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Code Of Practice

Volume 98: debated on Wednesday 4 June 1986

The text on this page has been created from Hansard archive content, it may contain typographical errors.

'(1) The Commission shall, after consultation with the Lord Chancellor and the Director-General of Fair Trading, prepare, publish and administer a code of practice with regard to the provision by building societies of conveyancing services.

(2) The code of practice referred to in subsection (1) shall (inter alia) make provision for the manner in which and the standards to which conveyancing services shall be provided by building societies and shall in particular make provision for protecting persons for whom conveyancing services are provided by building societies from conflicts of interest that might otherwise arise in connection with the provision of such services.

(3) Notwithstanding any practice rule made by the Council of the Law Society under section 31 of the Solicitors Act 1974, a building society operating in accordance with the code of practice referred to in subsection (1) above may, subject to such terms and conditions as the Commission may state, provide conveyancing services generally, including the provision of such services to persons to whom advances are made under section 10 of this Act.

(4) A building society not operating in accordance with the code of practice referred to in subsection (1) above may provide conveyancing services, but only to persons other than those to whom advances are made under section 10 of this Act.'.— [Mr. Weetch.]

Brought up, and read the First time.

With this it will be convenient to take Government amendments Nos. 409 to 412.

It is nice to see the Solicitor-General in his place. We have crossed swords on this matter before. There was a cold wind of conflict in Committee, but with the new clause I seek to bring a warm breeze of conciliation in an attempt to find a way through some of the difficulties. I hope that when the Solicitor-General replies in the euphemistic prose of the Law Officers he will express some sympathy for what we have to say.

One of the great issues of contention in the Bill has been whether building societies should be able to offer conveyancing services to borrowers. To put it simply, is it safe to obtain a mortgage and a conveyancing service from the same society? The main lines of argument have been debated a number of times both in the Chamber and in Committee. I do not intend to cover the ground in detail again, as the main lines of the disagreement are well marked out.

It remains our view that it is in the consumer's interest that building societies should be able to offer conveyancing services to borrowers. That is the principle of the argument and it is supported by the Consumers Association, the National Consumer Council and the Building Societies Association. In a Consumers Association survey in 1984, 81 per cent. of those interviewed said that they would be pleased to have building societies offering conveyancing services. Many thousands of owner-occupiers throughout the country would like to benefit from such services. It is not a matter of whether the Government or the Opposition want it. The consumer wants it. From the point of view of a consumer or free market society, the consumer is king, and if he or she wants the service that should be the deciding argument.

I will lay out briefly the basic framework of the case. First, there is considerable consumer demand for such a service. Many owner-occupiers would welcome a conveyancing service as part of a one-stop shopping package for housing services.

Secondly, there would be more freedom of choice for the consumer. That argument should appeal directly to the Government. At present, the consumer can choose an independent firm of solicitors. Shortly, he will be able to choose a firm of licensed conveyancers. The choice would be widened considerably if the consumer could use the same people through the medium of his building society.

Thirdly, such a change could lead to lower costs. The conveyancing industry in this country has long resembled the putting out system in the 18th century. Year after year, thousands of documents asking ritual questions are shuffled out from small workshops and thousands of other workshops return the same documents with ritual answers. Building societies offer scope for change with economies of scale and a large throughput of conveyances and mortgages with beneficial effects in terms of lower costs.

The main argument against the proposition has been that conflicts of interests will arise if the recipients of mortgage finance wish to use building society conveyancing services. I accept entirely that conflicts of interest may arise, but it is a quite different matter to suggest that they cannot be resolved, and we contest that argument at every stage.

The new clause seeks to provide yet another guarantee against any possible mal-effects of the very occasional conflicts of interest that may arise. Under clause 33(1) a building society is expressly forbidden to make the use of any conveyancing or other service obligatory because the consumer is in receipt of mortgage finance. Unfair pressure of that kind will be illegal, and the consumer will be totally free to go elsewhere if he or she wishes. That is the ultimate protection in a free market. If one does riot want the service, one goes elsewhere. That-should be good enough for any of us.

Moreover, the building societies will largely be using solicitors who have an established code of ethics and professional practice to deal with possible conflicts of interest. We are dealing not with fly-by-nights but with professional people who have accepted practices which are ethical. If conflicts of interests arise, therefore, we look to the professional standards of those involved to find ways out of the difficulty. As I understand it, the Law Officers Department says that that is not the position. We beg to differ and we are putting forward a code of practice as a constructive way out of the difficulty.

I point out to the Solicitor-General that in the critical area of the mortgage deed and the terms of finance for the borrower, the same solicitor may already act for the building society and for the borrower in millions of transactions every year, and very few conflicts of interest arise.

7.30 pm

At the end of the day it is an argument not about conflicts of interest but about which organisation is to take the biggest share of the conveyancing market when it is opened up to free competition. The legal profession is trying to protect an established service which has always borne heavily on the owner-occupier.

To explain the basic principle of the clause, we are bending over backwards to meet every objection from the Lord Chancellor's Department. If the proposed code of practice is not right, we shall invite the Lord Chancellor to frame another. We cannot do more than that. The Solicitor-General may argue that it is impossible to frame any code of practice that would resolve conflicts of interest but we bee to differ. Conflicts of interest can be resolved.

The problem is that there is an inherent conflict of interest if somebody operates for a building society and also for the customer. In the code of practice it would be necessary to say that a solicitor, if he felt that there was a conflict of interest, should refuse to act for both parties. There could be a conflict of interest. Most of us believe that almost all societies are good and fair. But let us suppose that a society put some nasty clauses in its mortgage contract. Would a solicitor tell every customer about that? Would that society employ a solicitor who would tell customers about those nasty clauses? There would need to be a code of practice not for the solicitor but in regard to the mortgage contract. If we could get a sensible mortgage contract which we knew was decent, fair and above board, without onerous resettlement clauses and so on, we could say that that had got rid of the most important conflict of interest because the solicitor would no longer need to comment on the mortgage contract. That is the real conflict. I do not know how the hon. Gentleman's new clause would solve it.

I am grateful for the intervention, because it throws into sharp relief some of the issues that have to be debated. In the latter part of his remarks the hon. Gentleman may have pointed one way forward by proposing certain structural changes. Conflicts of interest do and will arise. Is there a way round them? The main consumer organisations think that there is, and they have put forward suggestions to the Lord Chancellor's Department. Perhaps we shall hear from the Solicitor-General about the to-ing and fro-ing that has been taking place. Consumer organisations and many members of the legal profession are confident that the conflict can be resolved.

The new clause provides for discussions with the Lord Chancellor's Department about what should go into the code of practice in an attempt to find a way out of the difficulties. The Solicitor-General should accept that it shall not be illegal for a building society to offer conveyancing services to a recipient of mortgage finance.

