EUROPEAN COMMUNITY (DOORSTEP SELLING)

HC Deb 28 June 1978 vol 952 cc1400-58

3.45 p.m.

The Minister of State, Department of Prices and Consumer Protection (Mr. John Fraser)

I beg to move, That this House takes note of EEC Documents Nos. R/113/77 and R/134/78 on Contracts negotiated away from Business Premises.

Mr. Speaker

I have selected the amendment in the name of the hon. Member for Gloucester (Mrs. Oppenheim) and her hon. Friends.

Mr. Giles Shaw (Pudsey)

On a point of order, Mr. Speaker. Is it in order for me to move the amendment prior to the main motion or not?

Mr. Speaker

If the hon. Gentleman did that it would be the first time in history, and I suggest that we do not make history today. Mr. John Fraser.

Mr. Fraser

The draft directive which is before the House is the first such consumer protection measure to be considered on the Floor of the House, and I welcome the opportunity of listening to the views of hon. Members—indeed, that is why we have the debate.

This draft directive on doorstep selling was born of the EEC consumer protection policy which was adopted by the EEC Ministers in April 1975. Some people think that since then it has grown up to be a rather awkward and disagreeable child, and some have even gone so far as to question its legitimacy, certainly under article 100 of the Treaty of Rome, and I have heard others question its legitimacy in even more robust terms. The draft has so incensed the mail order traders that they have begun to pamphleteer on a scale worthy of Thomas Paine—and I stress there the question of scale, not of content. Like Tom Paine, they have carried their dissent to the Continent, and with some degree of success, because they obtained a favourable resolution from the European Assembly.

On mail order catalogue selling I ought to explain my own views and those of my Department. If the draft should become a directive—and I do not mean in its present form—I do not believe that the controls in it should be inapplicable to mail order traders, but I do believe that they should be innocuous to them. That is to say, the mail order trader ought to have no greater obligations and duties than he would have in any event under the provisions of the Consumer Credit Act for credit transactions and he ought not to have to assume more than broadly similar obligations for cash transactions.

If that line were followed, I do not think that mail order traders would be inconvenienced by the imposition of a standard of protection which many of them already widely exceed. There is some merit, particularly of simplicity and fairness, if controls on contractual matters and on the law of credit are universally applicable.

We have always, especially in negotiations in Europe, resisted ad hoc changes in the law of credit and the law of contract. We ought to resist ad hoc exemptions also, so that in saying that mail order traders ought to come within scope fully recognise their problems about documentation, and I fully recognise the inadequacies of the draft directive as it stands. I recognise also the high standards of fairness and efficiency of mail order traders in this country and the high regard in which they are held, although that is not to say that there could not be some occasion in the future when someone who was not a member of his association and was unscrupulous abused the rights of consumers.

I take issue with the European Commission on many aspects of this directive. I shall deal with my detailed objections to it. I also take issue whether this is an area where the Commission should intervene. First, the matters in this directive barely involve intra-Community trade. Many of the hard-selling techniques seem to come from the other side of the Atlantic rather than from the other side of the Channel.

My second objection is that under the terms of the directive—and this is certainly the view of Danish Ministers with whom I have recently discussed the matter —member States would be permitted to ban doorstep selling altogether, as is done in Denmark and, perhaps, in Luxembourg. If other States can go beyond the terms of the directive there and ban doorstep selling, this can hardly be called an act of harmonisation.

Thirdly, I have some objection about whether the Commission ought to intervene in this area. If the Commission had not intervened—and this applies not only with this draft directive, but in other instances too—we would probably already have legislated in this country to deal with cash transactions on the doorstep as well as credit transactions. We have already legislated for credit with a cooling-off period. Shortly, canvassing for sales on credit will require special consent with a consumer credit licence.

Having made my fundamental objections to intervention in this area and having raised a warning light for future activities by the Commission, I agree that doorstep sales can represent a serious abuse of consumers. I think that it would be helpful to the House if I gave some examples. The main problem with doorstep selling is that the consumer can be taken unawares by high-pressure salesmen. The consumer could be an old-age pensioner or a spouse who would normally confer with the other partner before coming to a purchasing decision.

Pressure doorstep selling takes place at the initiative of the salesmen, not that of the consumer. Therefore, there is no opportunity to compare other prices or goods. Switch selling is possible. One example is where a so-called repair man says that he will look at a customer's vacuum cleaner or washing machine, tells the person concerned that it is not working and will not work again, that it is a write-off, and that the best thing is to buy a new washing machine or vacuum cleaner from him.. That is what happens with doorstep selling, whether for cash or credit.

In other cases, salesmen may pose as spokesmen for an education department. It may be the education department of their own firms, not of the local authority. They can bring about sales in that way. Although it is illegal, others pose as representatives of charities.

Another abuse is that, after a sale for cash, it may be impossible to trace the address of the selling company. A credit case came to my notice only yesterday afternoon. A lady was approached by a double glazing contractor and was sold, with a hard sell on the doorstep, a double glazing contract. She now finds that her bill is to be about £2,000, and she bitterly regrets her own impetuosity.

From 1st July this year, under our domestic legislation, anyone selling goods and services on credit on the doorstep will need a special licence either as a creditor or as a broker, and, subject to certain safeguards, debts incurred by unlicensed traders or through unlicensed brokers may be irrecoverable.

For credit transactions there is ample legislative provision for the protection of consumers. The main safeguards are licensing, which I have described, and a cooling-off period. But for cash transactions there is a need to protect the consumer from the surprise attack of the unscrupulous doorstep salesman of goods or services. The consumer's predicament in these circumstances puts me in mind of the cinema advert for "Jaws" with the unsuspecting woman being approached by the shark. If the House will excuse the expression, we still need laws against "Jaws"—at least the jaws of doorstep salesmen.

To the extent only that the draft directive provides an opportunity to deal with abuses on a Community-wide basis, I welcome it. But however much we welcome the draft directive in principle, and no matter how much unanimity there is about the evils which it seeks to remedy, it has serious defects and can have perverse results.

Mr. Geoffrey Finsberg (Hampstead)

May we infer from what the Minister said that none of those abuses has ever been laid at the door of British catalogue mail order trading?

Mr. Fraser

Earlier, I said that our mail order traders have a high reputation for fairness and efficiency, and often the protection which they give to their customers goes far beyond not only what is right but what is required by law. I thoroughly agree with the comment made by the hon. Gentleman.

This draft directive has serious defects and can have perverse results. It is not acceptable in its present form, and we shall press for it to be withdrawn unless it is substantially changed.

I shall conclude by listing the defects which we have identified and upon which we have robustly negotiated.

Mr. Douglas Jay (Battersea, North)

Did I understand my hon. Friend to say that the Government will definitely not accept this directive in anything like its present form?

Mr. Fraser

That is exactly what I said. In its present form it is not an acceptable basis for legislation or, indeed, for changes in existing legislation on the statute book. I agree with the Opposition in the spirit of their amendment. Whether we withdraw the draft directive or have it substantially replaced by another document is a technicality that we need not explore in great detail. However, I agree wholeheartedly with the spirit, attack and point of the Opposition's amendment.

I should like to give a warning about over-reacting to a draft directive. It is not a proposal from Ministers. This draft directive, like many of its brothers and sisters coming from Brussels, is nowhere near agreement. It would be unthinkable if such a draft directive as this were to be approved as it stands. It is merely a proposal capable of debate and demanding change—even fundamental change. If draft directives were seen in that light, I think that there would be less concern than we have had in the past about them. I assure the House that nothing in the scope of the draft will be foisted on this country.

Mr. R. A. McCrindle (Brentwood and Ongar)

Accepting that point, am I correct in saying that we are dealing with a revised draft directive? If so, this is presumably an updated version of what was even more unacceptable. If that is the case, does the Minister feel that he should underline, yet again, that it will not be enough to say that we shall go back for a third bite of the cherry but that we shall do our best to start on a clean sheet of paper with a totally new approach to this matter?

Mr. Fraser

It is important that there should be a new approach rather than a clean sheet of paper. Since the draft directive was published, a set of amendments has been suggested by the Commission. Those amendments are published in the second document before the House. Some of those amendments make the draft directive a little better, for example in respect of doorstep deliveries, but others make it worse. I do not regard the amending document as in any sense a redeeming feature of the original draft. I hope that I have made that clear.

I come now to the defects. First, the scope of the document—I am dealing with both the document and the proposed amendments—is diffuse and unclear. We are not certain how trade premises are to be defined. As it stands, it could apply to an auction in a private house or to a large sale perhaps at Mentmore which is far removed from what would normally be regarded as trade premises. It could, preversely, apply to the sale of a television set on hire purchase, for the technical reason that the television set is being sold by a finance company, not by the person who displays it in his window. We could have that kind of perverse result.

Mr. David Mitchell (Basingstoke)

Will the Minister indicate whether, in his view, an AA breakdown service vehicle would fall into that category?

Mr. Fraser

I knew that the hon. Gentleman would not miss that one. I agree that control of doorstep sales should apply only where the contract is not at the initiative of the customer—in other words, where the customer is taken by surprise. To frame it in any other way—whether they are our proposals or EEC proposals—would rob consumers of the freedom or ability to strike a bargain or to obtain a service at a time when they wanted it and at the price they wanted to pay. The scope is too wide and the definitions are too diffuse and unclear.

I come next to the lower cash limit. Originally, it was £17—roughly equivalent to the number of units of account. There is a proposal to reduce it still further. The lower cash limit in the directive is too low. It would be the subject of frequent change. It is totally unpredictable, because it is tied to units of account. It is not expressed in our currency. Therefore, it is not acceptable. In my view, it should be left to national judgment, perhaps within a band, to determine the cash limit. We would want this matter to be consistent with our own policy under the Consumer Credit Act.

It is difficult to make laws simple. However, I am convinced that the law should be as simple as possible for both consumers and traders. To have a diversity—a variety—of cash limits for doorstep transactions, depending whether they are controlled under the Consumer Credit Act or are dealt with by European directives, some tied to sterling and others to monetary units of account, can only be confusing to the consumer. Therefore, it must be left to our national judgment to decide the starting point for the control.

I come to the next objection. The directive should not apply to doorstep deliveries such as bread and milk. I do not think that I need to make any more point about that. I think I have the unanimous support of the House.

Nor should it apply to emergency services—and I now come to the remarks of the hon. Member for Basingstoke (Mr. Mitchell), because as the directive is drafted, if a motorist's vehicle breaks down on a motorway, say the M1—or in the hon. Gentleman's case, the M4—and along comes the AA emergency service and the AA man draws up to the stalled car and asks, "Would you like some help?" under the directive as it is drafted, there is a doorstep salesman, the AA representative, initiating a doorstep sale with the motorist on the hard shoulder of the Ml or the M4.

As the directive is drafted at the moment, that would probably be caught as a doorstep sale, and there would be a cooling-off period. The motorist would not want a cooling-off period because he would probably have been cooling off for long enough, anyway, before the AA breakdown van came along. So the directive ought not to apply to emergency services, whether they be plumbing, electrical repairs or motor repairs.

Mr. David Mitchell

The grave danger is that the consumer, being invited to join the AA and then obtaining its service, will obtain its service and then renege on his membership of the AA or whatever the organisation may be. I hope that the Minister will have in mind in any future negotiations in this particular area that there has to be protection not only for the AA but for a number of other organisations in a similar field. Perhaps he would give me that assurance.

Mr. Fraser

People have all sorts of regrets about the associations which they have joined. But of course, the point that the hon. Gentleman makes must be taken into account.

