Meaning of 'consumer Trade Practice'

New Clause 3 – in the House of Commons at 12:00 am on 16th May 1973.

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'In this Act "consumer trade practice" means any practice which is for the time being carried on in connection with the supply of goods (whether by way of sale or otherwise) to consumers or in connection with the supply of services for consumers and which relates—

  1. (a) to the terms or conditions (whether as to price or otherwise) on or subject to which goods or services are or are sought to be supplied, or
  2. (b) to the manner in which those terms or conditions are communicated to persons to whom goods are or are sought to be supplied or for whom services are or are sought to be supplied, or
  3. (c) to promotion (by advertising, labeling or marking of goods, canvassing or otherwise) of the supply of goods, or of the supply of services, or
  4. (d) to the way in which goods are packed or otherwise got up for the purpose of being supplied, or
  5. (e) to methods of demanding or securing payment for goods or services supplied.'.—[Sir G. Howe.]

Brought up, and read the First time.

Photo of Miss Betty Harvie Anderson Miss Betty Harvie Anderson , Renfrewshire East

With this we can discuss the following Amendments to the new Clause: (a), after 'goods', insert 'or servicing or maintenance thereof'. (b), at end add: '(f) to the system of marketing and distribution of goods or services'. We can also discuss Government amendments Nos. 10, 32, 77, 79, 80 and 81, and the following amendment:

No. 32, in Clause 17, page 13, line 18, after 'quantity', insert 'and packaging'.

4.0 p.m.

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , Reigate

I beg to move, That the Clause be read a Second time.

Half of that Clause 3 will then reappear in the form of new Clause 3 and the intention is that it should reappear at the beginning of Part II of the Bill.

The reason that makes sense is that as a result of the amendments we shall shortly be considering to Clause 2 the phrase "consumer trade practice" ceases to have any relevance for Clause 2 and is relevant only for Part II of the Bill. This is in response to a general desire expressed in Standing Committee that we should, as it was put, "unstitch" Clause 2 from the definition of "consumer trade practice". We shall deal with Clause 2 in a moment, but we intend to unstitch Clause 3 from it by removing "consumer trade practice".

What is happening here is that the whole of Clause 3 as it originally was in the Bill is to be removed if the House accepts Government Amendment No. 10.

Secondly, the other half of Clause 3, that is, subsections (2) and (3), will go into the main definition part of the Bill down to Clause 125, and that change is effected by Amendment No. 77. Amendments Nos. 79 to 81 are consequential on Amendment No. 77.

The mechanics of the amendments are as follows: Amendment No. 10 to remove Clause 3; new Clause 3 to replace the "consumer trade practice" part of it in Part II of the Bill; Amendment No. 77, together with Amendments Nos. 79, 80 and 81, to remove the definition of the consumer part of the old Clause 3 to Clause 125 of the Bill. I hope that that makes it clear to the House what is happening structurally. Within these changes certain important additional changes are taking place which are in response to points raised in Committee.

If one looks at new Clause 3 and compares it with Clause 3(1) of the Bill as it is before the House, one finds that it has grown because it has had added to it a new paragraph (d). Paragraphs (a), (b), (c) and (d) of the old clause now appear as paragraphs (a), (b), (c) and (e) of this new clause. The stranger—I hope a welcome stranger—in new Clause 3 is paragraph (d), which says that "consumer trade practice" means, and for this purpose includes, any practice in connection with the supply of goods or services which relates to the way in which goods are packed or otherwise got up for the purpose of being supplied. That is related to the point raised specifically by the hon. Member for Fife, West (Mr. William Hamilton) in his Amendment No. 32, which we are also debating. It meets the point raised by a number of hon. Members in Committee as regards their concern that packaging should be one of the matters with which the Director-General and the Consumer Protection Advisory Committee would be able to deal. I think that my hon. Friend the Member for Merton and Morden (Miss Fookes) also raised that point. This meets that point and broadens the scope of Part II.

A change is also introduced in the form of the definition of "consumer" as that appears in Clause 125. It is a small change and it arises out of a point raised by the hon. Member for Bradford, East (M. Edward Lyons). If hon. Members look at Amendment No. 77 and compare that with the definition of "consumer "as it appears on page 3 of the Bill, they will see that the last two lines on page 3 read, who does not obtain or seek to obtain the goods or services in the course of a business carried on by him". The corresponding last two lines of Amendment No. 77 said: who does not receive or seek to receive the goods or services in the course of a business carried on by him". That picks up a point raised in Committee so as to make it clear that it is not necessary for there to be an act of obtaining for that clause to apply, and that unsolicited receipt has the same effect. It is a small change but it meets a point raised by hon. Members upstairs.

Finally, there are two amendments standing in the names of my hon. Friend the Member for Gloucester (Mrs. Sally Oppenheim)—amendment (a)—and the hon. Member for Sedgefield (Mr. David Reed)—amendment (b). It is perhaps for the hon. Members to speak to their own amendments first and I should certainly be interested to hear what my hon. Friend the Member for Gloucester has to say on her amendment. It looks to me, on the first assessment of her amendment, that the concept of servicing or maintenance is embraced by the original phrase in Clause 3(1)—namely, "supply of services "—because both servicing and maintenance would be covered by that phrase. I know that this is a point to which my hon. Friend attaches some importance and it may be that her argument will demonstrate that it is insufficient to cover for her interests.

I think it best to leave the hon. Member for Sedgefield to develop his own case in regard to amendment (b) because his understanding of the breadth of this may go wider than my own. He was courteous enough to send me a letter explaining the significance of the amendment, and no doubt the House will listen with interest to what he says.

I commend the amendments in my name as representing a number of sensible changes in the direction indicated by hon. Members in Committee.

Photo of Mr Willie Hamilton Mr Willie Hamilton , Fife West

I very much welcome some of the changes that have been made as a result of the proceedings in Committee. In particular, I want to address a few remarks to the question of packaging which I raised in the Committee and which the Government have seen fit to incorporate in the new clause. However, the wording of the new clause is puzzling. I do not know exactly what it means when it refers to the way in which goods are "packed or otherwise got up". I am not quite sure what the distinction is between "packed" and "got up". The Minister might care to tell us what is the difference.

The point was well made in Committee that there is a good deal of deception of the consumer in the form in which goods are packaged. I referred upstairs to the question of fake or false bottoms—in bottles, I hasten to add, and other containers. I mentioned the deceptive size of packages, such as packets of detergent, where one gets a giant package which is three-quarters full, or a giant package or packet containing a minute tube of toothpaste.

The abuse is particularly prevalent in the sale of cosmetics, where one very often gets a jar within a jar, the inner jar representing a minute volume compared with the actual jar purchased. In Committee the Minister rationalised this by saying that women prefer to have a large jar on the dressing table. The hon. Member for Gloucester (Mrs. Sally Oppenheim) made the point that, if it were made clear by the manufacturers that there was a much smaller volume of cream or powder or whatever it was than might be presumed from the size of the outside container, there would be no deception. But quite clearly there is deception. The manufacturers play on the vanity of women, or of men in the case of after-shave lotion, for example. The practice is to be deplored, and I am glad the Minister is taking steps to see to it that it is stopped.

We spent a little time in Committee dealing with packaging. We talked about dangerous goods being sold, but I do not think that we referred to dangerous packaging. We have read stories in newspapers of children getting polythene bags over their heads and suffocating in consequence. That kind of packaging should be declared illegal, and the Bill is the appropriate mechanism for doing so.

The hon. Member for Cannock (Mr. Cormack) has introduced a Bill which deals with packaging in the form of plastics and non-returnable containers. The use of plastics for this purpose is equally indefensible because it adds to the already considerable problem of pollution. Manufacturers should not be allowed to use materials which add to pollution with no regard for anyone except their own commercial interests.

I hope that the Minister will give us the assurance that the clause makes it an unfair and improper practice for a manufacturer to produce goods for the retail market which lead to pollution or danger to life.

