HIRE PURCHASE (LIMITATION OF PAYMENTS) (Hansard, 14 May 1963)

§ Mr. Tam Dalyell (West Lothian)
I beg to move, That leave be given to bring in a Bill to limit the total amount which may be paid by way of deposit and instalments under a hire-purchase agreement or a credit-sale agreement to 150 per cent. of the sum stated as the cash price of the goods. Before explaining the terms of the Bill I wish to say, on behalf of all those Members newly elected at bye-elections—on both sides of the House, I imagine—what a pleasure it is to be able to say that we have seen the right hon. Member for Woodford (Sir W. Churchill) in his place.

Hon. Members
Hear, hear.

§ Mr. Dalyell
The Bill seeks to limit the total amount which may be paid by way of deposit and instalments under a hire-purchase agreement, or a credit sale agreement, to 150 per cent. of the sum stated as the cash price.
First, I wish to pay tribute to the vast majority of hire-purchase firms, who render a service and a function to the community, and especially to young couples who are setting up home for the first time. But there exists in our society a small minority of unscrupulous, ruthless hire-purchase robber barons whose practices of unrelenting usury would have been insufferable even to the caliphs of ancient Baghdad. To bring into focus the sort of situation which the Bill seeks to remedy I offer one example.
A constituent from Bathgate, in March, 1956, started to pay for a television set whose cash price was £75 15s. 0d. By January, 1963, my constituent had paid £152 0s. 9d., and was still paying £1 a week to pay off an extra £10 13s. 0d. which was mounting at compound interest. Does not this constitute sheer, damnable extortion?
My proposed Bill has two virtues. The first is its simplicity. The calculation is straightforward. The total sum that can be paid will be one and a half times the cash price, which has to be stated in black and white under existing law. Simplicity is important, because if my 1139 constituent, like many others, was blame-worthy, he was blameworthy basically because he was incompetent with financial documents.
Hon. Members on both sides of the House cannot be very happy about some of the abracadabra presentation of accounts that appear too often from a few-hire purchase firms. I am supposedly fit to be a Member of the Public Accounts Committee of the House of Commons, and to have some familiarity with the way in which accounts should be presented, but I confess that, when confronted by the accounts of some of these hire-purchase firms—I admit that the ones with which I am concerned are few in number—I have been utterly bewildered by what I believe to be purposely chaotic accounting. If Members of Parliament are confused, is it not easy to forgive others less familiar with documents, who are utterly bamboozled?
The second virtue of my proposed Bill lies in the time scale. If 150 per cent. of the cash price were the limit, there would be a positive disincentive for hire-purchase firms to have long-drawn-out accounts extending over years because their capital would be locked up in an unproductive way. To get it back the firms might be obliged to go to law for a comparatively small amount. In effect, hire-purchase firms would have to look much more carefully at the likely ability of a potential client to pay within a reasonable 1140 time and in itself that would be a good thing.
We are concerned to prevent excess of extortion and to add one extra tooth to that corpus of legislation initiated in the late 1930s by Ellen Wilkinson and built on by many hon. Members, some of whom are present today. If the Bill be given a Second Reading its provisions may perhaps be made to apply only to sums of under £300 because we are not concerned with industrial hire purchase. I commend the Bill to the House as a small Measure which may mitigate a large volume of sheer misery.