HC Deb 27 July 1981 vol 9 cc804-5
3. Mr. Teddy Taylor

asked the Secretary of State for Trade if he has yet come to a decision upon the Monopolies and Mergers Commission's recommendations on credit card surcharges.

9. Mr. Wilkinson

asked the Secretary of State for Trade if he is yet able to state what action he intends to take following the Monopolies and Mergers Commission's report on credit cards.

25. Mr. Sainsbury

asked the Secretary of State for Trade what steps are being taken to implement the Monopolies and Mergers Commission's report on credit cards.

The Minister for Consumer Affairs (Mrs. Sally Oppenheim)

The Director General of Fair Trading and I have been consulting interested parties on the steps to be taken following the report. There are complex issues to be considered and my right hon. Friend will announce his decision as soon as practicable.

Mr. Taylor

Does not my right hon. Friend agree that total confusion has been created for the consumers, when they are facing substantial and escalating surcharges? As prices are being increased in almost every case, as tourism is being damaged and as no other comparable country allows surcharges, will not the Minister change the proposals of the Monopolies and Mergers Commission and allow the previous situation to continue?

Mrs. Oppenheim

My hon. Friend has validly indicated some of the complexities in the problem that the Government must face in reaching that decision. He is right to say that confusion has arisen in some cases for consumers where the surcharge is not indicated, and in others where it is indicated. All those things are under consideration by the Government and by my right hon. Friend and I during the consultations that we are holding at present and in our consideration of the final outcome of the issue.

Mr. Wilkinson

As my right hon. Friend will admit that the present situation is far from satisfactory not only with regard to surcharges, can she tell the House when she will bring proposals to it to take measures appropriate to the recommendations in the Monopolies and Mergers Commission's report, because it was produced in September 1980, which is almost a year ago?

Mrs. Oppenheim

My hon. Friend has made a valid point. He mentioned the great complexities in the issue, all of which the Government must consider. My right hon. Friend and I in particular must consider them in reaching a decision on the issue. It would not be fair to any of the parties concerned, most of all to the consumer, if we rushed the decision and did not consult as fully as possible before reaching such a decision. I am aware that there is some uncertainty now and that that uncertainty is unwelcome. My right hon. Friend and I will be as quick as we can in giving full consideration to all the representations which have been made to us.

Mr. Stokes

Does not my right hon. Friend agree that whether we have any more surcharges or not, those cards are inflationary, in that they encourage people to spend money which they do not have?

Mrs. Oppenheim

I am not sure whether that has been fully established. As I understand it—it is not particularly an issue in this case—a large majority of people using credit cards do not avail themselves of the full credit facilities, but only of the monthly facility. It is more a service that is provided to consumers than anything else at present. That is one of the things that adds to the complexity of the situation and the decision that the Government must make.

Mr. John Fraser

Does the right hon. Lady believe in one simple proposition, that garages that give discounts for cash should not be penalised by credit card companies?

Mrs. Oppenheim

Yes, Sir. But at the same time one of the things that we must consider is whether those who are giving discounts for cash are the same people who are adding a surcharge for the use of credit cards. At the moment that is one of the things that are not absolutely clear, which are clouding the issue and that are under consideration.

Mr. Emery

So that my right hon. Friend can consider the whole matter, does not she agree that the companies that take credit cards are having to pay to the credit card companies a percentage—sometimes 3 per cent.—of the bill that they charge the customer? Therefore, if there are limitations, there could be a decrease in the number of outlets taking credit cards, which would be a disadvantage to the customer.

Mrs. Oppenheim

My hon. Friend has illustrated well one of the facets of the situation that my right hon. Friend and I must consider. It is true that there are charges. I must make it clear mat those are more likely to be service charges than credit card charges because, as I understand it, those using those facilities can reclaim the money more or less on the same day in most cases. However, the service that is levied, and the one that costs the money, is that of servicing the facility on the part both of garages and of the credit card companies. I should also make it clear—

Mr. Speaker

That is an inordinately long reply. In fact, every one of the Minister's replies has been inordinately long. The Minister may finish her sentence, however.

Mrs. Oppenheim

I should also make it clear to the House that the recommendations of the Monopolies and Mergers Commission will affect not only garages but the whole retail trade, as well as restaurants and hotels.