§ Mr. Graham Page (Crosby)
I beg to move, in page 2, line 12, to leave out from "advertisement" to end of line 14.
Clause 2 directs thatAn advertisement to which this Act applies shall not be displayed or issued unless it includescertain information which is set out in the rest of the Clause and that this information is "displayed clearly" in the advertisement. The Clause continues—and these are the words which my Amendment seeks to leave out:in such a way as not to give undue prominence to any part of it in comparison with any other part617 It is my desire to leave out those words because I feel that they will cause very great difficulty in the drafting of advertisements and because I think that they are superfluous following after the words "displayed clearly". If, in fact, this information is displayed clearly in advertisements, that would seem to me sufficient without introducing the phrase "undue prominence" which is a very difficult phrase to construe.
I ask hon. Members to put themselves in the position of the artist or the copywriter of a hire-purchase advertisement. He will, first, have to consider what is meant by prominence. Let us suppose that he is given some information about the terms on which the goods are to be offered for hire purchase, terms which, perhaps, are better than those offered by rival firms, and that he wants to indicate that in the advertisement. It may be, perhaps, that a smaller deposit than that required by rivals is offered or that more and, therefore, smaller instalments are offered, or some such fact as that. If the artist or copywriter wants to give any particular information of that sort prominence—let us leave out the question of whether it may be "undue"—he would do so by positioning that information in the advertisement where it would catch the eye, or by the use of different type, for instance, by the use of italics or heavy type.
Prominence to any part of the information required by the Bill may be given in a perfectly ordinary way and not necessarily deliberately. The position of information in an advertisement creates, in itself, a prominence as I understand the meaning of the word in this Clause. Even the angle at which the type may be set, the sort of type used or the colours used if it is a colour advertisement, and so on, creates a prominence.
The artist or the copywriter has to put himself in the position of the magistrate and come to a sort of judicial decision as to whether he is giving prominence to any particular part of the required information over any other part. Having decided whether he is giving prominence, he has to decide whether that prominence is undue. He has to consider what prominence is due to the statement of the deposit payable, what prominence is due to the number of instalments payable, 618 and so on. In fact, he has to consider what is meant by "undue prominence". It is a phrase which is nowhere else defined in law or in the Bill, and I presume that it will have to be defined by the courts in due course if it remains in the Bill.
In Committee my hon. and gallant Friend the Member for Rochdale (Lieut.-Colonel Schofield), the promoter of the Bill, said that we could trust the courts to give a sensible decision. If I may say so without offence to my hon. and gallant Friend, that is a stupid and dangerous thing to say. The courts have to construe the actual words of a Statute whether those words are sensible or not, and if we put into the Bill the words "undue prominence" the court will, first, have to decide what is meant by "prominence" and then what is meant by "undue." It seems to me that it is setting the court a very difficult proposition for no purpose at all because in the earlier part of the Clause the object is perfectly well achieved by the statement that the information must bedisplayed clearly in the advertisement.As I understand the aim of the Bill, it is that the prospective purchaser under a hire-purchase or credit-sale transaction shall be fully informed of all important details of the transaction into which he is entering. It is not its aim, as I understand the Bill, to forbid inducing people to enter into hire-purchase or credit-sale transactions. Indeed, I do not think that one could legislate for that. It is merely a Measure to put before the prospective purchaser the information about hire-purchase transactions so that he may know to what transaction he is binding himself. Therefore, if the information is displayed clearly that should be sufficient without the words "undue prominence" which will give the artist and the copywriter of advertisements extreme difficulty and which will undoubtedly bring about unnecessary litigation.
§ 1.0 p.m.
§ Mr. F. P. Bishop (Harrow, Central)
I beg to second the Amendment.
I support what my hon. Friend the Member for Crosby (Mr. Page) has said and I hope that my hon. and gallant Friend the Member for Rochdale (Lieut.-Colonel Schofield) will find it possible to 619 accept the Amendment. I understand that this is one of the points in the Bill which has presented difficulty to many of those in the advertising industry, including the Advertising Association and other of the other responsible organisations who are by no means ill-disposed to the objects of the Bill or to its provisions as a whole.