Photo of Miss Janet Fookes Miss Janet Fookes , Merton and Morden

In general terms I am delighted with the new Clause that has been moved by my right hon. and learned Friend. But the phrase "otherwise got up", apart from being repetitive, is somewhat inelegant. If some such expression is necessary, is the English language so poverty-stricken that we cannot find a better term than this to go into a Bill which we hope will become a permanent part of our statute law?

4.15 p.m.

Photo of Mr David Reed Mr David Reed , Sedgefield

I want specifically to refer to amendment (b) to new Clause 3, and it may help the House to know that the amendment is intended to be taken in conjunction with Amendment No. 37 which I hope, if I catch your eye, Mr. Deputy Speaker, to have an opportunity to discuss later.

The object of the two amendments taken together is to give the Minister for Trade and Consumer Affairs and the Director-General of Fair Trading the opportunity to look at a new kind of consumer trade practice—the marketing-oriented type of consumer trade practice which is increasing. Leaving aside Amendment No. 37, amendment (b) will stand up on its own. It seeks to put right an omission in the matters to which the Director-General will be able to apply himself.

The amended Clause 3 even with its redistribution in the Bill is fine, with one exception. Under new Clause 3 the Director-General will be able to look at the whole gamut of approaches to what is a consumer trade practice. He will be able to look at the way in which goods and services are advertised, packed, paid for and so on. The one thing he is specifically not allowed to look at is the system by which the products or services reach the public, in other words, the way in which they are marketed or distributed.

I am concerned about the growing abuse of the marketing and distribution system, and that is why my hon. Friends and I have tabled amendment (b). The marketing-oriented abuse is growing rapidly. Marketing is almost a new science and it gives the racketeer, the rogue and the con-man another set of levers to pull in trying to con the public out of their hard-earned savings. The purpose of the amendment is to enable the Director-General to look at the activities of people who, although they may currently be operating within the law, are operating way out on the fringe of it.

I have particularly in mind pyramid selling, a subject which has concerned many hon. Members. My hon. Friend the Member for Watford (Mr. Raphael Tuck) introduced a Bill to try to deal with it. Pyramid selling is a twentieth century abuse, and new methods of tackling it are necessary. The problem is largely that these super crooks are using such modern techniques that it is difficult for anyone who is interested in their activities to keep up to date with them. They have available to them a whole range of expertise. They use psychologists to advise them about human reactions. They use motivation experts to advise them how to rig a meeting to get the best response from members of the public whom they are attempting to con into investing in their business. They use financial experts who can arrange shady loan deals at high rates of interest. All these people are being used, in addition to 'the general run of marketing and sales promotion people.

I do not know the extent of this abuse, but I can say with some degree of certainty that tens of thousands of people have lost their life savings to companies of this sort and the total amount of money involved runs into several million pounds.

I am worried that pyramid selling is just the first of many marketing-oriented swindles that will be developed. The next step for pyramid operators is the crooked franchise operation. A person is invited to invest money in advance for the privilege of distributing a certain product. That person, in return for the investment, is given an area in which to work. The impression is given to the gullible investor that he will get a guaranteed area and that no one will be in competition with him in selling that product in that area. The real rogues are simply "selling" the same area time and again to many different people. Pyramid selling as it is now is merely the first of many similar abuses.

There are many more such activities There are the variations on the doorstep selling theme—the crooked magazine subscription method in which a student says that he is taking part in a competition. There is the double-glazing firm which offers a psuedo cut in the retail price to induce a sale. We shall be seeing more of the party-plan technique, which may be used by reputable firms on a reputable basis, but is also being used by people who are selling shoddy products. Parties are given and the promoters rely on the guests being reluctant to offend the hostess by not buying anything.

All these marketing-oriented trade abuses should be looked at by the Director General of Fair Trading. These systems of crooked marketing can result in an eventual mark-up of 1,000 per cent. to the retail consumer on the original cost of a product. I see the hon. Lady the Member for Gloucester (Mrs. Sally Oppenheim) shaking her head, but I know one example of a product which was bought for around 5p a bottle by the original corporate body but was sold to the retail consumer at well over £1 a bottle. That was caused by the markups at the various stages in the crooked marketing system.

Irrespective of whether we want to look at any one firm or its method, we ought to give the Director General and his staff almost a direction from this House to be aware of what is happening in this area and to go on looking into it. It is not just the retail consumer who is buying in lots of £1, £2, £3 or £4 a time. What is even more important is the sort of person who is pulled into this kind of swindle and who is asked to invest several hundred pounds in advance. Since I started looking at it—and I know the same applies to my hon. Friend the Member for Watford—I have had hundreds of letters from people who have been caught in this kind of operation.

What it can mean is that somebody invests to earn a part-time income from marketing a product. That is their idea. To do it they will normally have to borrow the money. Quite often they have to borrow it from a bank or a finance house. Quite often they have to use their home as security. They have to obtain a second mortgage on their home to get the money to invest. The result is that when they find products at a 1,000 per cent. mark-up which will not sell retail, their homes, their lives and their family's lives are placed in jeopardy. There are literally hundreds of thousands of people in this position throughout the country because of this kind of swindle. It is extraordinary the way people get involved, with the best of motives initially, to earn a part-time income, to try to produce for their families a better way of life, but end up by being swindled in this way into losing everything, into losing friendships and even their own self respect.

I do not want particularly to start a debate today on the issue of pyramid selling. If we can get Amendment No. 37 called either later today or tomorrow, I hope that we shall be able to discuss the abuse and how we need to tackle it. It is clear that the Director General of Fair Trading must be placed in a position where he can look at this kind of abuse. He must be able to prepare, for his own advisory committee, for the Minister for Trade and Consumer Affairs, reports dealing with any changes which this kind of operator introduces. I can best describe it in terms of Clause 2 of the Bill. In my view, these are undoubtedly consumer trade practices which may adversely affect the economic interests of consumers in the United Kingdom. For that reason, it is important that we give the Director General these powers, and I commend this amendment to the House.

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

I hope it will be in order, in speaking to the amendment which stands in my name and that of my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward Taylor) if I refer first to new Clause 3. We shall possibly have some difficulty in debating new Clause 3 because we shall not first have discussed the redrafting amendment to new Clause 2.

Photo of Miss Betty Harvie Anderson Miss Betty Harvie Anderson , Renfrewshire East

I should like to make it plain to the hon. Lady that the amendment is selected for discussion only, and that it would not be the appropriate time, even if she wished to move it, to do so at this moment.

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

Does this mean that I can discuss only the amendment and not new Clause 3?

Photo of Miss Betty Harvie Anderson Miss Betty Harvie Anderson , Renfrewshire East

If the hon. Lady continues, she will get on quite well.

Mrs. Oppeaheim:

With regard to new Clause 3, the fact that there have been drafting amendments to new Clause 2 makes it difficult to discuss the point that no alteration has been made with regard to a satisfactory definition of a consumer trade practice. Paragraph (b), I was about to say—and I have been justified subsequently by the amending subsection that my right hon. and learned Friend moved at the beginning—had a rather curious extension, thanks to the explanation given by my right hon. and learned Friend.

I welcome the points my right hon. and learned Friend made about paragraph (d) and the packaging provisions therein. I am not quite sure whether this is intended to refer to standard packaging, which we discussed at length during the Standing Committee, or whether it is also likely to encompass unit pricing in relation to my hon. Friend's Bill.

If this is the case. I would be rather dismayed, as my hon. Friend already has a Bill which has received a Second Reading in the House. Perhaps my right hon. and learned Friend can clarify that.

With regard to groceries, necessities and things such as that, I would certainly add a warm welcome to the concept of standard packaging and also to the concept of doing away with misleading packaging.

As far as cosmetics are concerned, I take the feminine view. Unlike the hon. Member for Fife, West (Mr. William Hamilton), I do not wish to see a spartan array of medicine bottles on my dressing table. I want to see my face cream or my scent in a pretty bottle or a jar. I do not mind how misleading the outside of the jar may be, as long as there is a label describing either the weight or the quantity therein. I leave the hon. Gentleman for Fife, West to his spartan bottles.

