HC Deb 26 January 1990 vol 165 cc1203-36

Question again proposed, That the Bill be now read a Second time.

Mr. Speaker

In fairness to the hon. Member for Clwyd, South-West (Mr. Jones), who has had some time taken from the debate on his private Bill, may I ask hon. Members now participating in the debate to adjust their speeches so that he does not lose any more time.

11.48 am
Mr. Alexander

The House was wise to receive that exchange of concern, although it took place just as I was warming to my theme.

I was explaining the difficulties experienced when a customer finds that the goods that he has bought do not come up to his original expectations. I was arguing that it would be much easier if the customer knew, unless he was prominently informed otherwise, that he will have a guarantee. It is wrong and frustrating when something goes wrong with an item that one has bought within a year, because one must either comply with the restrictive terms of the so-called guarantee or wait for the item to be sent back to the works, where the defect may be dealt with some time in the future.

Even more frustrating for the customer is to be told that, as he has used an item—driven it, washed something in it, or watched something on it—for a month or two he has no redress. All hon. Members want business to succeed and do not want the Bill to harm or be a burden on it, but if business is encouraged to sharpen its service to the customer it will achieve greater success. A business that stands by its work deserves to succeed.

It is important to point out that the provisions of the Bill are not compulsory. Nothing obliges the manufacturer or trader to give a guarantee, but it enables the customer to know where he stands.

I speak as a qualified solicitor, although I am not declaring an interest, as I am no longer a partner in a firm. It has been suggested inside and outside the House that if consumer problems are not resolved simply, lawyers will gain business.

Mr. Stern

Will my hon. Friend give way?

Mr. Alexander

May I make a little progress?

In my experience, no family solicitor likes to take on a client who has a claim about defective goods, because he knows that it will be tedious, time-consuming and frustrating for the client, for whom almost invariably he will be unable to get much satisfaction. I should like it to be known that the legal profession does not seek the business of dissatisfied customers who have goods with which they are not satisfied.

I have been impressed that almost all the organisations that have contacted me and the hon. Member for Clwyd, South-West (Mr. Jones), although they may have ideas on improving the Bill, have accepted the principle behind it. Perhaps a little to my surprise, the Society of Motor Manufacturers and Traders, almost all the major car manufacturers and the Retail Consortium, which sent a useful briefing, accept the Bill in principle.

It seems that only my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs is hostile to it. I await his speech with interest, but I gather from the press that he feels that it would be too bureaucratic. I can understand the Minister believing that any legislation, particularly that emanating from his Department. is likely to be bureaucratic—bureaucracy is involved in much legislation—but I would like him to reflect on the fact that Ministers have hardly ever commended reforming legislation under the private Members' ballot. Ministers usually say that such Bills involve bureaucracy and that they cannot commend them to the House.

Mr. Forth

So that there is no misunderstanding, and to be fair to the Society of Motor Manufacturers and Traders—I may not have a chance to deal with the problem in my speech—let me make it clear to the House that I have a letter from the society, which I have its permission to use, which states: the Bill contains a number of serious flaws which will only give rise to dispute should the Bill become law… we believe that legislation of this sort should not be rushed through Parliament by way of a Private Member's Bill. I think that the House should know that that is the position.

Mr. Alexander

I am grateful to my hon. Friend for correcting me. I had understood from press releases that the society was in favour, but if that is its view, unreservedly withdraw my remark.

My hon. Friend the present Minister is a successor of Baroness Oppenheim-Barnes, who was Minister for Consumer Affairs—a very distinguished one, too—when I first came to the House. She promoted the idea behind the Bill. She clearly thought that it would be workable and that such proposals could be commended to the House.

For the customer, the Bill should be simplicity itself. The customer will know that he or she has the right to a replacement or a refund if something goes wrong during the first 12 months after the purchase has been made. The manufacturer will know that, if he gives that guarantee, his product will be enhanced. The Bill certainly needs some smartening up—no private Member's Bill does not—and amendments will be made as it proceeds through the House, but that is not a reason to reject the Bill, and I hope that my hon. Friend the Minister will not advise us to reject a measure of such obvious benefit to our constituents.

