House of Commons Hansard Debates for 1 Mar 1991

Mr. Stevens : Does my hon. Friend agree that under the Bill it would not be incumbent on the estate agent to put down the measurements? If he did not find it convenient to get the measurements right, he need not put them down.

Mr. Summerson : It is an estate agent's job to market property as effectively as he can. If an estate agent were permitted to say that he had done the best that he could and said that the approximate size of a room was 9 ft 9 in by 10 ft 6 in and left it at that, I hope that that would be held to mean that he had done the best that he could in difficult circumstances. I understand that there is no prohibition on qualifying statements or on disclaimers, but estate agents' particulars might fall into even more disrepute if they were hedged about with qualifications and disclaimers. I fear that that is inevitable in some circumstances.

My hon. Friend the Member for Gloucester (Mr. French) spoke about whether a room could properly be described as newly decorated. What is "newly" and what is "decorated"? Those terms need to be defined. A room may have been decorated three months ago : is that newly

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decorated? It may have been decorated six or nine months ago ; that is perhaps getting a little bit marginal, but who is to say? The omission of particulars could be an offence under the Bill. My hon. Friend the Member for Wyre Forest cited a large omission relating to a motorway running by the side of a house, but what about a small omission, for example, failure to mention a cracked lavatory bowl? If an estate agent did not reveal that in the particulars on the property, would that be held against him? A more serious example could be omitting to reveal that an old property had lead pipes. Would failure to disclose that be held against the estate agent? Should it not be possible for the estate agent to defend himself by saying, "I am not a plumber. How on earth can I go round the house to find whether there are any lead pipes?" If part of the pipework had been replaced with copper or plastic but other lead pipes still existed, would an estate agent commit an offence if he did not reveal that?

Some years ago I bought a property in Marylebone, London. It was not until after I had purchased it and the environmental health officer came round that I was told that I had to put 2 ft of concrete in the basement. I asked why, and the environmental health officer told me that the House had been built on the site of a plague burial pit. Certainly in those days estate agents did not put that information in the particulars--if they had, they would never have sold the house, apart from anything else. Would an estate agent be liable under the Bill if he did not state that there was danger of death from bubonic plague if 2 ft of concrete was not laid in the basement?

What should an estate agent do if he goes round a property to take the measurements in the usual way? Normally that is done by an estate agent and his assistant and they comment beneath their breath on the property owner's taste and when they can get away for a cup of coffee. The estate agent has already made up his mind on the descriptions--for example, "A wealth of period features"--but what happens when he discovers by chance a wealth of active woodworm? Does the estate agent state in the particulars that the wealth of period features already houses woodworm or does he say that that is nothing to do with him? Would he not be caught by the Bill if he did not reveal that fact?

Mr. Moate : My hon. Friend has described the dilemma faced by the estate agent in such circumstances, but he should apply those circumstances to the purchaser. How can a purchaser discover that he needs 2 ft of concrete to protect himself from the leftovers of the great plague? How could my constituents discover about brickwork activity of 80 years ago and the dangers that that now posed because of poisoned soil? Surely we should consider the protection offered to the buyer.

Mr. Summerson : My hon. Friend is talking about the services of a chartered surveyor. I am not especially blowing my own trumpet, but he has given me a good opportunity.

Mr. Leigh : My hon. Friend has asked whether omissions will be covered by the Bill. An estate agent must first make a statement before he is liable. If an agent described a property as being in a quiet cul-de-sac without revealing that that quiet street would in six months be an access road to an estate of 2,000 new houses, he would be liable.

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An estate agent would not be liable if he made an innocent omission. Let us take the example of the bubonic plague burial pit. If an estate agent said that the house was in an historic spot well noted over the centuries for its healthy nature, he might be liable if he failed to reveal that, many centuries ago, it had been the site of a plague burial pit. He would not be liable if he did not make any admission as to the healthy nature of the site over the centuries.

Mr. Summerson : I am grateful to my hon Friend for that clarification. It would be absurd to say that, millions of years ago, dinosaurs roamed the land around here.

Mr. John Marshall : Perhaps my hon. Friend can tell us how he described the property when he sold it.

Mr. Summerson : I am sorry that I raised the subject.

Mr. Marshall : Answer.

Mr. Summerson : There was no difficulty because we had hired cement mixers by the score to put 2 ft of concrete in the basement.

