HC Deb 28 June 1957 vol 572 cc637-51
Lieut.-Colonel Schofield

rose

Mr. Page

On a point of order. Mr. Deputy-Speaker. I rose on each of those Amendments which the House has just passed, but I failed to catch your eye before you collected the voices

Mr. Deputy-Speaker

I am sorry. The hon. Member was unfortunate.

Amendments made: In page 4, leave out lines:30 to 32.

In page 5, line 2, at end insert: directly expressed" means expressed (whether in words or figures or both) otherwise than as a fraction of, or by reference to, some other amount.

In line 31, leave out "actual figures as to price" and insert "details of payments".—[Lieut.-Colonel Schofield.]

2.0 p.m.

Lieut.-Colonel Schofield

I beg to move, in page 6, line 7, at the end to insert: (3) For the purposes of this Act it is immaterial whether any information included in an advertisement does or does not correspond with the terms on which goods to which the advertisement relates are in fact disposed of; and accordingly— (a) for the purposes of subsection (2) of section one of this Act, and of subsection (4) of section two of this Act, an advertisement shall be taken to specify the amount of a deposit or instalment if it specifies an amount as being the amount of the deposit or instalment in question, and (b) in so far as any provision of this Act requires information as to an amount or number, or the length of a period, to be included in an advertisement, that provision (subject to compliance with any requirement of this Act as to the manner in which any such information is to be expressed or displayed) shall be taken to be complied with if the advertisement specifies an amount or number, or length of period, as being the amount or number in question, or the length of the period in question, as the case may be. This Amendment was discussed in Committee, and it was negatived, but on second thoughts we see an absolute necessity for its being made. It is designed to meet doubts which have been expressed about the relationship between hire-purchase advertisements and subsequent hire-purchase agreements. As the Parliamentary Secretary has said, the Bill does not attempt to require that the terms on which goods are offered for disposal by hire-purchase or credit sale in a shop should, of necessity, be identical with those contained in the advertisement.

Mr. Glenvil Hall

I beg to second the Amendment.

Both in Committee and subsequently some of us had some doubts about the desirability of making, this Amendment, but we have been persuaded that if words such as these are not inserted in the Bill it may be considered that an offence, even a criminal offence, is committed by advertisers who, for one reason or another, most of them good, vary the terms of the offer from the terms of the advertisement.

The argument which has appealed to me almost more than any other is that of the difficulty of knowing how long an advertisement shall subsist. When an advertiser puts an advertisement in a periodical it may be assumed that that is an offer open to everyone who likes to take advantage of it. One question that would arise would be: how long does the offer subsist? Does it subsist until another advertisement is put in by the same individual who put in the original one? Although some hon. Members of the Committee felt that the matter should be left to the courts, and to the gradual building up of case law upon it, we feel that it is perhaps reasonable that words such as these should be put into the Bill. We feel—and I hope that we are right in so feeling—that the fact that they are inserted will not detract from the efficacy of the Bill when it becomes an Act.

Mr. Page

This Amendment means the collapse of the Bill and shows how impossible it is to legislate for what my hon. and gallant Friend the Member for Rochdale (Lieut.-Colonel Schofield) wants to legislate. The Amendment puts the position thus. An advertiser can advertise any figures or words he chooses as long as he calls them those things which are set out in Clause 2. Of course, if one went any further than that and said the advertiser must be bound to sell at the terms set out in that advertisement, that would be a very substantial change in the law.

The advertisement is in no way an offer. As the law stands at present, it is merely an invitation to treat. Only when the prospective purchaser responds to that invitation and goes into the shop or otherwise contacts the prospective vendor and makes his offer to purchase and the vendor accepts that offer is a contract formed and are the two parties bound. So this Amendment quite rightly confirms the existing law that the advertisement shall not be part of a contract.

Therefore, the misleading advertiser is still left free to advertise whatever terms he chooses and then say he will not be bound by them. It is, of course, quite simple for the prospective vendor of the goods to inquire as to the prospective purchaser's means and then to say, "I am sorry I cannot sell to you on the terms advertised. The terms for you are so and so." They may be much more onerous terms. The misleading advertiser can attract the customers into his shop or attract them to communicate with him through the post by setting out completely misleading figures.

