HC Deb 29 February 1984 vol 55 cc345-52

Resumed debate

9.57 pm
Mr. Alexander Fletcher

I have to conclude my opening remarks by referring to the principle of the measure. On the question of principle, our main concern has been to ensure that, in future, proposals by the Commission in the consumer affairs field should be limited to subjects that have a more obvious Community-wide dimension than is the case with the directive that we are considering. As a result of our representations on this point, we have reached an understanding with the Commission and other member states that Community action will concentrate on those areas in which measures are necessary to attain the Community's objectives in connection with the functioning of the Common Market as they are defined in the Treaty.

In its 1983 report, the Select Committee also refers to the mention in my Department's supplementary explanatory memorandum of the need for compatibility with United Kingdom legislation in the fields of consumer credit and hire purchase and with the proposed EC directive on consumer credit. We shall cover the first aspect in the implementing legislation. With regard to the link between this proposal and the proposed consumer credit directive, may I reassure the House that we are fully aware of the points at which these two proposals are liable to overlap. We shall make every effort to ensure that any provision relating to doorstep selling in the consumer credit directive is compatible with the doorstep selling directive.

I hope that the House will agree that these points are not in themselves sufficient grounds for blocking a proposal which, though limited, represents a very useful measure. Although the majority of traders who make unsolicited visits to homes are reputable and honest, there are nevertheless pitfalls for consumers who buy goods or services as a result of this method of trading. Some salesmen indulge in high-pressure selling techniques or other dubious practices, which can be frightening to many householders—especially the elderly and those living alone. As a result of their fears, or simply because they are under pressure, consumers can and do sign contracts for goods that they may not really want or may be unable to afford.

Mr. William Benyon (Milton Keynes)

Reputable doorstep organisations fear that the pass may be sold in the Community because of those countries — Denmark in particular—where doorstep selling is not allowed at all. Can my hon. Friend reassure me that Her Majesty's Government will not consider such a move?

Mr. Fletcher

I am happy to reassure my hon. Friend. Our complaint about the directive has not been about the principle of doorstep selling. What we have questioned, rightly, is whether such an issue requires Community-wide legislation. That is why the directive has been before the Council of Ministers for some time. We hope that it will be given a shape and form that is acceptable not just to ourselves but to those who trade in this manner in our country.

Mr. Tony Marlow (Northampton, North)

Does my hon. Friend consider that it is necessary that this sort of legislation should be provided on a Community-wide basis? If so, why?

Mr. Fletcher

We do not agree that such legislation has to be Community-based. That is why I have just discussed the point of principle. We have made that point to the Commission in suggesting amendments to the directive which would make it suit the requirements of the United Kingdom in this field. We do not want more legislation such as this to be presented to us by the Commission as Community legislation. This is essentially a domestic matter, and there are other issues of greater importance affecting trade within the Community on which the Commission could better spend its time.

Mr. Marlow

If the Government believe this directive to be unnecessary, why have we accepted it? There is plenty for us to do without accepting unnecessary legislation.

Mr. Fletcher

I have already said that we accepted this legislation because we have successfully amended it to suit trading practices in Britain. It is not at all far out of step with the type of domestic consumer credit legislation that we pass. Having made the point of principle that my hon. Friend has rightly drawn attention to, we were able to accept it. We are now saying, "Please let us leave it at this and get on with other more important matters and not legislate on matters that are at least doubtful in regard to Community-wide business or trading."

Mr. Marlow

Why not veto it?

Mr. Fletcher

These are decisions that must be made according to the circumstances in any piece of legislation. If it is harmless in United Kingdom terms, in that it does not upset the method of trading here and affords some useful protection to consumers, we can accept it. I am not disagreeing with my hon. Friend. We are telling the Commissioners that we do not want to spend time on such legislation in the future. I do not think that my hon. Friend and I are far apart on that.

Consumers who sign contracts in these circumstances which include a hire purchase or—when the Consumer Credit Act 1974 comes fully into force next year—a regulated credit agreement, already have the benefit of a cooling-off period, a period of reflection in which they can consider carefully and without pressure whether their original decision was correct. The proposal that we are considering will ensure that similar protection is available to people who pay in cash or by cheque and that the cooling-off period is extended to seven days.

