HIRE-PURCHASE (No. 2) BILL [H.L.]

HL Deb 30 January 1964 vol 254 cc1247-311

3.13 p.m.

Report of Amendments received (according to Order).

Clause 1 [Extension of application of Hire-Purchase Act 1938]:

THE MINISTER OF STATE, BOARD OF TRADE (LORD DRUMALBYN) had given Notice of several Amendments dealing with bodies corporate, the first being, in subsection (1), after "shall" to insert: (except as provided by section (Exclusion of bodies corporate) of this Act)". The noble Lord said: My Lords, as your Lordships know, the Molony Com- mittee recommended that the Hire-Purchase Acts should apply only to consumer transactions. We did not follow this recommendation in the Bill as drafted. As I explained previously, there would have been great difficulties of definition. Instead, the Bill raises the monetary ceiling to £2,000 and we did not think it likely that practical difficulties would arise if purely commercial agreements up to that figure were brought within the scope of the Acts.

Since the Bill came before your Lordships' House we have received a number of representations about such agreements. There are, of course, many instances of commercial firms acquiring goods under hire-purchase agreements within the £2,000 ceiling; for example, there are acquisitions of industrial plant and motor vehicles. It has been represented to us that consumer protection safeguards are not really appropriate to such purely commercial transactions. Further, it has been represented that commercial hire-purchase agreements are concluded on terms which are quite normal between business concerns but which could not be made to satisfy the requirements of the Acts. As an example, there is quoted to us a variable rate agreement under which the parties agree that the hire-purchase charges shall vary during the lifetime of the agreement in sympathy with movements of hire-purchase rates generally. When the agreement is made the amount of the hire-purchase price and of each instalment is not known, so the requirements of the 1938 Act cannot be complied with.

My Lords, we have considered the matter further in the light of these representations. The protection which the Hire-Purchase Acts give to the hirer is something exceptional, in recognition of his comparative weakness and lack of knowledge in relation to the finance house and the dealer. There is no particular reason why normal business concerns should be so specially protected in their dealings with other business concerns. Our conclusion is that, particularly since the application of the Acts to purely commercial agreements could cause practical difficulties, we should deal with the problem by exempting from the scope of the Hire-Purchase Acts all hire-purchase and credit-sale agreements where the hirer or buyer is a body corporate. Your Lordships will recall that during the Committee stage I accepted an Amendment doing just this in relation to the cooling-off provisions. We have now decided to apply that principle generally. I beg to move.

Amendment moved— Page 1, line 9, after ("shall") insert ("(except as provided by section (Exclusion of bodies corporate) of this Act)").—(Lord Drumalbyn.)

LORD PEDDIE

My Lords, this Amendment is the logical outcome of the Amendment moved from this side of the House excluding corporate bodies, particularly with regard to the safeguards in connection with the cancellation of agreements, and we would accept the point of view which indicates that corporate bodies should not come within the provisions of this Bill.

LORD HUGHES

My Lords, I do not disagree with this at all; I am just seeking some information. What exactly is meant by a "corporate body"?—because the Minister in his remarks referred to "normal business transactions" and "commercial concerns". I know that it would include the limited company, presumably public or private. Does it include a partnership or a one-man business?

SEVERAL NOBLE LORDS

No.

LORD HUGHES

Some of my noble friends say, No. I do not know whether they are saying "No" to a one-man business, or to a partnership. Some partnerships and, in fact, some one-man businesses are still very large concerns. Would they be excluded, or would they get the benefits of the Bill irrespective of their size?

LORD DRUMALBYN

My Lords, I think that what is meant by "corporate bodies" is any organisation incorporated under the Companies Act, any corporation established by Statute or any corporation established by Charter.

LORD HUGHES

That means that a business partnership which was not a limited company would have the benefit of the Bill?

LORD DRUMALBYN

Only if not incorporated under the Companies Act. There is a great difficulty in drawing the line here. In theory, the easiest way would have been to define consumer transactions; but we found that it was not possible to do that. In any event, we do not want to take out of the Bill the small businessman, because often many of the hardships of repossession affect him in particular. What we do think is reasonable is to take out the body corporate, and that is the purpose of this Amendment.

LORD HUGHES

I think the position is that there are still a fair number of fairly large businesses which are not limited companies. On the other hand, there are a great number of very small businesses which are private limited companies. So that we can have the situation that the way this matter has been dealt with will deprive a very small company of the benefits of the Bill while conferring them on the organisations very much more able to look after themselves.

LORD CHORLEY

My Lords, my noble friend Lord Hughes has raised a very important point, and I hope that the Minister will look into it between now and the time this Bill comes before another place. Some very large manufacturing concerns are still, of course, run as partnerships. All the disadvantages, in respect of sliding arrangements for prices and that sort of thing, will continue to apply to them. If some way out of this could be found, I am sure that it would be of great advantage to the commercial and industrial interests of the country.

LORD DRUMALBYN

My Lords, I admit that there are anomalies; but I think that, whatever we did, there would be anomalies in this matter. I should have thought the large enterprises referred to are unlikely to be affected by this Act. For one thing, the provisions of the 1938 Act, on which this Bill is based, apply to a limited extent, and this Bill raises the upper limit of the transactions to £2,000. While it is perfectly true that large organisations who make hire-purchase agreements below the value of £2,000 will, if they are not corporate bodies, be covered by the benefits, I should not have thought that that fact had any great practical significance. We are perfectly willing to look at the position again to see whether we can define it more closely, but I think your Lordships will appreciate the great advantage of a clear division of this kind that will be well understood.

On Question, Amendment agreed to.

LORD DRUMALBYN

I beg to move that the new clause be agreed to.

Amendment moved— After Clause 1, insert the following new clause—

Exclusion of bodies corporate

". The principal Act shall not apply to any hire-purchase agreement or credit-sale agreement which is made by a body corporate (whether incorporated in the United Kingdom or elsewhere) as the hirer or buyer of the goods to which the agreement relates.".—(Lord Drumalbyn.)

On Question, Amendment agreed to.

Clause 2:

Requirements relating to hire-purchase agreements and credit-sale agreements

2.—

(2) The Board of Trade may by regulations provide that in any document which constitutes a hire-purchase agreement to which the principal Act applies, or constitutes a credit-sale agreement to which that Act applies under which the total purchase price exceeds £20, the signature of the hirer or buyer shall be inserted in a space marked in such manner, and accompanied in the document by such words, as may be specified in the regulations; and the regulations may include provision as to the size and colour of the lettering of those words and as to their location in relation to the space in which the signature is inserted.

3.24 p.m.

LORD SHACKLETON moved, after subsection (1), to insert:

Amendment of sections 2 and 3 of the principal Act

"(2) Section 2 and Section 3 of the principal Act shall have effect as if:— (a) there were inserted after subsection 2(b) of each section— (bb) the agreement contains a statement of the amount of any commission in any way attributable to the introduction or acceptance of the agreement if such commission is paid or to be paid to any person (in this subsection referred to as a 'dealer') or to the servant or agent of a dealer by the person to whom the dealer has supplied or is to supply the whole or any part of the goods comprised in or to be comprised in the agreement; and (b) there were inserted after '(b)' in the provisos to subsection (2) of each section '(bb)'".

The noble Lord said: My Lords, I rise to move Amendment No. 3, which deals once again with the question of secret commissions. This was a matter which we debated on a different Amendment, concerned with charges, moved by my noble friend Lord Shepherd on the Committee stage. This Amendment is a narrower one, and its purpose is to ensure that the agreement signed by the hirer reveals the amount of commission that is paid to the dealer. If I may take an example similar to the one that my noble friend Lord Shepherd mentioned on the Committee stage, on a car costing £1,000, which might be payable over two years, the payment to the dealer for negotiating the agreement, if it was negotiated with a motor agent who was in fact dealing with one of the Finance House Association members, might be £22 10s. 0d., while if it was another one it might be as much as £37, because the amount of the commission varies between 10 and 25 per cent. I have a later Amendment to restrict the amount of commission that shall be paid. Whether or not that is acceptable—and I can see that there are arguments against interfering in that type of arrangement—there surely can be no argument against revealing the facts to the average hirer of a motor vehicle.

It would be our submission, and the submission of those who support this Amendment, that the average hirer does not know how the charges are made up, and in particular does not know that there is a commission payable to, say, the motor car agent. The hirer comes along, chooses a car of a certain value and price, and then he has to think how he is going to pay for it. He does not know at any time that the motor agent, who he thinks is rendering him a service, is already being fully remunerated, for rendering little in the way of service at all. Indeed, it would be perfectly open for the individual to go direct to one of the Finance Houses and arrange his own hire-purchase; and if he were to do that, it would save him something like 1 per cent. of the charges he would pay in the course of the year.

I submit that there is everything to be said for bringing this situation out into the open. It does not occur to the average hirer, the average individual, to inquire the rate of the hire-purchase company's charges, or how they are made up. He has no idea at that stage what total he has to pay over and above the cash price (and this was the matter which my noble friend Lord Shepherd dealt with), and therefore has no inducement to find out whether he could get better terms elsewhere. We should like to see that it is brought home to the hirer that he is, in fact, having to pay quite heavily for this accommodation. We also think it is undesirable that there should be such a strong incentive to the motor agent who is selling the car—and I am relating this mainly to the motor car as the best example—to persuade the individual to take out a hire-purchase agreement, as opposed to paying cash; and, furthermore, to enter into an agreement which it is also in the interests of the agent to stretch over as long a period as possible, because, again, his own commission will be to that extent higher.

When we debated this matter on the Committee stage, the noble Lord, Lord Drumalbyn, said that no case had been made out for this Amendment, but I should have thought it was a case which has only to be mentioned to be apparent: that it is highly desirable that people should know what they are dealing with. This is not just a single transaction; it is not lake going into a shop and buying a car for cash. It is an additional transaction. Whereas they may know the price of the car, the monthly charge and the total charge, they do not know the rate of commission payable to the dealer, and are not in a good position to compare one price with another. I hope that the Minister will be more forthcoming to-day than he was on the last occasion. This is a comparatively simple Amendment. Furthermore, it is one that I think most reputable people concerned in the provision of funds for hire-purchase would support. I beg to move.

Amendment moved— Page 2, line 29 at end insert the said subsection.—(Lord Shackleton.)

BARONESS BURTON OF COVENTRY

My Lords, perhaps I might add a word in support of what my noble friend has said. In a previous existence (if I may put it that way) I had a certain amount to do with the motor car industry in my constituency, and I should not have thought that there was any real argument against the case put forward by my noble friend. I agree with him that most people have no idea that the motor agent gets this commission, and I should have thought it not a bad idea that they should know. I do not know about the rest of. your Lordships, but the wide range of possible amounts of commission quoted by my noble friend as charged by different agents was, to me, quite staggering. The Government at the moment seem rather concerned with the consumer—in the first place, that he should be supported, and, secondly, that he should also be able to buy things at the cheapest price available: that he is to have this freedom of choice—and I should therefore have thought that this particular Amendment might have carried more weight. I think that the House will agree that there seems no reason at all why, if commission is paid, the amount should vary to the extent indicated by my noble friend. Furthermore, I should have thought that if it were possible for the purchaser of a motor car to have a hire-purchase agreement which would cost him considerably less if he went to another source, at least he might be made aware of it. I hope that the Minister will be more forthcoming on this occasion.

LORD AIREDALE

My Lords, I, too, should like to support this Amendment. I do not understand the need for commissions to be paid to dealers by hire-purchase companies. It seems to me that the finance companies confer a benefit upon the dealers by enabling them to sell goods which otherwise they would not be able to sell at all. I see the justification for what one might call a documentation fee to be paid to a dealer who fills in documents which would otherwise have to be filled in by the representative of the finance company, and at their expense. A properly worked out documentation fee, which recompenses the dealer properly for the work that he undertakes in filling in forms, I can understand and would agree with; but I cannot see the justification for commissions in excess of that sort of fee; and if one cannot see the justification for these commissions, one certainly cannot see a justification for their being paid in secret. I support this Amendment.

LORD SHEPHERD

My Lords, may I support my noble friend, but perhaps from a different aspect. We now know that finance companies are paying varying rates of commission to their dealers. Those within the Association, I believe, have limited themselves to 15 per cent. There are others outside who are offering terms of 25 per cent., and some, at one time, were a good deal higher than that. Therefore the House will recognise that finance companies are under considerable pressure to increase their rates of commission. Those who are offering 15 per cent. may well see good business going to those hire-purchase companies that are offering 20 or 25 per cent. This means that the pressure is on the whole range of finance business. If we ever expect—and I think we should expect—charges on hire-purchase business to be reduced (and I think many would wish to see this, even those within the industry itself) it is quite obvious that if 15, 20 or 25 per cent. of the total charge of the agreement is immediately going to the dealer, the opportunity for a hire-purchase company to reduce its charges to its customers will be a good deal less. I think the House should recognise that the dealer receives his commission on a percentage basis of the total charge, and therefore the dealer will increase his rate of commission, his profit, if he can persuade the customer to take perhaps a three-year agreement—the longer the better so far as the dealer is concerned. Therefore, the pressure is not only upon the hire-purchase company for higher commission, which in itself must be a higher charge on the agreement, but also upon the customer for the length of the agreement.