It is the most vulnerable of our constituents who will benefit if the Bill becomes law—the person who is too intimidated to go to law or too confused to argue his case with the manufacturers, the trader or even the small claims court. It is a Bill that gives such obvious national benefit that I should be astonished to find anyone voting against it or anyone completely against it. I join the hon. Member for Clwyd, South-West in commending it to the House.

11.58 am
Mr. Hugo Summerson (Walthamstow)

After the private notice question about the storm, we have to get back into the swing of the debate, so let me begin by congratulating the hon. Member for Clwyd, South-West (Mr. Jones) on drawing first place in the ballot. Goodness only knows how he did it. I think that next time we have a ballot I shall ask him to write my name in the book for me, then perhaps some of his good luck will rub off on me.

I am sorry that the hon. Member for Clwyd, South-West does not have more of his own hon. Friends here to support him today. It is true that the storm may have something to do with it, but some of the Labour Members who have been stuck at King's Cross and Euston might have taken the opportunity to come rushing back to support him. That was not to be, but the hon. Gentleman seems to be getting plenty of support from Conservative Benches.

Mr. Ron Davies (Caerphilly)

The hon. Gentleman has given me the opportunity to assure the House that my hon. Friend has a great deal of support from Opposition Members, but we are anxious that the Bill should be given its Second Reading this morning, so I have prevailed on my hon. Friends not to make long speeches. We could do so if necessary. I hope that the hon. Gentleman understands.

Mr. Summerson

Of course, I understand that and I join the hon. Gentleman in his wish that the Bill should have its Second Reading.

To start with, I had strong reservations about the Bill. I have always been a firm believer in the efficacy of the market and I have always believed that regulation or prospective regulation should be looked at closely. However, I also believe that a measure of regulation can be helpful to the market. The market is sometimes a muddled place. Anyone who walks down a street market will see the basics of a market at work and that there can be a muddle. Once I had read through the Bill—I assure the House that I have—I thought that many of its provisions were excellent and would add a great deal to consumer choice.

My hon. Friend the Member for York (Mr. Gregory) described the Bill as a "caring" Bill. As he used those words, I am sure that I saw my hon. Friend the Minister's teeth growing longer and more pointed. However, I see that his teeth have now receded and I hope that when he comments on the Bill, he will accept that many Conservative Members have made comments in favour of it. It is not an especially long or stringent measure and it places great stress on voluntary co-operation with manufacturers, which has persuaded me to support it.

What is the present process when we go into a shop and buy goods, and how do guarantees arise? When one buys goods, one spends half an hour back home unpacking the item, by which time the floor is probably covered in shavings, packaging and bits of cardboard which, in turn, give rise to rubbish. One tends to think about recycling, but I must not be diverted. Doubtless a small postcard eventually falls out of the packaging. Attached to the postcard are a number of paragraphs of extraordinary verbiage, which no one can understand, and small print which goes on at length. One will find somewhere that one is enjoined to fill in the card and return it to the manufacturer.

All too often, one forgets either to fill it in or to post it. If one gets as far as filling it in, putting a stamp on it and posting it, there is always the thought at the back of one's mind that one will be submerged in floods of junk mail. One thinks, "Will the manufacturer put me on the lists of all his chums in the trade?" Next, the postman staggers up the stairs weighed down with junk mail. I have moved house three or four times in the past three years and at the last address but three, bagfulls of junk mail are still arriving, which drive the present owner of the house mad. I have had to incur expenditure in going to the local post office, filling out yet another card and paying an extraordinarily fat fee to the Post Office for the privilege and pleasure of ensuring that all that junk mail is forwarded to me at my present address. That does no one but the Post Office any good.