Mr. Marshall : How did my hon. Friend describe it?

Mr. Summerson : Under the present law, I did not have to say that I had put 2 ft of concrete in the basement, therefore there was no further danger from the bubonic plague, but under the Bill I might have to do just that. Is that reasonable and sensible?

An estate agent should never mention the structural condition of the property. It is none of his business to do so, as things stand. Under this Bill he may have to mention it. If surveyors, including chartered surveyors, make mistakes from time to time in assessing the condition of a property, how much more often will an estate agent make mistakes? We are undoubtedly heading towards far more integration in the performance of buying and selling property, and to vendors' surveys. Whether the public wish it or not, the net result will be a sharp rise in the fees charged by estate agents. I can see nothing else for it. They may even rise to the level in the United States of America where they represent 10 per cent. of the value of the property. That is a far cry from the 2 to 3 per cent. charged by most estate agents in this country.

Mr. Marshall : That is still too much.

Mr. Summerson : My hon. Friend knows perfectly well that people do not have to use the services of an estate agent, if they choose not to. If he were to sell a house for £200,000 and found an agent who was prepared to do it for him for 2 per cent., the fee would be £4, 000. On the other hand, if he chose to sell the property himself but made a hash of it and sold it for £10,000 less than an estate agent could have got for him, he would lose out considerably.

Clause 2, headed "Due diligence defence", is the most extraordinary clause. Subsection (1) states :

"In proceedings against a person for an offence under section 1 above it shall be a defence for him to show that he took all reasonable steps and exercised all due diligence to avoid committing the offence."

That is fine. If the Bill had left the matter there, I would have no objection, but it has to qualify it. All legislation must qualify itself. Subsection (2) states :

"A person shall not be entitled to rely on the defence provided by subsection (1) above by reason of his reliance on

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information given by another unless he shows that it was reasonable in all the circumstances for him to have relied on the information"-- Again, if the provision stopped there, I would have no quarrel, but it continues--

"having regard in particular--

(a) to the steps which he took, and those which might reasonably have been taken, for the purpose of verifying the information, and (

(b) to whether he had any reason to disbelieve the information." I could hardly believe my eyes when I read that. When an estate agent goes round a property which Mr. and Mrs. Smith have asked him to sell and they tell him that the house has woodworm and damp-proof guarantees, that they have recently installed a gas boiler and so on, he will assume--most estate agents would--that they know what they are talking about and jot that down in the particulars. The clause provides that the agent must verify the information, so he must then ask Mr. and Mrs. Smith which company undertook the damp-proof and woodworm treatment. They will say, "Such-and-such a company" and the estate agent must get on to the company and ask whether it undertook the work and gave guarantees. Meanwhile, Mr. and Mrs. Smith are demanding "Why haven't you put the property on the market? Why all the delay"? The agent can only reply, "I have been on to the firm but have not yet had a reply." Mr. and Mrs. Smith, in the meantime, are not selling their property, all because., according to subsection (2)(b), the agent had to wonder

"whether he had any reason to disbelieve the information." How can the average agent have any reason to disbelieve information given to him by clients? We are talking about a professional relationship with a client, which is based on mutual trust. This is asking the agent to disbelieve all information given to him by his client. That will involve him probably in weeks of extra work checking what his client has told him.

The extraordinary clause 2 goes on :

"(3) Where in any proceedings against a person for an offence under section 1 above the defence provided by subsection (1) above involves an allegation that the commission of the offence was due-- (

(a) to the act or default of another, or

(b) to reliance on information given by another,

the person shall not, without the leave of the court, be entitled to rely on the defence unless he has served a notice under subsection (4) below on the person bringing the proceedings not less than seven clear days before the hearing of the proceedings or, in Scotland, the diet of trial."

I do not know what "the diet of trial" means. Some legal language is remarkable and I do not know why a provision such as that could not have been written in plain English. I admit that I am not a lawyer. It goes on :

"(4) A notice under this subsection shall give such information identifying or assisting in the identification of the person who committed the act or default, or gave the information, as is in the possession of the person serving the notice at the time he serves it."

I think I understand that. It means that if, say, the purchaser of a property three years or two years and nine months later takes the estate agent to court for misdescription, the agent has a defence ; but he must serve notice

"identifying or assisting in the identification of the person who committed the act or default"

being his original clients. The agent can only say, "Mr. and Mrs. Smith moved to the west country". How on earth is

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the agent to know more than that? In the court it will probably sound as though he is trying deliberately to be unhelpful. Believe it or not, I welcome the principles behind the Bill, which should be given a Second Reading, although a great deal more work will have to be done on it.

