residential premises where the consideration is not a capital sum for the transfer of the lease but a capital sum that is paid for goodwill, fixtures and fittings. That is a possible loophole in the Bill that the amendment closes.(d) transferring or creating any other estate or interest in residential property as part of a larger transaction involving the sale or stock-in-trade, goodwill or other assets of a business carried on in any part of the property'.
The Minister was very brief, but I do not complain. I only hope that I properly understood the purpose of the amendment. Let me remind him of the debate that took place in Committee when we were concerned about the small business and the small trader and the transfer of businesses.Perhaps the Minister will confirm that this amendment covers the points that in Committee appeared to be extremely difficult to overcome. Will he confirm that we are dealing with the questions that we asked him in Committee to consider? Does he think that the amendment covers the points satisfactorily?
It does not cover all the matters that were dealt with in Committee. The Bill covers the sale of residential property and the sale of mixed residential and business property—that is, the corner shop and the flat above. I was urged in Committee to try to extend the Bill to cover all commercial premises. I have looked at the matter yet again, but it is not within the scope of the Bill, the money resolution or the short title. To extend the Bill would be a vast enterprise involving a good deal of enforcement effort and a good deal of expenditure. I would regard it as being impracticable, and it would mean that the Bill was no longer merely a consumer protection measure.I have sought to close the potential loophole where the premium paid for the transfer of a lease is not a premium for the lease itself but a premium associated with goodwill. That frequently takes place with the transfer of business premises. The amendment modestly closes a loophole. It does not go as far as I was urged to go, but I have, as I promised the Committee, considered the matter in full.
Has the Minister considered the rented side of property, which he promised to examine?
Yes, I looked at that, but again I have concluded that that issue would very much widen the scope of the Bill. In Committee we discussed deposits that were by way of payment of rent in advance. I have looked at this matter and I am convinced, as I told the Committee, that there would normally be a remedy against the landlord. In those circumstances, the agent is holding the money as a deposit for the landlord. He is a true agent of the landlord, and is not a stakeholder in the normal sense of the word. Therefore, there is a right of recovery against the landlord for whom the rent or a deposit for breakage of fixtures and fittings is being held. Therefore, because there is an adequate remedy, from the point of view of the prospective tenant or assignee, I think that an adequate degree of protection is provided.In Committee I was urged to give some protection to those with agents who collect rents for them. On that matter I think that it is right to leave the Bill as it is. There is, after all, this difference. A person buying a house has no choice of agent through whom he buys it. He has generally no choice of agent to whom he pays the deposit, if he chooses to pay a deposit to him. A landlord of property who is having rent collected has a choice of the agent who collects his rent. He is not in the same tight position of lack of choice as the prospective purchaser. For that reason among others, I have not extended the Bill to the collection of rents.
I accept that where there is a managing agent—[Interruption.]
Order. If the Scottish Grand Committee could move to the Grand Committee Room, that would be convenient.
I accept the Minister's explanation where there is a managing agent and in the case of furnished property. But I do not think that his explanation quite covers the situation where there is a deposit on unfurnished property and the agent is not a managing agent.
I do not see how one can properly take a deposit on unfurnished property. If the property is at the lower end of the market and if the lease is protected under the Rent Acts, it would be improper to take a premium for the assignment of a lease in any case.
I welcome the amendment. It will cover a small but important area, and therefore it is worth having. I am sorry that the Minister has not been able to extend the provision to commercial properties. I tabled amendments containing definitions but, as I accept, Mr. Speaker was unable to select them for discussion because they were not covered by the title of the Bill.I welcome the Minister's attempt to cover this area, which I think is important.
Amendment agreed to.
Orders Warning Against Continuing Certain Practices
I beg to move amendment No. 2, in page 5, line 31, after 'per son', insert
'has failed to comply with any such obligation as is referred to in section 3(1)(c) above (in this section referred to as a "relevant statutory obligation") or'.
With this we are to take Government amendments Nos. 3, 4 and 5.
This amendment honours a promise I gave to the Committee. Clause 4 provides for a warning procedure where an unfair practice has been carried on. The Committee wanted me to extend the warning procedure where there had been breach of an obligation under clause 15 and under clauses 18 to 21.