Next, I do not believe that the directive should apply to insurance contracts.

Mr. Ernest G. Perry (Battersea, South)

Hear, hear!

Mr. Fraser

I am not saying that there should not be some control over hard selling of insurance on the doorstep.

Indeed, at the moment there is a cooling-off period, I think, of 10 days for sales of life insurance. But that ought to be subject to an entirely separate regime and is not amenable to this sort of proposal.

Nor do I think that the directive ought to apply to home study courses, with which I shall not deal now, because we have debated them separately on another European directive dealing with correspondence courses, which excited a number of hon. Members in a Standing Committee.

Next, I come to documentation, which has caused the Mail Order Traders Association some concern. In my view, the draft directive goes into far too much detail. It must be our objective, in terms of efficiency and cost, to keep documentation to the very minimum. When I look at the pamphlet issued by the Mail Order Traders Association, in which it talks about 790 million additional pieces of paper a year, I do not call that documentation; I call that Community confetti. That sort of detailed documentation and control is something, again, which we must decide for ourselves, and not impose an unreasonable burden on those who are carrying on perfectly fair and honest trading.

Mr. Charles Fletcher-Cooke (Darwen)

Is it not, in any case, contrary to the treaty, and particularly to article 189, to describe these details in a directive? Es it not a fact that a directive is specifically limited to questions of principle? Directives are now being issued as though they were complete codes of law—that is to say, as if they were regulations and not directives at all. It is not only in this case. It is in every other case, nowadays, that directives suffer from this vice.

Mr. Fraser

I would not entirely agree. I have had some experience of dealing with directives in the employment area—although this is not directly germane to this debate—and of dealing with directives on notice of mass dismissals, on equal pay throughout Europe and on equal opportunity for women. I believe that when one has a directive, one has to have a sufficient degree of precision to enable it to be properly interpreted by member States. It would probably create even more confusion if what the hon. and learned Gentleman calls a statement of principle were to be a statement of principle so wide and so vague that it caused even more concern in the Community than one drawn with a fair degree of precision.

On the other hand, I agree with the hon. and learned Gentleman that the method of carrying out the decision in a directive should be left to the judgment of member States. To that extent, I agree with him that there is far too much detail here, and that the method of implementation must be a matter for domestic legislation. To go so far as to have an annex to this draft directive which prescribes the exact form in which the consumer has to give notice of cancellation is going to ludicrous lengths in trying to prescribe the nature of domestic control of what is an admitted mischief.

Article 4 is the provision which says that the consumer must sign the document personally. I shall give just one instance of how one has to look at local custom. There are many instances where a husband signs for a wife, or a wife signs for a husband, on a doorstep sale. It is a perfectly reasonable arrangement and, of course, local custom and the way in which we conduct our affairs must again be a matter for local judgment when we come to these matters.

The directive goes on to say that contracts should be automatically void. I do not believe that that should be the case at all. To leave both the vendor and the purchaser with a nullity is not right. In my view, a contract ought to be voidable or enforceable only by a court. I think that the nature and the form of the cancellation is also a matter for existing local domestic judgment and for existing practice. Again, the time within which one can cancel an agreement is a matter which we have to decide for ourselves.

I happen to believe that our proposed five-day cooling-off period for credit transactions—and when that comes into force, that will replace the existing three-day cooling-off period, which now applies only to hire-purchase credit sale and conditions of sale agreements—coupled with the time that documents will spend in the post, is an adequate period, and we should not be wasting our time discussing in Europe whether it should be five, six or seven days. As long as there is an adequate cooling-off period, that ought to be enough.

Another objection to the draft directive is that consumers should, as with the Consumer Credit Act, be under an obligation to take care of goods which they have decided to return.

I hope that I have made clear to the House, first of all, that there is a mischief to be dealt with, although part of it we have already dealt with by domestic legislation—the Consumer Credit Act—and I do not want to have to change a piece of legislation which has taken a long time to implement, after a long and detailed discussion with trade interests.

Secondly, I hope that I have made clear the status of the draft—and I emphasise the word "draft". Thirdly, I hope that I have made clear its inadequacies. Finally, I hope that I have demonstrated to the House that we have a rather frank and robust approach to this sort of proposal.

Mr. Tim Smith (Ashfield)

Given that credit transactions are already adequately covered by domestic legislation, as the Minister said, and given that he would exempt from this doorstep deliveries, emergency services, insurance contracts and home study courses, will he say how wide is the area to be covered?

Mr. Fraser

It would be fairly wide. It would apply to most goods and services ordinarily peddled, sold or traded on the doorstep. One thinks of vacuum cleaners, educational books and encyclopaedias, but there are serious abuses. Let us consider provisions for roofing which are sold on the doorstep, surfacing front drives with tarmac and double glazing. There is a fairly long list of goods and services which are sold in this way which would, in my view, be quite rightly affected by controls, whether they be on credit or on cash transactions.

As I say, I hope that I have made it clear that I have a fairly frank and robust approach to this directive. As I said at the beginning, I do not think that it is the sort of area in which the Commission ought to intrude. I look forward to hearing the—

Mr. Giles Shaw (Pudsey)

Will the Minister give way?

Mr. Fraser

I was about to say that I look forward to hearing hon. Members' views. Perhaps those of the hon. Member will be the first of them.

Mr. Giles Shaw

Will the Minister say quite clearly whether he is accepting the Opposition amendment in its entirety?

Mr. Fraser

Yes, I accept the Opposition amendment. I ought to make it quite clear that I interpret the Opposition amendment as being the withdrawal of the proposals as they stand in this draft directive, both in their substance and in their style, and their replacement with something which is more acceptable to both the Government and the House. Of course, there will be further negotiations, and I would want to keep the House informed of the nature of those further negotiations and the fundamental changes which I hope to see made.

4.9 p.m.

Mr. Giles Shaw (Pudsey)

I beg to move, at the end of the Question to add 'but does not consider that they are an acceptable basis for legislation in the United Kingdom, and urges the Government to secure their withdrawal'. Now that history has been made, we can get down to our normal business. I am grateful to the Minister for saying that he will accept the amendment.

I must remind the Minister, after his rapid review of the problems associated with this directive, that it has been around for a long time. It was published on 19th January 1977, discussed in the Select Committee ably chaired by the hon. Member for Farnworth (Mr. Roper), reported on by the Select Committee in another place and debated at length in another place. It is by no means unusual, therefore, for us to come forward urgently with such a positive and cogent amendment as I have just moved, because little has happened to show that the Government could achieve any significant changes in the original directive. That contrasts oddly with the robust speech by the Minister. I can only hope that it will be matched by robust action.

We want it laid on the line that if this directive, in this form or anything like it, came before the Council of Ministers before it reached the House for discussion again, it would be vetoed by our representative as an unacceptable basis for legislation. I intend to shorten my remarks, if I can, because it seems that there is a wide measure of agreement on this matter.

The directive forms an important part of EEC consumer policy. We are not suggesting that the British consumer is put more at risk by our attempt to alter the directive. On the contrary, as presently drafted, the directive is dangerous to many real consumer interests, as the Minister has made clear.

Of course, both sides agree that we must protect British consumers from unscrupulous traders and that we must provide some protection compatible with the maintenance of competitive choice of goods and prices—provided that such protection can be seen to be both necessary and effective. In principle, we agree that the unscrupulous doorstep salesman should be stopped and that the consumer should enjoy the same protection in cash transactions as she currently enjoys in credit transactions.

But is the directive the best way of doing that in the United Kingdom? We agree with the Minister that it is not and that we should be ill advised to use the directive procedure in this area. This should be a matter in which national laws or even national administrative action is more efficient than invoking the panoply of Brussels.

It is ludicrous that this directive should be rooted in article 100, which says: The Council shall, acting unanimously on a proposal from the Commission, issue directives for the approximation of such provisions laid down by law, regulation or administrative action in Member States as directly affect the establishment or functioning of the common market. It is extraordinary that a directive like this should be considered so important as to be issued under article 100.

Mr. Jay

Is the hon. Member saying that, in the Opposition's view, there is no need for EEC legislation on this issue at all?

Mr. Shaw

That is not what I was saying, if the right hon. Gentleman would listen with care. I was saying that to deal with the abuse of doorstep selling there may not need to be any use of Community directives, because we should be able to produce adequate safeguards for United Kingdom consumers. There may be areas where the Community has a role to play in consumer protection—harmonisation and safety of products, for instance—but in the case of the doorstep salesman, going down, as the directive proposes, to very small amounts of money, there must be different ways of dealing with it which would be more appropriate in this country. This seems a hefty sledgehammer to crack a nut on our doorsteps.

I cannot believe that there is any intraCommunity trade in doorstep selling which is a threat to the consumer. Are we to believe that our constituents are at risk from phalanxes of French onion sellers pedalling through Pudscy or from a sudden invasion of itinerant Italian ice cream sellers inching their way through Ilfracombe? That is a nonsense.

However, there is evidence that consumers are at risk. The study referred to in evidence to both Select Committees is that undertaken by the Office of Fair Trading in 1974. That suggested that many consumers had laid complaints and that over half of them related to transactions or purchases of less than £10 in value. It is important that the House should know that that study was conducted by asking trading standards officers to do an analysis of complaints which derived from doorstep selling in a five-month period in 1974.

There were 218 such complaints and 122 related to goods and services at prices of £10 or below. The main range of items was covered by complaints such as book and magazine subscriptions, servicing of domestic appliances, cosmetics, photography and such matters, but those complaints were part of a large total of consumer complaints, which in 1974, according to the OFT's report, reached 406,845. So even if, allowing for the five months, one doubles the number, only a minute percentage of total complaints can be seen to be derived from the activities of doorstep salesmen.

The number has gone up. In 1975–76, the number, including cash and credit transactions, reached 535 out of a total of 470,503. For the latest year for which there was a report—1976–77—there were 607 recorded out of a total of 590,000.

The more important factor for us is not the actual number—we all know that for every one who goes through the procedure of complaint, there are several hundreds who do not, although they are equally affected—but the fact that it is undoubtedly the disadvantaged sector of the community, the elderly, the housebound and the lonely, who are most at risk from unscrupulous door-to-door salesmen, and it is those people we have a duty to protect. But the House may conclude that this directive will not produce that result.

When representatives of the OFT and the National Consumer Council gave evidence to the Select Committee chaired by the hon. Member for Farnworth, a Mr. Healey said: We believe that doorstep selling can serve a useful service to the consumer. The problem is to cure the abuses and not to ban it. I think that we recognise that that is the state of mind in which we should approach the directive.

However, if the EEC is determined to legislate in this area, the House must decide whether the directive will do the job for the United Kingdom consumer. Our view, as the Minister has said, is that it does not and should be withdrawn.

Despite the amendments, document R/134/78 is far too wide, covering credit transactions, insurance and mobile shops. There is some doubt whether the exemption of foodstuffs would apply to those mobile shops which sell many other products. They might be in the ludicrous position of being exempt when selling bread, milk or eggs but not when selling detergents and other household items.

Agency mail order trading and professional transactions are within the directive's scope and should be removed from it. The legal definitions are inadequate. particularly the crucial definition of what constitutes a doorstep contract. The same applies to the definition of business premises and the price payable. As the Select Committee has said, that should be more comparable with our own terms in the Consumer Credit Act.

Thirdly, taking deposits should not be forbidden, as the directive would provide. Even if offered, the directive will now say that deposits must not be taken. This is a cause of particular concern to the double glazing industry or to central heating where products are tailored to individual houses and cannot easily be removed.