10.1 pm

Mr. Alan Williams (Swansea, West)

I join the Minister in saying that we trust that this will be the last measure of its type that Brussels dares to impose on member countries. It is a type of directive that Brussels showed a tendency towards in the mid-1970s. The Government then told Brussels—I know that this is the Government's view — that when internal action constrained trade between countries that was a legitimate matter for the EC to consider but that the type of protective legislation such as we are discussing today is domestic consumer legislation. I suspect that if it had not come forward so early we should not have contemplated it but blocked it at the outset. The House is at one in that the EC must understand that we want no more directives of this type.

I say that it should go through because I am favourably disposed to the EC. Perhaps I am in the minority tonight. Nevertheless, I have never felt that the EC is a particularly beneficial influence on consumer legislation. It is an institution that has frequently led to delays when we could have acted more rapidly and appropriately domestically. In so far as accepting the directive will make it easier for the Government to go ahead with their own proposals, we shall give it our blessing.

The Minister knows the detailed points that worry me. We are especially anxious about the anomalies between the directive on doorstep selling, a proposed directive on consumer credit and the Consumer Credit Act, which I took through the House in 1974. Thresholds differ between the three, as do ceilings. The Minister has said that he intends to ensure that those deharmonising factors can lead to a harmonious outcome. Nevertheless, I note that under these proposals it would be possible for the contract to purchase to be declared invalid while the contract for the credit to carry out that purchase would remain valid. That seems somewhat inconsistent and unfair.

I hope that, bearing in mind our reservations about the possible conflicts between the directive, other proposals from the EC and our own legislation, the Minister will try to ensure that we do not wander into this type of position again. I hope also that he will ensure that the EC is left in no doubt that this is the last of such legislation. On that basis, and on that basis alone, we shall support it.

10.4 pm

Sir Dudley Smith (Warwick and Leamington)

My hon. Friend the Under-Secretary of State is certainly right about this directive. I did not intend to speak when I heard his opening comments, but I am somewhat alarmed at the background information that has emerged. I am sure that my hon. Friend has taken the right attitude on behalf of the Government and I agree with the right hon. Member for Swansea, West (Mr. Williams) that it is quite wrong for proposals of this kind to emanate from the EEC.

A politician is perhaps the last person to talk about doorstep selling and canvassing, but we know that it is a sensitive issue, as we have been round the course so many times. It is a difficult subject and there are mixed feelings about it. On the whole, however, I tend to be against doorstep selling because the bad people get the good ones a bad name and it is difficult and intrusive for people living alone and for elderly people. Be that as it may, as my hon. Friend has said, it is certainly a matter for domestic consideration and decision. I am sure that we can regulate our own affairs correctly in this regard. Indeed, I believe that in the past few years we have more or less got it right and Members no longer receive many complaints about abuses.

This is the kind of thing that has given the EEC a bad name. Having listened to my hon. Friend in this short debate, I stand by the view that until we can reform the bureaucrats, this excellent and essential institution in Europe will continue to go the wrong way. We must do something to stop this kind of thing emanating from Brussels. I support the attitude of my hon. Friend today and I am sure that he and his colleagues will continue to take that view if further unreasonable missives come to the House from Brussels.

10.6 pm

Mr. Teddy Taylor (Southend, East)

I am sure that the Minister and the House accept that we are suffering from a flood of harmonising legislation from the EEC which is achieving very little. It is sad to hear Ministers say time and again that they have introduced domestic legislation to try to reduce the damage caused by the various directives.

Why is this directive being introduced as a harmonising measure when it is no such thing? Article 8 provides that member states may make their own legislation even if it is wholly different from the directive. I have never seen such a thing before. What is the point of harmonising legislation which allows national Governments to make their own completely different national laws? How can anything be harmonised if we can go ahead and pass legislation entirely different from that of France, Germany, Italy or Denmark?

Mr. Marlow

Does my hon. Friend agree, however, that allowing member states discretion to introduce their own legislation is a very positive move, which should be supported?

Mr. Taylor

My point is that we could go that way without any directive at all. This is one of the most ridiculous examples of EEC attempts to interfere with British domestic legislation. It is a harmonising proposal which harmonises nothing.

Secondly, I have never before seen a note from the Department to the effect that we are discussing an informal copy of what is believed to be the latest text of this proposal. Do the Government mean that this may not be the right text as there may be a different one? If that is so, would it not be simpler to postpone the debate until we have a proper text? It is straining the patience of the House too far to expect us to debate what the Government merely believe to be the latest text of legislation.