We welcome the amendment as a response to an amendment moved by us in Committee, which allows and requires the Director General of Fair Trading to give a warning to an estate agent guilty of one of the offences designated in the appropriate clauses of this Bill. In Committee, the Minister expressed some reservations about such a move. He implied that it might not be to the advantage of the estate agent. I wonder whether he has come to any conclusion on that point and whether he is completely satisfied that what he is now moving is in the best interests of the estate agent.
I said that, if that was what the Committee wanted, it could have it. It has got it if the House passes the amendment. It is true that a warning can be given for breach of the obligation under the clauses I have mentioned. If subsequently, when there has been an order, because of the words used in clause 4, there is a further breach of the obligation, the estate agent could quickly be disbarred from practising as an estate agent. I was a little worried about that in case a small infraction should bring about a disbarring. But I am now satisfied that he is protected because, even before giving the warning notice, under the procedure set out in the amendment, the Director General will have to be satisfied that he is unfit to practise as an estate agent, and then come to the conclusion that a warning would be an adequate way of dealing with the matter.It is very unlikely that the Director General would take the view that one small infraction of one of the obligations in clauses 15 and 18 to 21 would itself cause a man to receive a warning. I believe that that is an adequate protection. There would have to be a full inquiry and the chance to make representations before even a warning was given. That was a mitigated penalty. In the circumstances, I believe that represents a happy conclusion to the matter.
Amendment agreed to.
Amendments made: No. 3, in page 5, line 34, after "person", insert
"were again to fail to comply with a relevant statutory obligation or, as the case may be".
No. 4, in page 5, line 41, after "Director", insert
"a further failure to comply with a relevant statutory obligation or, as the case may be".
No. 5, in page 6, line 2, after "addressed", insert
"fails to comply with a relevant statutory obligation or, as the case may be".—[Mr. John Fraser.]
Revocation And Variation Of Orders Under Sections 3 And 4
I beg to move amendment No. 12, in page 7, leave out lines 30 to 32.
With this we are to take amendment No. 13, in page 7, line 41, leave out from "it" to "but" in line 42.
This is a new point. It relates to the powers of the Director General of Fair Trading, which, by most people's accounts, are fairly considerable and wide-ranging in their effect on the profession of estate agency. We are endowing with deterrent powers to regulate this profession should the offences, outlined in the Bill and subsequent secondary legislation, be in evidence. The amendment seeks to modify those powers in one small but not unimportant respect.The two exclusions deal with the Director General being able to consider an application for revocation or variation of order in terms based not solely on factual evidence but on his own speculation as to what course of action the appellant might undertake in future. This seems to us, on reflection, to be unjust and to depend too much on the subjective view of the Director General. We wonder why it was felt necessary to put such a provision in the clause. The Director General already has powers to consider whether the applicant is unfit and remains unfit, but we question whether he should do so on the grounds of what might happen in the future. In other words, as the Bill stands, the Director General is able to make a very important decision relating to an estate agent's livelihood on the basis of what he thinks that estate agent might do in the future if the order were either revoked or varied. In those circumstances, I would welcome the Minister's comments on whether he, too, would agree that this was perhaps unfair to an appellant.
If the amendment were carried, the Director General would have no criteria by which to go, and his powers would therefore be rather wider or more arbitrary than I am sure the Conservative Opposition would wish. Subsection (4)(b) places criteria on the Director General—and consideration is not an absolute discretion, because he has to be guided by evidence—by which to judge the applicant who has been barred as a result of the practice. The Director General must consider whether the agent has improved and whether he is unlikely in the future to repeat the practice. That seems to be a perfectly fair test.If a practice has been declared unlawful, and it has led to an estate agent being struck off or debarred from engaging in estate agency, it seems to me right to say that the Director General must address his mind to whether the person is likely to repeat that offence. If by his conduct he has evinced an intention not to repeat the mistakes of the past, it seems right to guide the Director General in that way. The hon. Gentleman may be worried about the word "considers" But that does not give the Director General an arbitrary discretion. He has to consider the matter on its merits and act in a semi-judicial capacity. Of course, if he errs in that, the matter is subject to appeal. I am sure that the effect of carrying the amendment would be to place the estate agent at a much greater disadvantage.