The Clause, without the words which the Amendment proposes to delete, would provide that the information required to be given should be given clearly. What more could reasonably be asked than that the necessary information which it is felt should be given to safeguard the customer should be given clearly?
On the question of givingundue prominence to any part of it in comparison with any other partwe enter a sphere which will present great difficulties, not only to those who construct, compose and lay out the advertisements, but to those who have to interpret what is meant by "undue prominence"
An advertisement is not a contract. It is not a prospectus. It is not even a catalogue. It is something which is designed to attract the eye of the purchaser and to lead on to the stage at which a contract may subsequently be made.
The question of what is "undue prominence" in one part of the advertisement as against another must depend upon a number of considerations, including the standard of judgment. The man who writes and composes the advertisement and lays it out has his view of what would be the right prominence of each part of it according to its attractive qualities. Other people may have differing views from quite different points of view.
The expressionin such a way as not to give undue prominence to any part of it in comparison with any other partis not necessary for the purpose of the Bill. It is not necessary for the essence of what my hon. and gallant Friend is trying to do. It presents a difficulty to many of those who are sympathetically inclined to his object. I hope, therefore, that he will find it possible to accept the Amendment.
§ Mr. Glenvil Hall (Colne Valley)
I hope the House will reject the Amendment. When the Bill was in Committee upstairs, we had a fairly long debate upon it, and when we divided the hon. Member for Crosby (Mr. Page), who now moves the same Amendment on Report, got only one supporter. The whole of the Committee, from all quarters, was solidly against him on this issue. I think that as we had a long discussion in Standing Committee, the House would be well advised not to accept the Amendment now.
For one thing, in the view of, if not all of us, certainly a majority in the Committee, if we accepted the Amendment it would stultify one of the main objects of the Bill. We are trying to ensure that advertisements offering goods on hire-purchase terms should be plain in their meaning and that a person reading those advertisements should know exactly what the offer is and what he is expected to pay.
For that reason, in the past it has been the custom with some advertisers—certainly not with all of them and not, I think, the majority—to put certain items of information in very small type and for some to miss them out altogether. What will happen, it seems to me, is that if the Bill becomes an Act without these words therein, it will mean that although a person is obliged to insert the information which the Act will stipulate, he will put some of it in such small type that many of those reading the advertisements will miss it.
§ Mr. Hall
The hon. Member made play with the fact that the courts might find it difficult to interpret "undue prominence". If that is so, they would also have, according to the hon. Member, difficulty in interpreting "clearly". So long as the print is clear, there will be no stipulation in the Bill, if these words are omitted, that the type shall be adequate to such other type as is also in the display. "Undue" is the operative word.
A display artist can set forth an advertisement and not feel at all limited in his artistic conception of how the advertisement should be laid out if we leave 621 these words in the Bill. He will know, and, I think, the courts and everyone who brings common sense to bear on this issue will know, that "undue prominence" means what it says. It may well be that the hon. Member for Crosby feels that there is ambiguity in the wording, but he is about the only one.
As it is our view that the Amendment would stultify one of the main objects of the Bill, I hope that the House will share the view expressed so clearly upstairs and reject the Amendment.
§ Lieut.-Colonel Schofield
One of the principal objects of the Bill is to prevent misleading advertisements, advertisements which highlight certain parts of the terms and make it almost impossible in many cases to read other parts of the terms. The whole essence of the Bill is to prevent these misleading advertisements.
If we accept the Amendment, we shall go right back to the position in which we are today. We should find, "Yours for £1", with a great big "£1", and then, tucked away somewhere, "plus £10 deposit and 24 monthly payments of £1." It may be clear to my hon. Friend the Member for Crosby (Mr. Page), if he wants to make it clear—he may be able to see better than I or somebody else—but I have seen so many advertisements in which it is impossible, even wearing my spectacles, for me to read some of the terms. To omit this stipulation would be to leave the position back to where it is today.