The number of conflicts of interest will be very small, and it should not be beyond the wit of hon. Members to find a way out of the difficulties. Therefore, the new clause is put forward in the constructive hope that the Government will consider the whole point and say that in principle we are right, but they will think about the detail and bring forward a solution at a later stage.

I speak with a feeling of resignation, because we have been over the ground so many times. The arguments that we have put forward are accurate. I do not want them to be devalued by repetition, but they have to be put forward.

In attempting to stop a building society from doing conveyancing for people who are getting a mortgage from it. the Government are betraying the promises that were held out to me. It is being done on a specious pretext, in a strictly dishonourable fashion. That point has to be reiterated because of the way in which the Government have persevered in their position.

The Bill allows building societies to provide conveyancing services, but the Lord Chancellor has said that the regulations under which a society will be allowed to do so will be so defined that a society will be able to provide conveyancing services only for the customers of other building societies and not for its own customers. The principle is being conceded, but at the same time the Government are specifying that it will be under rules that will make the practice so unattractive that building societies will not do conveyancing. It is a confidence trick to fulfil the principle in such a fashion.

The Government are betraying the promises and pledges given to me by the Solicitor-General and reiterated in the House by the Prime Minister. There is no point in being mealy-mouthed about it. The Solicitor-General promised that building societies would be allowed to do conveyancing for their own customers, not for the customers of other building societies. It was clearly envisaged that that would be part of a comprehensive service provided by building societies. On the basis of those promises, I withdrew my House Buyers Bill early in 1984.

It was clear from the Solicitor-General's speech in Committee that the promises were validly made. I do not think that he has been converted to believe that the promises were wrong or that the practice cannot be conceded. He has simply been overruled by the Lord Chancellor. That is a strong argument for getting rid of that medieval anachronism and having a sensible Minister of Justice answerable to the House.

The Solicitor-General has been put in a difficult and embarrassing position. I sympathise with him, but at the same time he is betraying the promises that were held out to me. He may have been overruled by the Lord Chancellor and is not being allowed to fulfil those promises, but that was not made clear in Committee. He did not say, "I promise this but, of course, I cannot promise anything because my boss, the Lord Chancellor, can immediately tell me that black is white and I shall come to the House of Commons and say that black is white." Since the Solicitor-General made the promise to me, the Lord Chancellor has begun to use the conflict of interest argument as a way of resiling from the promise.

That process is crude. It is clear that it is the Lord Chancellor and not anybody else who is doing this. Ministers in various Departments and former Ministers have said to me privately, "We know that you are right. It will come; do not get over-anxious and push it too far. It's Hailsham. We cannot do anything about it." Clearly the will of one man is being imposed in an area about which he has little background knowledge or information and for which he has no responsibility. He is arguing that customers of building societies should receive independent financial advice. That is a financial matter, not a legal one.

At the same time, the Lord Chancellor is betraying the Government's policy on competition. We seek to extend the principle of competition through the new clause by allowing more organisations to compete to serve consumers. I should have thought that the whole Government. apart from the Lord Chancellor, were committed to that principle.

That is the position, and it has been brought about by a dirty trick, a betrayal and by dishonourable behaviour by the Lord Chancellor. It is directly in his interests to behave in this fashion. It is possible that the income of solicitors will suffer if they lose conveyancing to building societies, but I do not think that they will. I believe that they will maintain a major share of this expanding and lucrative market.

Why should house buyers subsidise the provision of other legal services by solicitors, as they are being asked to do? Secondly, if the income of the profession suffers, it is the Lord Chancellor's responsibility to make it good by improving and extending the legal aid scheme. It is not our responsibility to give solicitors a feather bed to rely on financially to protect their income from competition. The Lord Chancellor's financial interest is that he is responsible for the allocation of legal aid. He is having difficulty in providing legal aid on the level that he would wish because there is a power in the land superior to the Lord Chancellor — the Treasury — which is saying, "Thou shalt not hand out this money."

Is the hon. Gentleman aware that the provision of legal aid is achieved through a Vote which is not cash limited and which has been growing steadily since legal aid was introduced? Surely he is talking, not about the provision of legal aid as such, but about the fees payable to banisters under the scheme?

That is right, and the Lord Chancellor is in hot water with the profession over those fees. It is wrong that that influence on the Lord Chancellor should lead him to say, "I shall protect the legal profession from this competition which might affect its income because I cannot make as full provision as I should under the legal aid scheme." The Lord Chancellor has a conflict of interests which is resolved in favour of his profession— the legal profession. His motivation is extremely doubtful.

The conflict of interest argument which has been advanced for not allowing building societies to provide conveyancing services for their customers is spurious. It is only an excuse, and that is widely agreed by most knowledgeable people.

I am a solicitor, and I have listened with interest to what the hon. Gentleman has said about a conflict of interests in the case of a solicitor acting for both a building society and a borrower. Does the hon. Gentleman think it would be a good idea for a solicitor to act for a client who is buying a house and for the builder who is selling the house? A great deal of money would be saved, but the Law Society does not allow that to happen because, in its wisdom, it believes that there will inevitably be a conflict of interests. If a solicitor acts on behalf of a builder, who may be an important client, he cannot pay proper attention to the individual who is buying from the builder. If a building society employed a solicitor to act for a purchaser, would that purchaser not he put in exactly the same position, and would that not be undesirable?

7.45 pm

In answer to that I shall cite the reply of the BSA to the Lord Chancellor, who put forward the argument about conflicts of interest. The letter stated:

"the conflict of interest to which you refer arises regardless of the status of the conveyancer (i.e. independent or employed) if he has accepted instructions from both parties to the transaction. While in either case the ultimate paymaster is the borrower, in practice the only way of ensuring that a borrower receives totally independent advice is to incur the cost of separate professional advisers on both aspects of the transaction."
In other words, a conveyancer can act for both parties, in which case there is a conflict of interests, and the Law Society does not stop that. Where a conflict of interests is resolvable in favour of an extra fee for a solicitor, it is permissible, but where it is in favour of an employed solicitor, it is not permissible. The argument folds on that basis and on the reality that people face when buying houses.

The Which? survey shows—this fact is demonstrable from all our experiences — that people go first to a building society and subsequently to a solicitor, whom they regard as a type of mechanic. He has a function, but it is less important than securing a mortgage. In most cases the terms of the mortgage are agreed before people go to a solicitor for the subordinate function of conveyancing. We are not talking about a world where people want or get independent financial advice.

In most aspects of the transaction the interests of the lender and borrower are identical. People expect to receive advice as purchasers about the property, but not as lenders or borrowers. Indeed, solicitors are not qualified to give independent financial advice about a mortgage. They do not have the experience, they are not financiers and they are not answerable for their financial advice. It has been argued that people need independent financial advice about a mortgage, but the evidence from surveys is that they do not want it or receive it. Therefore, the conflict of interests argument is specious.