12.17 pm The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh) : I congratulate my hon. Friend the Member for Wyre Forest (Mr. Coombs) on the way in which he presented the Bill. The whole House will be sad that my hon. Friend the Member for Coventry, South-West (Mr. Butcher) cannot be with us, especially as he has taken a close interest in these matters. Indeed, he started the ball rolling on the Bill when he held my present position at the Department of Trade and Industry.

I thank also other hon. Members who have spoken in the debate--my hon. Friends the Members for Nuneaton (Mr. Stevens), for Gloucester (Mr. French) and for Walthamstow (Mr. Summerson), the hon. Member for Great Grimsby (Mr. Mitchell) and the right hon. Member for Swansea, West (Mr. Williams).

On behalf of the Government, I welcome the Bill--and I say that, I assure the hon. Member for Great Grimsby, not through gritted teeth. It would plug a gap in the laws that protect consumers and would, at the same time, do something to help restore public confidence in estate agents. It is a relatively modest measure, which should not be at all onerous to comply with or to enforce, and I fully believe that it should hold no difficulties or worries for the responsible estate agent.

Estate agents have, we must accept, long suffered from a bad press and a poor public image--a point made particularly by some of my hon. Friends. I see the purpose of the Bill as being as much to restore public confidence in estate agency as to protect purchasers of property, and I hope that the House will bear that theme in mind today.

We have had some interesting and illuminating contributions from hon. Members which demonstrate that there is a keen interest in the Bill. That interest is shared by a number of consumer associations. Indeed, I believe that they have assisted my hon. Friend the Member for Wyre Forest in his preparation for today. There has also been much interest in the press and generally. Many hon. Members who have spoken in the debate, the press, consumer groups and the Government have all looked forward to the Bill with enthusiasm and welcome it. I shall recall some recent history on the subject, respond to my hon. Friend the Member for Wyre Forest and explain the Government's attitude to the Bill and how it will fit in with other estage agency measures currently being proposed by the Government. Although the Bill is relatively straightforward, it contains a number of complex provisions, as my hon. Friend the Member for Walthamstow made clear. We should, therefore, study it in some detail.

I said that I would refer to the recent history of the subject, and that is what I propose to do. I shall not, therefore, attempt to explain why the Trade Descriptions Act 1968 does not apply to statements about real property nor elaborate on the background to the Estate Agents Act 1979, although I shall refer to it again later. Suffice it to say that, in June 1989, my hon. Friend the Member for

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Mid-Worcestershire (Mr. Forth) the then Parliamentary Under-Secretary of State for Industry and Consumer Affairs, published the Department's review of estate agency business. He also asked the Director General of Fair Trading to discuss with the industry a code of practice and to review the question of extending the Trade Descriptions Act 1968 to misdescriptions of property.

As hon. Members will know, although in general terms the Trade Descriptions Act makes it an offence for a trader to misdescribe goods and services, it does not apply to real property. Thus, a car dealer, for instance who materially understates the mileage travelled by a car that he is selling or misdescribes its condition, commits a criminal offence. Similarly, a tour operator who knowingly or recklessly misdescribes a holiday hotel, for instance, also commits an offence.

However, an estate agent who misdescribes a house in respect of which he is seeking offers--even if the misdescription is serious and he does it deliberately, and even if the value of that property is, as several of my hon. Friends said, a major investment for the potential client--commits no offence under existing legislation. That is clearly a lacuna in the law, which is why the Government welcome the Bill and the attempt by the House to deal with the problem. Many people have considered, quite rightly, that that hole in the law is an anomaly. That is why my predecessor asked the Director General of Fair Trading to review the matter. At the same time, he also said that he was considering using subordinate legislation under the Estate Agents Act 1979 to strengthen consumer protection in relation to estate agents. I shall refer to that in more detail later.

In response to my predecessor, the then Parliamentary Under-Secretary of State, the Director General of Fair Trading issued a consultation document in September 1989, inviting comments from a wide range of consumer groups. He also asked for views on the appropriateness of various remedies, both voluntary and statutory, that had been put forward in the past.

