HC Deb 28 July 1950 vol 478 cc878-92

1.6 p.m.

Miss Burton (Coventry, South)

I am glad to have a chance of raising in the House the question of the establishment of consumers' advice centres in this country. I would like to do that for three reasons. First, it is entirely a nonparty affair; second, I believe that such establishments would be for the benefit of the community; third, they would enhance the standing of reputable manufacturers. Before going any further I should make it plain that I appreciate that it would be entirely out of order for me to raise on the Adjournment any matter that would require legislation. I hope therefore that I shall be able to keep within the rules of order. I have taken advice on the matter, and I believe that the suggestions I am going to make would not require legislation or amendment of the law.

It might be of interest if I gave a definite example of the type of work which would be done by consumers' advice centres. I shall go for my example to America, and shall take the case of aspirin. The American public have the choice of 65 kinds of aspirin. Consumers' Union of America decided to conduct a test of all of them. Perhaps the Americans are slightly better than ourselves at drafting extravagant captions, but some of these aspirins were described as "pure," some as "certified," some as "dissolving faster." One advertiser said that his brand of aspirin gave quick relief because it dissolved more speedily in water. All these inducements were held out to the American public. Consumers' Union tested them all.

They found some very interesting facts. They found that the speed with which an aspirin dissolves in water is no indication of the speed with which it is absorbed into the system. They found that its speed of dissolving in water is no indication of the speed with which it cures headaches or pains. The last thing—which they did not discover, but which the great American public had entirely forgotten—was that all aspirins were compelled by law to meet a certain minimum standard of purity and identity. So, Consumers' Union found that the 65 different brands of aspirins were alike in all important respects.

The members of Consumers' Union who received the findings of the test therefore realised that it was an entire waste of time to look at the various captions, because they conveyed nothing, and they also realised that the prices which some of them had been paying for some of these aspirins—I am speaking now of the price before devaluation, because I think it is simpler—varied from 2 cents per 100 to 85 cents per 100, equal to 1d. to 3s. 6d. per 100. As a result of the tests by Consumers' Union the public realised that whether they paid 1d. or 3s. 6d. their aspirins were alike in all fundamental respects, and I suggest that that was a very useful thing.

To come from that very definite example to the organisation which made such work possible, may I say that I was in America in 1948, for three months, and I realised the great importance which the American manufacturers, perhaps naturally, place on the consumer. Although I have no wish to raise any controversy today, I should like, in passing, to say that I believe that the American manufacturers pay much more attention to woman as a consumer than is done in this country. It seemed to be realised in America that women spend 75 per cent. of the consumer purse. Greater attention should be paid to women at the consumer end in this country.

In America, I found two main organisations, one called Consumers' Union and the other called Consumer Research Incorporated. I cannot take both today, so I shall deal with Consumers' Union, which is a non-profit making organisation. It derives its income from fees and is chartered under the membership corporation laws of New York State. It has a present membership of between 300,000 and 400,000 people and an annual subscription of five dollars. That gives it an annual gross income of 1,500,000 dollars, or £375,000 before devaluation. The important thing is that it allows, and spends yearly, 21s. per member, which is a lot of money. Consumers' Union publishes a buying guide once a year which is issued only to members and is not reproduced in the American Press. It consists of some 300 to 400 pages and is divided into sections for different consumer goods.

Opinions differ very much in America, of course, as to whether each section is equally worthwhile. One thing which they have in America—it may seem to us to be rather unnecessary—is toothpaste tasters. I presume that they taste toothpastes and advise members of Consumers' Union what they taste like. A section in the buying guide is devoted to toothpaste tasters. There is a strong body of opinion in America which believes that it is unnecessary to have toothpaste tasters or even that that commodity should be tested by Consumers' Union, and that it would be better to spend time examining more durable and more expensive goods which people buy only once in a lifetime. However, in view of the very wide range between 1d. and 3s. 6d. per 100, the aspirins seemed worth examining.

