I beg to move Amendment No. 1, in page 1, line 18, leave out

'and such other particulars as may be prescribed'.

As the Bill stands, it states that

"The Council shall establish and maintain a register of insurance brokers … containing the names, addresses and qualifications, and such other particulars as may be prescribed".

It will be appreciated that one of the principal features of this measure, if it becomes an Act, will be the publication of a register and list. For the public, the physical emanation of the legislation will be the register and the list. It is argued that they will give a degree of protection to the public. If an individual is purporting to be an insurance broker, the public will be enabled to check with the central register to ascertain whether the person is a registered insurance broker or, if incorporated into a registered company, is registered to transact insurance broking business.

There may be argument whether that provision offers a degree of protection to the public, but the position is clear. What is not clear is why there should be any need to add to the information provided in the register any information other than the name and address of the person or company so registered.

There was an extensive debate in Committee and I was rather encouraged by the response of certain hon. Members to believe that the point made by myself and others had met with some acceptance. The Minister was not too forthcoming, but we cannot expect too much. I felt that the point was made that there was no strong case for saying that further information should be set out in the register.

In subsequent clauses the Bill sets out a number of detailed criteria that must be met by persons wishing to be registered insurance brokers. It was argued by the Minister that it was not unreasonable that the register should state clearly the qualifications that the broker had to demonstrate to meet the criteria.

I draw the opposite conclusion. I say that if a man has met the criteria and has been accepted, that is sufficient. It is sufficient that his name should be on the register. The essential matter is whether the man has passed the test or failed the test. It is not a question whether he is a good or bad broker. It is not a question whether some people think him suitable or unsuitable, or better or worse than any of his competitors. The simple fact is pass or failure.

If we are to seek analogies, let us look to the Law Society, the architects' professional body, or the Institute of Chartered Accountants in England and Wales. In those professions there is a simple situation that a person has to pass his examinations. As far as I know—I am open to correction—once a person has passed those examinations he is in a position to practise in his profession. That is a different proposition from that with which we are faced today. I refer to a proposition that applies to many of the clauses with which we shall be dealing.

I imagine that the Law Society registers a man as having passed his examinations. Thereafter that person is enabled to practise. I do not think that a string of additional qualifications should be published in as much as it might provide interesting commercial information. It is the case that the public might well be interested in more information. I do not dispute that proposition. What I do dispute is that the register is the place in which to publish information that might be of commercial interest.

It might be of interest, as was argued in Committee, whether a man was expert in atomic power plants. My hon. Friend the Member for Harrow, West (Mr. Page) quoted the case of a broker who specialised in rubber factories in Dahomey, now I understand, called Benin. It is true that a person seeking insurance cover might be very interested to know who was the best broker in that class of insurance. But it is not up to a central body to decide who is most suitable. My hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) is a life insurance expert, and I would not hesitate to turn to him for life insurance expertise. However, my hon. Friend the Member for Harrow, West would be surprised how quickly my hon. Friend the Member for Brentwood and Ongar would become expert in rubber factories in Dahomey if anyone offered him such business.

All brokers regard themselves as general insurance brokers, and if they have not the necessary expertise in a subject, it is surprising how quickly they can obtain it or find specialists to employ who are leading experts. I say essentially that it is not for those who draw up the register to decide whether a man is good or bad or well qualified or only half qualified. We are concerned with the simple fact of law that he has met the necessary criteria.

The next interesting matter this raises is whether there is any intention in the mind of my hon. Friend the Member for Harrow, West that the register should say whether a person is a specialist in a particular subject. One of the interesting features of the Bill is that, although it seeks to guide the public about whether a person is a good or bad broker—

It does not say that.

Perhaps I have oversimplified the point, but basically that is the position. If a person is a bad broker, he will fail to meet the criteria.

I hesitate to interrupt my hon. Friend, but he must try to be a little more factual. He is suggesting that my intention is to show that any broker who carried out insurance broking business and who was not on the register was a bad broker. Nothing could be more unfair.

The last thing that I want to do is to be unfair to my hon. Friend the Member for Harrow, West. I was using the terms "good" and "bad" as a shorthand way of describing those who passed or failed the criteria. If someone applies to be a registered broker and has his application declined, the reason will be that he is not good enough to be a broker. There is a dividing line to be laid down between those who are good enough to qualify and those who are not.

There are many people who will not wish to qualify and who will not wish to go on the register. My hon. Friend is arguing that anyone who does not attempt to qualify feels that he has not the proper qualifications and is automatically a bad broker.

If my hon. Friend objects strongly to what I said, I withdraw it. But there is a serious point about the benefit to the public.

Let me develop the point about the life insurance expert who is approached about insurance on a factory. As I understand it, the Bill does not intend to define the classes of insurance which a broker is qualified to transact. It means that someone who is a life specialist—perhaps a practitioner solely in life insurance and a self-employed life insurance broker—will be registered as an insurance broker. Thereafter, he will be entitled to engage in any class of insurance to the extent that it is an authorised class under the 1974 Insurance Companies Act.

11.15 a.m.

I cannot see what advantage there is to the public if the register does not make clear whether a person is a specialist in a particular class of insurance. If that is the intention at a later stage—and one or two remarks have been made hinting that matters may develop in that way—the broker would be very concerned. He would want to know whether restrictions could be placed on him about the classes of business which he could transact. It may be that in the other particulars to be prescribed it is not intended to lay down classes of insurance which a broker may or may not transact. If that is so, it would be helpful to have it on the record.

The next matter is of even more fundamental importance. The Bill poses the interesting problem about the practising broker and the non-practising broker. Later in the Bill, we see that there are certain criteria which a broker has to meet. To pass the pre-entry conditions, he has to pass certain examinations or to have had certain experience, or a combination of both. In a later part of the same clause, it is provided that if he is a practising broker at the time he must meet certain financial criteria. The essential word there is "if". It follows that a man can apply to be a registered insurance broker but, if he is not in practice at the time, he does not have to demonstrate that he is insured by a professional indemnity policy or that he has adequate capital resources. That being so, we have a practising broker and a non-practising broker. We have two different classes of people.

It is interesting that the Bill provides for only one register. It does not say that there shall be a register of practising brokers and another register of non-practising brokers. Nor is there provision for someone registered as a broker saying subsequently "I wish to practise as a registered broker and now I must comply with the Act, produce accounts and demonstrate sufficient indemnity insurance." It may be that I have missed the step which is necessary there, or it may be that the Bill is faulty in this respect. I hesitate to say that it is faulty because the Minister assured us on Second Reading that it was well drafted, even though 90 amendments have been tabled for Report and probably an equal number were down for consideration in Committee.

The hon. Member for Faversham (Mr. Moate) must allow for the fact that I said on numerous occasions in Committee that for a variety of reasons it was probable that I should be bringing forward a substantial number of amendments at this stage. The hon. Gentleman should stick to the facts.

I was stating a fact. If the Minister cares to look at what he said on Second Reading, he will find that he used the words "a well-drafted Bill". I am not sure whether that is a well-founded description. But is the Bill correctly drafted in this respect? In Committee, my hon. Friend the Member for Harrow, West referred to a non-practising insurance broker and to the non-practising list. I can find no provision in the Bill for a non-practising list. It may be that when we talk about

"other particulars as may be prescribed",

we shall say whether a person appearing on the register is practising or non-practising. If that is so, it should be defined by law.

I hope that my hon. Friend the Member for Harrow, West will help me on this very important point, because he will appreciate that these are statutory rules which will apply to the practising and non-practising insurance broker. Where will the information appear? Will there be two lists and two registers—the list being of those corporate bodies registered as insurance brokers and the register being of those individuals who fulfil the necessary criteria? We must have clarification on that point. If this is not to be stated here in the

"other particulars as may be prescribed"

where will it be stated in the Bill? My hon. Friend the Member for Harrow, West, who knows his Bill backwards by now, should be able to give me a precise answer on this important legal point.

I have made my point on this amendment, but to sum up, I think that the Bill as it stands goes wider than is strictly necessary. It is not necessary to add any further information other than the name and address of the person who passes the test and fulfils the criteria for being placed on the register of insurance brokers. Any other information may be of interest to the public but it is not essential for the statutory purpose of providing a register. I hope that the House will accept that point—that to provide any further information is unfair and misleading. Hon. Members on the Standing Committee generally seemed to accept the strength of the argument, and the proposition that the register should be limited simply to the information that I have described.

The Bill does imply a distinction between the registered broker who is in practice and the registered broker who is not practising. Will there be two lists, and if so, where are the provisions for this in the Bill? If not, how will the information be given to the public about whether a man is in business and meets the necessary financial criteria?

The hon. Member for Faversham (Mr. Moate) has made a very powerful case for the deletion of the words set out in the amendment. I want to support him. I hope that the House will accept his amendment.

This Bill is clearly restrictive, and it is necessary to ensure—and I use the word advisedly in this case—that details which are irrelevant or unnecessary are not inserted. The hon. Member for Faversham criticised the word "qualifications", and I would agree with that criticism.

My view is that before a person can be put on the register it is necessary to set out his qualifications for inclusion, and that is understood. But the clause itself contains the words "names, addresses and qualifications". We have not sought to delete the word "qualifications"—that remains; but we object to the words that have been added

"such other particulars as may be prescribed."

Why are these words added? Why leave it to the Council to prescribe whatever it thinks fit to put on the register?

The simple point is that the register contains the names, addresses and qualifications. I am against the idea that the Council should have a general power to put whatever it likes on the register. These other words are very wide, and I wonder what they mean. Is it for the Council to decide what it wants to put in? Personally, I object to the inclusion of these words. The clause is all-sufficient—the register will contain the names, addresses and qualifications. I suggest that this matter is beyond argument and that the words should be deleted.

This amendment will restrict the powers of the Council and hedge the scope for future action. Could the Minister or the sponsor of the Bill outline the sort of particulars that could be necessary in practice and give us an idea of the parti- culars that will appear and the reasons why?

It is important not to create unnecessary divisions in the industry—a sort of class or tier system. In reading these particulars we do not want a sort of "Who's Who" of insurance broking, or any information which could prejudice the reader in any way other than outlining the expertise that he or she can obtain.

The basic question is whether we trust the Council to carry out with responsibility the powers in the Bill. I am always very wary of building in such freedom which, at worst, can be abused or interpreted in ways that we cannot even imagine, or can be used in a way that is contrary to what the supporters of the Bill have in mind. But in reality this is an extremely pessimistic approach. Given the nature of the insurance business and the professional standards attained by established bodies, it is not unreasonable to retain the words in the clause. These will allow the Council to take account of any future or unseen needs without the unwieldy and time-wasting Government and constitutional procedures. I oppose the amendment, although I appreciate the wisdom of having second thoughts and the caution which that underlines.

There are grave penalties in the Army and in the Services for those who give themselves a self-inflicted wound. This debate today is a wound inflicted on myself, as a sponsor, because of the unhappy habit of verbosity that I employed in Committee.

My hon. Friend the Member for Faversham (Mr. Moate), when he introduced this debate in Committee, described this as a kind of probing amendment to find out exactly what I thought should go on the register. Unwisely, I let my imagination rip.

The question is whether the register is exclusively a roll or more than a roll. When, as hon. Members, we take the oath of allegiance we sign a roll, and our names are there without qualifications, addresses or anything else. The question is how much information should or should not go on this register.

I hope that it will not harm the hon. Member for South Angus (Mr. Welsh) if I thank him for his intervention, which expressed my views extremely well. The point is that this is a self-regulating Bill for the industry and the advantage of self-regulation is that the people involved probably know more of the details of the business they are undertaking than the man in Whitehall. We would be unwise in this Bill or in any other to try to lay down the minutiae of every activity that the business being undertaken needs for its own regulation.

However, I accept very much that the register is really a list of those who have qualified to be on that register. Nevertheless—and I do not think that it is necessary to write this into the Bill—there is no intention that the register should include the kind of business in which the registered insurance broker is taking part. I do not see that this is a necessary aspect, any more, I imagine, than that the lists kept by the Law Society, the chartered accountants' bodies or medical bodies stipulate the kind of business that the firm undertakes.

11.30 a.m.

However—this leads me to the second point made by my hon. Friend the Member for Faversham—it occurs to me that whether the individual is practising or not practising may be just the kind of information which, with deliberations within the Council, it might be considered worth while including on the register.

Hoping that the Bill may remain "The Page Bill" for the next century or two, as the guide in this field, I think that it would be rather stupid for us to make it necessary for there to be some kind of amendment or Statutory Instrument, or whatever it is, if at some stage it was decided that it might be worth while, for instance, stating the nationality, office or place of abode. If the man were the greatest insurance broker and were resident in Geneva, New York or Hong Kong, it might be worth while stating something like that.

Perhaps I have already unwisely fed ideas into my hon. Friend's mind. However, I should have thought it rather silly for us not to allow the Council, which, if the amendment is accepted, after the initial period will be elected by registered brokers, to say what should be on the list.

Therefore, I hope that in the probing spirit with which my hon. Friend moved the amendment, he will feel that it is sensible not to tie the hands of the Council too tightly.

I should like briefly to add one or two points in support of the line that has been taken by the sponsor of the Bill, the hon. Member for Harrow, West (Mr. Page).

I think that there is a case for having some form of additional powers to include in the register various other matters of information. When we were debating this matter in Committee, I cited that it might be necessary to have the sex of the broker described, because names are sometimes misleading. I cited Hilary as a name. What about Jan? What about Evelyn? All those are names that could lead to confusion. Also, the age of the broker may be a relevant consideration.

I do not know whether I am attracting the attention of the hon. Member for Faversham (Mr. Moate)—evidently not.

That is a pity.

It seems to me that he ought—

It might be helpful if I were to interrupt the Minister, because everything that he is saying is of such vital importance to my hon. Friend the Member for Faversham (Mr. Moate.) Perhaps it would give my hon. Friend a chance to return to his seat. I see that he is doing so now.

I hope that the hon. Member for Faversham heard what I was saying.

It seems to me that the age of the broker may be relevant. The date when he was first registered may be a relevant factor. Certainly on the Law Society roll that is always included, as it is in the list of barristers who are practising in the United Kingdom. The directorships that he may hold may be relevant. Whether he has actually paid his registration fee for the current year may be relevant, though I would not necessarily go to the wall on that one. However, it seems to me that these are all factors that ought to be given consideration and were omitted from the hon. Gentleman's speech.

I can think of another factor. What about that of being a Member of Parliament? I should have thought that any sensible client would immediately feel that it would not be reasonable to employ such a broker, who would not have the time properly to attend to his affairs. [HON. MEMBERS: "No."] I withdraw that remark. No doubt I would suffer from those circumstances if I were not a Minister.

My hon. and learned Friend the Member for Hackney, North and Stoke Newington (Mr. Weitzman) argued that the Council ought not to have this general power because, under it, it could do whatever it liked. That is not accurate. I ask him to look at Clause 8(2)(h), which deals with the question of rule making. That is all subordinated to the power of the Secretary of State, as set out in Clause 28(1), because the rules prescribed in Clause 8 have to receive the approval of the Secretary of State, and, furthermore, it is all subject to the possibility of parliamentary scrutiny under the negative procedure. Therefore, the Council would not have the last word in this matter—far from it. It is a matter that can come under surveillance.

When I look at Clause 8 I am a little troubled by subsection (1)(h),

"prescribing anything required or authorised to be prescribed by the provisions of this Act relating to the register or list."

One turns back to the clause that we are discussing and the words,

"and such other particulars as may be prescribed."

Is there not a danger there that the matter is left at large?

No. My hon. and learned Friend is missing an essential element. It is that these rules prescribed in Clause 8 as being capable of being made by the Council have to be read in the context also of Clause 28, which in fact provides for the way in which the Secretary of State will deal with the matter, and in turn Parliament then has the right, if it wishes, to scrutinise the position further.

May I suggest, with all respect to my hon. Friend, with his great legal knowledge, that if he briefed some other counsel he might well argue the point that I am making with some conviction?

My hon. and learned Friend argues all his points, both here and in the courts, with great conviction, but I suggest that he would argue this point not necessarily with success.

I hope, therefore, that the hon. Member for Faversham will feel that this is not something that he ought to pursue. However, we ought certainly to keep the matter under scrutiny. The assurances that are set out in the Bill should suffice to deal with the points made by the hon. Gentleman.

Will the Minister deal with the very serious point about the question of a non-practising and a practising registered insurance broker, particularly in the context of Clause 3, which clearly distinguishes between the two classes of persons, while the Bill as it stands makes statutory provision for only one list?

The hon. Gentleman is reinforcing the points that I am seeking to make, because Clause 2 could provide for this very point, as to being one of the other pieces of information that needs to be provided on the register—whether or not a broker is practising. I am grateful to the hon. Gentleman for pointing that out.

It seems to me that the essence of the amendment moved by my hon. Friend the Member for Faversham (Mr. Moate) is that there should be a distinction between registration by statute and commercial information that might be of interest to the public. My hon. Friend raised this point in Committee, and my hon. Friend the Member for Harrow, West (Mr. Page) undertook to look at it—nothing more than that.

My hon. Friend the Member for Faversham also asked for clarification about whether there would be a practising or non-practising list. The point was dealt with by the Minister a few moments ago. It seems that my hon. Friend is trying, by the amendment, very sharply to restrict the nature of the clause. My hon. Friend feels that no other information is needed and that to provide it would be unfair and, indeed, misleading. He said, and the Committee seemed to accept his argument, that the Bill implies a distinction between practising and non-practising lists. The hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) questioned the need for the Council to have this power to require further information of any kind that it may like.

The hon. Member for South Angus (Mr. Welsh) made the point that if Parliament does not trust the Council to carry out its responsibilities that is a very pessimistic attitude for Parliament to take. I am inclined to that view as well. My hon. Friend the Member for Harrow, West has fairly stated that the register is a roll, not very much more and not very much less. But how much information should there be on that roll? My hon. Friend also points out that what we are discussing is a self-regulatory Bill for the insurance industry and that the insurance industry itself knows best what sort of information it needs for its own regulation.

My hon. Friend has assured the House that there is no intention of including details of what kind of business a broker is engaged in. My hon. Friend has therefore made some fair points in reply to my hon. Friend the Member for Faversham. He has said that it would be unwise not to allow the Council to say what should be on the list and that it would be wrong to tie its hands too tightly. That is a wise and sensible attitude to take towards this clause. What Parliament should do is to allow a certain degree of flexibility and to place upon the Council the responsibility to see that it uses its powers wisely and fairly in the interests of all those who are engaged in insurance broking.

I very much hope, therefore, that on reflection my hon. Friend the Member for Faversham will feel that we can reasonably leave to the Insurance Brokers Registration Council the discretion itself to decide what sort of information it requires under this clause.

I confess that I am disappointed with the response of the sponsor of the Bill and by that of the Minister and my hon. Friend on the Opposition Front Bench. My hon. Friend the Member for Uxbridge (Mr. Shersby) argued that we should trust the Council. Frankly, if we are to trust the Council, I am not sure why we are so concerned about the details of the roll. I am not certain why we should demand that Parliament should scrutinise the details to be put on the register as provided for in the Statutory Instrument which the House will be able to consider and reject.