But I think there is another danger in this connection. In practice, the companies that are offering these higher commissions are those which are the more likely to be found in what is called "snatch-back" or various other practices which have brought hire-purchase business into disrepute. At least the customer would be able to judge roughly the position of the hire-purchase company by the mere sight on his agreement of the amount of commission that that company was prepared to pay the dealer for the business to be sent to him. It would be a pretty good guide as to the position of the hire-purchase company.

I am quite sure that the noble Lord, Lord Drumalbyn, has read the Molony Report—I am sure he has read it two or three times—and he will agree that the Molony Committee were most strong on this matter. They felt, and they said in clear terms, that where these commissions were being paid the customer was entitled to know. I beg the House to support this Amendment, to see that the customer shall be aware of the charge that he will be paying on his agreement, and also that part of it which the dealer receives merely for introducing the customer to the hire-purchase company and perhaps assisting him in the filling in of the documents.

3.38 p.m.

LORD DRUMALBYN

My Lords, I think that the way the House has to look at this matter is to ask what additional advantage the hirer will get from having this particular piece of information. The Amendment seeks to insert immediately after Section 2(2)(b) of the principal Act, a subsection which would make it obligatory to disclose to the hirer any commission attributable to the introduction or acceptance of the agreement. Paragraph (b) states that the agreement must contain a statement of the hire-purchase price and of the cash price of the goods to which the agreement relates, together with a statement of the amount of each of the instalments, the dates on which they fall due and a list of the goods. I think the House would wish to consider whether the information that is now being asked for is in line in any way with that and will really help the hirer to make up his mind whether or not to sign the agreement.

There are, after all, only two major figures with which the hirer is concerned. One is the cash price and the other is the hire-purchase price. He is perfectly able to see the disparity between the two. If he thinks that the hire-purchase price is too high, he will either proceed with the agreement or he will look around to see whether he can get better terms elsewhere. What this Amendment proposes is that the amount of commission Paid to the dealer should be set out separately in the agreement. I should not have thought that this would have been of direct concern to the hirer in reaching his decision, since any commission which is payable to the dealer by the finance house will already be included in the charges and therefore in the hire-purchase price. The purpose of the Hire-Purchase Acts is to make available to the hirer information which is essential for his purpose in deciding whether the extra costs of buying through hire-purchase are worth while. We shall certainly risk some confusion if we prescribe information which is not essential for that purpose.

One of the fallacies which lies behind this Amendment, if I may say so, is that the amount of the commission is necessarily an extra charge on the consumer. In so many cases there is a trade-in price given for the second-hand goods which are handed in as part of the transaction. Quite obviously, if the dealer gets a commission he is able to shade the price for those trade-in goods. It is not as if there were a fixed market price for the trade-in goods. There may not even be a fixed market price for the cash value of the goods which the hirer is going to acquire on hire-purchase. There is no fixity about this, and it may easily be that the amount of the commission is of advantage in this way and that part of the advantage may be passed on to the hirer.

LORD AIREDALE

My Lords, does this not discriminate against the hirer who has not got something to trade in?

LORD DRUMALBYN

What is to be borne in mind, surely, is this. The finance houses themselves are in business to lend money on hire-purchase transactions. They are not going to give a higher commission than is required to enable them to get the business. They are competing for business and if in such competitive circumstances they give too high a commission in relation to other finance houses they themselves will very soon be out of business.

LORD SHACKLETON

My Lords, before the noble Lord leaves that interesting point, that the dealer shades his price, does he suggest he will have one price if there is a hire-purchase agreement and another if there is a cash transaction and that he will vary the price according to the rate of his commission? This is what the noble Lord is saying. He is saying that the hirer will be asked, before he is told what he is going to be given for his trade-in whether he is to enter into a hire-purchase agreement.

LORD DRUMALBYN

I do not know the answer to that in any particular circumstances, but, with great respect, I do not think it matters because the dealers are in business to dispose of their goods. They may make a higher profit on one transaction than on another, but they will be considering their business as a whole and their ability to make sales as a whole.

Quite apart from this, there is the practical point about these commissions. The provision in the Amendment could not be satisfactorily enforced. Apart from the possibility of cash payments which could not be traced, there would be obvious ways in which finance houses could make payments to dealers in cash or in kind which need not be related to particular hire-purchase transactions. Indeed, any figure given as the commission could not be readily proved or disproved. Whatever the merits of this may be it really is quite unenforceable. This was one of the reasons why Molony came out against compulsion in the general sphere of commission. I agree that the Molony Committee did not like them, but in the end it was forced to the conclusion that it was not possible to introduce compulsion into this field.

I strongly submit to your Lordships that this is not a matter on which it is appropriate to legislate. The two things the hirer is interested in are what he can get for the goods for cash and what he is being offered by way of a hire-purchase transaction. He may quite easily know what he is getting the goods for for cash—the cash prices of the goods may be much the same in a number of shops. Therefore, if he looks round he is able to compare what he could get the goods for on hire-purchase as between varying shops and can make up his own mind between them. It will not help simply to state the amount of the commission. That is only one element in the total charges, and I would ask your Lordships to reject this Amendment.

LORD PEDDIE

My Lords, I am sure the House will find little satisfaction in the reply given by the noble Lord opposite. He bases his objection to this Amendment, first on the ground that it is likely to offer little advantage to the hirer; and, secondly, on the ground that there are difficulties in regard to enforcement. I do not know on which particular argument he truly rests his case, but when we come to the question of an advantage to the hirer—an advantage which the noble Lord apparently doubts—the main virtue of this Amendment is that it would be a decided advantage to the hirer. Indeed, as the noble Lord has indicated, under the principal Act it is necessary for there to be a declaration of the cash price and the hire-purchase price, and the sole purpose of including those two pieces of information is so that the hirer will be able to assess truly the real cost of the credit. Therefore with the exclusion of this other element, the commission, he is not in fact in possession of information which will give him knowledge as to the true cost of that credit.

The noble Lord asked, "Will it help him to make up his mind?" Of course it will help him to make up his mind. It will enable the hirer to have clear knowledge as to what sort of commissions are being paid to dealers, motor car salesmen, and the like, in order to encourage the hirer to take up one hire-purchase transaction or another. Therefore, without any shadow of doubt it is to the advantage of the hirer and unquestionably will help him to make up his mind. It will at least help him to make up his mind with regard to the decision as to which hire-purchase company he deals with; there is no doubt about that.

In regard to the point made by the noble Lord, that it is a fallacy to say that the commission is a charge on the hirer, surely the House will not accept that. Is it seriously suggested that there will be no impact at all on the hirer in this regard? The House cannot possibly accept that argument. I would ask the House to compare the arguments advanced on both sides, and to come quite strongly to the conclusion that this Amendment unquestionably would strengthen the Bill for it would add to the ability of the hirer to understand the agreement and the true cost of the credit which he is seeking.

LORD SHACKLETON

My Lords, I am grateful to the noble Lord for his support. I, too, found the arguments of the noble Lord, Lord Drumalbyn, quite astonishing. To start with, he rather suggested that the Amendment would not be enforceable. A good number of the finance houses regard it as being enforceable, would welcome it, and regard it as perfectly satisfactory.

There are three items in this. There is the basic charge which the hirer pays for the goods, for the motor car; there are the charges of the hire-purchase company, which are difficult to dissect because they include what they have to pay for the use of the money that they are lending, and so on; and there is the third item, which is the commission that the dealer gets and which is entirely concealed at the moment from the hirer. There is this argument that the Amendment would enable the hirer to look with rather clearer eyes at any pressure upon, any cajoling of, him to enter into a hire-purchase agreement—and there are such instances. There is a difference in the price that is paid for a hire-purchase agreement. It may be that we cannot restrict completely what that should be, but at least we can let people know what the components of the hire-purchase price are; and if they know that the dealer's commission ought only to be 10 or 15 per cent., and they see that it is 25 per cent., it will make them think. They might even begin to wonder whether they should sign a particular agreement.

The noble Lord suggested that hire-purchase companies could get round this provision. He talked about inducements, payment in cash or kind. I wonder whether he could specify what he means. Is he, in fact, implying some kind of corrupt practice on their part? I really think that, if this is a serious argument, we ought to know what this sort of practice is. I should have thought this was a perfectly simple proposition. It is regarded through large sections of the hire-purchase trade as entirely enforceable, and I really cannot see why the Government should resist this. In these circumstances, I hope the House will support this Amendment in the Division Lobby.

3.56 p.m.

On Question, Whether the said Amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 38; Not-Contents, 56.

CONTENTS
Airedale, L.	Henley, L.	Peddie, L.
Alexander of Hillsborough, E.	Hobson, L.	Rea, L.
Attlee, E.	Hughes, L.	St. Davids, V.
Burden, L. [Teller.]	Iddesleigh, E.	Shackleton, L.
Burton of Coventry, B.	Killearn, L.	Shepherd, L.
Champion, L. [Teller.]	Latham, L.	Stonehaven, V.
Chorley, L.	Lindgren, L.	Strang, L.
Clwyd, L.	Listowel, E.	Summerskill, B.
Douglas of Barloch, L.	McNair, L.	Taylor, L.
Elliot of Harwood, B.	Meston, L.	Walston, L.
Gaitskell, B.	Morrison of Lambeth, L.	Willis, L.
Gardiner, L.	Moyne, L.	Wilmot of Selmeston, L
Henderson, L.	Ogmore, L.

NOT-CONTENTS
Abinger, L.	Ebbisham, L.	Milverton, L.
Ailwyn, L.	Falkland, V.	Mountevans, L.
Albemarle, E.	Ferrers, E.	Polwarth, L.
Allerton, L.	Ferrier, L.	Poulett, E.
Ampthill, L.	Forster of Harraby, L.	Rathcavan, L.
Auckland, L.	Gage, V.	Rothes, E.
Balerno, L.	Goschen, V. [Teller.]	St. Aldwyn, E. [Teller.]
Bessborough, E.	Greenway, L.	Sandford, L.
Bossom, L.	Hanworth, V.	Sandys, L.
Bridgeman, V.	Hastings, L.	Sandwich, E.
Chesham, L.	Horsbrugh, B.	Somers, L.
Conesford, L.	Howard of Glossop, L.	Spens, L.
Craigton, L.	Lambert, V.	Strange of Knokin, B.
Crathorne, L.	Lothian, M.	Strathcarron, L.
Denham, L.	MacAndrew, L.	Strathclyde, L.
Devonshire, D.	Massereene and Ferrard, V.	Suffield, L.
Dilhorne, L. (L. Chancellor.)	Merrivale, L.	Wakefield of Kendal, L.
Dowding, L.	Mersey, V.	Waldegrave, E.
Drumalbyn, L.	Mills, V.

Resolved in the negative, and Amendment disagreed to accordingly.

4.3 p.m.

LORD PEDDIE moved, in subsection (2), to leave out all words after "and as to" and to insert: any other terms or statements contained in the document".

The noble Lord said: My Lords, I rise to move Amendment No. 4. The purpose of this Amendment is to enable the Board of Trade to regulate the size and colour of the lettering of the whole of an agreement, and not merely one section of it, so that there will be the opportunity, by the exercise of this power, to emphasise particular aspects of a hire-purchase agreement which it is felt, in the interests of the hirer, should be emphasised. During the Committee stage the noble Lord, Lord Drumalbyn, in opposing this, said that such a deletion would reduce the power of the Board of Trade to warn the hirer that he is signing an agreement; but, in fact, it does not, for there is power in Clause 2, subsection (2), which says: … the signature … shall be inserted in a space marked in such manner, and accompanied … by such words, as may be specified in the regulations; Thus there is power there to make certain that the hirer is duly warned. Important though the location of the signature is, what is much more important is how it is displayed.

On Committee stage the Minister indicated that he was prepared to look into this matter. He said that also with regard to many other Amendments, but he has apparently looked long and seen little. I hope that on this occasion he will accept this Amendment, because it undoubtedly strengthens the Bill. The clause as it stands limits the power of the Board of Trade to the control of only the marking of and location of the hirer's signature on the document, and the size and the colour of the lettering: it does not go beyond that. But this Amendment permits an extension of those powers. It would extend the Board of Trade's powers, which are now limited under the Bill to the signature box, to all the agreement. If there is virtue in bringing the attention of the hirer to a special section of the agreement—namely, where he signs his name—surely there is also same advantage in giving power to the Board of Trade to enable steps to be taken to enhance particular aspects of the agreement that are important to the hirer.

I might also make reference to another point, which is that, in the past, there has been considerable criticism of hire-purchase agreements in the courts, particularly with regard to the size of the type—the minute type. It is important to remember that even the most intelligent people are frequently deterred from reading a document when the type is exceptionally small. This Amendment, without doubt, helps to bring to the attention of the hirer the more important terms of the agreement. Indeed, I would say that if the only objection on the part of the Minister to this Amendment is that it deletes the reference to location, then there is nothing wrong at all, because I would be prepared to accept the retention of the reference to the location provided there was an acceptance of the principle involved in this Amendment. I beg to move.

