§ The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. John Butcher)
I beg to move,That the draft Control of Misleading Advertisements Regulations 1988, which were laid before this House on 23rd March, be approved.
If approved, the proposed regulations would implement the Council directive 84/450/EEC, relating to the approximation of the laws, regulations and administrative provisions of the member states concerning misleading advertising.
The directive has its origins in the preliminary programme for consumer protection adopted by the Council of Ministers in 1975. Technically, it is a harmonisation directive. In proposing it to the Council, the Commission argued that the differences between member states' laws on misleading advertising impede the free flow of goods by restricting international advertising campaigns and making it difficult to adopt a uniform marketing strategy.
The first draft of the directive required member states to enable complainants to approach a court to have a misleading advertisement prohibited. On the recommendation of the European Parliament, that was amended so that the appropriate powers and duties could be conferred on either the court or an administrative authority.
Against that background. the previous Government set up a working party, the Burgh committee, comprising the principal interests involved, to consider how the self-regulatory system of advertising control, administered by the Advertising Standards Authority, should be reinforced by legislation. The incoming Government in 1979 felt that the working party should first consider whether reinforcement of the self-regulatory system was necessary. Although we felt that the system generally worked well, the working party suggested that the Director General of Fair Trading could usefully be given a power to apply to the High Court for an injunction in those cases where the self-regulatory system had failed to prevent the publication of a misleading advertisement.
Subsequent negotiations on the directive enabled the United Kingdom to achieve two very important changes which allow us to implement it along the lines of the working party's recommendation. First, if a member state chooses to provide for complainants to have access to an administrative authority, that authority may be empowered either to decide on complaints itself, or to apply to the court for an order prohibiting a misleading advertisement. Secondly, the directive now enables us to give administrative authorities powers to require complainants to have prior recourse to other established means of dealing with complaints, including self-regulatory systems.
In the most general terms, the directive requires member states to ensure that they have adequate and effective means for the control of misleading advertising, to protect consumers, other businesses and the general public. In particular, those means of control must include measures for the legal prohibition of misleading advertisements.
273 The directive defines both "advertising" and "misleading advertising" very widely and that is reflected in the definitions in regulation 2 of the draft regulations. The draft regulations do not, incidentally, reproduce article 3 of the directive which sets out an illustrative list of examples of information that should be taken into account in determining whether advertising is misleading. In our view, the list is unnecessary. We consider that it does not add anything and, in practice, may even serve to narrow the interpretation of misleading advertising in the United Kingdom to a degree not intended by the directive. The definition of "advertisement" would extend to oral representations and leaflets, but an advertisement would be misleading only if, by its deceptive nature, it was likely to affect consumer behaviour or to injure a competitor of the advertiser. To be misleading, an advertisement would not need to have actually affected any consumer or competitor. It would be enough that the advertisement was likely to have such an effect.
Member states are required by the directive to provide arrangements enabling any person or organisation regarded under national law as having a legitimate interest in prohibiting misleading advertising to initiate legal proceedings against such advertising or to bring it before an administrative authority. An administrative authority must be competent either to decide on complaints or to initiate appropriate legal proceedings. The Government propose to entrust this competence to three named administrative authorities.
The principal authority would be the Director General of Fair Trading. Regulation 4(1) would put him under a duty to consider complaints, and regulation 5(1) would empower him, if he thought it appropriate, to apply to the High Court or, in Scotland, the Court of Session for an injunction or an interdict.
The duty to consider complaints would be subject to two qualifications. The director would not be required to consider a complaint if he considered it frivolous or vexatious. More importantly, he would be able to require complainants to satisfy him that they had exhausted the established means of dealing with complaints. In effect, this would be a discretion to refer complainants to other bodies. The main bodies would be the Advertising Standards Authority and the trading standards department of local authorities. He would, however, be able to refer complainants to other bowies as appropriate in relation to particular complaints.
The House will no doubt be familiar with the self-regulatory system of advertising control which is administered by the Advertising Standards Authority. The Government believe that self-regulation has, by and large, served the public well and have no wish to diminish its importance—hence the proposed power of the director to require prior recourse to established means. Regulation 4(4)(b) would require him to have regard to the desirability of encouraging the self-regulatory system.
The other principal established means would be the trading standards departments of local authorities. Their activities stem mainly from their enforcement functions under the Trade Descriptions Act 1968 and other consumer protection legislation. Although the legislation 274 which they enforce provides for criminal penalties for non-compliance, trading standards departments resolve most cases with the advertisers concerned.
I think that it is important that these regulations should not undermine the valuable work done already by trading standards departments. I believe that they, and the ASA, will be able to point to the director's new powers to encourage advertisers to co-operate voluntarily and withdraw or amend any offending advertisement.
I should mention that there are several other bodies operating to control misleading advertisements in particular sectors of the market that the director would no doubt wish to refer complainants to in appropriate cases. They are, for example, the Department of Health and Social Security for pharmaceutical products, the Building Societies Commission for advertising by building societies, and the Bank of England for banking services. The director would have a wide discretion to refer complainants to such bodies as he thought fit.
To enable him to fulfil his functions, regulation 7 would give the director a power to require information to be supplied to him, in particular to ascertain whether factual statements in an advertisement were true. Failure to comply with a notice from the director requesting information could be followed by an order from the court on the application of the director requiring the default to be made good. This power is necessary for those cases where the evidence as to whether an advertisement is misleading is uniquely in the possession of the advertiser. To be able to act swiftly and effectively, in the interests both of consumers and of rival advertisers, the director needs a power to obtain this information.
§ Mr. John Fraser (Norwood)
Is it intended that the power should be exercised before the director general applies for an injunction or during the injunction proceedings? It would seem sensible to get the information before applying for the injunction.