In March 1990, the Director General of Fair Trading published his firm recommendations following the response that he had received from his wide- ranging consultation. The responses ranged widely, as one might expect. Some people said that no action should be taken ; others said that extensive legislation was needed, with a complete reform of the property transfer system. Because of time restraints and to allow other hon. Members to speak, I shall not recap on all the director general's recommendations now, but shall confine my remarks to the issue of property misdescription.

In his consultation document, the director general made the suggestion that the Trade Descriptions Act 1968 should be extended to cover property misdescriptions. In doing so, he also responded to two views that had been expressed on the subject. First, he said that he was inclined to reject the view that the availability of subordinate legislation under the 1979 Act made an extension of the Trade Descriptions Act unnecessary. Secondly, he said that he believed that misdescription of property should be an offence of strict liability, in line with the offence of misdescribing goods, under the existing Trade Descriptions Act. The director general's final recommendations in his report, after taking full account of the responses received, upheld both those conclusions.

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It is worth emphasising that the director general's firm recommendation was that those matters should be covered by the criminal law and not left to a voluntary code of practice or subordinate legislation under the 1979 Act. He also recommended, however, that an order under section 3(1)(d) of the 1979 Act could make interim provision against misdescription of property, pending the availability of parliamentary time for primary legislation. In response to the director general, my hon. Friend the then Minister told the House in a written answer on 19 April 1990 : "It is therefore the Government's intention that, as soon as legislative time is available, the Trade Descriptions Act 1968 should be extended to cover misdescription of property."-- [Official Report, 19 April 1990 ; Vol. 170. c. 1005. ]

I reaffirmed the Government's intentions on that matter in an oral answer on 23 January this year. I promised the House then that an order would be laid before it. However, it has not been possible to find the necessary parliamentary time for primary legislation, which is why the Government welcome the efforts of my hon. Friends the Members for Coventry, South-West and for Wyre Forest in bringing forward the Bill.

In the time available I shall deal with the comments raised during the debate. As revealed in the director general's consultation exercise, there is a wide range of views on the subject. At one end of the spectrum it is argued that nothing needs to be done. To those with that view I say, as I have said before, that confidence in estate agency needs to be at a high level--in the interests of not just potential purchasers of property, but the estate agent industry.

Whatever arguments were accepted in relation to the coverage of the Trade Descriptions Act years ago, it seems that it is extremely difficult in these days of high property values to argue that estate agents are in a significantly different position from those who work in other sectors that market goods and services--a point made by the right hon. Member for Swansea, West. In a lyrical speech, the hon. Member for Great Grimsby gave some of the estate agents' lyricisms, which have become notorious. It is right for my hon. Friend the Member for Coventry, South-West to seek to address that problem. The fact that estate agents are not subject to criminal law when they misdescribe property does not inspire confidence in those who deal with them. There is no doubt that their unique position is anomalous and should not be maintained. Some people say that to arouse further suspicion among the general public, who already hold estate agents in something rather less than high regard, is wrong. I do not suggest that that attitude is justified, but few would deny that it exists. The best way to allay that suspicion seems to be to bring estate agents into the same sort of regime that applies to most other sales.

Estate agents are in a unique position. There is no reason why it should be allowed to continue, although it was set out a long time ago in the 1968 Act and the House should now act.

Some people would advocate a more draconian and detailed regime to deal with property misdescriptions--a point hinted at by Opposition Members. The Bill would bring misdescription by estate agents within the scope of the criminal law for the first time, which is a major step forward. The Bill follows a similar line to the one taken by

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the Trade Descriptions Act 1968 in relation to statements about goods, and that has stood the test of time remarkably well. This Bill ought to be sufficient for that purpose, but if it is not we are prepared to consider these matters.

Those who argue against the need for the Bill say that purchasers of property are already protected by the property purchase system and are not in the same position as the purchasers of goods. It is argued that they always have the benefit of professional advice before making any final commitment. There is something in that argument. I must tell my hon. Friend the Member for Faversham (Mr. Moate) that it is not our intention to regulate the industry out of existence. My hon. Friend made some sound comments about the need to ensure fairness and to provide customers with full information, but without going too far and without loading too many costs onto the industry--costs which will be passed on to the consumer. That point must always be borne in mind when dealing with consumer legislation. Notwithstanding our wish to protect the consumer, we should always bear in mind the point made by my hon. Friend the Member for Faversham. His comments were most pertinent and we should always remember them when introducing legislation that purports to protect the consumer.