We have looked at the example, and the organisation; now I should like to come to the actual operations which produce the results given to the members of Consumers' Union. No advertisements at all are accepted in the buying guide. Consumers' Union employs shoppers to go to the various shops and stores in the different cities of America to buy goods on current sale. It would be no use a manufacturer sending any goods to Consumers' Union and asking that they should be tested, for they would be ignored. Only goods bought by the shoppers are tested. When they have been tested, the findings are reported in the buying guide. Normally, two classifications are used, "Acceptable" and "Not acceptable," but sometimes there is a third one, "Best buy."

I found three points of particular interest. The first was that the money of Consumers' Union belongs neither to the State nor to the public, but comes entirely from voluntary subscribers. The second—which I certainly should not like to see here—was that the section of the American public making the most use of Consumers' Union was the middle income group, because only the middle income group could, or was prepared to, find five dollars a year—about 25s. before devaluation—as a subscription. I noticed with interest, as it bore out that point, that during the unemployment years in America membership of Consumers' Union fell off very considerably.

The third point—I do not know whether I am right in saying that I think women would agree with this even more than men would because, presumably, men must be as good judges of style as women—was that although Consumers' Union could test quality and performance, it was unable to test style. We might find that a cheaper article was as good and durable as a very expensive one, but the more expensive one might have that indefinable something which created the style and was, therefore, worth more money.

That is what is done in America. As we all know, a good deal of consumer advice work has been done in this country for years. I am not a car owner, but I know that the motoring correspondents of the general Press and the motoring trade papers give advice and opinions—impartial, I think—about new models which are brought upon the market, and organisations like the A.A. and the R.A.C. are always prepared to give advice to people buying new cars. The British Electricity Authority and the Gas Council issue a good deal of publicity about their commodities, and some magazines refuse to accept advertisements unless the goods advertised reach their own particular standard. Many organisations, particularly women's organisations, have done a great deal of this consumer advice work. We heard in the House this week of various consumers' councils set up in connection with the nationalised industries.

I feel that a great deal of consumer advice work is being done in this country, but it is all very loose and disjointed. Some people do not even know that it exists, and those who do know that it exists do not know how to get their feelings put forward to the right places. I believe that we could set up a consumers' advice centre in this country to bring together all the information which is scattered about in various organisations. Reports could then be made to the country through the organisations connected with the centre.

I come now, with some trepidation, to the legal aspect. Speaking as a layman, I feel that very often in this House the law, when interpreted by a layman, is more intelligent to the layman than when it is interpreted by a high legal authority. It seems to me—although I am subject to correction—that it is obviously very difficult to give a ruling unless one has a test case actually in the courts. But the law of defamation, as I understand it in this particular case, is that if a manufacturer wants to bring an action successfully, he has to prove that the report concerned is not only malicious and untrue, but that it has actually caused him damage.

I am further informed that any such consumers' advice centre could, under the present law, publish findings mentioning branded goods by name to its members, but that if the Press tried to make spectacular stories out of such reports, they might then render themselves liable to proceedings. In other words, one could probably not say of branded goods that X apparatus was better than Y, but one could say that X used 50 therms of gas in so many hours, whereas Y used 100.

I believe this to be very much a nonparty matter of benefit to us all, and I think it would be less than just to the party to which I have the honour to belong if I did not mention that in their publication, "Labour Believes in Britain," they put forward the formation of a consumers' advice centre, as one of the aspects of the policy of the Labour Party at the last General Election.

I think the points suggested there are of interest. The first was that such a centre should be independent, or publicly financed; the second, that it should conduct expert tests, and examinations of various consumer goods on the market; the third, that it should issue buying guides indicating the relative merits and demerits of the products tested, and furthermore, how far each is reasonable value for money; and, lastly, that such a centre should institute safeguards to avoid injustice to manufacturers.