§ Mr. Butcher
The agency would normally be the first body that the director general would expect to have an investigation made. If the agency did not feel that it could secure the information it required, under standard practice, it would go via the director to the High Court—if that long-stop power were required—to obtain the information. I hope that that helps the hon. Gentleman. If he will allow me to continue, he may find that there is further clarification later in my speech.
In the case of broadcast advertising, and advertising transmitted by a licensed cable service, the administrative authorities would be the Independent Broadcasting Authority and the Cable Authority, respectively. Both are already empowered to decide on complaints. The IBA may, if it considers an advertisement misleading, refuse to broadcast it, and the Cable Authority may, under section 15(1) of the Cable and Broadcasting Act 1984, issue a cable operator with a direction not to transmit an advertisement. In the event of a cable operator failing to comply with such a direction, the Cable Authority already has the power to apply to the court for an injunction or to revoke the cable operator's licence.
Under the draft regulations, both authorities would be able to consider a factual claim in an advertisement to be inaccurate if the person responsible for the advertisement failed to substantiate the claim when asked to do so by the 275 authority. The relevant provisions are, in relation to broadcast advertising, draft regulations 8 and 9, and, in relation to cable advertising, draft regulations 10 and 11.
In implementing the directive we propose to allocate responsibilities between administrative authorities primarily on the basis of the medium carrying the advertisement. However, there would be one sectoral division. Investment business advertisements issued by or on behalf of a person authorised under the financial Services Act 1986 or the appointed representative of such a person would be excluded from those regulations. Implementation of the directive in that sector would be achieved by the provisions of that Act, and the administrative authority would be the Secretary of State or any person to whom he has transferred relevant functions under the Act. In practice, that would mean the Securities and Investments Board.
The SIB has issued rules governing the conduct of business by authorised persons, which include prohibitions on those types of advertising practice which the directive seeks to prevent. Some authorised persons will operate under the rules of self-regulating organisations or recognised professional bodies, themselves recognised by the SIB. SROs and RPBs are required to have rules providing investors with protection at least equivalent to that provided by the SIB's own rules. The SIB has power to apply to the court for an injunction restraining an authorised person from a breach of the SIB's rules or, in certain circumstances, those of an SRO or an RPB. Both the SIB and the Secretary of State have power to apply for an injunction restraining an authorised person from a breach of certain provisions of the Act itself, including its provisions as to advertising.
Therefore, regulation 3 would provide for the exclusion of investment advertisements issued by authorised persons and their appointed representatives. However, advertisements issued by persons exempt from the requirement for authorisation under the Financial Services Act would fall within the scope of the draft regulations. Regulation 3 would also exclude listing particulars and associated advertisements. The Government's view is that the directive does not apply in this area, as there is a set of specific directives which regulate these matters.
These regulations, if approved, would be a valuable addition to our already extensive regime of protection against misleading advertisements. Moreover, they would achieve that in a way that created no new criminal offences for traders; did not impose burdens on business; did not undermine the established means; imposed a negligible cost on the public purse; and afforded responsible businesses protection against unscrupulous competitors. In short, this measure is good news for both consumers and business. I commend it to all quarters of the House.
§ Mr. Austin Mitchell (Great Grimsby)
It is clear from the Minister's somewhat laboured explanation that we are dealing with a ramshackle structure. I am sure he did not wish to be misleading, but he succeeded in being confusing. It is not clear that this measure will operate in the simple and straightforward fashion that we want in controlling misleading advertising.
We welcome anything that will control, check and stop misleading advertising, and it is right that we should do so. We welcome such measures even more when they provide 276 us with the interesting spectacle of a Minister from the DTI criticising misleading advertising. It is interesting to watch the Minister walking the fine line between his attachment to market forces and the need, forced upon him by Europe, to introduce some form of regulation.
We have two basic points of criticism. The first and most straightforward point is simply that the process of developing the regulations has taken far too long. This is the gestation period not of one elephant, but of a dozen elephants. Moreover, the way in which the regulations have been produced reflects no credit on the EEC. We do not expect otherwise. The EEC is used to producing—and is there to produce—such Euro-farces. But it reflects no credit on the Government either. The Government have dragged themselves slugfooted, clumsily, reluctantly, hesitantly and pedantically to the regulations. I should have added "belatedly" to that list.
At the end of that elephantine gestation period, we are left with a "ridiculus mus"—an allusion for the classically educated hon. Members on the Conservative Benches, who do not play much part in the Conservative party; they, I imagine, are nocturnal advertising men—which has been born deformed and hybrid, rather than high-bred. It is neither self-regulation nor proper, effective regulation. It is an uneasy compromise between the two, which really does not do enough to regulate the deficiencies in the existing system.
The European side of the story is quite straightforward. It is an early venture by the EEC into consumer protection, which is welcome as a departure from its usual role of producer protection—particularly in regard to producers of useful things such as dairy products. Its origins date back to 1975. The directive was first published in 1978, without proper consultation or any recognition of the way in which we do things in this country. Since then, the advertising industry has clearly had a long struggle to draw the teeth of the original proposals of 1975 to 1978.
The Advertising Association says:A ten-year drafting process is not only wasteful in terms of money and time, but does little to improve attitudes to the Commission held either by industry or by anybody else. Worse, it puts an unacceptable strain on the essential partnership between consumers and industry.It has not been the most enjoyable experience for the association. But that was only the beginning. After the European side, we hear the British side of this story of blunders.
The directive was finally adopted in a changed form in 1984, and the member states were supposed to comply with it by 1986. In 1988, we are finally making the appropriate provisions. I am not trying to argue that our control of misleading advertising is the best in the world. I would be suspicious of any such claim. Basically, it consists of the Trade Descriptions Act 1968, which makes it an offence to publish false and misleading statements. But even that needs updating to conform with modern conditions.