I do not believe that we should trust outside bodies in this way—and I do not care whether it is insurance brokers or any other group. We are giving statutory powers to a body outside this House. Thereafter, we shall have very limited powers of scrutiny or control over what that body does from day to day. Certainly we can look at the statutory instrument. I know that the Minister places immense faith in the Secretary of State to make perfect judgments. Frankly, I do not believe, either, that it is the job of Parliament to trust outside bodies or Secretaries of State. It is our job to get the law right.

11.45 a.m.

What we are saying is that the register is a statutory document which is to be set up under an Act of Parliament. Its form and content ought to be described precisely in an Act of Parliament or in the subsequent Statutory Instrument. I do not think it is sufficient to say "trust the Council". I am sure that every individual on the Council will be trustworthy and honourable, but it is up to Parliament to get it right.

I do not believe that the case has been advanced for saying that the Council should be free to include interesting information which may be of advantage to the public. The Minister said that it would be of interest to the public to know how old a man was. But why should the Council advertise the fact that a young man has just started up in business? From what the Minister said, I deduce that the fact that he was only 24, compared with a mature broker of middle age, would be regarded as a disadvantage. Otherwise, what does it mean?

Does my hon. Friend not agree that anyone seeking to consult a medical practitioner is perfectly free to look up in the register of qualified medical practitioners full details concerning that practitioner, including the date on which he qualified? From that information a person would quite clearly know when the man qualified and what sort of age he was.

I think it is up to Parliament to specify what information should be on the register. There may be a case for putting the date of admission. That is fairly standard practice with regard to the Law Society, the RIBA and others. We know roughly when the person qualified and whether we are dealing with an octogenarian or a young man. I think that should be specified here.

It is up to us carefully to define what information is to be on the register. If my hon. Friend the Member for Uxbridge wishes to move an amendment, or to persuade the sponsor of the Bill to accept an amendment, stating that the date of admission should be on the register, so be it. What I do not like is the suggestion that commercial information should be included on the list which would help the public make a judgment about one man or another. The young man has already passed and fulfilled all the criteria set down in a subsequent clause. He has proved that he has had the necessary years of experience, and that he has the necessary qualifications. Apart from that, I do not think any other information should be given.

I should have thought that Parliament should define what goes into this statutory document. My hon. Friend the Member for Harrow, West (Mr. Page) was helpful in one respect. He made a positive statement that there would be no intention of describing the class of business for which a particular broker was qualified to act. However, I do not think that that answers my main point. If a man is a life broker, does it help a member of the public, when going for motor insurance, to know that he is simply a registered broker? I should be loath to see any such description given, because a life broker might soon claim to be an expert if presented with a worthwhile volume of business.

This is supposed to be a measure to provide consumer protection, but it does not give any information to protect the consumer except in this one specific respect. I do not think that that point has been answered. I welcome the assurance that there will be no question of distinguishing between one broker and another as to the class of business that he is qualified to undertake—that is a helpful statement—but I do not feel satisfied with the answer given by the Minister about the non-practising and practising list. One can argue that this information should be included in the register under the terms of the phrase

"and such other particulars as may be prescribed".

But that is not good enough, because the Bill goes to considerable lengths to define the list or register. My hon. Friend the Member for Harrow West has referred to a practising list.

When, where and how, I wonder, have I made such a reference?

I shall speedily turn to the Committee proceedings. I can assure my hon. Friend that I am right and that he did refer to a practising list. He may not have meant to, but I think he was right to use those words, because the Bill makes quite a distinctive provision for a practising and non-practising insurance broker. It is important to the member of the public to know whether that man is practising or non-practising. If he is non-practising, he does not, or may not, have the requisite professional indemnity insurance, or reserves, or adequate financial backing.

It is not enough to say that that can be put into "any other information", when we go to such lengths to prescribe what is and what is not in the list. There is here an important legal point, and I suggest to my hon. Friend that it is a failing of the Bill that it has not been properly drafted in that respect. When the Bill goes to another place—if it does—some attention should be paid to making sure that there is proper legal provision to show whether a man is a registered broker in practice, or a registered broker not in practice.

I am disappointed that my hon. Friend has not seen fit to accept my amendment. Had he done so, he could have gone on to prescribe much more clearly and tightly the information that he thinks should be in the register, and we could then debate that. I repeat that I am disappointed in my hon. Friend's reply, but I do not wish to take up too much of the time of the House by unnecessary Divisions—at this stage at any rate—on a point of relatively minor importance. There are many more important matters to come. Thus, disappointed though I am with the reply that I have received, I beg to ask leave to withdraw the amendment.

I beg to move Amendment No. 2, in page 2, line 7, at end insert 'or'.

With this we may take the following amendments:

No. 3, in page 2, line 10, at end insert 'or'.

No. 4, in page 2, line 14, at end insert 'or'.

No. 5, in page 2, line 18, at end insert 'or'.

No. 7, in page 2, line 21, at end insert 'or'.

No. 9, in page 2, line 26, at end insert 'or'.

This is what I call the "or" batch of amendments, and I have tabled them in a genuine state of puzzlement. I did not believe that the Bill could be defective in this respect, and I might be wrong. However, if I am right in saying that the Bill should be amended as I propose, I should appreciate that assurance.

If I am wrong, and if the Bill is correct as it stands, I confess that I am mystified, because what we are setting up is a series of qualifications, to be attained by an individual, that I should have thought were well-nigh impossible of achievement.

Will it help my hon. Friend if I say that I am advised that the sense is not changed by the inclusion of the word "or"? My hon. Friend's proposal brings the clause into line with Clause 4, and to my lay reader's mind this proposal is attractive and valuable. I shall be delighted to accept the amendments as they stand, because they appear to make the Bill easier to read and more attractive to the lay reader.

I am delighted to hear that, although I am rather amazed that at one fell swoop one can get six amendments accepted. My hon. Friend and I might disagree about certain features of the Bill, but I should like to record the fact that throughout all the negotiations he has been immensely courteous and helpful, to the extent that he has been permitted to do so by his opinions on these matters.

I am grateful to my hon. Friend for saying that he is prepared to accept the amendments. I hope that the Minister will agree to their being included in the Bill and that the House can be persuaded that the amendments are correct. Because of what my hon. Friend has said I shall restrict my remarks and be fairly brief, but I think that I should put on record why these matters are important.

Clause 3 is the heart of the measure. It sets out a series of qualifications that a man has to meet to get on the register. It lays down eight criteria. In addition, a man has to establish that he is of good character. We shall come to that later. Furthermore, in certain cases he may have to prove that he has adequate practical experience. That is in four separate cases. In addition, if he is in practice there is a general need to establish that his finances are sound and that he has met the general code of conduct about indemnity, and so on. The Bill says that all eight criteria have to be met.

My hon. Friend says that the meaning of the Bill is not altered by the amendments. I submit that it is totally altered, because Clause 3 provides that

"a person shall be entitled to be registered in the register if he satisfies the Council—(a) that he holds a qualification"

under Clause 6 and

"(b) that he holds a qualification"

obtained under different circumstances. The first qualification under paragraph (a) is a United Kingdom qualification, while that in paragraph (b) is an overseas one. One can hardly demand that a man has a United Kingdom qualification and an overseas one, yet that is what the Bill says quite categorically. There should be an "or" between the two.

I think I am right in saying that all the paragraphs are qualified by the word "or" in line 30. It is like saying "meat, fish, eggs, bacon".

I am fascinated by my hon. Friend's interpretation of the draftsmanship, but we have paragraphs (a) to (h) containing eight separate criteria.

I agree with the hon. Member for Harrow, West (Mr. Page). I hope that it will not be necessary to go on making heavy weather of this. The matter was intended to be as the hon. Member for Faversham (Mr. Moate) is now suggesting it should be. That he is clarifying the position is only helpful, and I hope that we can move on.

I am grateful to the Minister for accepting what I have said. I am grateful, also, for my hon. Friend's assurance, but it is necessary to secure the approval of the House to the amendments. I think it has now been established that the amendments are technically necessary, and in view of my hon. Friend's assurance I hope that the House will agree to their being made. I presume that separate approval will be required for each amendment.

With the leave of the House, I shall put the questions on Amendments Nos. 3, 4 and 5 together.

I beg to move Amendment No. 6, in page 2, line 21, at end insert

'or by an authorised insurer'.

With this we may take the following amendment:

No. 8, in page 2, line 26, at end insert

'or by an authorised insurer'.

These words might seem fairly modest and insignificant, but I submit that they are of great importance and, in some respects, are fundamental to the Bill.

The importance of these words can be seen by considering how the clause would read if amended as I propose. I propose, for example, that paragraph (e), which reads

"that he has been employed for a period of not less than five years by the person carrying on business as mentioned in paragraph (c) above"

should have added to it

'or by an authorised insurer'.

A person who has been employed by an authorised insurer should be on an equal footing with someone who has been employed by an insurance broker.

The term "insurance broker" is not defined in the Bill, but the term "authorised insurer" is defined in Clause 30 as

"a person permitted under the Insurance Companies Act 1974 or the Insurance Companies (Northern Ireland) Order 1976 to carry on liability insurance business or pecuniary loss insurance business".

With my amendments, people employed by insurance companies will get the same treatment as those employed by brokers.

One of the points of disagreement between my hon. Friend the Member for Harrow, West (Mr. Page) and myself over many weeks has been the question whether a person employed by a company should get the same treatment. I had hoped that we were making progress on this, and I think that he felt at one stage that he had met the point.

Clause 3 was introduced in Committee as a new clause in response to arguments, and this is our first opportunity to amend it in any detail. In order to try to meet objections, my hon. Friend moved that a person should have

"… knowledge and practical experience of insurance business which is comparable to that of a person who has carried on business as an insurance broker for a period of five years".

An insurance company employee should be automatically as entitled as an employee of a broker to be registered.

My hon. Friend has referred to comparable experience as a qualification. I am grateful for that concession, but I do not believe that the term "comparable" should be put in an Act of Parliament, because it is a matter of opinion. Nor does it give the fair treatment to the insurance company employee which I believe should be given.

There have been other arguments whether accountants or solicitors, or their employees, who might deal with insurance extensively should be regarded as having comparable experience. My hon. Friend might have regarded the word "comparable" as relevant to such people. He might have a point, but that is not an adequate word to cover the rights of employees of insurance companies.

I hope that the amendment will ensure that justice is given to all those people—probably up to 200,000—employed by insurance companies. As I have said before, many leading insurance brokers started as insurance company employees. Many individual brokers began as life assurance or general insurance inspectors. No one required them to pass tests in order to become insurance brokers.

It is not up to us to say who is a good or a bad insurance inspector. My hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) said in Committee, I believe, that some inspectors would be welcomed as brokers while others would not. It is not up to the Council to decide who is good or bad as an inspector or a broker; that must be left to the test of the market. If a man is bad, he will not get the business.

All that the Bill should provide is that such a man has met certain criteria, that he has experience or qualifications, or a combination of both, and that his business is financially sound and he is insured against professional indemnity, Plenty of brokers are good or bad, and many of their employees who may meet these criteria will be inferior to insurance company employees. There are good barristers and solicitors and bad ones, but they succeed or fail on the basis of their work with the public. The Law Society does not say whether a person is a good or bad solicitor; it acts only when he has infringed the code of conduct.

I hope that at this late stage my hon. Friend will finally concede this case. Although the rôle of the broker and that of the insurance company are totally distinct. broking and underwriting are intertwined and interdependent. There is a far greater interchangeability and sharing of knowledge between the two than is generally appreciated. I hope that this far greater freedom of establishment will be allowed to insurance people who have the knowledge to practise as brokers. I argue that most people in insurance companies have that knowledge.

Insurance broking is an outstanding example of individual enterprise in serving the public. The broker is often an individual company man who has used that freedom to establish himself as a broker. It would be a sad day if Parliament prevented people from doing so.

I am rather surprised that the Minister, who is a skilled lawyer, seems ready to accept a word like "comparable" in an Act of Parliament. Perhaps he will surprise me by saying that he does not like the word. I should have thought that he would agree that it was bad law when a statute contained so many words that are matters of opinion. I think particularly of "adequate" and "practical experience". Who defines "adequate"? The Bill does not. Even a Statutory Instrument can hardly do so. This will be a matter of opinion for the Council when it is considering registration.

Nor does the Bill define "practical experience" and the Statutory Instrument will not; again, it will be up to the Council. Will this phrase include work in the accounting department of an insurance broker or will it include only experience within the insurance broking and the insurance company worlds? As a further complexity, what is "comparable" to adequate practical experience? I am surprised that the Minister's legal mind should find this terminology acceptable.

It would be far better to drop these expressions altogether and specify the simple qualifications necessary—a period of employment or some other qualification—and cut out all subjective matters of opinion.

I conclude my remarks on this amendment by emphasising my belief that all insurance men—

And women.

—I am grateful to my hon. Friend. I understanad that the term "men" embraces women. No doubt it applies in insurance, as elsewhere. They should start off on an equal footing. The insurance company man and the insurance broker should be able to go before the British Insurance Brokers' Council without any prejudice about their previous employment. I shall not develop the case by talking about the skills of life insurance inspectors and company managers. This is now beginning to be understood.

I hope that my hon. Friend will be as helpful and as forthcoming on this amendment as he was with the previous group of amendments and that he will give me and the insurance world the pleasure of saying that he accepts this proposition.

I am glad to say that I can again make my hon. Friend happy. I slightly deprecated his view that this was the final act of his to wring from an unwilling person—myself—a modest recognition of the abilities of insurance company employees. In fact, since the first evening that he and I discussed this matter I have had a lot of sympathy for this amendment. I said so in my Second Reading speech and I introduced in Committee what I thought was an amendment to cover the point that he wished to make.

All I will say is that I am happy to accept the amendment and hope that this will continue to increase the goodwill that my hon. Friend may show for the Bill.

I beg to move Amendment No. 10, in page 2, leave out line 40.

With this we may take Government Amendment No. 11.

The Bill requires that a person shall prove that he is of good character to the British Insurance Brokers' Council before he can gain registration. I do not in any way minimise the difficulty that the proposers of the Bill must have faced in trying to deal with this very sensitive point. In proposing to delete the words "of good character" I do not wish to suggest that I regard that as the conclusive answer. I think that on balance it may be the answer for this provision to be wider.

The Government have tabled Amendment No. 11. They have again changed the provision and have made yet another valiant attempt to get it right. They seek to insert only the words

"as to his character and suitability to be a registered insurance broker".

I understand that the debate began with the term that the person should be "a fit and proper person" in the words of the Insurance Companies Act 1974. Later, there was the provision that a person had to be "of good character". Now the Government are proposing that we should delete the words "of good character" and state that the applicant should satisfy the Council

"as to his character and suitability to be a registered insurance broker".

I find it difficult to know which of those phrases is best. I am sure that any lawyer could argue interminably about which was best and about whether a person was fit and proper, of good character, or simply of character. I am not certain what it means to be "of character", having deleted the word "good". There is endless legal argument about the meaning of these words and I doubt whether, at the end of the day, there is significant difference between the words. I would have though that lawyers would argue equally about the meanings and definitions of all of them.

12.15 p.m.

It comes back to the group of individuals sitting as the Insurance Brokers' Council having to make a judgment on the character of an individual and deciding whether he can be a member of the insurance broking profession. Some people are thus being asked to make a judgment on the character of others. This is very difficult to define in law, and I would have thought that it was very difficult to do in practice. I suspect that it would have been far better to decide that this should not be done at all. It is not necessary for it to be done, although I know why it is done. It is following the Insurance Companies Act 1974.

It would be helpful if the Minister could tell us whether a lawyer has to prove that he is of good character before he can set up his practice. I believe that the answer is that he simply has to pass his examinations and can then describe himself as a qualified solicitor or barrister and set up in practice. But he does not have to prove at that stage that he is of good character.

I think that the hon. Member will find that under the rules of admission to the Inns of Court a person has to be a person of good character.

That is a very helpful point. I shall not pursue the question of lawyers, except to say that presumably the lawyer does not have to prove at the point when he enters practice that he is of good character. But as lawyers are self-evidently of good character, the matter is purely academic.

It was suggested at one stage that Members of Parliament might require such information to be given in the Register of Members' Interests, and that therefore it should be essential knowledge for the general public. Some may argue that being a Member of Parliament would automatically mean that a person has failed the test of good character, but that is a matter of opinion.

If we take the example of accountancy, an accountant does not have to prove that he is of good character when he enters the profession, or at any other point. He simply has to pass his chartered accountancy examinations and set up in practice as a chartered accountant. I am not seeking to make a controversial point; I am trying to be helpful. If these examples bear analysis, the Government may find a way out of this genuine dilemma. It might be right to say that neither the Council nor the Secretary of State nor the courts should have to decide whether a person is of good character.

I was a member of the Committee dealing with the Insurance Companies Bill, as was my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle). We had very long debates on the meaning of the words of "fit and proper person" and long debates about control of insurance companies. We debated them at great length because we were very concerned that these far-reaching powers should not be given to a Government unless they were to be exercised very judiciously, sparingly and under some degree of scrutiny.

Very reluctantly we decided that it was right that the Government should hold this view, because insurance companies are in an almost unique category, in the sense that they are responsible for hundreds of millions of pounds of investments, premiums and savings. Having long-term control over those investments, there were suspicions that undesirable elements could gain control of insurance companies. There was even talk of Mafia or other criminal elements securing control of these massive investments. It was right that the ultimate power should be held by the Government to say whether someone is a fit or proper person.

We went further and said that a controller of a company had to be a fit and proper person. There was argument about what a controller is, because it is clear that an unfit or improper person could easily pass the controlling shares over to his brother, his sister, his uncle, or his aunt. We became quite Gilbertian in our debates on the question who was or was not a controller. It was considered right that in the end the Government should have the power.

There are such fundamental differences between the financial structure of insurance companies and insurance broking that the Minister would be well advised to seek the deletion of the good character provision. The difference is to a certain extent self-evident. In the Bill my hon. Friend does not seek for the Government the powers of scrutiny over the finances of insurance broking that the Government have over insurance companies. The Government, for obvious reasons, are not asking here for regular returns of insurance brokers' accounts such as are required under the Insurance Companies Act. Insurance companies and insurance brokers are totally different animals.

As insurance companies and insurance brokers are totally different in that fundamental respect, there is a case for not having the good character requirement in the Bill. For that reason, the House would be well advised to delete the good character requirement.

There is another point about controllers of companies. If we were so concerned that a person who was unfit and improper, or who was not of good character, should not gain control of insurance broking moneys, we should certainly have included a controller clause. We should have tried to establish that such a person would not be able to exercise control over an insurance broking house in any other way—for example, through related or hidden shareholdings.

We have not done that, because an insurance broker is a very different animal from an insurance company. It is clearly established that in insurance broking public money is not at risk in the same way as it is with insurance companies. Without exception, the insured's money is at risk with an insurance company. It is therefore right that the Government should have extensive powers of control and scrutiny over insurance companies affairs.