My hon. and gallant Friend said that the object of the Bill was to prevent misleading advertisements. This Amendment encourages misleading advertisements. The Bill itself imposes great obligations on the honest advertiser, but it in no way prevents the dishonest advertiser, the man who is determined to mislead the public.

Lieut.-Colonel Schofield

Is my hon. Friend not overlooking the fact that if a shopkeeper consistently misled people to attract customers into the shop he would not be able to carry on like that for very long, as it is impossible to carry on business for long in that way? A man who attempted to carry on business in that way would find himself out of business very quickly.

Mr. Page

That shows that the Bill is not necessary at all.

My complaint against the Bill is that it imposes heavy obligations on the honest advertiser, but does not do what my hon. and gallant Friend has tried hard in his drafting of the Bill to do—catch the dishonest advertiser; and when this Bill becomes law, if it becomes law, there will be many misleading advertisements all uncaught by the Bill, misleading advertisements deliberately set out to attract customers who, having thus been attracted, will be asked to sign contracts on quite other terms altogether. The prospective hire seller can keep entirely within the terms of the Bill by setting out false figures and calling them deposits, instalments, and so on.

These, perhaps, are Third Reading arguments against the Bill as a whole, but what I want to point out is what this Amendment does. It allows the advertiser to put anything he likes into the advertisement and then to sell on other terms altogether.

Amendment agreed to.

Motion made, and Question proposed, That the Bill be now read the Third time.—[Lieut.-Colonel Schofield.]

2.8 p.m.

Mr. Page

I should not like any words of mine against the Bill to be taken as any words against my hon. and gallant Friend the Member for Rochdale (Lieut-Colonel Schofield). I want most sincerely to congratulate him on his piloting of the Bill through its several stages, on the great ability which he has shown first in drafting the Bill and later in drafting the Amendments he has proposed. I think that it is a rotten Bill, but that is all the more reason why I should compliment him on his proficiency in getting it through to this stage.

I think that the Bill is bad because it is founded on two false assumptions, first, that a substantial number of people enter into hire-purchase agreements without knowing the terms of them, and secondly, that it is advertisements which induce such people to enter into hire-purchase agreements in that ignorance. Those are the assumptions which have been made by many hon. Members throughout our discussions on the Bill, and without any evidence being produced to prove them.

There was certainly no evidence produced on the first point, that a substantial number of people enter into hire-purchase agreements without knowing the terms. Certain examples have been given in the course of debate—examples in which there has been great hardship to those who have purchased goods on hire purchase and who have found that they cannot keep up the instalments. I wonder whether those examples would have stood up to examination as to whether the hire purchasers had been induced to enter into those contracts by any advertisement

A person is apt to make wild and irresponsible statements when he finds himself embarrassed by being unable to pay the instalments, and is apt to blame both the salesman and the shopkeeper and the advertisement for having misled him into it. I would be the first to admit that there are many cases of hardship arising from hire purchase, but I would not admit that those cases arise from people having been induced by advertisements to enter into hire-purchase agreements. They have entered into them with a sort of reckless optimism, without realising the burden which future instalments will be to them and without appreciating the difficulty of meeting those instalments. The Bill will not cure that.

The Bill will not cure the foolish, those without foresight, from entering into hire-purchase agreements. The evil is not lack of knowledge, but lack of appreciation of what a hire-purchase obligation means. All that this Bill sets out to do is to provide knowledge of the terms of the agreement and not appreciation of its future burden. The Bill certainly aims to give that knowledge, to give information on the various terms of the proposed hire-purchase agreement, but I doubt whether it will achieve its object, for a reason which I will explain in a minute. What it will not do is to stop the foolish from entering into hire-purchase transactions and bringing hardship upon themselves. In Committee my hon. Friend the Member for Louth (Mr. Osborne) said that what the Bill would do would be to save the fool from his folly. I do not think that it can possibly do that. At the same time, I think that in endeavouring to do that it is placing a great burden on the honest trader and the honest advertiser.