An exaggerated fear has been expressed today about the difficulty and trouble that the copywriters will have by complete equality of treatment being required. Complete equality of treatment is not asked for. The Bill merely asks that there shall not be "undue prominence". As the right hon. Member for Colne Valley (Mr. Glenvil Hall) has said, the operative word is "undue". In spite of what has been said by my hon. Friend the Member for Crosby about his opinion of the courts, my opinion of then is much higher. I believe that they would not put upon these words the narrow construction that he himself has tried to put upon them. I hope that the Committee will resist the Amendment.
§ Amendment negatived.622
§ Lieut.-Colonel Schofield
I beg to move in page 2, line 15, to leave out:actual figures as to priceand to insert "details of payments".
§ Mr. Deputy-Speaker (Sir Gordon Touche)
Perhaps it would be for the convenience of the House if with this Amendment we discussed those in the same page, in lines 20, 23, 25 and 33; in page 3 lines 5 and 6, and that in page 4.
§ Lieut.-Colonel Schofield
I think that that would be to the advantage of the House, because all the Amendments relate to the same point, and what I am about to say will apply equally to them all. As these are purely drafting Amendments, I do not propose to speak at length.
In the Standing Committee hon. Members on both sides saw difficulty in the use of the word "actual", and I gave an undertaking that, on Report, I would do my best to get rid of that word wherever I could, and also to find an alternative phrase for the expression "actual figures as to price". The Committee felt that the use of that word and of that phrase imported an indirect obligation on traders to enter into transactions only on the terms contained in the advertisement, whereas, in practice, we know that customers often wish, say, to put down a deposit larger than that advertised. Again, they may wish to complete payments in a shorter period. It does not happen that every transaction in a shop is in exactly the same terms as those stipulated in the advertisement. It was because of that undertaking that I gave to the Committee that I have put down all these various Amendments.
§ The Parliamentary Secretary to the Board of Trade (Mr. F. J. Erroll)
On behalf of the Government, I should like to support the Amendment, because I think that the Bill should go out from this House with its intention absolutely clear. This Amendment, and those that the House is taking with it, make it quite clear that it is not the intention of the Bill to link, absolutely and directly, an advertisement with any agreement that may subsequently be entered into. I believe that that purpose will be achieved.
623 I should like to emphasise that departure from advertised terms commonly happens in the course of perfectly proper trading. A customer may wish to pay more quickly, either by putting down more than the advertised deposit or by paying larger instalments than those advertised. On the other hand, a trader may, quite legitimately, refuse to supply goods to some customer whose credit is doubtful without his first receiving a deposit larger than that advertised. Furthermore, a change in the Government's credit restrictions or in the rates of Purchase Tax, or indeed—where a trader does not carry stocks—a change in the manufacturers' price, will necessitate quite a substantial departure from the advertised terms.
Quite rightly, the Bill does not seek to interfere with recognised trade practices by requiring all hire-purchase contracts to follow exactly the advertised terms. To do so would be to introduce an entirely new conception of advertising, with implications going far beyond hire purchase. In short, the Bill, as amended, will leave unaltered the present position that a hire-purchase advertisement is, as are other advertisements, only an invitation to treat, and not an offer. These Amendments will put that beyond all doubt.
I am sure that hon. Members will realise that if this Measure tried to tie hire-purchase agreements to advertisements, it would, in effect, become a Bill dealing with agreements rather than with advertisements. It would become an entirely different Bill, one bristling with practical difficulties. For example, there would be difficulty in determining which particular advertisement was relevant to a particular agreement; how long an advertisement remained effective; by which of a trader's advertised terms he was actually tied, and so on. Application and enforcement would present very great problems.
I am very grateful to my hon. and gallant Friend the Member for Rochdale (Lieut.-Colonel Schofield) for introducing these Amendments. I hope that the House will be able to accept them, as they will make the Bill the useful Measure it is designed to be, and will not leave any doubt in the minds of the public or traders concerned.
§ 1.15 p.m.
