HC Deb 24 April 1964 vol 693 cc1775-82

No person shall after the commencement of this Act issue any trading stamp, or cause any trading stamp to be issued, or deliver any trading stamp to any person in connection with the sale of any goods or the performance of any services unless the value of such stamp is not less than2½ per cent. of the cost of any such goods and services.—[Mr. F. Noel-Baker.]

Brought up, and read the First time.

Mr. Francis Noel-Baker (Swindon)

I beg to move, That the Clause be read a Second time.

As the Minister of State will know, in Standing Committee some hon. Members, particularly some of my hon. Friends, were extremely anxious to get a clear statement in the Bill which would have the effect of relating the value appearing on trading stamps both to money and to the gifts offered by the stamp companies and also of relating the value of the gifts offered to money. So far, Clause 2 merely says that each trading stamp must have— on its face in clear and legible characters a value expressed in or by reference to current coin of the realm. I stress the words "a value".

This is the difficulty. It was pinpointed effectively some weeks ago by one businessman—Mr. John Bloom—who is interested in trading stamps, when he openly threatened that he would issue stamps on which a nominal value would appear, which would be perfectly within the terms of the Bill as at present drafted, but which would bear no real relation to the value of the goods offered as gifts. To illustrate the point Mr. Bloom was making, a trading stamp company could put a value of 1d. on each stamp, but offer a gift worth £1 for 10 of them. This would have the effect of making nonsense of the face value and compelling the purchaser to take goods instead of redeeming the stamps for money.

I should like to ask the Minister of State a direct question. It will help us very much if he can give us a clear answer. Is he satisfied that the Bill as it stands, particularly Clause 2, effectively secures to the purchaser an actual right to redeem stamps for a real cash value? If the hon. Gentleman could give us that assurance, it would help us a great deal. We believe strongly that a way should be found to compel the stamp companies to put some reality behind the cash value appearing on the face of their stamps.

In the Clause we have found one way of doing this, which is to say that the value of no stamp may be less than 2½ per cent. of the cost of the goods and services in respect of which the stamp is issued. This is a reasonable figure. It is in line with current business practice. However, we are not necessarily wedded to this way of achieving the purpose. If the Minister of State could tell us of some other equally effective way of guaranteeing that the value appearing on the stamp is a real one related to the value of the goods offered and that, if the customer prefers not to take the gifts offered but to take cash, he will get value for his trading stamp, we should be satisfied.

My hon. Friend the Member for Bristol, South-East (Mr. Benn) has had a rather ingenious idea since the Committee stage. That is that the Bill should require the stamp companies, or retailers offering trading stamps, to sell trading stamps to anybody wishing to buy them for the cash value stated. We cannot think of any logical objection to this. If a trading stamp company maintains that a stamp which has a face value of 6d. is worth 6d., why should not the customer who wishes to buy it—thereby, perhaps, accelerating his right to buy a gift offered by the company—be able to pay 6d., get the stamp and add it to his collection? This would guarantee that the stamp really was worth 6d. and that the value on the stamp was the same as the stamp company claimed. I see no logical objection to this.

My hon. Friend the Member for Bristol, South-East may wish to develop his brilliant idea. If the Minister of State can assure us that by my hon. Friend's device, by the suggestion put forward in the Clause or in some other effective way, we can ensure that the value stated on the stamp is a genuine value, we would be prepared to think again. If the hon. Gentleman cannot give such an assurance, the whole value of the Bill would be destroyed. To allow trading stamp companies to put a fictitious value on a stamp makes nonsense of the purposes for which I and my hon. Friends who are sponsors of the Bill thought that it was designed.

Mr. John H. Osborn (Sheffield, Hallam)

The hon. Member for Swindon (Mr. F. Noel-Baker) has at various stages of the Bill pressed the point of view which he has just put forward. I fully understand what he wants to achieve. The recommendation of the Consumer Council, which was issued shortly after the Committee stage, underwrites to some degree the point of view put forward by the hon. Member.

On the other hand, during the last few weeks we have had, the benefit of a publication entitled "Trading Stamps and Retail Competition", by Mrs. Christina Fulop. It covers a wide issue, but it makes the statement that A specified cash option laid down by Parliament is not in the interests of consumers. The amount of the cash rebate should be determined by competition between trading stamp companies. We have, therefore, conflicting advice from those who have conducted the surveys.