The problem is not advice on the mortgage as such in the conventional sense. Almost all building societies and banks charge almost exactly the same interest rate. The customer wants and needs advice on the clauses in the mortgage contract because it is like no other contract that any of us ever signs. It does not specify the price of the purchase, but says that the purchaser will be charged an interest rate such as the building society may care to choose at any time during the following 25 years.

I am anxious that the hon. Gentleman should have his way on this matter, if we can resolve this issue. Some building societies are charging different rates for old and new borrowers, so there is no safeguard on interest rates. If we could get a code of practice which stated that building societies must charge the same rate to both existing and new borrowers, the client would have the safeguard of knowing that he was being charged the market rate. In that case, I would not mind if solicitors did not comment on the contract, except in so far as some societies build in onerous resettlement clauses so that if a customer does not like his interest rate which may have been pushed higher for existing borrowers, a customer is partially locked in because it is expensive to re-contract.

If we can get round that problem, I would agree with the hon. Gentleman. I wish that he would comment on that because it is a conflict of interest for everyone who signs a mortgage contract, not only for a few.

That is a wide-ranging problem. It is a problem on which solicitors in independent practice do not give advice to their clients. Why, therefore, should that be singled out as an area in which only employed solicitors working for the building societies have to give advice and in which people are disbarred from turning to those employed solicitors by the conflict of interest in that area. That point is not valid because it applies to all solicitors. What might be valid in the hon. Gentleman's argument is that solicitors can advise on the terms of the mortgage. That is another point. But it is interesting to note from studies carried out by building societies of their customers —the Halifax building society surveyed its customers and, more importantly, its branches—that solicitors do not give advice on the terms of the mortgage. That is the important issue. It is so rare for advice to be given that, for practical purposes, it does not exist. That is another area where a conflict of interest is alleged, but which in practice does not worry people.

I echo the remarks of my hon. Friend the Member for Ipswich (Mr. Weetch) that solicitors, whether employed or in private practice, are bound by the practice rules. Those practice rules can and should be used to obviate exactly the problems that have been held out as producing a conflict of interest. It is also important to emphasise that Ministers, especially the Lord Chancellor, have never specified what that conflict of interest is. We are asked to proceed on the basis of assertions and a specious argument which is never demonstrated and never proved. The Lord Chancellor never defines what he is talking about. Pressed to give a definition, he retreats into a cloud of gas and assertion which is never demonstrable. The practice rules will take care of the conflict of interest.

In Committee, the Solicitor-General defined the conflict of interest in reply to questions from me. He said that a very small conflict of interest was possible over title, but that in practice interest was almost the same for the borrower as for the lender so that it was not significant. But he thought that the serious conflict of interest arose on commenting on the terms of the mortgage. That is the conflict of interest upon which I keep inviting the hon. Member for Great Grimsby (Mr. Mitchell) to concentrate, because I believe that it is the sticking point for the Government. Much as I agree with everything that the hon. Member for Great Grimsby has said—I can see that he is upset about not getting the concession that he was expecting—I think that that is a genuine conflict which we must resolve. I have suggested some ways of doing it, but the hon. Member may not agree with those.

We are agreed that the terms of the mortgage are rarely queried by independent solicitors. Therefore, on the basis of a service that people do not receive, other people will be excluded from a service which would be beneficial, competitive and cheap. There is no more specious argument than that.

On the conflict of interest, I rest my argument on the fact that solicitors do not give independent financial advice and are not qualified to give it. They are not legally responsible for any independent financial advice that they give. Indeed, independent solicitors often have a direct interest in channeling people to a building society with which they have some preferential financial arrangement. That in itself is a conflict of interest. Let us not give the impression that independent solicitors give independent advice and that that can be used as an excuse to say that people going to a building society should have independent advice. They will not necessarily get it from independent solicitors.

The arguments about conflict of interest are specious. However, the Lord Chancellor stands bloody but unbowed at the end of the arguments still asserting what he cannot prove and will not demonstrate. He sits there like a garrulous Buddha making assertions about a conflict of interest which, for practical purposes, does not exist on any serious scale.

The Solicitor-General made a charming speech in Committee, the gist of which was that this matter can be considered later. The message I received from that was that, in two years' time, when we have a sane or a different Lord Chancellor, the Government will fulfil the promises that they made. That is not good enough. We have a chance to do it now in the Bill, in terms which entrench the proposal by the building societies for a code of practice. I want a code of practice for the estate agency side of building societies. I certainly want it to be established for the conveyancing side of building societies. It is a chance to cover all the points that the Solicitor-General would want covered—even those points that the Lord Chancellor might want covered—in a clear and defined form which allows the solicitors to operate for the building societies.

I shall not quote the code of practice, because it has been circulated to hon. Members, but it provides that the customer shall be warned off in certain circumstances, that the solicitor shall give a precise definition of the services that he provides, what he is doing and what he is not doing, that he shall specify the fees and the charges and that, in some cases, he shall not act. The suggested code of practice could be rewritten. It might be the basis for a better code of practice. It could be expanded and better defined. We are arguing simply that we should write it into the Bill so that we can set down a respectable and effective code of practice.

The Lord Chancellor holds out some prospect of that in his letter to the building societies. I hope that it is not just a fob-off. He says:
"This need not be the end of the matter."
He also stated that it might be possible
"to overcome the difficulties which concern me … The best way forward is to continue work on a code of practice in the context of work on those rules."

If the Lord Chancellor is of that opinion, we should be obliging him in the Bill by specifying a code of practice which can be worked out subsequently.

I hope that we can pass the proposal, which concedes what the Lord Chancellor wishes, because it opens the way to the important principle of competition to serve the consumer. That is all that we are trying to get. Here is an expanding market in which house prices are increasing and in which the fees payable are increasing, in which much money is flowing into the market and in which we need competition to serve the consumer. We need competition for shares of that expanding market. It is wrong that solicitors should be feather-bedded by the exclusion of the competition from building societies in an area where, if building societies were allowed to operate, they could provide a comprehensive service such as solicitors should provide.

Following the pattern of Scotland, English solicitors are setting up solicitors' property centres. I welcome that. It is a beneficial development and an important advance. I am glad to see solicitors competing for their share of the cake. I am sorry that the Law Society is so laggardly in its rules.

Is the hon. Member for Great Grimsby (Mr. Mitchell) interested in allowing only building societies to act for both parties, or is he in favour of banks also acting for borrowers? I remind him that there have been some unfortunate incidents involving banks. Would he be happier if consumers were represented by solicitors also acting for Johnson Matthey? Would he be happy for estate agents selling a house also to employ a solicitor to act for their purchaser? Would he be happy for solicitors to act for both parties? Would he be happy for licensed conveyancers to act for both parties? All those instances would save money, but they would not protect the public.