People come to my surgery, as other hon. Members have said, to complain about goods that they have bought, which are shoddily manufactured and which give bad service. They say, "What is the law on this point?" People think that as we make the laws, we should know what the laws are. They invariably look disappointed when I say that I am sorry that I do not know what the law is on the subject and that I shall have to find out. They say, "For goodness sake, you are a Member of Parliament and Parliament makes the laws. Why don't you know what is in them?" I say that they have only to look at the previous Session, when goodness knows how many Bills were passed. I confess that I have not even looked at quite a few of them. As a result, people go away thinking that their Member of Parliament is not giving them a very good service. If I say that they should consult a solicitor, they think that I am in cahoots with the local solicitors, which is not true.

Should manufacturers give a consumer guarantee? I can think of some firms that would have no hesitation in giving a guarantee and the name Rolls-Royce springs instantly to mind. Rolls-Royce is a simile for excellent workmanship, pride in craftsmanship and British endeavour. I am sure that Rolls-Royce would have no hesitation in giving a consumer guarantee on its products.

According to the Bill, the consumer guarantee will be purely voluntary. However, if manufacturers provided such a guarantee, they would discover that it gave a fillip to sales. People would see the guarantee and believe that the manufacturer was taking pride in his product and had no worries about providing the guarantee. I am also sure that those manufacturers would find that their sales abroad would increase. No manufacturer in his right mind would set up two production lines, one for consumer-guaranteed products and the other labelled, "Shoddy products to go abroad". All goods would come off the same production line and would be built to the same high standard.

If a product carrying a consumer guarantee goes wrong, the manufacturer will hasten to put it right. He will not want to be dragged through the courts because that would not be good for his name. If a manufacturer takes great pride in his product, he will have no hesitation in giving it a consumer guarantee.

The consumer guarantee is of particular relevance to microwave ovens. Schedule II refers directly to those ovens. I noted what the hon. Member for Clwyd, South-West said about the state of his health and what happened when he misused his microwave oven. We are all aware of recent incidents when microwave ovens have not heated food to the required temperature and people have become ill after eating food cooked in them. If a manufacturer provides a consumer guarantee for his microwave oven, that will ensure that the oven heats food to the correct temperature.

Why is the Bill necessary? As I said, all hon. Members receive complaints at their surgeries about shoddy goods. If all goods were well made, no one would complain and there would be no need for the Bill. Unfortunately, all goods—I was about to say that all goods are not well made, but I would have got myself into a proper tangle. I meant to say that many goods are not well made and that is why the Bill is necessary.

It has been claimed that people who are not satisfied with their goods can go to the small claims court. However, people are scared stiff of going to court.If someone buys something that does not do the job that it is designed to do, he wants only to take it back to the shop and to tell the retailer that it does not work. The retailer should then say that he is sorry and give a replacement. That was the point made by my hon. Friend the Member for Portsmouth, South (Mr. Martin).

I am sorry that my hon. Friend has left the Chamber because I am sure that he would be nodding his head furiously if he were present. I was interested to learn that he had a problem with something that he bought from Dixons. My wife told me that it was high time that I brought myself into the 1990s, so last summer I went off to Dixons and bought myself an Amstrad word-processor. The thing arrived and the customary guarantee card fell out of the packaging. I looked at it and then went back to the shop to ask exactly what sort of guarantee was being offered.

It turned out that there were two sorts of guarantee, but I cannot recollect exactly what they were. I filled in a card and paid a fee of about £50, which meant that if that expensive product went wrong, all I had to do was ring up a certain number to ask someone to come to fix it. The thing did go wrong and it turned out to be a problem associated with one of the disks. I rang the given number, and someone came to look at it, but told me that there was a call-out charge of £51. I said that I had already paid £50 so that if it went wrong someone would come to fix it and I asked why on earth I had to pay the call-out charge. I was then told that all I had to do was reclaim the charge under the terms of the guarantee. What a performance.

There was no question of picking up the word-processor and putting it in the back of my car to take it back to Dixons. It comes in three parts and it is rather heavy. Moreover, because of lack of space in my flat, I had not kept the wood shavings and cartons that were used to package the delicate parts of the mechanism. If I had taken it back to Dixons in Victoria street I should have had to park on a double-yellow line and, probably, I would have got a parking ticket or my car would have been towed away. What a lot of fuss.