Fourthly, there is the question of failing to safeguard traders' property. The Minister alluded briefly to this, but it is a very important matter. The directive apparently suggests that during the cooling-off period not only would property be at risk but recovery of the property would be at the expense and the risk of the trader. We feel that the trader should have some rights in this regard. A fifth point is that the whole directive is at variance with our Consumer Credit Act in terms of the length of cooling-off period, in terms of the threshold value and also in terms of the handling of tripartite contracts.

More important than the matters I have outlined, and the most important single point in my view, is the matter of mail order trading, because this is something in which the consumer is most significantly at risk if the type of agency mail order trading which has developed in this country should be removed. We strongly believe that this should be totally exempted.

Although the Minister has not perhaps gone as far as I would wish initially, we hope to ensure that any new directive coming before the House will have exemption for the form of agency mail order trading which operates in this country. That is the view of the National Consumer Council, which has written to the Mail Order Traders Association saying: We have taken the opportunity of making known infomally to both the British Government and to Commission officials our view that catalogue mail order trading should not be included within the scope of the Directive. We shall continue to do so. I would say unequivocally to the House that not only should it not have included in this directive but it should not be included in any other subsequent directive coming before the House.

What is most obvious is that this is not a source of serious complaint. It retails products to over 15 million people. It presents a 14-day sale-or-return period, which surely is very adequate protection to the consumer and a prevention from being pressurised into an immediate purchase. Certainly, if on top of the 14-days sale-or-return provision, the industry was required to adopt a further period of one week as recommended in the directive, the additional capital cost of some £35 million would be a ludicrous sum eventually to be paid by the consumer for that increased service.

Above all, its affects range from the urban working family, who find shopping difficult because there are at least two and possibly more wage-earners on the go, to the rural widow living in isolation; and through some 4 million agents it ranges throughout the length and breadth of the country and provides a very important service.

The reasons given by Mr. Commissioner Burke in his report to the European Parliament were feeble in the extreme. He seemed to suggest in the first instance that in the opinion of the Commission it is not possible to make a distinction between a catalogue and other documents. Frankly, most people can make such a distinction. The Commissioner failed to understand that we are talking about agency mail order trading and not trading by simple catalogue. He says with regard to the cooling-off period: If, therefore, mail order companies are not obliged to concede a cooling-off period to the consumer, but with the proviso that they confer on him the right to return the goods within 14 days, it will be impossible to impose a cooling-off period on any other trade, because the conditions of making the agreement are the same. I wonder whether consumers would rather have a 14-day sale-or-return on goods or a seven-day cooling-off period. It strikes me that there is no doubt at all that they would infinitely prefer the 14-day arrangement.

Finally, he said: If, therefore, you exempt one branch of commerce from the scope of this directive, other branches of commerce will want the same exemption, and there will always be some particular reason justifying such a demand. Frankly, that means that exemptions of any kind from any directive at any time are not acceptable. I find that a ludicrous state of affairs.

As far as I am concerned, Mr. Burke is raising hares—false hares—and he is possibly even raising superfluous hairs, and they should be cut out, preferably one by one. I am aware that the Government have now taken a robust stance on this and that the Minister has said today that he is prepared substantially to renegotiate the whole context of this directive, and that nothing like it in terms of content or form should be regarded as a measure to be approved by this House. I am grateful for that. But he might take as his text the report that came from a Select Committee in another place which seemed to me to contain some of the more robust statements made about this invidious directive. If I may quote partially from its conclusion: While wholly endorsing strict and effective consumer protection in this sphere, the Committee in no way support those provisions of the Directive which appear to have been designed less for the protection of the general consumer than for the competitiveness of the Continental shopkeeper. In a country such as the United Kingdom which has a long history of door to door trading, the apparent attempt to discourage traders from this practice appears to the Committee all the more undesirable. The Committee conclude that the present draft (R.113.77) is unworkable as a piece of legislation, and that much of it is unacceptable in the light of current trading practice in this country. They recommend to the House and to the Government that negotiations should proceed with particular caution on a Directive the provisions of which appear to have been drafted in a manner which the Committee can only describe as singularly loose and inadequate. The House should have the opportunity—and the Opposition by tabling this amendment have made clear where we stand—to deal a firm and I trust final blow to this directive and its amendments. Let us be quite clear that we cannot accept this kind of intervention in affairs of this kind which is so contrary to the standards of trading which have been developed over such a long period of time. I recognise that the EEC has a perfect right to issue directives for consultation with member States, but member States themselves, through their Parliaments, equally have a right to express a strong opinion when they find that their own concerns are placed at risk. I believe that that is the case with this directive and therefore, in accepting the amendment which I have moved, the House will considerably strengthen the Government in seeking a total redraft of this directive. I trust that it will result in something quite different.

As far as we are concerned, this directive should be completely withdrawn. If it is ultimately found necessary, in the interests of the cash trade on the doorstep to come forward with another, I suggest to the Minister that it would be better timed if it came at the same time as the directive on consumer credit which is in course of preparation, so that the House might have an opportunity of looking at the total provisions for trade on cash and credit in the area of doorstep sales. I am glad that the Government have accepted this amendment. I trust that it is a challenge that they will willingly take up on behalf of the consumers and suppliers in the name of fair trading.

4.28 p.m.

Mr. J. Enoch Powell (Down, South)

This is an important debate in which the House is engaged, although it is not yet quite clear how important; for there was a certain dichotomy in the speech of the Minister inviting the House to take note of the directive, a dichotomy not absent from the speech to which we have just listened from the Opposition Front Bench. There were two parts to the speech of the Minister. It was quite clear that he was hostile to the directive; but it was not equally clear what he wanted to happen. In one part of his speech he said that the Government were opposed to it "in its present form", implying thereby that it would be acceptable in a different form. He said the Government were opposed to it "as it stands", implying that if it were not as it stood but different, the Government could take a different view of the matter. The Minister said that nothing "of this scope" ought to be accepted as a directive; but in reply to the hon. Member for Ashfield (Mr. Smith) he disclosed a very wide scope which he did not exclude from some future, amended directive. That was one side of the speech of the Minister.

The other side was much bolder and went much more to the root of things. He said that this is not a suitable subject for EEC legislation, because there was no impact of this area upon intra-Community sales. That is an important statement which has been made on behalf of the Government. They consider that where a subject does not affect intra-Community trade, it is not a proper subject for EEC legislation.

The Minister supported this view with other words. He said that this was "not the sort of area where the Commission ought to intrude". If that is what he meant and if, in that part of his speech, he was speaking with the authority of the Government, this is indeed an important debate, and we can now look back upon debates on a number of directives which have escaped being mauled and establish that they were also directives lying outside the area in which, in the opinion of the Government, the Commission ought to intrude.

The first example that comes to my mind is the directive on the quality of drinking water in this country. That is typical of the sort of EEC directive of which, night after night, the House has been invited to take note and with varying degrees of enthusiasm, to approve as a fit matter for EEC legislation. After today, it will be different. Whenever a directive is brought forward, the Government will ask themselves whether the subject has any impact upon intra-Community trade, upon the nature of the Common Market. If it has not, they will presumably tell the House, as the Minister told us today, that it is not a fit subject on which the EEC should be legislating and that no amount of amendment, improvement or limitation of its scope will render such a directive acceptable. So much for the Government.

This is also a great day for the Opposition. It is the first occasion on which they have had the temerity to place upon the Order Paper an amendment inviting disapproval of legislative proposals of the Commission. I notice the gratification with which the breasts of the hon. Member for Gloucester (Mrs. Oppenheim) and her hon. Friend the Member for Pudsey (Mr. Shaw) are swelling. However, the terminology of their amendment is a little difficult to construe. The Opposition do not consider that these documents are an acceptable basis for legislation in the United Kingdom". What does that mean? Do the Opposition mean that this is not an acceptable form of EEC directive? Once made, a directive must be put into effect by United Kingdom legislation. Are the Opposition saying, as the Government are apparently saying, that this is not a subject on which the EEC ought to be legislating, or are they simply saying, as the Minister said in the milder half of his speech, that, in their present form, these documents are unsatisfactory to form an EEC directive and thus to form the basis of obligatory United Kingdom legislation?

The hon. Member for Pudsey strongly objected, in a magnificent phrase, to involving the panoply of Europe in such a matter. One felt then that he must be heart and soul with the Minister in repudiating the right of the EEC to intrude in a matter which does not affect intra-Community trade. But as we listened on, our confidence began to fade; for there followed the hypothesis "If the EEC is determined to legislate in this area." The hon. Gentleman said that if our masters were determined to legislate, we must try to secure certain amendments—which lands us back where we started.

It is disclosed in the explanatory memorandum to the second of the two documents that in the interval between their presentation, the directive has been to what is described as the "European Parliament"—I think that that term may be a new custom in explanatory memoranda. The Minister did not tell us what the European Assembly or Parliament had done about the directive; but I am reliably informed by a right hon. and learned Gentleman who is much in the counsels of the European Community that the Assembly approved it. It is true that the directive was approved by a majority—

Sir Derek Walker-Smith (Hertfordshire, East)

I am not sure whether the right hon. Gentleman's tardy amplification was caused by my rising to my feet, but it is a fact that the draft directive was not adopted unanimously. A most eloquent speech against it was made by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) and strong criticisms were made on a number of aspects, including the applicability of article 100—the very point that the right hon. Gentleman was making, with his customary perspicacity earlier.

Mr. Powell

I am very grateful to the right hon. and learned Gentleman, first for identifying himself—

Sir D. Walker-Smith

It was not difficult for me to be identified in this crowded Chamber.

Mr. Powell

I am also grateful to the right hon. and learned Gentleman for shedding illumination upon what transpired in the European Assembly.

This past incident stimulated certain reflections in my mind as to what would be the situation after a few months have run their course. We are to democratise the Assembly. It has been thought fit to turn it into a directly elected Parliament which will take its decisions by majority. So it may be that in a year's time we shall be confronted by the fact that the European Assembly has, by a majority—as this House frequently does—approved the principle of legislating in this area and the content of the legislation.

Very different then would be the attitude of the Commission towards the Council of Ministers and towards the Government's endeavours to implement the alterations that the House wants. Very different would be the attitude of the Government towards bringing documents before the House for us to express a view upon them and to dare to say, in the face of a majority decision of the directly elected European Parliament, that the subject of these directives is not the sort of area in which the EEC ought to meddle, not a proper subject for EEC legislation.

We have all gone in very deep today. This is a significant event, because the House as a whole not merely dislikes these documents and what they contain but dislikes the idea of legislation on these subjects being taken out of the domestic sphere and transferred to the Community sphere. I doubt whether there is a single hon. Member who does not share that view, yet that is not the position in which we stand. If the policy enunciated by the Minister on behalf of the Government and the aspiration—I choose a fairly neutral word—expressed from the Opposition Front Bench are to be made good, there will have to be very big changes in the relationship of the House with the legislative powers of the European Community.

Ironically and paradoxically, when great changes are to take place, the crystal that produces the precipitation, the event that brings about those great changes and makes them possible when they appeared impossible before, is often relatively trivial—an irritation, an indignation of ordinary people when they are brought face to face with the consequences of what we have been doing in the House. It is events of this sort which will gradually fill the cistern and add up towards the time when we shall decide in the House that we will not surrender to an external authority our power to make the law for this country.

4.40 p.m.