The hon. Member for Swindon wants to make certain that there is a real value in the sense of cash redemption. Throughout, our intention has been that the value which is put on the stamp, whether one-tenth of one-eighth of 1d., should be the value which, when the stamp is presented to a redemption shop or to head office, the stamp collector should subsequently receive from the stamp trading company, either directly or indirectly, in the way I have outlined. Under the Bill, the value on the stamp would thus be the real value in cash which the stamp collector would receive. That has been our intention, as, I am certain, the hon. Member for Swindon realises.

We then come, however, to the legal aspect. I have discussed the matter with lawyers and the difficulty appears to be that the drafting of the Amendment is meaningless. The "value of such stamp" could be a cash value, a merchandise value or, in extreme cases, the value at which the stamp is purchased by the retailer. Another aim that we have set ourselves is that in no circumstances should we "kill" the stamp by any indirect method. There is danger that in its present form the Clause could do this.

For instance, it is normal for a stamp trading company to issue stamps to the extent of 2½ per cent. of the value of purchases made in a shop, and the retailer can vary that at his own discretion. We must remember, however, that the stamp trading company obtains its goods at very low prices, as a result of bulk purchase, so that goods are purchased as a price lower than the equivalent value of the stamps purchased by a retailer from the stamp company. If we used this figure of 2½ per cent., we would allow no margin and would, indirectly, kill stamp trading as such.

I think that this will still have to be left to competition. It is my view that if the stamp trading company puts too low a price on its cash redemption, its image, when suitably edited and reported in miscellaneous ways and looked at by outside sources, will deteriorate accordingly. It is, therefore, in the interests of the stamp trading company to make sure that its stamp redemption value is reasonable, otherwise the customer my place his custom elsewhere. My own inclination is still to leave this to competition.

3.15 p.m.

Mr. Anthony Wedgwood Benn (Bristol, South-East)

I understand the difficulties expressed by the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) about the wording of the new Clause; that so many values can be attached to a figure of 2½ per cent., such as the wholesale value and the retail value, and the wholesale or catalogue value of the goods shown in the catalogue. At the same time, I think that the hon. Gentleman would be the first to recognise—because he has worked very hard on the Bill—that the new Clause seeks to put right one omission. The whole Bill is based on the assumption that the value printed on the stamps will be the real value, and that the value of the goods in the catalogue will be approximately equal in cash to the total value of the stamps submitted for redemption. But there is nothing to stop a man saying—and, indeed, Mr. Bloom himself recently announced—that he intended to publish stamps which had a very low cash value but offering very attractive prizes and other things on redemption.

If that is done by Mr. Bloom, or by any stamp trading company, there is nothing to prevent the whole purpose of the Bill being circumvented because, since there is then not a real choice between the cash redemption and the value of the goods and the cash price printed on the trading company's stamps, no one would go for 2s. 6d. in redemption value when he might get an electric toaster. That is a real problem that the Bill still does not deal with.

I recognise that the new Clause runs into difficulties, and I think that the Board of Trade, which has given great help, should have considered one further piece that drops into the framework—and my hon. Friend the Member for Swindon (Mr. F. Noel-Baker) gave a trailer, as it were, to my proposal. If a man wants to buy stamps on a cash value he should be able to do so. Then, if a company were to say, "We will give you 2s. 6d. stamps" and a toaster is worth £2, the man could buy stamps for cash and get the toaster. If a stamp trading company is not to circumvent the procedure, we should put this final bit in the jigsaw.

This would have other advantages. A woman living in a village might want to change from one shop to another. If at the first shop she had already obtained almost sufficient stamps to complete a book she could buy the rest for cash and then change to the shop next door where those stamps were not available. This would restore mobility to the shopper. It would restore greater freedom to the trader and he would not suffer by it because he would buy and sell the stamps. It would deal with what is a clear announcement of a circumvention of the intentions of this Measure by a man—and there may be other companies as well—that he is going to trade in this particular way.