Amendment moved— Page 2, line 38, leave out from ("to") to end of line 40 and insert ("any other terms or statements contained in the document").—(Lord Peddie.)

LORD CHORLEY

My Lords, in supporting my noble friend, I do not want to say a great deal more on the merits of this particular Amendment. In fact, I want only to add this—because the argument was put very fully and clearly to the Minister on the Committee stage. He himself attached great importance to the box for the signature, and seemed to think that, provided the box was there and the signature was in the box, that was all the protection the consumer needed. I do not think he knows very much about the high-pressure methods of salesmen, who have little difficulty in getting the signature into the box. Proper print, which is large and which brings the main matters to the attention of the consumer very clearly, seems to me to be much more important.

But what is worrying me is that, judging by the Amendments which are down on the Paper in the Minister's name, in spite of all the promises he made about giving careful consideration to these matters—though I have no doubt he has done that—he has not, in effect, made any concessions of any substance whatever. If he would indicate that the proposal of the noble and learned Lord, Lord McNair, which was to the effect that we should adopt the very successful procedure which has been applied throughout the Commonwealth of Australia (I think in all the different constituent States there) would be welcome to him and would receive Government support, that would go a good way: but he has done nothing of this—and not only in connection with this Amendment, but in connection with practically all the other Amendments. This really is reducing the value of our Committee stage on these Bills to a minute amount.

One of the great values of the work in this Chamber surely is that we have a proper Committee stage here, and that when useful Amendments are put forward there is a reasonable chance of their being accepted. If we are to be confronted with this sort of thing the value of the Committee stage in your Lordships' House is going to be greatly lessened. Indeed, it is not going to encourage Members of this House to spend the amount of time which my noble friends and I have been spending on this matter over these last weeks. I take a very serious view of this business; and I hope the Government will realise that if they go on in this way—and this is not the first occasion that this has happened—they will, in fact, be doing a great deal to destroy the value of the work of this House in connection with Committee stage. I hope that the Minister will realise what is going on.

It is difficult to know what is in the mind of the Government over this. These Amendments, quite obviously, are in the interests of the consumer; from time to time on Committee stage the Chairman of the Consumer Council has supported them. That seems to me to make no impression on the Government. The Government are obviously going to "play" the consumer interest in the General Election. That is pretty obvious from this Bill and from the Resale Price Maintenance Bill, and from all sorts of other straws that are blowing in the wind. I cannot myself understand the attitude they have been taking at the Committee stage and at the Report stage on this Bill. If that is their purpose, why are they rejecting these Amendments? It cannot be necessarily because they come from the Opposition, for several of the most important have come from the Consumer Council. Yet the Government make no sort of gesture in the way of acceptance. I hope that the Government will realise that this is quite a serious matter. There is time even now for them to change their mind over this business.

BARONESS ELLIOT OF HARWOOD

My Lords, I should like to support this Amendment. I supported it at Committee stage and I was attracted to the proposal of the noble and learned Lord, Lord McNair. It seemed to me highly practical. I cannot see why the Government should feel that just to print a document in which there is a clear space for somebody's signature is the only simple method of making the document intelligible. I have been reading several hire-purchase agreements, just out of interest, because they are so important in this Bill. Some of them are much better printed than others. But, on the whole, it would be very much better if the whole of the document were printed in a straightforward, honest-to-God type, of whatever size may be decided—and Lord McNair in making his proposal said that in Australia a certain type is used. I cannot see the reason why you want to have something which is readable but accentuate only one part: the place for the signature. The whole of the rest of the document is of great importance. I hope the noble Lord will see his way to look at this in a simple, practical manner. If somebody wants to read and understand a document it would be easier if all the type were good, clear type. I hope the Minister, even if he cannot accept this Amendment, at least may say that some regulation can be brought in insisting that the document shall be printed in proper, legible type.

BARONESS BURTON OF COVENTRY

My Lords, if my support would not condemn the Amendment, I should like to acid it. I was very drawn to the sug- gestion made by the noble and learned Lord, Lord McNair, on the Committee stage, and I listened with great interest to what the noble Baroness, Lady Elliot of Harwood, has said. I think I remember what the Minister said in rejecting the Amendment of the noble Lord, Lord McNair, on the Committee stage. I believe it was to the effect that if we accepted this we might then have all the type made bigger and, in that case, nothing would stand out from the rest. think we all agree in this House or in another place that if we want to do something we can do it; and if we do not, then we can very easily find every reason in the world for not doing it. If the Minister were to say to his civil servants (if they are the people to whom one should say it), "This is a principle we are determined to have; we are going to have this printing made of whatever size it may be. You draft something to cover it", nothing will convince me that the civil servants could not do it. I would say to the Minister that I am quite convinced that wherever he went in this country or in Scotland, quite apart from any political points of view, there is not one person who would not agree with a suggestion that all typescript on hire-purchase agreements should be large enough to be read. I hope very much that the Minister will be able to give way on this particular point.

LORD McNAIR

My Lords, I wish to support the object of this Amendment. It comes very close to the Amendment that I put down when the Bill was in Committee, and which I have put down again in order to keep it alive. The object of that Amendment was to enable the hirer to read the document that he signs; and I think there is agreement in all quarters of this House that it is desirable that a man, especially a humble man who is not very familiar with business, should be able to read, and to the best of his ability understand, any agreement that he enters into.

The Amendment proposed by the noble Lords, Lord Peddie and Lord Chorley, raises the question whether the object of my Amendment ought to be achieved by specific requirements throughout the Bill, saying that this and that shall be in certain sizes of type prescribed by the Board of Trade, or whether it would be better to have a global clause, such as I envisaged, which could cover not only the whole of the hire-purchase agreement but all the notices and other documents that come into being as a result of it. The clause I put down was based on the Australian legislation. I am in no way wedded to the terms of that clause, and I wonder whether the Minister—who, without giving any promise, was very fair-minded and rather sympathetic to my Amendment—would, with all the resources of skilled Parliamentary draftsmen at his disposal, put down a clause of a global character which would either directly require the agreement and all other documents to be in a certain type or give power to the Board of Trade to require that these documents should be printed in a certain type. In that way I think he would without doubt be removing one of the evils which at present beset hire-purchase agreements.

LORD SHEPHERD

My Lords, the Minister and the House may remember that on the Committee stage I moved an Amendment to entitle the prospective hirer to have a copy of the agreement or proposal for his perusal between the time in which he had signed the proposal and the time he received the relevant documents. The Minister then said that what we wanted to ensure was that the prospective hirer should study the agreement before he puts his signature to it. I agree with him that that is what we want. We want the prospective hirer to read the document; but anyone who has seen a hire-purchase agreement—and I showed one to the Minister the other day—will see a long list of terms, qualifications, responsibilities, and the like, placed upon the prospective hirer and printed in such type that unless he gets very close to it, it is a mass of colour instead of letters. The noble Ladies opposite nod their heads and I am glad they agree. I think it is obviously in the interests of the hirer that the facts which the Government regard as necessary to be drawn to his attention should be clearly marked.

It might be argued that the drawing of special attention to particular parts of an agreement might draw the attention of the prospective hirer away from other parts. That is a question of judgment, as to which terms should be clearly marked and clearly identifiable as of essential importance to the hirer. This Amendment seeks to achieve that. If the Minister says that we should place on the hirer the responsibility of reading the document before he puts his signature to it, I would say that, taking into account the difficulty of reading present agreements and the pressures that perhaps may be used in getting a signature in a shop or store, or even in a home, we should ensure that the facts important to the hirer, not only in regard to the benefits he may gain from the agreement but also, above all, in regard to the responsibilities he has undertaken, shall be clear. I beg the Government to accept this Amendment.

LORD DRUMALBYN

My Lords, the noble Lord who has just spoken begs me to accept this Amendment, yet the noble Lord, Lord Peddie, said earlier on that he would be quite prepared to have the Amendment varied, so to speak, and recognised that some of the words proposed to be left out should not be left out. Some fairly vigorous blows have been levelled at my head in the course of this short debate and I think I am entitled to reply to them. I think your Lordships recognise the difficulty that we are in—namely, that this Bill was taken fairly soon after Recess and so, in the nature of things, noble Lords were bound to put down Amendments fairly late and we did not have much time to consider them before Committee stage; and because of the many implications of a Bill like this we have not had much time to consider them since then. I think I should be entitled to ask at least for an understanding of this point.

Noble Lords asked me to accept the Amendment which they put down on Committee and which I agreed to consider, and they put down the same Amendment again on Report and expect me to accept it. If they want the principle to be accepted, by all means let us consider the principle, but if they want the Amendment to be accepted they have had time to revise it between Committee stage and Report. I am bound to ask what noble Lords really mean by this Amendment, because if we read the clause as it will read if amended, it will say: … and the regulations may include provision as to the size and colour of the lettering of those words and as to any other terms or statements contained in the document. Not, as to the size and colour of the lettering of any other terms or statements but, as to any other terms or statements". Surely noble Lords do not want that. Surely they do not want the Board of Trade to dictate, by regulation, what the contents of agreements should be. Surely they cannot press this Amendment.

Having dealt with the text of the Amendment, may I deal with what I think is in the minds of noble Lords? As I said before—and I think it is important—the purpose of Clause 2(2) is to warn the hirer as clearly as possible of one simple thing: that by his signature he is offering to enter into a hire-purchase agreement. That is the purpose of this subsection.

LORD LATHAM

Which he cannot understand.

LORD DRUMALBYN

The noble Lord, Lord Latham, says, "Which he cannot understand''. Some of us may never be able to understand.

LORD LATHAM

Indeed, my Lords, he may not be able to read it.

LORD DRUMALBYN

My Lords, I quite appreciate the noble Lord's point. What I am saying is that the purpose of this Amendment is different from that set out in the subsection. Even if it were right to provide this by regulation, it is not necessarily right to do so in this subsection. What Molony stressed was the need to make certain that the hirer should know that he was signing a hire-purchase agreement. This Amendment, as well as deleting the power to prescribe the location of, and draw attention to, the more important parts of the agreement, which I gather is not the noble Lord's intention, might equally not draw the hirer's attention to a particular provision, which in the end might turn out to be the vital provision so far as he is concerned, and he would have a grievance. It is difficult to ask the Board of Trade to distinguish in importance between the terms of a particular agreement, and this is what noble Lords are doing. This is quite a different purpose from that of the noble Lord, Lord McNair, which is that all parts of the agreement should be in legible type. That is not what this Amendment is asking us to do nor is it what I believe to be its purpose.

I said on Committee stage that I did not really see the need for this power, but, as I undertook to do, I have looked into the question further. The 1938 Act, as amended by Clause 2(1) of the Bill, already prescribes a statutory notice to be included in a hire-purchase agreement drawing the hirer's attention to his right to terminate the agreement, to the amount he will then have to pay and to the restriction of the owner's right to repossess the goods. To go further than this would be tantamount to deciding what parts were more important than other parts.

LORD SHEPHERD

My Lords, later there is an Amendment providing that the quality of articles to be received under hire-purchase agreements must be up to the sample in quality. On Committee stage I drew attention to the fact that when the hirer signs a proposal form, he recognises that he receives the goods in good order and condition. I think that that is a point to which the hirer's attention should be drawn.

LORD DRUMALBYN

My Lords, I think that the words used are "at the time of acceptance" of the goods, and that introduces a technical consideration.

If I may continue to deal with the point raised by the noble Lord, Lord McNair—it may be convenient to do so now rather than later—I would point out that there are difficulties about specifying the use of a certain type face, like Times. It might be that in certain parts of the country, if the actual type face were prescribed, one would be able to place contracts for printing hire-purchase agreements only with printers who had that particular face. I do not think anybody really wants that. Secondly, as the Amendment is drafted, it would be possible to print the whole document in capitals and therefore make it practically illegible. I do not know whether we should actually discuss this. All I would say is that we are considering this matter carefully and sympathetically, but we are not at the present stage in a position to frame words that we think would do what noble Lords want done. With that, I hope that we can pass on to the next Amendment. I am sure noble Lords will not press this Amendment, because it really does not do what they want it to do.

LORD McNAIR

My Lords, may I point out to the Minister that my Amendment does not specify the particular fount of type. The words are: or be printed in type of a size not less than the type known as ten-point Times. When I moved the Amendment in Committee I made it clear that, while the expression "ten-point Times" was current in Australia, I felt sure that the Government printer could advise the Minister as to an appropriate similar expression in this country. It is the size to which I attach importance, not the fount.

LORD DRUMALBYN

My Lords, I entirely take the point. As I said, we do not feel we can accept these particular words. For one thing, it is the clarity of the type rather than the size of the type that is important. Also important, as has been said, is the colour of the paper used and the colour of the printing on that paper, which can make the text either practically illegible or very legible indeed. There are a number of different things. It may be better to leave this to be dealt with by regulations when the time comes, but we are carefully considering the whole situation.