Powers Of Entry And Inspection
I beg to move amendment No. 6, in page 12, line 47, at end insert—
I promised a change in the enforcement provisions so that if the books of an estate agent were taken away the estate agent would have the ability to obtain access to those books and to obtain copies. This amendment meets that promise. I said that I would consider the problem of the residential flat above the estate agent's premises. The Committee was rather concerned in case someone quite innocent, and quite unconnected with the estate agent, had his premises searched on a warrant relating to the estate agent's business. I have looked at this, and I am assured that if there were a letting of that sort it would be a separate occupation for the purposes of the Bill and that, therefore, a warrant of powers of search and enforcement would not extend to those residential premises. As a result, no amendment is necessary.'(2A) If and so long as any books or documents which have been seized under this section are not required as evidence in connection with proceedings which have been begun for an offence under this Act, the enforcement authority by whose officer they were seized shall afford to the person to whom the books or documents belong and to any person authorised by him in writing reasonable facilities to inspect them and to take copies of or make extracts from them'.
I welcome the amendment, but I am a little concerned at the wording "not required as evidence". Does that mean that if the books are required as evidence the estate agent would not be able to get or take copies? As to premises above an estate agent's premises, what the Committee was concerned about was estate agents who occupied the flat above their premises. Would that be searched, or would a warrant have to be required to search his residential premises if he lived above his business premises?
If the estate agent lives above the premises, the powers of enforcement will extend to the premises in which he lives, because it would be only too easy to remove the books from the business part of his premises, take them to the residential part and escape any form of enforcement or detection.As to whether the books are required in evidence, the words are included so that the ability to have access to the books is not one that can be exercised in such a way as to interfere with the course of a prosecution.
In other words, if the books were needed as evidence, the estate agent could still take information from them?
The amendment uses the words
During the investigation stage, clearly the estate agent would be able to take copies."which… are not required as evidence in connection with proceedings which have begun".
Amendment agreed to.
Meaning Of "Clients' Money" Etc
I beg to move amendment No. 16, in page 14, line 7, at end insert
'or other sum of money'.
With this we shall take Government amendment No. 7.
A similar amendment was discussed in Committee and appeared to raise important issues which the Minister accepted as having a considerable degree of validity, namely, that the protection offered to the public in a transaction of house purchase should not be limited in terms of money to the deposit as defined alone but should extend to other sums of money for other purposes, such as insurance premiums, possibly advance payments of rent, or even repayments of a mortgage to a building society.The Minister undertook to look at this point, but it appears from Government amendment No. 7 that he has been unable to bring forward anything that would meet that point in substance. That is to assume, of course, that amendment No. 7 refers to matters which have already been raised on an earlier amendment and does not go as far as we would have wished under the terms of our discussion in Committee. It seems to us that, while the opportunity has been taken of providing protection for moneys entrusted temporarily by a client, a prospective house purchaser, to an estate agent, it should be possible to provide protection for such other moneys, apart from the deposit, which is, of course, the starting point of the Bill. It was the abuse of absconding with deposits that originally brought this need to the attention of the Department. Although there are other purposes to the Bill, it has always seemed to me that protection of deposits is a crucial factor in it. Certainly it defines those estate agents who are affected by the Bill in such terms. We are, therefore, considerably disappointed that it appears, from what has transpired since the Committee stage, that it has not proved possible to move in the direction that we wished to move. Before making any further comments on that, I give the Minister an opportunity of saying what his considerations have brought out since the Committee stage.
Those conclusions have partly resulted in Government amendment No. 7, which is consequential upon Government amendment No. 1, so that a deposit paid in relation to the goodwill of mixed business and residential premises would be caught and would have to be dealt with under the client account rules, and would have to be covered by the bonding arrangements.I looked again at the matters I promised to consider—for instance, insurance premiums and repayment of a mortgage. But I am sure that the advice I gave to the Committee was correct. In many instances, where there is payment of an insurance premium or the payment of a sum to a building society, the agent is acting truly in the legal sense of the word as the agent for the insurance company or the building society, and the protection that is extended to house purchasers in the Bill would not be necessary. When one comes to money paid by way of advance rentals, much the same consideration applies. There are other connections in which estate agents receive or collect moneys, such as the collection of ground rents—or feuduties, as I think they are called in Scoland—and there one could extend legislation to require the keeping of client accounts and bonding in such circumstances, but if one did that it would be going far beyond the intentions of the Bill, which were to protect the house buyer. It would, in effect, be starting to regulate relations between landlord and tenant or landlord and agent, but protecting the landlord rather than the consumer. In part, I have not done anything about this matter because it is not one for me. When one goes into that area of landlord and tenant and management functions, one is entering upon questions which are very much for the Department of the Environment. I am not saying that simply to pass the buck, but, as I said in Committee, the Department of the Environment has been conducting a study into these matters. It is really for those reasons—because one would be extending the Bill into another area—and also for public expenditure reasons and limiting the amount on enforcement effort necessary that I have not, after consideration, taken the Bill further than the modest Government amendment now under discussion.