In Standing Committee, my hon. Friend the Member for Glasgow, Cathcart and I—as my right hon. and learned Friend will remember—added an amendment to the original Clause 3, adding new paragraphs (e) and (f) with regard, first, to the quality and performance or standard of manufacture of goods and, secondly, to the servicing of goods, the availability of spare parts, components and so on, for goods at competitive prices. It is on this latter point that We have tabled amendment (a) today.

During Standing Committee, my right hon. and learned Friend gave assurances that the point made on quality and standard of manufacture was now met in the contemporary definition of merchantable quality in Supply of Goods Act implied terms, and that there was an implied condition that goods were of this quality. I entirely accept that assurance. At that time I put it forward as an alternative. One would hope that the Bill would ultimately provide a form of quality control.

However, with regard to the availability and the cost of spare parts, and the poor and expensive servicing of parts and domestic appliances, my right hon. and learned Friend indicated at the time—rather differently from that which he has stated more recently—that these would be covered by redrafting Clause 2. To some extent they are. That is one of the difficulties of discussing new Clause 3 before we discuss the amendment or Clause 2. I sincerely hope they are, because although this is a singularly intractable problem—as I am sure my right hon. and learned Friend would acknowledge—it is a serious one.

In the United States, the 1972 Vehicles Information and Cost Savings Act was introduced in an attempt to deal with this matter. One of the functions of that legislation is to set up a network of independent centres to investigate the cost and effectiveness of the servicing of cars and examination of the replacement of so-called faulty parts.

On the subject of the availability of spare parts, we discussed the monopolies aspect of the problem. I still hope that what the hon. Member for Clackmannon and East Stirlingshire (Mr. Douglas) described as monopolistic suppliers of components can be investigated under the monopolies section of the Bill.

Although I wish him no ill will at all, I hope that the Director General will be absolutely snowed under with evidence, under proposed Clause 2(1)(b), of appallingly low standards of servicing, of deception in the replacement of spare parts, of the low standards of quality in the manufacture of some of our products, and shoddy workmanship. As a result, he will press the Secretary of State into action in the interests of consumers, and also in the interests of our export trade because a disgraceful state of affairs exists today at the expense of consumers in this field. We should not blind ourselves to this, either from the point of view of consumers or from the point of view of our export trade.

4.30 p.m.

Quite fortuitously, an advertisement appeared in the Daily Mail this week which sums up the problem far more effectively than I can. In view of the proliferation of newspaper clippings during Standing Committee, I give a solemn promise that this is the only newspaper clipping I shall produce during Report.

The advertisement was put in by the Lucas spare parts and components company and shows a prototype spiv with a prototype blonde and a prototype Jaguar. This is not to indicate that anyone who has a prototype Jaguar, or indeed a prototype blonde, is a spiv. The headline on the advertisement reads: I know the motorists get conned, but I've got to eat, ain't I? The advertisement reads: Ed was getting a bit short of cash. So he decided to try his hand at the Lucas spare parts game. He started picking up Lucas dynamos, starters, distributors and alternators from scrapyards and abandoned cars. At first he threw away the ones that did not work. As he says himself, 'I didn't have a clue how to fix them.' The ones that did work, ho just cleaned up and repainted. Ed admits, 'As long as they were still working, I couldn't care less how long they'd last.' Ed used to sell his 'Lucas' parts to a friend. Now he's built up a lot of regular custom with several local garages. 'I'm making a fair bit of money out of them, I can tell you,' he says. Naturally the garages make their share, too. Some of them charge as much for Ed's 'Lucas' parts as they would for genuine Lucas B90 exchange units. And they get away with it. You see most motorists never ask if they're getting genuine Lucas B90 exchange units. Worse still, they don't know that genuine B90 units have a twelve-months written guarantee from Lucas. And that the guarantee will be honoured by any Lucas stockist anywhere in the country. I am sure the House will agree that Lucas has done a service to the motorist by producing that advertisement. However, Lucas might have taken a further step and said to the consumer "When you get your new spare part, ask for an invoice describing it as such". That would have been more effective.

This underlines the point which I am trying to emphasise that in some cases the original manufacture and in many cases the servicing of cars and domestic appliances is appalling and the cost is very high indeed. Furthermore, there is a lack of availability of spare parts. We seek to cover this point by the inclusion of She word "maintenance" in Amendment (a). As a possible breach of the Sale of Goods Act, when a consumer purchases a product he should no' be deprived of its use because of inadequate servicing or shortage of spare parts, as is often the case—or even worse by the high cost of repairs which he cannot afford to pay in respect of a domestic appliance or vehicle.

The question arises whether the goods supplied were in the first place of merchantable quality. My right hon. and learned Friend the Minister for Trade and Consumer Affairs said that some aspects of the problem were dealt with in the redraft of Clause 2 and some aspects of the matter could be dealt with in Part III of the Bill the Restrictive Practices Court, or alternatively in the new Clause to the Administration of Justice Act about the county courts. I wonder how many such cases would find their way to the county courts and, if they did, what evidence would be produced by consumers to prove the point they were making about the replacement of parts or the shoddy nature of the goods in the first place.

If it turns out that the Director General can act as a catalyst on this subject to bring in the necessary measures to remedy the situation, then this Bill will be justified on that issue alone.

In the meantime I welcome the new clause. It is slightly better than the old provision, but only just. I ask the Minister to accept our amendment as a token of his concern with regard to a very important consumer issue.

Photo of Mr Raphael Tuck Mr Raphael Tuck , Watford

I am in a little difficulty on this clause. I am grateful to my hon. Friend the Member for Sedgefield (Mr. David Reed) for tabling Amendment (b) and I give it my support. My difficulty arises because I now have before the House a Bill dealing with pyramid selling which, regularly, every Friday is subject to a cry of "Object" from the Government Whips. Therefore, in the present Bill I tried to insert a clause on Report to deal with the subject with which my Bill is concerned, but I was informed by the Public Bill Office that, procedurally, it was impossible to insert any provision dealing with pyramid selling at this juncture.

I also received a letter from the Minister of Trade and Consumer Affairs calling my attention to the procedural difficulties and suggesting that the matter might be better dealt with in another place. In those circumstances I did not seek to table an amendment. But now, to and behold, there appear on the Amendment Paper two amendments—Amendment (b) and Amendment No. 37—which deal with the very point with which I sought to deal in my proposed amendment. Wonders will never cease.

I give my approval to both the amendments, but I do not understand why I was not allowed to bring this matter to light in my own amendment. In the new circumstances I shall have to make my speech now, because I understand that the fate of Amendment No. 37, which is due to be discussed tomorrow, will depend on what happens to Amendment (b). In other words, if that amendment falls, Amendment No. 37 will also fall. Therefore, I shall make a few observations today and hope that it will convince hon. Members to vote for my hon. Friend's Amendment (b).

I cannot understand why the Minister did not adopt my suggestion of taking over my Bill lock, stock and barrel and amending the definition clause to include horizontal as well as vertical structures, and to get the Bill through Parliament in that way. It would have been simple and swift, and would have succeeded because the consensus in the House is that the Bill is necessary. No doubt the Minister will give his reasons for not doing so.

Pyramid selling is a terrible evil and I have come in contact with it on a number of occasions. In my room in the House I have a file almost six inches thick containing letters from people who have written to me complaining that because of pyramid selling they have lost their life savings.

The main emphasis in pyramid selling is the recruitment of other people. The first person involved buys in at a high level in the pyramid structure and pays £1,000 or £2,000, which may represent his life savings. He is then told that if he can recruit others up to his level or to a lower level he will receive £500 for each person he recruits. He is then sold about £850 or £1,000 worth of goods, and has to sell those goods. But the emphasis is not on selling. He will not recoup his £1,000 or £2,000 by selling the product; he will recoup it only by recruiting other people into the system. I understand that Golden Chemicals have a chart which shows that in the first week one person recruits two other people, and in the next week those two people recruit a further two people each, and so on. It has been calculated that after 26 weeks about 67 million people would be recruited. There comes a time, therefore, when the whole community is saturated with recruits and no more can be found because everybody is in the game.