In answer to that valid point, I must say that I am in favour of maximum competition and of people competing to serve the consumer comprehensively. The proposal for banks to do conveyancing came not only from me but from the Government. It was the Government's proposal that banks and building societies should be allowed to do conveyancing using employed solicitors for the range of property, registered and non-registered. My Bill restricted it to registered property. In this instance, we are talking only about building societies.

The principle of competing to provide a comprehensive service is valid. I should like solicitors to provide a comprehensive service through their property centres and estate agents through having employed conveyancers. Building societies should provide a comprehensive service by entering all aspects of house provision. I must emphasise that that is important, as it stops the drift of building societies into becoming big financial institutions. If the road to provide a comprehensive service to the house buyer is barred by the Government or the Lord Chancellor's whim, they will be forced much more in the direction of financial institutions and away from the prime and original purpose, which is service to the house buyer. That is what I want to see. Therefore, I want comprehensive competition. I do not see why building societies should have to face it with a ball and chain tied round their leg by Lord Hailsham when the solicitors can provide property centres, and the estate agents can do conveyancing.

8 pm

The costs of conveyancing have come clown substantially with the advent of competition. However, it is a rich market and I want to keep the pressure up. The consumer has no responsibility to provide, in any guaranteed way, an income to the legal profession for other aspects of legal business. There is every reason for expanding competition. What we are arguing for today will undoubtedly come. Even Lord Hailsham cannot hold back the tide of progress for ever. We should take the opportunity to allow competition on a sane, sensible and regulated basis which takes care of so many of the unrealistic fears which have been voiced by Lord Hailsham.

This is an argument on which right and honour are entirely on the side of the change we are proposing in this new clause. It is not right for the Government to behave in this fashion. It is dishonourable to betray the word they gave me as a Back Bencher. There are other important issues at stake. All the opinion polls show that people want the building societies to be able to provide a comprehensive service. The consumer organisations, which are there to protect the consumer and speak for them, want it and they say chat there is no problem. The building societies want it and can provide economies of scale and can use their computers and provide the kind of comprehensive service that the house buyer wants. Real competition and a genuine improvement in the range of choice to the consumer requires that comprehensive service. I can see no logic in the Government's position if they refuse the proposal.

It is unfair of the hon. Member for Great Grimsby (Mr. Mitchell), in his undoubted enthusiasm and sincerity, to say that the Lord Chancellor is guilty of just a whim. I believe that when the Government gave the pledge they meant to honour it and they have now looked into the problem in more detail and it has turned out that serious problems are involved.

As the hon. Member for Great Grimsby knows, in principle I am strongly in favour of what he wants, but I have bumped into the conflict of interest. I should like to explain briefly why solicitors have never looked at mortgage contracts in detail, although they should. Perhaps the hon. Member for Great Grimsby will ponder on the fact that until recently we had a cartel of building societies of which many people disapproved. I did not disapprove because, since they were mutual friendly societies and non profit making, it was fine by me if they jointly set the interest rate. If they had been using the cartel to stuff up the interest rate to make vast profits and had been profit maximising plcs, then, of course, I would have been against the cartel. However, a cartel operating in a mutual society movement is nowhere near as bad as a cartel in a profit maximising environment.

The solicitors were faced with the fact that the building societies were a cartel. They fixed a common interest rate and, crucially, until recently building societies always charged the same interest rate for their existing borrowers and their new borrowers, which was the cartel rate. Therefore, why should a solicitor bother to look at a contract where the interest rate was set to suit the market at the time? Even if the contract said that the borrower would be charged such rate as the building society may choose from time to time, in practice, every solicitor knew that that meant the borrower would be charged at the cartel rate. Therefore, solicitors got used to not bothering too much about the mortgage contract. Incidentally, given that the suppliers of mortgages have been praised by all parties in the House while they have been mutual societies operating specifically to help home ownership, there was probably little need for the solicitors to feel that they were dealing with a bunch of crooks who might be trying to rip off the customer.

However, we are now introducing a Bill in an age when the cartel has gone and where a number of building societies, I am sad to say, have started the practice of cutting the interest rate for new borrowers only and leaving it up for existing borrowers. That means that one could be heavily penalised in a way that is not specified in the contract. It should be pointed out that the contract does not safeguard a borrower from building societies charging two different interest rates. I would prefer the Government to have a mortgage Bill that stopped that nasty practice.

In addition, we should get rid of onerous resettlement clauses. If one is locked in by the higher interest rate for the existing borrower and there is also a big penalty for settling early, one cannot re-contract and become a new borrower at a lower rate with a different society. If we got rid of those practices, I would go all the way with the hon. Member for Great Grimsby and say that I could not care less whether solicitors looked at the mortgage contract. However, we do not have those safeguards.

I have suggested to the building society movement that it should have a code, of practice on mortgages. If the movement produced such a code, I do not believe that the Solicitor-General would now be having to get up to make the speech that we all know that he is about to make. He said in Committee that the only major conflict of interests that needs to be resolved is the mortgage contract.

The hon. Member for Great Grimsby and the hon. Member for Ipswich (Mr. Weetch) cannot get away with saying that that is a minor conflict or that it relates to only a few borrowers. In the new competitive environment that we are creating, where the mutuality and charity status of the movement may become a more bracing and competitive attitude, we cannot be sure that mortgage contracts will always be as if they were guided by a cartel in a charity or mutual type movement. We are going into a different world. Whatever solicitors have done in the past, they must start looking at the mortgage contracts that they are letting their customers sign.

The Lord Chancellor is not asked to do what the hon. Member for Great Grimsby says and ask what solicitors are doing—we all know that they have not been looking at mortgage contracts. The Lord Chancellor's job is to ask what they should be doing. They should be looking at the mortgage contracts and they should not operate where they have a conflict of interests.

The hon. Gentleman is saying that there is an argument for requiring solicitors in independent practice to give financial advice to customers who come to them to arrange conveyancing. That is not being proposed. His argument put forward on the differential interest rate is valid whether employed solicitors do conveyancing or not. Therefore, it is irrelevant to his point.

I agree that it would be nice to get rid of the dual interest rate problem and the onerous resettlement clauses whether or not building societies do conveyancing. However, my point is still valid. Suppose all building societies had identical contracts, which I am not proposing, which had been scrutinised by the Lord Chancellor, the commission and every consumers' association and had been declared marvellous contracts and we knew that they would always charge the same interest rate, none of us would want the solicitor to bother to read the mortgage contract. Because there is a possibility of nasty clauses turning up in the mortgage contract, I believe that the Lord Chancellor has to say that it is the solicitor's duty to look at the contract, not in order to give financial advice, but to give legal advice to tell borrowers what the contract legally locks them into. At the moment, borrowers are locking themselves into a 25-year contract which does not specify the price they will pay. I do not believe that any of us should allow that. I should be delighted if the Government would take action to make each institution charge old and new borrowers the same interest rate and not have onerous resettlement clauses. Therefore, if people were ripped off they could re-contract at low cost.