It is very much the exception when an insured's money is at risk with an insurance broker. There has been some misunderstanding about this. No doubt there are and will continue to be cases of fraud in this profession, as in others, but, generally speaking, once the moneys are paid to the broker they are at risk only vis-á-vis the insurance company. Once the broker has placed the insurance company at risk in respect of the client, the moneys are the responsibility of the insurer.

Leaving aside the question of fraud or defection, if the broker fails, his debt will be not to the client but to the insurance company, and the insurance company will honour the contract entered into between the insurer and the insured. A broker does not have control over the money of investors and clients in the same way as insurance companies have. I see no reason why the Bill should seek to follow the Insurance Companies Act either in its detailed wording or in principle. It would facilitate the passage of the Bill and its future administration if the Government would support my amendment rather than seek to pursue their own.

I ask the Minister to assume that the Insurance Brokers Council rejects a man's application for registration on the grounds that he is not of sufficiently good character and is unsuitable to be an insurance broker. The Government have the duty of administering the EEC rules on the freedom of establishment of the services offered by insurance brokers. The Government must issue a certificate to an individual if an individual is to have freedom to practice in other EEC countries.

I want to know from the Minister how the authority that will be vested in him from June or July to issue certificates to individuals will relate to the Bill. We could be in a serious legal dilemma. It might well be that the point could be resolved ultimately only by the European Court.

I ask the House to postulate that I decided to establish myself as an insurance broker independently and applied to be registered. If I had not endeared myself sufficiently to the members of the Council, they might say "That man is not of sufficiently good character."

I might then decide that I wished to practise on the Continent of Europe and that I satisfied the criteria laid down in the EEC directive. I might think "Though I have been turned down by the Council on the ground of bad character, I believe that I satisfy the necessary conditions laid down in the EEC directive."

Apparently, I have then to apply to a body called the "Certificate of Experience Unit, Europe. Industry and Technology Division, Department of Trade." I do not know what poet dreamed up the title "Certificate of Experience Unit." Nevertheless, that is the body to which I would have to apply. Presumably it is under the control of the Under-Secretary.

I quote from Trade and industry of 7th January 1977:

"Before operating in another state … the applicant must provide a certificate of experience proving that he complies with the conditions set out in the preceding paragraphs."

The preceding paragraphs lay down that the requirements are—

"The pursuit for at least one year of the activity of either insurance broker or insurance agent and receipt of the relevant attested training …"

It says earlier:

"For insurance agents and brokers the time limits involved are four consecutive years in an independent or managerial capacity or two consecutive years … or one year in an independent or managerial capacity"

in addition to training.

I hope that the point is now becoming clear. The standards laid down for training and experience are far lower in the EEC directive than those set out in the Bill. What is more important and relevant to the amendment is that the EEC directive does not say that a person must be of good character. To satisfy the EEC requirement it is not necessary that one should have passed the test of the British Insurance Brokers Council as to one's good character and suitability.

I should like to know what the Minister would do in such circumstances. Would he say to me "Yes, you certainly satisfy the EEC criteria and, even though you are an unfit and improper person, or are not of good character, we can certify that you have the necessary experience to be a practising insurance broker in the rest of Europe".

I hate to seem to be correcting my hon. Friend. I do so only when I think that what he is saying is definitely misleading. He spoke of satisfying the British Insurance Brokers Council as to his qualifications and character. He means the Insurance Brokers Registration Council, which is a substantially different body. It is important that the two bodies should not be confused.

I understand the point that my hon. Friend makes. I suspect that it will be some time before we become familiar with the two titles. I think that I now understand the position and am right in saying that the Insurance Brokers Registration Council is the statutory body.

I hope that I have not lost my hon. Friend on my general point, that there seems to be a total difference of approach between the United Kingdom requirements and the European requirements with which we shall be complying, in all probability, in June or July this year. I am sure that the Minister has much more information about this at his fingertips and he will be able to correct me. I was quoting from the publication of the Department of Trade and Industry which decided this matter.

12.30 p.m.

I return to my example. Let us assume that I have been turned down because I am a bad lad and unfit to be registered in this country, but I am given a certificate of experience enabling me to practise in the rest of the Community. Is the Minister saying that I would not be able to use that certificate of experience to practise in the United Kingdom?

I should have thought that under the Treaty of Rome freedom of establishment means that I would have freedom of establishment in all Community territories and would be free to provide such services. It would be helpful if the Minister could say what relationship there is be- tween the "good character" provision—which is an important turning point in the argument of suitability—and the EEC directive, which I think the Government accept.

The Bill incorporates a number of dubious legal points in that it uses words that involve matters of opinion, such as "suitability" and "bad character". I said earlier that words such as "opinion", "adequate", "practical" and "comparable" involve matters of opinion to be exercised by an independent body to which the House proposes to give statutory powers.

This is an unsatisfactory way of drafting Bills. I should think that the Minister accepts that it is unsatisfactory. In those circumstances, his best approach would be to limit as much as possible the use of words that concern matters of opinion. In this case, we would be better off without this power in the Bill. The words "good character" or the Minister's own description, involving "character and suitability" and so on, should be omitted from this legislation.

The points made by the hon. Member for Faversham (Mr. Moate) are numerous and I shall try to deal with them as quickly and as comprehensively as possible. In dealing with this issue we must have criteria governing important matters in an industry where business is transacted continually on the basis of the doctrine ultima fide—the utmost good faith.

It therefore follows that characteristics of honesty and integrity are essential. How we approach the matter is a fairly difficult problem, but it is not unique. Listening to the hon. Member for Faversham one gets the impression that this is an almost unprecedented situation.

I start with the proposition that there must be some basis on which the Council is able to deny access to the register to those who are not able to be regarded as trustworthy. The hon. Gentleman raised, and then slipped away from, the situation in which someone may be convicted for fraud. What about people who have been repeatedly associated with business failure? Is that not also a matter that ought to be taken into account, bearing in mind that we are talking about a situation in which we are seeking to provide a degree of protection for the consumer?

The hon. Gentleman went on to say that that protection was not necessary, because the situation was a different one from that which affected the insurance companies. Of course it is a different situation, but the mere fact that it is different is no reason for excluding this form of criteria from the considerations which ought to govern our minds when we approach the issue. The Government are seeking to retain the criteria to which I have alluded, concerning honesty and integrity, and also to pray in aid something that is already in practice.

We have adapted the wording from Section 3(1)(b) of the Solicitors Act 1974, which links the mention of character with the criterion of suitability for the solicitor's profession. After all, it is an applicant's suitability, in the broadest sense, that we are expecting any professional body, including in this case, the Council, to satisfy itself about before he is admitted to the register. It is an essential condition precedent.

It is perfectly true, in a sense, that these are matters of opinion or discretion on the part of a professional body, but I repeat that this is not a unique consideration. The hon. Gentleman is impliedly suggesting that we never trust professional bodies to exercise these very wide powers.

I am interested in the point that the Minister has made about the solicitors' rules. Is that a condition precedent to the man's right to practise as a solicitor, or is that part of his subsequent code of discipline, to which he has to conform?

It is both. It is a condition precedent and a continuing condition, and so it must be.

The Council will not be able to apply itself in an arbitrary fashion towards the consideration of these matters. There is a procedure under Clause 5 for appeal against refusal to register and I should have thought that that would provide an effective safeguard. We shall debate that later.

As for compatibility with the EEC rules, my understanding is that there is no inconsistency of approach here. We would be obliged to accept notarial evidence of compliance with the sort of requirements that we would be imposing here. We could not go behind that notarial evidence of compliance with, for example, the requirement for good character. The situation would apply in reverse, because there is reciprocity.

We can seek satisfaction as to the terms of compatibility with our requirements but we cannot go behind the evidence that is notarially produced in this regard. That is how I understand the position. If the hon. Gentleman wishes to pursue that aspect of the matter further I shall be happy to correspond with him about it. This is not an absolutely fundamental issue, and I hope that he will agree that we can deal with it separately.

I hope that I have given the hon. Gentleman, in headline terms, what is essentially the thinking behind the EEC rules in this regard.

Having listened to my hon. Friend the Member for Faversham (Mr. Moate) with great care, I find it rather difficult to comprehend why he takes such strong objection to line 40. After all, we are legislating in respect of people who are in direct contact with the public. It is, in my view, of vital importance both to the insurance brokers and to the general public that those people should be of good character. We are discussing, after all, a self-regulatory measure to enable brokers to be registered. That implies that the public, looking at the register, will assume that anyone whose name appears on the register is a person who is properly qualified and who is thought to be a fit and proper person to carry out the business of insurance broker.

The wording which we considered on the Committee stage came in for a good deal of criticism. I think that the alternative which is now proposed is a much more satisfactory form of words and one to which most people of good character surely could not take exception.

I accept, as my hon. Friend the Member for Faversham says, that it is a matter of judgment. It is a matter first of all to be considered by the Insurance Brokers Registration Council. But I have sufficient confidence to believe that the Council will operate this particular provision sensibly, and that it will be to the advantage of the general public to know that anyone whose name appears on that register is considered by his fellow men and women in the insurance broking profession as being of good character.

I thought that the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) made a very good point when he intervened to say that it was a rule of one of the Inns of Court that anyone practising at the Bar must be considered to be of good character. As the Minister has said, it is a requirement for solicitors as well. I cannot see any reason at all why anyone who wishes to practise as an insurance broker should not also satisfy both the Insurance Brokers Registration Council and the public, who will be dealing with that person, that he or she is considered to be of good character.

I hope, therefore, that my hon. Friend will not make too much heavy weather of this point, that he will feel on reflection that the form of words we now have can be accepted, and that we can make further progress.

In the discussion on this Bill I have usually found myself in agreement with the arguments put forward so ably by the hon. Member for Faversham (Mr. Moate), who, of course, has a profound knowledge of insurance practice, but I disagree with him on this occasion. I made some comments in Committee with regard to the unsuitability of the use of the words

"that he is of good character".

The words now suggested,

"as to his character and suitability to be a registered insurance broker"

seem to me to be very apposite and very useful for insertion in the Bill.

It gives me great pleasure to agree with the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman), and I am very happy to accept the amendment presented by the Under-Secretary of State for Trade. I have never particularly liked the words "of good character", and the words "fit and proper person" again are very subjective.

The proposed wording seems to get us closer to the idea of character and suitability from a business point of view. We are leaving out the social and moral aspects and concerning ourselves with the business ability and business character of the applicant. I have much pleasure, therefore, in supporting the Government amendment.

When I began my remarks on my amendment I conceded that it was a very difficult area for decision. I still believe that the Government are perhaps glossing over the difficulties of administering a clause of this nature. I accept the very strong parallel made by the Minister with solicitors. There is indeed a very great degree of comparability here. It has been difficult throughout the proceedings of the Bill to make helpful comparisons with other professions. I mentioned accountants, and I suspect that there is no requirement to prove that one is of good character before one goes on a register of chartered accountants. In that instance an examination is sufficient.

In this case perhaps an analogy with solicitors is more apposite and helpful, but I think the Minister glossed over the case some what when he made his comparisons with the Insurance Companies Act 1974. Anyone would think that the "fit and proper person" clause had been a model clause and one that the Government had found easy to operate—we shall be dealing later with the matter of appeals—but in fact we know that this has been a very very difficult area of administration and decision by the Government.

In moving the amendment I was genuinely suggesting a way in which in future the Bill could be administered—or the Act, if the Bill becomes one—with less difficulty than might otherwise be the case. There could be major problems in administration.

I accept that if we are laying down standards of entry into a profession we should like to keep out undesirable people, but it is hard to draw up statutory rules relating to whether a person is desirable or undesirable, and even harder to establish a system for making judgments about people. It is even harder again to consider how on earth the person concerned can appeal against any such judgment.

I am not totally convinced by the arguments put against me, but when faced with the particularly powerful case advanced by the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) I have no choice but to withdraw the amendment. I beg to ask leave to withdraw the amendment.

I beg to move Amendment No. 12, in page 3, line 3, leave out

'section 11'and insert 'rules under section 12(1)'.

With this we may take Government Amendments Nos. 19, 20, 71, 74, 75, 76 and 80.

We may also deal with Government Amendment No. 21, in Clause 12, page 9, line 6, at end insert—

'(1C) Subject to subsections (1D) and (1E) below, an accountant is qualified to give reports for the purposes of the rules if he is a member of a recognised body of accountants or is for the time being authorised by the Secretary of State under section 161(1)(b) of the Companies Act 1948 or, in Northern Ireland, by the Department of Commerce for Northern Ireland under section 155(1)(b) of the Companies Act (Northern Ireland) 1960.

(a) in relation to a practising insurance broker, if he is an employee or partner of, or an employee of a partner of, the practising insurance broker;

(b) in relation to an enrolled body corporate, if he is not qualified for appointment as auditor of the enrolled body corporate.

(1E) A Scottish firm of accountants shall be qualified to give such reports if, but only if, all the partners are so qualified.'.

With it we may deal with Amendment (a) to Amendment No. 21, to leave out

'recognised body of accountants' and insert 'body of accountants recognised by the Council in that behalf'.

We may also take a manuscript amendment which the Minister wishes to move and which has been selected by Mr. Speaker. The amendment reads:

"in page 3, line 33, leave out 'section 11'and insert 'rules under section 12(1)'".

Copies of the manuscript amendment are available at the Table if any hon. Member wishes to have a further look at it.

At the outset I point out that the manuscript amendment is of a drafting character.

This series of amendments, to which Amendment No. 12 is the paving amendment, reconstitutes the financial, independence and accounting requirements of the present Clauses 11 and 12, in order to take account of certain comments on the earlier wording which were made to us by the accountancy profession and the insurance companies. They also make it clear that these requirements apply only to enrolled bodies corporate and to those registered insurance brokers who are carrying on business as insurance brokers.

The provisions relating to the financial requirements of brokers, and their independence from insurers, now in Clause 11, should, we propose, if this amendment is carried, be incorporated in subsection (1) of the revised Clause 12. The present reference in Clause 11(1)(a) and (b) to "adequate working capital" and to an "adequate" solvency margin are, as the hon. Member for Faversham (Mr. Moate) has indicated, imprecise. I agree that they are unduly imprecise. The effect of this part of those amendments is to require the Council to prescribe the amounts it considers adequate in rules.

These rules, like those under the rest of Clause 12, are to be subject to approval by the Secretary of State and Parliament. Hon. Members will recognise that I have already referred to the provisions of Clause 28(1) in that regard.

By virtue of new subsection (1)(b) of Clause 12, the Council will now be able to require practising brokers to deliver statements for the purpose of ascertaining whether or not the rules under subsections (1) and (1A) have been complied with. It will also be able to require brokers to deliver accountants' reports for the same purpose. This gives the Council more freedom to specify the type of information which it may require—for example, in order to assess brokers' compliance with the independence requirement.

The definition of a qualified accountant for the purposes of the clause has been broadened by the new subsection (1C) so that accountants authorised by the Secretary of State under Section 161(1)(b) of the Companies Act 1948 are eligible. These include overseas accountants with qualifications comparable to those of qualified United Kingdom accountants and accountants deemed to have obtained adequate knowledge and experience in the course of employment by a member of a recognised accountancy body.

I hope that the House will accept our amendments.

I am grateful to Mr. Speaker for having selected Amendment No. 21(a) for consideration in this group of amendments. It was drafted by my hon. Friend the Member for Hayes and Harlington (Mr. Sandelson), who has asked me to apologise for his absence. He has to attend the funeral of a constituent.

My hon. Friend's amendment seeks to leave out the words "recognised body of accountants" and substitute

"body of accountants recognised by the Council in that behalf".

The Bill contains in Clause 12(1)(e) a provision enabling the Council to make rules requiring the delivery of reports

"by persons who are members of a recognised body of accountants."

That provision is now to be replaced by the Government amendment substituting for the words

"reports given by persons who are members of a recognised body of accountants"

the words

"he is a member of a recognised body of accountants or is for the time being authorised by the Secretary of State under section 161(1)(b) of the Companies Act 1948".

Section 161(1)(b) states that the person must be authorised by the Board of Trade to be so appointed as having similar qualifications obtained outside the United Kingdom, or a person with adequate knowledge and experience gained in the course of employment with a member of a recognised body, or a practising accountant before 6th August 1947. Therefore, the provision is clearly restrictive of the employment of accountants. I remind the House that again and again on Second Reading and in Committee the suggestion that people would be put out of employment by the provisions of the Bill was emphatically denied.

I am asked to make the plea for the acceptance of my hon. Friend's amend- ment on behalf of the Association of International Accountants, which has a membership of about 400 practitioners in the United Kingdom. It has 2,000 fellows and associates and 16,000 students. Admission to it is by examination only, coupled with approved accountancy experience of five years. The Association is the only accountancy body to examine in a separate paper on professional practice.

The Association was incorporated as long ago as 1932. Since 1948 no bodies other than the three Institutes of chartered accountants and the Association of Certified Accountants have been officially recognised under Section 161(1). Therefore, a monopoly has been created.

Since 1947 the Association has been seeking recognition by the Board of Trade and the Departments that have succeeded it. It has submitted data showing that it has a high standard. I have seen statements from the College of Technology emphasising how high is the standard required. The Association has seen Ministers and officials from time to time over a period of 30 years. I understand that during that time it has received assurances that attention was being given to its claim for recognition, but for some mysterious reason there has been no recognition to date.

Unless the amendment is accepted, serious injustice may well be done to existing practitioners. Insurance brokers now employing them will have to employ in addition other accountants, members of a recognised body, in order to make such reports. That must mean unemployment for members of the Association, which seems counter to the statement that people would not be deprived of their employment by the provisions of the Bill.

It will be noted that the wording of the amendment would leave it to the Council to see that accountants employed were properly qualified. The amendment is surely elementary justice.

My hon. Friend the Member for Hayes and Harlington (Mr. Sandelson), who is unavoidably absent, has spoken to me about the amendment, which has been very capably spoken to, as always, by my hon. and learned Friend the Member for Hackney, North and Stoke Newington (Mr. Weitzman). The more I think about the Hackney representation in this House, the more I feel that I must say that the House and the electors of Hackney as a whole are very well provided for.

The point that my hon. and learned Friend makes is not, unfortunately, in accord with a satisfactory standard, which must be applied here. I see that the hon. Member for Mid-Sussex (Mr. Renton) is present. He will have vivid recollections, as I do, of debates on this very issue during the passage of the Companies (No. 2) Bill, when we spent hours on the matter.

This debate has been in a sense stimulated by the Association of International Accountants Limited, which has sent all hon. Members a document setting out its case. As my hon. and learned Friend said, it is a fairly small body in the United Kingdom, with, he said, 400 practitioners here. It also has a number of overseas members. It has been pressing for recognition under the Companies Act for a very long time, but we must satisfy ourselves—and I am sure that my hon. and learned Friend will agree that the requirements must be very stringent in this regard—that its standards are comparable to those of the recognised bodies. I am sure that my hon. and learned Friend would not want to see lower standards in an area as important as this.