§ Mr. Glenvil Hall
On behalf of my hon. Friends, I accept what the Parliamentary Secretary has said. He was himself present in the Committee when the hon. and gallant Gentleman undertook—I think largely at the request of the hon. Member for Crosby (Mr. Page)—to submit Amendments of this kind when the Bill reached this stage. I should like to say how glad I am that the hon. Member for Crosby pointed out in Committee some of the ambiguities that might arise if the words at present in the Bill were used; notably, the word "actual," in certain places. As I understand it, the Parliamentary Secretary was not dealing with the final Amendment on the Paper, that in page 6, line 7, which, I assume, will be taken separately and spoken to separately.
§ Amendment agreed to.
§ Further Amendments made:
- In page 2, line 20, leave out "actual."
- In line 20, after "deposit," insert "directly expressed."
- In line 23, leave out "actual."
- In line 23, leave out "specified" and insert "directly expressed."
- In line 25, leave out "actual."
- In line 25, at end insert "directly expressed."—[Lieut.-Colonel Schofield.]
§ Mr. Glenvil Hall
I beg to move, in page 2, line 28, to leave out "and".
Perhaps it would be for the convenience of the Committee, Mr. Deputy-Speaker, if with this Amendment we discussed that in line 30, and that in page 3, line 2.
§ Mr. Glenvil Hall
There was some argument in Committee as to whether or not it was advisable to include in the particulars that must be given in any advertisement—whether in a shop window, periodical or newspaper—the 625 cash price of the goods that were offered for sale. There was some difference of view upstairs, although in the end the majority of the Committee quite definitely formed the opinion that it was wise and proper to insert amongst the information that must be given in any advertisement a statement as to the price.
The reason was that until and unless the cash price of a suite of furniture or other goods is known, it is very difficult to realise just what it will cost an individual if he buys on hire-purchase terms. Some of us were fortified in that view by the fact that traders' associations, which are fairly expert and knowledgeable in these matters, were anxious that we should include the cash price in the information which ought to be given in any advertisement.
The hon. and gallant Gentleman who is promoting the Bill undertook in Committee to try to persuade the House when we reached Report stage to include words which would insist that when information is given in any advertisement it should also include the cash price. Other hon. Members, and certainly my hon. Friends on this side of the House, feel very keenly on this matter, and I am sure that they will have something to say. Without wishing to delay the House, I think we should be well advised, even if it means spending a few minutes on it, to consider favourably the inclusion in the Bill of the words proposed.
§ Mr. Royle
I am glad to have the opportunity to support my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) in his contention. It was not my good fortune to be a member of the Standing Committee which considered the Bill, and I have read with great interest the debate which took place on this subject.
While the hon. and gallant Gentleman the Member for Rochdale (Lieut.-Colonel Schofield) himself did not make a promise that he would endeavour to insert such an Amendment on Report, he did indicate on more than one occasion in the Committee stage that he was prepared to give the idea serious consideration, with a view to inserting an Amendment at this later stage. I must therefore express my severe disappointment, as one of the backers of his Bill, that the insertion of these words has not been suggested by the promoter at this stage.
626 This is a very important feature of what is being attempted by this Bill. The hon. Member for Crosby (Mr. Page) in his speech a few minutes ago on another Amendment, said that the purpose of the Bill should be that prospective purchasers should be informed of all the details of a transaction. I agree with him completely, and I suggest that that information is not complete in the transaction if the prospective purchaser has no knowledge of the actual value of the item which he proposes to buy.
I hope that the hon. and gallant Gentleman will ultimately accept the Amendment, because then there will be some clarity if the value is placed in the advertisement. That is the only way in which we can approach this very important subject. If there is no way in which the prospective purchaser can compare the price for which he might buy the goods outright with what he is being asked to pay week by week and month by month, and the total of those payments, he has no clue in very many cases what rate of interest he will have to pay or the ultimate amount of interest which he will be called upon to pay.
I should like to give one illustration which has come to my notice in very recent times. A constituent came to see me less than a month ago. She was a poor woman, the wife of a man who was receiving a very small wage, and who had a large family. The husband was a man who did not enjoy the best of health, and he was compelled in the evenings to spend his time at home. His wife, concerned about him and the way in which every evening of his life he sat in a chair at home, decided without consulting him to buy a television set for his entertainment.