LORD McNAIR

May I take it that I shall not be expected to move this Amendment again when we reach it, but that at a later stage the Minister will return to the matter?

LORD DRUMALBYN

I am afraid I cannot undertake that we shall necessarily be ready with an Amendment at a later stage, but we will certainly see whether the result of our consideration will permit us to be.

VISCOUNT HANWORTH

My Lords, it seems to me rather unlikely that hire-purchase companies will go quite so far as to use the most illegible types for those paragraphs which they do not want read. This would seem to go against them somewhat, and the cases in which they did it would be rare. So perhaps the Minister may feel that some Amendment to define the size of type, without being watertight, should achieve the result.

LORD PEDDIE

My Lords, the debate seems to have got into some confusion by mixing the Amendment of the noble and learned Lord, Lord McNair, with which we agree, and the Amendment standing in my name. I thank the noble Baroness, Lady Elliot of Harwood, and the noble and learned Lord, Lord McNair, for their support. I am somewhat at a loss to understand precisely the reactions of the Minister to this Amendment. He had something to say about not having had time to consider. May I assume from that that if he had had time, or more time, to consider it, the Amendment would have had a more favourable reception? Frankly, there is little in the way of argument advanced against the proposition incorporated in the Amendment, and much of the comment the Minister had to make related more to Lord McNair's Amendment than to the one standing in my name.

I cannot follow the point the noble Lord makes and the intimations he gives to the House that it would restrict the power of the Board of Trade to do what the Bill itself would permit them to do. I would draw the attention of the House to the precise words of the Amendment. I will read from Clause 2(2). That says: and the regulations may include provision as to the size and colour of the lettering of those words and as to"— then comes the Amendment— any other terms or statements contained in the document … All that is asked is that power should be conferred to give emphasis to those particular aspects of the agreement to which it is necessary to draw the attention of the hirer.

The noble Lord went on to state that he may accept it in principle. My noble friend Lord Shepherd called for the acceptance of this Amendment, and I indicated a willingness to welcome the acceptance in principle. I recognise the necessity for changing words. I remember that on Committee stage, for instance, there was an acceptance of my Amendment with regard to the exclusion of a body corporate in connection with the question of non-acceptance of agreements. The Government have accepted that and extended it into other fields of this Bill. I have no objection to any variation of the words, provided there is acceptance of the principle that the Board of Trade should have wider powers to determine lettering and all other matters relating to the agreement itself.

LORD DRUMALBYN

My Lords, I really must ask the noble Lord to consider this Amendment again, because I do not think he has said what he wants to say. He read it out, and he made it clear that the Amendment as drafted goes much wider than what he seems to have in mind. If I understood him correctly, what he really wanted was: the regulations may include provision as to the size and colour of the lettering of those words and as to the size and colour of any other terms or statements contained in the document. …

LORD PEDDIE

Yes.

4.47 p.m.

BARONESS ELLIOT OF HARWOOD moved, after subsection (3), to insert: (4) If an owner or seller or any person who (whether by virtue of this Act or otherwise) is the agent of the owner or seller fails to comply with any one or more of the requirements contained in Section 2(2)(b) and Section 3(2)(b) of the principal Act (which

LORD DRUMALBYN

That is not what the noble Lord says. He says: as to any other terms or statements contained in the document", which would give the Board of Trade power to regulate the content of any other terms or statements contained in the document. I do not believe he can mean that, and, in those circumstances, I should have thought it would be better to withdraw the Amendment.

LORD REA

My Lords, is this not Report stage, when each Member speaks once only?

4.40 p.m.

On Question, Whether the said Amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents 32; Not-Contents 45.

CONTENTS
Albemarle, E.	Henderson, L.	Shackleton, L.
Alexander of Hillsborough, E.	Hobson, L.	Shepherd, L.
Burden, L. [Teller.]	Hughes, L.	Summerskill, B.
Burton of Coventry, B.	Iddesleigh, E.	Taylor, L.
Champion, L. [Teller.]	Latham, L.	Walston, L.
Chorley, L.	Lindgren, L.	Williams, L.
Douglas of Barloch, L.	Listowel, E.	Williamson, L.
Elliot of Harwood, B.	Longford, E.	Willis, L.
Gaitskell, B.	Moyne, L.	Wise, L.
Gardiner, L.	Peddie, L.	Yarborough, E.
Hanworth, V.	St. Davids, V.

NOT-CONTENTS
Ailwyn, L.	Falkland, V.	Radnor, E.
Ampthill, L.	Ferrers, E.	Rathcavan, L.
Auckland, L.	Ferrier, L.	St. Aldwyn, E. [Teller.]
Bessborough, E.	Forster of Harraby, L.	Sandford, L.
Bossom, L.	Goschen, V. [Teller.]	Sandys, L.
Bridgeman, V.	Greenway, L.	Sandwich, E.
Chesham, L.	Grenfell, L.	Somers, L.
Clwyd, L.	Howard of Glossop, L.	Stonehaven, V.
Conesford, L.	Lothian, M.	Strange of Knokin, B.
Congleton, L.	Massereene and Ferrard, V.	Strathcarron, L.
Craigton, L.	Merrivale, L.	Strathclyde, L.
Crathorne, L.	Mills, V.	Stratheden and Campbell, L
Denham, L.	Milverton, L.	Suffield, L.
Derwent, L.	Mountevans, L.	Wakefield of Kendal, L.
Drumalbyn, L.	Napier and Ettrick, L.	Waldegrave, E.

Resolved in the negative, and Amendment disagreed to accordingly.

prescribe the details of the hire purchase or credit sale agreement to be shown on the relevant document) as amended by Section 2(1)(b) of this Act, or fails to comply with regulations made by the Board of Trade in pursuance of Section 2(2) of this Act which may specifically refer to this section of the Act, shall be guilty of an offence under this Act and shall be liable on summary conviction to a fine not exceeding fifty pounds, or to a term of imprisonment for any period not exceeding three months, or to both such fine and imprisonment".

The noble Baroness said: My Lords, I rise to move this Amendment. We discussed it on the Committee stage, but I think I am justified in raising it again because it was one of the points about which the Molony Committee felt extremely strongly. This Amendment applies criminal sanctions for failure by a dealer to provide details (which include the total purchase price, the cash price, the amount and dates of the instalments, and the description of the goods) on the offer signed by the hirer or buyer, and also for failure to comply with such regulations to be made by the Board of Trade under Clause 2, as may be deemed to attract these penalties. The purpose of these regulations is, of course, to draw the customer's attention to what he is signing by ensuring a clear method of presentation. As I have said, this Amendment has the same intention as one that I moved in Committee—that is, to deter the doorstep salesman from short-circuiting the customer's safeguards by obtaining a signature to a blank form or obscuring the nature of the transaction in other ways. I am asking the noble Lord to reconsider this Amendment, because I am trying to strike at the unscrupulous salesman who will always have an opportunity to confuse and abuse customers who are often alone in the house and cannot get redress. There are, unfortunately, too many such happenings at the present time.

On the Committee stage, the noble Lord said that the owners would be more effectively deferred by the fact that an improperly conducted transaction would be unenforceable by them against the customer. This may be true, but it is not the purpose of this Amendment. This Amendment is directed at the individual doorstep salesman, whose un-scrupulous behavour is often unknown to, or is denied by, the owner. It is a fact that some of the salesmen employ methods of which, I am sure, some of the owners might not approve in this door-to-door salesmanship business. My Amendment is directed at that type of salesman. In any event, criminal penalties falling on the dealer are not in substitution for, but in addition to, the fact that the agreement may be rendered void. The sanction against the owner of unenforceability remains.

There are inherent difficulties in the circumstances surrounding doorstep selling which make control extremely difficult. We on the Consumer Council are at the moment going into these problems. Many methods have been studied, and are being studied, and I do not lightly propose the introduction of criminal penalties where other means would serve. Knowledge of these circumstances fully endorses the comments of the Molony Committee, in paragraph 527 of their Report, which I shall quote briefly. After referring to the new requirements about the style of the agreement and the cooling-off period, the Committee go on: Our confidence that it would be universally honoured, and not cunningly discouunted in some way by a salesman, is not so high that we can forgo recommending that failure to comply should be a criminal offence on the part of the owner and any person knowingly participating in delivery of an agreement defective in the relevant respect; as well as making the agreement unenforceable without possibility of dispensation by the Court. Those are strong words from the Molony Committee, who made a very careful study of these matters, and in the interest of protecting the buyer, the hirer, the consumer (whatever word you like to use) I believe that it is necessary to accept that failure to comply with the recommendations is something of a very serious nature indeed and could lead to very grave consequences for the buyer or the hirer. Therefore, I think that Molony was justified in asking that these matters should be treated very seriously indeed and should be brought within the terms of the law. I hope that the noble Lord who is taking this Bill will tell me whether or not he has reconsidered this matter, which I raised previously and which I raise again because this is one of the ways in which we could protect the buyer or the hire-purchaser in this matter. I beg to move.

Amendment moved— Page 3, line 11, at end insert the said subsection.—(Baroness Elliot of Harwood.)

LORD DRUMALBYN

My Lords, this Amendment which the noble Lady has moved does two things. It creates a criminal offence in regard to two separate contingencies. First of all, where Sections 2(2)(b) and 3(2)(b) of the 1938 Act are not complied with, and, secondly, where Section 2(2) of this Bil1 is not complied with. Perhaps I ought to say with regard to the first, that I do not think there was any recommendation by Molony that there should be criminal sanctions in regard to what seems to have worked reasonably well in the past. I think there can be no doubt at all that if Section 2(2)(b) of the Act is not complied with—that is, the provision that requires a statement of the hire-purchase price, the cash price, the amount of each instalment and list of goods, and so on—the agreement would not be enforceable, unless, of course, the court agree that it should be enforceable. To add criminal sanction to a provision which has not had it so far, and which the Molony Committee did not recommend, is, I should have thought, quite unnecessary.

With regard to the second point, this is a case where the Molony Committee did recommend that there should be a criminal sanction, for the reasons that the noble Lady stated. It is where the agreement does not contain the box, as it has so been described, and does not comply with Section 2(2)(b) as to what should be in that box. We believe that, here again, the need for enforceability is the best sanction. If the contract is not enforceable, I should have thought that the salesman would be very wary indeed of trying to evade this in any way; and I really do not see how it is possible, since the contract is not enforceable unless these requirements are complied with. Enforceability, surely, is the main sanction, and we did not think, and still do not think, in spite of the fact that we have reconsidered the matter since the noble Lady put the Amendment down again in this form, that it would be right in this case or necessary to provide a criminal sanction. I am sorry, but I must resist the noble Lady's Amendment.

BARONESS ELLIOT OF HARWOOD

In the circumstances, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

4.57 p.m.

LORD PEDDIE moved to add to the clause: (5) Any power of the court⁁

1. (d) under the proviso to section 2(2) of the principal Act, to dispense with the 1278 requirement specified in paragraph (d) thereof, or
2. (b) under the proviso to section 3(2) of that Act, to dispense with the requirement specified in paragraph (c) thereof,

shall not be exercisable except where the copy of the agreement has been sent to the hirer or buyer but not within the period of seven days of the making of the agreement.

The noble Lord said: My Lords, the purpose of this Amendment, which I moved at the Committee stage, is to restrict the exercise of the court's discretion in the same manner as is indicated in Clause 4(5) of the Bill. Here the provision relates to cases to which the cooling-off period applies, and the Minister on Committee stage quite rightly said that it was necessary to ensure that in no circumstances should the rights of the hirer be diminished in this regard; and with that I would agree. But I find it somewhat strange to hear the argument that because it is justified in one set of circumstances it must of necessity not be justified in another.

Under Clause 2(2) of the principal Act, the court is given discretion in cases where the non-supply of all relevant information was felt not to prejudice the hirer or buyer; and the information to which it refers is indicated in paragraphs (b), (c) and (d) of subsection (2) of the principal Act. These include the statement of the hire-purchase price and the cash price, the mode of determining the date on which the instalments should be paid, and the lists of goods covered by the hire-purchase agreement. It is true that the Minister said at the Committee stage that the exercise of this discretion had presented no difficulty in the past. We have no evidence to challenge the truth of that statement, but, even if it is true—and I will assume that it is—we have to remember that the past is past and new provisions and new circumstances are involved in this Bill. Therefore, the fact that the exercise of discretion by the court has created no difficulties since the passing of the 1938 Act, does not necessarily mean that we shall have the same set of circumstances following upon this Bill becoming an Act.

It was also said in the Committee stage by my noble friend Lord Chorley that the fact that the principle expressed in my Amendment is accepted in Clause 4(5) of the Bill could not be without its influence. To accept it in one clause of the Bill and not have it in another could have its influence; indeed, it could possibly be argued that the non-delivery of an agreement could not prejudice the hirer. No one believes that the non-delivery of an agreement would not be of prejudice to the hirer. Therefore, this Amendment simply ensures that all relevant documents are, with certainty, completed. That, surely, offers greater protection to the hirer or the consumer. But it does give the court discretion where a copy of an agreement is sent to a hirer but not within the period of seven days of the making of the agreement. In other words, if an agreement was sent after eight days or nine days, discretion could be exercised. I would urge as an argument in favour of this Amendment that the effect of the acceptance of this Amendment and its incorporation in the Bill would, without doubt, give the court greater guidance. I beg to move.