Mr. John Roper (Farnworth)

The right hon. Member for Down, South (Mr. Powell), in referring to the scope of Community legislation in his opening remarks, touched on the most important matter to which I shall be referring, and in respect of which I may slightly surprise him. I am not clear where the limits of the scope of Community legislation on consumer matters should be placed. Therefore. I might be the one Member in the Chamber who will disappoint the right hon. Gentleman on this occasion as perhaps I have done on one or two others.

I begin by declaring an interest. For many years I have been associated with the co-operative movement which is involved in various ways in doorstep selling. Further, I have chaired the Sub-Committee of the Scrutiny Committee, which took evidence on the matters now before us. I welcome what my right hon. Friend said in opening the debate, as I welcome what was sail by the Opposition Front Bench spokesman, the hon. Member for Pudsey (Mr. Shaw). Many of the points that I would have made have already been covered. Therefore, I shall be considerably briefer.

The hon. Member for Pudsey commended the House of Lords Select Committee's robustness on these issues. It was perhaps in contrast that he suggested that the Scrutiny Committee had been somewhat tepid and complacent in its views. That is a matter on which the House requires an explanation. The House of Lords Committee is empowered by its terms of reference to give an opinion on the substance of a Community instrument. It can do so, and it was right to do so. I support almost every word that is used in the relevant paragraphs.

The Scrutiny Committee, which this place has established, does not have that power. It has the power merely to report to the House if a matter is of legal or political importance and worthy of debate by the House. It does not have the power that is possessed by the House of Lords Committee to give a judgment on the question whether the substance is good or bad. I am sure that that explanation is not necessary for the hon. Member for Pudsey, but it is worth recording it for the future.

Mr. Giles Shaw

I appreciate the point that the hon. Gentleman made. My remarks were in no sense designed to suggest that he and his Committee were acting too meekly. However, has he sought to try to give evidence to the Procedure Committee that his Committee should have powers comparable with those of the House of Lords Committee?

Mr. Roper

I have not given evidence to the Procedure Committee, but the Lord President has indicated that before the end of the Session there will be an opportunity to debate the best arrangements for our consideration of European Community business. One option that does not meet with universal support is that we should have powers similar to those of the House of Lords. There are advantages and disadvantages. No doubt there will be another occasion on which we can debate them at greater length.

I start with two biases, both of which, I suspect, are known to the House. First, I am in general in favour of the European Community. Secondly, I am in favour of Community legislation. Having said that, there are four questions that need to he considered with some care First, I think that there is general agreement, without turning to the difficult problem of article 100, to which we shall no doubt need to return, that there is a strong case for the Community to work for the removal in general of non-tariff barriers if we have a Common Market. We should get rid not merely of tariff barriers erected against trading between the different countries but of non-tariff barriers.

The question arises whether differences in trading practices in different countries constitute non-tariff barriers for some traders. Article 100, on which the House of Lords Select Committee has produced an important report, in which it considers the impact of the directive and whether it is within the scope of the article, authorises the Commission to bring forward draft directives on occasions when there is a disparity between national legislation that may directly affect the functioning of the Common Market.

Mr. Cranley Onslow (Woking)

The hon. Gentleman is identifying a difficulty that is not obvious to me. It would help me, and it may help others, if he would give some illustrations of the area of doubt. Is he able to cite anything that may come within the category of a barrier in this context?

Mr. Roper

Is the hon. Gentleman referring to a specific piece of legislation?

Mr. Onslow

Yes.

Mr. Roper

If he had read the evidence that the Select Committee took, especially page 60—the evidence from the Glass and Glazing Federation—he would have the matter in mind. The final paragraph on page 60 states: a number of our members would be keen to extend their activities in the Common Market countries hence our hope that obstacles to this method of selling may be taken away within the Common Market because we believe we have a dynamic industry that is capable of doing a good selling job for Britain.

Mr. John Fraser

The directive states that there is nothing to prevent other member States banning doorstep selling completely, which is what has happened in Denmark. The Danes have said that they have no intention of changing their practices and their ban.

Mr. Roper

I am aware of that, and I was coming to it. In answer to the hon. Member for Woking (Mr. Onslow), there may be some areas in which the desirability in general—we are talking about the general case rather than the particular —of having common trading practices may enable such traders as double glaziers to operate on the same basis within not merely the United Kingdom but the Common Market if they attempt to sell double glazing to householders within the Community.

My hon. Friend the Minister said that the directive does not have the ability to ensure that they are able to do so. If it did, it could be argued that that would be advantageous and would come within the scope of article 100.

The directive does not give double glaziers the power to sell on the doorstep in Denmark or in any other Community country that forbids such selling. The point that I am coming to, perhaps somewhat tortuously, is that although the case for non-tariff barriers being removed and the case for removing differences in trading practices are strong, it is not clear whether they apply in this instance.

The second question that has to be asked is whether the European Community has a role in consumer protection. It is an important problem, because it depends on what we mean by consumer protection. For example, it may be sensible for the Community to determine regulations on food additives so that manufacturers of foodstuffs will know that if they use certain additives they will be acceptable in any Community country. That overlaps consumer protection and trade barriers. In some countries there are specific regulations allowing certain additives to be used and they can be used to protect a national industry.

There are some non-tariff barriers, some requirements to harmonise different trading practices, that overlap the problems of consumer protection. When those non-tariff barriers are being considered it is important that the EEC should take into account the interests of consumers as well as the interests of manufacturers. Therefore, we should not rule that certain aspects of consumer protection are totally outside the scope of the Community. That is where I differ to some extent from the right hon. Member for Down, South.

It must be asked whether doorstep selling is an appropriate area for such action. I have already suggested that if it were possible to give traders some assurance that they could trade on the same basis in each of the Nine countries, there might be a case within Community law as it stands for such a directive. But this is not to be so, because there will be an option open to member States to be even more restrictive than the restrictive nature of the directive.

When one considers the question of protection for the consumer one becomes sceptical about whether there is a case for the Community to act. That has been expressed by every speaker in the debate so far and it was made clear in evidence to the Committee. When one considers the details of the directive it is clear that it was drawn up without any understanding of the nature of some parts of United Kingdom commerce.

Agency mail order traders are an example. There is a good deal of mail order trade elsewhere in the Community but it is done on a different basis from that in the United Kingdom. It is clear that in spite of fairly lengthy attempts, not only by the Department of Prices and Consumer Protection but by the mail order traders themselves with the Commission and the European Parliament, it is apparently imposssible to explain to Commissioner Burke and his staff the problems faced by mail order companies in this country.

I hope that the Minister will make it clear that if he does envisage that a further directive on this matter will be introduced there will be total exclusion of the mail order catalogue trade. I hope that he will ensure that there is a clearer argument about why this is an appropriate subject for legislation at Community level.

I do not accept the general argument expressed by the right hon. Member for Down, South but I believe that in areas such as this the Commission must make clear why it is advantageous for legislation to be at a Community level rather than at a national level. There is no doubt that the Commission has failed to do that so far.

4.52 p.m.

Sir Stephen McAdden (Southend, East)

We were invited by the Government to take note of the directive. An amendment has been moved which I understand the Government are prepared to accept. I was fascinated by the Minister's speech because he convinced me that 90 per cent. of the directive is a lot of nonsense. I was heartened by that. If this is the Minister's considered view I wonder why we were invited to take note of the directive and why we did not send it back to where is came from and say, "Think again, because you are talking a load of rubbish."

I wish to speak about the mail order catalogue business which is being subjected to the directive by a body of people who do not know what it is all about. The United Kingdom is the only country in Europe which has an extensive mail order catalogue business. In the United Kingdom there are about 4 million agents in this business. In Germany there are about 1 million and in France the number is so small as not to be worth talking about. The rest of Europe does not know what it is all about.

The business has been built up over the years. I am not sure why it comes under the heading of doorstep selling. We all know that these sales are not conducted on the doorstep. They are conducted by mothers who buy goods for their families from a catalogue. They do not invite their friends to talk to them on the doorsteps but they invite them into the kitchen or the drawing room where they decide what they will purchase from the catalogue. That is the way that it works. Our Continental friends do not understand. They have gone to some trouble to issue a directive which affects a business which they do not understand.

Tedious repetition does not consist of one Member saying the same thing over and over again but of several Members saying the same thing. I do not want to tread on the toes of my hon. Friend the Member for Pudsey (Mr. Shaw) by repeating his arguments. That would be tedious repetition, especially as my hon. Friend expressed his arguments so well.

When the question of joining the Europeon Economic Community came before the House I was strongly opposed to it. Eventually, by a substantial majority, the House decided that we should join. Since I am a democrat I accepted the decision of the House. But I must confess that if we get many more directives such as this I shall begin to despair about whether we did the right thing. I hope that we shall not be subjected to any more of these stupid directives which affect industries that the EEC does not understand.

I am assured that the effect of the directive will be that 790 million additional pieces of paper a year will have to be produced. The trouble these days is that when we talk about millions it is beyond the comprehension of the average hon. Member. I often try to bring home to people what 1 million is. I ask people to consider how many days have passed since the dawn of Christianity. It is nowhere near 1 million.

I should not like my colleagues to think that I am a brilliant mathematician and that I can multiply 365 by 1,978, because I cannot. But I can do simple sums. I can suppose that it is the year 2000—which it is not—and that there are 400 days in the year—which there are not. I can add the noughts on the end, with the assistance of my more talented colleagues, and I can multiply four by two. By that I can show that not nearly 1 million days have passed since the dawn of Christianity.

But today we are being invited to produce 790 million additional pieces of paper a year. I am told that this will cost £20 million. That sum will be added to the cost of the goods which are sold. When we are trying to bring down prices it is stupid that people across the Channel, who do not understand the business, should try to impose this tax upon us.

I could understand if there had been some complaints about catalogue selling. But there have been few complaints. I understand that the numbers of complaints involved in the millions of transactions that take place amount to the devastating figure of 0.8 per cent. What is all the fuss and bother about?

Who has asked for the exemption of agency mail order trading? I am told that the exemption is backed by the National Consumer Council, the EEC consumers' co-ordinating group, the House of Lords EEC Scrutiny Committee and the European Parliament.

I hope that the Government will examine the matter from a United Kingdom point of view and recognise that this is a British industry which was started in this century and which has developed into a world wide business.

These agents are not hard, commercial operators grinding the faces of the poor. Not at all: they are family people and mothers who try to get orders from their families. Although there are 4 million agents the annual turnover is only about £200 per agent—an insignificant sum. I know that when each agent's turnover is multiplied by 4 million it produces a substantial business but it does not need to be controlled in the way that it would have to be if it were a hard-fisted business operation. It is nothing of the kind. The sooner we tell our friends in the EEC that they should mind their own business about how we should run our business the better it will be for all concerned.

5.0 p.m.

Mr. Ernest G. Perry (Battersea, South)

I support my hon. Friend the Minister and Opposition speakers in objecting to these EEC recommendations. I declare straight away a vested interest in this kind of business. It would be unfair of me, after spending 30 years selling insurance on the doorstep, if I did not say that at the present time I enjoy a pension from that work. If I did not say that I should be misleading the House. Having spent 30 years selling insurance on the doorstep, I regard the EEC directive as the brain-child of Brussels bureaucrats who do not understand how we conduct this sort of business in our country.

I want to refer briefly to the insurance industry, to credit traders and to mail order traders. There are branches of this business in our country which have grown up over the last century. It has been a century of honest business, conducted from the doorstep and sometimes by going into people's houses and explaining to them exactly what is involved. In that way a large amount of business has been done.

Anyone who says that in relation to these activities we have not enough regulations, restrictions, and so on, for the protection of the consumer, should examine what we have done in this respect in the last 50 years. Insurance companies, credit traders and mail order traders have been only too anxious to co-operate with various Governments in order to keep their house in order. Their record of trading with ordinary people over the past century is impeccable.