I understand that the Trade Descriptions Act does not cover property, and therefore does not cover the misleading advertisements put out by estate agents. Some of them are so lyrical and devious that they are worthy of Conservative Central Office. I see that the Estate Agents Act 1979 is brought into the regulations. Are we now to assume that misleading advertising by estate agents— 277 concerning the major purchase in people's lives—is now effectively controlled in a way that it was not controlled by the Trade Descriptions Act?
That is the first of our frameworks. The second relates to the powers of the IBA and the Cable Authority, which, on the whole, work reasonably well—except, in my view, when it comes to children's advertising, which can be totally misleading. My own kids set up a clamour for a toy which looks so effective, so lifelike, so exciting. When it is obtained, it certainly does not work in the way advertised on television.
Thirdly, there is the self-regulation of the Advertising Standards Authority. On the whole, I support self-regulation, and it works reasonably well. However, it is not perfect. It is important for us to keep up the pressure on the self-regulators because it can be a cosy conspiracy of industry managing itself. We should keep up the pressure to improve self-regulation, tighten the discipline and make it more effective. That is a power that we should exercise. It is right to be suspicious of self-regulation.
Self-regulation as it exists does not have effective teeth. There are areas that leave a lot to be desired, such as small advertisements, quack medicine advertisements, even loan advertisements. The Minister mentioned the financial services legislation. That covers investment advertising, but does it also cover the sort of loan advertising we see, particularly in the Sunday newspapers, where people are invited to pay less by paying more or to reduce their burdens to one monthly cheque, often at an exhorbitant rate of interest? That legislation certainly applies to investment advertising, but does it apply to loan advertising and will it be covered by the regulations?
A further point of clarification about the Advertising Standards Authority is that it needs some sort of statutory back-up. It needs some sort of machinery—perhaps a reserve power—to strengthen it. Our view is not invalidated by the fact that the European Commission agrres with it. Bad authorities do not necessarily make bad arguments. The Commission wanted a statutory reserve power. The interesting spectacle of the past four years has been to see the Government wriggling to fulfil their obligations to the Committion without upsetting their advertising friends and disturbing too much their own penchant for self-regulation, which extends everywhere except putting the burglars in charge of crime prevention.
We have had the spectacle of the Government wriggling in that fashion for a long time. Indeed, it began in 1980 when the Department of Trade and Industry working party recommended new powers for the Director General of Fair Trading as a back-up to the Advertising Standards Authority.
In 1984 the Government slugfootedly proposed that they should have power to seek court orders prohibiting the publication of misleading advertisements. In 1985 we had a consultative paper which made that proposal and which also said that there should be no direct access to the courts for individuals or organisations. It said that everything had to be channelled through the Director General of Fair Trading. The Government's arguments in that consultative paper are a criticism of the delays and inadequacies of the courts of law in this country.
In 1986, which was getting near the deadline appointed by the Commission, we finally had draft regulations. They 278 reduced even more the powers given to the Office of Fair Trading by requiring that office to pay due regard to the desirability of encouraging voluntary control. Effectively, what was being said was, "Here is a power; do not use it."
That was followed by the next draft regulations in February 1987. The deadline had passed and Britain was behind. That draft dropped the proposed powers for the IBA and the Cable Authority to require information from advertisers.
Finally, there was a draft in February 1988. That draft, even at the end of that long, awkward, clumsy and stumbling process, fell foul of the Joint Committee on Statutory Instruments. It was felt that the powers to require information from advertisers might be ultra vires in the sense that they were not required in the initial directive. The Committee went on to note that the regulations omit the provisions of article 3 of the directive, specifying matters relevant for determining whether advertising is misleading.
The Government did not want those requirements in their regulations. I can see why, given the nature of much of the Government's advertising. The directive proposes that an advertisement is misleading if it deceives in any way, including its presentation. That suggests that a lot of Government advertising, such as the advertising in Scotland on the poll tax, which my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) has, would fall foul of it. It would be very difficult to justify it in terms of that rubric. At the end of the process, we end up with the regulations that we are debating tonight. It is a sad saga.
§ Mr. Bob Cryer (Bradford, South)
Does my hon. Friend not think it curious that, although the Joint Committee on Statutory Instruments published its comments in its 21st report, which was available at the end of March, the Minister did not reply to the vires point, the fact that the regulations cover only part of the directive, and also that the statutory instrument refers to implementing the whole directive? That is another example of misleading. The omission of advertising from the Minister's speech is curious. He made no reply to the Committee's recommendations.
§ Mr. Mitchell
I agree absolutely. The Joint Committee has thrown the Minister an embarrassing hot potato. He did not know what to do with the report. The Government thought they would allow time to lapse and forget about it, so that they could gloss over it. The Joint Committee was right to make those points, and the Minister was wrong not to take them up in his speech. He will still have to deal with them when he replies to the debate.
That is the end of a process during which, the Advertising Association tells us, it has done all the work, rather than the Department of Trade and Industry, and has made the running throughout the past decade. The association says:The Advertising Association spearheaded an industry working party which was in close liaison with the Department of Trade and Industry at every stage of the directive's development. This working party included representatives of the advertisers, the advertising agencies, the television companies, the ASA, the IBA, the Cable Authority, the CBI' and every vested interest under the sun.
This is a Government of vested interests. We represent the consumer in this matter. The DTI has given full and 279 free rein to every vested interest under the sun. That is why it has all taken so long. We are now at the end of a long and painful process.
The Government are one of the major vested interests in this whole process. It is difficult for the Government to regulate misleading advertising properly and effectively when they do so much misleading advertising. The television campaign on "Job Start" has become a shabby way of shaking people off the unemployment register and is advertised as a dynamic new beginning.