I remember that when I was in New Orleans I joined a pyramid club just for the devil of it. I paid ten dollars and kissed that money goodbye. I had to find two people in the whole of New Orleans, the population of which was then around 250,000. I could find only one person to recruit, because everybody else was in the scheme. Thus, people who get in early are in for a good time and can earn a lot of money, but people who join in the middle or later often lose large amounts of money, which sometimes represents their life savings.

Incentives are always given by these confidence companies. My hon. Friend mentioned one. I can tell the House about Koscot. The House will remember that Mr. Justice Megarry made an order for its winding up and said that it reeked of cunning and dishonesty. The company had what is called "opportunity" meetings at a big hotel. People became fired with zeal and desire to join. They came to the promoters saying, "We want to join and to give you our £ 1,500, but we have not got it." The reply was, "Just a moment. We have an accountant who will help you." On seeing the accountant, they were told to cross the corridor, where they would find a finance firm willing to help them. Each would-be participant was lent the £1,500 by the finance firm to buy goods. Later, however, he found that the goods were worthless and that he was unable to recoup his money. On going back to the finance firm, and pointing out that it had guaranteed the arrangement, he was told that the firm denied all connection with Koscot. It had merely lent the money and was not concerned with the purpose for which it was lent. That is how the system works. It is a case of wheels within wheels, and people lose their money.

I cannot understand why this House cannot pass a simple Bill to deal with the abuses, of which there are five or six. The first is that a person joining one of these firms is not given an exclusive territory. He may find as many as 200 people working against him in a small territory. He has no guarantee that he can sell his goods. Any agreement entered into between one of these companies and a prospective franchise holder should contain a clause to the effect that the franchise holder will be given a specifically delineated exclusive territory. That is the first sine qua non of a just system.

Secondly, this person has to buy the goods. At present he has to buy say £850 or £1,000 worth of goods. What is the necessity for him to buy them? If the product is any good at all, it will sell, and he can therefore sell the goods on commission. There is no necessity to buy the goods. If they are no good he will not be able to sell them, and that is probably why he has to lumber himself with the goods. He is lumbered with £1,000 worth of goods, and probably sells about £100 worth. When he asks the company to take back the remainder it refuses; indeed, it may well have gone out of business. The unfortunate person therefore tries to sell the goods at knockdown prices in markets, thus spoiling the chances of others to dispose of their goods at the proper price. Many people tell me that when they have tried to sell their goods it has been pointed out to them that they can be bought in markets for half the price. No franchise holder should be required to purchase the goods himself. He should be permitted to sell them on commission.

Thirdly, no franchise holder should have to pay for joining such a company——

Photo of Miss Betty Harvie Anderson Miss Betty Harvie Anderson , Renfrewshire East

Order. I hope that the hon. Gentleman will not move too far from the new clause.

Photo of Mr Raphael Tuck Mr Raphael Tuck , Watford

I shall try not to, but I have to subsume these arguments under this clause in the course of this debate, because the amendment which we are due to discuss tomorrow may fall if the clause is not accepted today——

Photo of Miss Betty Harvie Anderson Miss Betty Harvie Anderson , Renfrewshire East

Order, we cannot anticipate tomorrow. Mr. Tuck. New Clause 3.

Photo of Mr Raphael Tuck Mr Raphael Tuck , Watford

I shall try not to move too far away from the clause.

The third sine qua non is that a prospective franchise holder should not have to pay to join the company. Today he may be required to pay a great deal to do so. Firms like Kleen-e-ze are in the business legitimately, and charge a man only £5 for his kit. I suggest that a franchise holder should be charged only £10 for his kit and no more.

The fourth and main sine qua non is that a franchise holder should not be paid for recruiting other people. If a provision of that kind were operated, his whole energy would be put into selling the goods rather than some of it going into recruiting other people. All that he should be paid is commission on the goods that he sells, with perhaps a smaller rate of commission on goods sold by people whom he has recruited.

Those are the essential conditions. There is a fifth one, which escapes me at present, but it is in my Bill. In my view these conditions could be incorporated into such a Bill, instead of passing this clause. However, as my Bill has not been accepted, and in view of the fact that the right hon. and learned Gentleman has refused to take it over, for his own reasons, I urge the House to adopt my hon. Friend's proposal and add this clause to the Bill.

4.45 p.m.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Glasgow Cathcart

In Committee my right hon. and learned Friend the Minister for Trade and Consumer Affairs was extremely helpful and courteous in dealing with our various points, and he has shown his interest in them by the amendments that he has tabled.

My hon. Friend the Member for Gloucester (Mrs. Sally Oppenheim) put forward a powerful case in support of amendment (a). However, my right hon. and learned Friend said that in his opinion problems involving the servicing and maintenance of vehicles and household equipment were covered by the words "supply of services".

I come, then, to amendment (b). We are told that this, too, is covered. In Committee we tabled an amendment saying that we hoped that it would cover the quality, performance and standard of manufacture of equipment. We were told that that was covered, if not by this clause, by the Supply of Goods (Implied Terms) Act.

It seems, therefore, that every little point which we feel to be important is covered by the words "supply of goods" or "supply of services". I know that my right hon. and learned Friend has considered this matter seriously. But if that is so, what is the point of having paragraphs (a), (b), (c), (d) and (e) in the clause at all? If, as it seems, every possible consumer trade practice is covered, would not it be adequate to end new Clause 3 in line 3 at the word "consumers", simply saying, In this Act 'consumer trade practice' means any practice which is for the time being carried on in connection with the supply of goods (whether by way of sale or otherwise) to consumers or in connection with the supply of services for consumers"? Bearing in mind the very important points raised in Committee, we have been told that everything is covered. I wonder whether the remainder will be helpful or necessary in relation to later clauses, especially those in Part II.

I have been impressed by the Government's recent decision to set up a committee to see whether we can simplify the law and make it more meaningful. Nothing makes it more difficult to implement or to understand the law than unnecessary definitions. I hope that my right hon. and learned Friend will not think that I am being critical because we are grateful for his various assurances, but will not these paragraphs simply confuse matters?

I have no doubt that there is a very good answer. It may be that if we did not have these definitions some vast sphere of operations would be excluded. But perhaps my right hon. and learned Friend can tell the House what is included which otherwise would be excluded by having paragraphs (a), (b), (c), (d) and (e), and whether they are really necessary.

Photo of Patrick Cormack Patrick Cormack , Cannock

I wish to address myself to paragraph (d) and at the outset to associate myself with the scathing and justified remarks of my hon. Friend the Member for Merton and Morden (Miss Fookes). Before the Bill becomes an Act I hope that we shall have got rid of "got up" which does not dignify any piece of legislation and is something up with which we should not put.

Paragraph (d) seems to touch upon an area in which I have a special interest and in respect of which I have introduced two Bills recently, the Weights and Measures (Unit Pricing) Bill and the Container and Packaging Control Bill.

In the Committee, on which I was not fortunate enough to serve, there was a great deal of debate about unit pricing and this revealed a distinct difference of opinion between myself and the hon. Member for Fife, West (Mr. William Hamilton). Both of us believed that unit pricing was necessary, the hon. Gentleman taking the view that it should be incorporated in the Bill and my taking the view that a separate Bill was necessary, an attitude in which I was supported by the Government.

On more than one occasion in Committee the Government spokesman said that the Government were waiting to give my Bill a fair wind. That attitude was welcomed by the Opposition spokesman. Due to little local difficulties, it was not until last Friday that my Bill got its fair wind and had a Second Reading. It is due to go into Committee before the end of this Session and I hope that the Government's attitude towards it has net changed, because I believe that a separate Bill for this important measure is necessary. This view is shared most strongly by my hon. Friend the Member for Gloucester (Mrs. Sally Oppenheim) who has referred in passing to this issue.

Another issue with which I am concerned is that of container and packaging control. Paragraph (d) refers to the way that goods are packed. Presumably at the back of my right hon. and learned Friend's mind, or possibly even at the front of it, when drafting this paragraph was the intention to deal with the enormous problems occasioned by deceptive and superfious packaging and all the consequential misfortunes which follow therefrom.