Perhaps I might remind the Minister of what he said on this matter in Committee. He made the criticism that the amendment then, as now, was rather vague, and that is not in argument between us. This is a means of raising the issue, and it is not intended to be a piece of carefully considered drafting. Then, having made that criticism, the hon. Gentleman said:
"I think that, in order to command certainty, the best way of dealing with the matter would be to have an amendment to clause 12 which would enable the Secretary of State to specify other classes of money which would be treated as clients' money for the purpose of the operation of the client account rules.
The Minister then gave the undertaking to look at another method of trying to define other classes of money. It remains a matter of regret that the Minister has not been able to come any of the way along this line. Of course, what he has said in response to the amendment tonight goes far beyond what was perhaps even intended at the time. What we had in mind in supporting the amendment in Committee was that at the time of the transaction for house purchase there may well be other sums not strictly a deposit which are at that time entrusted to the estate agent and deserving of the same protection which the deposit will have under the Bill. For example, there may be a repayment on a mortgage—the first repayment—and the estate agent may have been active in setting up the arrangement for the mortgage in the first place and agreed to pay the first instalment on behalf of the client. Equally, the agent might be required under the terms of the sale of a property to ensure that it was insured from the outset and so might accept money from the client to make certain that the first instalment of insurance premium was paid. One is not here asking for continuing protection in respect of a mortgage over 25 years, say, or in respect of rental payments over a 14-year lease. What is in mind is sums of money, possibly cash, handed over at the time the house is being purchased and entrusted to the estate agent, which we believe should be protected. If the Minister had come forward with a proposal for regulations to define these other classes of clients' money, we would not have hesitated to accept that this was likely to be technical and unsuitable for inclusion in the Bill. But it is disappointing that he can offer nothing but the very limited amendment on the Amendment Paper, which is consequential on the mixed hereditament amendment that he has already moved.I am sorry to resort to the formula of a regulation, but I believe that that would enable us—indeed, give us the obligation—first to consult the estate agency profession and to define fairly carefully the sort of sums that we have in mind. On that basis, I should be grateful if the hon. Member would withdraw his amendment."—[Official Report, Standing Committee E, 5 December 1978; c. 113.]
I accept the Minister's comments on continuing premiums or mortgage payments, money paid to an estate agent that is being passed on to a building society. But the danger lies on the first premium or mortgage repayment, which might go to the estate agent before it has been completed with the building society or insurance company at the time of the purchase of the property. That is what my hon. Friend the Member for Romford (Mr. Neubert) is putting forward, and I accept his view. There is a danger at this point.
This is an important part of the Bill which is trying to offer the public protection in transactions on property. Money is the root of the doubts that the general public may have about their transactions. The Minister referred earlier to the modest first Government amendment. That does not touch the important matter of managing money.This amendment is perhaps inadequate in the terminology that the Minister would require, but it tries to ensure that there are no loopholes in this clause in relation to clients' money. With that in mind, perhaps the Minister will reconsider his decision on it. It would help the general purpose of the Bill to have some words added here which would be all-embracing for financial transactions.
One does not promise to look at something and then does not do so. I have looked at it. The main areas that we identified were payments to a building society and payments by way of an insurance premium. One can think of others, but to embrace them would make the scope of the Bill so wide as to make it a different measure altogether.In those two areas, I am satisfied that the agent would be acting legally as the agent. In those circumstances, a right of action would lie against the building society or the insurance company, and there would be redress. Somebody may fraudulently represent himself as acting for a building society when he has no authority. That would be a serious criminal offence. Protection cannot be extended to double-bank against every possible criminal offence. Generally speaking, there would be a right of action where a person was acting as an agent for those institutions. I am satisfied that there would be adequate protection for the smaller payments as well as the main protection for the deposit.
Amendment made: No. 7, in page 14, line 38, at end insert—
'(5) Any reference in this section to acquiring an interest in residential property includes a reference to acquiring, in a single transaction, such an interest together with other assets; and any reference to the consideration for the acquisition of, or to an intention to acquire, an interest in residential property shall be construed accordingly.'—[Mr. John Fraser.]