Thirdly, and more generally, I have been concerned that in the rush to answer the consumer brigade or the consumer campaigning industry we may be going too far and causing real damage to genuine, honest traders who simply want to get on with their jobs. We have had a little too much legislation which, although apparently designed to help consumers, in my view has been introduced in such a way as to do real damage to honest traders. Indeed, we shall have the opportunity to discuss one such measure in a Committee of the House next Wednesday.

If this directive had been implemented by the Government through domestic legislation, it could have affected a recent transaction in my own home. We had a storm in Southend in which my house was damaged, and some slates fell off the roof. It happened three weeks ago. I telephoned a gentleman called Mr. Fenn and asked him to come round and sort out my slates. When he arrived at my home, he seemed to be an extremely pleasant and competent tradesman. So I drew his attention to a problem that had arisen in the interim. I had been trying to carry out some do-it-yourself repairs to a window, but unfortunately I dropped my hammer, and the hammer had broken the cistern in the downstairs bathroom. So when Mr. Fenn came to talk about mending my slates, I said to him, "Do you by any chance also mend broken toilets and cisterns which silly people drop hammers on?" He replied, "I am an expert on the job." So I concluded with him on the spot an agreement for him to supply and fit a new toilet and cistern.

Although Mr. Fenn, being an honest and reputable tradesman, went out and straight away ordered, at his firm's expense, the necessary parts and organised labour to carry it out, as far as I can see, under this directive, when Mr. Fenn came back with the materials, I would be entitled to say to him, "Get lost. I am sorry, but I have changed my mind. I do not want you to do the job." Clearly, that would mean a serious loss for Mr. Fenn.

I have looked at the directive to see whether there is a letout for Mr. Fenn. I find none. Although the directive does not apply to contracts for the construction of immovable property, it apparently applies to the supply of goods and their incorporation in immovable property. Clearly, a cistern and a toilet are goods that can be incorporated in immovable property, and are contracts for repairing the property concerned.

I wondered whether there might be a way out for Mr. Fenn on the basis that there was some connection between toilet cisterns and slates. Article 3(3) says that Member States may refrain from applying this directive to contracts for the supply of goods having a direct connection with the goods or services concerning which the consumer requested the visit of the trader. I do not think it would be possible for me to argue that a toilet or a cistern has a direct connection with slates that fall off the roof.

I therefore wondered whether any other provision might help. The only one I could think of was article 3(2) (f), which says that the regulation does not apply to cases where the trader is in good faith unaware that he is negotiating with the consumer. Could the Minister tell me precisely what is meant by that? How are we to gauge what is meant by saying that a trader who calls at a house to negotiate a deal is not aware that he is negotiating with the consumer? If we approve this directive, does it mean that someone in the position of Mr. Fenn, who is an honest and reputable trader, could find himself in the position of having a contract that he freely negotiated with me cancelled by me, and thereby lose a great deal of money? That is a specific case. I hope that my hon. Friend the Under-Secretary of State will not say that it can only be resolved by going to the European court or by consulting my MEP.

I fear that we are in real danger of introducing new legislation which, while allegedly protecting consumers, is unfair to good tradesmen. That is one particular case, but I could produce hundreds of similar hypothetical cases. If this directive had been in operation, could I have told Mr. Fenn that I did not want the goods that I had asked him to provide?

10.15 pm
Mr. Tony Marlow (Northampton, North)

The next time my hon. Friend the Member for Southend, East (Mr. Taylor) picks up a hammer and goes up to his loft he should remember the words of Hilaire Belloc that It is the business of the wealthy man to give employment to the artisan. He will then avoid the problems that he has described.

I am grateful to my hon. Friend for the reassuring reply that he gave to my intervention. I find the measure disturbing. As anybody on the Scrutiny Committee will realise, the Community wishes to put many measures before national Parliaments and there is a strong tendency for the Community to increase its powers, competence, areas of influence and those policies over which At has some control.

Conservative Members believe in minimising bureaucracy, government and taxation. Since we have been in the Community—I believe that the Government will address themselves to the problem with great vigour—we do not just have one Government, we have two. We do not have just one Civil Service producing policies, ideas and various measures to put before the people, which have to be paid for by taxation, but two such bodies, hungry for power, ideas and money. It is the taxpayer who has to pay for their pet projects.