That would mean that good manufacturers would be helped and that unscrupulous advertising would be exposed. The Board of Trade have the job of trying to work out practical proposals along these lines, and as long ago as 30th March last my right hon. Friend the President of the Board of Trade gave us an indication in this House that he was not unsympathetic towards these ideas. Consumers' Union in America claims, and produces evidence to support the claim, that not only does it enable the consumer to get the most for his money, but that manufacturers often take notice of the reports and improve their products where deficiencies have been noted. It is very true that it is not much use saying that one aspirin cures pain more quickly than others if a great many people are aware that all aspirins are equal in that respect.

In conclusion, I feel that if public money is to be spent on setting up such a centre or centres in this country, then, obviously, every section of the community must benefit. It would be entirely wrong if it were only the middle, the lower, or the higher income group which benefited. We might consider whether it would be right to concentrate on the expensive and the durable goods which people occasionally buy, such as radios, television sets, cars and refrigerators, or whether we should concentrate on our aspirins, our toothpaste or our washing powders.

I do not know what reply we are to receive today from the Board of Trade, but if the reply is, in general, that they approve of such an idea but that it does not go far enough, nobody will be more pleased than I. I do not think it goes far enough, but this was as far as I could go today without being called to order. I hope very much that we shall get these centres, and I would like to see branded goods mentioned by name and compared. I would even like to see patent medicines included so that advertising is cut, and, therefore, the cost to the consumer. I wish to pay a tribute to my right hon. Friend the President of the Board of Trade in his absence, because I feel that he has throughout been most sympathetic to this idea. It is one which I hope the House will support and which will eventually become an actuality in this country.

1.25 p.m.

Mr. Richard Winterbottom (Sheffield, Brightside)

First, I want to express appreciation of the way in which the case has been put by my hon. Friend the Member for Coventry, South (Miss Burton), and to supplement her plea for the establishment of a consumers' advice centre, or centres. I hope that my hon. Friend the Parliamentary Secretary will signify the approval of his Department when he comes to reply. I want to deal with this matter from a totally different aspect from that indicated by my hon. Friend, because my great concern is that we should understand quite clearly the purpose of such a centre.

I know it can be said by many people, both in and out of this House that this may be just another committee. As I envisage it, however, it means that any consumers' centre would need to have at the highest point some kind of an executive committee or executive council. Rightly or wrongly, I prefer to call that a consumers' council, and, in doing so, I am reminded that if we had a council of that nature in this country, it would not be the first in existence. If my memory serves me right, the first consumers' council was instituted in this country in 1917. I have turned up the official records, and I am fortified in what I say today by statements made by the late John Robert Clynes, who incidentally, nursed me, when he was a boy. I am very proud to quote what he said when that first consumers' council was set up in 1917, because I think it clearly defines what should be the object of any such centre. He said: On this council we shall ask representatives to sit who will act for the organised working-classes, and we shall ask women also to act upon the council. We propose that such representatives shall not merely come in once a week to be told some story by an official or to pass resolutions of approval, or merely to be told that the price of an article has been fixed at so and so, but they shall know for themselves the processes by which things are done, and see, with an eye on the consumer, whether the rights and interests of consumers are being properly watched or not. I commend the statement of my late right hon. Friend to my hon. Friend the Parliamentary Secretary, in the hope that it will not be overlooked whenever a consumers' advice centre is set up having the terms, aims, and objects of that earlier centre.

While we are on the historical survey which has been dealt with very faithfully by my hon. Friend the Member for Coventry, South, I think I ought to mention that a previous attempt was made in this House to set up a consumers' council. During the lifetime of the minority Labour Government of 1929–31, the late William Graham introduced a Bill into this House to set up a consumers' council. It passed through all its stages in this House, but was afterwards rejected in another place.

Although times and circumstances have changed, there is one problem which remains the same. Production and the processes of production were, and seemingly, are today, out of alignment with the needs of distribution and public services. I am not going to deal with what I would call this disequilibrium, but I say that it is very important when it reflects itself in the price level to the consumer.