Few people complete a purchase of property without the advice of professional experts, but that does not mean that purchasers cannot suffer as a result of misdescriptions : far from it. To begin with, purchasers are not obliged to engage professional advice. It is possible to do one's own conveyancing and there is no requirement to obtain the benefit of the advice of a surveyor. Even if purchasers do obtain such advice it cannot be certain that misdescriptions will be discovered. It is therefore possible, although perhaps not likely--presumably this is why the House has not found the time to act on this in the past--that a purchaser could go through with the purchase of a property before a misdescription came to light. A more likely possibility is that a purchaser will engage a solicitor or surveyor and hence incur not inconsiderable expense before a misdescription is discovered.

At the lowest level a purchaser may incur expense and inconvenience travelling to view a property ; he may have time off work, only to find that the house has been misdescribed. I have been told of someone who expressed great interest in a property and went to the expense of going to view it. He had seen a picture of the house, but it did not show the fact that right behind the house was a gasometer. The photo was taken at the time of day when the gasometer was down, so the purchaser was in a position to buy the house when he finally discovered that the view from it was obscured. My hon. Friends the Members for Wyre Forest and for Gloucester amused the House with similar examples which no doubt were not so amusing for the purchasers whose properties were misdescribed. Hon. Members will be familiar with the experience from their everyday lives.

I do not subscribe to the view that purchasers are already adequately protected. As many hon. Members have pointed out, the purchase of property is for most people their largest-ever expense. If it is done in the normal way, important safeguards are built into the system, but people can and do suffer economically and experience inconvenience as a result of misdescriptions, which is why it is right that the House should take action today.

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Hon. Members have talked of some of the things that can be misdescribed. My hon. Friend the Member for Walthamstow made a point of mentioning them in his detailed speech. He has a lot of personal knowledge and experience of these matters and the House is grateful to him for his comments.

I should like to draw the attention of the House to the provision in clause 1 of the Bill that would deal with this point and to clear up any doubts that hon. Members might have about the Government's intentions. If enacted, the Bill will have no practical effect until an order has been made by my right hon. Friend the Secretary of State. The order would specify the prescribed matters relating to land to which the provisions of the Bill would apply. The Secretary of State would be able to prescribe any matter relating to land and, as hon. Members will appreciate, land has a very wide meaning by virtue of the Interpretation Act 1978. Under that Act

"land includes buildings and other structures, land covered with water and any estate, interest, easement, servitude or right in or over land".

However, in order for the Bill to apply, the statement would have to be made in the context of estate agency business, which is defined by reference to the Estate Agents Act 1979. Nevertheless, the phrase "any matter relating to land"

gives considerable scope for the Secretary of State's discretion. Lest the House should have any concerns about this unspecific discretion, it may be helpful for me to give an indication of the Government's attitude on the matters that the legislation proposed by the Bill would cover. I hope that this will help my hon. Friend the Member for Walthamstow.

We are talking about location or address ; aspect and proximity to places and amenities ; facilities ; proximity to and availability of any services ; tenure ; in the case of leasehold property the length of the lease, including any unexpired term ; conformity or compliance with any standard, regulations, guarantee or scheme ; accommodation ; measurements and sizes ; physical characteristics, including construction, appearance or fittings ; fitness for purpose ; fixtures, whether moveable or not, included in or excluded from sale ; previous history, including the age, ownership and use of any building, fixture, component or thing ; treatments, processing, repairs, improvements and the effects and results thereof ; existence or nature of planning permission ; and existence and extent of any listed buildings status.

That is a comprehensive list. I cannot say whether all those matters would be included in the final order, but, obviously, a fair degree of common sense must be used.

Mr. Alan Williams : The Minister is being informative and helpful. Several hon. Members spoke about builders and solicitors. The Bill's long title refers only to estate agents. Would the Minister welcome any endeavours to change the long title to include builders and solicitors?

Mr. Leigh : I am grateful to the right hon. Gentleman for raising that matter. I shall shortly come to it. I have read the early-day motion that has been signed by a considerable number of hon. Members. Of course I would not finish my speech without explaining the Government's attitude to commercial property and solicitors. The list that I have read to the House details the items that the Secretary of State would consider when deciding the matters to be specified in an order under clause 1. No

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firm decisions have been taken on that and we intend to hold a consultation exercise. I have listened carefully to the debate and the Secretary of State will obviously listen carefully to representations by the industry and consumer groups before the list is published.