I filled in the claim form and I sent it off. I received notification from Dixons to say that it could not handle that refund application and that I had to do it through some other channel. That form is now sitting on my desk under piles of paper. Doubtless I shall get round to it some time, but, by then, I shall probably be told that the guarantee is out of date. One cannot win.

The example that I have given demonstrates the need for the Bill. It places no burden on the manufacturer. Should he voluntarily guarantee his products, however, the consumer, on seeing that label, will think, "Marvellous. I have a consumer guarantee." Consumers will be able to buy that product with great confidence and, as a result, the manufacturers' sales will increase at home and abroad. Manufacturers who know that their goods are shoddy will never dare to display a consumer guarantee on their goods. They will find that their sales will drop, so they will either have to update their products or go out of business.

Doubtless my hon. Friend the Minister thinks that I am being far too optimistic and that I am painting a rosy picture.

Mr. Forth

indicated assent.

Mr. Summerson

Well, never mind. I support the principle behind the Bill and if it is given its Second Reading I have no doubt that it will be made even better in Committee. I commend the Bill.

12.12 pm
Mr. John Maples (Lewisham, West)

I believe that I am in a minority of one. I do not oppose the Bill, but I am somewhat agnostic about its provisions. I need to be persuaded that it is likely to achieve the effects expected by its sponsors.

The hon. Member for Clwyd, South-West (Mr. Jones) is to be congratulated on picking a subject of undoubted importance to our constituents and ourselves. Everyone who has spoken this morning has identified the problem—that consumers are ripped off and, sold shoddy goods and that retailers and manufacturers do not honour their commitments, either under guarantees or under existing legislation. However, those hon. Members who naively expect the Bill to correct those people who do not honour their obligations have failed to address the central problem—the ability of consumers to enforce their legal rights. My hon. Friend the Member for Walthamstow (Mr. Summerson) is, with the greatest respect, somewhat naive to believe that the Bill will change the behaviour of retailers. They will not take back shoddy goods simply because a consumer guarantee exists. That arrangement will be voluntary and I cannot see how retailers' behaviour will improve as a result.

Mr. Martyn Jones

The point about the Bill is that it will act against the manufacturer. The retailer will not be all that concerned and will be happy to pass the responsibility on to the manufacturer.

Mr. Maples

I accept that, but all the examples cited concern people who have been unable to enforce manufacturers' guarantees. Problems arise with the retailer and the manufacturer and I doubt whether people will be any more likely to achieve their rights under such guarantees as a result of the Bill. I question the assumption that legislation is the right way to deal with the problem. General legal rights are available to everyone. I am not sure that the right solution is to put a rigid framework of guarantees and legislation round contracts for the sale of particular types of goods.

Unscrupulous traders and shoddy goods pose a problem, but competition between manufacturers and traders provide a solution. Part of competition is to be prepared to take back shoddy goods, and we know of good retailers who will do that.

I welcome the Bill's reforms of the Sale of Goods Act 1979, about which I shall speak later, but I do not welcome the guarantee provisions. I am somewhat agnostic about the Bill. I do not believe that it is either wonderful or terrible. I simply need to be persuaded that it will have the effects that are touted for it. I have a general prejudice against legislating when it is not certain that the law will have the desired effect. There is already a great deal of unnecessary legislation on the statute book.

I was and still am a lawyer but I am not about to join in the plethora of special pleading that we have heard from lawyers in this and other debates. When I was studying law the Sale of Goods Act 1893 had to be learned by heart. To follow an established tradition of contributing useless pieces of information to debates, that Act is usually misnamed. It did not receive Royal Assent until 1894. That is an easy way of winning £1 in a bet with a lawyer, because not many know that.

The Sale of Goods Act 1893, as amended in 1979, provides some good fundamental rules that are legally enforceable. One rule is that goods must be of merchantable quality. That means that the goods should be reasonably fit for the normal purpose, taking into account their price, nature, any description applied to them and any other relevant circumstances. In practical terms that means, for example, that a garden hose should not have a hole in it and the handle of a suitcase should not break the first time it is used. If goods are cheap one should not expect top quality but whatever the price, they should not be faulty. That is a good fundamental legal rule. It is available to everyone who buys something. Admittedly, it is available only against the retailer but it is a legal remedy.