The misleading advertising on the poll tax in Scotland falls foul of the rubric. Misleading advertising from the Department of Trade and Industry tells us about the enterprise initiativ—"Take it"—as if the Department was doing more for industry, when it is doing less than any of its European competitors and less than industry needs. It is handing over its work to consultancies with the aid of a gigantic consultancy "slush fund" that is being promoted by the DTI's own misleading advertising.
It is clear that the Government do not want the machinery to have effective teeth, because those teeth will probably end up in the backside of Lord Young of Graffham-Saatchi-Thompson as the most misleading advertiser in this country. We want a Government of advertisers for advertisers by advertisers who do not want effective regulation.
The Opposition will not oppose the regulations, but we certainly will not rejoice at an achievement that is inadequate and has taken so long and been so clumsy. It has taken eight years for us and 13 years for the European side. We will not indulge in any hymn of praise; we shall just have a quiet laugh. It will provide the Minister with a good plt for his next rock opera—one that he can advertise, even under the terms of these regulations, as combining the charm of the right hon. Member for Chingford (Mr. Tebbit), the compassion of the right hon. Member for Finchley (Mrs. Thatcher) and the lewd bawdiness of the right hon. Member for Suffolk, Coastal (Mr. Gummer), and get away with it.
§ Mr. Bob Cryer (Bradford, South)
I must point out, yet again, that the Minister did not make any reference to the 21st report of the Joint Committee on Statutory Instruments. I should have thought that, in a debate on the Floor of the House, the Joint Committee's efforts deserved some sort of reply other than the memorandums from the Department of Trade and Industry which are printed in the report.
On regulation 7, the Committee said that the power to require any person to furnish to the Director General of Fair Trading such information as may be specified or described was not contained in the EEC directive. There was no specific provision for that power, so we asked the Department of Trade and Industry for a memorandum. The Department said that, in effect, although there was no direct provision, it was necessary to have the power to implement the directive. Since the Department thought that that was a reasonable point of view, it decided to use those powers.
That is not the basis of legislation. If the Department happens to think when looking at subordinate legislation that the powers should exist, but they do not exist in 280 primary legislation, it is not incumbent upon that Department to assume that those powers exist and put them forward. On page 3 of our report, we said:In the Committee's view, these arguments, however cogent they may be on the question of the expediency of including Regulation 7, do not answer the question whether in the circumstances there is power under s.2 of the 1972 Act to do so"—that is, the European Communities Act 1972. The Department does not have power to provide regulation 7 of the statutory instrument; therefore, we reported on the ground that there was a doubt about the vires.
As my hon. Friend the Member for Great Grimsby (Mr. Mitchell) pointed out, the regulations omit article 3 of the directive, which sets out a definition of "misleading" and includes a number of illustrations of what "misleading" might constitute. That practice is precedented in other primary legislation. The explanatory note to the regulations suggests that they depend on the implementation of the whole directive. The explanatory note says:These Regulations implement Council Directive No. 84/450/EEC…relating to misleading advertising.The explanatory note should have said that the regulations implemented parts of that Council directive. That would have been a more honest and accurate account. As the Minister knows full well, these regulations have the full power of law and, in that, there are sanctions to apply the law and the user should have legislation that is as clear and free from ambiguity as possible. An explanatory note that states that the whole of the directive is being implemented is misleading when, on the admission of the Department, certain aspects of the directive are omitted. It does not give much confidence that the terms of the directive will be implemented with enthusiasm by the Minister when his own regulations appear to be misleading at the outset.
I hope that at the conclusion of this short debate the Minister will turn his mind to the conclusion of the Joint Committee, which is not a very powerful body, although it is set up by the House of Commons to weed out the discrepancies and ambiguities in delegated legislation, because delegated legislation has the same force of law as primary legislation. I remind the Minister that the Committee has a majority not of Opposition Members but of Government Members. Yet the Committee has made these points and it seems to me that it is incumbent on the Minister, in accounting for his actions to the House, to give a full explanation of the omissions and deficiencies that have been drawn to his attention in our 21st report.
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§ Mr. John Fraser (Norwood)
My hon. Friend the Member for Great Grimsby (Mr. Mitchell) welcomed the regulations, although he made it quite clear that if they had been prepared by a Labour Government they would have been more severe and more extensive. For many years hon. Members on both sides of the House have wanted to do something about the statutory back-up to the powers of the Advertising Standards Authority. I was certainly engaged as Minister of State for Consumer Protection up to 1979 in trying to introduce something along the lines of the regulations which are before us tonight.
The paradox is that, if we had wanted to legislate and there had not been the European directive, it would not have been possible to have something before us tonight in the form of regulations which could be concluded in an 281 hour and a half. We would have needed primary legislation, which would have had a Second Reading and no doubt occupied at least half a day in the House and several days in Committee. I am not saying that that is necessarily a good way of going about these things, and the lesson for future legislation, particularly on consumer protection and matters of regulation, whether involving companies or trading standards, is tht there is a very strong case for stating principles in legislation and giving the House an opportunity with the European Communities Act to pass legislation which is long overdue without having to rely upon the legal basis of a directive from Europe. So I think that in drafting future legislation on consumer matters, advertisement, and so on, that is necessary.
These regulations have been far too long in coming before the House. The last Labour Government negotiated with the advertising business. I found its members extremely professional, very quick and very co-operative, and it would have been possible by 1979, or certainly by 1980, had it not been for delays in Europe, to present something along these lines, given adequate parliamentary time. That is the great advantage of having regulations rather than an Act of Parliament.