Amendment moved Page 3, line 13, at end insert the said sub-section.—(Lord Peddie.)

LORD CHORLEY

My Lords, may I say a word in support of my noble friend? The argument about this Amendment was deployed, I hope sufficiently fully, in the Committee, and the Minister really did not, in my submission to the House, deal with it. It is a very common experience among lawyers—I am sorry the noble and learned Lord, Lord McNair is not here; I am sure he would have borne me out—that if in one particular section of an Act of Parliament discretion is limited in some way by some condition or stipulation or something of that kind, and in another section an exactly similar discretion is conferred which is not limited in that particular way, then the obvious argument is that it was not intended to limit it, because if it had been, the same stipulation would have been used in that particular section as in the other. That argument has succeeded, time after time, in actions before the courts, and it seems to me that if the Bill is left in this state there is a very real chance that it may succeed again. The Government cannot do any harm by inserting the Amendment here. As the noble Lord said, the object is to "mak' siccar". I think there is everything to be said for that.

LORD DRUMALBYN

My Lords, I took note of what the noble Lord, Lord Chorley, said in suggesting that the presence of a rather more limited power of discretion in Clause 4 (5)—that is, in cooling-off cases—might lend support to the argument that non-delivery of the agreement would not prejudice the hirer in other cases. We have been looking at the clause in that regard. But the hirers knowledge of his right to cancel the agreement in cooling-off cases may depend on the receipt of the notice required to be set out in the statutory copy of the agreement, and the ending of the period during which the agreement may be cancelled depends on the receipt of that copy. We therefore felt that in a cooling-off case there can be no question of dispensing with the requirement to send the hirer a copy of the agreement. But in non-cooling-off cases the court can dispense with the requirement to send a copy of the agreement only if it is satisfied that the hirer has not been prejudiced by that failure and that it would be just and equitable to dispense with it.

I have considered the point made by both noble Lords, but I can see no reason why the court, when making its assessment of the facts and deciding whether or not to exercise its discretion, should be influenced by Clause 4 (5). The court is given discretionary powers to dispense with some, but not all, the important provisions in Sections 2 and 3 of the 1938 Act for the protection of the hirer or buyer in relation to the making of the agreement. And surely the reason why it is given is to ensure that business is not impeded in order that there is no prejudice to the hirer. The noble Lord, Lord Shepherd, made a considerable point about this in several parts of this speech, and I should have thought that we do not want to interfere with business—and this is what he said—more than is strictly necessary. I think this matter can safely be left to the discretion of the court, and I would not recommend the House to accept this Amendment.

On Question, Amendment negatived.

5.4 p.m.

LORD HUGHES moved, after subsection (4), to insert: (5) Section 4(1) of the principal Act shall have effect as if for the reference to one-half of the hire-purchase price there were substituted a reference to one-third of the hire-purchase price.

The noble Lord said: My Lords, the general purpose of this Bill is to make conditions easier—perhaps a better way of putting it would be more favourable—for the purchaser. That is the object of Parts I and II of the Bill, and I think it would be reasonable to say that the intention in Part III is to make things more sure for a second purchaser; to see that he is not acquiring something which the hire-purchaser has no right to sell. So, generally speaking, the entire purpose of the Bill is to make things more favourable to the hire-purchaser. But there is one exception. Perhaps because of shortage of Parliamentary time, or a desire of the Board of Trade to bring everything into its own hands, there is no separate Scottish Bill. One of the results of this is that the Government have decided to apply a less favourable English condition to Scotland than presently exists. The purpose of my Amendment is to seek to reverse that process and to follow what is the usual thing when on a is seeking to better the lot of individuals; that is, if some people have a good condition and others have a less good condition, when you equalise them you apply the better condition all round.

The present law in Scotland is that where a hire-purchaser, for reasons good to himself, wishes to terminate a contract before it has run its full course, he can do so without further obligation, provided that he has paid, or makes up his payments to a sum equal to, one-third of the purchase price. This power is subject to the further condition that if he has damaged the goods more than is reasonable during that period, he may have to make payments in that respect—and that is a second provision that is common to both Scots and English law at the present time. That position has existed since the first Hire-Purchase Act was passed for Scotland in 1932; and in succeeding legislation—for England in 1938, for both countries in 1954 and for Scotland in 1961—that principle is not altered so far as Scottish law is concerned. I doubt very much whether, contrary to common belief, English people are any more willing to throw away their money than Scots are, and it would be reasonable to assume that a person who enters into a hire-purchase transaction and finds he is unable to proceed with it will take every step he possibly can to carry the thing through to its conclusion, so that at the end of the transaction he has the ownership of the goods for which he has paid. And whether the payment is one-third or one-half he will make up the payment to such a sum and have nothing to show for it only if such action is quite unavoidable. In this connection, it seems to me to be quite unreasonable that this benefit which the people of Scotland have enjoyed for all this time should be withdrawn in favour of the less favourable English conditions.

It may be argued that there are other advantages conferred on Scottish people which more than make up for what they are losing in this connection. But I would refer to the Amendment we have agreed to, removing from the benefits of this Bill bodies corporate—and it was because I wanted to know exactly who was removed from it that I asked my question earlier on as to what was meant by "bodies corporate". These bodies corporate, and commercial bodies of that kind, will, in the main, be the people who will be entering into most of the larger transactions, except perhaps in the case of the purchase of motor cars. Much of this motor car business will, of course, be domestic transactions, and the higher figures in this Bill will apply to non-commercial purchasers. But leaving out of account motor cars, the vast bulk of hire-purchase business is done in things like articles of furniture, washing machines, refrigerators, television, radio sets, carpets, and to a certain extent clothing. And there will be very few cases where the aggregate value of the transaction exceeds the figure in the present law of Scotland of £300. I doubt whether other than a small minority of those buying furniture and so on on hire-purchase will be entering into a contract where the higher figure confers any greater advantage upon them.

If I am right in this supposition, it follows therefore that the vast bulk of the transactions, being for smaller sums, are not going to get any particular benefit from this Bill, but are going to lose the substantial advantage that they have at the present time. I should have thought that, having had for the first time in I do not know how many years a Scottish Minister at the Board of Trade, we would have seen a reversal of the conditions where the feeling in Scotland is—and, I must admit, with a great deal of injustice to the Board of Trade—that the Board of Trade is an enemy to be fought rather than a friend to be run after. The noble Lord, Lord Craigton, smiles, but he knows how often the Scottish Office is sought as an ally against the Board of Trade. Here is a case where a former Scottish Minister and a Scot lands at the Board of Trade, and in this Bill he gives away the one advantage that Scottish hire-purchasers have had over their English colleagues.

It seems to me that, if the Government wish to give the full benefit of this Bill to people in both Scotland and England, they will accept my Amendment, on the basis that the English, having suffered for some thirty years under these inferior conditions, are entitled to receive the benefits which we in Scotland have enjoyed during that time. I must admit that my prime reason for moving this Amendment is not to confer any such benefit on the English at all, but to preserve it for the Scots. I beg to move.

Amendment moved— Page 3, line 13, at end insert the said subsection.—(Lord Hughes.)

LORD FERRIER

My Lords, I feel inclined to support the Amendment so ably moved by the noble Lord, Lord Hughes, opposite. As a fellow Scot, I cannot add anything to what he has said, and I share with him the anticipation of the reply which we are to receive from the Minister at the Board of Trade

5.13 p.m.

LORD DOUGLAS OF BARLOCH

My Lords, I should like to support the Amendment which my noble friend has moved, not only upon the convincing grounds which he has brought forward, but also from another point of view—namely, that if this Amendment is carried it will at any rate help to mitigate a fundamental injustice in this set of legislative provisions; that is, the fact that in many of these cases the amount which the hirer has to pay in order to get rid of his contract is quite excessive. This is related, of course, to the question of the true measure of damages which was raised on the Committee stage by my noble friend Lady Burton of Coventry.

Let us take quite a simple illustration. Suppose somebody enters into an agreement for the hire-purchase of a motor car under which the hire charges which he has to pay amount to £900. After he has entered into the agreement and it has become binding, some unforeseen chance occurs—he may meet with an accident; he may lose his source of living, or something else may happen—and he has paid, let us say, £50 by way of hire-purchase charges and he finds that he cannot go on. Under the Bill as it is drafted, he has to pay another £400, give up the motor vehicle which he has been hiring, and he is put to terrific expense. Of course, if he is wise he does not go about it in that way at all; he just fails to pay the instalments as they become due and so causes a breach of the contract, in which case he can escape. But if he does what the ordinary person, as an honest man, will do and says, "I am sorry, but I cannot go on with this", he becomes liable, after paying £50, to return the vehicle in perfectly good condition and to pay another £400. The Amendment which my noble friend has moved will at any rate reduce that position to a certain extent, and to that degree will mitigate the inequality which arises out of this totally arbitrary provision which has no relation whatsoever to the injury which the hire-purchase company suffers.

LORD DRUMALBYN

My Lords, the noble Lord, Lord Hughes, started by offering us a picture of England and Wales having been groaning for thirty years under an intolerable injustice which he was now proposing to remove by bringing the position into line with that in Scotland.

LORD HUGHES

Just incidentally, you must admit.

LORD DRUMALBYN

My Lords, I was going to say that this was just incidental. Later on, he made it clear that what he really wanted was to maintain the position as it is at present in Scotland, and to bring England and Wales into the same position. But, of course, there is something of the order of a package deal involved in this. I think perhaps the noble Lord rather underestimates the advantages which Scotland is to get under the present Bill—for instance, the power of a court to make a postponement order which does not at present exist in Scottish law, and not least the provision regarding the implied stipulations: what are called the conditions and warranties in England.

Here, I think we have a package deal of the kind which does not do an intolerable injustice to Scotland. It is true that, in relation to agreements under £300, the Scottish position will in future be slightly less favourable than it is now; but it is only in regard to agreements of under £300. One of the big factors in this Bill is, of course, that the upper limit is being raised to £2,000. This is of considerable significance. At the earlier stages of this Bill the implications of this were discussed at length. One of the most important of them is that hire-purchase agreements for motor cars will be subject to the provisions of the 1938 Act: that is, the hirer will have the right to terminate the agreement on payment of a minimum of one half of the hire-purchase price. I have explained why I think that on balance this is reasonable, and I think that on balance also it is not unreasonable since the benefits of the 1938 Act are being extended to the earlier Scottish Act which rather pioneered the hire-purchase provisions.

At any rate, under the 1938 Act the benefit of the later experience was incorporated into the Act for England and Wales, and it has been well recognised that for one reason or another Scottish legislation has never caught up except on this particular point in regard to the advantages to the hirer. As there are advantages to the hirer in the 1938 Act which are being still further extended under the present Bill, the combination of those advantages far more than counterbalances the difference in regard to the one-third and the one-half.

With regard to what the noble Lord, Lord Douglas of Barloch, said, I do not think it should be too readily assumed that this provision is in any way harsh. One has to look at it from both points of view. There are many articles which lose a substantial part of their value—possibly up to 50 per cent.—in the first year of use. In addition to that, one has the outlay in initial charges and so forth. There has been no great demand for the half-price to be changed. The Molony Committee did not suggest that it should be changed; indeed, they suggested in this respect that Scotland should be prepared to sacrifice its advantage in return for the other advantages which it would gain under the Bill. I am sorry not to be able to accept the noble Lord's Amendment, but I think that in this package deal Scotland really gains an advantage.

LORD HUGHES

My Lords, I am most disappointed in that reply. It is certainly not one which is worthy of a Macpherson or a Drumalbyn. I just do not understand it. The suggestion is that this is a "package deal". My understanding of a "package deal" is that you have two parties negotiating: one wants to do a certain thing and the other wants to do something else. Neither gets exactly what it wants, but they both agree to the combined transaction and accept it as the best both can do to their greatest mutual advantage. In this transaction who has been asking that Scotland should give up a third? Who are the other parties to the package deal? Who is making the package deal? I thought that the Government were seeking to do the best they could for the country as a whole, and in that transaction we expected them to follow the usual position of seeking to apply the better conditions all round.

It looks from this as though the Government, or sections of the Board of Trade or perhaps the Board of Trade and the Scottish Office—have been "in a huddle" about it, and somebody has said, "Scotland has got to pay something for getting these other advantages", rather than the Board of Trade in England being told: "You have thought up a whole lot of things which are very much better than we thought of in 1932, and we are very happy to accept all the better things you have done". But the Board of Trade, or the English, whoever it may be, say: "No, we cannot admit that the Scots have thought of something even better than we thought of ourselves, and in order to get our advantage they have got to give away the one-third". I do not understand it and I am quite sure that neither Mr. Macpherson nor Lord Drumalbyn would ever have thought of that as being a perfectly good thing when he was on the other side of the Border. It shows that the normal Scottish reaction to the Board of Trade is well-founded. I am quite certain that the Board of Trade will hear quite a bit more about this in another place.