I hesitate to say this, but when we have an EEC directive such as this, instructing the House of Commons to do certain things concerning this form of trading, it occurs to me that our representatives in Europe—they are not paid, but they receive gross expenses—have not been putting in Europe the point of view of the British people. It seems to me that they have not been telling the European Parliament how we conduct our business in this country.

On numerous occasions in this House there have been suggestions for improving relations between consumers, doorstep sellers and everyone else involved in this sort of business. In view of the fact that we are represented in Europe, it astounds me that the EEC should have produced a directive such as this.

Mr. Tim Smith

Can the hon. Gentleman tell us how the United Kingdom Members of the European Parliament voted in this matter?

Mr. Perry

The hon. Gentleman is as aware as I am of the way in which they voted. He cannot expect me to be any better informed than he is.

Mr. Smith

May I have an answer?

Mr. Perry

This directive from the EEC shows that it does not understand how business is conducted in this country. Indeed, it shows how abysmally ignorant people in Europe are of the way in which we conduct our business. As the hon. Member for Southend, East (Sir S. McAdden) said, credit trading and mail order business is a matter of trust. People gather together in the drawing room or the kitchen and go over a catalogue and order goods from it. If they do not like the goods they send them back. It is as simple as that. Likewise, when an insurance agent calls upon people and sells insurance, the people concerned can change their minds in the second week and get their money back.

As an ex-doorstep seller, I have no need to say a great deal in telling my hon. Friend the Minister and the hon. Member for Pudsey (Mr. Shaw) that the directive should be repudiated from every point of view by the House. I am very glad that my hon. Friend the Minister has taken his attitude and that the hon. Member for Pudsey had the initiative to speak in the way that he did. I support every effort that is made to show people in Europe that we know how to conduct credit business, insurance business and mail order business in this country. The sooner we reject the directive, the better.

5.6 p.m.

Mr. Charles Fletcher-Cooke (Darwen)

The hon. Member for Battersea, South (Mr. Perry) made a most powerful speech, in the course of which he referred to the attitude of Members of the European Parliament. I have some experience of the directive, both in committee and in the plenary session of the European Parliament. I have spoken and voted against it throughout. Before the hon. Gentleman makes charges of this sort he should realise that my hon. Friend the Member for Dorset, West (Mr. Spicer), for example, and other Conservative Members who voted against it were not joined by members of the Socialist group who, in order to curry favour with consumers, voted in favour of it. This happens over and over again. In this Chamber these directives are objected to by Labour Members, but when they are in Luxembourg, Strasbourg and Brussels. they support them because their European group wishes them to do so.

Mr. John Fraser

Did the consumers realise that their favour was being curried?

Mr. Fletcher-Cooke

The Consumers Association has a strong pressure group in Brussels, Luxembourg and Strasbourg, and it takes some courage to resist it. One is said to be anti-consumer if one raises a point about the legal basis of a document such as this. In the Lobby the other day I was attacked by a commercial agent because I was alleged to be against decent conditions for commercial agents on an equivalent and. I think, equally illegal directive.

It is my purpose to say why I think that the directive is not firmly based on article 100. I am amazed at the obstinacy of the Commission. It is running enormous risks in turning out these directives, ostensibly based on article 100, because one day it will come before the European Court in Luxembourg. It will not matter whether the European Parliament is an elected or non-elected body, or whether it has adopted the directive. The European Court will construe the legal basis of such directives, quite irrespective of what any European Assembly or European Parliament says, because the latter is not a legislative body.

In this instance there was no evidence whatsoever that the difference in the laws of the different countries, relating to the making of commercial contracts away from business premises, had any direct effect at all on the establishment or functioning of the Common Market. That is the heavy requirement of article 100—not that it may affect or that it indirectly affects but that it in fact directly affects the establishment or functioning of the Common Market.

We asked over and over again for evidence in support of the suggestion, for example, that an unscrupulous trader would scan and scrutinise the variations in consumer protection in the different countries and would then decide to set up shop in some country where consumer protection was less rigid than elsewhere. There is no evidence of it, because no trader has ever worked in that way. It is a fantasy to suppose otherwise.

The only reason why article 100 has been chosen is that no other article could be discovered. That is why it has been chosen. For all the explanations of the Commission and its legal advisers, no one is really convinced that article 100 applies to cases such as this. One day the Commission will come up against the European Court and the whole of its work will be destroyed. I am bound to say that I shall look forward to that day with some relish if the Commission continues in the way that it is proceeding at the moment.

That is really all I wish to say. It is a warning shot to the Commission that if it goes on basing falsely, upon article 100, objectives which may be very desirable in themselves, which may enormously improve the quality of life, and which may do all sorts of good things, but which do not directly affect the functioning of the Common Market—that is to say, do not in a material and substantial way prevent distortions of trade—it will be acting illegally, in the technical sense of the term, and in the end the court will come up with that opinion.

Greater brains than mine—dare I say it, even than those of my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith), who was so kind to me earlier—are very exercised on this matter. It is no secret that their lordships in another place will shortly debate the whole application of article 100 as it affects directives of this sort. It behoves us all, particularly the Government, who have already moved quite a long way today, to let the Commission know that it is really a great waste of time for the Parliament, the Commission, the Government and everyone else to have to plough through these directives, and to get outvoted time and time again by very well-intentioned people who want to improve the quality of life but who will not, or cannot, see that they are illegal.

Mr. Perry

I withdraw any remarks about our members of the Commission in Europe. I am glad to hear that at times they have opposed this measure. I am thankful for what the hon. and learned Gentleman said.

Mr. Fletcher-Cooke

There could be no handsomer or fairer withdrawal than that. I am most grateful to the hon. Gentleman. On that happy note, struck between the two Front Benches, and on the harmony in no way made discordant by the right hon. Member for Down, South (Mr. Powell), I think that I might sit down.

5.12 p.m.

Mr. Douglas Jay (Battersea, North)

I am struck by the statement of the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) that the EEC Commission is bringing forward what he regards as illegal directives and is, in fact, acting contrary to the law and to the Treaty of Rome. If that is happening, it is a serious matter which this House ought soon to debate, quite apart from the directive before us today.

I have also read the report of the House of Lords Scrutiny Committee which seems to raise serious doubt whether or not many directives that are coming forward are contrary to article 100 of the Treaty. If the EEC Commission is not merely wasting, or at any rate spending, a great deal of public money, and is not merely employing a large number of people and acting in some ways—for instance, with regard to fisheries—contrary to the interests of this country, but in addition is in breach of its own law and its own treaty, the sooner we debate these constitutional matters the better. I hope that the Government will take note of that.

I want to address one brief question to the Minister. As I understand him, he does not merely think that there are a number of undesirable, unacceptable and—I think he said—unworkable provisions in this directive; he thinks that there was no good reason for the EEC Commission's intruding in the matter of doorstep selling at all, partly for the reason that it did not affect intra-Community trade. If the Minister thinks that the whole subject is unsuitable for EEC legislation, it would seem to follow that not merely should this directive be amended or improved but that we should have no EEC directive or legislation at all in this sphere. Surely that is the obvious and inescapable conclusion from the Minister's view that this is not a proper subject for EEC legislation, whether or not it is legal under article 100.

I should like to ask the Minister whether he can give an assurance that he will oppose any EEC directive or other legislation on this issue. If he is not willing to do so, even though he says that it is not a suitable or appropriate subject for such legislation, will he explain why that conclusion does not follow from the opinion which he himself has expressed?

Sir D. Walker-Smith

Are not the right hon. Gentleman's two points interrelated? Is not the applicability of article 100 connected with the effect of intra-Community trade, or what is called in terms of article 100 "the functioning" of the Common Market? The right hon. Gentleman will appreciate that this is not a unique case, as my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) indicated. Perhaps he will accept that these draft directives are under scrutiny in the Legal Committee of the European Parliament, specifically with regard to the applicability of article 100. For example, I hope that next week we shall continue our discussion on the applicability of article 100 in relation to a still more important directive, the draft directive on liability for defective products.

Mr. Jay

I am grateful to the right hon. and learned Gentleman for that information. I would be disposed to agree that the two matters are interrelated. I am also glad to hear that they are under scrutiny somewhere. If they are interrelated, I hope that that justifies my having mentioned both of them in one brief speech, but surely it may well be that there is an objection to this directive under both heads at once.

5.16 p.m.

Mr. Geoffrey Finsberg (Hampstead)

I start by declaring an interest. I work for a large mail order company and I am vice-chairman of the all-party retail trade group, of which the hon. Member for Farnworth (Mr. Roper) is chairman.

I should like to make one comment on the speech of the right hon. Member for Down, South (Mr. Powell). He said that he saw a dichotomy in the speeches both of the Minister and of my hon. Friend the Member for Pudsey (Mr. Shaw). I am hound to confess that, after listening to many of the right hon. Gentleman's speeches, I feel that he will always trod dichotomies unless we make speeches with which he agrees or which he has written with his well-known clarity of expression and choice of phrase. So be it. Most of us would accept that charge with equanimity.

I should like to describe this draft directive in racing terms as "stupidity by arrogance out of ignorance'.

Mr. Ben Ford (Bradford, North)

It is a non-starter.

Mr. Finsberg

Indeed, as the hon. Member for Bradford, North (Mr. Ford) says, it is a non-starter. It is the brainchild, or, more likely, the brainstorm, of Commissioner Burke, an aptly named gentleman. He displays utter ignorance of the way in which British catalogue mail order trading operates. I should like to read a letter from Commissioner Burke which was sent to Mr. Rampton, chairman of the Mail Order Traders Association. It is dated 13th February 1978: Dear Mr. Rampton, Thank you for your letter of 24th January last, and your kind invitation to visit either your Company or G.U.S. Unfortunately, I am fully booked up until well into the Autumn and must therefore regretfully decline. It is a one-hour flight from Brussels to London or Manchester. Indeed, because of the vagaries of British summer time. Commissioner Burke need not lose any time if he comes at the right time of the year. No British Minister would have the effrontery to write to a reputable organisation in that way. I can only conclude that Mr. Burke merely signed a letter put before him by some of his minions in the Commission.

Mr. MeCrindle

Is not my hon. Friend rather understating the case of the difficulty which would attend any visit from Brussels to this country? Is it not correct to say that if Mr. Burke gets the right flight at the right time of year he will arrive before he left?

Mr. Finsberg

He would be rather like the well-known bird which flies backwards. I agree entirely with my hon. Friend. The trouble is that Commissioner Burke will not fly. How one can be a Commissioner and not fly I have not yet understood.

I shall not call this the behaviour of the Commission, because there are some intelligent Commissioners, who produce sensible ideas for directives. But the idea of Commissioner Burke really is stupid. What it does is give encouragement to the enemies of the concept of Europe and make those of us, such as my hon. Friend the Member for Southend, East (Sir S. McAdden) and myself, wonder whether we did the right thing in voting for accession. Being a democrat, I accepted the view of the House and, more important, the view of the referendum. As far as I am concerned the matter rests there. But this sort of action only fuels the flames of those who will not accept democratic decisions.

Mr. Jay

If Commissioner Burke really deserves this kind of language, is it not a rather serious criticism of the EEC that it should have placed him in this highly responsible position?

Mr. Finsberg

I gather that Commissioner Burke has more than one portfolio. If, as I gather, one of his portfolios may mean giving us money to build a Channel Tunnel, I shall merely confine my comments to his ability on consumer affairs and this directive.