It has taken altogether, as the Minister made quite clear, about 13 years from conception to execution to get a statutory back-up to the Advertising Standards Authority. That is far too long and in future we want to see a bit more speed. For instance, there has been on the stocks for a very long time a directive about doorstep sales, which is one of the most blatant forms of consumer abuse. Goods are sold on the doorstep to vulnerable people who do not have the chance of obtaining independent advice. That directive ought to be implemented as rapidly as possible.
Is Lord Young of Graffham to be the first to receive an injunction under the present regulations, because he goes on television, spending the advertising slush fund, telling us that we will have a single integrated market by 1992. Hon. Gentlemen may say that I have gone over the top, but we have had a modest regulation on which there has been almost total agreement between the industry, the Labour, Conservative and Liberal parties and everybody else as far as I know and on which there has been unanimity for 13 years, including the virtual unanimity in Europe, and it has taken 13 years, on a matter which is uncontested an which comes before the House at 10'clock in the morning, to put it into practice. Shall we really have a single integrated European market by 1992 on matters which will be highly controversial? I should have thought that one of the first persons to suffer what I think is called an interdict in Scotland and an injunction in England would be Lord Young of Graffham.
My second question concerns a technical matter. Is it intended that there should be a power to obtain ex parte injunctions under the tax regulations? If the order obtained by the Director General of Fair Trading in the courts is the last resort, and if people are expected to explore other avenues first, I should have thought that the ex parte injunction was inappropriate. I hope that the Minister will say something about that.
282 Thirdly, I should like the Minister to say whether the regulations broaden the control over misleading information beyond the statutes that give rise to present liability for breach of regulations under the Consumer Credit Act 1974 or obligations under the Trade Descriptions Act 1972. I am thinking, for instance, of the misleading advertising by people such as Allied Carpets, Queensway Discount Warehouses, or MFI before it merged with another firm. There are two institutions in Britain which have continuous sales. One is Her Majesty's Government and the other is the discount warehouse—Allied Carpets, Queensway Discount Warehouses and so on. The prices advertised at such discount stores are those at one of their stores in a remote part of the country, and clearly that is misleading to consumers.
I hope that the Minister will say that there will be discussions with the Director General of Fair Trading and the Advertising Standards Authority to widen the scope of the code of practice because criminal sanctions have proved peculiarly inadequate in such cases of misleading price claims, irrespective of the Consumer Protection Act, and whether those regulations willthen be available to prevent the kind of abuse of consumer information that has been commonplace for far too long among discout warehouses.
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§ Mr. Matthew Taylor (Truro)
I must make it clear that, committed as we are to the extension of consumer rights, Democrats welcome the regulations and their effect in reining in misleading advertisers. It is a pity that the regulations have been so long in gestation, but they are, nevertheless, a necessary and important addition to the present self-regulatory powers.
No one should doubt the value of the changes to ordinary men and women. The regulations introduce a legal backdrop that begins to give some teeth to the current system where that is necessary, in particular, where quick action is needed.
Nevertheless, there remain several outstanding concerns, some of which have been aired tonight and more of which should be aired. The first is that protection is needed not only against advertisements that are misleading—that is the limit of the regulations-but, for example, against the 12 per cent. of cases referred to the ASA in 1986 which concerned adverts thought to be distasteful, indecent or in some other way offensive. Of those, more than one in three alleged that adverts were distasteful because of their depiction of women.
Indeed, one of my constituents complained to me of the junk posted through her door by a tabloid newspaper advertising and illustrating pornographic videos and magazines—material that went first into the hands of her children. The present advertising code looks at whether a majority would react, or whether a minority finds advertisements grossly offensive, but it can take precious little account of whether material will reach the hands of minors, as in my constituent's case, or of the offensive treatment of women.
If women are viewed primarily as sex objects, there is not a great deal that the ASA can do. We still find near-naked women used to sell car parts, or what have you, in the press. The cinema, I regret to say, goes further. Atmospheric scenes evocative of rape are not uncommon and in too many cases go beyond acceptable limits.
283 The present self-regulating system seems increasingly unable to address the problem and it is not touched on in the regulations. During the long interval, has the Minister addressed the problem? He should do more than ask advertisers and businesses what they think, because clearly they have a vested interest in anything which may sell their products. Has the Minister considered whether anything can he done to tighten control?
Of still more immediate concern is the overstopping of political boundaries. I do not suppose that the Government have done much about this; if they have, they have no told us about it. There is a thin line between politics and public information, as the Goernment themselves pointed out when they banned local authorities from engaging in campaigns. Hon. Members have already referred to some of the campaigns which the Government ae involved in.
Public information on AIDS or the single European market which is to come into effect in 1992 may b one thing, but what of more controversial advertising on the poll tax or changes in benefits? What about the way in which the problems are glossed over and only the positive side is presented in an attempt to promote policies which are politically controversial and which are not of general public interest?
We are told that the IBA has refused departmental advertising on a number of occasions. Will the regulations apply to the Government's own advertisements? Have they considered the effect that the regulations will have? They will have to be careful when they put the regulations into practice. It is reported that the will spend £1 million on the English and Welsh poll tax campaign. We have already heard about the Scottish campaign. When they go ahead with the English and Welsh campaign I would not be surprised if they were the first victims of their own regulations. They may be had up for misleading the public about the campaign being part of the Government information service when it is blatant party political propaganda, paid for this time not by local authorities through the rates but by central Government out of the public's income tax contributions.
At the end of the day it is not Government, advertisers or big businesses which have the greatest interst in the proposals. It is the ordinary man or woman who interferes in no one else's life but is prey to small-time sharks who are interested only in making a fast buck at someone else's expense. Mail order advertising is one area of which I hope the Minister will take particular account.