I should have pressed this matter to a Division to-night, because I feel that the Government have not a leg to stand on on this matter. But I recognise that to a certain extent I am at fault in having presented this Amendment for the first time at Report stage, and part of the price I must pay for having brought it in at such a late stage is not to force another Division and thus ruin completely the tea of those who have not yet had it. I will give the Government time to think about the matter again, in the hope that, when the measure is considered in another place, wiser counsels may prevail. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD PEDDIE moved, after Clause 2, to insert the following new clause:

Amendment of Section 6 of the Principal Act

". Section 6 of the principal Act (which relates to the duty of owners and sellers to supply documents and information) shall have effect as if there were inserted at the end of subsection (1) the following:— '(d) the amount or amounts which become payable by virtue of a rebate scheme that may be offered by the owner or seller to the hirer or buyer.'

The noble Lord said: My Lords, my noble friend deployed very fully and very well the arguments in support of this Amendment, and the noble Lord opposite on that occasion stated that he had a great deal of sympathy with it. We have therefore put down the Amendment once again in the hope that we may be able to have from the Minister some clear indication of his willingness to accept the principle of this Amendment. Its purpose is quite clear. It is to make possible the application of a rebate scheme whereby a hirer who is in a position to pay off the contributions at an earlier date and settle the whole transaction will know from the start on what particular basis these rebates would be paid. I beg to move.

Amendment moved— After Clause 2, insert the said new clause.—(Lord Peddie.)

LORD DRUMALBYN

My Lords, as I said on Committee stage, I think that for finance houses to give rebates to hirers and to buyers who complete their payments ahead of time is a desirable thing and is recognised by many as such. But I have come to the conclusion that it would be neither practicable nor appropriate to make such voluntary rebates, which are not part of the terms of the agreement, the subject of a statutory requirement, as this Amendment would do. The Amendment only requires a finance house to tell a hirer what rebate he could get if that finance house has a rebate scheme. I feel that such a provision might actually discourage finance houses from having rebate schemes at all. If they had to give information about such schemes, they might not be prepared to operate a fixed rebate scheme at all.

In any case, the practical aspects of this matter are far from simple. The Molony Committee, in paragraph 553 of their Report, took the line that the moral case for conferring an entitlement to the hirer applied only to the interest element in the charges. The basic allowance would have to be shaded to take account of other elements in the deal—for example, earlier delays in payment by the hirer. In practice, the finance house decides in each case what rebate the hirer's performance justifies and what part of the charges they regard as interest and available for rebate. In the last resort the matter is one for a bargain between the hirer and finance house; unless the finance house offers a sufficiently attractive rebate, it will miss its chance of getting its money back early when it knows the hirer has it and is willing to pay. I believe that where the hirer is anxious to bring a contract to an early end, the matter is better left to arrangement between the parties.

LORD SHEPHERD

My Lords, I must say that I am rather disappointed with the reply. The Minister in his first few words welcomed the idea that a finance house should give rebates for early payment. The noble Lord is aware that the more responsible hire-purchase companies operate rebate schemes; it is part of their method of business. There may be discussion between the prospective hirer and the business house or dealer as to what should be the period of the agreement. It might then be pointed out to the hirer, "You can take a three-year agreement, but you have the right to pay off earlier and we operate a rebate scheme". This is part of the understanding when the agreement is signed. But at present the prospective hirer has no right whatsoever to a rebate scheme. As the noble Lord has said, it is at the discretion of the hire-purchase company when the hirer goes to them and offers to pay. The noble Lord said that the finance companies might welcome early repayment under an agreement. That is not true. The hire-purchase company makes its money by the length of the agreement. The longer the agreement is in existence the greater is the company's profit. Therefore, it is against the interests of the hire-purchase company for an agreement to be paid off earlier, unless of course in the judgment of the finance company a person may be a special risk because of his profession.

I am very sorry that the Minister has taken this line. He may feel that to lay a responsibility on a finance house which operates such a scheme, to state details and terms in the agreement, will be restrictive and make them feel that they should not commit themselves at an early stage when others are not so doing. But I hope that the Government, and the Minister in particular, will consider very much the question of perhaps having a. statutory scheme to govern rebates on all hire-purchase agreements, as I suggested was operating most satisfactorily in the United States. It would then be quite clear to the hirer and to the hire-purchase company what can be received if an agreement is paid off earlier. If they can operate such a scheme, why cannot we? I beg the Government to consider this matter between now and their discussions on this Bill in another place.

On Question, Amendment negatived.

5.33 p.m.

LORD SHACKLETON moved, after Clause 2, to insert the following new clause:

Requirements relating to Commissions

".—(1) No person shall, in connection with a hire-purchase or credit-sale agreement offer, promise or give to any other person (in this section referred to as a 'dealer') or to the servant or agent of a dealer, nor shall a dealer or the servant or agent of a dealer seek or accept, a commission exceeding one-hundredth of the difference between the price at which the goods (in this section referred to as 'the relative goods') comprised in or to be comprised in the hire-purchase or credit-sale agreement could be bought for cash from the dealer and the amount of the initial payment or deposit paid by the hirer or buyer as the case may be nor a benefit of any other nature if:—

1. (a) Such commission or benefit is in any way attributable to the introduction or acceptance of a hire-purchase or credit-sale agreement, and
2. (b)All or any of the relative goods have been or are to be supplied by the dealer to the person by whom the commission or benefit is to be paid or given.

(2)Any person who contravenes the provisions of this section shall be guilty of an offence and liable on summary conviction:—

1. (a) If it is his first conviction of an offence under this section, to a fine not exceeding fifty pounds;
2. (b) In any other case, to a fine not exceeding one hundred pounds.

(3) Proceedings for any offence under this section may (without prejudice to any jurisdiction exercisable apart from this subsection) be taken against a person at any place at which he is for the time being.

(4)Where an offence under this section committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or any person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly."

The noble Lord said: My Lords, I rise to move Amendment No. 10, the purpose of which is to limit the amount of commission that can be paid to a dealer by a hire-purchase company for making arrangements with the hirer to have a hire-purchase agreement. On the Committee stage I moved a similar Amendment in the sense that the purpose was the same. But, if anything, this is even better than the one which the Government turned down, because whereas my previous Amendment was designed to limit the commission to one-tenth of the difference between the price at which the goods could be bought for cash and the hire-purchase or credit-sale price, this Amendment limits the commission to one-hundredth of the difference of the amounts mentioned in the Amendment. Therefore the rate of commission remains the same, however long the hire-purchase agreement may go on. It is not related to the variation in the amount paid in the way of charges, as a result of a longer type of agreement.

We discussed a little earlier a proposal to bring daylight to bear on these secret commissions. The last time we debated this matter it was interesting how even such well-informed Members as the noble Lord, Lord Hawke, were not only unaware of the existence of such commissions, but did not even know the rate that the individual hirer had to pay, so they were rather shocked, I think, to find how much he did in fact have to pay. There is little doubt, indeed I would say there is no doubt, that these commissions raise the price of hire-purchase. I have details of rates, and certain hire-purchase companies do in fact have two rates; one according to whether they have, so to speak, sold the hire-purchase through a dealer, and another according to whether they have sold it direct—the difference between them being as much as 1½ per cent. for a twelve months' agreement.

In limiting this commission to one-hundredth of the difference of the amounts in the Amendment, I am, in effect, establishing a rate somewhere around 10 per cent.; and this is a rate which I think would be acceptable to the majority of responsible finance houses. It has already been argued, particularly by my noble friend Lord Peddie and others, that this variation is a very expensive one for the hirer. The amount of the commission may vary between 10 and 25 per cent. If my Amendment is adopted we shall fix this, and this will be a definite contribution towards saving money and keeping the price of goods down.

On the Committee stage the Minister, who has been singularly unaccommodating in his usual very charming way, used against my previous Amendment a number of arguments which I have had an opportunity to consider further. He argued, for instance, that these commissions are no different from any other commissions introduced in respect of other types of business. The noble Lord, Lord Airedale, proceeded to point out that he was wrong in this. I would again say that this is an argument which is false. It has a certain specious analogy. If, for instance, we were to try to compare it with a retailer's mark-up we should find there was, in fact, no comparison. A retailer renders a service; he provides the goods. The motor agent provides a service when he brings a car to his garage and sells it, and he very properly gets his margin on it. But in this case the dealer does absolutely nothing for his commission. He may fill in a few documents, but I should have thought a small commission was enough.

In equity, one could even argue that he ought to have to pay for the loan, because he otherwise might not have been able to complete the sale. He does not have to do very much except possibly to look for the finance house which will give him the biggest commission. The unfortunate hirer does not know what this commission is, because the Government have refused to accept an Amendment designed to make that possible. Therefore, the secret commission goes on, and it goes on at a rate which definitely adds to the cost of the goods. I would argue that any analogy with an insurance agent is equally false, because the insurance agent usually has to go out and get the business. Although I know quite a number of people who act as insurance agents to their friends, and do not perhaps do very much in the way of getting business, none the less it is their job to get the business. But in this case the hirer is already captive. There is a subtle distinction. He is not free in these matters; he is not allowed to be given all the information he needs to judge these matters. Therefore, I would strongly argue that we should impose a limitation by this Statute.

This new clause would be perfectly fair to all parties, and I would urge that this is a perfectly reasonable proposition. I do not think the dealer has any particular right to commission; but, all right, let him have a small commission. I do not accept for one moment the argument of the noble Lord, Lord Drumalbyn, that as a result of these commissions he is able skilfully to vary the price of the motor car which he is about to sell. I am certain he cannot do this in the individual transaction. He does not say, "If you have this hire-purchase agreement, I shall have the highest commission and you can have the car cheaper". He does not even say, "You can have it cheaper", without revealing the secret source of income. If the noble Lord is going to argue that that is fine, and it goes into the dealer's profits so it all comes out at the end, this is really to have a complete disregard for the rôle of the dealer in this connection. His rôle is to provide the cars and to do business; it is not to increase, possibly against the public interest, the amount of hire-purchase.

Indeed, it would be possible for an agent to go very aggressively into the hire-purchase business, and to be less inclined—indeed, he must be less inclined, because it is less profitable for him—to do straight cash sales. One can see the motor agent "ticking off" his sales manager and saying, "You are getting far too many cash sales; it is wholly against the interests of our company". But, my Lords, it is not against the public interest. I put this Amendment forward; and may I just add that it is one which would be acceptable to reputable finance houses. I hope, therefore, that the Government will treat this more kindly than its predecessors. I beg to move.

Amendment moved— After Clause 2, insert the said new clause.—(Lord Shackleton.)

LORD DRUMALBYN

My Lords, perhaps I ought to draw the attention of your Lordships to what the Molony Committee actually said, because I think the noble Lord, Lord Airedale, at one time quoted one sentence. I propose to quote that sentence and the following sentence. The noble Lord quoted the sentence: Like other secret commissions, this is a bad practice which ought not to continue. The Committee were there talking about dealers' commissions. Then the Report goes on: However, we do not think that the prohibition of the Australian Acts ought to be adopted, for the reason, which we regretfully recognise, that it is impossible to stop such practices. So the noble Lord, Lord Shackleton, is moving an Amendment here to put a limit on a practice which the Committee say cannot be stopped. Surely there are practical objections to that, and practical considerations to be borne in mind. If a prohibition cannot be enforced, could a limitation be enforced? One knows what happens when a fixed limitation is imposed: normally, something of the order of a black market arises. The noble Lord says that the hirer is already captive in these transactions. But surely that is not so. The hirer is perfectly capable of breaking off negotiations and seeing whether he can get his hire-purchase transaction cheaper elsewhere.

On the other hand, does the noble Lord seriously suggest that an artificial limitation of this kind, however welcome it might be to those who have to pay the commission, would in fact result in people not entering into agreements because in effect they might be expected to pay more consideration to them? This is a very difficult question indeed, and I really do not think an artificial restriction of that kind would work. I say that because, apart from the possibility of cash payments (which, as I said before, would be very difficult to trace), there are obvious ways in which finance houses could make gifts of various kinds to dealers which would not come within the limit of the commission laid down. It might be anything from cases of whisky or boxes of cigars at Christmas to free summer holidays. That is the sort of thing which could easily happen. You prescribe a fixed commission and they work within that, no doubt, but they give additional incentives of one kind or another—gestures of friendship, as they might be described. You could not possibly avoid that; and, even if it could be established that a dealer had received payments in cash or in kind from a finance house, it would be impossible to relate these to particular hire-purchase agreements and to prove that they had been paid as commission on those particular hire-purchase agreements. They would be general concessions of one kind or another.

