Mr. Alan Williams
I beg to move amendment No. 4, in page 7, line 12, leave out from 'where' to end of line 13.
The amendments deal with a highly technical point raised since 868 the Committee stage by the Building Societies Association. I apologise to the hon. Member for Southend, West (Mr. Channon) if the objective is not immediately clear. I am sure that if he read my brief he would still find that it was not immediately clear.
It is a perfectly reasonable point that has been drawn to our attention. The association says that subsection 1(b), as amended in Committee, does not cover the situation in which societies lend the premium for an insurance company guarantee, made under pre-existing arrangements with the company concerned, when the transaction is in respect of a house being built on land already owned by the debtor.
We took measures to ensure that where the transaction involved land the situation would be covered, but the building societies reasonably pointed out that there is the probability that where the land is already owned by the person who is borrowing to build on it the situation would not be covered without the amendment.
§ Amendment agreed to.
§ I trust that the situation is absolutely clear to the hon. Gentleman.
§ Amendment made: No. 5, in page 7, line 24 leave out from ' Act' to end of line 38 and insert—
§ (1A) Subsection (1) applies only where the agreement is—
- (a) a debtor-creditor-supplier agreement financing—
- (i) the purchase of land, or
- (ii) the provision of dwellings on any land, and secured by a land mortgage on that land; or
- (b) a debtor-creditor agreement secured by any land mortgage; or
- (c) a debtor-creditor-supplier agreement financing a transaction which is a linked transaction in relation to—
- (i) an agreement falling within paragraph (a), or
- (ii) an agreement falling within paragraph (b) financing—
- (aa) the purchase of any land, or
- (bb) the provision of dwellings on any land, and secured by a land mortgage on the land referred to in paragraph (a) or, as the case may be, the land referred to in sub-paragraph (ii).—[Mr. Alan Williams.]
§ Mr. Paul Channon
I beg to move Amendment No. 6, in page 8, line 13 leave out subsection (5).
869 We had some discussion on this matter in Committee. As the clause stands, both under this Government and under the previous Government I must concede that powers are taken by the Secretary of State to exempt certain of the nationalised industries from the provisions of the Bill. I ask why that should be necessary and whether the Secretary of State intends to use the powers given under the Bill. If it is right that there should be justice in the private sector and truth in lending, surely it is right that the nationalised industries should be covered by the Bill's provisions.
I think that it is common ground that there are many areas of the nationalised industries in which consumers would in future like more rights rather than fewer rights. I do not see why it is necessary for the Secretary of State to have the power to exempt the nationalised industries. If the nationalised industries are to have consumer hire agreements of the kind that would normally be regulated under this measure if undertaken by anyone else, surely it is reasonable that they should have to comply with precisely the same rules as anyone else in the community.
I do not wish to put the nationalised industries in a worse position. On the other hand, I do not see why they should be in a favoured position. The Bill seeks to protect the consumer. If it is right that certain constraints be put upon other industries, why is it not right that the nationalised industries should not also be included? For example, what about the offices of the electricity and gas industries where equipment such as refrigerators and cookers are sold? Surely it is right that the Bill, where it is applicable to the nationalised industries—I suspect that it is applicable in many examples—should not exempt the nationalised industries. It may be that the Secretary of State has no intention of making such an order—we accept that that is understandable—but I do not see why it is necessary to have these powers in the Bill. My hon. Friends and I would much prefer to have them taken out. I hope that the Minister will be able to satisfy us on this matter.
§ 11.45 a.m.
Mr. Alan Williams
As the hon. Gentleman rightly said, this provision was in the Bill that was put forward by the 870 previous administration. It is nice to look back on those three and a half years and find one measure on which I can agree with them.
The hon. Lady is correct; we supported that Act as well. Let us spell out as clearly as we can the limitations of what is intended. This is an enabling power. It does not give the exemption. It enables the Secretary of State to exempt where it is considered appropriate. The hon. Gentleman says that it would be intolerable if the electricity showrooms, for example, were not covered by the same rules as private traders in the High Street. I accept that completely. I would never introduce legislation to give the nationalised industries in that sort of commercial undertaking an immunity which I believe no firm should have in its relationships with the public.