My hon. Friend the Member for Wyre Forest spoke about how the Bill could be extended. I suspect that that issue is of most interest to the House. My hon. Friend the Member for Coventry, South-West framed the Bill in a fairly narrow way and my hon. Friend the Member for Wyre Forest has simply taken it up as it stands. There is no reason why it should not be amended later. My hon. Friend the Member for Wyre Forest said that the Bill should be extended to cover commercial as well as residential property. In a cogent speech, my hon. Friend the Member for Gloucester also argued strongly in favour of that, as did my hon. Friends the Members for Faversham and for Walthamstow and Opposition Members. I have considerable sympathy for that idea. If we accept the principle that descriptions of property should not be false or misleading, it is somewhat illogical to draw a distinction that depends on the purpose for which the property is being offered, whether it is domestic or commercial.

Some may argue that the purchaser of commercial property is likely to be more sophisticated and expert than the buyer of a house and, therefore, more able to look after his own interests. That may be so in many cases, but it is not always the case. I think that it was my hon. Friend the Member for Walthamstow who cited the example of small grocers. It cannot be assumed that all potential purchasers of commercial property are very sophisticated in regard to the property market.

At the earlier stages of a small firm's development, decisions must be made that are crucial to the long-term success of the enterprise. The premises on which the business is to be conducted are often of the acutest concern to that business, which may be under considerable pressure and, as I have said, may not have the necessary expertise in commercial property transactions. It is extremely important that such vital decisions are not made by small businesses on the basis of inaccurate information. The aspiring self-employed builder, shopkeeper or car mechanic is at least as susceptible to detriment caused by property misdescription as is the house buyer--indeed, perhaps more so. I suggest to my hon. Friend the Member for Wyre Forest that there is a strong argument for descriptions of commercial property to be subject to the same requirements as descriptions of residential property.

A substantial amount of the commercial property on the market is sold not to small or medium-sized firms but to large corporations and businesses. In such cases, the buyer may well have the knowledge, the expertise and perhaps even the resources to clarify and verify the information provided. It could be argued that such buyers, at least, do not need the protection offered by the Bill. I see some merit in that argument, but I am not entirely convinced by it. I think that it is possible to argue with equal conviction that descriptions should not be false or misleading, full stop. If the Bill, or any amendments to it, attempted to draw distinctions between small and large businesses--and representations to that effect have been made to us--we might find ourselves in all sorts of difficulties. I think that it is better to rest on the point of principle that the buyer-- whether that buyer is an individual or a large or small business--has a right to

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information from the estate agent which is not misleading. That, surely, is logical and, if my hon. Friend the Member for Walthamstow tabled an amendment to that effect, we would not oppose it. Estate agents involved in selling commercial property may say that it is more difficult for them to ensure that descriptions are accurate, as they have to rely largely on information supplied by the seller. That may well be true, but it does not mean that the estate agent will necessarily find himself in a more difficult position. The Bill provides defences which are common in laws of this nature--here we come to the "due diligence" argument to which my hon. Friend the Member for Walthamstow referred.

The Bill does not prohibit or restrict the use of qualifying statements to reflect the circumstances in which they are made. The courts would have to take such matters into consideration in the event of a prosecution. I have a little experience in these matters and I know that the courts approach such prosecutions with a fair amount of common sense. I hope that that reassures my hon. Friend. I believe that the estate agent who acts reasonably and, above all, conscientiously has nothing to fear from the inclusion of commercial property. On the contrary, he may have more to gain from the increased confidence in the industry that would result from such an inclusion. As I said earlier, the Bill is designed to protect not only the consumer but the industry from the small minority who may indulge in misdescriptions. We shall have to see how my hon. Friend frames his amendment in Committee, but I do not think that there will be any problems and I am sure that we can make progress.

My hon. Friend the Member for Wyre Forest also suggested that builders of new houses, and others who are in the business of marketing property, should be subject to the Bill. I know that a number of other hon. Members, including some of the Bill's sponsors, share that view. The case for including in the Bill builders of new property seems to be a fairly persuasive one. Having said that, I would of course wish to acknowledge the improvements that have taken place in the building industry over recent years. Standards have improved enormously from the situation that appertained in the 1950s and 1960s. I think that we can generally accept that the industry has advanced to the high quality of construction that we have seen in recent years and which we really take for granted.