Insurance Cover For Clients' Money
I beg to move amendment No. 8, in page 18, leave out lines 39 to 46 and insert—
'(f) prescribe any matter required to be prescribed for the purposes of subsection (2A) below.
(2A) No person who carries on estate agency work may describe himself as an "estate agent" or so use any name or in any way hold himself out as to indicate or reasonably be understood to indicate that he is carrying on a business in the course of which he is prepared to act as a broker in the acquisition or disposal of interests in residential property unless, in such manner as may be prescribed,—
(a) there is displayed at his place of business, and (b) there is included in any relevant document issued or displayed in connection with his business,any prescribed information relating to arrangements authorised for the purposes of this section.'
With this we may take Government amendments Nos. 9, 10 and 11.
These amendments appear more frightening than they are. Both the professions and the Members of the Committee were concerned about the case of an agent who did not take deposits and who therefore had no insurance arrangements and no bonding arrangements. They felt that it might be difficult for the public to distinguish between those agents who did not take them and had no insurance arrangements and those who did. Some of the arguments put by members of the profession to the effect that there should be universal bonding were motivated by the worry that members of the public would not be able to distinguish between one and the other.Originally we provided some protection, namely, that the agent would have to exhibit the certificate of insurance, or details of the bonding arrangement inside his office. I considered the comments made in Committee and felt that one of the best ways of dealing with this would be to ensure that the agent, on his notepaper or on the particulars of property, communicated to the public whether he was a bonded agent. When those statements were made or not made, the trading standards officer, his competitors, or his bankers and solicitors could check whether he had these arrangements. This public statement of cover or no cover, coupled with the other powers we have for the display of certificates, will enable the public to distinguish. It will be an added protection, and I hope that the amendment will be welcomed.
We look on this amendment with considerable interest because the Minister is quite correct in saying that there was anxiety in the Committee and outside the House about whether the public are likely to be sufficiently protected, and whether they will be able to know which agents are covered.The Minister has suggested that the claim will be made that a man or woman is a bonded estate agent. I am more of the opinion that the clause defines the use of the term "estate agent". Is it a correct reading to say that only those who are bonded and provide this protection will be able to use the term "estate agent"? If so, what is accomplished here in one clause is what took a whole Bill to accomplish in the case of insurance brokers. I would welcome the Minister's economy and ingenuity in achieving that in such a small amendment. Certainly it has a lot to commend it. The profession itself must make known to the public where their best interest lies. It must lie with people of qualification, and if the amendment achieves that end it is to be welcomed. To go on from stating the importance of insurance cover for clients' money as provided under clause 16 is to raise again the question why in clause 17 there should be exemptions from this all-important insurance cover. This, too, has caused anxiety. In what circumstances will it be considered appropriate that there should be exemptions granted from what would seem to be a vital element of protection in the Bill?
The amendment does not go as far as the hon. Member thinks. It provides that someone who carries on estate agency work may not describe himself as an estate agent unless he displays certain prescribed information. It is really only a form of words to link the prescribed information to estate agency business. It does not go so far as to do what another Act of Parliament did for another profession.The hon. Member for Romford (Mr. Neubert) asks about the exemptions in clause 17. In Committee I drew an analogy with third party insurance under the Road Traffic Acts. It may be that a bank, an insurance company or a building society incidentally carries on some estate agency business. But it may be that its deposit or financial reputation is so outstanding or so great as to make it unnecessary to require the deposit of a bond. I emphasise that the powers of exemption would be exercised sparingly in a commonsense fashion. There is one further matter which I think I should draw to the attention of estate agents, even under the present law. It has come to our attention that many agents are not putting the names of all the partners on their notepaper. The law already requires them to do so under section 18 of the Registration of Business Names Act 1916. I understand that the Registrar of Business Names recently wrote to the main professional bodies reminding them of the obligation. The giving of names is a small but significant protection for the public in that they then know with whom they are dealing. This might be a convenient place to put on record the Government's feelings on the matter, even under the existing law.
May I have one point about exemptions clarified? As I understand it, if the estate agents do not, take deposits they need not be bonded. Does that mean that if they are not bonded and do not take deposits they may not use the words "estate agent"?
No. The amendment does not have that effect. It simply requires the prescribed information if somebody is an estate agent. That is putting it briefly but properly.
Amendment agreed to.