On the second point, which I suggested was a false assumption—that it is the advertisement that induces people to enter into hire-purchase agreements in ignorance—I cannot believe that that is so. No examples have been produced in any of the debates that we have had on the Bill. Perhaps it might happen in the very rare occasions where goods are advertised for hire-purchase sale in a newspaper or magazine and the prospective purchaser is invited to apply for them through the post. There may perhaps be a direct inducement there, and no other persuasion intervenes. But even then the prospective purchaser will not get the goods until he has seen and signed a formal agreement under the 1938 Act which sets out the particulars, and, indeed, sets out more—it has to set out the cash price which hon. Members opposite have required to be inserted in the particulars required in this Bill.

Usually, what happens from the advertisement is that the prospective purchaser goes to the shop or a salesman is on the doorstep of his house. It is surely the salesmanship which induces the transactions eventually. The advertisement does no more than bring the parties together. So even if the Bill succeeds in its aim of putting before prospective purchasers all this information, I cannot feel that it will succeed in preventing hardship to those who are financially careless in entering into hire-purchase transactions.

But will the Bill succeed in giving this information? Clause 2 is very elaborate and it is difficult to understand. It has, indeed, been improved since it first appeared in draft—some of the ambiguous words have been removed—but it is still a difficult Clause to understand. I think that the reaction of those who wish to sell on hire purchase will be, "We had better not put anything into the advertisement at all other than that hire-purchase terms are available." If they merely put, "Hire-purchase terms available," then they escape the rigors of the Bill.

That is not giving the public any information at all. It is probably attracting the prospective purchaser into the shop where he will be subjected to high-pressure salesmanship, the glossing over of the number of instalments and of the hire-purchase price compared with the cash price, and so on. Surely it would have been far better to have had those terms announced to him in the advertisement, as, indeed, is generally done today, than to attract the customer into the spider's web of the high-pressure salesman. It is my view that there is likely to be less information put into hire-purchase advertisements than there is at present.

The main objection, surely, is to the last Amendment which has been inserted into the Bill in the last few minutes. It makes the whole Bill quite impracticable. The misleading advertiser, the advertiser who is determined to mislead the public, is, after all, the man we are trying to catch by this Bill. I understand that we are not endeavouring to catch the honest advertiser who wants to put before his customers all the information. By this Bill we are endeavouring to catch the man who is trying to deceive. If he is determined to deceive his customers, he will certainly still do so despite the Bill. He can say in the advertisement that the deposit is £X, the instalments so many and so much and then, for any reason he may choose, he can decline to enter into a transaction on those terms and persuade a prospective customer to sign an agreement in other terms altogether. I am afraid that that may be the result of this Bill.

Therefore, I have opposed the Bill throughout and I still oppose it. I hope that the House will not give it a Third Reading, because I do not think it does what it sets out to do, namely, to provide full information for the prospective purchaser. In trying to achieve that result, it places a very great burden on all those connected with advertising—the manufacturer who wants to advertise his goods, in a general way, on hire purchase, the retailer who wants to advertise that he can sell on hire-purchase terms, the newspapers accepting hire-purchase advertisements, and the advertising agents composing those advertisements. It merely imposes a great burden on them for no purpose whatsoever.

2.20 p.m.

Mr. Oram

I should like to congratulate the hon. and gallant Member for Rochdale (Lieut.-Colonel Schofield) on the excellent work that he has done in connection with the Bill. He has made an honourable and gallant attempt to deal with the hardships which arise through misleading and deceptive advertisements. Because of that, and because of the rather unhelpful attitude which has been taken throughout by the hon. Member for Crosby (Mr. Page)—

Mr. Page

The hon. Member speaks of an unhelpful attitude, but if he will look at the Notice Paper today he will see that almost all the Amendments in the name of my hon. and gallant Friend the Member for Rochdale (Lieut.-Colonel Schofield) are Amendments which I suggested in Committee.

Mr. Oram

The hon. Member for Crosby concluded his speech today by saying that he had opposed the Bill throughout. I will amend my remarks by referring to the opposition adduced by the hon. Member. Because of that opposition, I regret to appear in any sense to agree with what the hon. Member has just said. I certainly do not agree with his description of the Bill as a rotten Bill, but, unfortunately, I have to describe it as a weak Bill.