It has been suggested by some in the building industry that there is no need for legislation in this area, given the protection offered to purchasers of new homes by the National House Building Council and equivalent structural warranty schemes. In May 1990, the supply of structural warranty services in relation to new homes was referred by the Director General of Fair Trading to the Monopolies and Mergers Commission for investigation under the monopoly provisions of the Fair Trading Act 1973. The commission's report was delivered to my right hon. Friend the Secretary of State for Trade and industry on 14 December. It will be published in due course. In the circumstances, I do not think that it would be appropriate--the report has only recently been delivered to my right hon. Friend--for me to prejudge the conclusion of the report by commenting on the merits or operation of structural warranty services.

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Leaving aside the merits of such schemes, there are arguments as to why the Bill should extend to builders of new houses. First, structural warranty schemes will not cover as wide a range of characteristics as are envisaged being covered by the Bill. As my hon. Friend the Member for Faversham said, we cannot necessarily rely on a structural warranty when we are thinking of purchasing a property. The list that I read out covers a far wider area than the warranty.

The Bill would enable my right hon. Friend the Secretary of State to prescribe the matters relating to land that would be covered. I gave an indication of the sort of things that would be considered for that purpose when I referred to the report of the Director General of Fair Trading. In all the circumstances, I think that we need to look to the list if and when the Bill becomes an Act. I think that it can be assumed that the list will be wider than the structural warranty. Therefore, I can see considerable merit in what has been suggested. The main argument seems to be one of equity--

Mr. Austin Mitchell : The problem that we face with builders and solicitors is that they do not come within the terms of the present long title, which refers to

"misleading statements by persons carrying on estate agency business in connection with property transactions."

My early-day motion 528, which has been signed by 53 hon. Members, suggests that the title should be widened to cover other aspects of the selling of houses. Will the Minister support a widening of the long title to include those aspects?

Mr. Leigh : I have already raised the matter with those who advise me. Apparently it is possible under the procedures of the House for the title to be changed--for example, it could become the Property Misdescriptions Bill. There is no problem about that. If it were wished to amend the Bill in that way to cover the matters that we are discussing, I should not oppose that change. We are talking about creating the famous but elusive level playing ground, if the House will forgive me for using that expression. It would be ridiculous if we were to be constrained by the long title. As I have said, I have been told--I hope that the Clerks will not disagree with me--that we can amend the long title.

The argument turns not on warranties and detailed difficulties but on equity. Would it be fair to the house buyer to have the protection of the law when buying a new house through an estate agent but not when buying direct from a builder, bearing in mind that, as likely as not, there would be NHBC or equivalent coverage in both instances? Would it be fair if the estate agent was subject to the provisions of criminal law when he who is, in effect, his direct competitor, the builder, was not? If we are to load the criminal law on to the estate agent, it would seem unfair if we did not also put it on to his main competitor, the builder. We have an open mind on that question. I shall have to see what amendments come from my hon. Friend the Member for Wyre Forest, but I listened closely to the comments that were made about builders, which were interesting, illuminating, and in many respects persuasive. No doubt my hon. Friend will seek advice before tabling his amendments.

The third area that my hon. Friend the Member for Wyre Forest indicated as offering potential for extending the coverage of the Bill particularly exercises the mind of the hon. Member for Great Grimsby, who has a long

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record of seeking to provide consumer protection. I well remember a Bill that he presented in my early days in the House and I respect his knowledge of such matters.

The Bill depends very much on the definition of estate agency work that appears in the Estate Agents Act 1979, which specifically excludes things done in the course of his profession by a practising solicitor or a person employed by him. It is generally accepted that it excludes solicitors from the effects of the 1979 Act when they are undertaking estate agency work.

There are valid arguments why that should be so. The 1979 Act established a detailed regime for controlling the conduct of estate agents, which gave the Director General of Fair Trading powers to prohibit an estate agent whom he considers unfit from doing estate agency work at all, or from doing certain types of such work. That point was made by the right hon. Member for Swansea, West, who questioned why someone who had just been discharged from prison could immediately undertake estate agency work. Agents are subject already to regulations imposed by the Director General of Fair Trading. United Kingdom solicitors are subject to strict rules and discipline. It can be argued with some force that the profession's own internal rules, together with the powers of the independent, statutory discipline tribunals, are more rigorous in their effect than those imposed by the 1979 Act. That argument could be extended to suggest that the high standards enforced by the law societies and discipline tribunals justify the exclusion of solicitors from the Bill, but I am not sure that it is right to take the argument that far.