Amendments made: No. 9, in page 19, line 1, leave out '(2)( f) above' and insert '(2A) above,—( a)'
No. 10, in page 19, line 3, at end insert 'and
(b) "relevant document" means any advertisement, notice or other written material which might reasonably induce any person to use the services of another in connection with the acquisition or disposal of an interest in residential property.'.
No. 11, in page 19, line 5, after '(1)', insert 'or subsection (2A)'.—[ Mr. John Fraser.]
I beg to move, That the Bill be now read the Third Time.I move the Third Reading with some pride and pleasure. For 90 years hon. Members on both sides of the House have tried to obtain a Third Reading for legislation of this nature. I am pleased that even at this late hour we are able to do it on this occasion. I am sure that the Bill is welcomed on both sides of the House, and especially by those who buy houses, for some of whom it is the most important transaction in their lives. I conclude by thanking members of the Committee for the helpful and constructive way in which they assisted with the passage of the Bill. I particularly thank my now silenced lion. Friend the Member for Enfield, North (Mr. Davies), without whom, as they say, this would not have been possible.
Perhaps I may take a little longer further to echo the tribute paid to the silenced hon. Member for Enfield, North (Mr. Davies), whose original Private Member's measure formed the basis for this Government Bill. In some small respects it is a better Bill than when we discussed it on Second Reading, following the amendments made in Committee and tonight.In addition, assurances were given on a number of points of anxiety to members of the profession—that they would be consulted on the definition of "undesirable practices" in clause 3; that an estate agent would have a chance to put his case to the Director General of Fair Trading before a decision was made affecting his livelihood; that the appeals panel should almost certainly include those with experience of estate agency work—the Minister undertook to consult along those lines—and that the professional institute would also be consulted when it came to laying down minimum standards of competence. That is a very important feature of this Bill, of which we have had very little indication in our discussions so far. We await regulations. Finally, the profession was anxious that there should be some provision that those practising now, not being otherwise undesirable in their activities, would not be excluded by the provisions of this Bill. The Bill still does not go as far as some, notably the professional institutions, would wish. For example, they would want solicitors to be excluded. However, it is a valid argument to say that solicitors are already regulated by conditions which are at least as stringent as those imposed by this Bill on estate agents. It has not been extended to commercial property. In our view, there is no ground for that as large business organisations are well able to look after themselves. At least two-thirds of them professed themselves satisfied with the service of their estate agent and only a very small fraction found their estate agent's service to be poor. In those circumstances, there hardly seems any reason at all for widening the scope of the Bill to that extent. For the same reason it is not extended to all estate agents. It never ceases to astonish me that the institutions are so enthusiastic to put their professional necks in the statutory noose. I can understand that after 90 years they may wish to make the most of this legislative opportunity, but I remind them and others that a similar Bill has already foundered once as a Private Member's measure last Session. With the Government rapidly approaching the precipice of an unavoidable general election, it could well stand a chance of lapsing a second time. Any attempt to expand the Bill's scope and/or to increase its cost at this stage might well prejudice its passage through Parliament. Friends of the Bill, whether members of the profession or prospective home buyers, would be well advised to settle for the measure as it stands. The Bill strikes a sensible balance by its deterrent powers. It avoids the twin excesses of over-regulation and overprotection. It concentrates on the worst abuses to which the house buyer is vulnerable, offering a substantial degree of protection in what remains for most people the single most important transaction in their lives. They will still have to keep their wits about them, but that is as it should be. At the same time, the Bill will undoubtedly enhance standards in the estate agency profession. It is for the profession to publicise much more widely the advantage of dealing with estate agents of proven competence and integrity. It is far better to have this self-regulation, strengthened by sanctions, than to hanker after a costly bureaucratic Government licensing system which would confer the State seal of approval on every practising estate agent. The Bill, however, will not preclude entry to the profession except by reference to minimum standards of competence and practical experience. It will not stifle innovation or enterprise. On the other hand, it will not totally prevent the activities of fly-by-nights and other unscrupulous operators. But that is the price we pay for freedom. It is a price well worth paying. We commend the Bill and wish it well on its way to another place. We shall hope to see it return here in as short a time as possible.