Another that has hit some of my constituents are advertisements offering so-called work at home. There are several types but the most common advertisement demands a fee or a deposit for an instruction pack on how to start earning. Large earnings are promised with little effort or skill required. But the pack brings no more than a number of display cards and suggested advertisements to he used at the consumer's expense to recruit—yes—more home workers. In other words, the scheme recruits ever more agents to recruit ever more agents, with no real product at the end. The purchaser of the pack has to choose between losing his money—the sums involved mean a lot to the individuals who put money into these schemes—or trying to rip off someone else to recoup what he has already lost.
I took up a case with the Minister. My constituent from Mount Hawke had fallen prey to just such an unscrupulous scheme. The Minister's response was 284 interesting. He offered little consolation. The Department was aware of such rip-offs and he quoted the ASA code. Indeed, he mentioned that tonight's new regulations might control such conmen; he hoped so anyway. But he did not seem certain. He concluded:It remains to be seen whether 'money making' schemes like this will be brought under control.Without effective control, the Minister was only able to suggest that my constituent write to the advertiser to sayhe considers that he was misld by their literature and demanding a refund of his money.It is not very realistic if, in spite of the regulations and the ASA's code, all a person such as my constituent can do is write to the shark in question at a PO box number through which he will not be traceable. In this case, the shark did not even seem to have a box number; he had an address which turned out to be one, but it did not look like one.
So we must hope that the regulations will be effective. More effective protection for the ordinary men a nd women who suffer from such advertisements is needed. But the fear remains that the regulations will not work. The Minister expressed it in the letter to which I have referred. If the regulations do not work, I and my hon. Friends will return to the House to seek greater protection for consumers—the ordinary men and women who are always the losers.
§ Mr. John Home Robertson (East Lothian)
The House should be grateful to the European Commission for taking this initiative, which has led the Government to take this rather timid step towards more effective controls on advertising standards.
The Minister spoke about the powers of the Director General of Fair Trading and our beleaguered local authority trading standards departments. He might also have referred to the most effective agency of all in enforcing standards of advertising—the "That's Life" programme, which seems to be the ultimate deterrent for many charlatan operators. My hon. Friend the Member for Norwood (Mr. Fraser) said that Lord Young of Graffham would be the first person to be hauled before the courts under the new regulations, but I suspect that we can beat him to that in Scotland.
The Secretary of State for Scotland has been inundating the letter boxes of Scotland with junk mail such as that described by the hon. Member for Truro (Mr. Taylor). The utter hypocrisy of Government Departments is a serious problem. They legislate to prevent local authorities from advertising certain aspects of their work, but blatantly spend large sums of public money on advertising the Government's political point of view. There have been recent spectacular examples of that in Scotland with the poll tax, as my hon. Friend the Member for Great Grimsby (Mr. Mitchell) mentioned.
I have a copy of a leaflet. circulated by the Scottish Office last autumn at public expense. It was sent to every household in Scotland, and was misleading in many ways. It was a nice glossy leaflet with pictures of smiling people who will evidently be eager to pay the poll tax in due course. The leaflet was an attempt to sell the poll tax to an uninterested and hostile population in Scotland. It begins:"What is the Community Charge?It is a contribution payable by each adult to their local authority".The word "contribution" implies that there is something voluntary about the poll tax. This is the soft sell approach. 285"How will the Community Charge differ from domestic rates?Domestic rates are paid by householders, less than half the adult population.That is almost true, but the Government can make that assertion only by assuming that spouses are not part of the household. If we include the spouses of ratepayers, about 80 per cent. of the population of Scotland are ratepayers."Will those on low incomes have to pay, such as the unemployed and other benefit recipients?Yes, but the rebate scheme will take account of their ability to pay.
Those of us who followed the interesting debates initiated by the hon. Member for Hampshire, East (Mr. Mates) on the English poll tax Bill will know that the rebate scheme takes only limited account of the ability to pay. Once again, we have demonstrated that that leaflet, circulated by the Government at public expense, was misleading and deceitful advertising material.
There is lots of stuff about "self-regulation". The Independent Broadcasting Authority and the Advertising Standards Authority apply certain standards to commercial advertising, but what self-regulation is there over misleading and deceitful Government advertising? I hope that the Minister will say something about that.
That is not the end of it. Another booklet has been circulated in Scotland, entitled,You and the Community Charge—A step by step guide.Again, that has nice little graphics of smiling people, including, rather significantly, a smiling policeman and a man holding a shovel and also smiling. No doubt he is equally enthusiastic about the prospect of paying the poll tax. Among other things, it poses the question:Will the Registration Officers be able to go wherever they want to get information for their Registers?The answer is:No. The inquiry form will always be the main source of information. The Registration Officers will not be able to approach people's neighbours.The registration officers and their staff this very week in Scotland, in my constituency and in Strathclyde, are trying to get information from neighbours about who is resident in which household. That is another example of a deceitful assertion, seeking to reassure people in Scotland about the way in which the poll tax will be operated.
§ Mr. John Maxton (Glasgow, Cathcart)
It is even more misleading than that. When I received my form to fill in, it had my name and that of my wife on it. How the inquiry form can be the main source of information to the registration officer when it already has that vital information, I do not understand.
§ Mr. Home Robertson
My hon. Friend is right. We could have an interesting debate about the poll tax, but I suspect, knowing the stringent standards that you apply to these debates, Mr. Deputy Speaker, that I might run into trouble were I to do so. The point is that this soft sell, coming from the Secretary of State for Scotland, at public expense, is misleading and deceitful advertising.
§ Mr. Matthew Taylor
I would not want to accuse the Government, wrongly, of deliberately and directly misleading people in a leaflet, but the leaflet says that people cannot be approached for gossip and rumour about their neighbours. We were told in the Committee considering the Bill to introduce the poll tax into England 286 and Wales that they could. Is there to be a different situation in Scotland—in which case, I am rather concerned for my constituents, and why they are being treated differently—or are the Government completely wrong in that leaflet?