On Friday, at three minutes to four, we had a short debate on the Container and Packaging Control Bill and my right hon. Friend the Minister for Local Government and Development, who was, in effect, standing in for my right hon. and learned Friend, had time to say that whilst the Government welcomed the fact that the Bill had been introduced and appreciated the complexities of the problem, they felt that it was not sufficiently all-embracing to deal with the matter as it should be dealt with.

I do not necessary quarrel with that. I am fully aware that I did not produce a perfect Bill. It was a simple piece of enabling legislation. But if that simple piece of enabling legislation, much more all-embracing than paragraph (d) in the new clause, were not sufficient to tackle the problem, I hope that, as an earnest of the Government's good intentions, we shall have a clear indication from my right hon. and learned Friend that something of a more comprehensive nature will follow very soon.

We are dealing with two enormous problems. At the risk of wearying the House I should like to comment on each of them.

The first is unit pricing. I think that the discussion which was stimulated last year, partly as a result of the Bill that I introduced for the first time then and the newspaper articles and broadcasts that followed, showed that throughout the country there was a great demand by housewives to have this added piece of consumer protection. Often the housewife in a hurry in the supermarket is bamboozled by the veritable jungle of packages and bottles which confront her and she has no idea what she is getting for her money. She may come out clutching a child in one hand and pushing a trolley with the other only to find when she gets home that the 1lb. of jam is 12 oz. and the half-pound of biscuits is 6½ oz. If she goes into a chemist's shop on the way home and buys her shampoo, toothpaste, and so on, she has no idea how to compare what gives best value for money.

I risked your wrath last year, Mr. Speaker, when I produced certain examples of deceptive packaging in the Chamber of the House. We could all go out now into the highways and byways of London and our constituencies and produce mountains of such examples.

It is essential that firms which do not move towards the standard quantity concept for the goods they are selling should give a clear and precise indication of the price per appropriate unit.

It is fair to point out that some housewives would take no notice of this information, just as some take no notice of the ingredients on the sauce bottle. But there is some information to which the housewife is absolutely entitled. Just as she is entitled to know the ingredients of her tomato ketchup, Daddies Sauce, or whatever else it may be, so she is entitled to know what she is getting in weight and volume for the money that she is spending. It is a small but significant weapon in the fight against inflation for the discriminating housewife. Most housewives are, or at least want to be, discriminating. The trouble is that the old cliche, "The customer is always right", has become for too many, "Let us take the customer for a mug."

In that context it is appropriate to move on briefly to the second subject with which I am concerned—namely, packaging. I have done a great deal of research on this matter during the last few weeks. I never cease to be amazed by the ridiculous ploys which manufacturers will adopt. I noticed an article in the Sunday Times last weekend about one firm selling ladies' knickers in tin cans. It is certainly novel, but hardly necessary.

There is a great deal of superfluous packaging on the market. I am not advocating a return to the days of the ubiquitous brown paper bag, nor am I suggesting that we should sacrifice hygiene to other considerations, but we do not need to buy our shoe-laces in plastic bubbles. I am certain that ladies do not need to buy their knickers in cans.

I am persuaded that plastic is being over-used. For example, when a man buys a small pack of razor blades he will find that it is on a large card with a plastic bubble at the top. This is not necessary.

A lady may go into a shop and ask for a certain type of cheese spread. She will certainly get the cheese spread but will find that it is wrapped in special paper and inside a box. Last week I bought some sauce which was inside a box. The purpose of the box was to show a picture of the bottle. That is taking packaging to ludicrous extremes.

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

Does my hon. Friend agree that a great deal of this extra and superfluous packaging is in some way necessary because supermarkets do not provide adequate bags or carriers in which to put the goods that one has purchased, without having to pay for such bag or carrier? It is the shortfall in the standard of service provided in supermarkets that causes the superfluous packaging of individual items.

Photo of Patrick Cormack Patrick Cormack , Cannock

There is a deal of truth in what my hon. Friend said. I believe that she has studied this matter as carefully as anyone. However, I do not accept that the supermarket is entirely the villain of the piece. I think that we are all the victims of the ad-man who far too often becomes the con-man. I refer to marketing techniques which persuade people to put a certain hair spray, first, inside an aerosol and, secondly, inside a plastic sleeve round the aerosol. The total cost of the packaging in that instance is about 40p and the price of the article is about 55p. This is quite ridiculous. I could quote numerous examples of the price of packaging being as much as 35 per cent. of the cost of the item. This is bad and something should be done about it.

5.0 p.m.

I am particularly worried about plastic bottles. I hope that whatever else is within the Bill and whatever powers may or may not be indicated by the Clause and subsection it will, at least, be possible to prevent dairies from going over to the plastic milk bottle. I have mentioned this before. If the plastic milk bottle were introduced it would result in 11,500 million bottles a year—sufficient to build six columns to the moon. There are, too, enormous problems of disposal. Some of this packaging is not degradable and most has to be buried in holes in the ground. The amount of superfluous trash collected by the housewife in the supermarket today litters the hedgerows and despoils the countryside tomorrow.

Likewise something must be done about the non-returnable bottle. Last week I bought two bottles of cider. One bottle contained 3 fluid ozs more than the other. It was a returnable bottle on which there was 3p back. Hundreds of thousands of non-returnable bottles are distributed throughout the country every week, and this creates enormous problems.

I have given just a few examples at random. I could choose many more, but I hope that I have said enough to provoke an encouraging response from my right hon. and learned Friend. I hope that he will use strong words about these matters and indicate how far the Bill will go, as well as how much further the Government are prepared to go with other legislation or by trying to get a code of practice worked out in the near future. These problems affect every family in the land and will also affect future generations. They call for a positive response.

Photo of Alan Williams Alan Williams , Swansea West

I recognise that the right hon. and learned Gentleman has attempted in the new Clause to meet some of the points raised in Committee. I join the hon. Member for Glasgow, Cathcart (Mr. Edward Taylor) in wondering whether the list is necessary and whether a simple sentence might not have achieved the objective which we all want and which would leave no doubt about possible loopholes. Most of my comments will be concerned with trying to establish whether loopholes exist in the format which we have before us.

I regret that the definition still exists on consumer trade practices as opposed to trade practices generally. This issue was discussed in Committee, when those of us on this side felt that it should apply to trade at all levels and not just at the consumer trade level. Nevertheless I do not think that it would be fruitful to pursue this matter at this stage because it has been fully discussed on more than one occasion in Committee. There was basic disagreement here and I do not see any reconciliation being achieved.

There is still a degree of uncertainty about the extent of the term "economic interests" of consumers and also about the full extent of the consumer trade practice. As the right hon. and learned Gentleman knows there is the Nader school of thought which would like to interpret terms in the widest possible sense, following the point made by the hon. Member for Cannock (Mr. Cormack) about disposable bottles and their pollution effect as well as their cost to the consumer. I should like to put to the right hon. Gentleman a set of questions and I should be grateful for his advice, in so far as he can give it.

In relation to the economic interests of consumers and the question of packaging, which has already been mentioned by several hon. Members, we welcome the attempt to meet the arguments made by my hon. Friend the Member for Fife, West (Mr. William Hamilton) in Committee. He did a service to the consumer by bringing the point to the Government's attention and getting it accepted. But the point was made by hon. Members on both sides, here and in Committee, that packaging affects the consumer in more than one way. It can increase the cost—indeed, perhaps add as much as a third to the cost of the goods, and yet be unnecessary. Packaging can be visually misleading. The hon. Member for Cannock chose the particularly relevant case of a 12-oz jar of jam being all too often mistaken by the housewife for a 11b jar as she rushes around the supermarket. There is also the secondary cost to the consumer. The consumer is also a taxpayer, and as a taxpayer he has an interest in the cost of the disposal of these goods. It is in that sense that we wonder how far the present wording of the Bill goes to meet the Nader group requirement and the public interest research centre requirement that more than the direct impact upon the consumer's pocket can be taken into account.