One of the most important problems with which we have to deal today is the price level in our internal economy. But for the difficulties in world relationships, I think that the price level would be the major' political problem of the day. I support, therefore, the proposal for a consumers' centre to deal efficiently with the problems of the price level and, in words which I read the other day in a "News Chronicle" pamphlet, to bring to the consumer those consumer goods at the right time, in the right place, in the right quantities, at the right price. I believe that the findings of the Linlithgow Committee, which was set up some time ago, could be applied quite easily today. When we are examining this problem of price, we are dealing with something which, from the viewpoint of the general public, is causing profound disturbance. When I think of the Report of the Linlithgow Committee and their findings, and know that precisely the same things are happening today in distributing consumer goods from the producer to the consumers, then I think that there is a crying need for a consumers' advice centre.

Take, for instance, Covent Garden. First of all, there is the grower; then there is the London commission salesmen and, next, the London wholesaler; then we get the London commission buyer and the provincial wholesaler—sometimes there is a secondary wholesaler; and then we have the retailer. I have spent most of my life in the world of distribution. I have done a great deal—I do not say this boastingly—in examining the prices of commodities, and I say quite categorically that in examining the prices of commodities, at the various stages in their distribution from the producer to the consumer, I cannot find excessive margins at any one stage. There is, however, an excessive margin between the final retail price and the cost of production. Two-penny cabbages very often cost 8d., 9d. or 10d. on the market; that is one of the problems which we have to examine.

I do not believe that we shall ever do anything effective about price levels until we have examined very closely and diligently the problem of the plethora of intermediaries in the world of distribution. What is even more important is that of the total national product in this country of £11,201 million, almost £6,000 million is being spent over the counters of the shops; that is a matter of serious moment. Therefore, I say that there is a case for wise, courageous and systematic investigation into the price level by a consumer advice centre.

I want to make it clear to the Parliamentary Secretary that I am dealing only with consumer goods such as food, clothing, household articles, and to the point of newsprint. I know that provision in the way of very wise protection has been made for the consumer in regard to, say, electricity and gas, but what I am dealing with are the things which men and women are buying every week of their lives. I bring to the notice of my hon. Friend as an illustration, a fact which emerged only this last week. In Press reports we have been told that the catering working party have issued their report, which shows that rather deplorable conditions exist in the 230,000 catering establishments of the country. Those deplorable conditions militate mainly against the health of the people.

Another important fact, which I believe to be true, is that in the world of distribution over 50 per cent. of the consumer expenditure—that figure is my own estimate—is done by means of credit trade. I distinguish between the two sections of credit and cash; the former includes hire purchase. I could go into the structure of the organisations which deal in this way with this kind of trade and I believe that their existence could be investigated and tackled by a consumers' advice centre.

I appreciate all that has been done by the very many parties who have dealt with the distribution of consumer goods, but I ask the Parliamentary Secretary to consider very seriously this suggestion. Why is resort made to ad hoc sporadic committees, when we could have a permanent structure which would deal in a more permanent way with the whole problem? That body can be a consumers' advice centre. It is not only when dealing with consumer goods that the need for the establishment of such a centre exists. It is also required in conducting investigations into the nature, the substance and the quality of those consumer goods. I believe that ultimately, as a result of our findings here in Parliament and the findings of the consumers' advice centre, which I hope to see set up, the health, wealth and happiness of the British people will benefit.

1.38 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. Rhodes)

I should like to thank my hon. Friend the Member for Coventry, South (Miss Burton), for raising this very interesting subject and for the charming way in which she has given the House the benefit of her investigations. The Government have given quite a lot of protection to the consumer in many ways, especially in time of shortages, by price control regulations, rationing schemes, and also by utility schemes and other means. I quite agree the problem is now extended and we shall have to find appropriate means of protection for the more normal economic conditions which we hope will exist in the future. I shall not be able to answer fully all that has been said, particularly by my hon. Friend the Mem- ber for Brightside (Mr. R. Winterbottom), as that would involve me in difficulty. The outcome of deliberations at the Board of Trade might be that it would become necessary later to introduce legislation to deal with this problem, and I should be quite out of order in dealing with that now.

