Clause 10 - Part 2 of the 1973 Act
Enterprise Bill
6:15 pm
Miss Melanie Johnson (Parliamentary Under-Secretary, Department of Trade and Industry; Welwyn Hatfield, Labour)
The clause repeals most of the provisions of part 2 of the Fair Trading Act 1973. Part 2 of the FTA was designed to deal with novel unfair trading practices as they emerged. It allowed the Secretary of State, by way of secondary legislation, to prohibit or modify unfair, but not illegal, trade practices that harmed the economic interests of consumers. The Secretary of State would make those orders on the advice of the Director General of Fair Trading and a then newly created consumer protection advisory committee.
Part 2 has barely been used. Only three orders have been made under it. The consumer protection advisory committee, on whose report the order-making power is dependent, has not existed in practice since 1983. Two of the orders made under part 2 are still in force and in everyday use by trading standards officers. The clause ensures that they are retained, together with the enforcement provisions for them. The rest of part 2 is repealed by the clause.
The order-making power under part 2 was found to be rigid and the process took too long. Specifically, it proved difficult to satisfy the legal tests in part 2, particularly the test of attributing specific consumer economic detriment to practices that were clearly undesirable. The possibility of reforming part 2 to make it easier to use has been considered at length. However, it has proved extremely difficult to identify the circumstances in which a revived part 2 might be used in the future. In any case, the Bill significantly strengthens consumer protection, and we therefore see no need to keep the provisions in part 2–other than those that I have mentioned–on the statute book.