Moreover, there are many cases in which the dealer performs some continuing service to the finance house. He may, for example, act as their agent for the collection of instalments. He may quite easily be given a commission for that service; and it certainly would not be right to debar the dealer from being paid for such a service. But, equally, a finance house could easily conceal commissions for the initial transaction within payments of this kind. A dealer often performs the service of warranting the accuracy of the statements of the hirer regarding his earnings, and so forth, and his general credit-worthiness; and he is at risk in so doing. The noble Lord said, "The dealer does nothing, absolutely nothing"; but this is an important service, or may easily be an important service, so far as at least some of the finance houses are concerned. Admittedly, they will have their own means of checking up on creditworthiness as well, but, all the same, it cannot be said that the dealer carries out no service whatsoever—and it is very difficult to evaluate those services, certainly at one-hundredth part of the total of the charges.

I think noble Lords tend to have too fixed a view of the charges. They say that, of course, there are the interest rates and there are the administration charges, and then they say, as was the suggestion in the earlier Amendment, that all the rest ought to be stated as commission; but it does not work out as easily as that. There is a certain interplay between them, and I really do not think that this would be a practical Amendment at all. I must ask your Lordships to reject this Amendment for this reason, and on the basis of the advice which the Molony Committee gave—namely, …for the reason, which we regretfully recognise, that it is impossible to stop such practices"; and, equally, I think they would have said that it is impossible to limit commissions in this artifical way.

LORD AIREDALE

My Lords, has the Minister not been using an argument which the Molony Committee said they did not think much of, as they did in the words following those which the Minister quoted when he accused me of not quoting enough of the paragraph of the Molony Report?

LORD DRUMALBYN

My Lords, may I answer that question, with the permission of the House? I did not actually quote: I cited a service which is given. I quite agree that the Molony Committee considered that, so far as commissions were concerned, this service was irrelevant to their consideration of it; but I was pointing out clearly, in reply to the noble Lord who said, "The dealer gives no, absolutely no service", that this is the answer there.

LORD PEDDIE

My Lords, do I understand from the noble Lord that one of the arguments advanced in justification of commissions is that the agent or the dealer fulfils a certain function in checking the credit-worthiness of the potential hirer? That is something of a surprise to me. I rather think there is stronger force in the argument advanced by my noble friend, that he ought really to be paying a contribution himself, because in many cases the deal would never go through—the sale of the motor car, or whatever it may be—were it not for the fact that hire-purchase facilities were available.

LORD DOUGLAS OF BARLOCH

My Lords, I think it is a little unfair for the noble Lord to cite the observations of the Molony Committee made upon a totally different proposition—namely, to prevent the giving of commissions altogether as an argument against the proposal which has been made by my noble friend. More than that, I am very surprised indeed, for the second time this afternoon, to hear an Amendment dealing with this subject rejected upon the ground, in effect, that all the companies giving hire-purchase facilities are so dishonest that it is absolutely impossible to give effect to it—for that is the substance of the argument which the noble Lord has used. I do not believe that that is true, and I think it is only an excuse for not dealing with something which the Molony Committee quite properly said was a serious abuse. The hirer does not know that the dealer has a financial inducement, in the shape of a commission, to place the business with a particular hire-purchase company; and he ought to know it.

LORD WALSTON

My Lords, I regard as very confusing the comments I have listened to, particularly the speech of the Minister. I was under the impression that this Bill was designed to protect the purchaser in hire-purchase transactions, but, having listened to the Minister, I begin to wonder whether, in fact, it was not designed to protect the interests of the salesmen involved. He made a passionate plea on behalf of the salesmen, saying that they did admirable work, obviously had to be recompensed for this, and were labourers worthy of their hire. It made one wonder why there were not minimum commissions so that the salesmen could charge 10 per cent. instead of 3 per cent. Surely, we must go back to the object of this Bill, which is to safeguard the purchaser. There are many matters which have been under discussion in this Bill where the purchaser needs safeguards. One of them, manifestly, is in this matter of commission which is paid to the salesman in any hire-purchase transaction. It is further manifestly clear that in certain cases it is very much in the interests of the dealer or the salesman that the transaction should not be for cash but should be on deferred terms, because his recompense will be more. Not only is that not in the interests of the purchaser; it cannot be in the interests of the country.

It seems to me extraordinary that a Government spokesman should defend something in this Bill which is against the interests both of the purchaser and of the country itself. So far as I can make out, the only reason he gives is that in certain cases—not in every case what the Amendment provides would be difficult to enforce. The Minister brings in what I respectfully suggest is the "red herring" of boxes of cigars and cases of whisky at Christmas. We know these things are given by some people to others. Unfortunately I am not one of the recipients of these. But that is a moral question, dealing with corruption of all sorts, and it does not really come into this Bill at all. If this Amendment is a good one, the fact that it can be got round by some dishonest people giving cases of whisky and boxes of cigars is not an argument which ought to carry weight with your Lordships. We should really listen to whether it is going to act in the interests of the consumer and whether, in the long run, it is likely to lead to a better form of hire-purchase and lower costs.

My view is that the original Amendment which was defeated earlier this afternoon was very much better, because it would have allowed the freedom—which we on this side of the House would like even more than noble Lords opposite—for people to charge different forms of interest, with the proviso that it must be made abundantly clear to the man who is eventually paying how much he is to pay and where that money is going. But that Amendment was defeated. As the second best, which is forced on us through the Government's action, this is the only way left now to protect the consumer. I hope your Lordships will not be led astray by the hard plight of the motor-dealer and other salesmen who deserve their 10 per cent., 15 per cent. or 22½ per cent., nor by the fact that this can be got round in some way by some dishonest people; but regard it solely on its merits and support this Amendment.

LORD SHACKLETON

My Lords, think we are going to have to press this Amendment. The Minister has not given an answer. He could, of course, as my noble friend has said, have given an answer by accepting our earlier Amendment and letting the ordinary processes work. Incidentally, he referred to the noble Lord, Lord Airedale. It was not the noble Lord, Lord Airedale, who quoted Molony; it was the noble Lord, himself; and he said that that is another point of view. The noble Lord, Lord Airedale, said he did not think it necessary to remind the noble Lord of what he said. But his arguments are simply these: that, first of all, a service is rendered. Well, we are prepared to concede 10 per cent. for that; and this is the view of many of the finance houses. He used the additional argument that the seller might have to supply some warranty. In how many cases, in fact, does the dealer supply that warranty so that he takes a financial risk? I doubt whether the Minister knows; I certainly do not. Secondly, he may render other services for which he is paid. That is certainly not an argument for being paid for this.

Finally, my noble friend Lord Walston pointed to the old cigars and whisky argument. The amount you can give away in this way is very limited. And, in any case, it is not possible to make up £500 or £1,000. Moreover, there are certain standards of business behaviour to consider. I do not know the motor dealers well enough, and therefore I would not pass any remarks; but I would suggest that there are some sections of industry who would not do this sort of thing. I am sorry that this argument has been used against a perfectly

Clause 3 [Right of cancellation of certain hire-purchase and credit-sale transactions]:

LORD DRUMALBYN

My Lords, I beg to move this Amendment, which is consequential on the Amendments I moved to Clause 1.

Amendment moved— Page 3, line 15, leave out ("not being a body corporate").—(Lord Drumalbyn.)

6.5 p.m.

LORD PEDDIE moved to add to subsection (1): A copy of the relevant document shall be retained by the prospective hirer or buyer and it shall contain particulars of the name and address of the person to whom cancellation may be delivered, and to whom goods may be returned.

The noble Lord said: My Lords, I hope, with a high degree of optimism,

sensible proposal which is regarded as workable by the industry themselves.

5.57 p.m.

On Question, Whether the proposed new clause (Amendment No. 10) shall be there inserted?

Their Lordships divided: Contents, 27; Not-Contents, 43.

CONTENTS
Airedale, L.	Gardiner, L.	Rea, L.
Alexander of Hillsborough, E.	Henderson, L.	St. Davids, V.
Amulree, L.	Hobson, L.	Shackleton, L.
Burden, L. [Teller.]	Hughes, L.	Shepherd, L.
Burton of Coventry, B.	Latham, L.	Summerskill, B.
Champion, L. [Teller.]	Longford, E.	Taylor, L.
Chorley, L.	Meston, L.	Walston, L.
Douglas of Barloch, L.	Morrison of Lambeth, L.	Williams, L.
Gaitskell, B.	Peddie, L.	Williamson, L.

NOT-CONTENTS
Ailwyn, L.	Elliot of Harwood, B.	McCorquodale of Newton, L.
Auckland, L.	Falkland, V.	Massereene and Ferrard, V.
Bessborough, E.	Ferrers, E.	Merrivale, L.
Bradford, E.	Ferrier, L.	Milverton, L.
Bridgeman, V.	Furness, V.	Mountevans, L.
Carrington, L.	Goschen, V. [Teller.]	Radnor, E.
Chesham, L.	Greenway, L.	Robertson of Oakridge, L
Congleton, L.	Grenfell, L.	St. Aldwyn, E. [Teller.]
Craigton, L.	Hanworth, V.	St. Oswald, L.
Crathorne, L.	Hastings, L.	Sandys, L.
Denham, L.	Hawke, L.	Somers, L.
Derwent, L.	Headfort, M.	Strange of Knokin, B.
Dilhorne, L. (L. Chancellor.)	Iddesleigh, E.	Stratheden and Campbell, L.
Drumalbyn, L.	Lothian, M.	Wakefield of Kendal, L.
Ellenborough, L.

On Question, Amendment agreed to.

that this Amendment will receive a more favourable reception than others that have been moved this afternoon. At Committee stage, arguments were advanced from both sides in favour of this Amendment, which makes it necessary for a copy of the document to be retained by the hirer after he has first appended his signature. I think that your Lordships will agree that no one could dispute the common sense of having a copy of any document that one has signed. But the Minister, in reply, made great play with the fact that at the stage when the signature was first appended to the document, the agreement is not complete, and that when it is complete, both sides will have a copy. We are aware that upon the completion of the agreement, when the hire-purchase company has accepted the proposal, a copy of the agreement will be forwarded to the hirer. We are quite aware, too, that the four-day cooling-off period starts when the copy of the agreement is received.

The noble Lord, Lord Drumalbyn, went on to point cut [OFFICIAL REPORT, Vol. 254 (No. 25), col. 818]: We certainly do not prohibit the leaving of a copy. There is no question of denying a right to a copy if it is thought right by a finance house … That, to my mind, is an incredible statement. On the one hand, there is no argument against the point we made in favour of having a copy retained by the hirer, but there is a suggestion that if the finance company, on their part, think it necessary, then there will be no objection to it. The noble Lord goes on to make what, to my mind, is an equally incredible comment. He makes the suggestion, as an argument against this Amendment, that it is likely that the receiving of a copy at the time of signing will cause people not to read the agreement. I do not want to misjudge the point which has been made by the noble Lord. Therefore, I will quote from the OFFICIAL REPORT of that date (col. 818) his words: …it will tend still further to deter the potential hirer from reading the document before he signs. In other words, the argument is that if a hirer receives a copy of the document he has already signed, that will cause him not to read it, because he has a copy. In the absence of a copy, he does not have any opportunity at all to read the document. So I am completely at a loss to understand the argument that was advanced at Committee stage against the Amendment.

Let me explain how the process would operate under the Bill as it stands. In the first instance, probably on the doorstep, the hirer receives no copy at all. Later on, when the hire-purchase company has accepted his offer, he then signs a completed agreement, and at that point, or subsequently, the hirer receives a copy of the agreement. The effect of this Amendment would be to lengthen the period of consideration on the part of the hirer—and that is the purpose of this Bill—without imposing any disability on the owner or any lengthening of the period before the completion of the transaction. Therefore, all the virtues are on the side of this Amendment. There is no disability so far as the hire-purchase company is concerned. There is no lengthening of the full period of consideration, because the hirer would have the copy at the time of signing and the four day cooling-off period will operate from the moment when the hire-purchase company signs the document.

I would also point out that Clause 3(4)(b) says in any other case, the service of the notice shall operate as a withdrawal of any offer to enter into such an agreement which is contained in, or implied by, the relevant document, and as notice to the owner or seller that any such offer is withdrawn. I mention that because there seemed to me to be an assumption on the part of the noble Lord opposite that the cancellation could be exercised only after acceptance. In other words, one did not operate the cancellation of the agreement until the agreement was completed. But in Clause 3(4)(b) it is clearly laid down that it is possible to cancel or withdraw even before the agreement is completed, merely during the period when the offer is being made by the hirer. If that be the case, and the Bill anticipates the possibility of such a cancellation, surely there is every justification for ensuring that the hirer, the first time he appends his signature to the document, has the right to secure a copy.

I hope the noble Lord opposite will accept this Amendment. I know that the officials responsible for the Bill do not like anyone messing about with their draftsmanship—that seems to be the dominant factor underlying the brief from which the noble Lord opposite has operated. But, quite frankly, here is a proposition, supported on the last occasion by noble Lords on both sides, which imposes no additional liability upon the hire-purchase company. Without any question of doubt it brings advantage to the hirer, and it is in complete conformity with Clause 3(4)(b). In the light of these arguments, and in consequence of the support demonstrated on the last occasion from both sides, and since this is not a political Bill, one might on this occasion expect noble Lords on both sides of the House to give support to a point of view that I believe is in the best interests of the Bill and of everyone likely to be affected by it. I beg to move.