The amendment would give the Council discretion as to whether to recognise bodies of accountants as having standards high enough for their members to audit registered brokers. I do not know why that should be necessary, because my right hon. Friend the Secretary of State recognises under the Companies Acts four bodies as having members sufficiently qualified to audit companies. Those bodies are specified in Clause 30. The non-recognised bodies of accountants, of which this happens to be one, are in certain instances making determined efforts to improve their standards. I recognise that, but I feel that the standards will fall short of those required of the recognised bodies. In these circumstances, I do not want the Council to be seen as more liberal than the Secretary of State. In the Bill we are trying to legislate for high standards for brokers. Therefore, we should legislate for high standards for auditors.

The amendment states:

"body of accountants recognised by the Council in that behalf."

If the Council felt that the standard was not high enough, it would not accept this body of accountants. I am asking only that the Council be the judge of the matter. I agree with my hon. Friend's remarks about high standards, but surely the Council should be the judge of this matter.

The matter has to be considered in a much broader context. The fact is that the two accountancy bodies that have applied for recognition are at present not recognised under the Companies Act. In that context we must determine whether they should be able to provide their services on the important basis that we are now considering. My hon. and learned Friend says that the matter should be left to the Council, but on the broader issue of public policy I cannot agree to that course.

My hon. and learned Friend has referred to some form of delinquent conduct on the part of the Department of Trade in respect of the applications that have been made. I cannot agree. The fact is that the applications are being considered. At our suggestion those concerned are in the process of appointing independent moderators to examine the standards of the examinations and the syllabus. Surely that is essential. I understand that early recognition is not in prospect as even when the standards are brought up to those of the recognised bodies it will be some considerable time before a sufficient proportion of the membership has obtained entry under the new arrangements.

There is no question of people being rendered unemployed by reason of these events. I believe that my hon. and learned Friend has exaggerated the situation. Surely it is not right materially to reduce standards in respect of the professional requirements that are imposed upon another body of professional people.

My hon. Friend says that he is not content to leave the matter to the Council. Those were the words that he used. I remind him that he is content to leave matters of character and suitability to the Council. Why should my hon. Friend not leave the standard required to the Council?

That is because this is a matter that embraces a wider point of public policy. The other matter involves day-to-day administration, which is best determined by the Council. We do not and cannot support any idea of reducing standards in a profession that is as important as the accountancy profession. If the other bodies are able to bring up their standards to those of the recognised accountancy bodies, so be it. If they are able to do so, that will be all right. However, as I indicated, it will be some time before they can ensure that their existing membership can obtain entry under such arrangements.

I hope that my hon. and learned Friend will not feel it appropriate to press the matter. I have given him the assurance that the applications that the two bodies of accountants have put forward are being closely examined and that there is no question of any delinquency on the part of the Department in dealing with them.

Before I call the next speaker I make it clear that the only Question before the House concerns Amendment No. 12. The hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) will have the opportunity later to move his amendment formally.

I am grateful for your clarification, Mr. Deputy Speaker. I understand that we are debating the other grouped amendments.

The other amendments are being debated and they can be moved formally at the appropriate time.

Is Amendment No. 12 to be discussed now? It has been moved.

Amendment 12 has been moved, and that is the amendment that we are debating. The other grouped amendments, including the manuscript amendment, are being discussed with Amendment No. 12. If desired, there will be the opportunity subsequently to move the amendments formally.

I ask for further clarification, Mr. Deputy Speaker. I understand that Amendment No. 21(a) may be moved formally later. Will there be the opportunity for a separate vote on that amendment when it is moved formally?

That would be absolutely correct.

I take it, Mr. Deputy Speaker, that when I move my amendment formally I shall be able to reply to the Minister.

All the debate on the amendment should take place now. There will be the opportunity for the hon. and learned Gentleman to move his amendment formally but there will be no further opportunity for debate.

I take it, Mr. Deputy Speaker, that I have no right of reply.

That is correct.

My main intention is to talk about the substantial batch of Government amendments now before us. Before doing so, I comment on the case that has been advanced by the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) in support of his amendment. I do not think that the Under-Secretary of State gave a fully satisfactory answer to the case that the hon. and learned Gentleman advanced.

I accept that this matter has been the subject of exhaustive debates elsewhere and involves matters of considerable public importance. Therefore, perhaps the Minister feels that he cannot go into the long and complex argument in the context of the Bill. However, I do not think that he gave a fully satisfactory answer to the case made by his hon. and learned Friend.

I refer to the document that has been sent round to all hon. Members on behalf of the Association of International Accountants. In paragraph 7, page 2, it states:

"The practical effect of the clause therefore is that a broker who is already employing a member of the Association of International Accountants to prepare his accounts will also be compelled to employ a chartered or certified accountant for the separate purpose of giving the report required pursuant to the clause. He is most unlikely to accept that he should employ and pay two accountants, and is therefore likely, against his will, to dispense with the services of the first. Accordingly such an accountant, by losing his existing employment, would be deprived of his existing rights of employment, without any redress."

It seems that it is quite legitimate for us to argue about what is a recognised body of accountants for the purposes of the Companies Act. The House should consider carefully whether individual accountants will lose business, and perhaps even their livelihoods, as a result of the Bill.

It is open to any individual who finds himself in such a position to apply to the Secretary of State. If the Secretary of State thinks that his qualifications are sufficient, he may be accepted both for the purposes of the Companies Act and for the Bill, including the amendment as drafted, if it is enacted.

Only for 12 months.

The Minister says "Only for 12 months". I presume that it is a limited right. I do not imagine that the position is as simple as is suggested.

The Companies Act 1976 in fact covered this. There are to be no more applications under Section 161 after 12 months from the time that this provision comes into effect. However, that does not disqualify people who have acted under a Section 161 authorisation from continuing to act in the future in this connection.

We have a situation, then, in which there is limited scope for relief for such individuals. But it is only limited scope. In any event, if it were as simple as that I imagine that the Association of International Accountants would not have gone to such lengths to protest its case in defence of its members. It says:

"In each case where that expression"—

"recognised body of accountants"—

"has been used the effect in practice has been to shut out of employment accountants who are not either chartered or certified accountants. This bears particularly hard on members of the Association of International Accountants, a professional body which is in fact at present undergoing a prolonged process of detailed official scrutiny in order to determine the justification of its claim to be 'recognised' under Section 161."

I was surprised that the Minister wished to close the door against this body. It is especially strange, bearing in mind that he laid such stress on the Government's willingness to allow the Insurance Brokers Registration Council to make a whole range of decisions, that they are not prepared to allow it to say to a broker that he may continue to use the same firm of accountants that he has been using satisfactorily up until now. That strikes me as being a very restrictive approach.

This body has for 30 years been seeking recognition and has submitted standards showing how well qualified its members are. For some mysterious reason it has been given assurances from time to time, but nothing has been done.

Of course, all these cases of professional recognition involve very complex matters. It is not for me to engage in a discussion of the respective merits of the different bodies of accountants. But it is harsh to impose a new requirement in this Bill. I do not suppose that my hon. Friend the Member for Harrow, West (Mr. Page) ever dreamt that this matter would arise, but, inadvertently, we are imposing conditions that will deprive certain accountants of a great deal of their business.

My hon. Friend the Member for Faversham (Mr. Moate) always attempts very carefully to attribute to me thoughts that are not my own. No attempt is being made by the Minister or by this clause to remove business from any accountant. He will be entitled to carry on his accounts as before. Under this Bill, we have merely the introduction of a new certificate. The business remains exactly as it is.

If I attempted to attribute to my hon. Friend the Member for Harrow, West any sentiments, it was only in an effort to be generous. I was not trying to be malicious. I quoted extracts from the submission of the body most concerned about this. It is that body's view that the consequence of this clause could be that certain accountants would lose that business. Obviously my hon. Friend is right to say that the accounts can continue to be handled by the same firm of accountants, but they will have to have another body to certify them. The Association dealt with that point, and I said that in practice people were unlikely to employ two firms of accountants and that the result would be that they would cease to use their existing accountants.

Many persons who are members of this international body are employed by companies. If they are not allowed to sign reports, it must mean the employment of two accountants. That would be too expensive. The result will be the very one that the hon. Member for Harrow, West (Mr. Page) says that he does not want to achieve—unemployment resulting from the dismissal of members of this body.

The hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) has a stronger point than the Minister has allowed. I hope that before we take a decision on that amendment the Minister will change his mind and that he and my hon. Friend the Member for Harrow, West will agree that the amendment should be added to the Bill.

I turn to the main batch of Government amendments relating to the financial position of insurance brokers. It is a complex and substantial block of amendments but, broadly speaking, they are fairly non-controversial. They represent a sensible tidying-up of the previous arrangements, and in principle I do not quarrel with them.

However, there is one matter in respect of which I feel that the clause is defective and will be difficult to operate in practice. Before we deal with it, I think that we shall have to look carefully at the rules that are laid down when we have a chance to examine the Statutory Instruments.

Other right hon. and hon. Members are much more expert in accountancy procedures than I am. But it seems to me that we are saying that the Council will be able to make rules prescribing the working capital of a company, the value of the assets of its business in excess of its liabilities and the bank accounts and various other accounts that it will have to keep, and laying down a series of rules for insurance brokers that are different from those for other limited companies, with the exception of certain companies such as insurance companies.

It may be that when the rules are prescribed they will be sensible and that the House will have no objection to them, but I hope that when those responsible for drawing up the rules are discussing them with the Department they will not seek to make them too restrictive.

I can see no reason why an isurance broker should have a greater surplus of assets over liabilities than any other limited company. I can see no reason why the ordinary operation of the Companies Act should not be applicable to an insurance broker as to any other firm. Presumably the Minister believes that there is a case for separate laws to be applied to insurance brokers with regard to their working capital and their surplus of assets over liabilities. I hope that they will not be too unreasonable.

There are large numbers of very small insurance brokers operating as limited companies who might find themselves unable to meet any strict criteria imposed on them by these regulations. It would be very hard if people were put out of business, even though they could no longer call themselves insurance brokers, when they complied with the Companies Act and were solvent in accordance with the current definitions of solvency. It would be very unfortunate if that resulted from their failure to have a surplus of assets over liabilities in accordance with a Statutory Instrument issued under this legislation.

I look forward to hearing the Minister say why he believes that an insurance broker, large or small, is in a different category from other companies. Why should an insurance broker have to have different standards of financial solvency from those of other companies? It may be that there is a case, but it has not been advanced, and I think that the case should be made before we approve this amendment.

The point that concerns me especially in this occurs in Amendment No. 20. Subsection (1)(c) of that amendment reads:

"that the number of insurance companies with which they place insurance business, and the amount of insurance business which they place with each insurance company, is such as to prevent their businesses from becoming unduly dependent on any particular insurance company".

This again introduces matters of opinion. We have already debated a number of words that are very much matters of opinion and that we have sought to incorporate in statutory form. Here we have another. Someone has to judge whether an insurance broker is unduly dependent on one client. There may be accountants who are unduly dependent on one account or solicitors who are in the same boat—

No.

My hon. Friend says "No", but I suspect that many solicitors get their main income from one large corporation or one big concern. Maybe they are not totally dependent, but I suspect that some would go out of business if they lost one or a group of clients on whom they relied.

In the insurance world it is difficult to say what is meant by undue dependence on one company, and it is almost impossible for anyone to make an intelligent and sensible judgment on that. What the Government are saying is that in certain cases broking houses are not truly independent brokers but merely agents of a particular insurance company, operating under a different name and therefore under false pretences.

I suspect that the reasoning behind this lies in the history of Vehicle and General, and the public argument about Andrews and Booth, which, it became clear later, was a wholly-owned subsidiary of Vehicle and General and was channelling a large proportion of business to the parent company. Therefore, it was not an independent broker.

Since then we have had the new rules under the 1974 Act which provide for full disclosure of any such relationships. It seems to me that this has done the trick. There are plenty of brokers who put a great volume of business with one insurance company. I can think of several very reputable firms that would be decimated if they lost a substantial account with one particular insurance company. I shall not mention any names, but I can think of firms in the constituencies of some of my hon. Friends who are in the Chamber now. These companies would be regarded by their rivals as being virtually dependent upon a particular contract placed by a group of clients or by one insurer. Although nobody would dream of saying that they are not sound, successful and flourishing brokers, the fact remains that they are dependent on one underwriter or one company.

Some brokers are specialists, and this involves placing business with one particular underwriter. Now the Minister is moving an amendment that says, in effect, that this is improper. Is he seriously saying that he is changing the rules for Lloyd's brokers—no, I am sorry, Lloyd's brokers are privileged and they get by regardless. The fact that Lloyds' brokers qualify automatically and do not have to go through strict tests will cause some upsets in the provinces. The provincial broker, on the other hand, has to prove that he is not unduly dependent, and I do not think that a lot of them will be able to do so.

Why has the Minister introduced this wording into the Bill? It is most unsatisfactory as it stands. The Bill will lose nothing if it is taken out. The Minister has the rules of disclosure requiring the broker to disclose the facts if he is a subsidiary of an insurance company. We do not need to require brokers to state that they are independent. The Bill is better off without this proposal, which would be unworkable anyway. The Bill will lose nothing by the withdrawal of this phraseology. Perhaps the Minister will look at it again before the Bill goes to another place—and I suspect that there will be a whole host of amendments in another place.

There is one other matter on which I seek guidance from the Minister. The Council will comprise, to a large extent, practising insurance brokers who will have placed before them a great deal of private information about other insurance brokers. With limited companies it is not too difficult to see their accounts if they file them on time. One only has to go to Companies House and have a look. Some firms are exempted for one reason or another—a partnership is a classic case—and one does not have a great deal of information about their accounts. One certainly does not establish any relationship between their turn over and capital requirements, and so on.

This is a privileged group of brokers. They will be seeing the accounts of their rivals. I realise that that is unavoidable and I am certainly not suggesting that these people will misuse the information. But what are the rules of confidentiality of such information? Where are these rules laid down, and how will they be enforced? If a member of the Council misuses the information, what penalty will he suffer?

The Minister may think that this is academic, but insurance broking is a very competitive world. The provincial broker with a large volume of business at risk—and in the insurance broking world one is always fighting to gain or defend an account—might be very wary of feeding information to the Council, on which he knows that his direct competitors are sitting. I can think of just such examples, although, for obvious reasons, I shall not quote them. This is a real danger. A provincial broker might be reassured if he knew that there were tight rules of non-disclosure of this information.

I hope that when we deal with the amendment in the name of the hon. and learned Member for Hackney North, and Stoke Newington the Minister will concede that it can be added to the Bill. To sum up, I should be grateful if the Minister would explain how he intends to enforce the parts regarding undue dependence on one insurance company, and if he would state the penalties for breaches of the confidentiality of information.

In this debate a number of interesting points have been raised. I shall carefully consider those put forward by the hon. Member for Faversham (Mr. Moate) between now and the time the Bill goes to the House of Lords, because he made some points of substance.

I turn, initially, to the points made by my hon. and learned Friend the Member for Hackney, North and Stoke Newington (Mr. Weitzman) concerning this body of accountants. He has repeated his assertion that the body of accountants concerned has made application to the Department of Trade for recognition for over 30 years. When one is trying to increase professional standards in auditing—and I stress that auditing is relevant here—it is vital that the Department of Trade should ensure that the standards of new applicants for recognition are not lower than those of the bodies already recognised whose standards have been scrutinised and found acceptable.

It is essential that they should satisfy the Department about their syllabus and their examination standards, and it is also essential that they should be able to ensure that people within their particular body are capable of adhering to those standards. In other words, those who are members of the bodies would have been required to undertake examinations to become party to the professional régime on which we place so much importance.

I recognise that the Minister is right in saying that certain standards ought to be adopted. I have made investigation into this matter. I understand that the standards that have been reached are very high indeed and should certainly qualify the Association of International Accountants for recognition. What I seek from the Minister is this. I understand that it has applied for over 30 years, from time to time, and has submitted evidence. It may be that the Board of Trade was not satisfied with that evidence. All that I seek from the Minister is an assurance that, at any rate, the most careful and urgent attention will be given to its application so that at the earliest possible moment it can be given recognition. Otherwise, if the standards are there and the position is as I have put it, it is a gross injustice that it should not be recognised.

I have no intention, nor has the Department, of excluding people from recognition if they attain a certain standard. Indeed, we should be delighted that that should be so. However, what has happened so far is that we suggested to the body that it should appoint independent moderators to investigate the syllabus and the examination procedures, and this it has done. This is an essential precondition. It has not been the situation in the past, so some movement is being made.

However, I cannot give an undertaking to my hon. and learned Friend that we shall necessarily recognise the body. It depends on our being satisfied in the public interest that the standards are high—as high as those of the other recognised bodies. I have no desire, in any way, not to expedite these considerations. I want to do that because I think it is right that if the body is able to satisfy us that satisfactory standards are being attained, it should have the opportunity of being recognised. But that is the essential precondition.

I come to the second point made by my hon. and learned Friend, and by the hon. Member for Faversham. That was that some degree of unemployment will result from these provisions because brokers would have to appoint two firms of accountants, one to deal with their accounts and one to deal with the auditing. It is not an unknown proposition at all in business life that even unqualified accountants—unqualified even by the standard of the professional body to which we are here alluding—are employed by a business to deal with its accounts and a professional certified firm of accountants or chartered accountants is brought in to deal with the auditing. It is done with great regularity and frequency. I should think that virtually every smallish professional firm does not employ a firm of chartered accountants to undertake its everyday accountancy, because it would be far too expensive for the firm to do so. The firm employs either an internal accountant or a freelance accountant, who may not be professionally qualified, to do its everyday accounts. A note of alarm has been brought into this matter—not necessarily by hon. Members, because they have been rehearsing arguments put to them in the paper that they have received.

I shall turn shortly to the other points concerning the adequacy of working capital and the question of independence, but before doing that I ought to add a footnote to the point about why the Council should not have the right to deal with this matter, which I almost overlooked. I think that if the Council were to have the sole right to look into the qualifications, effectively, of accountants to deal with auditing, it would expose the Council to constant pressure to approve bodies that the Secretary of State has not yet deemed it advisable to approve because their standards, in his judgment, are not high enough. That would be a quite unfair burden to place on the Council.

I turn to the other point raised by the hon. Member for Faversham. I cannot put the case any better than it is put in the document "Insurance Intermediaries", with which he is very familiar. The arguments are very well rehearsed there as to the question of independence. It is a public concern. The people who offer professional advice should do so on a basis of independence. This is an argument that has been raised with regard to auditors. They are fully aware of the situation, and a working party set up by the auditors is investigating that aspect of the matter at present. The public are entitled to be concerned about the independence of their professional advisers, the way in which advice is tendered and so on. Therefore, I make no apology for that, and indeed, even in the definition of an insurance broker in the EEC draft directive, the words that are imported there are

"persons acting with complete freedom as to their choice of undertaking."

What is there implied is that there should be some independence in the judgment that is applied to these important matters, which can do so much to affect and even blight the lives of people who rely upon this form of professional advice.

