§ The Under-Secretary of State for Trade and Industry (Mr. Alexander Fletcher)I beg to move,
That this House takes note of European Community Documents Nos. R/113/77 and R/134/78 concerning contracts negotiated away from business premises and of the supplementary explanatory memoranda submitted by the Department of Trade on 18th June 1980 and the Department of Trade and Industry on 9th November 1983, and supports the Government's intention to secure a satisfactory resolution of the outstanding points.The debate is held on the recommendation of the Select Committee on European Legislation which has considered the proposal on three occasions since 1977. The early drafts of the proposal found no friends in this House. Both the Select Committee in its 1977 and 1978 reports and the House in its 1978 debate had considerable reservations about it. In the 1978 debate, the House resolved that it did not consider the proposal an acceptable basis for United Kingdom legislation. The Government of the day accepted that view.In further discussions in Brussels, it emerged that the majority of member states were still anxious to proceed with a directive on contracts negotiated away from business premises. But it was generally felt that the original draft proposal was a dead letter. The Commission therefore produced a new and much simplified text and a further round of discussions began.
The present draft is a very simple document, on the same lines as the informal draft which the Select Committee considered in 1980, but with a number of changes. For the convenience of hon. Members I have placed an informal copy of the latest working draft, with the formal documents for this debate, before the House.
The central feature is the establishment of a cooling-off period of seven days for certain contracts which are concluded away from business premises. Article 1 lays down the circumstances in which the directive will apply and article 3 specifies certain types of contract which will be exempt from its provisions. The main exemption is for contracts with a value of less than 60 European units of account — about £35. Other exemptions cover the construction, sale and rental of immovable property, drinks and foodstuffs supplied by regular roundsmen, catalogue mail order trading, insurance contracts and contracts for securities.
Apart from these exceptions, the directive applies to all contracts concluded during an excursion organised by a 306 trader away from his business premises or during a visit by a trader to a consumer's home or workplace, or to another consumer's home, when the visit does not take place at the express request of the consumer. The trader is required by article 4 to give the consumer written notice of his right to cancel the contract within seven days and the name and address of a person against whom he can exercise that right.
It may be convenient if I outline to the House the paints that are still under discussion in Brussels. The first concerns article 1.2 which applies the directive to contracts for the supply of goods or services other than those for which the consumer requested the visit from the trader. It has yet to be decided whether this provision will be mandatory or permissive.
The second is a proposal for an additional exemption in article 3 to cover cases where the trader is in good faith unaware that he is negotiating with a consumer.
Finally, there is a proposal to extend article 8 of the directive to ensure that the directive does not prevent member states from banning the doorstep selling of certain goods. The House will note that there are very few remaining points of difficulty.
I hope that the House will agree that the present draft of the directive is a considerable improvement on its predecessors. It exempts insurance and catalogue mail order contracts about which several hon. Members expressed anxiety in the 1978 debate. It sets a higher and more realistic value limit than the 25 European units of account limit in the 1980 draft. It also includes a provision designed to bring within its scope "supply and fix" contracts — covering such items as double-glazing installation or cavity-wall filling — which are an important feature of this method of selling in the United Kingdom.
In its 1980 and 1983 reports, the Select Committee drew attention to doubts expressed in the 1978 debate over whether the proposal could properly be put forward under the treaty of Rome. Although on broad grounds of principle it would still be possible to argue that way, we consider that, since major improvements to the draft have been achieved, it would be undesirable to reject the directive now on wires grounds.
§ It being Seven o'clock, and there being private business set down by THE CHAIRMAN OF WAYS AND MEANS, under Standing Order No.7 (Time for taking private business), further Proceeding stood postponed.