§ Mr. Home Robertson
The answer is that there is to be equality of misery between the constituent parts of the United Kingdom, except that we are getting it a year earlier than the south.
The substance of the debate concerns advertising standards and the need for adequate protection of citizens, traders and everybody else against deceitful advertising. It comes ill from a Minister in this Government, whose colleagues in another Department are putting about misleading and deceitful advertising material at public expense, to give us such an assurance. I welcome the principle of more effective controls of such advertising, but I want an assurance that Government Departments and Ministers will be subject to the same standards. If such standards are to apply, the Secretary of State for Scotland should be hauled up before the appropriate authority, or court, pretty damn quick, and that would be a useful step in the right direction.
§ Mr. Michael Jack (Fylde)
I rise to ask my hon. Friend the Minister two questions. Will he clarify how the regulations interrelate with the misleading price indicators code, which he is currently drafting under the terms of the Consumer Protection Act 1987? Will action under the regulations in any way prejudice subsequent action that someone may wish to take on the subject of misleading price indicators under the Consumer Protection Act?
§ Mr. Butcher
A large number of questions have been raised and in the time available I shall do my best to respond to each of the specific questions that have been put to me.
First, in regard to loan advertisements, consumer credit advertisements are regulated under the Consumer Credit Act and enforced by the trading standards department under the Director General of Fair Trading. Such advertisements may also be controlled under these regulations by the Director General of Fair Trading, or in the case of a television advertisement on independent television by the IBA, or by the Cable Authority in the case of cable advertisements.
The hon. Member for Great Grimsby (Mr. Mitchell) went on to say that we were talking about a ramshackle structure, that it would take too long and that we were tardy in our reaction in comparison with other members of the European Community. My brief answer to that is that an extensive regime is already in place in the United Kingdom and these regulations provide a long-stop, albeit a potentially draconian long-stop. Secondly, it was necessary for us to co-ordinate the implications of the regulations with the financial services legislation, and, thirdly, the United Kingdom has negotiated the system which we wanted to fit in with our regime. I do not think that the hon. Gentleman was entirely correct in his assertion that we are behind the European Community. Several other member states have not yet implemented such measures.
287 The question was asked why the Government have not provided complainants with direct access to the courts. That would place an excessive burden on the court's resources, and I have every confidence that the Director General of Fair Trading will be able to identify those complaints which require action. I used the expression "long-stop". In most cases, we would expect the director general or an appropriate administrative body to take the bulk of the action required. Only if he is faced with a particularly serious action will the director general need to go to the High Court for an injunction. Of course in a particularly serious situation we are complying with the requirements of the directive.
The hon. Member for Bradford, South (Mr. Cryer) rightly reminded us of the very important role of the Joint Committee. I made reference to that Committee in my opening comments—perhaps at too high a speed. The hon. Gentleman, amongst other things, raised the Committee's doubts about the vires for this power. I do not share those doubts. I consider that it is fundamentally a question of fact rather than law. The director general has considerable experience of the operation of a similar injunctive power under section 35 of the Fair Trading Act 1973, and he has found that the lack of a power to require the production of relevant information about business conduct has significantly restricted his ability to take effective action under that Act. If advertisers are able to frustrate the operation of these regulations, we shall not be meeting the requirements of the directive. Therefore, I consider that the power is quite justified.
§ Mr.. Austin Mitchell
Why did the Department, after initially proposing that the IBA should have the same power to require evidence from advertisers, withdraw that proposal and not give the IBA such powers?
§ Mr. Butcher
The IBA has a very clear sanction to stop an advertisement which does not satisfy it. I believe that it has a good track record in exercising its responsibilities in that regard. The regulations deal with the prevention of advertising, if it is felt that it is likely to mislead. Penalties are dealt with in different legislation—for example, in the Trade Descriptions Act 1968. All hon. Members will commend the way in which the Independent Broadcasting Authority has used its preventive powers. I do not believe that it wants them to be enhanced.
§ Mr. Cryer
The point is not that the powers are not needed to implement the directive but whether the Minister has the power to implement the directive that is provided for by primary legislation. Merely because the director general thinks that the powers might be useful does not give the Minister the right to provide for them in the regulations. That can be done only by means of primary legislation. Is the Minister able to point to any primary legislation that would provide him with that power?
§ Mr. Butcher
Statutory powers are provided in the Trade Descriptions Act, and they have been used by trading standards officers. The regulations do not challenge those powers. We want to encourage trading standards officers to take advantage of the penalty powers that are provided for in the Act. We also want them to take advantage of the power to stop, investigate and police, and this is provided for in the regulations. I shall examine the 288 record carefully tomorrow. If what I have said is not clear to the hon. Gentleman, I shall write to him, expanding on the points that he made in his first intervention.
The hon. Member for Norwood (Mr. Fraser) asked about doorstep selling, about the possibility of ex parte injunctions and about continuous sales. The directive on doorstep selling has been implemented. Regulations have been made and they come into force in July. As to the possibility of ex parte injunctions, interim relief is available for urgent cases, as regulation 6(1) makes clear by its reference to an interlocutory injunction. However, it will be the exceptional, not the normal case. As for continuous sales, misleading prices are to be dealt with by regulations that are to be made under part III of the Consumer Protection Act 1987 and by a code of practice that is to be approved under the Act. Misleading advertisement regulations will also be available, if necessary. If there is doubt, changes will be made to the Advertising Standards Authority code. I hope that that explanation helps the hon. Gentleman, but again I shall examine the record arid if there is a point with which I have not dealt I shall write to him.
