HC Deb 21 June 1982 vol 26 cc5-6
7. Mr. John Fraser

asked the Minister for Trade if he will seek to introduce legislation to protect consumers' and investors' deposits.

The Minister for Consumer Affairs (Dr. Gerard Vaughan)

This will be for consideration in the light of the Cork committee's recommendations, and those I shall be receiving in due course from Professor Gower.

Mr. Fraser

Has the hon. Gentleman had a chance to study the recent annual report of the Metropolitan and City fraud squad, which describes legislation for the protection of depositors as inadequate? In the light of that report and the farce of Laker's collapse, with people having paid for scheduled air tickets in advance, does he agree with the general principle that consumers' and investors' money ought to be protected by the depositor keeping proper accounts and keeping a clients' account? Will he eventually move to outlaw muddle and meddling with investors' and consumers' cash?

Dr. Vaughan

That is a very important aspect. The Conservative Party has always concerned itself with people's ability to save and with protecting their savings when they are abused. I am looking at several different reports on the matter. We shall have to wait until we have had an opportunity to look in detail not only at the Cork committee's proposals, but at the Gower discussion document and the comments that are coming in on that.

I welcome the comments in the Cork report about trust funds being used for deposits where they exist and are appropriate.

Mr. Squire

Does my hon. Friend accept that many hundreds, if not thousands, of people in Britain are losing money every year under the present legislation and that several of us would support a major change in that legislation? At first sight, the Cork committee's proposals will not of themselves do very much to change the underlying position.

Dr. Vaughan

I accept that there are some serious abuses in this area. We shall have to consider whether we should do what Cork would like and take his report as a package to be legislated on as a whole, or to pull out some parts of it and deal with the more urgent abuses more immediately.

Mr. Christopher Price

Is there no quick help that the Minister can offer to my constituents, Mr. and Mrs. Johnston, of Cranston Road, Forest Hill, who were foolish enough to pay their deposit for their Laker holiday through an Access credit card and now find that the credit card companies are hiding behind the small print? It looks as though there will be many months of expensive litigation before Mr. and Mrs. Johnston see a penny of their money. On top of that, they get wholly unhelpful answers from the Minister.

Dr. Vaughan

I am deeply concerned about Mr. and Mrs. Johnston and, if I may say so, about many other Mr. and Mrs. Johnstons in various parts of the country.

My hon. Friend will be answering a question later this afternoon about the collapse of Laker Airways.

Mr. McCrindle

I in no way challenge the validity of the proposition contained in the question, but would it not be as well for my hon. Friend to make it clear to the House and the country that if the idea were to be extended—as it is arguable that it should—to those going on package holidays, the interruption of cash flow to travel agents and tour operators would necessitate a very considerable increase in the cost of package holidays?

Dr. Vaughan

As my hon. Friend knows, we are very concerned about these matters, and we are looking into them. Meanwhile, my advice is that people should use credit cards when it is appropriate, because they get some protection in that way. They should also deal with traders who are members of the voluntary bonding schemes which are run by different parts of the industry.