In the report produced by the Friends of the Earth earlier this year, the second recommendation was that packaging should be designed ideally for re-use. That is the point which the hon. Member for Cannock was prevented from putting last Friday when the proceedings on the Bill immediately before his on the list went a little longer than expected. How far could the Director General go in this respect? How far could his responsibility overlap into environmental questions? I suspect that, at some stage, this issue will have to be decided. What is the limiting factor specified in the Bill? Is any limitation set, or is it left to the common sense and judgment of the Director General?

Assuming that the Director General may not be allowed to range as wide as some of us might wish, how far would he be able to comment on and make recommendations about the trend towards enforced disposable packaging as opposed to returnable packaging? Assuming that there is a social disadvantage, consumer choice is also being limited. Supermarkets are among the main initiators of this trend to disposable packaging, because they do not want people coming in for their money back and they do not want their limited storage space taken up with empty bottles and cartons. Nevertheless, a definite trend towards disposable packaging is being perpetuated by the move towards mass selling. Will the Director General be able to comment on trends such as this in the wider consumer interest?

Will he even be able to comment on the fact that, in some instances, tax may actually aggravate an undesirable development which would come within the scope of the term "undesirable consumer trade practice"? If the hon. Member for Cannock has not heard of this matter, I think that he will be interested in it in view of his deep concern about packaging.

In The Grocer of 28th April 1973 there is a quotation from Mr. Leonard Reeves-Smith, of the National Grocers Federation, who referred to VAT and returnable bottles and said It is like something out of Alice in Wonderland. He said that, when the Chancellor eventually decided to zero-rate the contents of mineral water and squash bottles, he concurrently zero-rated the disposable bottle but not the returnable bottle. So a peculiar anomaly arises. VAT has become a polluter.

In Mr. Reeves-Smith's words, the Chancellor … either forgot about or decided against zero-rating the containers in which these things were packed. Thus we have the ludicrous situation where mineral waters and squashes are free of VAT but if they are packed in a returnable bottle that bottle is subject to VAT if it is not returned by the consumer. He referred to the "monumental bookkeeping exercise" each week of checking out returnable bottles and containers on which VAT is charged and then crediting the VAT charge when the bottles are returned. He said that the return must be negligible but that the bookkeeping headaches for the small trader were considerable.

In order to avoid this unnecessary monument to VAT and irrelevant paperwork, the small retailers may now add their momentum to that of the multiples and supermarkets, on the principle, "It is easier for us in administrative costs if we are supplied with disposable rather than returnable containers". Therefore, a Government tax decision is exacerbating an undesirable consumer trade practice. Would the Director General be able to comment on that?

Will the Minister also confirm that credit is fully covered by the new clause? He will remember that there was some confusion about this in Committee. At one meeting, the Under-Secretary and I were locked in lengthy verbal debate about credit, we saying that it should be covered, he saying that it should not. At the next meeting, the right hon. and learned Gentleman said that it was covered by the Bill. If only we had known that at the previous meeting, a considerable amount of time might have been saved.

Will the Director General hold the fort, pending Crowther? Even if Crowther comes in during the next legislative year, it will mean that 3½ years will have passed since the report was given to the Government before it gets on the Statute Book. One cannot be unconscious of the fact that the next legislative year could be interrupted by a certain political event which may disrupt the legislative programme We might be part of the way through implementing Crowther only to find an election called, in which case we would have to wait another year for Crowther, lengthening to 4½ years the time between the report's presentation and its appearance on the statute book. That would leave a two-year gap between the appearance of the Director General and the appearance of his counterpart on the credit front.

Will he have adequate powers in the interval, and what will his guidelines be? Will they just be the existing law? In Committee, considerable publicity was given to the voluntary code of practice produced rather suddenly by the Undersecretary in an Adjournment debate initiated by the hon. Member for Gloucester (Mrs. Sally Oppenheim). The headline in The Guardian the next day was, "Code to curb fat home loan profits." Will the Director General be able to implement that code while he is acting as temporary representative of the consumer, pending the implementation of Crowther?

If so, how far will he be tied by the guidelines put forward by the Ministry in its written guidance to the finance houses? I am sure that, when we saw that Guardian headline, we thought that the gross exploitation of second mortgages was being brought effectively under control. But perhaps the Minister will confirm for us that, in the latest advice to go to the finance houses, it is made clear that the voluntary restraint on second mortgages does not apply to second mortgages over £3,000. Is it not absolutely absurd, therefore, that what the Government are saying is, the bigger the deception the less the deceiver's risk? Is this harmful limitation on the working of the code being applied, and will it also apply to the Director General when he eventually takes over?

The hon. Member for Gloucester helpfully mentioned servicing and repairs in Committee. I, too, would like confirmation that this area is adequately covered. I have examples here, but for the sake of progress I will not quote them. Certainly, however, the availability of spare parts is an issue on which we should like some guidance.

5.15 p.m.

The Slough and District Consumer Group's Newsletter No. 7 of March 1973 states: Four years ago, a Prestcold deep freeze with a capacity of some 6·5 cubic feet cost around £70. Prestcold have unhappily gone out of business since then, but their spare parts concern is looked after by the Acre Company Ltd. Today the asking price for a new lid for the said Prestcold deep freeze is £26.45 or rather more than one-third of the original total cost of the article. What function will the Director General have in ensuring not only that spares are available but also that they are available at a reasonable price? That is not a trivial question. As goods become more complex they are more likely to go wrong. As models change more rapidly, a member of the public can find himself with a perfectly useful but, in market terms, obsolescent product, be it a car, a washing machine or any household appliance. It is directly in the consumer's interest that there should be a continuing and economically justifiable—in price terms—supply of spares. Will the Director General be able to ensure that that situation exists?

What could the Director General do about the story carried by the Sunday Times on 15th April about the cigarette firm Gallahers? It was indicated in the report that Gallahers was deliberately rationing the supply of the safest of their cigarettes—that is, the least harmful, for we had better be sure what we mean. In a report entitled "Silk Cut—Follow-Up Action", signed by the firm's general sales manager, salesmen were told Please memorise it, do not show it to anyone and return it to your manager at the next team meeting. When trying to sell the products, the advice given to salesmen is Continue tactfully to discourage stocking of Extra Mild; where the outlet insists, you should limit his order to a maximum of 400 per retailer, and 1,000 per wholesaler. In other words, that is a system of rationing of a cigarette which contains one-third of the tar and nicotine contained in other cigarettes within the Gallaher range.

Photo of Alan Williams Alan Williams , Swansea West

It is disgraceful. How did the firm justify this in morality on the health impact? At a sales conference in London last week, an area marketing manager told salesmen: Extra Mild are so mild and tasteless they could put people off smoking for good. It might be a good thing if they sold more widely rather than less so. Here is a deliberate attempt to frustrate the efforts being made at public expense to win the public away from smoking.

What could the Director General do about this sort of abuse? What heading would that come under? The right hon. and learned Gentleman may be able to satisfy us on this point, but if he cannot he must revert to the formula suggested by his hon. Friend the Member for Cathcart (Mr. Edward Taylor), which we would support.

Regarding pyramid selling, it might reduce the length of our discussions later on the Bill and hasten our proceedings if the Minister indicated, as he did in Committee, that he would look at the possibility of covering pyramid selling in the Bill. We realise that the time between the end of consultation and our debate today has not been very lengthy. Is the Minister envisaging introducing changes in the other place? An indication of that would be helpful. I ask the Minister to let us know at the earliest date the nature of the change he might consider. We regard this as a matter of urgency.

My hon. Friend the Member for Sedge-field (Mr. David Reed) proposed an enabling amendment which deserves consideration regardless of whether pyramid selling is to be dealt with separately. As the right hon. and learned Gentleman the Minister for Trade and Consumer Affairs and my hon. Friend the Member for Sedgefield have pointed out, the rate of change in marketing methods is so rapid that it is almost inevitable that any precise formula produced by the Government will be outdated by developments in marketing techniques.

Where my hon. Friend is doing a service is in giving a formula which will enable the Director General and the Minister, without need for legislative action but by order, to keep pace with the changes which take place in undesirable marketing techniques. It may be that the precise wording is inadequate. If it is not, perhaps the Minister will consider introducing in the other place an amendment along these lines which would give this future flexibility to the Minister and the Director General.