The idea of a consumers' advice centre is very sound, but there is a danger of accepting it too easily and thinking it a simple matter. It is not, and before we move in the matter we have to make quite sure that when we advance detailed proposals for such a service, that as far as possible, we shall have foreseen the many difficulties and have formed a clear idea of the kind of work which may be most useful in this field; and, conversely, the kind of work which may look useful at first sight, but may turn out to be wasteful and ineffective.

A proposition of this kind would cost money and the probability is that some may be public money paid by the taxpayer. As the taxpayer and the consumer are one, we have to make quite sure that as a consumer he is to get value for the money he provides as a taxpayer, in whatever service it is provided. That is why we have to take time in making a careful and critical study of a possible consumers' advice service, how it could be organised, how much it would cost, and, above all, what kind of advice it could give and how it would get its advice over to the public.

The hon. Lady mentioned the American model. Up to now I think the American model is the only one. They work on the basis of testing and issuing rating reports. One of the things we have had to do was to learn all we could from American experience and to examine that experience in as critical a manner as we could. Our conclusions from this study are that a good deal of what is done in America would not be very useful for us to copy, though we have also picked up much of value from that experience. But it is no use just copying; what we have to do is to create something properly attuned to what we require in this country.

The hon. Lady mentioned the guides which are published in America. The contents of those guides do not appear to be uniformly useful. There are long lists of branded things like toothpaste, cosmetics and all sorts of cheap goods which are divided into two kinds. One is "acceptable" and the other is "not acceptable." We think it very doubtful that such a classification of goods would be of very great use. People soon find their favourite brands without doing themselves or their pockets much harm.

There are also American publications giving long lists of tinned foods where the rating is largely dependent on the view of a "flavour panel" which is a representative collection of housewives. With all due respect to housewives, we do not think we should waste money in telling housewives what other housewives thing about the flavour of A's soup as against B's soup. It is the family which decides things of that description.

The best advice in these American reports is on things like washing machines and refrigerators, technical things about which the layman knows very little. We think there are possibilities in this line of country, but, again, we have to be careful not to give people expensive advice about expensive types of appliance which at present everyone cannot afford.

Another important point is that for the purposes of public reports, only branded goods can be dealt with in the American scheme. Otherwise, when they go shopping people cannot identify the goods described in the reports. This is an important limitation on the whole method. For example, practically no reports could be made on furniture, at least at the moment in this country, and on many types of clothing or essential household goods like pots and pans, although these are things on which advice is often badly needed. As far as we can make out, the American guides deal with goods worth, at most, 10 per cent. of normal consumer expenditure, and a lot of the information given is of doubtful value.

Another thing we have had to look at very carefully is the idea that these rating reports can, by themselves, stop people getting a false impression from advertisements. The hon. Lady took the example of aspirin. Some makes of aspirin have fancy names and are widely advertised and cost a lot, as she said. The same thing can often be had, far cheaper but just as good, in a less well advertised make.

The suggestion is that consumer reports can stop the waste of money that goes on in this way. But it has to be remembered that all the advice centre can say about this is that make "A," costing 2s. and make "B" costing 6d. are both "acceptable." This is not a very exciting statement and it probably does not get into the newspapers. Subscribers may read it in a pamphlet or bulletin and it may impress them. But, meanwhile, maker "A" is still spending many thousands of pounds a week saying that people should buy make "A." Unless we spent as many thousands telling people that they should buy make "B," the chances are that they will go on using make "A." It would be nice to stop this sort of thing, but we have to be realistic about it.

There are all sorts of other questions which arise out of a study of these American bodies. For example, they do not, as is sometimes thought, compare the value for money of competing brands. All they do is to give factual reports of tests they have carried out. This is an important lesson for us. Many factors make up the value of an article; some of them can be tested objectively, but others cannot, because they are matters of taste—appearance, design, and so on. It would be impossible and misleading to say that one article is better than another, unless one could make an objective statement about all the features of that particular article.