I shall read part of the Building Societies Association's code of practice which is fairly hilarious. All hon. Members have received immense help from the Building Societies Association. As a result of its advice, the Bill has been dramatically improved. The following part of the association's code of practice makes the Lord Chancellor's case far better than I am able to do:
"If the conflict of interest is in respect of a matter which, in all the circumstances, is not of a minor character, the employed conveyancer shall forthwith cease to act for the client."
If a conflict of interest is not of a minor nature, the association's view is that its own solicitors should not act for the client. We are not talking about a minor conflict of interest. We are talking about a 25-year contract that people sign to purchase probably the most expensive object they will ever buy. Some people spend nearly half their annual income on mortgage repayments. We cannot say that there is no conflict of interest when a solicitor says, "Sign this contract which has been dished out by my employer. The contract is perfectly all right, but it does not specify the interest rate and it has a few onerous resettlement clauses which I shall not mention, because my employer would fire me if I did so."

I thank the hon. Member for Ipswich (Mr. Weetch) for his kind welcome to me in the debate. I return the compliment by saying that we have crossed swords on the topic on a number of occasions, but I have always welcomed and admired not only the dexterity of his attacks but the unfailing courtesy in which they have been expressed. I am grateful for the manner in which he moved the new clause. We are on interesting ground, but it is ground that has been thoroughly surveyed in Committee. Therefore, I believe that my response to the debate can be more succinct than otherwise would be necessary and courteous.

The Government's amendments are further positive evidence of the fact—as the Lord Chancellor, myself and other members of the Administration have repeatedly asserted—that the Government are strongly in favour of legislative progress towards integrated house buying services, subject only to the proper and sensible safeguarding of the customer against becoming the victim of a serious conflict of interest.

What distinguished the speech of the hon. Member for Ipswich from the much longer speech of the hon. Member for Great Grimsby (Mr. Mitchell) was that the hon. Member for Ipswich acknowledged that a conflict of interest can arise. I found it hard to discern in the speech of the hon. Member for Great Grimsby any recognition of that fact. When there is a conflict of interest with a solicitor offering services to a customer of his employer, there is a divided loyalty.

8.15 pm

The Government's amendments are designed to bring the sole practitioner within the scheme of schedule 17, whereby the Lord Chancellor may make recognition rules in respect of those to be permitted to carry out conveyancing services. Under the Bill as drafted, the sole practitioner was omitted. That point was raised by the hon. Member for Isle of Wight (Mr. Ross) in Committee, and I promised that the matter would be considered. I am glad to say that the amendments are the result, and I hope that they find favour with the House.

I can offer the House further evidence and confirmation of the Government's policy in favour of moving towards integrated house purchase services. In December last year, we announced that consultations were to take place on the questions whether conveyancing services might be provided by subsidiary companies to lending institutions, and whether estate agents should be permitted to offer a combined house purchase and conveyancing service to vendors. Those consultations are now complete. In consequence, the Lord Chancellor has decided in principle that, subject to satisfactory safeguards, both subsidiary companies and estate agents should be allowed to offer conveyancing services. The nature of the safeguards that will be needed will be considered carefully by him when he makes the recognition rules under the provisions of schedule 17.

The kind of provision that might feature is a code of practice to prohibit preferential pricing arrangements of the kind so vividly alluded to by my hon. Friend the Member for High Peak (Mr. Hawkins), who knows so much about the subject and speaks without being vulnerable to the charge that he is yet another lawyer out to protect his cosy monopolies.

The new clause requires the commission to prepare, publish and administer a code of practice to cover the provision of conveyancing services by building societies, to be made after consultation with the Lord Chancellor and the Director General of Fair Trading. Societies operating in accordance with such a code would be able to provide conveyancing services to their borrowers.

I take minor issue with the speech of the hon. Member for Great Grimsby. On more than one occasion he spoke of the code. The new clause does not specify a code. No doubt, the hon. Gentleman had in mind the revised code already alluded to which was offered to the Lord Chancellor by the Building Societies Association. I shall say something about that in a moment. The new clause does not specify a code. It makes provision for a code to be provided by the Building Societies Commission.

I turn to the draft code that was kindly provided to the Lord Chancellor by the chairman of the BSA last month. It is a revision of a code which was first put forward in the middle of last year. I shall quote a passage from a letter that the Lord Chancellor sent to the chairman, Mr. Cox, on 16 May, because it succinctly says what I wish to say in answer to the debate. The letter states:
"The adoption of a suitable code of practice may well be the best way of avoiding problems of conflicts of interest. I have seen your code and, while I think there is much to praise and a clear determination to protect the public, I am not at present satisfied that it yet overcomes the inherent problem of a conveyancer serving two masters.
I believe that it is somewhat unrealistic to expect a conveyancer to give advice in the best interests of both parties. The relationship between borrower and lender is one in which the interests of both can all too easily be at odds. Where this happens, both require an advisor who can tell them what they ought to do, not one who is 'impartial' or who is giving one party advice which is entirely against the best interests of the other. The code seems to leave the clients without an advisor at the one point in the transaction where. if a conflict does arise, he most requires this service."

The Lord Chancellor in his letter to the chairman made the point that my hon. Friend the Member for High Peak has just made. He said:
"The distinction between a 'major' and 'minor' conflict is, moreover, somewhat puzzling. It is not clear what is 'major' and what 'minor' or, indeed, who should take the responsibility of advising the borrower on such [natters. There seems to me scope here for delay and complexity.
I am sorry to write in such terms, but I think you appreciate the difficulties I have over this. I do not at present think that this code does overcome the problem of a conflict of interest. I should make it clear, however, that this need not be the end of the matter. Clause 101 and Schedule 17 of the Building Societies Bill are deliberately drafted in wide and flexible terms. No amendment to the Bill would be required to enable a code to be used if it proves possible to overcome the difficulties which concern me. All that would be needed would be an amendment to the recognition rules. The content of these rules is very far from settled and I am sure the best way forward is to continue work on a code of practice in the context of work on those rules."

In that passage from the Lord Chancellor's letter, the House will be unable to recognise the machinations of an unscrupulous protector of his profession's cosy monopolies which were conjured up by the hon. Member for Great Grimsby. If I did riot know the hon. Gentleman as well as I do, and if the House did not know the amiable way in which he invariably addresses it, I should feel, on behalf of my noble Friend the Lord Chancellor, a certain fleeting resentment at some of the expressions that the hon. Gentleman applied to him. But I let that pass.

From the passage that I have read from the Lord Chancellor's letter to the chairman of the BSA, it is plain that the Lord Chancellor is motivated by one concern alone —that the Government's desire to enlarge competition should not be fulfilled at the expense of the proper interest of the customer in not becoming the victim of a serious conflict of interest.