The Minister has given sympathetic support for the views expressed to him about doorstep selling. The hon. Member for Farnworth and I took a deputation to see the Minister, who was completely frank and extremely helpful. He said then what he said today. I am glad that he has now publicly repudiated this directive.

I shall remind the House of the answer given in another place by Lord Oram, who was asked about some problems that would affect catalogue mail order trading. He said: The Government appreciate the difficulties which would be created for catalogue mail order trading companies if the draft Directive on contracts negotiated away from business premises were to be applied in its present form, and they have no wish to subscribe to a proposal which would create unnecessary problems without at the same time offering corresponding benefits to consumers. The United Kingdom approach to this proposal will be conditioned by these considerations as well as by the provisions of the Consumer Credit Act 1974."—[Official Report, House of Lords, 9th February 1978; Vol. 388, c. 1240.] The Minister was perfectly right to bring the draft directive to the House so that he could be reinforced when the House threw it out. This must make his task much easier when talking to Commissioner Burke. He will be able to tell him that he put the directive to the British Parliament and the British Parliament said "In no way will we accept this." No other country has the same sort of catalogue mail order trading on anything like the same scale as we have here. It is right to understand how this type of trading works. There are misconceptions about it. The British Press, for example, frequently talks about mail order when really it means the stupid advertisement squares in the national newspapers. There are clearly not anything like the same safeguards with those squares. Catalogue mail order trading means that all goods can be returned without charge or question. There is an unconditional guarantee of quality, and no payments are made until the goods are accepted. Credit terms, where applicable, are known in advance and in a vast number of cases there is, in fact, no charge for instalment payments.

If the terms of this directive had been adopted there would be 800 million extra pieces of paper—bits of confetti. As the hon. Member for Battersea, South (Mr. Perry) said, the costs would fall on the consumer. In fact, the costs are quite large and should not be overlooked. It is estimated that there would be £35 million of capital expenditure and £20 million of revenue expenditure, all to he paid for by the ultimate customer. I do not believe that even Commissioner Burke imagined that this could happen. The vast majority of agents are part-time workers—housewives and similar people—who would not want to be burdened in this way.

Who is in favour of this draft directive, other than Commissioner Burke and his minions? I can find virtually nobody. What is more significant is the long and impressive list of organisations which are against the directive and which support the exclusion of agency mail order. I ask the Minister a question specifically on exclusion. In the past he has said that lie does not favour the idea of exclusion, but lie went on to say today that insurance should be outside the directive. Surely that would be a precedent to the exclusion of agency mail order. It means that there can be no objection in principle to excluding a particular trade. Did the Minister really mean the two things that he said—that insurance should be outside the directive, but that he did not see how mail order could be? I hope that the Minister will answer that when he replies to the debate.

My hon. Friend the Member for Southend, East spoke about the number of complaints—0.8 per cent. That should be viewed against about 600,000 daily transactions. It is also worth noting that many Members of this House get the monthly document from the Advertising Standards Authority, which lists the complaints that come to it from consumers. It is a very rare event to find any catalogue mail order trader in that list. Lots of mail order traders are there, but they are not catalogue mail order traders. They are people who advertise in the newspaper squares. Therefore, there is a case made out very clearly for the exclusion of catalogue mail order traders.

I hope that the Minister will give an assurance that he will want to know the views of the House again if we were presented with an amended directive. Perhaps he will go further and say quite firmly that he does not see any need for any directive on this subject. He could say that we can safely leave it to the national Parliament to deal with this problem. If he is not prepared to say that, will he at least say that if a further directive is forced on him—and I do not see how that can happen—the House will have a further opportunity of consigning that directive to the same waste paper basket as I hope we shall consign this one?

Sir D. Walker-Smith

On the question of force, my hon. Friend will have in mind that article 100, if it is applicable in the context of this directive, requires unanimity.

Mr. Finsberg

I am grateful to my right hon. and learned Friend. I was going on to say that "force" might also be construed as part of a package deal. I want an assurance on this as well. It is not unknown for there to be a certain "trade-off" or, as the Minister said, "switch selling" on the doorstep. I do not want to see a switch sell which would give, for example, the Minister of Agriculture everything that he wants on fishing at the cost of the Secretary of State for Prices and Consumer Protection accepting a directive on doorstep selling. I hope that the Minister will give an assurance that he will say "No" completely, and even if it is part of a package deal, he and his Department will take the same robust view, say "No" and next time recommend No" to this House.

5.28 p.m.

Mr. Jim Spicer (Dorset, West)

At the outset I thank my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) for his intervention and the way in which he set the record straight about the European Assembly. I also point out to the hon. Member for Battersea, South (Mr. Perry) that we face a problem in dealing with consumer affairs in the European Assembly and in its committees.

I am on the Public Health, Environment and Consumer Affairs Committee, and I can say that it is absolutely true that those of us who try to bring reason into the whole approach to consumer affairs are all too often labelled "anti-consumer". Nothing could be further from the truth. However, there is this very strong lobby in Europe and in this country which believes that the consumer is a god towering above us all and that we must all bow down before it. But, unfortunately, that god has feet of clay and therefore we—who 'we" might be in this context, I am not sure—must decide for the consumer. We must push through things and drive through ideas that have no relevance to the consumer. If he knew about them he would say that he wanted nothing to do with such nonsense.

Time and again in the European Assembly and in the committee there one finds the Socialist group consumer-oriented in that way. I believe that is a great pity. We should be dealing with what is right for the consumer and not with what we think is right for the consumer.

The right hon. Member for Down, South (Mr. Powell) spoke of a train of events. It is true that in this draft directive there has been a train of events which brings the House to a situation which we have not seen before. In other words, we are not "taking note"; we are virtually rejecting a draft directive.

I was appointed rapporteur in the Public Health and Environment Committee on this draft directive. I spent a long time on this matter and in this country I spoke to mail order traders and representatives of insurance companies, who gave me their views and opinions. As a result of those consultations, I included a series of amendments in my report on the draft directive. When the matter came before the European Assembly on 13th September, some of those amendments were carried. However, the key amendment that I put forward—an amendment that had the full support of that Assembly—was that we should exclude mail order trading from the scope of this directive.

The door was open for Commissioner Burke at that point to accept that amendment. Had he done so, the train of events would not quite have moved in the way it has. When the Commissioner said "No, this will remain in the draft directive or in a future directive", I made it clear that I would do all in my power to bring the matter back to the Floor of this House so that we could reject the whole directive.

I heard the speech of my hon. and learned Friend the Member for Darwen in the Assembly on that occasion, when he dealt with the effect of article 100. That article was not a proper vehicle. Therefore, from having been a rapporteur who sought to guide consideration of the directive in a sensible way, I found myself increasingly convinced that there was no reason for a directive at all.

I am slightly puzzled because the Minister, having said he did not like the directive, said that if it were to be redrafted it would include within its scope mail order trading. He implied that another directive was about to emerge. However, that does not accord with the temper of the House today, and I am certain that the Minister must be aware of that fact.

It is high time that we fired a warning shot across the bows of some of the people in Brussels. Despite the opportunity afforded to them to produce sensible directives, directives such as this one keep emerging. People in the various directorates are working on them but are ignoring the advice that we give them. If they continue to ignore that advice, sooner or later they must realise that we in this House will not accept directives, and they will fall.

I am delighted that the Government have accepted our amendment. I hope that we shall go further and say quite firmly that we do not wish to see another draft directive coming forward. Enough time has been wasted on this directive. This is the time to consign it to the wastepaper basket, where it rightly belongs.

5.35 p.m.

Mr. R. A. McCrindle (Brentwood and Ongar)

Most hon. Members who have contributed to the debate so far have tended to take a broad-brush approach. I wish to do the reverse and to concentrate on only one aspect of the draft directives in so far as they relate to insurance.

I wish to refer to the effect on insurance of some of the proposed provisions of document R/134/78. This is a revision of the orginal draft, but I contend that in so far as it relates to the transaction of insurance business away from commercial premises it is, if anything, substantially worse in its implications and in its threats than was the original directive.

I wish to concentrate on three articles of the revised directive namely, 2(e), 4 and 9. Will the Minister confirm the indications which have reached me from the Department of Trade to the effect that, even if this directive were to go forward, it is not intended that it should embrace insurance, but that if a directive were felt to be necessary, a separate directive for that purpose would be forthcoming? If the Minister can confirm that indication it will relieve some of my anxieties. I believe that the revised directive attempts to be more lenient in its recommendations in protecting the consumer generally and, if anything, makes it more difficult for the insurance consumer.

I should declare an interest, in that I act as parliamentary consultant to the British Insurance Brokers Association. However, it is not only insurance brokers but representatives of insurance companies, engaged in what has come to be called pejoratively "doorstep selling", who are concerned about the effect of this directive. They are concerned and perplexed because they feel, especially the insurance brokers, that only a year ago domestic legislation went through this House which strictly defined an insurance broker and imposed considerable penalties in terms of his continued ability to trade as an insurance broker if he overstepped the requirements laid down in that legislation. In other words, the legislation on insurance brokers and the Insurance Companies Act 1974 relating to insurance companies laid down standards to which the vast majority of insurance people conform. If they do not conform, the penalties are considerable.

I turn to the three articles which give me cause for concern—and this would apply whether we were dealing with this directive or a separate directive on insurance. Article 4 of the revised directive reads: The provision that a copy of the contract may be forwarded to the consumer immediately after it is signed, is removed. The effect is that the consumer must be given a copy of the contract when it is signed. I do not know whether it is widely known to the House, but the proposal form in an insurance transaction forms the basis of the contract. In completing the proposal form on the doorstep, an application is being made to an insurer to provide a policy which, if accepted, is issued as a policy and is produced as the contract.

It will be evident that it is quite impossible for the contract, which in this case is the policy, or even a copy of the policy, to be handed over when the doorstep sale is being transacted. The premium must be paid before the contract can be given because the contract, that is to say, the policy, is the receipt for the premium.

Elsewhere in the directive, however, we are not to be allowed to accept the premium until the end of a particular period. The Commission cannot have it both ways. This is indicative of the muddled thinking which is coming forth from Brussels on this matter.

I turn now to article 9 which reads: The trader is now not only forbidden to require full or partial payment during the cooling-off period but also to accept such payment if offered". Just suppose that there is a requirement for some sort of life assurance cover to be provided immediately. Let us suppose that the acceptance of a life assurance policy is the basis upon which one may take up a new position. As I read the suggestion here, the insurance company is prevented from accepting it and the proposed insured is prevented from offering it. I suggest that that is not protection of the consumer's rights; it is an interference with the consumer's freedom.

Finally, I turn to article 2(e), because I want clarification from the Minister, although I say in advance that it may not be possible for this sort of clarification to be forthcoming by the time the Minister replies to the debate. The article reads: The figure below which the controls in the directive will not apply is reduced and the figures given are, effectively, from £17 to £10.

As it applies to life assurance policies, is that figure of £10, or any other figure that may ultimately replace it, to be taken as the annual premium or, as most people now pay, a monthly premium for life assurance? This is important, because whether or not the protection will exist will to some extent depend upon the level of premium. This a technical matter, sufficiently technical for the Minister to wish to consult his colleagues at the Department of Trade. Sooner or later, however, we should have a better indication of what it means for life assurance policies.

From the point of view of insurance I urge the Minister not to accept the draft directive—an approach that we are told he is prepared to adopt—and, if something vaguely similar is created in its place, that he should strongly resist even the temporary involvement of insurance in such a directive for the reasons I have suggested.