Being an ignorant woman—and the House knows in what way I use the term ignorant—she went to a shop where an advertisement was displayed for a television set, in no way showing what was its value in terms of outright purchase. The poor woman found, after getting the set home, that it was quite unsatisfactory, and it had to go back to the makers. Even then satisfaction was not obtained. I totted up for her the amount she would have to pay over a period of four years. It came to about £120 for a television set which had never given satisfaction and the cost of which, if bought outright, certainly would not have exceeded £60.
627 This is the kind of thing about which we are concerned. If from the advertisement in the shop that woman could have clearly seen that the value of the set was about £60 or less, she would have been in a position to compare that figure with what she would have to pay over a period of four years, and the situation would have been much clearer to her.
It is the duty of this House in considering legislation of this kind to protect every member of the community, however innocent or however ignorant, when undertaking transactions of this kind. I want to know what the trader has to lose. Why is anybody, no matter who it may be, prepared to defend the trader who does this kind of thing? I suggest that it is only honest trading to state in the advertisement the value of the set if purchased outright, as compared with the alternative way of selling it by paying nine shilling a week for a period of four years or whatever the amount may be. That would be honest trading.
I have been in business on my own account for the whole of my life, and I should not regard myself as being a worthy member of my trade if I did not come forward with the most honest method of trading that I could think of. Therefore, I turn to my fellow traders and ask them to take that line and to make perfectly clear when they are selling an article what its real value is. What is to be lost by it? I hope that the hon. and gallant Gentleman will see the force of these arguments and agree to accept the Amendment, and thus clear up what at the moment is a very undesirable practice.
§ 1.30 p.m.
§ Mr. A. E. Oram (East Ham, South)
I have a particular interest in this matter because, like my hon. Friend the Member for Salford, West (Mr. Royle), I felt that this was a fundamental point to achieve the purpose of the Bill.
I recall that at an earlier stage the promoter of the Bill made some very favourable comments on this Amendment. Consequently I was interested and glad to see that he had put his name to it. This morning as I came into the Chamber I obtained a more up-to-date copy of the Amendment Paper, and to my regret I find that his name is now missing.
628 I hope that the hon. and gallant Gentleman will explain why this is so and why he has changed his mind. I shall be interested to know whether the reason is adequate. I cannot for the life of me see what reason there could be. Perhaps the hon. and gallant Gentleman will give us some insight into the mysteries of this matter and tell us what influences have been brought to bear on him to persuade him to change his mind.
§ Mr. Erroll
I fully appreciate the views which have been so ably expressed by hon. Members opposite. The matter was raised not only in Committee but on Second Reading as well. I said then that, while appreciating the intentions behind it, I thought that such a requirement would be of very doubtful value.
I have thought over the subject very carefully since then, and I remain of the same opinion for the following reasons. As I pointed out at the time, the Bill does not set out to make advertisers show what is being charged for credit. Even if this were one of its purposes, the Bill would not necessarily achieve that purpose by requiring the cash price to be quoted.
The hon. Member for Salford, West (Mr. Royle) talked about showing the value of the article, but we are concerned here actually with the cash price as distinct from the value. In many cases, particularly in the second-hand field—and more especially with second-hand motor cars—the cash price which is quoted in an advertisement has very little meaning. It is essentially an offer to treat. When the would-be purchaser approaches the vendor, a bargain is finally struck which might be substantially different from the cash price actually shown in the advertisement.
There is another difficulty of which I think the House should be made aware, and that is that the trader who is mainly concerned with credit trading could so inflate his cash price as to make it appear that he was charging little or nothing for the credit facilities. I know that the majority of traders in this country are honest, but we have also to deal with the sharp trader. Indeed, one of the principal purposes of the Bill is to deal with the trader who sets out to mislead. We have to consider how easy it would be for such a trader to mislead the would-be purchaser into thinking that he was getting his credit facilities perhaps entirely 629 for nothing. He would succeed perhaps in persuading some customers, who would otherwise buy goods for cash, to acquire these goods on hire-purchase terms, thinking that they would not be saving much if they did make a cash purchase because the cash price was practically the same as the credit price offered.