In view of what has been said, I feel obliged to cite again some of the examples that I gave in Committee of where the need for separate advice may arise in practice. I used examples that were provided by the chairman of the Luton and Dunstable Law Society, including one involving mortgage terms. One example given by the Luton and Dunstable Law Society was as follows:
"That draft mortgage Deed contains a provision that the loan of £86,250 would carry a rate of interest of either …
  • (i) a rate of interest higher by 6 per cent. than the base lending rate from time to time of the National Westminster Bank plc or
  • (ii) the rate notified in writing by the company to the borrower." — [Official Report, Standing Committee A, 20 February 1986; c. 479.]
  • In other words, in this case the life assurance company had an open-ended ability to charge what it liked. I happily believe that the number of such instances would be small although not negligible, but the customer must be protected from the divided loyalty of the solicitor or licensed conveyancer who is employed by the building society or bank. It is not a matter of conjuring up fantasies. We must have regard for what happens in real life.

    In Committee, I also referred to a letter published in the Daily Mail from a manager of a branch of Lloyds bank. He said:
    "I am the manager of a small branch of Lloyds. In the past five years I have seen the job changing from that of a general financial adviser to that of a salesman of Lloyd's products.
    This is not to say that I doubt their worth, but increasingly I have difficulty in giving impartial advice when I am all the time looking to achieve business targets.
    So far I think I have been able to achieve a happy compromise, but as I am under increasing pressure to sell 'in-house' products, especially insurance, the impartiality is bound to disappear. By far the worst aspect of this is that the financially less aware will have nowhere to go for advice which will be truly impartial—everyone will have an axe to grind."
    That would be just as true- of a solicitor employed by a building society that is in competition with others.

    As my hon. and learned Friend knows, I entirely agree with the point about the conflict of interest over a mortgage contract. But does he agree that we could get rid of that conflict of interest by having a code of practice on what mortgage contracts should contain?

    That is an interesting suggestion. It falls outside my exceedingly limited field of ministerial responsibility, but I shall ensure that it is passed on and considered in the right quarter. However, I agree that that is where the conflict of interest principally arises.

    There is great merit in the way in which the Bill is formulated. Schedule 17 empowers the Lord Chancellor to do three things: to make rules for the purpose of recognising institutions as being suitable to undertake the provision of conveyancing services and to recognise institutions under those rules; to exempt them from the present restrictions on persons who can undertake conveyancing; and to impose conditions on those institutions with which they must comply to remain recognised.

    Following our consultation, we felt that we could not in all conscience sweep under the carpet serious warnings about a conflict of interest and legislate as though that consultation had never taken place. That would have been dishonourable.

    I shall give way in a moment. The hon. Gentleman took me to task for having said to him in February 1984:

    "We will shortly issue a consultation paper on how best to ensure that conflicts of interest and anti-competitive practices do not arise when solicitors employed by banks, building societies and other organisations are permitted to undertake conveyancing for their employers' customers. We hope to bring forward legislation permitting building societies to offer the service next Session." — [Official Report, 17 February 1984; Vol. 54, c.347.]

    It is abundantly plain, and must have been at the time, that if that consultation threw up advice to the effect that it was impossible to overcome conflicts of interest in all circumstances where the solicitor's employer was lending money, it would be dishonourable to proceed.

    It was also dishonourable for the Government to say that they hoped to bring forward legislation. The intention was clear. Can the Solicitor-General cite any instance of a conflict of interest that was not known at the time that he promised me that building societies would be allowed to do conveyancing through employed solicitors?

    It was our intention to introduce legislation. We are not sufficiently arrogant about our confidence in our right thinking to say that, whatever consultation throws up, we shall not be influenced by it. We live and work in the hope that we may be able to overcome these difficulties. The Lord Chancellor's letter makes that clear. Meanwhile, the task is to press ahead with the hard work on the rules, consulting the BSA and others, with a view to bringing them into force with the minimum delay.

    Although I regret not being able to commend the new clause to the House, I hope that my explanation—which has taken longer than I intended because I felt obliged to answer the points raised—will lead to the motion and clause being withdrawn.

    I should declare my interest in the debate. I am a practising solicitor, and, although I do not engage in much conveyancing, I obviously have an interest in the matter.

    It is extraordinary that more of my professional colleagues have not spoken in the debate. Apparently none served on the Committee, and that was also extraordinary. As a profession, I believe that we have much to be proud of, and that is at the heart of this debate. The problem is that the consumer is in danger of being sacrificed on the altar of competition. The hon. Member for Ipswich (Mr. Weetch) said that the consumer was king and that if he demanded it he should have the right to have it. I shall explain why that is a strange proposition.

    Principally, we are concerned about conflicts of interest. The hon. Member for Great Grimsby (Mr. Mitchell) belittled this concept and seemed to be saying that conflicts of interest can be got round, avoided or somehow rubbed out. That cannot be true. They cannot be overcome simply. Warning consumers that conflicts of interest exist does not mean that they will go away. No amount of warning in this day and age is sufficient for the majority of consumers. They want to buy a house and they have set their heart on one. They want as large a mortgage as they can possibly get, possibly more than they can afford, and warnings will not prevent them from going ahead with the transaction.

    8.30 pm

    Perhaps the most vivid example is the conflict of interest between banks and customers on the making of wills and the appointing of executors. Surely no customer would appoint a bank to be an executor if he knew how much it would cost—it is usually 5 per cent. of the assets in the estate. Despite that, time after time, perfectly straightforward estates are complicated by the involvement of banks and the extortionate—there is no other word for it — charges that banks make for the administration of wills.

    Competition is there to serve the consumer, and it is the Government's responsibility to see that that is the case and that competition does not become a god in its own right. The hon. Member for Great Grimsby said that my profession has been featherbedded against competition from building societies. To give him some credit, his initiative in the House Buyers Bill has made a fundamental change in the profession. Solicitors engaged in conveyancing are not featherbedded against competition from their own colleagues, and we are not afraid of competition from building societies. I doubt whether building societies will do conveyancing for less than solicitors are prepared to charge, and this is one of the sectors in which the consumer will be duped. He will be offered a package of an all-in loan which will cover his costs, and he will not know what the costs are. By the time that he has finished paying for the conveyancing, he will have paid many more times what he would otherwise have paid.

    Another charge made by the hon. Member for Great Grimsby is that solicitors are not liable for advice that they may give on financial matters. Nothing can be further from the truth. We are men of affairs and give advice to clients on the full range of aspects of house buying, and we are liable personally for that advice. If it turns out to be wrong, we are personally liable to reimburse the client.