Amendment moved— Page 3, line 29, at end insert the said words.—(Lord Peddle.)

BARONESS ELLIOT OF HARWOOD

My Lords, I supported the noble Lord, Lord Peddie, on this Amendment at the Committee stage, and I rise with great pleasure to support him again on Report stage. I endorse every word that he has said. He has put the question of the importance of this far better than I can. But I am thinking now of information that comes into the Consumer Office from all over the country—from citizens' advice bureaux and elsewhere—about this question of whether or not the terms of the hire-purchase agreement, the object of it, the way it is put out and so on; and how they can best be discussed by a husband and wife. Usually it is the wife at home who receives the man who comes to sell the object, and the husband is away all day. The transaction may be quite a complicated affair; it may be quite difficult for the wife to explain to the absent partner, when he comes home in the evening, what was in the agreement or proposal. We have been talking about the difficulty of reading the documents and of getting them into clear type so that people can read them. These things are not easy. If a wife receives a call from somebody, and signs a document which is then taken away, it is difficult for her, if she has nothing to show, to explain to her husband, when he comes home in the evening, what she has done. I should hate to have to do it, and I daresay I might be better qualified than some of those who are called upon to do it in their homes

As the noble Lord, Lord Peddie, said, there does not seem to be any reason why what I propose should not happen. It would, in my opinion, be in the interests of the people selling the goods, because they have the time, the patience and the interest. It is said that people do not read things—and I agree that they do not, if they are not interested. But presumably, if they want to buy the object, they want to know what the conditions are and are interested. Yet they cannot read anything about it if the document has been taken away by the salesman to his place of business. They have to wait for it to come through the post and then have time to look at it; but that may be quite a little time later. Perhaps the wife may be rather excited about the purchase; it may be something she desperately wants and longs to discuss it with her husband. The husband asks his wife questions, but she cannot answer them; and I do not blame her: she has nothing in her hands to show for it.

All the evidence that we get from the country points to this as being a perfectly simple proposal: it is not elaborate and complicated, but quite simple. I beg the Minister to consider this seriously. It will be to everybody's advantage. Of course it is to the advantage of the consumer, because he has much more time to look at the document. It is also to the advantage of the seller, because if the document is a good one, well drawn up and so on, perhaps the mind of the purchaser will be made up by the time it comes in the post and the transaction will go through much more quickly. In every way I think this is something that we ought to support, and I hope the Minister will reconsider it. As I say, it does not add any complications or costs. If any of us were going into, let us say, a store where we had purchases charged to an account, we should certainly be given a copy of whatever we ordered, whether it was on hire-purchase or in another way. We all know that a carbon copy is made of a bill which is torn off and you are given it and you go off with it in your pocket. If it can be done in a store, it can be done on the doorstep. The salesman has only to come along with a book containing a duplicate and it is as simple as can be. It does not seem to me that there is any complication about this at all. I beg the Minister to accept this Amendment. It would make a great deal of difference to the consumer.

VISCOUNT HANWORTH

My Lords, I support this Amendment, and I would make only one point. If you go away, having signed a document, you have not then got it. So you have no opportunity to find out whether you fully understand it until it comes through the post, when you have a four days' period. If there is something that you do not understand, and you want to go back to the hire-purchase company and find out, you have not time to do it without losing your option to cancel the contract. This is a small point, but I think it is important. Many people are not capable of understanding all the terms written down in this document, and they should have the opportunity of going back and inquiring about it from the hire-purchase company, if they so wish, without losing their option to cancel the contract.

LORD AIREDALE

My Lords, I, too, should like to support the Amendment, because it tends to lengthen the four-day cooling-off period, which in all conscience is not too long. It may begin, for instance, upon the day on which a long-distance lorry driver sets out on a journey from the South of England to Scotland and back again. In those circumstances, four days is not a very generous cooling-off period. This Amendment, which tends to lengthen the time for consideration, is very much to be commended.

6. 20 p.m.

LORD DRUMALBYN

My Lords, I think that there is nothing between us on this, that in this matter we are out to protect the consumer. One has to admit right away that, as between what is in the Bill and what is proposed in the Amendment, there is a much longer time in which to consider action. What we are not so certain about is whether action will so readily result if we have a copy. I may make myself plainer as we go along—I see the noble Lord, Lord Shepherd, frowning. It is, I have no doubt, good practice to leave a copy in such circumstances, but there are many things that are good business practice which we should not wish to prescribe as a statutory duty. I do not lay any stress on the fact that this was something which was not actually recommended by Molony, but it is inconceivable, that, in their consideration of what the proper degree of protection should be in this case, they should not have considered this suggestion. Nevertheless, they did not recommend it.

I must come back to this again, and I do not think it quite deserves the scorn the noble Lord, Lord Peddie, poured upon it. What the Molony Committee were really after in their recommendation as to the box, and the necessity for the signature being placed in that box, was that the attention of the hirer should be drawn to the fact that the document was a hire-purchase contract. We feel that we should go even further than this. We want to make certain that as many people as possible read the contracts before they sign them. Noble Lords have been laying great stress on the point that the contracts themselves should be legible so that reading of them can be encouraged. Surely this is right. We want to encourage reading them before they are signed.

I know that this Amendment applies particularly to the cooling-off provisions, but outside those provisions it would be quite normal for somebody who is going to sign a hire-purchase contract to take a copy of the agreement and read it. This is what we want to happen. This is surely what we should be encouraging: that the document should be read before the signature is appended. In the cooling-off provisions we are talking of special circumstances where the salesman may be in a special position very strongly to influence a person in his own home to sign a contract, and we are providing special arrangements for that case. Those special arrangements are in accordance with what Molony has recommended. It is said that four days is a short time in which to consider this matter, but these matters have to be brought to a point. It is much more effective if they are brought to a crucial decision, when they have to make up their minds in a certain time and must get on with it and make that decision. This must have been in the minds of the Molony Committee when they suggested this four-day period, and the concentration on making the hirer understand that when a copy of the agreement itself came along he was able to exercise his right, if he wished to do so, to withdraw from the contract. If we lay a statutory provision that a copy should be left with the hirer in the first place, there is undoubtedly a danger that when the actual agreement comes along later less attention might be paid to it than otherwise would be. We do not want to give any salesman an opportunity of explaining away the cooling-off period. The salesman could quite easily say, if he were leaving a copy, "Of course, you will be receiving a copy later on. You need not take any notice of that. By that time you will have received the goods and, of course, everything will be fixed up." This is a danger, and I do not think it is a danger which should be underestimated.

One could refer to a technical point, which is that at the time when the hirer actually appends his signature the name of the finance house may not even be known. I know the noble Lord, Lord Shepherd, thinks that this is a rare occurrence, but I am told that it is not as rare as he may think.

LORD SHEPHERD

My Lords, on this point, is it possible legally to undertake to make a proposal to an unknown person—to make an agreement with an unknown person?

LORD DRUMALBYN

You are making a proposal through an agent who may be representing more than one principal. That is what it amounts to, does it not? I am afraid one has to face the fact that, in the pursuit of this kind of business, things do not run exactly according to the book, and I daresay that goes for other businesses. For that reason, if for no other, we must try to maintain the provisions as simple as possible in the interests of the consumer.

The point I was going to make is this. Supposing a copy is not left. What then? What is going to be the sanction? There is no sanction provided. Is it that the contract is to be unenforceable simply because a copy has not been left, simply because this additional period has not been given, in spite of the fact that the main Molony recommendation is being implemented in the Bill and that the person will have his cooling-off rights under the Bill? Is it seriously supposed that, simply because a copy is not left, the contract should be unenforceable? If somebody says, "Yes, it should be made unenforceable", how are you going to get the evidence? A dishonest hirer will say, "I never received a copy." A dishonest or a forgetful dealer who may have made an error may say, "I left the copy. Look, here is a duplicate. I have it here." But he may never in fact have left the copy at all.

This really is a very difficult field. I appreciate entirely the excellence of the motives of noble Lords opposite, and I think every encouragement should be given to the leaving of a copy. But it is a totally different matter to make it a statutory requirement to do so. It is always a principle of legislation that you should not legislate unless what you are legislating for is capable of enforcement and is sensible. I do not think that this would really be true here. I am bound to say that we shall go on considering this, because it has apparent merits. But, against that, I think there are weighty considerations, and so far I am bound to say that I am not convinced that this safeguard which noble Lords would like us to write into the Bill would prove to be an effective safeguard at all. I would ask noble Lords to allow us to consider this matter further and not at the moment to press this Amendment to a Division.

LORD PEDDIE

My Lords, it was perfectly obvious, at least from this side of the House, that the noble Lord opposite was in some difficulty in replying to the case made in support of this Amendment. I do not know whether he plays cricket, but if he plays it in the style in which he handles this Bill he will not be pretty to watch, because he does too much stonewalling. I think we have had an admirable example of stonewalling in his reply. Quite frankly, I think the noble Lord must come to the conclusion that there is little case in the argument that has been advanced against us. The suggestion is that it is good practice to leave a copy, and yet the Minister goes on to suggest that one need not have statutory authority to take up that good practice.

We have made it clear—and the noble Lord has accepted the point—that there is no disability and no extra cost involved in leaving a copy at the time when the document is first signed. And surely at the time when (to use the noble Lord's own words in Committee) the owner or the agent is "breathing down the neck" of the hirer, it is extremely unlikely that he will be able to give careful consideration to the document. But after the document is signed at the time of the offer, the leaving of the document would enable that person to make a very detailed consideration of what he had signed.

Surely the suggestion that less attention will be given to the agreement if a copy is left will not be accepted by any noble Lord; nor the suggestion that if a copy is left at the time of signing the hirer will be likely to give less attention to the document than later when he gets a copy at the end of the period when the hire-purchase company has accepted it. We have taken note of the point that the noble Lord will give consideration to this matter. Can we assume from that that there will be a serious attempt to accept the principle on the basis of this Amendment? I should be glad to have an assurance at this stage, because I was not quite certain about it. Can the noble Lord give us an assurance that he will accept the principle behind this Amendment?

LORD DRUMALBYN

My Lords, with the consent of the House I should like to speak again in answer to this point. I cannot, of course, commit myself to saying that we accept the principle. I cannot accept the principle of the Amendment, because it involves putting a statutory requirement to do something to which I am not yet satisfied it will be wise to apply a statutory requirement. I must be quite frank with the House: If am not at all certain that this will be the right thing to do. What I said was that I thought it would be good practice, but always with the qualification that at the same

time as the copy is left it is made absolutely clear that when the copy of the agreement arrives it is then that the time for action comes, not before. As I said before, the danger lies simply in the fact that if you leave the copy before, the emphasis on the right of the hirer to exercise that right when the copy of the agreement arrives, and to have four days in which to emphasise it, may be prejudiced. This is what we have to consider. I have said that I will go on considering, but I am afraid I cannot commit myself to acceptance even of the principle, because the principle involves a statutory requirement.

LORD SHEPHERD

My Lords, the noble Lord is always fair, but my feeling is that we should commit ourselves this evening on the principle, and I hope that my noble friend will press this Amendment to a Division.

6.35 p.m.

On Question, Whether the said Amendment (No. 12) shall be agreed to?

Their Lordships divided: Contents, 45; Not-Contents, 23.

CONTENTS
Airedale, L.	Headfort, M.	Rea, L.
Alexander of Hillsborough, E.	Henderson, L.	St. Davids, V.
Amulree, L.	Hobson, L.	Sandys, L.
Auckland, L.	Hughes, L.	Shackleton, L.
Champion, L. [Teller.]	Iddesleigh, E.	Shepherd, L. [Teller.]
Crook, L.	Kinnoull, E.	Somers, L.
Douglas of Barloch, L.	Latham, L.	Strabolgi, L.
Ellenborough, L.	Lindgren, L.	Strang, L.
Elliot of Harwood, B.	Longford, E.	Strange of Knokin, B.
Ferrier, L.	MacAndrew, L.	Summerskill, B.
Furness, V.	Merrivale, L.	Swansea, L.
Gaitskell, B.	Meston, L.	Taylor, L.
Gardiner, L.	Milverton, L.	Wakefield of Kendal, L.
Grenfell, L.	Morrison of Lambeth, L.	Walston, L.
Hanworth, V.	Peddie, L.	Williamson, L.

NOT-CONTENTS
Bessborough, E.	Derwent, L.	Massereene and Ferrard, V.
Bossom, L.	Drumalbyn, L.	Mountevans, L.
Carrington, L.	Falkland, V.	Newton, L.
Chelmer, L.	Ferrers, E.	Radnor, E.
Chesham, L.	Goschen, V. [Teller.]	St. Aldwyn, E. [Teller.]
Craigton, L.	Greenway, L.	St. Oswald, L.
Crathorne, L.	Hastings, L.	Stratheden and Campbell, L.
Denham, L.	Lothian, M.

Resolved in the affirmative and Amendment agreed to accordingly.

LORD DRUMALBYN

My Lords, I beg to move that further consideration on Report be now adjourned.

Moved, accordingly, and on Question, Motion agreed to.