Other rules say that goods must be fit for any particular purpose made known expressly or by implication by the buyer to the seller and that goods must be as described. A leather wallet should not turn out to be made of plastic and furniture that claims to be made of wood should not turn out to be veneered. Those three basic rules are good fundamental consumer protection. They provide remedies that are available to everyone. The difficulty is in using them. The proposal in the Bill to allow the small claims court to be used to enforce guarantees could be extended to allow claims under the Sales of Goods Act 1979 to be enforced there.

The Unfair Contract Terms Act 1977 makes it clear that guarantees can no longer exclude customers' fundamental rights. There was a time when guarantees were used to reduce consumers' rights under the sale of goods legislation and substitute less advantageous rights. Now that cannot be done.

There is a basis in law for consumer protection. It provides remedies, depending on whether one is deemed to have accepted the goods, which allow the consumer either to seek a replacement, his money back, or damages. That is a well-established framework which has been around for some time.

The Law Commission was asked to examine the framework of consumer protection. In 1987 it produced a report in which it recommended some changes, most of which have been included in the Bill. Its main recommendation dealt with the phrase "merchantable quality", which is rather archaic. It recommended substituting the phrase "acceptable quality", while the phrase in the Bill is "satisfactory". The Law Commission also recommended that the concept of acceptance by a consumer should be varied so that the consumer was not deemed to have accepted goods which he had not accepted or not had the opportunity to decide whether he wanted to accept.

The Law Commission recommended against some changes in the Bill. The most important recommendation was against a cure scheme whereby a retailer could be deemed to have cured a defect by putting matters right. The Bill seems to give better protection for consumers than would those provisions. However, the Law Commission suggested that we should not go too far the other way and provide no time limit to the right of consumers to get all their money back. It stated that a cure scheme would be extremely complicated and that it wanted to keep the procedure simple. Its report came down against those provisions on the grounds that it was not sufficiently confident that that would be more beneficial to buyers and sellers generally than the present law. It feared that such a provision would become a fertile source of dispute and legislation.

On the more pertinent point of no time limit on the right to get one's money back, the Law Commission stated that it did not think there should be a change to the present requirement that a buyer should be deemed to have accepted the goods when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them. The Commission discussed and came down against a new general long-term right to reject a sales transaction. It concluded against the long-term right to reject goods because of latent defects or lack of durability on the grounds that such a right would effectively amount to the same thing as a general long-term right to reject. It then considered replacing the expression "reasonable time' with "a fixed period of time" within which the buyer would retain his right of rejection, but concluded that it could not suggest a better answer than the wording of the present law, given that it applies to every sort of good. However, the report mentions an alternative way forward and suggests that consideration might be given to laws applicable only to specific types of goods, for which fixed time limits would apply. That is an important point and it is one into which the consumer guarantee proposed by the Bill would run. We should bear in mind that the Law Commission considered that point and rejected it.

Mr. Leigh

Does my hon. Friend agree that in discussing the point about "reasonable time", it is important that nothing affects the buyer's right to damages for any defect?

Mr. Maples

My hon. Friend makes that point well. I do not know whether I would have come to it, but I am glad that he reminded the House that the rights under the Sale of Goods Act, to which every consumer has redress, are limited by the statute of limitations and not by an artificial period of, say, six or 12 months.

I understand that the Government are committed to introducing the Law Commission's recommendations. In answer to a parliamentary question, my hon. Friend the Minister said that the Government intend to implement the changes recommended by the Law Commission which will clarify consumers' rights, in particular by replacing the present requirement of "merchantable quality" with a more up-to-date definition. He also said that a new Act would spell out the relevant aspects of determining "satisfactory quality", including fitness for the purpose intended, appearance and finish of the goods, freedom from minor as well as major defects, safety and durability. The Government have announced their intention to introduce legislation to implement those changes to clarify and strengthen consumer rights. My hon. Friend also pointed out that the Law Commission has rejected other proposals. He said that the Law Commission gave careful consideration to all the arguments when it considered the issue, but recommended against the creation of a long-term right of rejection.