I agree with the hon. Member for Crosby when he says that the weakness of the Bill has been increased or demonstrated by the last Amendment with which the House has just dealt. It appeared to me, on first reading, to take the meat out of the Bill as originally drafted. I am not quite sure that this is the case, or whether it merely demonstrates that there was not a lot of meat in the Bill in any case.

What the Bill now appears to do is to establish new standards in advertising hire-purchase arrangements which all honest and good traders will quite rightly endeavour, and in some respects be compelled, to adhere to, but I am very uneasy at the thought that the Bill will do very little indeed to catch the rogue. That leads me, in these final stages of the Bill, with the thought that despite all that has been so well done in the proceedings on the Bill the problem has not been solved. The Bill is still a weak one and, indeed, as it now stands is even a weaker one.

I hope that the hon. and gallant Member for Rochdale, who has done such good work in this connection, will still consider it to be his particular task and that he will be successful in future Ballots and will take up the struggle again. If he does so, and he succeeds in drafting further safeguards for customers, I shall be most happy to support him. I am sure that my hon. Friends will do all they can to help him and one hopes that even the hon. Member for Crosby will join in that endeavour.

2.24 p.m.

Mr. Bishop

I should like to join in the congratulations to my hon. and gallant Friend the Member for Rochdale (Lieut.-Colonel Schofield) on bringing the Bill so successfully to the point which it has now reached. I should also like to add a word of congratulation to my hon. Friend the Member for Crosby (Mr. Page), who has been criticised for his attitude to the Bill.

The hon. Member declared his attitude on Second Reading and, if I may judge from reading the Report of the Committee stage—and I was not a member of that Committee—he fought a lone hand steadfastly throughout the Committee and he has had some success, at any rate, in achieving the points that he was trying to make. He has had a perfect right to declare his attitude and to fight for it, and he appears to me to have done so with great good humour in a position in which not very many hon. Members appeared to be with him.

On Third Reading of a Bill on which I have taken no previous part, I find that the point of view of my hon. Friend the Member for Crosby is very much nearer mine than is the point of view of my hon. and gallant Friend the Member for Rochdale. I have had long experience in the past in this matter of trying to regulate and control misleading advertising. It is about thirty years now since I was appointed, by the Advertising Association, chairman of the first committee that was set up by the industry itself to deal with patent medicines. We had with us representatives of the British Medical Association, the manufacturing chemists, and so on. After long and careful investigation, we worked out a report which ultimately led to legislation, though that legislation never went so far as our report in laying down the rules to govern these matters. In the years between the wars a great deal more was done on these lines.

There is a time for legislation in these matters, but very often legislation does not achieve the objects that the Legislature has in mind. I have a fear that the Bill will not achieve all that the promoters hope for and that it will also do a certain amount of damage to those who are perfectly honest and straightforward traders. There are one or two points in the Bill which cause me some concern. It happens sometimes that when a Bill goes to another place some of our errors of omission or otherwise here are corrected. I hope that that may be so in this case.

My first point refers to Clause 2, which deals with giving undue prominence to this or that piece of information in an advertisement. It throws an unnecessary burden on those who construct advertisements and misunderstands the nature and purpose of an advertisement compared with a contract or a straightforward catalogue of goods. I will say no more on that now. I am more concerned about the list of items of information that are required to be put into every advertisement by Clause 2 (2).

The details required will have a serious effect on some forms of advertising which are quite prominent at present, particularly small advertisements. Anyone who studies the columns of some newspapers, particularly the provincial and local newspapers in all parts of the country, will find that a great deal of space is taken up by classified advertisements which contain a list of articles for sale. Very often a single line is devoted to one article with perhaps a cash price or it may be a first payment. There is room only for that amount of information. Advertisements of motor cars for sale are a typical case. The information may not be 100 per cent. complete, but it is not misleading, and it seems to me that there is no reason why difficulties should be put in the way of the small man who wants to advertise in that manner.