There are quite a number of traders whose hire-purchase trading is far more important to them than their cash trading, and therefore they would not reckon to be losing very much by advertising a cash price which was inflated to take account of what I have just said and which really bore no relation to the cash price appropriate to normal cash trading. The result of this would undoubtedly be to prejudice the trader who has a large cash business compared with the trader who specialises in hire purchase. I feel that it is important for the House to appreciate these points.
§ Mr. Glenvil Hall
I wonder what the hon. Gentleman means by "the trader who specialises in hire purchase." What he really means is the moneylender—not the really honest trader who wants to sell a suite of furniture or a radio set or some other article which people can only afford to buy on hire-purchase terms.
Will the hon. Gentleman explain why 95 per cent. of the retail traders in this type of business want this Amendment to be made? It is only the 5 per cent.—the crooked ones, those who are money-lenders and not dealers in goods for sale—who support what the hon. Gentleman wants us to do today.
§ Mr. Erroll
I do not think it appropriate that those whose business is in hire purchase should be called money-lenders. What I was trying to make clear was that such traders who do little cash business—and there are quite a number of them—would not find themselves at a disadvantage if they quoted a cash price which was higher than they would be normally prepared to deal in if they were dealing normally for cash. They would thereby be able to mask the true cost of their credit terms by showing higher cash prices—
§ Mr. Erroll
I believe that is a possibility, but it is not always easy to compare one settee, for example, in one shop with a settee in another shop on the basis of the cash prices offered. The object of inserting the cash price in the advertisement, as I understood the hon. Gentleman, was to enable the would-be purchaser to see how much the credit was costing.
§ Mr. Erroll
All I am pointing out is that if the House decides to insert this Amendment in the Bill, that object will not necessarily be achieved. In fact, it may have another and deleterious effect of enabling the trader who predominantly trades in hire purchase to mask the true cost of the credit facilities by showing higher cash prices than he would otherwise do.
§ Mr. Erroll
In my submission, a number of traders are in the habit of showing on their advertisements the credit terms or the hire-purchase terms because they are not really interested in doing cash business at all. I only wanted to make these points to the House so that hon. Members might realise that they are not necessarily achieving the object which they desire. I believe that the information already required by the Bill is all that is necessary to enable a customer to calculate from the advertisements the total amount payable for the goods. I do not think there would be much to be gained by the addition of this further information which could be of little use to the customer and might in fact be positively misleading. I should like particularly to stress that.
If, however, the House feels that it would like to see the Amendment in the Bill, if hon. Members feel that it adds a valuable provision to the Bill, I would not seek to oppose it—having made quite plain that I see some serious disadvantages in accepting it.
§ Mr. Frank Allaun (Salford, East)
I am sure we are all most grateful to the Parliamentary Secretary for his last few words. He is giving the benefit of the 631 doubt to those who favour this Amendment, and I am sure he is right. It was very clearly the intention of the Standing Committee that this Amendment should be inserted. Only two out of thirty-five members of the Committee opposed the Amendment, and as they had opposed every comma in the Bill, their opposition was neither very surprising nor very effective.
§ Mr. Allaun
Since then, we have received widespread support for our point of view, particularly from the reputable hire-purchase traders and notably from the main organisation of the reputable firms, the Hire Purchase Retail Traders' Association, who are most emphatic that this Amendment will help them and will injure the bad boys if it is inserted. Since then, too, probably the largest hire-purchase undertaking in the country, the Co-operative movement, has also given support to the Amendment. I feel certain that the Bill would lose half its value if the Amendment were not inserted.
I want to make it quite clear that I am in no way opposed to hire purchase. For many people with low incomes, hire purchase is an absolute necessity if they are to set up home when they get married. What many of us are opposed to is the exploitation which occurs in connection with hire purchase and, in particular, the extortionately high rate of interest charged. It is a fact that more profit is made on the money-lending side of the business—because that is what it is—than from the sale of the goods themselves. I know of a case in which a television set costing £79 cash price cost the consumer, ultimately, £172. That happened to one of my constituents.