I should be glad if the Minister will look again at this point before the future stages of the Bill. A broker can be substantially dependent, perhaps unduly dependent, on one insurer, but he does not, thereby, cease to be an independent broker and he does not lose the freedom of choice that is explicit in the EEC definition. This clause has got it wrong. As an independent free broker, he can still have an undue proportion of his business, if he likes, with one particular insurer.

The hon. Gentleman has a point. I do not accept that the clause has it wrong, but I should like to look at the matter again. I hope that the hon. Gentleman will accept that assurance.

On the question of the adequacy of the working capital, that is rehearsed, as I have indicated, in the document. It is essential, considering the background against which we are discussing this matter—that is, the handling of very substantial sums of money and the ability in the past, anyway—it will be severely limited now—to set up an establishment without too much difficulty. However, again I want to be sure that we shall not cause any injustice to anyone by reason of too high or too difficult a standard. I shall look again at this aspect of the matter. I think that I recall that the sponsor of the Bill was worried about it in Committee.

The question of confidentiality is a bit of a red herring. Again, we are not without precedents in this matter. For example, we have the Association of British Travel Agents, which no doubt from time to time is invested with quite confidential information from competitors. We have the British Insurance Association. Under the Policyholders Protection Act, as the hon. Gentleman will recall, we set up a group of people who are able to advise the Secretary of State on the exercise of his powers, and most certainly they will have confidential information available to them, fed in by competitors.

Another example I would pray in aid is the Airworthiness Board, on which manufacturers and different interests are represented, clearly very often in competition one with another, and yet there is an understanding that it is necessary to maintain confidentiality.

I have no evidence that in any of these institutions the situation has resulted in prejudice to anyone. There is a risk, but I do not think that it is a serious concern.

This is another difficult area of administration. The examples that the Minister has quoted are all fairly recent examples. I think that he would accept that. However, he will recall that in our debates on the Policyholders Protection Act this same concern was expressed by the House about individuals who are, in effect, being given privileged information. It seems that it is an area of concern, and the more bodies that we create that have such powers, the greater the concern should be.

Of course there is some concern, but generally anxieties are more theoretical than practical. One could pray in aid a whole range of areas in which confidential information is vested. For example, shop stewards are frequently told that if they disclose information it will damage their membership and, as a matter of practice, they do not disclose it.

I think this is a little bit of a red herring. One has to have some faith in the capacity of those who administer a scheme of this kind, and that is what is happening. I hope that the hon. Member for Faversham will feel prepared to accept the assurances that I have given.

I beg to move Amendment No. 13, in page 3, line 30, at end insert:

'or

(d) that so much of its business as consists of insurance broking is carried on under the management of a registered insurance broker'.

The background to the amendment is a fairly extensive one. The clause was referred to in the Second Reading debate and a substantial amendment was introduced in Committee. It was not discussed, but was accepted. My hon. Friend the Member for Harrow, West (Mr. Page) was as persuasive as ever and the amendment was not dealt with at any length.

In my view, the Bill has still got it wrong. I hope that my hon. Friend, and the Minister, will make yet another effort to get it right. I hope that it will not be necessary to press this amendment to a Division, but I feel strongly that the Bill is wrong and that it needs amendment. If it is not amended, there will be quite unnecessary disruptions to businesses that are at present trading in a perfectly proper manner. That disruption would be of no possible benefit to the public and in that sense the Bill would be negative and damaging.

This may be a fairly mild and minor matter, but it is a fairly major principle. I would refer back to the original Clause 4 of the Bill which stated that

"A body corporate shall be entitled to be enrolled in the list—

(a) if it satisfies the Council that a majority of its directors are registered insurance brokers or, in the case of a body corporate having only one director, that he is a registered insurance broker; or

(b) if it satisfies the Council that the greater part of its business consists of activities other than insurance broking and that so much of its business as consists of insurance broking is carried on under the management of a registered insurance broker."

It was pointed out, for example, that this meant that we had two categories of corporate insurance brokers and that a firm of brokers ought to have a majority of its directors as registered brokers. I do not think anyone quarrels with that, although I can think of substantial firms of brokers who might not always have a majority of persons on the board who were qualified as insurance brokers. They might well have a majority of lawyers, accountants or financial advisers. But there is no fundamental quarrel with that proposition.

1.45 p.m.

A contrast was then made between that requirement and others. The case of Thomas Cook's was the fundamental example used. It was asked whether it was not wrong that broking firms should be required to have a majority of registered brokers as their directors whereas another organisation which has an insurance department need have only one registered manager in charge of its operations. This contradiction or unfairness was pointed out by a number of my hon. Friends and I pointed it out myself.

In Committee my hon. Friend the Member for Harrow, West introduced a new amendment which henceforth effectively deleted the right of a large organisation to have an insurance department under the management of an insurance broker. It means that such a company must set up a separate subsidiary company if it is to continue an insurance-broking operation. That is quite wrong. I can see no justification for that whatsoever.

Since then certain examples have been given to me where, in my view, the Bill would operate unfairly and detrimentally to the public interest. My hon. Friend the Member for Harrow, West should have gone exactly the other way and should have stated that any organisation, insurance brokers or otherwise, would simply have to prove that its business, or that part of its business consistent with insurance broking, was under the management of a registered insurance broker. That would have been simple and effective. Instead, my hon. Friend went the other way and said that insurance broking must be controlled by a majority of registered insurance brokers.

A specific case comes to mind. I shall not quote the name of the bank because it is not necessary, but it is one of the largest banks in this country, which has a very substantial insurance broking department. It is not a separate limited company but a department. It runs effectively, and while many insurance brokers may rather regret the competition offered by banks, I personally do not share their regret because I think it is quite legitimate and proper competition which offers an effective public service.

Banks and others operate such insurance broking divisions under the management of very skilled insurance brokers. There is no doubt that the manager of that department would qualify as a registered broker, indeed, many members of such departments might qualify. But we are told that this is not acceptable because under the Bill as it stands that bank either has to hive off that business or make sure that there is a majority of insurance brokers on the board of the bank. I do not think that makes sense. I cannot imagine any of the big banks insisting on a majority of registered insurance brokers running the bank. There could be conflict if other organisations, like travel companies, make similar regulations. What is the point of doing that? The public will not benefit by saying to the bank that it has to form a separate limited company.

In turn, if it does create a separate limited company we are still saying that a majority of its directors must be registered insurance brokers. That means that a majority of those on the board are registered brokers. I should have thought that the bank itself would like to continue to control the affairs of its subsidiary. That seems proper. But if it is obliged to have a majority of specified persons of the board it is no longer in control of the day to day running of its affairs. I should have thought that was undesirable.

My proposition simply states that henceforth it should be sufficient to prove that the insurance broking business is under the management of a registered broker. There is nothing wrong with that. That registered insurance broker, and the insurance broking operations, are just as much subject to the disciplines. codes of conduct and the financial requirements as all other registered brokers. They still have to apply to be registered brokers. They are still a body corporate and have to make a submission for registration. They are as much subject to scrutiny and control as any other organisation. All we are saying is that the organisation needs to be under the management of a registered insurance broker.

That seems to be a strong case. I am not talking academically. I have copies—as I am sure my hon. Friend has—of the correspondence that I have had with one of the major banks. I do not believe that my hon. Friend would wish to make life more difficult for the major banks. I do not think he would argue that it is desirable to force a bank to create a separate subsidiary company, but that is what he is doing, and I shall be interested to hear his argument for what he proposes to do.

I have here a letter dated 28th March 1977, from the Department of Trade, signed by a Mr. Tucker. He concludes his case, which was against the proposition that I am putting forward, by saying:

"… it does seem to offend common sense to allow organisations principally operating in other fields such as travel agency (or indeed banking) to call themselves insurance brokers unless the organisation as a whole contains the requisite expertise."

I think that that is a nonsensical argument. It is the letter that offends comon sense. Is anyone suggesting that a major bank, with a substantial insurance department, does not have the requisite expertise? If so, I do not think that it is an argument that can be sustained.

I cannot understand why my hon. Friend—or the Department—is not prepared to accept the much more flexible and sensible proposal that I have put forward. It may be that my hon. Friend will accept my case. Perhaps he will again surprise the House by accepting this proposition, but so far I have seen no sign of his doing that. My impression is that my hon. Friend and the Department are determined to ensure that a majority of directors of any organisation that is engaged in insurance broking shall be registered brokers, and I do not think that that is right.

I hope that the Minister, or my hon. Friend, can put forward a better case than has been made so far. In the expectation of a helpful and encouraging reply I shall curtail my remarks and hope that my hon. Friend will find a way out of this dilemma.

When I moved the amendment in Committee which my hon. Friend is now trying to amend he was, unfortunately, in Bermuda, I believe and the Committee was unable to have the opportunity of the Committee speech that he has, in effect, made today.

My hon. Friend is a well-known expert on the Report stage of Private Members' Bills. When I last took a count, which was about an hour ago, I found that my hon. Friend had been on his feet for 40 per cent. of the time that the House had taken to debate this measure, and I think that there must be no possible shadow of doubt in the mind of the House and of the public that my hon. Friend is out to torpedo the Bill and to try to destroy it.

I say that more in anger than in sorrow, because there have been many opportunities for my hon. Friend to clear up these matters. The Minister was available throughout the Easter Recess. My hon. Friend enjoys trying to explode a depth charge without warning, instead of trying, as one might expect from a parliamentary colleague, to seek the co-operation that he has said he has not found it difficult to obtain from me.

We now face the fact that my hon. Friend is trying to destroy the Bill, and the strange ringing in my ears whenever he gets up to speak must, I think, be the echo of the Lutine Bell. My hon. Friend has chided myself and the Minister about the amendment that was passed in Committee. I have a suspicion that anyone who writes to my hon. Friend with any case against the Bill, however thin or feeble, finds in him someone who will launch that case as a major new unsatisfactory aspect of the Bill.

In this instance, my hon. Friend is asking for one rule for the rich, and another for the poor. The big banks must be allowed special privileges so that they are not hurt, whereas the reason for my amendment in Committee was to ensure that the regulations that apply to the High Street company apply to the banks, to the Thomas Cooks, and to others like them.

If the Bill goes through, I insist that the Midland Bank, Barclays, or whoever is concerned, shall stand on all fours in the matter of the regulations for insurance broking with Joe Bloggs, Insurance Brokers Limited of Faversham, and it is right that that should be so. It would be iniquitous if any company could carry on insurance business by employing one registered insurance broker and saying "We are insurance brokers", and by that means drive a coach and horses through the objectives of the Bill.

I think that in taking the view that he has taken my hon. Friend has shown a shallow appreciation of what the Bill is trying to do and the fairness of myself and, I believe, a majority of the House in sponsoring this measure. The support that my hon. Friend has had from members of my party and from hon. Members on the Government Benches in trying to destroy the Bill has been very small. He will have the whole weight of responsibility on his shoulders if the Bill, which I believe is desired by a vast majority in the House—which is not so important—and in the insurance business as a whole, is torpedoed. The responsibility for the sinking will be wholly on his shoulders.

The Minister said that my hon. Friend was magnificent when roused, and I endorse that sentiment. I am sorry that the harmony that has so far assisted in our debates should be disrupted, and that the responsibility for that should be attributed to me, but I think that on this occasion my hon. Friend's ire has meant that he has failed to give to this proposal the proper consideration that he has generally given to other matters. I believe that there is a strong case for what I have proposed, and I am sorry that my hon. Friend has now dug in and entrenched himself in defence of what I regard as his indefensible proposition.

My hon. Friend is wrong when he says that the clause as drafted means that the same law will apply to the rich as to the poor. That is a grand phrase, but it is meaningless nonsense in this context. I shall go on to elaborate that, but before doing so I must make it clear that I oppose the principle of the Bill. I have made that clear at length.

It is not possible for one Member to torpedo a Bill in the way that my hon. Friend says. It is possible for one Member to ensure that a Bill is scrutinised at great length, but if my hon. Friend has the support that he claims, there is no problem for him. He has only to take the votes. He has only to move closure motions. He has only to find other days on which to continue this Report stage. My hon. Friend laughs, but we know that there are other days on which he can bring this measure forward.

If my hon. Friend is suggesting that we should not scrutinise the Bill in this way, he is wrong. This must be one of the longest Private Members' Bills that the House has seen for some time. There are 30 clauses of detailed legislation. The Bill had a perfunctory Committee stage indeed, and hence it is essential for the House to give proper consideration to its detailed implications. My hon. Friend cannot blame me for the list of amendments. They are not all mine—

If the hon. Gentleman is anxious to continue proper scrutiny of the Bill, perhaps it would be helpful if we did not debate motives but actually got on with considering the provisions of the Bill. I am sure that he is anxious that we should complete consideration of this matter by 4 o'clock, because many people are dependent upon this matter.

I am very grateful for the Minister's assistance, because I was about to intervene myself. I was merely allowing fair time for the exchange which was taking place. I think that we may now conclude that round one is over and return to the amendment.

I am grateful for the opportunity that you gave me, Mr. Speaker, to respond to my hon. Friend's suggestions. May I just conclude my sentence by saying that the amendment is only one of a small batch of 17—since six are identical, they number only 12 in fact—compared with 68 tabled by the Government? That must be nearly a record. If the Government are so anxious to table so many, it is up to them to find the time.

My hon. Friend referred to the lack of debate in Committee on the amended clause, which he attributed to my absence. I am gratified that the proceedings should depend on my presence, but I was not aware that a Committee stage depended on one Member's attendance. One would like to think that scrutiny continued regardless. However, it is wrong to suggest that my absence on parliamentary duties elsewhere prevented proper scrutiny.

On a point of order. Is not that a wrong reflection on those of us who were not in Bermuda on the Wednesday morning when we continued to consider the Bill? Is not my hon. Friend casting aspersions upon the way in which we did our duty in his regrettable absence?

I was in fact saying—

Order. The hon. Member was addressing me. I do not have many opportunities.

I apologise, Mr. Speaker. I thought that I was trying to correct the aspersions cast by my hon. Friend the Member for Harrow, West on other members of that Committee. Those of us who sometimes have to go on parliamentary delegations, even to organise them on behalf of the British-American Parliamentary Group, sometimes regret missing a Committee. My hon. Friend may not believe me, but I would rather have been on that Committee that morning, but duty decreed otherwise. If anyone thinks that there is any pleasure in transatlantic journeys on a short weekend, he has another think coming.

This matter was not properly examined in Committee and it is right to examine it now. I regret my hon. Friend's answer. It is not just the banks which are affected. Many commercial organisations have insurance departments and act as fully-fledged insurance brokers. It is nonsense to say that if we allowed them simply to have a registered broker in charge, they would escape the rules of the Bill. The rules will apply to the big as to the small. A registered broker will still have to prove his case before the Insurance Brokers Registration Council, establishing that he has met all the qualifications. Even a bank must establish that it has adequate reserves and keeps its insurance money in the right way.

My hon. Friend is achieving nothing in defence of the public interest by saying that these organisations have to change the way in which they operate so as to suit his preconceived idea about the rich and the poor, which is totally irrelevant.

Of course it would not be impossible for such organisations to set up subsidiary companies. It would be expensive, involving the creation of separate returns and reprinting of notepaper and signs, but these large organisations could swallow the cost. But why should they? What is my hon. Friend seeking to achieve?

In the letter which I quoted earlier, the bank also said:

"We have been watching the progress of this Bill, since its provisions could affect the operations of the Insurance Department of the Bank, which provides a service to our customers akin to that provided by an insurance broker. It has done so for some years, to the general satisfaction of our customers."

So it has acted as a reputable insurance broker with no problems.

"If the Bill should become law as amended in Standing Committee, Clause 4 would seem to require that a change in our present practices should be made, and this might mean that the activities of the Insurance Department would have to be carried on by a subsidiary company formed for the purpose, with the majority of the directors being insurance brokers. We should clearly not be the only organisation affected in this way. There seems to be no advantage to the public in such a change and there would be some inconvenience to the Bank although a number of staff in the Insurance Department would themselves be eligible for registration as insurance brokers."

The letter goes on to advocate a course of action direct to the Minister.

I have also suggested this course, although I have no wish to contaminate this proposition, as my hon. Friend would see it, with my own support. I wanted to see a constructive solution, but I am afraid that the Department has been as negative as my hon. Friend. They are quite wrong. The bank suggested this amendment direct to the Department and it has been rejected on totally specious grounds.

The bank replied to a letter from the Department:

"The suggestion in your penultimate paragraph that reprehensible actions by the Insurance Department of a body corporate such as a Bank could go unchecked, with all respect seems in our view to ignore the provisions of Clauses 12–14 of the Bill, which, of course, provide for disciplinary procedure against any body corporate enrolled under Clause 4 and for the erasure of the body corporate should circumstances warrant it. With regard to your final paragraph, no organisation—travel agent, bank or 'pop group'—could call itself an insurance broker unless it did, as a whole, contain the requisite expertise as provided for in the Bill."

Therefore, if my amendment is accepted, that corporate body will still be subject to the rules of the Council. My hon. Friend knows that that is true, with the one exception of the provision relating to a majority of the directors. In all other respects, the body would have to comply.

Where is the public interest at stake? The insurance department offers good broking services and will continue to do so if it has to be a registered broker. Yet my hon. Friend uses the nonsensical phrase that my amendment would drive a coach and horses through the Bill. That is an unsustainable argument. I think that he has allowed his wrath and indignation to lead him on this one occasion to take leave of reason.

I ask my hon. Friend again to consider this proposition. If he does not, I will, though without much prospect of success, seek to divide the House.

I beg to move Amendment No. 15, in page 7, line 5, leave out from 'arrangements' to end of line 7 and insert:

'for the collection of fees with such body or bodies as may be prescribed".

This is purely a drafting amendment. I am advised that Clause 8(4) as drafted could have been interpreted as meaning that only one body, whether the British Insurance Brokers Association or another body, could have been prescribed for collection of fees. The amendment puts it beyond doubt that more than one body may be prescribed.

I wish to put one question to the Minister. The amendment effectively provides that a variety of bodies, and not simply the British Insurance Brokers Association, could be collecting agents for such fees. What is the position regarding collection of fees from a registered broker who is not a member of any of the recognised associations or bodies, the man who is purely an independent broker and has no wish to be a member of such a body? How are fees to be collected? Does the amendment provide that the fee has to be collected from some such body or not?

That is a matter that we shall have to work out in practice. The amendment is to save the position so that we do not have to come back with amending legislation.

I beg to move Amendment No. 17, in page 7, line 43 at end insert—

"(3) The statement shall in no respect seek to restrict competitoion between registered insurance brokers".

With this we may also take Amendment No. 18, in page 7, line 43, at end insert—

"(3) For the purposes of this section an insurance broker seeking to retain any moneys paid to him on account of a fee or commission for his services when his instructions have been withdrawn before any introduction has been made shall be guilty of unprofessional conduct".

Amendment No. 18 is in the name of my hon. Friend the Member for Wirral (Mr. Hunt), who is not here at the moment, but I hope that he will return before we finish the debate on this amendment.

I am concerned that there should be some discussion on the question of the code of conduct. My amendment seeks to place a limitation upon the provisions of the code of conduct in one respect that has caused concern and that still causes me some concern. The code of conduct will obviously be a vitally important part of the operations of the process of registration.