I wish on Third Reading simply to register one or two of the points that we expanded at far greater length when we considered a similar Private Member's Bill in the last Session of Parliament.I welcome many of the provisions of the Bill as a consumer protection measure. It is very helpful and desirable to have on the statute be measures which protect the public against those who might misuse public money. To that extent there is a great tradition of protection of the public, dating from the moneylenders' Acts of bygone times, and it is quite right and proper that there should be protection for depositors' money. In that sense, I very much welcome the Bill. I also welcome the provisions in the Bill which require bonding for clients' money and separate bank accounts for depositors' money. In that respect, I welcome the measure and think it could help to curb some of the unfortunate practices which have received publicity over the years. The clause I do not like in the Bill is the one which is, I feel, a bad omen for the future, clause 22, which gives the Secretary of State power to designate some body which can prescribe minimum standards of competence. That is where I fear that the closed shop will start to creep in. I agree with my hon. Friend the Member for Romford (Mr. Neubert), who expressed some surprise at the enthusiasm of organisations which seem so keen to put their heads into the statutory noose. It never ceases to surprise me that organisations and individuals outside, who are the first to complain about the excesses of bureaucracy, and who complain about interfering legislation, are the first to suggest more legislation and more rules and regulations with which they will have to comply. I do not blame the Minister of State for this at all. The philosophy that he has pursued in this legislation has been much better than that pursued in other similar legislation—for example, the Insurance Brokers (Registration) Act. He has avoided the business of registration or licensing, but the seeds of the licensing and registration system are contained in clause 2. A future Government will have to implement that clause. I hope that the professional bodies will not be able to exert pressure on the Government of the day to enforce what, in effect, would be a closed shop, to keep out innovation and to prevent—
There was a time last year when I used to think that the worst five-letter word in the English language was the name of the hon. Member for Faversham (Mr. Moate). I think that he recognises that I took account of the points that he made when last we debated the Bill and changed clause 22 to give myself the power to prescribe a degree of practical experience. The hon. Gentleman was worried about academic qualifications. I took his point on board and the Bill was altered in that respect. I hope that he will give some credit for the alteration that was made because of his genuine concern which I then recognised.
I am grateful to the Minister for his comments. Perhaps he would also acknowledge that when we engaged in extensive debate on the last occasion it was not out of a desire to hold up other legislation but because of a reluctance to see on the statute book more interfering legislation. My opinion of the Minister went up on that occasion, because he was attempting to avoid some of the pitfalls that others had not avoided. The simple inclusion of "practical experience" is not a complete safeguard, because that can be built into regulations and become a barrier to the innovator and newcomer wanting to set up in estate agency.I conclude by registering my support for the consumer protection element in the Bill as it is today. To go back to the previous occasion, I expected that Private Member's Bill to succeed towards the end when I thought that we had reached a degree of understanding about these matters. The consumer protection provisions are good, and I welcome them. I read with some trepidation clause 22 and the possible threat of a closed shop on estate agency. I hope that my fears will prove unjustified. I hope that the Bill will do what it sets out to do—protect the public—and will not in any way diminish the competition that in the end is very much in the public interest.
I am drawn to my feet by the few words that we heard from the hon. Member for Faversham (Mr. Moate). I am grateful that they were a few words. I thought that we might be here for another half an hour.I welcome the Bill and the fact that it has reached this stage. I hope that it will pass rapidly through the other place so that we get it on to the statute book this time. The response to the hon. Member for Faversham is that it is only fair to say to people who have practised or earned their living from estate agency over the last 10 years, particularly the more responsible bodies—including my own, the Royal Institution of Chartered Surveyors—that what has taken place is amazing. The attitude towards competition and presentation has changed beyond all belief. If 10 or 15 years ago I had put out the kind of advertisements which we see today—I welcome the way in which properties are properly presented and the competition which takes place over fees—I should have been hounded out of the institution. These innovations are all to the good. But we should give the profession some credit for the change in attitude which has taken place. I hope that it will continue. I believe that the Bill is worth having. I think that it could have gone a little further, but I understand the restrictions which do not make it possible. I add my congratulations to the hon. Member for Enfield, North (Mr. Davies), who started out on this path, and to the Minister, who seems to be able to come to the Dispatch Box without notes and deliver a speech, for which I admire him enormously.
I wish to add my good wishes to the Bill. It is a better Bill than when it started, and I congratulate the hon. Member for Enfield, North (Mr. Davies) who introduced it. The amendments which have been made have improved the Bill to a great extent. It will cover an area of protection that is needed by the public.I am only sad that the Bill did not go a little further and deal with the rented sector. Sooner or later we shall have to deal with the question of accommodation bureaux, because there are problems in that regard. I wish the Bill well.
Question put and agreed to.
Bill accordingly read the Third time and passed.