On the Second Reading of a new Clause I suppose it is possible to sug- gest other ways of effecting the proposals in that Clause, just as it is possible on the Second Reading of a Bill. I agree with the view that has already been expressed that it is a bad thing that a Bill should leave this House in the hope that it will be amended in another place, but here is a way of tackling the problem. If the Minister will undertake to give further consideration to this loophole, in the spirit of what has been said, perhaps it could be dealt with and the matter could be put right elsewhere, in which case it would have to come back to us for the Lords Amendments to be agreed to.

Mr. Martin Madden (Hitchin)

I am in a slight difficulty in the sense that we have before us a proposed new Clause and, at the same time, another proposition running around. It is a very interesting proposition, and certainly there is a problem to be faced. I am not sure that in large degree the way of facing it does not arise from the fact that the retailer is free to choose whether he wants to have stamps at all, and, if so, which company's trading stamps he wants to have.

I think that I am right in assuming that the public—and, on the whole, we mean women—have some sense in their heads and can tell a good stamp, as it were, from a bad one. Surely, if we are interested in the topic at all we must assume that there is some demand from a substantial number of women for cash value instead of commodities in exchange for stamps. If, indeed, there are a large number of people who wish to have cash instead of commodities in exchange for stamps, I should have thought the matter would very quickly sort itself out in the normal processes of competition and that, in fact, anybody who put too low a cash value on the stamps would soon find that the retailers had no interest in having his stamps and the customers would not have any interest in having them either.

The problem rests on the assumption that people want cash, and, if that is so, I am not at all certain that the matter will not look after itself.

Mr. F. Noel-Baker

The hon. Member referred to "the normal processes of competition". Is it not a fact that there are only two companies operating trading stamp arrangements in this country, both of them very large? Were they to get together, it is not impossible that there would be no competition at all.

Mr. Maddan

In that case, no doubt the hon. Member and I, with some wealthy backers, would have a very good opportunity to start another company. We are not setting this up as a Government monopoly.

Mr. du Cann

If I may reply very quickly to the debate, which has been both interesting and useful, I hope that I shall be in a position to take the Committee a bit further in the matter. I say "quickly" advisedly, because I know that hon. Members on both sides of the Committee are anxious to make progress with the Bill.

I must tell the Committee that I am concerned about the new Clause. It is, in our opinion, unworkable, as I think the hon. Member for Bristol, South-East (Mr. Benn) was good enough to acknowledge and as my hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) pointed out. None the less, I entirely appreciate the interest of the hon. Member—I hope that I can say "my hon. Friend"—for Swindon (Mr. F. Noel-Baker) in this matter. His interest is right and valuable, and I have a personal degree of sympathy with it.

I was asked specifically by the hon. Member for Swindon if I could give an assurance in definite terms that the value of a trading stamp would be genuine value. I will give him an opinion that I think it certainly will be in part, for reasons advanced by my hon. Friend the Member for Hallam and my hon. Friend the Member for Hitchin (Mr. Maddan), but it will be impossible for me to give him that assurance other than to say that I am satisfied with Clause 2 as currently drafted. We have looked at this matter with a degree of care. A great deal has been said about competition by my hon. Friends the Members for Hallam and for Hitchin, and questions have been asked about the extent to which people do, in fact, want to receive cash in exchange for stamps. I thought that my hon. Friends made valuable points about that.

To sum up, I think that any form of control of the level of cash option would be extremely difficult to draft, if not totally impracticable. I repeat, on the other hand, that I understand the point which the hon. Member for Swindon is making. I am perfectly ready to give an undertaking that I shall look at the matter again in the light of what has been said, with particular reference to the entirely new suggestion made by the hon. Member for Bristol, South-East (Mr. Benn), which, of course, we shall wish to consider with care. The hon. Gentleman will understand that it is not a point which I had considered in this particular context before the debate.

I am satisfied with the position at present, and I think that it may be very difficult to do anything about it. I hope, nevertheless, that the hon. Member for Swindon will feel that I am giving an assurance which I mean and am fully prepared to carry through. I am very ready to look at the matter seriously. Moreover, in another place a Board of Trade Minister will be paying attention to the Bill, and I hope that the hon. Gentleman will think that this will make doubly valuable the assurance which I give.

Mr. F. Noel-Baker

In view of the very generous assurance from the Minister of State, for which I thank him, both to me and to my hon. Friend the Member for Bristol, South-East (Mr. Benn), I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.