The Amendment is one of the strongest safeguards against that kind of thing. It will ensure that the consumer can compare the cash price with the price which he will have to pay by buying through 632 hire purchase. What is the objection? I think the Parliamentary Secretary has stated it as clearly as it can be stated. He said, "This is of doubtful value because the trader will so inflate his cash price as to make it appear that he is charging little or nothing for credit facilities."
This argument was advanced in Standing Committee and I think it was completely disposed of there. What is the point of an unscrupulous trader raising the price for his television set to £110, in order to make it appear that the consumer would pay little more by buying on hire purchase, when the shopper can walk ten yards down the street and see the same television set on sale for £80? Clearly such a practice will not be followed. The Parliamentary Secretary says that unscrupulous traders would adopt this practice, but that is not so.
The Parliamentary Secretary said that the Amendment would enable the trader to mask the true cost. The answer is that which has already been given: today most of the reputable traders state the cash price, and it is their belief that it is in their interests and in the interests of the buyer that this should continue. I therefore warmly support the Amendment, and I am very glad that there is not to be official opposition to it.
§ 1.45 p.m.
§ Lieut.-Colonel Schofield
I have been asked why I withdrew my name from the Amendment on the Order Paper. As I explained in Committee, ever since the Bill was published I have been beset by all sorts of members of the trade on the question of the cash price. I have received many arguments in favour of showing the cash price and many arguments against it. In Committee I expressed my own views. I do not care whether the Amendment is included in the Bill or not because I do not attribute to it the full importance which has been attributed to it by hon. Members. Like my hon. Friend the Parliamentary Secretary, however, I shall not oppose it if the House wishes that it should be made. I removed my name merely in order to leave me with a free hand to put one or two points which are opposed to the Amendment.
We have to consider that when the would-be hire purchaser looks at an advertisement or an article in a window, 633 invariably he has not the ready cash with which to do a cash transaction even if he wants to do a cash transaction. In many cases he sets out with the firm intention of doing hire-purchase trade. If he is to do hire-purchase trade, it is very important that the details of the terms upon which he will do the business shall be clearly shown to him on the advertisements which advertise the goods.
That is why I did not wish to include anything which might obscure that information. I want nothing to go into the advertisement which would make it more difficult for the customer to be shown the essential information, which is the deposit, the amount of the installments, the number of instalments which have to be paid and the period over which they have to be paid. Those are the details essential to a would-be hire purchaser.
I agree that the purchaser may walk along the road and see similar articles elsewhere, but it has been said that although about 95 per cent. of the hire-purchase advertisements already include the cash price, very often it is an inflated cash price. We must remember that the Hire-Purchase Act, 1938, lays down that before a transaction takes place the seller must inform the buyer of certain facts, one of which is the cash price. He must do it either by means of writing to him or by showing it on an advertisement or a label or in a similar way. I think that many of the reasons why the cash price is shown—and in many cases it is completely fictitious—is in order that the seller can say that he has already informed the would-be purchaser of the cash price, without having to go into more detail. Nevertheless, I shall not oppose the Amendment if the House wishes to make it.
§ Mr. Bishop
I am sorry that my hon. and gallant Friend the Member for Rochdale (Lieut.-Colonel Schofield) has adopted that attitude, because I hoped by speaking for a few moments to be able to express my agreement with him in one of his views on the Amendment. I am opposed to the Amendment, in the first place for the reasons given by my hon. Friend the Parliamentary Secretary. Indeed, I felt so strongly on the matter that I took the trouble of bringing into the Chamber with me a heavy volume in order to be able to quote to him what 634 he said on this subject on Second Reading had he shown any sign of weakening in his view.
I think there is a danger that the additional piece of information which the Amendment demands—the cash price—may have the effect not of clarifying the situation in the mind of the would-be purchaser but of fogging it more than need be.
May I give another reason which I think is of some importance? If a man is in business, doing trade on a hire-purchase basis, and if he does not want to do business on a direct, immediate-sale basis, why should he be forced to do so by Act of Parliament?