I can give the hon. Gentleman an assurance that there is no intention that the nationalised industries shall be given any special privileges or that the consumer will lose any protection. As the hon. Gentleman will appreciate, some of the nationalised industries by their very nature—for example, gas, electricity and water—essentially operate by a metering system. The need, therefore, is to exempt metering. If it were demonstrated to the Secretary of State that the exemption was being used in some way prejudicial to the consumer, the Secretary of State would be able and, I am sure, willing to tell the industry that if it did not put right any misdemeanour the exemption could and would be withdrawn.
I now turn to telecommunications. We have in mind telecommunications equipment. If the exemptions are not made, it seems that virtually every household in the country will have to have a separate written agreement for such things as meters for various services which are supplied into the household. That would be required although there is no evidence of any abuse that cannot already be remedied. It would be a major bureaucratic operation for a small objective.
As Conservative hon. Members continually berate the nationalised industries and allege all manner of inefficiencies 871 against them, I trust that they are not now wishing to impose an unnecessary administrative burden upon them. The system has worked satisfactorily until now. There is discretionary power for the Secretary of State to withdraw the exemption in the event of any evidence being brought forward to indicate that the situation was not working satisfactorily.
In exercising the power of exemption, the Secretary of State is also answerable to the House. Therefore, hon. Members on both sides of the House will be free to draw to the attention of the Secretary of State any abuses which they feel could arise from the exemption. This is an item on which, surprisingly, both administrations are in agreement. Some may say that that is a good reason for looking at it again. In fact, I considered the matter after our discussions in Committee. I am glad to say that I am still convinced that my judgment was right. It is unvaried and it coincides with that of my predecessor.
§ Mr. Tim Renton (Mid-Sussex)
The Minister of State says that both administrations have been in agreement about bringing the nationalised industries within the scope of the Bill.
Mr. Alan Williams
Let us be clear. It is not a matter of bringing them within the scope of the Bill. They are within its scope. We are talking about a limited exemption for meters and telecommunications equipment. The nationalised industries are covered as is private industry.
§ Mr. Renton
I accept the Minister's point. All I wished to do at the outset was to remind him that in Standing Committee D on 4th December 1973, when he was speaking from the Opposition benches, he queries whether these particular operations of the public authorities should be brought within the scope of the Bill. He said at that time that he would like to look further into the matter and to give it more consideration.
I must declare an interest, as I did in Committee, in that I am connected with a British-based bank that conducts a great part of its operations abroad. I believe that the main point we should consider regarding the nationalised industries and possible exemptions from the Bill is the rôle of the Director General. 872 This matter was raised in Committee on the Fair Trading Bill in March 1973. It was then emphasised by a number of my hon. Friends that it was highly desirable that the Director General should have as much independence as possible in relation to the rôles and duties that he has to perform. If we accept that all the metering regulations and agreements of the nationalised industries fall within the scope of the Bill, if they are to be exempted it will be by the Director General having consultations with the Secretary of State. That is bound to diminish the independence of the Director General. That is an important principle which hon. Members on both sides of the House have wished the Government to bear in mind. It is primarily on that basis that my hon. Friends and I would ask the Minister of State to think carefully about the amendment.
A further point hinges round the parlous state of the nationalised industries. I am sure many of my hon. Friends have had more letters from constituents complaining, for example, about electricity, gas and water charges than on any other subject. The man in the street feels that it is necessary that he should be protected from the nationalised industries as he sees them responsible for his gas, electricity and water bills. It is to try to give additional protection to the consumer against these monopolistic bodies that we put forward the amendment.
It was only yesterday that the Prime Minister emphasised at Question Time the parlous financial condition of the nationalised industries. He spoke of the need to raise another £1,400 million in revenue for them. Therefore, the consumer should have every reason to be worried about the effect of the activities of the nationalised industries on him and on his purse. It is a question not only of what the nationalised industries are doing today but of the possible increase in the scope of the nationalised industries.
I wish to refer to the note on the current work programme of the Department of Industry issued by the Secretary of State for Industry in which there is mention of the National Enterprise Board. On page 3 the right hon. Gentleman suggests that the board should actto reduce the growth of monopoly power by inserting public enterprise competition where this is needed".873 The matter, in the words of "Alice in Wonderland", becomes "curiouser and curiouser". It is hard to see how the growth of monopoly power was exercised by the nationalised industries can be reduced by inserting more public enterprise competition.