The hon. Member for Truro (Mr. Taylor) referred to the exploitation of women in advertising and asked why the regulations should not be used to restrain their exploitation. I recognise that some people are offended by the way in which women are represented in some advertising. The agencies that have a regulatory function in relation to matters of general taste apply the standards that they believe to be held by most people. Most advertising conforms to those standards. In any event, the regulations are not an appropriate occasion for addressing such matters, as the directive is confined to misleading advertisements.
The hon. Gentleman also asked whether the regulations deal with the advertising of pornographic material. He may not have mentioned dubious telephone services, but that is also part of the question. The regulations will enable the director general to seek a court injunction against a misleading advertisement, if he considers that it is appropriate to do so. The regulations are not the way in which to deal with the wider subject of other methods of marketing goods and services, to which some people object.
§ Mr. Austin Mitchell
If I see an advertisement featuring a scantily clad girl, which promises to tell me on the telephone about "My first ride" and I then ring up and hear about pony-trekking on Exmoor for 10 minutes and am dissatisfied with that, do the regulations provide me with a means of redress?
§ Mr. Butcher
If the lady in question had satisfied the hon. Gentleman's objective arid he really was asking for a heavy-breathing telephone call, that would be covered by the Telecommunications Act 1984. It is an offence to send an obscene message over a telecommunications system, as he will know because he served on the Committee which considered that Bill.
It is not a question of obscenity, so far as the misleading aspect of such a message is concerned, if it is found to be harmless. We must ask whether the advertisement was legal, decent, honest and truthful. I do not wish to pronounce judgment on that, but, as a preliminary stab, I would say that it may not have been truthful, as the hon. Gentleman may have expected a heavy-breathing 289 conversation and received a much more harmless one. I suspect, therefore, that the advertisement was misleading in that it was not truthful.
I turn now to the question of political advertising. I appreciate that there was a great temptation on the part of Opposition Members to indulge in leg-pulling about my Department's major campaign. I make no apology for that whatsoever. There is a strong reason for marketing the approach to 1992. I wish to quote from the Daily Mirror editorial of 12 March which states:1992 must not become another 1066.Yesterday, Mrs. Thatcher and the Trade Secretary, Lord Young, launched a campaign to make all of us, employers and workers alike, aware of what is needed.We must all support it. It is not a party political matter. Our future rests on its success.
I assume that most Daily Mirror editorials are now cleared with the Leader of the Opposition, so I ask the hon. Member for Great Grimsby to take another look at his comments when he made his accusations of politicisation of some of our advertising. We stated clearly in the White Paper thatOne of the aims in developing and publishing the objectives of the DTI was to give greater cohesion to its organisation and policies. The policies which DTI operates and the services which it offers to industry must be limited in number, coherent in approach and tightly defined so that they can be clearly understood and recognised by people in business. They must be well marketed and promoted.
I have heard accusations from some Oppostion Members that many of the Department of Trade and Industry's schemes and methods of assisting business and commerce have not been properly marketed, and that it is difficult for businesses in their constituencies to obtain what is available. We have been advised time and time again to use the most powerful medium, which is 290 television. We are doing that and our advertisements correspond clearly with that legal, decent, honest and truthful requirement placed upon us by current practices.
The hon. Member for Great Grimsby tempted Conservative Members and indulged in a little leg-pulling about the politicisation of Government advertisements. The Opposition should take another look at some of the advertisements that appeared in the dog days of the Labour Administration in the 1970s. There is a magnificent headline in a national advertisement put out by the then Labour Government in 1975, which says:We must all co-operate in these difficult times to save our country…Inflation. We can beat it together.
By contrast, the Department of Trade and Industry's advertising campaign says to British industry, "Be a winner". We are saying, "This is how you can win. This is the information that you need, come and get it." What I have here is entirely negative and should be a political advertisement. I shall advise Conservative Central Office to reproduce this advertisement in the press as it stands so that people can be reminded of what it was like back in 1975.
A second advertisement, which I have here, reads:The Government's Anti-Inflation programme came into full effect on August 1st. This is what it will mean to you.It is a full-page advertisement, and it is not Bernard Ingham—it was the Government of the day. It says:Your pay-rise will be limited to £6 a week in the next 12 months…If you earn £8,500 a year, or more, you will not get any increase at all…Action will be taken to limit price rises on some of your basic foods…If you own any shares your dividents will not be allowed to rise by more than 10% over last year.That advertisement should become a political advertisement sponsored by Conservative Central Office. It should be reproduced in its entirety so that people can reach their own conclusions.
291 We are putting out advertisements on the "can do" principle. Britain can do it. These advertisements remind us of the days when the Government said, "You cannot do it. It is tough. Our country is under threat."
§ Mr. Home Robertson
The hon. Gentleman complains of leg-pulling by Opposition Members, but he is doing a little bit of his own. He is amplifying our argument. We quoted examples involving the poll tax and the Minister is quoting examples from some time ago. I have not seen all of the advertisements from which he is quoting, so I do not necessarily accept that they are examples of abuse. Does he accept that there is an overwhelming case for effective controls over the standard of advertising by Government Departments? This debate is supposed to be about controls over deceitful advertising in other sectors. Can the hon. Gentleman give us any undertaking that there are to be such controls over Government advertising?
§ Mr. Butcher
The controls are adequate, indeed very adequate. They have been enhanced today. I am afraid that I cannot agree with the hon. Gentleman. Perhaps he is in his confessional and implying that the Labour party may have been guilty of putting out the kind of advertising which he accuses us of putting out. The controls exist. The IBA has a clear stance. It has agreed that our advertisements are perfectly in keeping with non-party political objectives, I assume. I commend the regulations to the House.
§ Question put and agreed to.
That the draft Control of Misleading Advertisements Regulations 1988, which were laid before this House on 23rd March, be approved.