    Various uncomplimentary statements have been made about my noble Friend the Lord Chancellor. My hon. and learned Friend the Solicitor-General has already rejected them, as we must. My noble Friend has a tremendous record of looking after the profession, and he is the last man who would stand in the way if he believed that what was proposed was right.

    It has been alleged that solicitors are simple mechanics in the matter of house transfer, but this is inaccurate. A solicitor advises as to the suitability of the property for the buyer. He advises as to the terms of the contract, and all the flak that has been thrown at my profession about sending out inquiries that do not mean anything before contract is largely unfounded. The solicitor advises as to the financial aspects of buying a house, on the terms and on the cost of the mortgage. There can be no question of the enormous institutions that building societies are becoming giving the detailed personal independent advice through their employed legal people that is offered by independent solicitors.

    How can a solicitor employed by a building society, who has his business targets, possibly have the time, patience, inclination or financial incentive to give independent advice to borrowers? All these are major matters, and even if the building societies' code which would make it necessary for the building society solicitor to send the customer elsewhere were to be implemented, as my hon. Friend the Member for High Peak (Mr. Hawkins) suggested, that would be unlikely to happen. How can the building society solicitor become involved with the detailed administrative arrangements of a house purchase and sale transaction? He will not have the time and inclination. All that he will be interested in is processing as many loans as possible in as short a time as possible. The borrower, the consumer, will be the sufferer.

    We should protect the independence of the legal profession. It is a vital institution in any civilised society. In-house conveyancing does not cost the public any more. It is probably already costing the consumer a great deal less than he would pay a building society if the new clause were adopted.

    There is some pressure on me to sit down, so I shall end my speech by saying that I wholeheartedly support the anxieties of my noble Friend the Lord Chancellor about conflicts of interest and that I agree with the provisions of schedule 17. They will bring a tremendous wind of change to the profession, and the prospect of that has already brought some improvements to the profession. The Law Society has done its best, but it cannot keep things in the same way as they have always been. It has tried to do that, and that has been its failure. We have to admit that. The consumer must be protected, and it is the Government's responsibility to provide that protection. It is clear that the hon. Members for Great Grimsby and for Ipswich will not provide it.

    Parts of the debate have been entertaining. I thank the Solicitor-General for his reply, although I am not sure whether to glean any comfort from it. I never am when I have replies from lawyers. Such replies are like mounting the Alexandine steps, which, as hon. Members will know, are a mirage. They appear to be going upwards, but when one treads on the steps one finds that they are, inevitably, going downwards. I suspect that that is what has happened in this case.

    The new clause will not do anything revolutionary. Solicitors conveyance property, and in a short time licensed conveyancers will be doing so as well on their own account. Suddenly, it is said that if we put the same class of person behind a building society plate glass window the whole conveyancing world will collapse because of the conflicts of interest that are not capable of being resolved. I reject that argument.

    The Government have created a new competitive world in financial institutions. I am glad to see it, because it could have done with some more competition, goodness knows. Building societies are in a new competitive world. If they engage in ripping off the consumer through conflicts of interest, they will not survive in the new competitive climate. That, at the end of the day, will be the answer to the problem. Conflict still remains. I do riot accept the Solicitor-General's reply, however hard he tried to bring some comfort to us. Therefore, I shall divide the House.

    Question put, That the clause be read a Second time:—

    The House divided: Ayes 114, Noes 225.

    Division No. 205]

    [8.39 pm


    Abse, LeoCallaghan, Jim (Heyw'd & M)
    Adams, Allen (Paisley N)Campbell, Ian
    Anderson, DonaldCampbell-Savours, Dale
    Archer, Rt Hon PeterCanavan, Dennis
    Ashton, JoeClarke, Thomas
    Atkinson, N. (Tottenham)Clay, Robert
    Bagier, Gordon A. T.Clelland, David Gordon
    Banks, Tony (Newham NW)Clwyd, Mrs Ann
    Barron, KevinConlan, Bernard
    Beaumont-Dark, AnthonyCook, Frank (Stockton North)
    Beckett, Mrs MargaretCook, Robin F. (Livingston)
    Benn, Rt Hon TonyCorbett, Robin
    Bennett, A. (Dent'n & Red'sh)Craigen, J. M.
    Bermingham, GeraldCunningham, Dr John
    Boyes, RolandDalyell, Tarn
    Brown, Gordon (D'f'mline E)Davies, Ronald (Caerphilly)
    Brown, Hugh D. (Provan)Davis, Terry (B'ham, H'ge H'l)
    Buchan, NormanDeakins, Eric
    Caborn, RichardDewar, Donald

    Dixon, DonaldMarshall, David (Shettleston)
    Dobson, FrankMartin, Michael
    Dormand, JackMason, Rt Hon Roy
    Douglas, DickMaxton, John
    Dubs, AlfredMaynard, Miss Joan
    Dunwoody, Hon Mrs G.Michie, William
    Eadie, AlexMitchell, Austin (G't Grimsby)
    Eastham, KenMorris, Rt Hon J. (Aberavon)
    Evans, John (St. Helens N)Nellist, David
    Ewing, HarryOakes, Rt Hon Gordon
    Fatchett, DerekO'Brien, William
    Faulds, AndrewPark, George
    Fields, T. (L 'pool Broad Gn)Patchett, Terry
    Foster, DerekPendry, Tom
    Foulkes, GeorgePike, Peter
    George, BruceRadice, Giles
    Gilbert, Rt Hon Dr JohnRedmond, Martin
    Godman, Dr NormanRees, Rt Hon M. (Leeds S)
    Hamilton, James (M'well N)Roberts, Ernest (Hackney N)
    Hamilton, W. W. (Fife Central)Robinson, G. (Coventry NW)
    Harrison, Rt Hon WalterRogers, Allan
    Hogg, N. (C'nauld & Kilsyth)Short, Ms Clare (Ladywood)
    Holland, Stuart (Vauxhall)Skinner, Dennis
    Home Robertson, JohnSmith, Rt Hon J. (M'ds E)
    Hoyle, DouglasSpearing, Nigel
    Hughes, Roy (Newport East)Strang, Gavin
    Janner, Hon GrevilleThomas, Dafydd (Merioneth)
    John, BrynmorThompson, J. (Wansbeck)
    Jones, Barry (Alyn & Deeside)Thome, Stan (Preston)
    Kaufman, Rt Hon GeraldTinn, James
    Leadbitter, TedWardell, Gareth (Gower)
    Leighton, RonaldWeetch, Ken
    Lewis, Ron (Carlisle)Welsh, Michael
    McCartney, HughWigley, Dafydd
    McDonald, Dr OonaghWilson, Gordon
    McKay, Allen (Penistone)Young, David (Bolton SE)
    McNamara, Kevin
    McWilliam, JohnTellers for the Ayes:
    Madden, MaxMr. Frank Haynes and
    Marek, Dr JohnMr. Mark Fisher.