I am a little puzzled, as a non-lawyer, by the significance of new Clause 3 now appearing at the start of Part II. Does this in any way alter the import of the new clause? Will it limit, for example, the ability of the Director General in terms of making orders, particularly orders covering health and safety? Does it affect the ability of the advisory committee to have regard to health and safety? We are a little confused on this matter. We have not had prior notification that this change of position was envisaged.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Glasgow Cathcart

The hon. Gentleman has said that new Clause 3 will appear at the beginning of Part II. Why?

Photo of Alan Williams Alan Williams , Swansea West

Exactly. I am sorry that the hon. Gentleman was not present at the outset of the debate. I believe that he missed a few moments. His right hon. and learned Friend made the point that the new clause would now appear at the beginning of Part II. He is nodding agreement. There is no indication of that on the Order Paper.

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

I understood that the definition of "consumer" would reappear in Clause 125, but I did not understand the position about the new clause.

Photo of Alan Williams Alan Williams , Swansea West

The right hon. and learned Gentleman the Minister can see this clearly. I have one of my hon. Friends to thank for picking up the possible significance of this matter. There is doubt on both sides of the House about whether this has altered the balance of the Bill.

We should be grateful for guidance and answers to the various small points we have raised.

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , Reigate

In response to the last point made by the hon. Member for Swansea, West (Mr. Alan Williams), I fully understand why hon. Members are confused about where new clauses will appear in the Bill and the implications of the amendments to the Bill. The procedure of this House, frankly, does not enable us, whether Government or backbench Members, to use the Order Paper in a way which would make clear our intentions.

I forget which hon. Member it was who expressed his welcome to the appointment of my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) to the Committee to inquire into the process of legislation. I endorse that welcome wholeheartedly. This is one of the many illustrations that occurs to me—for all my sins, I have had something to do with a variety of legislation in the past two or three years—of ways in which the process of legislation is made less intelligible and more difficult as a result of the rules under which we operate.

One should be able at least to say "New Clause 3" and then in brackets, and not quite in this language, "By the way, chaps, this new clause will turn up at such-and-such a place and such-and-such a page and line of the Bill". I should like to add, "We are doing this for the following reasons". As I am discussing this slightly irrelevant matter, I should mention that I have also been attracted by the pattern of Law Commission Bills and proposed legislation introduced in the Canadian legislature, which has explanatory notes on facing pages of clauses. Again, legislators when dealing with them can understand more readily what they are dealing with. I hope very much that the inquiry being undertaken will look widely at all these matters. I do not say that either of these suggestions is necessarily right but they deserve attention.

The explanation that I have to give in this way—because the rules do not allow me to give it in any other way— is that the new clause, which is the first part of old Clause 3, will appear at the beginning of Part II of the Bill. The second part of the old clause, namely the definition of "consumer", will appear in the definition Clause 125, because that is of wider application.

The reason that "consumer trade practice" is being uprooted from Part I and transplanted into Part II is that it will now no longer have application to Part 1. The concept of a consumer trade practice is designed to provide a definition of the field within which the Director General and the Consumer Protection Advisory Committee can propose the making of orders which can lead to the imposition of criminal sanctions. We have therefore unstitched it from Part 1, and when we debate the amendments to Clause 2 we shall find that the Director General has been liberated and unshackled and is able to operate over a wide field as a result of the changes in Clause 2, which is no longer tied closely to the definition of "consumer trade practice", which is therefore to lurk later in the Bill.

I am slightly dismayed by the extent to which some hon. Members have given a mildly grudging welcome to the proposal. Even my hon. Friend the Member for Gloucester (Mr. Sally Oppenheim) did not latterly seem as enthusiastic as at the outset of her speech I thought she might be. I say that in no sense of grievance, but only because I have listened to the points made by hon. Members and none of them has suggested changes to the new clause which are strictly relevant in the context of what we are trying to do in the Bill. Throughout our debates there has been a tendency to load upon the Director General a mountain of expectation and high hopes which would surpass the prowess or capacity of any man or woman in this House or outside it.

The hon. Member for Swansea, West regretted that the Director General would not be able to police business morality at all levels. That is quite a tall order when added to consumer protection. My hon. Friends have been talking about the extent to which they want environmental matters to be covered by the Bill. Again, it is quite an additional burden to take on the whole of the environmental lobby as well as the consumer protection lobby. If we study the scope of what we are try- ing to do, the amendments then take reasonable shape.

Photo of Alan Williams Alan Williams , Swansea West

The point I was trying to get at in my comments on the environment was to see whether a limitation exists for the Director General and how far the right hon. and learned Gentleman could go towards the points that hon. Members on the Conservative side and I were making about the possible work of the Director General.

5.30 p.m.

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , Reigate

I shall try to deal with it but there must be a limit in the context of the Bill. I shall not be able to answer all questions posed by hon. Members. The hon. Member for Swansea, West, has a capacity for producing a sheaf of interesting newspaper cuttings and asking detailed questions upon them upon which I am expected to speak at short notice. Also, while I try to study all the Bills introduced by my hon. Friend the Member for Cannock (Mr. Cormack), I cannot deal with the merits of all of them in one afternoon.

Several hon. Members, including my hon. Friend the Member for Merton and Morden (Miss Fookes), my hon. Friend the Member for Cannock and the hon. Member for Fife, West (Mr. William Hamilton), have an astute concern for the quality of the English language and for legislative language in particular. They were somewhat dismayed by the appearance of the words "got up". When this expression was first in contemplation we wondered whether there was not a more elegant way of phrasing it. If we contemplate what we are trying to deal with, it is not only the packaging, the box or the jar—deceptive or otherwise—with which we are concerned; these are comparatively straight forward. We are concerned with the trimmings, the buttons and the bows.

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , Reigate

The hon. Member proffers an alternative phrase. "Got up" and "decked out" are two attractive, slightly mediaeval ways of presenting what we all understand and I suspect that parliamentary counsel could have said "packaged". There was a statutory instrument during the war called the Tins, Cans, Kegs, Drums, Packages and Bales Order, and that is the kind of legislative language we are accustomed to from the nineteenth century. We could indulge in that exemplary style going on for half a page but I think that "got up" is not at all bad.

Photo of Patrick Cormack Patrick Cormack , Cannock

May I get up? I cannot see anything much wrong with the word "presented" and it might be a good investment if Sir Ernest Gowers' "Plain Words" and Fowler's "Modern English Usage" were presented to the draftsmen and assistants.

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , Reigate

I must defend the parliamentary counsel, particularly from that charge in relation to this phrase. One could hardly hope to find two words more Anglo-Saxon, terse, monosyllabic and appropriate for the first page of "Plain Words" than "got" and "up". It is a phrase in use in some other branches of the law and it is not a bad way of describing what we are about.

Questions were addressed to me on the wider implications with which my hon. Friend the Member for Cannock is concerned in his penultimate Bill about which he said something this afternoon. The answer is that this Bill is not designed to deal with environmental pollution. We are here attempting to deal with measures for the protection of consumers. There are, of course, important questions which can arise in relation to the disposability, biodegradability, and all the rest of it, of all products and packages of this kind. There are even matters which can arise in relation to the impact of VAT. The hon. Member for Swansea, West raised one, and that is no doubt under consideration, but this Bill is not designed to deal with the point with which my hon. Friend's Bill is designed to deal, namely the environmentally pollutive quality of packaging or "get-up".

My hon. Friend also asked me questions about the relation of this Bill to unit pricing. We discussed that subject extensively in Standing Committee. The Bill does not enable provisions to be made about unit pricing and that is why I and the hon. Member for Swansea, West wish my hon. Friend's Bill well and why we are glad that it received a Second Reading. I hope that that will be an indication of the Government's favourable attitude to the powers that my hon. Friend is introducing on unit pricing.

I hope, however, that it will not lead people to believe that unit pricing is a magic cure for all consumer problems. Many of the examples raised by my hon. Friends were more related to the need to prescribe standard quantities in relation to jams, biscuits, toothpaste and so on, and I am hopeful to be able to make progress in prescribing standard quantities for biscuits and toothpaste, which is a step along the road, quite apart from unit pricing.