The trouble is that this Bill, with its requirement of the additional information, may have the effect of making uneconomic some forms of advertising in this country, and it is not a time at which we should be imposing additional burdens upon those who are so dependent upon the business of advertising. In that I venture to include the newspapers themselves, which are going through such difficult times. I do not know whether it is accurate, but I am told that, in the case of the television advertisements, if the "15 minute shorts" are called upon to give all the detailed information required in the Bill. they will have to be doubled in length and, therefore, doubled in cost.

There is one other matter which has not been referred to but which was the subject of an Amendment during the Committee stage and which, I am sorry to say, the Committee rejected. I am referring to the provision to safeguard the innocent publisher of an advertisement who is simply acting in the normal course of his business in accepting and publishing the advertisement. Over a long period the newspaper organisations have had to deal with this problem in a variety of forms, and there is now a more or less standard Clause which has appeared in several important Acts of Parliament, namely, the Merchandise Marks Act and the Food and Drugs Act, which it was proposed should be included in Clause 3 of this Bill. I do not know why the Amendment was rejected, nor do I think it was a sound decision by the Committee, and I hope that the matter may be looked at again in another place.

I agree with my hon. Friend the Member for Crosby about the effect of the last Amendment which we considered a few minutes ago on Report. Not knowing the background of this matter, not knowing the immediate purpose of the Amendment, when I first read it on the Notice Paper I could not imagine what was its purpose and I read it over and over again. I see clearly now the purpose and why it has been found necessary. It has been found necessary to make clear that an advertisement is not, and cannot, be the kind of binding offer which by acceptance can be turned into a contract. Unfortunately, in making the Amendment to clarify that position it comes about that the essence and purpose of the Bill is undermined, because although we require the advertiser to put into his advertisement all the different figures and statements, we end by saying that it does not matter whether the figures are right or not, because whatever is put in the advertisement can always be varied when it comes to making the final contract upon which the sale depends.

That appears to cut the ground from under this Bill. Therefore, while I sympathise with its purpose and motive, I feel that here is another of these cases where much more careful thought and study of the facts is called for before legislation is wise. I do not think that the Bill is necessary. In some respects, it is vexatious for those who have to conduct their business in difficult times as best they can. I still hope, therefore, that it may be possible that some of its blemishes may be removed before the Bill reaches the Statute Book.

2.35 p.m.

Mr. Glenvil Hall

Normally, occasions of this kind are rather delightful. In all quarters of the House hon. Members vie with each other to congratulate the promoter of the private Bill that has been under discussion and is about to receive its Third Reading. This afternoon the hon. Gentleman the Member for Crosby (Mr. Page) has cast quite a gloom over our proceedings. In fact, he has intimated that all our work will go for nothing, that this is not only a rotten Bill but that it will not achieve the things it sets out to achieve.

The hon. Gentleman may be right, and, if so, I hope that the hon. and gallant Gentleman who promoted the Bill will follow the advice of my hon. Friend the Member for East Ham, South (Mr. Oram) and have another shot next Session if he is so fortunate as to win a place in the Ballot. We can only see what the effect of this Bill will be should it become an Act. For my part, I think that although it does not go all the way that some would like it to go it will perform a useful function.

In any case, the position cannot be worse than it is now, and it is likely that the mere fact that this Measure reaches the Statute Book will make certain that the gentry against whom we are legislating think twice. They will, in any case, if they issue advertisements, have to put into those advertisements the facts and not hide any of them.

It may well be that when it comes to the actual sale, when the two sides meet and a bargain is struck, the terms of the final offer will not be those that were in the advertisements. We cannot help that. That is the law and we are not altering the substantive law on contract. That was perhaps one of our difficulties when we considered this Bill. We are dealing with advertisements, not with hire purchase agreements and the law affecting hire purchase.

It may well be, therefore, that as and when we see how this Measure functions, changes may be necessary. It may be that the changes will have to be made in favour of advertisers. I do not know. None of us wishes to be unfair to those who advertise, but we are unanimously anxious, I think, that the mischief now inherent in the hire-purchase market should be dealt with by Parliament to protect the consumer as far as possible. The ordinary seller of goods is not the individual we are after. It is that small section which is more concerned with getting the interest on the hire purchase that goes with the goods sold. They ought to be called moneylenders, because they are nothing else.