The Law Commission argued that such a right would be a major commercial uncertainty that would be extremely unfair to sellers. Consumers who bought a defective product would, in effect, get free use of it until the defect appeared, but the seller would then be obliged to take back the used product and refund the purchase price in full. Suppliers would be obliged to hedge against the commercial uncertainties of such a regime, with unwelcome implications for consumer prices. My hon. Friend said that he wants to avoid that. The important thing is that my hon. Friend has reiterated what the Law Commission has already said.

The National Consumer Council stated in its report that we should create a long-term right of rejection, which is what led to its conclusion that there should be a consumer guarantee, and to the Bill's proposals for such a guarantee but the council did not recommend a change in the Sale of Goods Act 1979 to produce that.

However, the Bill amends the Sale of Goods Act in several ways that were recommended by the Law Commission. Clause 16 is the most pertinent and seeks to replace the phrase "merchantable quality" with "satisfactory quality", which seems more likely to mean something to the average consumer. The clause states: Goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price… and all the other relevant circumstances. The clause then lists certain characteristics that should be taken into account in deciding whether the goods meet that definition.

Clauses 17 and 18 implement the Law Commission's recommendations on acceptance and introduce the concept of partial acceptance. The Law Commission was worried about the circumstances in which a buyer could be deemed to have accepted goods when it was unfair to think that he had. Clause 17(6) states: (6) The buyer is not by virtue of this section deemed to have accepted the goods merely because (for example)—

  1. (a) he asks for, or agrees to, their repair by or under an arrangement with the seller, or
  2. (b) the goods are delivered to another under a sub-sale or other disposition."
He is not deemed to have accepted the goods if he signs the receipt on a delivery note.

Those changes seem to strengthen the basic protection that the law gives to consumers in the Sale of Goods Act 1979. They are good remedies, and I wholly welcome them. They are the result of a commitment that the Government would legislate along the lines recommended by the Law Commission. I do not think that hon. Members will have any difficulty supporting that part of the Bill.

The Law Commission specifically rejected the concept of long-term right of rejection, and at this point I start to have difficulties with the Bill. As I said, it does not lead me to believe that the Bill is wholly wrong, but I need to be persuaded that it is right, or that it is likely to have any effect with the guarantees scheme.

Do we want to go further than the Sale of Goods Act provides? That is a fundamental question. The Sale of Goods Act provides some remedies, but I shall deal with how difficult it is to enforce those remedies. Do we want to introduce more law along the lines of compulsory guarantees?

The Bill allows only one form of guarantee for goods in the schedule. One either has a schedule or one does not. If one has a guarantee, it is in the form stated in the Bill. In many respects, the Sale of Goods Act gives better rights than do guarantees. We know that most traders and retailers behave reasonably. If one buys something in Marks and Spencer, John Lewis, Sainsburys, or Tesco and it is no good, one can take it back. I have never had any difficulty getting something substituted. Obviously, there are problems, but most respectable retailers realise that it is in their interests to provide a good service. If, by accident, they happen to sell something shoddy, they will replace it. No doubt they go back to the manufacturer who supplied the item and say, "This does not work. We want another one." That works reasonably well.

The problem lies with a minority of traders, but it affects many consumers. It was identified by the Office of Fair Trading as long ago as 1986, and it is the nub of the problem. The Director General of Fair Trading, Sir Gordon Borfie, said: Guarantees offered by manufacturers and suppliers can be of great benefit to the consumer, but all too often they are used merely as a marketing ploy or as an additional source of income for the trader. Trading insolvency may leave the consumers with a worthless piece of paper and a guarantee may be used to divert consumers' attention away from their basic legal rights. He seems to be saying that a guarantee is useful if a manufacturer or retailer honours it. The problem is that companies can go bust or refuse to honour guarantees, or make it difficult for consumers to enforce them. The Bill is unlikely to make any difference to the difficulty of enforcement by the consumer.