I believe that the insurance authorities in this country recognise only too well their responsibility to protect the public from an unscrupulous doorstep trader, but I do not believe that they should be prepared or expected to cosset the individual prospective policyholder and, in the process, to insult his intelligence.

5.44 p.m.

Mr. Cranley Onslow (Woking)

I must declare an interest in the subject that we are discussing, since I am a director of a company which is very active in direct selling. I do not, however, rise as a spokesman for that section of British industry, nor is it on that account that I am particularly glad to have heard the Minister's robust denunciation of the directive and the echoes that have come from every corner of the Chamber on precisely the same theme.

It seems that one of the most important points that needs to be registered is that there are matters that are much better left to be protected by British consumer interests, and we have today clearly identified one such. I put it to the Minister, however, that a rather unattractive light must have been shed upon the machinery for the representation and protection of the British consumer within the European system. I am not criticising the Minister's officials. So far as I know they have been assiduous throughout in trying to put forward the various points of view put to them by the interests that would be affected by the directive.

I am more concerned about the absence of any part played by the consumer association-type representatives from this country. As I understand it, the directive, as part of its gestation process, has gone through a body which acts as a consumer consultative committee and which exists under the aegis of the Commission. I believe that there is a body called the European Consumer Union, and that that is represented on the consultative committee. I believe, too, that this country is represented on the European Consumer Union.

The more I hear about what has happened in that area the more disturbed I have become. I am most disturbed by what my hon. Friend the Member for Dorset, West (Mr. Spicer) said. I was disturbed to hear that when the consultative committee was invited to give an opinion on the draft directive, that opinion was written by the Danish member. That scarcely indicates that it is likely to be biased in anything except towards the slavish extension of Danish law, which is extremely restrictive in this area. Even more disturbing was the fact that, so far as I know, no dissenting opinion was entered by the British representatives on that committee to the effect that the proposals would not be accepted by the British consumer and that the whole thing was a waste of time.

It is extraordinary if that is an accurate account of what happened. It is extraordinary that no voice of warning was raised by our consumer representatives. Surely that is part of their function. Unless and until there is such a person as a European consumer, the various interests of the various different consumers might as well be spoken for, and the consultative Committee seems to be the forum in which the view of British consumers should be put forward.

My hon. Friend brought home another point to me. There has been a good deal of trading off in the European lobby. I dare say there is a great deal of back-scratching, whereby some Members undertake to keep quiet about someone else's hobby-horse, in turn for tacit or vocal support for their own. I wonder whether we are fully aware of the end-result that may flow from this. As I understand it, the consumer consultative committee is interesting itself among other things, the banning of all television advertising. I understand that there is a strong lobby in the same circle to press for the total banning of smoking in public places. Neither of those issues seems to me to have any great connection with non-tariff barriers. I should be glad to enlist anyone's support to stop Labour Members smoking in the Division Lobby but I do not say that that is a suitable subject for an EEC directive.

Mr. McCrindle

How does my hon. Friend know what Labour Members do in the Division Lobby?

Mr. Onslow

I sometimes find myself in a Division Lobby with Labour Members, and I can distinguish between those who smoke and those who do not, and between those with whom I normally vote and those with whom I do not.

I do not know in what respect these two objectives have any consumer support. There may be some who favour the banning of television advertising. There may be a growing preponderance of opinion against smoking in public places, and that is not necessarily a bad thing. There is another example— the ending of all duty-free concessions on tobacco. This is a matter in which the European Consumer Union and the consumer consultative committee are actively interesting themselves. What do these busybodies think they are about? What possible bearing have these pees in their bonnets upon the proper functioning of the European Community?

As hon. Members on both sides have said, they are succeeding only in bringing the Community into disrepute, and the sooner they are clearly told to drop it the better. If they resent being told to drop it, I suggest that they be invited to resign, so that they may pursue their predilections elsewhere. There seems to be no reason why they should be expensively maintained within the fabric of the European Community to pursue objectives which, by no possible stretch of imagination, can be said to be supported or widely desired by consumers in Europe as a whole or in most of the individual countries. I hope that that lesson will be driven firmly home as a result of this debate.

5.50 p.m.

Mr. Leslie Spriggs (St. Helens)

I rise briefly to draw attention to the fact that the draft directive does not appear to take into account the highly specialised home improvement equipment which is produced in the glass industry—for example, double glazing. Whereas the door-to-door salesman specialises in selling mass produced articles, double glazing is a home improvement product of high value which brings the salesman and the craftsman to the home of the would-be purchaser to measure up and to get all details of the building before a sale can be effected. Will this draft directive include such valuable items as-double glazing? If so, I assure the Minister that most of his hon. Friends will take every available step to throw it out.

Mr. John Fraser

The directive does-not distinguish between products. In the example that my hon. Friend has given, if the salesman comes to the consumer's house without any prior knowledge of or invitation from the consumer, makes oral representations, and gets him to sign a double glazing agreement there and then, the directive would apply. Indeed, our Consumer Credit Act would apply. If, on the other hand, the consumer, by answering an advertisement, invites a salesman or service firm to come into his home to measure up and provide the service, he will not be affected by the directive. It is the difference in approach, not the product.

Mr. Spriggs

I thank my hon. Friend for that information. But it appears that the Commission does not appreciate the difference between the direct selling of mass produced articles and articles of very high value, such as double glazing. If the directive intends to exempt high value articles, it is up to the Commission to make clear which items are to be exempted.

5.54 p.m.

Mr. Tim Smith (Ashfield)

This has been a most interesting and in many ways significant debate. Its implications go far beyond the limited ambit of the proposed directive to protect the consumer against contracts negotiated away from business premises.

I think that the determining factor should be not, as has been suggested by some speakers, whether consumer protection is a valid matter to be considered by the Commission, but whether the proposal in any way impinges on fair competition. The aim and object of the Community should be to ensure that conditions in all member States are such that enterprises are able to compete on a fair and equal basis. That may in practice mean that consumer protection regulations and laws in one member State will have to accord with those in another.

For example, the proposal to try to introduce a directive on product liability is important, because insuring for product liability is a high overhead in many industries. This proposal from the Commission might mean a large increase in insurance costs throughout the Community. The point is that there should be equal application to each member State and enterprise.

If this directive were introduced throughout the Community, that would not necessarily be the case, because, as has been pointed out, it is restrictive. The directive does not place upon any member State an obligation to permit the kind of activities to which it is related. There is no positive requirement to allow doorstep selling or any of the other activities mentioned. Therefore, even if it can be argued that it is relevant to fair competition, possibly a de minimis rule should apply.

The directive refers to approximately 100 units of account, which I understand is worth about £17. The Consumer Credit Act does not apply until the figure of £50 is reached. The Minister said, on the one hand that the scope of the directive was diffuse and unclear and, on the other, that the documentation was bureaucratic. Those two statements may not be inconsistent. However, it is important in a directive of this kind that the terminology and definitions should be clear. Otherwise, there will be doubt about the scope of its application. That fact has been clearly evidenced in the debate, because a number of questions have been asked about the application of the directive.

I should like to take up one point made by the right hon. Member for Down, South (Mr. Powell). In pointing out how significant the debate was he said that when, in a year or two years, we have a directly elected European Parliament, perhaps the attitude of the directly elected Members would differ and that the manner in which the decisions of the Parliament were treated would differ.

We have been told that when this matter was discussed in the European Parliament last September, at least Conservative Members voted against it, but not Labour Members. Surely, if there were a directly elected European Parliament, it would be open to directly elected representatives of the United Kingdom to vote against such a proposal, and no doubt they would, because they would probably be more in touch with their constituents on EEC matters, as they would be concerned only with EEC matters, than Members of Parliament here. Even if that were not so, there would appear to be no reason why, in theory, the Council of Ministers should not have the ultimate right of veto.

Mr. Powell

The point is that a directly elected Parliament elected by the electorate of the entire Community confers upon the majority decision a significance which cannot attach to the majority decision of an Assembly composed of deputations from the respective Parliaments.

Mr. Smith

I accept that point. The right hon. Gentleman knows that some of us are a little less concerned than he is about a loss of sovereignty by the United Kingdom.

The main point about a directive of this nature, which would result in 790 million pieces of paper per annum being generated—no doubt other horrifying statistics will emerge—is that it damages the reputation of the European Community, brings the Common Market generally into disrepute and gives no assistance to those of us who believe that British membership of the EEC will in the long run be beneficial. So on an occasion like this it behoves us all to make our position clear—that we reject this directive.

6.0 p.m.

Mr. Giles Shaw

Perhaps I may briefly make some observations from the Opposition Benches. The opinions expressed are extremely clear. The House as a whole will have no truck with this directive or what it contains. There is an additional point. There is a genuine view that doorstep selling should not be a matter to be controlled by means of an EEC directive. I share that view.

I think that we all recognise that there are other ways of handling this matter. What we require are firm commitments. We require from the Minister a firm commitment to accept the view of the House, so clearly expressed, and to convey in these next months in his discussions with Brussels the view that the House will not accept directives of this kind. He should equally, perhaps, undertake a commitment that if there is a major consumer abuse in doorstep selling the Government may seek to remedy it by the means which are already largely at their disposal.

One of our important features in handling consumer protection in this country is that we have evolved a sensitive mechanism that has stood the test of time. The Fair Trading Act and the Consumer Credit Act are important vehicles for consumer protection which, in my judgment and that of many consumer organisations, have provided a level of consumer protection vastly superior to much that applies in other member States. We must be clear that if we seek to extend the role of protection of the consumer to doorstep sales activity, we have adequate vehicles of our own which we can adapt for the purpose.

The matter of doorstep selling arose as long ago as 1962 in the report of the Molony Committee, so it is not for want of time in realising that we have a problem which should be dealt with. It could be that in the Private Member's Bill which came before the House in 1966, and which suggested identification marks for doorstep salesmen, there are certain proposals which could be taken further. These have had some approval by some consumer organisations. But it is clear from the debate that the House does not believe that directives of this kind have a useful part to play in what is after all a very small level of commercial activity even if it does undoubtedly bring hardship and ill will to a number of consumers.

I recognise the challenge made by the right hon. Member for Down, South (Mr. Powell)—that here we are, united perhaps in agreeing to rebuff the Community very firmly on the matter of a directive. I think that that is a very healthy thing for this House to do. I believe that it will strengthen the feeling that the Community cannot get its way totally on every matter on which it seeks to issue a directive.

When we call in aid the chairman of the committee of the European Assembly, and my hon. Friend the Member for Dorset, West (Mr. Spicer), when we read the discussions that took place in the European Assembly and the comments made by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke), and when we note the comments of our own Select Committee and of the hon. Member for Farnworth (Mr. Roper). who chaired it, and of the Select Committee in the House of Lords and the debate that took place there, there can be no question but that we are all united in saying that such directives have no part to play in dealing with the problem that exists, and that there are other and more effective ways of dealing with it within the framework of normal United Kingdom legislative and administrative action.

It is in that spirit that the Minister should report back to his colleagues in the Community that as far as we are concerned we shall be able to handle this matter in a different way, and deal with the consumer problem that we know exists.

6.6 p.m.

Mr. John Fraser

I may not be popular in doing so, but I should begin with a short defence of Mr. Commissioner Burke. I do so because Mr. Burke was appointed some time after this draft directive was produced. It is not his brainchild. He was not responsible for preparing it. One should say this in all fairness, because he has been the target for attack by more than one hon. Member and it is right, since he cannot speak for himself, that I should say something in his defence.

Mr. Geoffrey Finsberg

But Mr. Burke was Commissioner when the revised draft came, so he has to accept that responsibility.