Therefore, I add my congratulations to those already voiced to the hon. and gallant Gentleman who has got so far with this Bill. It is interesting that the original Bill on this matter was promoted by a private Member, the late Ellen Wilkinson twenty years ago. Obviously, during that time certain gaps in the legislation have come to light, and it is our duty, as a Legislature, to do our best to put them right.

I would like also to extend congratulations to the hon. Gentleman the Parliamentary Secretary. It is obvious that there are one or two things in the Bill which he, and perhaps some officers of his Department, do not like, but they were willing to bow to the general will of the Committee upstairs in the view it took on certain things in its desire to have Amendments made in the Bill. Therefore, I thank the hon. Gentleman both for his help and for the fact that he has been so accommodating to the members of that Committee on both sides in their anxiety to see this Bill reach the Statute Book in a proper shape.

2.40 p.m.

Mr. Erroll

Perhaps I may be allowed to thank the right hon. Member for Colne Valley (Mr. Glenvil Hall) for his gracious remarks about the help which I have tried to give the Bill. I should like to add my congratulations, too, to my hon. and gallant Friend the Member for Rochdale (Lieut.-Colonel Schofield) who has piloted the Bill so skilfully through its various stages to what I think we can confidently expect will be an unopposed Third Reading.

In view of the disparaging remarks made by two of my hon. Friends, I should like to make it plain that in the Department we have thought over carefully the weaknesses which they claim to have discovered in the Bill. We admit that under the Bill as it stands a trader will, in theory, be able to advertise fictitious terms on which he has no intention of entering into agreement or doing any business, but we have had no complaint of any trader actually going in for this practice and I do not believe that such practice would have any practical commercial advantage. A customer who could see that the advertised terms were purely fictitious would probably not buy, and the goodwill of the business would suffer.

On the other hand, the Bill will stop the very real mischief about which hon. Members have complained in the past. It will prohibit the misleading type of hire-purchase advertisement which quotes only a part, and usually only the most attractive part, of the terms or which deliberately confuses the terms applicable to hire purchase and to credit sale and so induces people to enter into negotiations or agreements under a false impression. The Bill requires full details of hire-purchase terms to be set out clearly.

Several of my hon. Friends have said that it represents some hardship, particularly in the case of small classified advertisements, but it is surely right that the full terms should be clearly displayed in any hire-purchase advertisement so that a customer may see the full nature of his possible commitments. The Bill has perhaps a limited objective, but in my view it is a very useful one.

2.43 p.m.

Lieut.-Colonel Schofield

First, I should like to thank all hon. Members who have assisted in the passage of the Bill through its various stages. I hope it will be well received when it reaches another place. In my opinion, the Amendments which have been made as a result of long discussions have improved the Bill, and I agree with my hon. Friend the Member for Crosby (Mr. Page) that many of the Amendments which I put down are a result of points which he raised in Committee.

At times there has been some confusion on the part of some hon. Members who seemed to think that the Bill was designed to change the law of hire-purchase and credit sales. That is not so. Hire-purchase and credit sale transactions are governed by the Hire-Purchase Acts of 1938 and 1954. All that the Bill requires is that where an advertisement contains any figures, whether they be the amount of a deposit or the amount of an instalment, those items shall not be given in isolation, but that the full details for that transaction shall be included so that it is possible to calculate approximately what the goods will cost.

One of the things the Bill is designed to stop is that class of advertisement which says "Five shillings weekly" and nothing else. Many hon. Members know that "Five shillings weekly" means just nothing. It is impossible to calculate from such an advertisement—and there are many in shop windows and news—papers at present—how much any article will cost. It may mean five shillings for two weeks or five shillings for a much longer period. If I were to be frivolous I might suggest that it might mean five shillings for the rest of the purchaser's life.

I submit that the Bill should put a stop to misleading advertisements of that kind, and if it does nothing else than prevent some of these advertisements which read, "Yours for £1", or "Yours for 5s.", which are so misleading, I believe that it will serve a useful purpose, and I hope that it will be given an unopposed Third Reading.

Question put and agreed to.

Bill accordingly read the Third time and passed.