§ Mr. Bishop
The 1938 Act requires that when the contract is written, the purchaser should be handed in writing the information showing, among other things, the cash value of the goods. As I said in an earlier intervention, an advertisement is not a contract.
Although, when delivering the terms of a contract which somebody is being asked to sign, a man may be required to disclose this information, why should he be required, in an advertisement which is merely an invitation to people to deal with him and do business with him, to make an offer in a way that he does not wish? It is almost as though nobody were to be allowed to advertise a house for letting unless he were required at the same time to offer it at a fixed purchase price.
That is not a fantastic comparison. I remember very well between the wars, when there were more houses to let than there are now, being offered a house and being given the choice of buying or renting it. When speaking to the agent about it, my first reaction was to ask, "Why is the purchase price apparently so high in relation to the rent that is being asked?" The agent shrugged his shoulders and said, "It is because the owner does not really want to sell".
If in this case, as my hon. Friend the Parliamentary Secretary has said, the man who is seeking to do business and is putting the terms into the advertisement is compelled to put in a price for cash when what he wants to do—because 635 it is his normal method of business—is to do it on hire purchase, surely the likely effect is that he will put in a cash price designed to discourage the cash sale instead of the hire-purchase arrangement. If that is so, what my hon. Friend has said will come to pass and the cash price quoted in the advertisement will have the effect of fogging instead of clarifying the real cost of the hire-purchase terms.
§ Mr. Allaun
The hon. Member believes that the insertion of the cash price will fog rather than clarify the terms. How will the insertion of three words—"Cash price £X" confuse rather than help the buyer?
§ Mr. Bishop
I suggest that the cash price quoted may in itself be an artificial figure which is not the information that will help the purchaser.
§ Mr. Bishop
That is the view I am expressing in support of what my hon. Friend the Parliamentary Secretary has said and that is one of the reasons I am opposed to the Amendment.
I am also opposed to the Amendment on the general ground that it appears to me to add to the amount of information that the advertiser must get into what may be a very small advertisement. We should keep the essentials down to the very minimum and I do not regard this as an essential.
§ Amendment agreed to.
Further Amendments made: In page 2, line 30, at end insert:
and (f) a sum stated as the cash price of the goods".—[Mr. Glenvil Hall.]
In line 33, leave out "actual figures as to price" and insert:
details of payments" — [Lieut. -Colonel Schofield.]
§ Lieut.-Colonel Schofield
I beg to move, in page 2, line 40, to leave out from "of" to "sum" in line 44 and to insert "a price or."
It will be remembered that in Standing Committee the hon. Member for Lewisham, North (Mr. MacDermot) queried the use of the expressions "hire-purchase price" and "total purchase 636 price" without going to the lengths of defining them later in the Bill. As these two expressions appeared only in Clause 2 (3, a, i), it has since been proved possible to simplify the Bill and to get rid of these two expressions entirely without detracting from the purport of the requirement concerned. That is the reason for the Amendment.
§ Amendment agreed to.
§ Further Amendments made: In page 3, line 2, leave out "paragraph (b)" and insert "paragraphs (b) and (f)."—[Mr. Glenvil Hall.]
§ In line 5, leave out "actual figures as to price" and insert "details of payments."
In line 6, leave out from "the" to "or" in line 9 and insert:
amount of the deposit payable in respect of those goods, or of any one or more of the instalments so payable, and that amount is directly expressed in the advertisement.
§ In line 9, leave out from "goods" to end of line 12.—[Lieut.-Colonel Schofield.]
§ Lieut.-Colonel Schofield
I beg to move, in page 3, line 14, to leave out "where an advertisement relates" and to insert:in the case of an advertisement of goods.
§ Mr. Deputy-Speaker (Sir Gordon Touche)
I think it would be convenient if the following two Amendments were taken at the same time.
§ Amendment agreed to
§ Further Amendments made: In page 3, line 15, leave out "to" and insert "as being".
§ In line 17, leave out "to" and insert "as being".—[Lieut.-Colonel Schofield.]