Mr. Fraser

These things have a momentum of their own. I do not know whether one can say that Mr. Burke was able to resist it.

I can tell the House that I have spoken very bluntly to Mr. Burke about this directive and other directives of the same ilk. For instance, there is a directive, which the House may discuss in due course, which deals, inter alia, with the unit pricing of bananas, turnips, spring onions and a whole range of goods. I have made it absolutely plain that I do not regard that as an area of Community competence by judgment—I shall deal with the vires of the matter in a moment —and, indeed, that it could actually have the effect of preventing us from doing now those things which we judge ought to be done now according to our own national judgment, because we would have to wait for a Community directive to be agreed by the member States.

Earlier, I listed a number of objections to the scope and content of the draft. The hon. Member for Pudsey (Mr. Shaw) added deposits. I agree with him. It is a point that I should have mentioned. I have also made it clear that I do not want to see insurance included within the scope of this directive, partly because insurance is sui generis. When we passed the Unfair Contract Terms Act, we agreed that insurance contracts are a thing on their own needing separate treatment. For that reason I escape all the other detailed questions that the hon. Gentleman put to me. But even if I were not able to escape, I do not think that I would be able to answer them from the precision of the directive at the moment—for example, whether it is a £10 premium monthly or weekly or per annum, I do not know. But I think that insurance should be excluded from it.

The main case that is put to me is that catalogue mail order selling should be excluded if any form of directive is agreed. I answer that not by asking whether catalogue mail order traders should be excluded altogether but by asking another question—how will it affect them and to what extent should any directive affect them?

My answer, as I said earlier, is that I do not believe that they should be affected any more than they would otherwise be affected by the Consumer Credit Act. No one has ever argued that catalogue mail order trading should be totally excluded from our own domestic controls. Indeed, the practice of catalogue mail order traders is followed by the Consumer Credit Act, in the sense that their own good practice is the sort of thing that brought the Act to us. Therefore, they must be amenable, and would not resist being amenable, to some form of control. So long as that form of control is no more onerous than that likely to be imposed on them by the Consumer Credit Act, I see no reason why they should not be subject to the draft directive.

Mr. Jim Spicer

I think that there is an area of confusion here. It is quite impossible to have the mail order traders within the scope of the directive, and subject to all its provisions, without at the same time imposing on them all the additional paper work and additional cost which, as has been made clear to all of us, lie within the directive at the moment. If one does not want the directive to apply to them at all and does not want to impose any burden, why on earth should they not be excluded? I take back not a word of what I have said about the whole directive, but as we are arguing on it as it stands now, I cannot see the logic of continuing to retain these traders within the scope of the directive.

Mr. Fraser

Perhaps I may finish what I have to say in my own way. I think that I shall be able to answer the hon. Gentleman's question. I do not want to see these traders subject to any more onerous obligations than the Consumer Credit Act would impose, together with obligations in respect of cash transactions, for which we have no legislation at the moment but obligations which I would intend to impose, with the agreement of the House, and which should be analogous to those imposed on credit sales negotiated away from business premises. To that I think that they ought to be amenable.

But I say to the House that if that is not possible to achieve by negotiation and by agreement with the Commission and with our partners in the Community, I shall most certainly resist to the last any provision to include them in the directive, and I shall then support the suggested amendment passed by the European Assembly. I hope that that gives sufficient assurance on the point. They should not be affected.

A good deal of argument has ranged around the question whether the directive is ultra vires—unconstitutional. I have not tried to deal with article 100, firstly, because I find that legislatic arguments about competence can sometimes be rather unproductive; secondly, because it is not a matter for me to judge whether the directive is or could be unconstitutional; and, thirdly, because if the Commission did not choose article 100, it is always open to it to choose article 235.

Indeed, when I dealt with a previous directive in the Council of Ministers, I suggested, since I did not want article 100 in that case to be a precedent, that those who thought that article 100 was appropriate might care to have a recital to that effect, and others who thought that article 235 was appropriate might have a recital to that effect, and we would finish up rather like the appointment of an English trustee under a trust deed, which mentions the powers under the Trustee Act 1925, and always adds and all such other powers entitling us so to do. But I did not want to engage in that argument about article 100, because I do not think that I am in a position to reply on the matter, which probably requires a debate of its own.

What I did say—and I stick to these words—is that on my judgment about whether there is competence under article 100, as a matter of judgment, I believe that it is inappropriate for the Commission to engage upon this sort of exercise and others of which I have given examples—the unit pricing directive, for example.

Mr. Giles Shaw

On that specific point, the Minister has heard the views of the House that we do not consider that this is a suitable matter to be handled by an EEC directive. What is his view about that? Will he now take the point that there may not any longer be a need to have an EEC directive in this area but that member States could—and we certainly could—handle the problem by other means?

Mr. Fraser

I have made it plain for some time to the Commission that I do not regard it as being an appropriate area for intervention. I hope that in considering its future work in the field of consumer protection, the Community will distinguish between an area where there is a need for harmonisation, such as consumer safety, and those more general policy issues, such as doorstep selling, where a harmonised approach is neither necessary nor appropriate, but where, perhaps, the exchange of information on similar problems could be of value—but not in the form of a directive —and there may also be a need—I say "there may be"; there probably almost certainly is—for more thorough preparation of Community proposals. I commend to the Commission again—I have done it in the past—the Green Paper approach which this country has, which I think ought increasingly to be adopted by the Community.

Mr. Jay

But if it is my hon. Friend's view—I think that he has now said it three times—that this is an inappropriate area for EEC legislation, will he not say, quite simply, that he will oppose the issue of any directive whatever on this subject?

Mr. Fraser

I am coming to that matter. It is not as easy as my right hon. Friend makes out. If the Council of Ministers or the Community had a Second Reading procedure for directives there would be a point at which the principle of the directive was discussed at a very early stage, and where it could be thrown out altogether. But that is not the way in which these matters proceed.

I was asked to give examples of cases where harmonisation on consumer protection was appropriate, and I can give some. Unfortunately, the Community has often been far too slow, but I believe that there is a great deal of advantage to our industry, particularly to the food industry, and an advantage to consumers, if we can start to agree a range of prescribed quantities which are applicable throughout the whole of the Community, because that gives an ease of trade for producers and gives a certainty to consumers in that they are able to compare one pack with another. That is appropriate. Unfortunately, the preparation of prescribed quantity schedules in the draft directive has taken so long that, once again, I am in a situation in which I would have made prescribed quantity orders some time ago but for the fact that we were still negotiating in the Community.

I have already mentioned safety. There is a great need to have, let us say, the same safety standard for toys, agreed by members of the Community, operating throughout Europe. In that way, consumers are protected by having an adequate safety standard, and the producers of toys—we export many toys from this country and many are produced in other parts of Europe—have a certainty of being able to sell to a large market without unnecessary and restrictive barriers against trade.

Another useful area for harmonisation is the labelling of dangerous products, which, at the same time, protects consumers and can protect workers as well.

We are producers of cosmetics, and soon I hope to lay cosmetic regulations under the European Communities Act. That is an appropriate area for harmonisation.

I happen to think that product liability is a useful area for harmonisation and advance throughout the Community, though many people may disagree with me. That is something that we shall have to debate on another occasion.

My right hon. Friend the Member for Battersea, North (Mr. Jay) asks whether I will oppose all inappropriate directives. In a sense, yes, I will. In a sense, I have already done so. I have not always been to the Commission. The Commission has sometimes come to me. But I have done so by saying quite clearly to the Commission that I regard certain areas as being inappropriate, as being a waste of my civil servants' time and a waste of the time of civil servants in other parts of the Community. I have not only pursued that with the Commission. I have pursued it by visits to both of the other new entrant States. So I am prepared to oppose to that degree.

But, as I say, there is not a Second Reading procedure. What happens is that the draft directive makes its way along, usually by discussion by officials. When it reaches its final form it may be quite innocuous for this country. For instance, if the directive on doorstep selling requires us to do nothing on credit sales because we have already done it a long time ago, and if it requires us to do something about cash sales which we would have done in any case, one is not going to oppose it at that point, because no harm is done.

There may be other circumstances in which a directive comes up to the point of agreement and it may be inappropriate, though it may be innocuous for us and require us to do nothing, but it may be that three, four or five other member States do want certain things to be harmonised, and there is no point in our standing in their way as long as our own traders and consumers and our system do not suffer by it.

Mr. Jay

Surely the Minister is not now telling us that there is no stage at which the British representative on the Council can oppose an individual directive?

Mr. Fraser

Of course he can oppose an individual directive, but because directives tend to go into a committee stage before there is a discussion in principle, the opportunity does not always arise.

I am not trying to dodge the matter. What I have said to Commissioner Burke and to the other members of the Corn-mission is that I do not like a system in which reaching a point of decision is long delayed. What I have suggested on these consumer matters, many of which I consider to be inappropriate, is that there ought, at an early stage, to be a meeting of Ministers, who would then be able to decide at a political level, very early on, whether they collectively thought that these matters were right for Community intervention.

If we can get that sort of discussion going—I am talking only about that field for which I am personally responsible, the consumer field—and if we can approach the matter in that way, it would be rather more productive. The Commission would be acquainted with the political views of member States at a much earlier stage. I think it fair to say that the views that I have expressed in the House today are not out of accord with the views of the two other new entrant member States, with whose Consumer Ministers I have taken the opportunity of discussing these matters.

Mr. Geoffrey Finsberg

I should like the Minister to reflect on what he has said, because he has been eloquently and most helpfully saying that there are areas which he considers inappropriate. But he qualified that by saying that because some of the directives may be innocuous, we can let that go by. Surely he must accept that there is a principle. If the directive is inappropriate, he ought to resist it, whether or not our legislation covers it completely, otherwise he really is perpetuating a nonsense, and in order to prove that we have got to do nothing his civil servants, as he said, have got work to do. I ask him to reflect again and to decide really that if it is inappropriate it is out, and not that because it is inappropriate but innocuous he can allow it to come in.

Mr. Fraser

Even if I wholly agreed with that point of view, the opportunity for stopping a directive in its tracks does not always exist in the early stages. This is one of the difficulties. The best way for me to respond is to try to create a situation where there is a ministerial discussion of these matters at an early stage, where if one felt strongly about the inappropriateness of a directive one could make known that point of view, but I am afraid a difficulty is that the opportunity does not always arise.

I am grateful for the views which the House has expressed, which I believe largely reflect the views which I put in my opening speech, but that does not make the debate in any may superfluous, it makes it extremely useful, because now those views, which I have represented privately but cogently, are very much reflected by the views which have been expressed in the debate. That will be of considerable assistance to myself and those of my advisers who have to nego- tiate the details of these matters in Brussels.

Mr. Onslow

Will the Minister touch on consumer representation and try to get a message through to them on that, also?

Mr. Fraser

I have enough problems answering for myself and the Government. I am not going to put myself in the position of trying to explain how a welter of other consultative bodies, the European Parliament, and the rest behave themselves. That is a matter for them, not for me.

I conclude by saying that I am grateful for the views expressed by the House. There has been a large degree of unanimity. The content of this directive must be substantially and fairly fundamentally changed and I will certainly seek every opportunity to keep the House informed of the progress on it.

Amendment agreed to.

Main Question, as amended, agreed to.

Resolved, That this House takes note of EEC Documents Nos. R/113/77 and R/134/78 on Contracts negotiated away from Business Premises but does not consider that they are an acceptable basis for legislation in the United Kingdom, and urges the Government to secure their withdrawal.