    Alton, DavidDorrell, Stephen
    Amess, DavidDouglas-Hamilton, Lord J.
    Ancram, MichaelDunn, Robert
    Ashby, DavidDurant, Tony
    Aspinwall, JackDykes, Hugh
    Atkins, Robert (South Ribble)Favell, Anthony
    Atkinson, David (B'm'th E)Fenner, Mrs Peggy
    Baker, Rt Hon K. (Mole Vall'y)Field, Frank (Birkenhead)
    Banks, Robert (Harrogate)Fletcher, Alexander
    Batiste, SpencerFookes, Miss Janet
    Best, KeithForsyth, Michael (Stirling)
    Biffen, Rt Hon JohnForth, Eric
    Biggs-Davison, Sir JohnFox, Marcus
    Blaker, Rt Hon Sir PeterFranks, Cecil
    Boscawen, Hon RobertFraser, Peter (Angus East)
    Bottomley, PeterFreeman, Roger
    Bottomley, Mrs VirginiaFreud, Clement
    Bowden, Gerald (Dulwich)Fry, Peter
    Brandon-Bravo, MartinGalley, Roy
    Bright, GrahamGarel-Jones, Tristan
    Brinton, TimGow, Ian
    Brittan, Rt Hon LeonGower, Sir Raymond
    Brown, M. (Brigg & Cl'thpes)Greenway, Harry
    Bruce, MalcolmGregory, Conal
    Bryan, Sir PaulGriffiths, Sir Eldon
    Buck, Sir AntonyGriffiths, Peter (Portsm'th N)
    Budgen, NickGround, Patrick
    Carlile, Alexander (Montg'y)Grylls, Michael
    Cash, WilliamGummer, Rt Hon John S
    Channon, Rt Hon PaulHamilton, Hon A. (Epsom)
    Chope, ChristopherHamilton, Neil (Tatton)
    Clark, Hon A. (Plym'th S'n)Hancock, Michael
    Clark, Sir W. (Croydon S)Hanley, Jeremy
    Clegg, Sir WalterHannam, John
    Conway, DerekHargreaves, Kenneth
    Cope, JohnHarris, David
    Couchman, JamesHaselhurst, Alan
    Cranborne, ViscountHawkins, C. (High Peak)

    Hawksley, WarrenPercival, Rt Hon Sir Ian
    Hayes, J.Pollock, Alexander
    Hayward, RobertPorter, Barry
    Heathcoat-Amory, DavidPortillo, Michael
    Heddle, JohnPowell, William (Corby)
    Henderson, BarryPowley, John
    Hickmet, RichardPrentice, Rt Hon Reg
    Hicks, RobertPrice, Sir David
    Hind, KennethProctor, K. Harvey
    Hogg, Hon Douglas (Gr'th'm)Raison, Rt Hon Timothy
    Holland, Sir Philip (Gedling)Rathbone, Tim
    Howard, MichaelRenton, Tim
    Howarth, Gerald (Cannock)Rhodes James, Robert
    Howell, Ralph (Norfolk, N)Rhys Williams, Sir Brandon
    Howells, GeraintRidsdale, Sir Julian
    Hubbard-Miles, PeterRifkind, Rt Hon Malcolm
    Hunt, David (Wirral W)Roberts, Wyn (Conwy)
    Hunt, John (Ravensbourne)Robinson, Mark (N'port W)
    Jackson, RobertRoss, Stephen (Isle of Wight)
    Jenkin, Rt Hon PatrickRyder, Richard
    Johnson Smith, Sir GeoffreySackville, Hon Thomas
    Jones, Gwilym (Cardiff N)Sainsbury, Hon Timothy
    Jones, Robert (Herts W)Sayeed, Jonathan
    Kellett-Bowman, Mrs ElaineShaw, Sir Michael (Scarb')
    Kershaw, Sir AnthonyShelton, William (Streatham)
    Key, RobertShepherd, Colin (Hereford)
    King, Roger (B'ham N'field)Shersby, Michael
    Kirkwood, ArchyShields, Mrs Elizabeth
    Knight, Greg (Derby N)Silvester, Fred
    Knowles, MichaelSims, Roger
    Knox, DavidSkeet, Sir Trevor
    Lang, IanSmith, Tim (Beaconsfield)
    Latham, MichaelSpencer, Derek
    Lawler, GeoffreySpicer, Jim (Dorset W)
    Lawrence, IvanStanbrook, Ivor
    Lee, John (Pendle)Steel, Rt Hon David
    Leigh, Edward (Gainsbor'gh)Steen, Anthony
    Lennox-Boyd, Hon MarkStern, Michael
    Lester, JimStevens, Lewis (Nuneaton)
    Lewis, Sir Kenneth (Stamf'd)Stewart, Ian (Hertf'dshire N)
    Lightbown, DavidSumberg, David
    Lilley, PeterTaylor, Teddy (S'end E)
    Livsey, RichardTebbit, Rt Hon Norman
    Lord, MichaelTemple-Morris, Peter
    McCrindle, RobertThomas, Rt Hon Peter
    McCurley, Mrs AnnaThompson, Patrick (N'ich N)
    MacGregor, Rt Hon JohnThornton, Malcolm
    MacKay, Andrew (Berkshire)Thurnham, Peter
    MacKay, John (Argyll & Bute)Townend, John (Bridlington)
    Maclean, David JohnTracey, Richard
    McLoughlin, PatrickTrippier, David
    McNair-Wilson, M. (N'bury)Twinn, Dr Ian
    McQuarrie, Albertvan Straubenzee, Sir W.
    Madel, DavidWainwright, R.
    Major, JohnWall, Sir Patrick
    Malins, HumfreyWallace, James
    Malone, GeraldWaller, Gary
    Marlow, AntonyWalters, Dennis
    Mather, CarolWardle, C. (Bexhill)
    Maxwell-Hyslop, RobinWarren, Kenneth
    Mayhew, Sir PatrickWatts, John
    Meadowcroft, MichaelWells, Bowen (Hertford)
    Merchant, PiersWells, Sir John (Maidstone)
    Meyer, Sir AnthonyWheeler, John
    Miller, Hal (B'grove)Whitfield, John
    Mills, lain (Meriden)Winterton, Mrs Ann
    Mitchell, David (Hants NW)Winterton, Nicholas
    Morrison, Hon P. (Chester)Wolfson, Mark
    Moynihan, Hon C.Wood, Timothy
    Neale, GerrardWoodcock, Michael
    Newton, TonyYeo, Tim
    Norris, StevenYoung, Sir George (Acton)
    Page, Richard (Herts SW)
    Patten, Christopher (Bath)Tellers for the Noes:
    Pawsey, JamesMr. Donald Thompson and
    Peacock, Mrs ElizabethMr. Peter Lloyd.
    Penhaligon, David

    Question accordingly negatived.