This is another example of where the House has to deal with a matter by statutoray instrument. The code of conduct, as I understand it, is to be drawn up by the Council. No doubt there will be discussion and consultation with the Department, and what will be regarded as a satisfactory code of conduct will be produced and put before the House in the form of a Statutory Instrument.

The Minister believes that that process could produce good results, but those of us who have bashed our heads so many times against the brick wall of Statutory Instruments know that it is not a satisfactory procedure. When the Statutory Instrument has emerged it gains almost the strength of a tablet of stone and is certainly unamendable. Yet this code of conduct will gain the force of statutory approval and will then be presented to the insurance broking world as a fait accompli.

I have no doubt that the code of conduct will be drawn up in such a way that it will be of advantage to the public. I know that everyone who is likely to be involved is desperately concerned with the good image of insurance broking and to ensure that we maintain the highest possible standard. I have never sought to maintain otherwise.

What concerns me is that the code should not be so restrictive in certain ways as to be a disservice to the public. The example illustrated by my amendment is one area where there is great room for doubt and certainly great room for debate. The amendment seeks to ensure that the code shall in no way restrict competition. I hope that the Minister, who has some responsibility for restrictive practices and monopolies, will endorse that sentiment. It is a commonplace and truism that everyone should accept this as a general intent, but this is not always the case. There are insurance broking codes of conduct already, and some of these codes of conduct have been causes of contention. Codes of conduct drawn up by reputable people of good intent are not automatically accepted by the profession as being non-controversial.

I have before me the regulations of the Corporation of Insurance Brokers, and I think that the House will understand from these regulations why I have tabled the amendment. The regulation dealing with competition was amended by resolution on 4th October 1966. If it has been amended since then, I apologise to the Corporation. The regulation on competition states:

"Members are required to respect the business of other members. When in contact with the insuring public it is the duty of a member to inquire whether the insurances are handled by another incorporated insurance broker or incorporated life insurance broker. If so, the member must withdraw unless the insured expresses dissatisfaction with his present insurance broking arrangements."

This proposition has caused a number of brokers not to join the Corporation because it is undeniably a restraint upon competition between members of the Corporation of Insurance Brokers. It is an eminent and highly reputable body, which I am sure does an absolutely first-class job in raising insurance standards and, generally speaking, its rules and criteria must be set only so as to enhance the status of the profession in the eyes of the public.

This provision has upset certain insurance brokers. From personal experience I know that a number of brokers have said, "I am sorry, but I regard one of my intentions as being to take a little bit of business away from my competitors". That seems a very healthy state of affairs. They say, "I do not subscribe to an organisation which says that I should be restricted from so doing unless I can persuade the customer or client to express dissatisfaction". Someone who does not conform to that standard renders himself liable to expulsion, suspension or a penalty. So the rule has teeth.

I am concerned about such provisions creeping into codes of conduct. This code of conduct will have statutory effect. If it is drawn in that way it will be unfair to many concerns who may find themselves under the threat of suspension or expulsion. That is probably putting it too high. I hope that the code will be fairly relaxed on such matters.

In this clause, as in so many others, provision is made for proceeding by Statutory Instrument. The code need not be so exhaustive as to prevent it from being set out in the Bill. I believe that it should have been set out in the Bill. The amendment goes some way towards that, as does the amendment tabled by my hon. Friend the Member for Wirral. It seeks to prescribe certain modest conditions. The code of conduct for the Corporation of Insurance Brokers is not long. Many of the points dealt with therein are already taken up in the Bill—for example, the requirement as to personal indemnity.

If the sponsors had so wished, it would have been possible to incorporate into the Bill many of the points that are subsequently to be dealt with by Statutory Instrument. It has been pointed out that the Bill requires the use of Statutory Instruments in nine separate cases. This is one such case. If the code of conduct had been incorporated in the Bill we could have considered whether it was reasonable to apply such a code to registered insurance brokers.

I should find it very helpful if my hon. Friend the sponsor of the Bill would tell us whether a draft of the code of conduct is available and whether we shall have an opportunity of considering some of its features before we reach a conclusion on the Bill. I do not like the modern tendency of having enabling Bills, which means that the House is prevented from considering many detailed points of law. This Bill is a bad example of that.

I can understand the dilemma of the draftsman. He must decide whether to make a Bill massive and unwieldly, and therefore expose it to an excessive number of Government amendments on a Friday, or to proceed by way of Statutory Instrument to such an extent that the power of the House to consider points of legal importance, is reduced.

Has my hon. Friend seen a draft code of conduct? Can he share with the House some of the points in that code? Will he say, for example, whether any comment has been made on the chances of the Corporation of Insurance Brokers regulation being part of this general code of conduct?

The hon. Gentleman may speculate on all sorts of permutations for the code of conduct. He has made his point, that he thinks that the code of conduct should have been brought before the House. The fact is that it has not been brought before the House, I think for very good reasons. This is a matter that must be worked out after prolonged consultation. I do not think that it is appropriate for the Bill itself at this stage.

Is it the hon. Gentleman's intention now to postulate this tremendous number of permutations that would be available for the code of conduct? If it is, he can go on until 4 o'clock. Alternatively, does he agree that it is appropriate that this matter should be invested with the expertise and experience of those in the professional body concerned, that it should come before the Secretary of State for scrutiny, and that it should then be available for the House to scrutinise and assess? The choice lies with the hon. Gentleman.

I only wish that the choice lay in my hands. Clearly it does not. We do not have the code before us. We do not have the prospect of dealing with an endless series of permutations—that would be out of order. The Under-Secretary should realise that we are discussing a precise amendment dealing with the restraint of competition between brokers. I am not dealing with other permutations. I am saying that on this very point the House should accept my proposition.

Speaking for myself, I understand and am not in real disagreement with the sentiment behind the hon. Gentleman's proposed amendment. I assure the House that the Government Will have close regard to their policy on restrictive practices when considering the code of conduct with a view to approving it. I hope that the hon. Gentleman will accept that assurance.

I am not quite sure what the Under-Secretary is saying. If he wishes to intervene again, I shall be quite happy to give way. Is he saying that he will accept my amendment?

No. I did not say that I would accept the amendment, for the reasons that I have given. I said that the code of conduct must be very carefully scrutinised and considered in the context of the Government's policy on restrictive practices, which is not vitally different from the point of view of the Opposition and of the previous Tory Government. I should have thought that that assurance would be adequate for the hon. Gentleman.

The only assurances that I like are amendments written into Bills. Assurances flow fairly thick and fast during Committees and Report stages, but it is subsequently difficult to translate them into legislative form. If the hon. Gentleman believes that the amendment enshrines an acceptable proposition and he agrees with the sentiment behind it, I should have thought that there would have been no harm in this proposition being embodied in legislative form.

No, because there is no end to it. If one were to accept this proposition because one had sympathy with it, one might have sympathy with many other matters that could be included in, and were more appropriate to, the code of conduct. That is where these matters must be worked out, not on the Floor of the House on Report. I do not deny that the hon. Gentleman has the opportunity of continuing upon this path of frustrating the passage of the Bill.

The Minister is wrong. Of course there is an end to it. The end lies in the fact that there is only one amendment before us. We do not have available to us an endless series of remedies. The code of conduct is not before us. We are not considering an endless series of amendments dealing with various aspects of the code of conduct. The House is considering one amendment, dealing with one sentiment—with which, as I understand it, the Under-Secretary has sympathy—on a point of detail that has caused concern to insurance brokers.

I could quote examples of brokers who have not joined the Corporation of Insurance Brokers because of the existence of the provision to which I have referred. I am sure that endless numbers of other organisations and individuals have adopted a similar view. I think that the regulation is unworkable in practice. Why does the Minister not accept the one proposition that I put to him, with which I gather he is in general sympathy?

This is not a matter of no concern; it is a matter on which brokers have expressed concern to me. Their minds would be put at rest if a provision were accepted that would ensure that the council would not be able to incorporate into its code of conduct a provision to the effect that there should be a restraint on competition between brokers.

I do not understand why the Minister is so confident that our proceedings for considering Statutory Instruments means that the House can give them proper consideration. I should have thought that it was self-evident that they did not give any such assurance. That is why I think that the code of conduct could properly be considered at this stage.

2.30 p.m.

There is a further and stronger reason why I think that my amendment should be accepted. This is because the point about non-competition has lately been the subject of some controversy, on a matter with which the Minister might be familiar, namely, the question of the insurance of solicitors. As we know, about a year or so ago the Law Society introduced a scheme that required solicitors to insure through certain insurance brokers, and therefore through a certain channel.

This was hotly contested, so the Law Society held a referendum of all solicitors to find out whether the proposal met with majority approval. In the end, it did, but only just. Nevertheless, many solicitors were very unhappy at being forced to change their insurance brokers, with whom they had been dealing satisfactorily for many years, and being directed to other insurance brokers, which was not always necessarily to the solicitors' advantage.

In the context of this compulsory transfer, the point was made that members of the Corporation who were securing this business were doing so by taking business from other brokers with whom a client had not expressed dissatisfaction. The solicitors felt that this was in breach of the code.

It obviously seemed that there was a conflict that did not have any legal significance, because the code had no legal backing. In future, it will have legal backing and these matters will have to be settled by the courts. It would not be right to leave these matters in such a state of doubt that they would have to be settled by the courts.

My amendment, if added to the Bill, would do two things. First, it would avoid the possibility of future legal conflict. Secondly, it would put at rest the minds of those many brokers who have in the past expressed dissatisfaction with that feature of the code of conduct of the Corporation of Insurance Brokers.

I beg to move Amendment No. 22, in page 9, line 9, leave out 'all or'.

This is a drafting amendment, removing the words "all or" to ensure that there is consistency with Clause 13(3)(g), which is the corresponding provision relating to professional indemnity. The meaning is unaltered.

I beg to move Amendment No. 23, in page 9, line 11, leave out from 'rules' to end of line 21 and insert

'for indemnifying—

(a) practising insurance brokers and former practising insurance brokers, and

(b) enrolled bodies corporate and former enrolled bodies corporate,

against losses arising from claims in respect of any description of civil liability incurred by them or by employees or former employees of theirs, in connection with their businesses.

(1A) The Council shall also make rules for the making of grants or other payments for the purpose of relieving or mitigating losses suffered by persons in consequence of—

(a) negligence or fraud or other dishonesty on the part of practising insurance brokers or enrolled bodies corporate, or of employees of theirs, in connection with their businesses; or

(b) failure on the part of practising insurance brokers or enrolled bodies corporate to account for money received by them in connection with their businesses.'.

With this we may take Government Amendments Nos. 24 to 36.

The main object of Amendment No. 23 is to make Clause 13 more general in its scope and to ensure that the protection of the public against loss caused by brokers or their employees is as wide as possible.

Subsection (1) provides, as before, for the Council to make rules for a professional indemnity scheme for practising brokers and enrolled bodies corporate. The changes are largely ones of drafting.

Subsection (1A) is new. Although perhaps 95 per cent. of possible claims against brokers may be met by means of a professional indemnity scheme, there will be a residue of claims for which the indemnity cover—at whatever level it is provided for by the rules—will be insufficient, or which will not be covered by the terms of the indemnity. The new subsection covers these types of case. It is worded in deliberately general terms, since I understand that it is possible that such payments may be made not by the Council from a compensation fund but by insurers under a wider form of insurance policy. This was one of the points raised by the hon. Member for Faversham (Mr. Moate) in another context.

I realise that this "market day" is running late, and I shall be as quick as I can to allow the Bill to proceed. I wonder whether, in this part of the Bill, the Minister took into account the special circumstances of solicitors in Scotland.

The rôle of a Scottish solicitor is an exceptional one, in that insurance broking is only one part of his more general activities. In Scotland our solicitors do not sell insurance so much as advise clients as a part of their more general conduct of affairs.

In setting up such indemnity funds in this way, the Bill is perhaps guilty of financial over-kill, because solicitors in Scotland already have some standing in law in regard to safeguards and professional conduct. All solicitors in private practice in Scotland are required to contribute to a Scottish Solicitors Guarantee Fund, set up and financed by the profession itself, to indemnify persons suffering any loss arising out of a solicitor's dishonesty. In addition, the vast majority of the Scottish profession already carry professional indemnity insurance.

It may be that the Bill is looking specifically at the English situation and has in a sense not looked as hard as it should at the Scottish context and practice. As the Law Society of Scotland has pointed out, it would seem unreasonable to expect a Scottish solicitor to contribute to two compensation funds and to carry two professional indemnity insurance policies when in fact the Scottish Solicitors Guarantee Fund and the individual member's personal indemnity policy will cover all claims which could possibly arise.

I ask the Minister and the sponsor, therefore, to look again at these problems, whether here or elsewhere, and to take into account the special situation specifically with regard to the Scottish solicitors.

The hon. Member for South Angus (Mr. Welsh) has just referred to the position of solicitors in Scotland and I shall not speak at length on that subject. I imagine that all hon. Members have received the memorandum from the Council of the Law Society in Scotland and will have understood the hon. Member's point. There is a problem here, inasmuch as solicitors could be faced with extra financial burdens which are quite unjustified.

There is a more general point concerning solicitors throughout the United Kingdom, particularly in the context of the requirement for professional indemnity insurance. Solicitors in England and in Scotland have professional indemnity insurance. As the submission of the Law Society of Scotland makes clear, the society is well aware of the need for such cover. Indeed, it is now a condition of practice, I believe, in the United Kingdom. But many solicitors transact a great amount of insurance business.

Under the rules of the new scheme for professional indemnity insurance, to which solicitors have to adhere, I believe that they are required—I speak from memory and the Minister will no doubt correct me if I am wrong—to insure for a figure of £30,000 per partner. There may be a minimum requirement if there are two partners, or it may be that it is £50,000 minimum for one partner, but, broadly speaking, it is of that order, and three or four partners would have an indemnity of £90,000 to £120,000. That is the sort of figure that has been accepted by the Law Society as being a reasonable level of professional indemnity insurance for solicitors.

Solicitors, we know, are conducting insurance business sometimes on a quite substantial scale. Indeed, one could probably argue that solicitors on many occasions are involved in very substantial estates and handle some fairly high-risk business, and have a degree of insurance responsibility for the way in which that business is conducted. Yet solicitors have a lower level of indemnity than that proposed by the Bill for insurance brokers. I must correct myself there, because the Bill does not propose a level, but the figure of £250,000 has been mentioned over and over again by the sponsors of the Bill. It has been mentioned in the consultation document produced by the British Insurance Brokers' Council, and it might also have been mentioned in the White Paper.

2.45 p.m.

It seems to me unfair that a solicitor will be allowed to continue to transact insurance business with a much lower level of professional indemnity insurance than that which is likely to be adopted for insurance brokers. There is a real problem here. I am as devoted an advocate of wide-scale professional indemnity insurance as anybody. I can even claim a degree of specialisation in the subject. I should like to see all professionals heavily insured for professional indemnity purposes. I should like to see them all carrying the maximum indemnity insurance that they can possibly afford. But that is not to say that we should impose on the small broker an unreasonable level of insurance.

I hope that my hon. Friend the Member for Harrow, West (Mr. Page) will be able to tell us whether consideration has been given to adopting a rather more flexible approach to this question than that suggested so far. A large number of brokers do not, frankly, require £250,000 professional indemnity. Professional indemnity insurance is not cheap insurance. Under the rules for contractors, individuals have to produce £250,000 indemnity, I know, but that is ordinary insurance and is relatively cheap. But £250,000 professional indemnity insurance involves a substantial cost, which could be certainly from £350 upwards. That might not be very much for the substantial broker or for somebody established in a prosperous way of business, but many small brokers would find it a heavy imposition. I do not think that one could always justify £250,000 as being necessary in those circumstances.

My hon. Friend the Member for Harrow, West has on many occasions stressed that it is not his desire or intention to make it harder for the small man to operate. He has expressed his view that the Bill will not prevent the small man from operating, but I put to my hon. Friend the possibility that the Bill could price these people out of the market if we are not careful.

I should like to put the case of the small one-man life insurance salesman who at present operates in a small way of business but manages to make a living as an insurance broker. He is handling, perhaps, relatively low sums by way of insurance and no doubt the business is handled properly. We know that the proposals are always scrutinised by insurance companies with care. Frankly, the risk of exclusion is very small.

Given that that is the case, would my hon. Friend, as a self-confessed specialist, not confess that the premium charged for the small broker would be infinitely lower for an indemnity of £250,000 than the premium charged for a larger broker for the same indemnity?

In general, that must be true, but the figures we have been talking about so far are for minimum premiums, and that is the point. I suppose that if all brokers insured the premiums might come down a bit. A great number of them probably do not carry insurance. If all these small men took a cheaper scheme the premium might come down, but on balance that is unlikely. In practice we are talking of minimum premiums of about £350. That is at the low end of the market. It is quite possible that a figure of £400 or £450 is possible. I do not really understand why the self-employed one-man-band life insurance broker should be forced to pay £ 300, £400 or even £500 for a cover that is not proving to be necessary.

My hon. Friend understands both aspects of the argument. He understands the life insurance operation very well indeed, as well as the professional indemnity market. He will understand that there is not a very strong case for the life broker to have the same limits of indemnity as a man who is dealing in liability business or in substantial materials damage business or even a man dealing in the motor business.

Does my hon. Friend accept that many small life brokers also sell personal accident insurance, frequently to run alongside the life contract? Does he agree that it is in regard to the personal accident policy that the small broker may need the indemnity, rather more than in respect of the admittedly small sums assured in connection with the life policies?

It is always hard to argue on the question of liability, particularly as one spends a great deal of one's time trying to persuade people to take high indemnity limits. There is a strong case for brokers to carry the maximum they can afford, as is true of all clients in the insurance world. But we are talking about placing a statutory obligation on people to carry certain levels of insurance—a statutory obligation to spend certain sums that could place an unnecessary burden upon the their business operations.

It is because I feel that it is an unreasonably high statutory level that I quoted the case of the solicitors who are dealing with personal accident insurance but who carry a limit of only £30,000 per partner. It happens that that scheme is also backed by statute, because it was introduced by the Law Society under the provisions of statutory authority given by this House. I shall not go into the question whether that was a proper use of the power or whether the House intended it, but there is in that statutory scheme that much lower level of professional indemnity requirement than we propose here.

It may be that representations have already been made. We are told that this is the end of a long process of consultation. Representations have no doubt been made to my hon. Friend the Member for Harrow, West and perhaps he has conceded the case, if it is in his power to do so. We must be careful about placing excessive burdens on such people.

This burden does not exist on its own. We might be faced with extra solvency requirements. Brokers might have to have a higher surplus of assets over liabilities than other limited companies or other operators have. In addition, they have all the registration fees to pay. My hon. Friend earlier spoke of fairly low figures for registration fees. I hope that they remain low. Under this clause or a related clause we have the question of a compensation fund. There is no detailed description of how it will be arranged. One imagines that it will be a sort of post-event fund, which will provide for a levy on brokers in the event of payments being needed. If that is not so, it would be helpful to have an outline of how the compensation fund will operate.

