Hire-Purchase and Credit Sales

Part of the debate – in the House of Commons at 12:00 am on 13th March 1952.

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Photo of Sir Eric Fletcher Sir Eric Fletcher , Islington East 12:00 am, 13th March 1952

I beg to move, That an humble Address be presented to Her Majesty, praying that the Hire-Purchase and Credit Sale Agreements (Control) Order, 1952 (S.I., 1952, No. 121), dated 28th January, 1952, a copy of which was laid before this House on 29th January, be annulled. It will probably be for the convenience of the House if we also discuss the next Motion: That an humble Address be presented to Her Majesty, praying that the Hire-Purchase and Credit Sale Agreements (Maximum Prices and Charges) (Amendment No. 2) Order, 1952 (S.I., 1952, No. 122), dated 28th January, 1952, a copy of which was laid before this House on 29th January, be annulled. The two Motions deal with substantially the same subject-matter. Both Orders to which we invite the House to object were made by the President of the Board of Trade in order to place limitations upon the freedom of the community to enter into hire-purchase agreements. When the Chancellor of the Exchequer made his statement on the financial and economic situation on 29th January, he spoke of the necessity for introducing regulations to lighten the domestic load on the engineering industry by restricting the supply of metal goods bought for personal use.

These Orders were laid before Parliament that day and came into operation on 1st February. I am not sure whether the House, still less the public, are sufficiently familiar yet with their effect or their very serious infringement upon the hitherto very wide freedom of the community to enter into hire-purchase agreements.

Our criticism of the Orders is directed not against the necessity for placing some restrictions upon the use of consumer goods but against the method by which that principle is carried out. The burden of our criticism is that this is a vicious piece of class legislation and that it is unnecessary and unfair discrimination against the poorer sections of the community, which is paralleled by other measures that the Government have introduced since then.

What would be the effect of these Orders if they were to remain unchallenged and not annulled? I should like to draw the attention of the House to the very wide range of articles included in the Schedule. This is not an Order which deals merely with television sets, radio-gramophones and matters of that kind. This is an Order which deals with a very large variety of household goods in daily use in practically every household in the country. For example, it deals with dish washers, drying cabinets, ironing machines and irons, wringers and mangles, floor polishers, vacuum cleaners, water softeners and so forth, apart from all kinds of office furniture, bicycles, tricycles and practically every kind of mechanically-propelled vehicle.

The House will be aware that for many years past the community has been in the habit of acquiring articles of this kind under the hire-purchase system. That has proved to be the only method by which not only the poorer sections of the community, but a very large number of people can, on the one hand, set up in business when it is a case of buying office furniture; I am referring to the needs of the small traders. On the other hand, it is the long recognised method by which a newly-married couple desirous of setting up a home can acquire the essentials of a household.

For a long time people have had the advantage of buying these household goods on very generous hire-purchase terms. The object of this Order is seriously to curtail those terms. What the Order does is to make it illegal as from 1st February for anybody to acquire any of these articles under a hire-purchase agreement unless the hire-purchase agreement conforms to the provisions of the Schedule.

The relevant provisions of the Schedule are, first, that in any hire-purchase agreement entered into after 1st February there shall be paid a minimum percentage in cash of 33⅓ per cent. of the purchase price. That, of course, is far higher than was the standard normally required to be paid by the purchaser under a hire-purchase agreement. Second, the Schedule requires that the period over which the hire-purchase instalments may be spread shall be limited to a period of eighteen months, and in one category of cases to 12 months. Those periods are very much shorter than has been normally the recognised period over which the payments are spread.

There are other serious objections to these Orders to which some of my hon. Friends, who will speak, will draw attention, and to only one of which I would refer, which I am sure would appeal to the Parliamentary Secretary to the Board of Trade. I am talking about the glaring ambiguities in the Order. The hon. Gentleman is a master of precision in the use of the English language, and I was very sorry to see, therefore, that an Order, emanating from his Department of all Departments, contained language of such appalling obscurity and such dreadful ambiguity that he, of all persons, had to go as a penitent in a white sheet before the Statutory Instruments Committee and apologise for the ambiguity of the language, undertaking to introduce an amending Order, which, we hope, will do something to remove the ambiguities.

I will refer to one of them. It seems impossible, reading this Order, to know in which category an ordinary motorcycle falls. Is it in the category governed by 33⅓ per cent. for 18 months or in the category governed by a minimum payment of 25 per cent. for a period of 12 months? The motorcycle is not specifically referred to but there is one group of articles called "mechanically propelled vehicles" and another category, "bicycles and tricycles whether or not mechanically propelled." Practically everybody who buys a motorcycle does so on the hire-purchase system, and many firms specialising in that trade want to know in which of the categories a motorcycle falls. This is even more true of motorcycles and sidecars.

It is an affront to produce an Order containing such ambiguity. The burden of my complaint is not merely technical but it goes to the root of the policy which has led the Government to introduce this Statutory Instrument. We are not unmindful of the realities of the financial and economic crisis, and we are not unprepared to support all necessary measures that Her Majesty's Government may introduce to deal with it, but we object most vehemently to the misuse of the national emergency for the purpose of introducing measures of this kind, which are vicious examples of class legislation.

This Order limits the amount of goods which can be obtained, and discriminates against those who have not the means to obtain ready cash. It discriminates against the poorer sections, who are just as entitled to have these articles as anybody else. It is unnecessary to introduce these measures against one class of the community under the alleged necessity of dealing with an economic crisis. For those, and other reasons which my hon. Friends will substantiate, I hope that the House will support the Motion and annul this Statutory Instrument.