There is the possibility of the scope of the nationalised industries being extended, and there is also the question of the serious financial condition in which they find themselves. For both reasons, the consumer needs to be protected against and in relation to the nationalised industries and what they may do under the Bill. I therefore support the amendment.
§ Mrs. Sally Oppenheim
I was surprised at the Minister of State's grudging approbation for some Conservative measures passed during the last Parliament in view of the number of Conservative measures which the present Government have seen fit to reintroduce in this Parliament.
My hon. Friend the Member for Southend, West (Mr. Channon) was right to draw attention to the fact that the consumers of the goods and services of nationalised industries are among the least satisfied of consumers, partly because of the nature of the nationalised industries. We do not blame the employees of the nationalised industries or those responsible for running them, but it is a fact that there is not the discipline of competition in this sector. I too receive numerous letters from constituents on these matters. I shall not bore the House by going into individual cases but I should point out that some of them involve credit agreements to buy major domestic appliances. I should like the Minister of State to assure us that agreements of that type come within the scope of the Bill.
We are somewhat reassured to hear that the Director General is enabled by the Bill, in a negative way, not to exempt the supply of goods activities of the nationalised industries. He is given a similar power in Section 16 of the Fair Trading Act. I should like the Minister to confirm that the powers in the Fair Trading Act to vary through the Secretary of State are introduced in the Bill. I should also like him to confirm that consumer credit agreements with nationalised industries are in no way inhibited.
874 The Minister raised the question of metering. Some water boards allow caravan site operators to collect water rates for them to operate the metering. The equipment is not kept in good condition and, therefore, water is wasted and the metering is incorrect. It would be unsa metering is incorrect. It would be unsatisfactory if a credit agreement either between the consumer and the site operator or between the consumer and the water board could not be dealt with in this Bill.
I hope that the Minister of State will be able to give us further assurances on those matters.
§ 12 noon.
Mr. Alan Williams
May I say, with permission, that we have peripherally skirted the amendment while procedurally keeping one big toe on the correct line.
As I have already said, the nationalised industries are covered by the Bill. The hon. Lady the Member for Gloucester (Mrs. Oppenheim) specifically asked about their credit activities. This is so, and it is right that it should be so. That is our intention, and that is one of the objectives of the legislation.
The hon. Member for Mid-Sussex (Mr. Renton) spoke about a reduction in the independence of the Director General. I do not accept what he has said. No reduction in independence is envisaged for the credit commissioner. In deciding what exemptions should be permitted, the Secretary of State would consult the Director General to ensure that his point of view was heard. If he had evidence which suggested abuse—and hon. Members know that the present Director General would confirm this to be the case—he would make the point forcefully to the Minister.
The hon. Member for Mid-Sussex referred to what he described as the parlous state of the nationalised industries. We discovered a £1,500 million deficit which had been concealed by the Conservative Government. [Interruption.] Hon. Members opposite may mutter about it, but there was a deficit of £1,500 million and the senior colleagues of the hon. Member for Southend, West (Mr. Channon), who was a Minister, indicated in small print that they would have to deal with it in a post-election situation.
The hon. Lady the Member for Gloucester said that the public needed 875 protection from the nationalised industries. In so far as that is so, they will get protection under the Bill. However, I ask her to bear in mind that the main targets of the legislation of which she is so proud—the Fair Trading Act and the Sale of Goods (Implied Terms) Act—and of our Trade Descriptions Act and of the Bill we are discussing are not the nationalised industries, but what the Leader of the Opposition has called the ugly face of capitalism. It is from the activities of capitalism that the need for consumer protection has arisen so massively and it is those activities which have prompted the procession of consumer protection legislation through the House.
Now that we have had our little political parade of the nationalisation issue, perhaps we can return to having the sort of amicable and constructive discussion that we had in Committee.
§ Mr. Channon
I do not know why the Minister of State should have sought to broaden the argument. I did not know that it was in order on this Bill to debate the deficits of the nationalised industries. I rebut the Minister's argument, and I can amplify my rebuttal on some other occasion.
All that my hon. Friends and I are saying is that the powers given to the Secretary of State are very wide. She can by order providethat this Act shall not regulate consumer hire agreementsif the owner is a body corporate. The Minister of State has assured us that the right hon. Lady will not fully use the powers. That is partially satisfactory, although we do not think that it goes far enough.
However, as the Minister has given some assurance, I should not wish to press the amendment.
§ Amendment negatived.