Many would say that when a criminal offence is created--as opposed to the kind of regulatory regime contained in the Estate Agents Act 1979-- solicitors who act as estate agents in direct competition with others in the business should also be subject to the same statutory requirements. In some parts of Scotland at least, solicitors have the lion's share of estate agency business and in the rest of the country there is certainly potential for their share to grow--and many solicitors hope that it will. It can be argued that if solicitors are to compete on equal terms with others in the market, and to be seen to be doing so on the level playing field to which the hon. Member for Great Grimsby referred, the same provisions in respect of criminal offences should apply to both sides.

I remain open minded about the question of solicitors. We are consulting the law societies and so far the solicitors' reaction has been positive. However, we want that consultation process to complete its course. Presumably it will be a week or two before the Committee stage, so there is time to complete that consultation before we next consider the Bill. Obviously we should like to know the views of the solicitors' representative bodies and to see the amendments that are to be tabled by my hon. Friend. Nevertheless, I remain entirely open minded about whether solicitors should be included in the terms of the Bill.

Mr. Alan Williams : I understand the need for consultation and I must admit to some procedural inadequacy on my part--though I suspect that it may extend to other right hon. and hon. Members--in respect of amending the long title. In preliminary discussions, it has been suggested that the long title may have to be amended before the Committee stage. If that is so, we shall not have the amount of time that the Minister suggested

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we might have. I am afraid that I have been rather remiss and have not taken the trouble to double check. Can the Minister give us any guidance? I can well understand that he may not be able to, in which case, will he take the matter into account in timing his consultation?

Mr. Leigh : I am not sure that one is allowed to talk about such matters at this stage, but I understand that there is quite a long queue and that it may be some time before the Bill can go into Committee. I do not want to give a definitive judgment off the top of my head, but, as far as I know, it is possible to amend the long title, which would make it perfectly possible to include solicitors, commercial property builders and the other groups in which hon. Members are interested.

We have been consulting fully with the solicitors and they also know that there is a time constraint. I want to return to my original point because some hon. Members may find it surprising. They may imagine that the representative bodies always adopt a very conservative attitude to these matters. Our experience is that they have been forthcoming and interested. They recognise the problems that have been alluded to by hon. Members who ask why solicitors should be in a special position. I remain fairly confident that we shall be able to achieve a degree of consensus. I know from my own experience of taking a private Member's Bill through the House last year that such Bills are very delicate flowers. If one is not careful, one can easily build up a wave of opposition and, as we all know, a perfectly justifiable Bill may be talked out with great ease. I have great confidence in the diplomatic skills of my hon. Friend the Member for Wyre Forest. It is important that he should approach the matter in a diplomatic way. I am sure that if he does, he will be able to make progress. It is his Bill ; it is not a Government Bill. I am sure that my hon. Friend will allay any concerns that the solicitors have. Then we shall have to see what happens. It is up to my hon. Friend. He is in charge of the Bill and he must ensure that he does not build up too much opposition to it.

It may help the House if I give my views on some of the implications of the Bill and on the way in which it would work in conjunction with the subordinate legislation that is proposed under the Estate Agents Act 1979. The hon. Member for Edinburgh, South (Mr. Griffiths) is in his place on the Opposition Front Bench. He may well wish to refer to these matters, as is his right. He may accuse the Government of being dilatory. If I were in his position, I might be tempted to do the same, but I am not and before the hon. Gentleman makes his comments I should explain what the Government have done and the constraints that have been placed on them.

I do not see the Bill as a regulatory measure. The criticism is often levelled at regulations that they can prove cumbersome or bureaucratic or act as an unfair burden on business--the point made by my hon. Friend the Member for Faversham. The Government are rightly concerned about such allegations. My Department has gone to some lengths to cut red tape, to deregulate and to encourage deregulation in other Departments wherever possible. That has been achieved as part and parcel of the Government's commitment to increase competition by the creation and opening up of larger markets. As I said to the hon. Member for Great Grimsby in an intervention, the Government are not supporting the Bill through gritted teeth. We regard the Bill not as a regulatory measure but

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