There could be costs of not just £300 or £400 but up to £1,000 a year placed on the small broker. I cannot say that I can justify that figure in total, because I do not know what the provisions will be in the rules and regulations, but it would be undesirable to face a large number of small brokers with the difficult decision whether it is worth carrying on as insurance brokers or whether they should withdraw from that profession and call themselves insurance agents, insurance consultants, intermediaries or whatever else is permitted once the Bill becomes an Act.

We have had well-publicised assurances from my hon. Friend about his desire to help the small man and not hinder him—assurances that have been well received—but it is incumbent on him to ensure that the costs are not unreasonable. I do not think that at present we have the means to ensure that they are not. The Government amendment opens the door to allowing excessive impositions to be placed on small brokers. That is one point on which we are entitled to receive some assurance from my hon. Friend.

In the correspondence columns of some of the insurance brokers' journals we can see that this matter has caused concern to a number of insurance brokers. I have received a number of letters from people who have said virtually that. I hope that my hon. Friend will feel that I am simply echoing the expressions of concern voiced by brokers and that he will respond helpfully, in his usual manner.

I turn to the latter part of the new provision (1A) of the amendment, which says that

"The Council shall also make rules for the making of grants or other payments for the purpose of relieving or mitigating losses suffered by persons in consequence of—

(a) negligence or fraud".

It should be noted that the amended clause would provide for much wider insurance requirements than merely professional indemnity. It seems to me that the wording enables the Council to lay down rules on such matters as fidelity guarantee insurance—something which is probably quite right—and other classes of insurance. It states rules for indemnifying practising brokers against

"losses arising from claims in respect of any description of civil liability incurred by them … in connection with their businesses."

We are talking about other relevant and important matters besides professional indemnity. I emphasise that because the new provision (1A) refers specifically to

"negligence or fraud or other dishonesty on the part of practising insurance brokers".

This raises the question of the relationship between the rules laid down by the Council in regard to fidelity guarantee insurance and the power that it will have to make grants itself.

I can well understand the case for ex gratia payments to be made on occasions by the Council. It is probably a strong case, but we must then ask whether these will be a consequence only of having insisted that brokers insure for, say, fidelity guarantee, with the failure to do so resulting in the Council's having to make ex gratia payments. There is a relationship here which should be explained.

This leads me to the question how the payments are to be funded. We have not yet been told what the Council's source of funds will be to make grants or other payments as described in subsection (1A). I hope that the Minister will tell us precisely where the money is coming from. Is it to come from registration fees? Is the Council to start off with a fund to be collected by a levy on insurance brokers? Is this a reference to the compensation fund? This is a very important area of debate. We do not know what possible impositions brokers could face with regard to the compensation fund. Is it to be a pre-event fund rather like the Stock Exchange fund, which must be topped up every time there is a loss, or a post-event fund, rather like the Policy Holders' Protection Board Fund? We are entitled to know the intentions of the Government, the sponsor and the Registration Council in this respect.

If the Minister can help us in this matter, he will be doing the House and the insurance world a favour.

The hon. Member for South Angus (Mr. Welsh) was rightly concerned about a specific issue concerning solicitors in Scotland. It is extremely unlikely that most practising solicitors will opt to be insurance brokers within the framework of this scheme. Therefore, there will be no question of financial over kill. We are dealing only with solicitors who opt to be insurance brokers within the scheme.

If the hon. Gentleman looks at Clause 13(3)(g) he will see that the Council may specify circumstances in which exemptions may apply to any of the rules. If in practice a powerful case emerged, I am sure that the Council would be sensitive to the arguments which the hon. Gentleman has raised, which apparently are concerning the professional body of solicitors in Scotland.

3.0 p.m.

The concern of the hon. Member for Faversham (Mr. Moate) is that some solicitors will carry less indemnity insurance than some insurance brokers. That depends on whether the solicitor is an insurance broker under the scheme. In that regard I do not see that the hon. Gentleman expressed any cogent argument.

I suspect that the Minister makes that comment because he has not grasped the point that I was making. I was saying that solicitors, even if they are not registered as insurance brokers, will continue to conduct insurance, perhaps on a substantial scale. Under a scheme that has, in effect, statutory backing they have to carry indemnity of only £ 30,000 per partner, which will be much less than the insurance broker's indemnity.

We do not know what the brokers will have to carry as there is flexibility. Mention has been made of £ 250,000 but that has not been imported into the Bill. It is a matter for the rules, which will have to be specified. I am sure that the Council will be sensitive to public opinion. When referring to "public opinion" I mean opinion, too, within the profession.

The hon. Gentleman's point is really a non-point because it concerns one of the penalties of the scheme as well as one of the advantages. Those within the scheme will possibly have to undertake certain burdens that those outside the scheme will not have to undertake. Solicitors who are not brokers within the scheme will not have to undertake some of the burdens of the scheme. There is always a burden as well as a benefit to be derived from being a member of a profession. Such burdens are willingly undertaken because of the benefits that accrue to the public at large and be- cause those concerned invest their profession with a certain status and reliability upon which the public can depend. That applies equally in this instance.

The hon. Gentleman then asked how the scheme is to be funded. I can only refer him to Clause 13, which sets out the circumstances and the scope within which the rules might be made. As he well knows, I am not in a position today to indicate how the scheme will be funded. It is a matter that will be subject to the rules. The rules will be within the scrutiny of the Secretary of State and, ultimately, within the scrutiny of Parliament. That is a matter that the hon. Gentleman obviously finds terribly offensive. Surely he is anxious to ensure that the rules are worked out comprehensively and diligently as a result of representations that are made by outside opinion. That is a much better way of proceeding than trying to draft the necessary provisions in the Bill.

For some 20 minutes we listened to my hon. Friend the Member for Faversham (Mr. Moate) expressing his concern about this matter. It seems that again my hon. Friend is making rather heavy weather of something that has to be considered carefully in due course by the Insurance Brokers Registration Council. It may be that the public will look with considerable favour on placing their business with a registered insurance broker who carries a high indemnity and who, they may feel, has their business very much at heart. Perhaps they will look with more favour upon such brokers than upon some other sections of the community that conduct insurance business and do not belong to the Council. Essentially this is a matter for the Insurance Brokers Registration Council.

Surely the House did not need to go into this matter in such detail this afternoon. I hope that on reflection my hon. Friend will feel that this is something that can be dealt with by the professionals who will be involved, who have very much at heart the interests of the brokers, both large and small.

With the permission of the House, I shall put Amendments Nos. 24 to 36 formally.

Amendments made: No. 24, in page 9, line 22 after 'indemnity', insert

'and of enabling such grants or other payments to be made,'.

No. 25, in page 9, line 25, leave out 'compensation'.

No. 26, in page 9, line 28 leave out 'registered' and insert 'practising'.

No. 27, in page 9, line 29, leave out 'class of registered' and insert 'description of practising'.

No. 28, in page 9, line 32, leave out 'subsections (1) and (2) above' and insert 'the preceding subsections'.

No. 29, in page 9, line 34, at end insert 'or a grant or other payment'.

No. 30, in page 9, line 39, leave out 'registered' and insert 'practising'.

No. 31, in page 9, line 40, leave out 'class of registered' and insert 'description of practising'.

No. 32, in page 10, line 1, leave out 'registered' and insert 'practising'.

No. 33, in page 10, line 2, leave out 'class of registered' and insert 'description of practising'.

No. 34, in page 10, line 18, leave out 'them' and insert 'it'.

No. 35, in page 10, line 21, at end insert—

'(ff) may specify circumstances in which, where a grant or other payment is made in consequence of the act or omission of a practising insurance broker or enrolled body corporate, the Council or insurers may take proceedings against him or it in respect of the sum so paid;'.

No. 36, in page 10, line 22, leave out 'registered' and insert 'practising'.—[Mr. Clinton Davis.]

I beg to move Amendment No. 37, in page 10, line 33, leave out

"it is alleged that an individual or"

and insert—

"(a) it is alleged that a registered insurance broker or enrolled".

With this, we may take Government Amendments Nos. 39 and 40.

The purpose of the amendments is to offer some flexibility to the investigating and disciplinary committees in processing minor complaints. Their effect is to release the investigating committee from the obligation to refer to the disciplinary committee complaints which, though fully subsantiated, are clearly not serious enough to justify erasure of the offending broker from the register. Since erasure is the only sanction available to the disciplinary committee it is not really appropriate that it should be required to deal with these minor complaints. Instead, I envisage that the investigating committee will deal with such matters informally as it thinks best, perhaps by issuing a reprimand it self or by reporting the matter to the Council.

On reflection, I have felt unhappy about the lack of flexibility in some of the provisions for the investigation of complaints and want to ensure that the procedures can operate smoothly and in a way which will secure the confidence both of brokers and of the general public. I hope that hon. Members will agree that these amendments will facilitate this objective.

I thank the Minister for his previous answer, and I expect that the answers to these points may be along the same lines.

I want briefly to put to the hon. Gentleman some matters which again are of concern to Scottish solicitors, who are put in an exceptional position by the clause. The provision would be a duplication of tried, tested and proven existing safeguards affecting solicitors in Scotland, who are already subject to considerable and effective disciplinary procedures.

The words of the Law Society are worth putting on record. It says:

"There is a Solicitors (Scotland) Disciplinary Tribunal which is a completely independent Tribunal set up to investigate complaints against Solicitors. The findings of the Tribunal are binding on the Society and are appealable to the Court of Session."

In addition to this, there are other mechanisms.

"… complaints against Solicitors can be reported to the Council itself and the Council's treatment of these complaints is open to review by a lay observer appointed by the Government."

Therefore, solicitors in Scotland already are subject to strict disciplinary controls, quite apart from long-standing professional ethics. This provision in the Bill is what might be termed a "disciplinary overkill."

In addition, I should like to know why the Bill asks solicitors to register with this second professional body—unless, by implication, it is questioning their professional integrity. Moreover, why has there been no attempt in the Bill to use the existing Scottish disciplinary procedure for our solicitors? Elsewhere, the Bill makes exception for Lloyd's members because of the wish "to avoid publication" of safeguards. I regret therefore, that similar provision has not been made to meet a very similar situation concerning Scottish solicitors.

While I am on this subject, perhaps I might seek some clarification from the Minister about whether the present Law Society and Scots law degree provisions as well as apprenticeship schemes in Scotland will be adequate to allow registration with this Council. Has this been considered in the talks which have gone on in the background to this Bill?

To sum up, solicitors in Scotland are not at all happy with certain aspect; of the Bill, I ask the Minister and the hon. Member for Harrow, West (Mr. Page) to think again about the Law Society's representations to them.

I am obliged to the hon. Member for South Angus (Mr. Welsh) for making those representations on behalf of Scottish solicitors. I wish that more non-solicitors in the rest of the United Kingdom would make representations on behalf of solicitors here.

I do notthink that solicitors in Scotland are in an exceptional position. The answer which I gave before is essentially the same here. If they elect to be insurance brokers, they come within a discipline which is rather different in character from the natural discipline to which they as solicitors have to conform. It is not a natural consequence of being a solicitor to be an insurance broker or to have expertise in insurance browing. It is very peripheral to the occupation, and I speak with some knowledge of that, as a solicitor.

It is right that solicitors should be required to register with another professional body if they want to be insurance brokers. I do not believe that solicitors, except in a number of very rare situations have any peculiar knowledge of insurance broking. Therefore, why should they be in a special position?

It does not necessarily follow that a solicitor who falls fouls of the disciplinary provisions for insurance broking under this scheme would have committed an offence that is subject to disciplinary proceedings by his own professional body. I concede that it is possible that a man, who fell foul of the disciplinary procedures here, would also fall foul of his own professional proceedings, but it does not follow that one is dependent wholly on the other in all circumstances.

There is a difference between Lloyd's brokers and solicitors. Lloyd's brokers have expertise in this particular field, and it is not the case that solicitors would necessarily have it as well.

I note the hon. Members' point, but what is much more important, so will the Council. Certainly if, in practice, there is any problem which should be resolved, I am confident that this will be done.

I beg to move Amendment No. 38, in page 10, line 35, leave out

'subsection (1), (2), (4) or (5) of'.

With this we may take Government Amendments Nos. 41 to 47.

Amendment No. 38 is a paving amendment for a series of amendments to Clause 16. The amendments to Clause 16 serve to remove an inconsistency in the Bill and at the same time improve the drafting of the clause. They have little practical effect on the grounds on which a registered broker or an enrolled body corporate becomes liable to erasure.

It has been pointed out in relation to Clause 16(2)(a) that the only offence under the Bill which could be committed by a body corporate is to pretend to be enrolled on the list when it is not. It is therefore incorrect to refer in Clause 16(2) to the commission by an enrolled body corporate of "an offence under this Act" The provision in subsection (2)(a) is accordingly combined with that in subsection (1)(a) by this series of amendments. I am sure that I have persuaded the House of the clarity of these views.

I beg to move Amendment No. 48, in page 14, line 10, leave out from 'proceedings' to 'the' in line 12 and insert 'before the Disciplinary Committee in England or Wales or Northern Ireland'.

With this we may take Government Amendments Nos. 49 to 54.

These amendments are intended to enable the Disciplinary Committee to conduct proceedings in Scotland and Northern Ireland according to their respective laws, as well as in England and Wales. They ensure, in particular, that courts can issue summonses for witnesses and call for documents, not only in their own jurisdiction, but throughout the United Kingdom. The amendments take account of the different legal situations in England and Wales, Northern Ireland and Scotland.

Amendments Nos. 48, 49, 50, 51 and 2 make it clear that the present subsections (1) of Clause 20 applies only to proceedings of the Disciplinary Committee in England and Wales and in Northern Ireland and that writs for the attendance of witnesses and production of documents issued by courts in England and Wales, and in Northern Ireland shall be effective throughout the United Kingdom. The Supreme Court of Judicature (Consolidation) Act 1925 applies in England and Wales only and the Attendance of Witnesses Act 1854 in Northern Ireland only.

3.15 p.m.

The main amendment—No. 53—adds a new subsection dealing with proceedings before the Disciplinary Committee in Scotland. It enables the Committee to administer oaths, and provides for the Court of Session to require witnesses to appear before the Disciplinary Committee and documents to be produced with the power of issuing a second warning or "second diligence", which is a Scottish term, if this is not done. The amendment also enables evidence to be taken at second hand. This is the purpose of granting commissions.

Amendment No. 54 is mainly consequential to Amendment No. 48 and makes it clear that the term "proceedings" in Clauses 20 and 21 means any proceedings before the Disciplinary Committee—for example, proceedings under Clauses 17 or 18—and not just those relating directly to disciplinary cases.

As I say, I do not think that this does more than tidy up a situation that needed to be tidied up. I hope that the House will accept it.

I beg to move, Amendment No. 55, in page 15, line 26, after "Chancellor", insert

"or, in Scotland, the Lord Advocate".

With this we may take Government Amendment No. 56.

The intention is that the disciplinary committee should be free to conduct proceedings in Scotland under Scottish law, and amendments have been proposed to Clause 20 to facilitate this. Clause 21, in providing for assessors at disciplinary committee proceedings, empowers the Lord Chancellor to make rules about the functions of assessors. However, in relation to proceedings in Scotland it is appropriate that the Lord Advocate, rather than the Lord Chancellor, should make the rules about assessors. These amendments accordingly give the Lord Advocate the necessary power in that respect.

I beg to move, Amendment No. 57, in page 16, line 41, at end insert 'who wilfully'.

With this we may take Government Amendments Nos. 58, 61, 64, 65 and 68.

The purpose of these amendments is to insert the word "willfully" in the expression in Clause 23 about making it an offence to "take or use" the name of insurance broker. I think that this goes a long way towards accommodating some of the anxiety expressed in Committee about some matters that could arise here. In doing this we are following the precedent of Section 21 of the Solicitors Act 1974 and Section 31 of the Medical Act 1956, under which it is the wilful taking or using of the name "solicitor" or "registered medical practitioner", as the case may be, that constitutes an offence.

Amendments Nos. 57 and 64 are the substantive amendments. The others are consequential.

I want to make clear that the normal use of a passport—this was the concern of the hon. Member for Faversham (Mr. Moate) in Committee—containing the reserve title "insurance broker" is not intended to constitute an offence. What the hon. Gentleman was concerned about in Committee was whether it would be an offence to be described as an insurance broker in documents such as passports that were issued before the passing of the Bill. I have looked at the matter very carefully and I am advised that it would be most undesirable to specify in the Bill that such conduct would not constitute an offence.

The reason for this is that other statutes conferring exclusive right to a name on certain professions—doctors, nurses, dentists, opticians, solicitors and pharmacists—and which are worded in a similar way have no such provision. Therefore, that would be unprecedented and to include such a provision in this Bill would or could create the presumption that exmembers—for example, retired members—of those professions that I have mentioned who failed to have their passport amended on ceasing to practise would be committing an offence.

In any case, I am advised that the normal use of a passport describing a non-registered person as an insurance broker would almost certainly not be an offence under this clause, even without insertion of the word "willfully". Nevertheless, we want to put the matter beyond reasonable doubt.

I hope, therefore, that hon. Members will agree that the amendments that I have proposed go as far as we reasonably can to remove doubts on this part of the Bill. To go further would produce no practical benefit but would bring into question the interpretation of these provisions and existing statutes and could, therefore, risk embarrassing members of other professions. I hope that the hon. Member for Harrow, West (Mr. Page) will feel that we have tried to move in the direction that he was referring to upstairs.

I concede that the Under-Secretary has gone out of his way to acknowledge that the point that I and other hon. Members were making in Committee was a valid one, although that point was rather denied at the time by a number of hon. Members. However, I cannot really say that the Minister's reply meets the point that I was making. Perhaps I can emphasise why. I was concerned, and still am, that this Bill seeks to place a legal barricade around the term "insurance Broker".

For centuries, individuals have called themselves insurance brokers, whether or not they are in business on their own. They have used the term "insurance broker" to describe their professional occupation. They may be directors, partners, junior employees or whatever, but they are insurance brokers. When asked in a pub "What do you do for a living?" a chap might reply "I am an insurance broker".

We know that the Bill as it stands would make it an offence to call oneself an insurance broker. At the moment it would incur a penalty of up to £400 but a subsequent amendment seeks to increase that penalty to £1,000. I still argue that the Bill would make criminals out of all those 50,000 people—more. I suspect—who are employed as insurance brokers and who call themselves insurance brokers. In future they would be committing an offence if they wilfully called themselves insurance brokers.

What my hon. Friend says is surely incorrect. They will not be committing an offence unless they do it wilfully. There is the question of whether they are registered insurance brokers. If they are registered insurance brokers there is no reason why they should not call themselves insurance brokers. Surely the whole point of my hon. Friend's Bill is to ensure that people who use this description only do so if they are registered. That surely nullifies the point that my hon. Friend the Member for Faversham (Mr. Moate) is seeking to make.