If my hon. Friend's Bill is able to make headway during the Session he knows that my Department is in touch with him about technical amendments which will be necessary to make it effective, but beyond that we shall have to see what kind of progress it makes. The hon. Member for Swansea, West asked several other detailed questions and I shall come back to them very shortly.

The Bill covers transactions concerning the supply of the service of credit to the extent provided for by the Bill. It does not go in many respects as far as the Crowther recommendations so that it cannot hold the fort until legislation based on Crowther arrives. It could be used to meet, but by no means completely, certain important matters which are dealt with by Crowther. That is true in relation to some of the provisions in the code enunciated by my hon. Friend the Under-Secretary of State. I am sure that by no means all of those matters could be dealt with under the Bill if it becomes an Act. That is why I told the Committee that the Government are anxious to make headway as soon as they reasonably can with the introduction of consumer credit legislation founded on Crowther.

My hon. Friend the Member for Gloucester and my hon. Friend the Member for Glasgow, Cathart spoke to Amendment (a). My hon. Friend the Member for Cathcart, with characteristic incisiveness, wanted to dispense with all the qualifications contained in paragraphs (a) to (e) of the new clause. The reason that we cannot embark on that is that it would allow for the making of orders, as we discussed in Committee, on all questions related to quality or price. We can now allow the Director General and the Consumer Protection Advisory Committee to go that far. That is why we have made an extension to described the matters which should be covered.

If I said that the clause as drawn covered the subject of amendment (b) I did not mean to make that statement. In fact, I do not think I said that. I said in relation to amendment (a) that the clause as drawn applies to the promotion of the supply of services and therefore to the promotion of the servicing or maintenance of goods. I hope that I did not say—I did not mean to say by implication—that the definition of "consumer trade practice" would enable Part II of the Bill and orders made thereunder to apply to the servicing and availability of spare parts for goods.

I appreciate the importance which hon. Members attach to that matter. It was a matter which we discussed a great deal in Committee. However, it is not something with which it is possible to deal by the making of criminal orders. What we have done to meet the concern expressed by some of my hon. Friends and some Opposition hon. Members about servicing and spare parts has been to introduce an amendment to Clause 2. That places the provision of services of that kind in the Director General's territory and enables him to make recommendations. We do not think it is right to regard that as a matter which could be dealt with by the making of criminal orders. We can discuss that matter later when we discuss the amendment to Clause 2.

I know that the hon. Member for Watford (Mr. Raphael Tuck) and the hon. Member for Sedgefield (Mr. David Reed) have taken a close interest in the problem of pyramid selling. I read in the Press in the North-East of England that the hon. Member for Sedgefield was preparing a dossier on pyramid selling. Every day in the papers in that part of the country it was reported that the hon. Gentleman was about to present his dossier to me. I waited for weeks and finally the document arrived. It was very interesting and informative.

I have also studied the Bill of the hon. Member for Watford. I hope that the publication of the consultative document before Easter made it perfectly clear that it is our intention to deal with pyramid selling as soon as we can and as soon as it is clear what is the best way of doing so. The hon. Member for Watford had a sense of mystery as to what amendments were or were not admissible in the House on that subject. I can understand that. As I understand it, amendments dealing with pyramid selling specifically and precisely are not in order in the House. The hon. Gentleman asked me why it was that I did not take on board his Bill. I did not do so because his Bill deals with multilevel marketing. I was advised that, defined in that way, the scope could not be extended to deal with horizontal pyramids. That is one of the practices with which we are concerned to deal.

I have studied the hon. Gentleman's Bill and I have studied his reaction and the reaction of others to the consultative document. It is clear that there is a general will to get a solution and to tackle pyramid selling. We must be sure that we produce a solution which is right and sufficiently flexible and responsive to remain right. That is the point which was made by the hon. Member for Sedgefield.

I share the concern of every hon. Member who has spoken about the growth and extension of the worst kind of pyramid selling activities. I echo and underline what hon. Members have said and what I have said in the past as a warning to all citizens and consumers to beware of becoming involved in such schemes without having received the most careful and independent advice.

The amendment would not be acceptable because it is an amendment to the specifically consumer part of the Bill. If we are to deal with that, as I hope we shall be able to do, we shall need to devise a reasonable tailor-made package. I hope that in the light of the comments which we have received on the consultative document we shall be able to take action shortly. We shall certainly be considering the possibility of introducing the necessary measures at a later stage.

The difficulties encountered by the hon. Member for Watford are by no means out of the way. We must try to get the right answers in the light of all representations and then try to introduce satisfactory measures as early as possible.

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , Reigate

I give way to the hon. Member for Sedgefield.

Photo of Mr David Reed Mr David Reed , Sedgefield

I accept that the right hon. and learned Gentleman's intentions about pyramid selling are in line with the intentions of my hon. Friend the Member for Watford and myself. It was our hope that the amendments would give him the sort of flexibility which he needs. Irrespective of pyramid selling, will he explain whether the definition of "consumer trade practice" will cover the general business of marketing and distributing a product? There is a danger that other forms of marketing abuse arc growing and it is important that the Director General should be able to consider them.

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , Reigate

I am glad that the hon. Gentleman reminds me of that. The hon. Gentleman gave a number of specific examples. He talked about magazine subscription selling, double glazing selling on unattractive lines and crooked franchising. He also mentioned party-plan selling. Magazine subscription selling and double glazing selling are clearly sales to a consumer in one form or another. It is true that they can be perfectly well and properly conducted but it is known that sometimes they can be conducted on the wrong basis. Party-plan marketing methods involve the recruitment of marketing assistants and sometimes sales to the consumer.

We believe that the definition is wide enough and flexible enough to cover all consumer transactions. Marketing techniques of a franchising kind and crooked franchising, of which pyramid selling is perhaps a principle example, are not matters which are covered by "consumer trade practice". To achieve that coverage we would need rather differently designed legislation. That is not something which I would ever contend the Bill is likely to produce. I do not claim that the Bill will produce a completely satisfactory outcome.

Photo of Mr Raphael Tuck Mr Raphael Tuck , Watford

Will the right hon. and learned Gentleman consider amending the definition clause of my Bill so as to include horizontal structures as well as vertical structures? Does the right hon. and learned Gentleman not agree that the consultative proposals in the consultative document do not go far enough to remedy all abuses?

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , Reigate

It is not possible, for a variety of reasons, to deal with the hon. Gentleman's Bill in the way which he suggests. I have taken account of his commendation of his Bill in the light of the consultative document and in the light of views which other people have expressed about the document and the hon. Gentleman's Bill. We hope to be able to produce something which will be effective. That deals with all the points which were raised as far as I can do so.

5.45 p.m.

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

Could my right hon. and learned Friend reconfirm a point he made in Committee—that if practices such as those described in the Daily Mail advertisement were persistently pursued by persons like "Ed" of the advertisement, they could be dealt with by the Restrictive Practices Court and the Director General, as implied in Standing Committee?

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , Reigate

I was trying to follow my hon. Friend's description of the activities of "Ed" of the Daily Mail, but I was beguiled and distracted by the inclusion in his activities not only of a Jaguar but of a blonde. I could not see how they came into it. I understand that "Ed" was marketing defective or falsely described products repeatedly—I think that is a short summary of the long narrative which my hon. Friend read out. If so, he would qualify under Part III of the Bill for action by the Director General.

Photo of Patrick Cormack Patrick Cormack , Cannock

Mr. Cormack rose——

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , Reigate

I hope that my hon. Friend the Member for Cannock will forgive me but, having dealt with two of his other Bills in the course of this short reply, I fear that I must now draw to a conclusion.

I invite the House to accept new Clause 3 and to conclude that Amendment (a), as it seeks to amend what is in the new Clause, is unnecessary because its intention is met by later amendments to Clause 2. I ask the House also to reject Amendment (b) as being not apt to deal with the problems the hon. Member for Sedgefield raised, important though they may be.

Question put and agreed to.

Clause read a Second time, and added to the Bill.