The measure has been generated by that massive motor of incompetence, intervention and bureaucracy in Brussels. My hon. Friend rightly said that the measure is unnecessary, unimpressive and unimportant. Why was a decision reached despite the Committee's recommendation that we should have a debate beforehand on the important and serious issue of ESPRIT, information technology and large European investment, in which many hon. Members would have been interested? Reasons were given for the decision being made before the House debated that issue. Surely it could not have been for lack of time. We have time to deal with this piffling measure this evening. Surely time should have been found in the parliamentary programme for something as important as that. One wonders, although one does not know, whether it is more convenient for non-controversial measures to be put before the House, whereas there are other ways of dealing with those measures that might cause problems, wrinkles or disruptions between Britain and other members of the Community, particularly during the present budget negotiations.

I know that the Direct Selling Association Ltd. has looked at the measure carefully. It, as everybody knows, regulates direct selling within the United Kingdom. It believes that the directive will provide a valuable level of trading standards for direct sellers although far below the standards that apply in Britain. As my hon. Friend the Member for Milton Keynes (Mr. Benyon) has said, there is a feeling that the Danes are concerned that there should be no direct selling in Denmark, and it is they who have put pressure on the Community and on the Commission to ensure that article 8, the article about which my hon. Friend the Member for Southend, East was complaining so loudly, was incorporated. Article 8 states: This Directive shall not prevent Member States from laying down or maintaining more favourable provisions to protect consumers in the field covered by this Directive. One can take one's choice, and do it the way one wants. It would be nice if, when some of the directives come forward that people would like to foist upon us — Vredeling and other such directives—we had similar discretion in the United Kingdom. It might draw some of the horns from the directives.

I know that the Direct Selling Association, and I think sensibly, would prefer that article 8 should be changed, and should be more in line with the realm of Community legislation so as to read: This Directive shall not prevent member states from maintaining other provisions to protect consumers in the field covered by this Directive insofar that such provisions are in accordance with the Treaty. In my view, that is a fair point. We in this country, rightly or wrongly, abide by the provisions of the treaty. It is only right and fair in those circumstances that other countries should do likewise.

10.21 pm
Mr. Alexander Fletcher

I agree with the comments of my hon. Friend the Member for Warwick and Leamington (Sir D. Smith), and I think that he agrees with mine. It is just as well that politicians are excluded from the draft directives.

I understand the points made by the right hon. Member for Swansea, West (Mr. Williams) about the harmonising effects of existing legislation in the United Kingdom. As I said in opening, we shall take the earliest opportunity to bring the five-day and seven-day cooling off periods into line. There will still be some difference in the amounts of money in the Consumer Credit Act that will be at variance with the sum of money that affects doorstep selling. There is a draft directive on consumer credit, but I think it is still some years away, under consideration by the Commission.

My hon. Friend the Member for Southend, East (Mr. Taylor) said that member states appear to be able to go their own way, which is true. My hon. Friend the Member for Northampton, North (Mr. Marlow) said that there is discretion to individual countries. I think that this is an admission by others of the success that we have had in pointing out that in principle this is not a matter for Community legislation. That is why there is a specific discretion in this draft.

I wish to tell my hon. Friend the Member for Southend, East that this is the latest text. We thought that there might be further amendments, but the document before the House is the latest text. My hon. Friend asked about the effect on honest traders. No honest trader has anything to fear from such a directive, but in the circumstances of his own unfortunate mishap, I can say only that the terms of the directive would apply. As to my hon. Friend's constituent who was willing to do a deal on the spot, if my hon. Friend decided, for whatever reason, during the cooling-off period that he wanted to change his mind, under the terms of the directive he would be entitled to do so. His constituent, the tradesman, would be aware of these provisions, and I am sure would be able to continue with the contract, knowing that my hon. Friend is the last person in the world who would ever repudiate anything he said to a tradesman or any other person.

Mr. Teddy Taylor

Does the Minister not think it is unreasonable that a tradesman can go along in such circumstances to proceed with an emergency job, be commissioned by the person who has called him to do a job, go out and buy the goods concerned, arrange for labour, and then find that the contract is torn up and that he loses a great deal? Surely this is an example not of protecting consumers but of putting at risk the funds of decent, honest tradesmen who want to act in a responsible way? What possible justification can there be for that provision?

Mr. Fletcher

I think that there must be some misunderstanding. I assumed that my hon. Friend was referring to calling in a tradesman to repair one item and then asking him, while on the premises, to look at something quite different. If he was looking at something quite different, the terms of the draft directive could apply, but it would not if the addition was connected with the original request for the tradesman to visit his home.

Question put and agreed to.

Resolved, 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.

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