I do not think it does. I said they would be committing an offence if they wilfully called themselves insurance brokers. In a moment I shall explain what I understand the word "wilfully" to mean. They would be committing an offence if they wilfully used the term "insurance broker" when they were not registered insurance brokers. In practice, of course, the majority of insurance broking employees would not have any reason to be registered I suppose they could become registered. An employee, perhaps with the intention of setting up business on his own, might seek registration. There is no reason why he should not. As employees with a number of years experience and with the qualifications they could apply to be registered and thereafter legally call themselves insurance brokers. But the majority of employees would not do so. They have no reason to do so and it would be rather foolish if they did because we would have the most enormous register and the whole thing could become unworkable. They would have to pay fees and that is a disincentive.

In Committee the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) and I actually put down amendments which sought to be helpful in this respect and which argued that the term to be protected was not "insurance broker" but "registered insurance broker". We thought that would have made the position clear. If the person called himself a "registered insurance broker" that would be an offence just as a person calls himself a chartered accountant, when he is not, is also committing an offence.

On a point of order, Mr. Deputy Speaker. I draw your attention to the fact that there were amendments which you did not think it appropriate to call dealing with the whole argument about "registered insurance broker". What the hon. Gentleman is saying does not seem to be relevant to the argument that I was seeking to adduce or to the amendment before the House.

That is my impression. Perhaps the hon. Member for Faversham (Mr. Moate) will return to the amendment under discussion, which is No. 57.

Thank you, Mr. Deputy Speaker. Perhaps I may explain what I believe to be the real relevance of the point that I was making.

We are talking about a new criminal offence. The Minister said that acceptance of the amendment to insert the word "wilfully" would meet the point that we had been making that individuals would be guilty of an offence if they called themselves insurance brokers. By referring back to the registration argument I was illustrating one way in which we could have avoided that individual being accused of committing an offence. The Minister chose to resist that proposition. That would have got him out of his dilemma. He is saying that the use of the word "wilfully" produces an equivalent result or one that is as near as he feels is desirable, and that is the point that I am making.

Because of your ruling, Mr. Deputy Speaker, I shall not refer to the amendment that has not been selected. It sought to ensure that a person would be guilty of an offence only if it was demonstrated that he was wilfully calling himself an insurance broker to secure business for the purpose of making a profit. That would have been clear, but the Minister said that he wants the word "wilfully" in the Bill.

The Minister quoted the example of a passport. I am not concerned about that, but it is an example of the range of documents on which an individual describes his occupation. The Minister says that even if someone wilfully puts his name on a passport application form and gets a passport he is not guilty of an offence, but I think that the Bill says just the opposite. If the amendment is accepted, it will mean that someone who wilfully uses the description "insurance broker" on his passport will be guilty of an offence.

I am surprised that the Minister should say that this is not the case. The wilful use may not involve profit. It may be said that someone has deliberately used that description and therefore should be guilty of an offence, and we come back to whether it is right that that should be an offence. We shall deal later with what should be the penalty if an individual calls himself an insurance broker. If he is conscious of the fact that he is doing so he is doing it wilfully. Whether he does that for profit, and whether he is in business on his own account, seems incidental.

The whole point of inserting the word "wilfully" is to deal with a person who does it wilfully. If he does not do it wilfully, there is no question of a prosecution.

My hon. Friend has put his finger on the point. He accepts that an individual who wilfully calls himself an insurance broker for the purpose of any documentation will be guilty of an offence. He accepts that as a principle.

The Minister was saying something different. He was saying that even if someone wilfully calls himself an insurance broker for the sake of a passport application, a mortgage application, or for any other purpose, he is not guilty of an offence. I think that the Minister's words were contrary to those in the Bill. I think that the Bill is totally unsatisfactory in its present form, and that it will not be assisted by the insertion of the word "wilfully".

As I commented before, I regard this as a matter of fundamental importance. I regard it as nonsensical that large numbers of people who have properly and honourably used the title of insurance broker will be guilty of an offence if they wilfully call themselves insurance brokers once the Bill becomes an Act, and assuming that they have not applied to the Council for registration.

3.30 p.m.

I have quoted before the analogy of the accountant. A man can wilfully call himself an accountant and be guilty of no offence. Though he has no qualifications, he can set up in business. An employee of a firm of accountants can do the same. But once the Bill is given the Royal Assent, insurance brokers who have used that term honourably for centuries will be deprived of the title.

For centuries?

My hon. Friend reacts, but that is the truth. It is not the oldest profession, but it is an old one.

I cannot understand why the sponsors of the Bill have been so adamant about imposing this restraint. I can understand the argument for stimulating standards, for having chartered institutes to lay down examination standards and present the best possible face to the public. That is a course that I would have recommended to the insurance broking profession but they have decided on the much more Draconian approach of depriving anyone who does not meet the criteria of the title "insurance broker". That is why this is an unsatisfactory amendment, which does not meet the case.

I was encouraged when the Minister implied agreement with what I said in Committee, that there was no wish to penalise a man who carried on calling himself an insurance broker, but the amendment does not carry out his good intentions. If he said that he would look again at the matter, I would gladly leave it for a later stage.

We need better words than "wilfully". Someone should be guilty of an offence only if he is trying to mislead the public to his financial advantage and perhaps to their financial disadvantage. If a man sets up as an insurance broker to gain business when the law says that he shall not, I can understand the case, but that is not what we are talking about. The argument is that no one shall be a broker unless he is registered. I say that there are thousands of insurance brokers who do not need to register to establish that that is what they are.

I am surprised that hon. Members have found it so difficult to understand this simple point. The analogy with accountants is absolute: the prohibition is only of calling oneself a "chartered" accountant without being registered.

The Bill has been presented as a measure to protect the consumer and raise standards. It is a mystery how it can be argued that this legal sanction against using the title "insurance broker" will help the public. The word "wilfully" will not meet the point that I made in Committee. I would rather that the Minister accepted the word "registered", but we are not debating that. The inclusion of the words "for the purposes of profit" would make sense.

I accept that a corporate body that wilfully calls itself an insurance broker when it is not has no case. A corporate body must accept the law and cannot publicise itself as an insurance broker when it is not. But for the individual there is a different argument. The individual who today calls himself an insurance broker should continue to be allowed to do so. The law should be much clearer on this question. This very lack of clarity emerged from the Minister's speech in support of the amendment.

The Minister said that on the one hand, if a man wilfully states in a passport application that he is an insurance broker he is not guilty of an offence. My hon. Friend the Member for Uxbridge (Mr. Shersby) was much more precise. He said that if a person wilfully used the title of insurance broker he would be guilty of an offence. The legal position should be much clearer. At the moment the Bill is unsatisfactory.

In Committee it was said that my proposition to change the emphasis was a death blow to the Bill. In fact, I thought that I was giving it the chance of life. Had the sponsors been prepared to take a much more generous attitude to people who wanted to call themselves insurance brokers, as long as they were not trying to mislead the public, that would have been very helpful. I am sorry that we have not made great progress. The Minister would help the House if he could give a helpful response to the case that I have made.

The hon. Member for Faversham (Mr. Moate) seems to know no distinction between life and death if he is now purporting to breathe life into the Bill. He is doing it in a most extraordinary way, because what he is doing is designed to kill the Bill. The hon. Gentleman has been repeating his arguments all afternoon but they do not improve the point that he is making.

I have given a perfectly cogent explanation of the law and it is the hon. Member for Faversham who is doing an extraordinary disservice to the public and to people involved in the insurance business by promoting alarm that is absolutely baseless. It reflects no credit upon him and does great disservice to the case that he is purporting to present to the House.

I do not believe it right that people in the body politic as a whole should be under any misunderstanding about the people to whom they go to for advice. That is what the Bill is about. I do not propose to argue matters that were raised on Second Reading, and if I attempted to do so I would be ruled out of order.

The hon. Member for Faversham has his own purpose which, with respect, is somewhat malicious to the Bill.

We come to Amendment No. 67.

On a point of order, Mr. Godman Irvine. What happens to Amendment No. 63?

Further to that point of order, Mr. Godman Irvine. I am not moving Amendments Nos. 63 and 69.

I thought that that would appear to be clear if we went to Amendment No. 67.

I beg to move Amendment No. 67, in page 17, line 9, leave out from "list" to end of line 10.

The words that we are proposing to delete are redundant, because the term used has already been defined in Clause 1.

I beg to move Amendment No. 72, in page 17, line 26, leave out "widow" and insert 'surviving spouse".

With this we are to take Government Amendment No. 73.

These are essentially drafting amendments to ensure that the surviving spouse of a female practising insurance broker is treated in the same way as his female counterpart. The term "widow" does not allow for this.

I beg to move Amendment No. 77, in page 19, line 1, leave out "shall not be made".

With this amendment we may take Government Amendments Nos. 78, 79, 82, 86, 87, 88, 89, 91, and 92.

This series of amendments provides for future elections to the Registration Council by registered brokers. The substantial amendment is No. 86. Amendments Nos. 77 to 79 and No. 82 are paving amendments, and the rest are consequential.

The hon. Member for Faversham (Mr. Moate) suggested in Committee that all registered brokers should be able to vote for Council members. The hon. Member for Harrow, West (Mr. Page) and I undertook to consider this. I hope that this group of amendments will meet the points he had in mind.

It would obviously be impracticable—I am sure the hon. Member for Faversham will accept this—for the initial batch of brokers' representatives to be elected. Registered brokers cannot elect until they have been registered; and they cannot be registered until the first Registration Council has been formed and has begun to carry out its functions under the Bill. Amendments Nos. 86 and 87 provide that the 12 nominated broker-members of the first Council will be replaced within four years by broker representatives elected by registered brokers.

I hope that the hon. Gentleman will accept that we have done our best to meet him on this point. The elections will be held in accordance with a scheme to be drawn up by the Council and submitted to the Secretary of State within two years of its setting up. It will then be for the Secretary of State to approve the scheme with or without modifications.

It would be ungrateful of me not to acknowledge that the Under-Secretary and my hon. Friend the Member for Harrow, West (Mr. Page) have been as good as their word and have met, at least in part, the points that were made in support of the case for election of the Council by all registered brokers, not simply by those who were members of the existing bodies or members affiliated to the British Insurance Brokers Association.

I wish to record my appreciation of the action of the Under-Secretary and of my hon. Friend and at the same time record the fact once more that the Government or my hon. Friend have tabled or accepted amendments that I moved to the Bill. If the Government or anyone else persist in saying that my intentions are totally dishonourable, I am bound to point out that many of the constructive points I have made have been met and have been accepted. If I had not been as persistent as I have been, the Bill might have looked much worse than it now does.

May I deal, without being out of order, with the allegation made by the Under-Secretary of State? In any case, I shall not be any more out of order than the Under-Secretary was by making the allegation. The hon. Gentleman said that I am here to kill the Bill. He knows very well that there is plenty of time hereafter to deal with the remaining stages of the Bill. That may not always be the case with private business on a Friday, but he knows that it is the case at this stage of the session. He knows also that there have probably already been discussions about time being provided for the remaining stages of this Bill.

In the light of what my hon. Friend has just said, are we entitled to assume, as he has spoken extensively at all stages of the Bill, so far, that in the event of further time being provided we shall hear a little less from him?

Order. Might I encourage the hon. Member for Faversham (Mr. Moate) to proceed with Amendment No. 77, in which case we would be killing two birds with one stone?

May I make the point, in response to that made by the Minister—who said that he was seeking to meet the case that I had put in Committee—that my contributions seem to have been productive rather than destructive. I hope that an exhaustive examination will continue on this amendment and others in the future. I repudiate the suggestion that on a Friday such as this one Member can or would kill a Bill. That is not the case. Bills can be killed only by the apathy of their supporters or by the mal-intent of the Government. The Government have tabled 68 amendments to the Bill—

Order. May we deal with Amendment No. 77?

I was really, in a roundabout way, Mr. Deputy Speaker, expressing my gratitude to the Government for the helpful amendments that they have tabled. I said that they have only half met my point, but perhaps half a cake is better than none. My point is that only about 3,000 of all brokers are affiliated to existing organisations which have come together to form the British Insurance Brokers' Association. There have been estimates that 9,000 to 10,000 people call themselves insurance brokers and may seek registration. It is also argued that many of those people do not wish to become members of these associations. Had they so wished they might already have applied to join. Perhaps some would not meet the criteria but many would. However, they have decided not to apply.

I was pleased with the way in which the Minister and my hon. Friend accepted the fact that it would be wrong to force people to join an association or else face the possibility of being dis- enfranchised during the election of members to the British Insurance Brokers' Registration Council. I am disappointed that this election cannot be held earlier. I can see that there are practical difficulties but I cannot understand why we have to wait for four years before the election takes place. The Minister ought to have been a little more generous there and said that the election could take place in, say, two years' time. It is not satisfactory to have to wait for four years.

I am happy to concede that the Minister has gone out of his way to be helpful. I am particularly glad that we have now provided that there is a statutory obligation on the Council to produce plans for a wider franchise. As it stood, it was merely a matter of hope that in time the Insurance Brokers' Council would produce some wider franchise to allow all those who are not members of the BIBA to have a vote. It is proper that there should be a statutory obligation to produce plans for elections. This is a helpful step and I thank the Minister and my hon. Friend for their acceptance of the case I put in Committee.

I beg to move Amendment No. 81, in page 20, line 18, at end insert:

'"insurance broker" means a person who, acting with complete freedom as to his choice of undertaking brings together, with a view to the insurance or reinsurance of risks, persons seeking insurance or reinsurance and insurance or reinsurance undertakings, carries out work preparatory to the conclusion of contracts of insurance or reinsurance and, where appropriate, assists in the administration and performance of such contracts, in particular in the event of a claim'.

I feel it necessary to remind the Minister and my hon. Friend the Member for Harrow, West (Mr. Page)—but particularly the Minister—of the important words in the proposed amendment. I am still surprised that the Minister has not put these words in the Bill. We discussed this matter in Committee in an indirect form, and I should have thought it was self-evident that there was a need for the definition of "insurance broker" to be present in the Bill.

The term "insurance broker" is used in the Bill but there is no definition of it. There are definitions of "registered insurance broker" and in relation to corporate bodies, and all the other bodies referred to in the Bill, but not of "insurance broker". We know that in future it is the intention that an insurance broker shall be a registered insurance broker, and that it will be unlawful for him to call himself an insurance broker unless he is so registered. But that is for the future. In the interim the Bill is defective in not providing a definition of "insurance broker". I say that because there is a requirement placed upon an individual to prove, prior to the date of the Bill getting Royal Assent, that he has been employed by an insurance broker.

The fear of sudden and imminent death concentrates the mind. Would I be out of order, Mr. Deputy Speaker, in saying that if I agreed to accept this amendment my hon. Friend the Member for Faversham (Mr. Moate) might agree to remain seated for the rest of the afternoon? On that basis I should be prepared to stick my neck out—I do not know how far—and accept the amendment.

Although I appreciate the intention, bargaining of that kind at this stage is not helpful. There are other amendments to be considered. My hon. Friend knows in his mind, as I know, that there will be more time available for the Bill. This is not a usual situation at this stage of the Session. Admittedly, we have no knowledge, but we have a strong suspicion—

indicated dissent.

The Under-Secretary of State shakes his head, but there are other amendments to be moved, and another hon. Member has an amendment to be debated. I do not think it would be proper at this stage to make deals of the kind suggested, even though I understand my hon. Friend's honourable intention in that respect. I really want the Minister to say it, because it is he who really has to accept the statutory responsibility of ensuring that these rules are kept.

The point I am making, and am anxious to make, is that Clause 3 of the Bill provides that a person, to gain registration, has to prove that he has been employed by an insurance broker, but the Bill does not tell us what an insurance broker is. The European Economic Community tells us what an insurance broker is, and it is the EEC's definition that I have used.

The Minister cannot complain about the words. They are basically his words that were in his White Paper, and they are in the EEC directive. If we do not define the meaning of "insurance broker", how on earth can an individual go to the registration council to prove that he has been employed by an insurance broker? It is rather like the song about the hole in the bucket. We go around in a complete circle.

At the moment a man would say "I have been employed by an insurance broker for five years. May I be registered?". The Council would reply "We are sorry, but you have to have been employed by a registered insurance broker in order to be registered". But there would have been no registered insurance brokers before the coming into force of the Act, and certainly not for five years. Therefore, if the Bill does not have a definition of this kind in it, it is totally defective.

I should be glad if the Minister would endorse the views of my hon. Friend and say that he concedes not the amendment—I am not too hopeful of that—but the argument that there should be a definition of "insurance broker" in the Bill.

If the hon. Gentleman finds that at the end of the day he has killed the Bill, the responsibility will fall fairly and squarely on his shoulders, and his alone. I can give no guarantee that further time will be available.

I do not believe that a definition is necessary, or that to introduce the proposed definition could do other than to produce confusion. The present wording could not be incorporated into the Bill, because the language is not compatible with the statutory language used in the rest of the Bill. In effect, it would have to be translated. There would then be two authoritative definitions of "insurance broker", one in the EEC directive and one in the Bill. It is true that they would be the same in substance, but even so they would create endless confusion. To make the amendment would be to produce an alternative definition which is absolutely unnecessary in this context.

That is about the most dreadful answer I have ever heard. I have demonstrated a specific instance where it is necessary to provide a definition of "insurance broker". The Minister said that it was not necessary and just brushed it aside. Such a cavalier answer should not be satisfactory to the House.

Unless the hon. Gentleman tells us what an insurance broker is or has been prior to the date of the Bill, I do not understand how someone can prove that he has been employed by an insurance broker for a few years. Or are we saying that in future a man must prove that he has been employed by a registered broker who has met the criteria, but that before the date of the Bill anybody can have called himself an insurance broker, even retrospectively, and thereby give credibility to an individual's claim to have been employed by him? Does that mean that for five years before the date of the new regulations coming into effect any Tom, Dick or Harry can say "I was an insurance broker and employed you for five years"? That is what the Bill seems to suggest.

Unless the hon. Gentleman puts in a definition of "insurance broker" the Bill will be totally defective. It is up to him to produce better answers.

I find extraordinary the hon. Gentleman's suggestion that it would be confusing to put this definition in the Bill. The wording is that of the EEC directive, amended in only one way to conform with the Bill. The directive refers to "persons". I have put my amendment in the singular, because that is how the definition clause seems generally to be drafted. I fail to understand how the Minister can say that the amendment conflicts with the Bill when it is his own wording, the wording he has taken from the directive.

The Minister says that the wording does not have statutory form. Does not the EEC directive have statutory form, and is this not the exact wording of the directive? If the hon. Gentleman says that it is not, I shall bow to his judgment, but I understand that we shall soon face accepting the directive—if we have not done so already, for these things happen in a mysterious, roundabout way sometimes. The directive will become the law of the land, and the amendment is in the precise terms of that directive.

Therefore, the Minister has given a bad reply, and it will be most unsatisfactory if it is left at that. I hope that before we return to the Bill the hon. Gentleman will have had second thoughts and decided to put a definition of "insurance broker" in the appropriate clause. I am sure that there will be further occasions. I understand the hon. Gentleman when he says that he can give no assurance. I never expected that he would give a guarantee of further time, but the Bill needs further scrutiny. The Government have tabled nearly 70 amendments on a Friday—