Another point we have noticed is that, as would be expected in any country with a high standard of industrial production, most of the goods are rated as acceptable—it would be wrong to get an idea that our country is particularly flooded with goods of a very shoddy nature; it is not; our goods, taken by and large, are of a high quality—and very few cases are judged unacceptable. The customer who usually "buys blind" will probably buy what the buying guide says is acceptable to 80 per cent. or 90 per cent. anyway.

This has led us to ask whether for our purposes it would be worth while to prepare and publish a lot of information which merely confirms the consumer in his or her normal choice. We think this may be a wasteful and inefficient method of advising people and that perhaps it might be better to confine the reports to cases where there is really something worth telling the people, or something specific about which to warn them.

The object of saying a good deal in criticism of the American version of consumer advice is not to pour cold water on the remarks of the hon. Lady or my hon. Friend the Member for Brightside, because we are very keen on the idea and general principle. I would not like to suggest in any way that there is nothing useful to be done. There is quite a lot. We are fully convinced of that, and of the need for such a service. Our object is to try to show hon. Members, who have raised this subject, that there are really some difficult problems to solve in arriving at a concrete workable scheme. They are not problems that we are inventing, but real matters for study and consideration before we put our hand to legislation on the subject.

Our view is that there is a good deal of general advice to consumers of one kind and another, which ought to be made available from some central service. There is a good deal of helpful material already available in one form or another, for example, the Council of Industrial Design, Food Facts and the Ministry of Fuel and Power Fuel Efficiency Bulletin which have been built up over the years, but probably they need co-ordinating in some way or another. We think there is room for something more synthetic in this field, and that there are gaps to be filled. General advice of various kinds, such as the suitability of different textiles for different purposes, how to choose well-made furniture, and so on, should be the starting point, and the attempt to give advice about particular goods should grow out of it.

The technique of testing and rating, about which we have learned a great deal, study of the work done in America, would, we think, come in very useful in the context of a general advisory service. We should aim to use this technique in a selective and economical way, applying it to just those lines of goods where it seems to us most effective. It is impossible to go into detail at this stage. Our work in the Board of Trade on this problem is continuing, and it is important to lay a firm foundation by taking trouble at the outset to get workable proposals. When the President is able to announce detailed proposals for a consumers' advisory coun- cil, it will be seen that the careful preparatory work has been worth while.

1.57 p.m.

Mr. Shepherd (Cheadle)

This proposal is utter nonsense. Millions and millions of pamphlets are being printed telling people what they already know. The hon. Member for Brightside (Mr. Winterbottom) says himself that in America they have gone too far, and we certainly have no reserves to waste upon printing more and more instructions for people who already know what they want themselves. I do not mean to say that there should be no protection for the customer. Neither do I assume that there are no measures which the Government can rightly take to improve the standard of products. Surely the remedy for that exists. If we want to maintain standards we should insist upon the trade maintaining them. The utility scheme does that, and if that goes we can manage it by a development council. If there is any tendency to monopolist tendencies there is the Monopoly Commission to deal with it.

To suggest the setting up of another organisation, which is going to occupy shops in the main street of certain towns or big offices in London, is utter nonsense. There is only one way of safeguarding the consumer, and the Parliamentary Secretary knows it as well as I do—to ensure there is adequate competition. If there is competition the consumer will be safeguarded. I can assure the hon. Lady the Member for Coventry, South (Miss Burton) that if the most elaborate apparatus in the world is set up, millions and millions of pamphlets are printed about it, and if it is the biggest monopoly that was ever seen in this country, there will still be people in the business who will exploit the consumer in some way or another, or who will get away with something which is not as good as it ought to be.

The answer is not to set up these organisations, not to add another committee to the thousands we already have, but, first, to safeguard the standards through the machinery we already have available; second, to deal with any tendency towards monopoly through the channels already existing; and third, to see that there is a rightful amount of competition, which is the only safeguard for the consumers' interests.

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