The recommendations of the Office of Fair Trading seem to call for a voluntary code of practice on guarantees rather than legislation. The Director General stated: I will not hesitate to use my powers under the Fair Trading Act and the Consumer Credit Act to take action against individuals or firms who refuse to honour guarantees or who offer guarantees which seriously mislead consumers. IT manufacturers and traders do not bring about improvements voluntarily, I shall consider recommending legislation. Sir Gordon obviously felt that the best way to deal with the problem would be by voluntary industrywide codes of practice. Some industries have particular problems, and cars are an obvious example. If motor traders were to form an organisation in which they promoted a guarantee which was particularly suitable to cars and, as an industry, police it and make sure that it was enforced, it would be a better system. It would be tailored to meet the needs of the car industry and consumers and would not be imposed by a legislative straitjacket.

In 1988, the National Consumer Council report reiterated some of those considerations and made clear the extent of the problem of many consumers. I was interested in page five of the report, which states: The Office of Fair Trading estimated that each year 38 per cent. of the adult population is dissatisfied with a purchase they make. This amounts to some 14 million people. A comparable survey by the OFT three years earlier put the figure at 28 per cent. The OFT estimated… that nearly half of these people will not get the problem resolved. This means that each year about six million consumers do not obtain redress for unsatisfactory goods. One part of the OFT data that is not questioned is that the dissatisfaction level for cars and household appliances far exceed the level from items purchased regularly, such as food, drink, fuels and toiletries. From those data it is clear that the Bill, which many of my hon. Friends support, addresses a serious problem. There is no doubt that the information shows that consumers are getting a rough ride in some respects.

The problem, however, is not that the goods do not come with guarantees or that the fine print enables the manufacturer to slip out of its responsibilities, but that the retailer and the manufacturer do not honour their commitments or, as I often find with my constituents, that the shop from which they bought the goods has disappeared, or that the builder who gave them a roof guarantee for 20 years became insolvent and is now trading under another name next door.

This issue is the enforcement of consumer rights and it applies equally to consumer rights in common law. If the consumer found a mechanism that made it easier to enforce his legal rights under the Sale of Goods Act 1979, it would not be necessary for him to worry about enforcing guarantee obligations, too. The problem is that traders do not honour their guarantees. We need a simpler way of enforcing rights under the Sale of Goods Act, just as the Bill proposes that rights under the consumer guarantee should be enforceable in the small claims court. That provision is sensible. If there is to be a guarantee, let it be enforceable in the small claims court. Lawyers could not then run up huge bills and the consumer would be on an equal footing with the supplier and the manufacturer.

That provision could be extended to the remedies under the Sale of Goods Act, although I am aware of difficulties with the level of jurisdiction of the small claims court in the Courts and Legal Services Bill that is currently being considered in another place. I hope that when that Bill comes to Committee we can ensure that the limit is raised to a point that would cover most of the items in schedule 2 of this Bill, although whether it could cover the most expensive cars is debatable.

If enforcement were available in the small claims courts of those new and extended rights that the Bill will give to consumers under the Sale of Goods Act, is it necessary to go further and impose a fairly rigid guarantee? The manufacturer either has to offer this guarantee or no guarantee at all. Consumers will not necessarily gain some rights by being able to enforce the provisions of that guarantee rather than their rights under the Sale of Goods Act. I doubt whether a dishonest or disreputable trader is more likely to honour the consumer guarantee any more than he honours his present obligations under existing guarantees or the Sale of Goods Act.

I want to deal with a point made by the Minister in his reply to an Adjournment debate. After-sales service and guarantees of quality are proper subjects of competition between businesses and proper areas for the exercise of consumer choice. Consumer magazines write up products and say which product is better than another, which provides better after-sales service and which is more reliable. Those are items that consumers should be able to take into account when making their choice between different products. I have no doubt that those characteristics will often, although not always, be reflected in the price of a product. The nature of the guarantee and the reliability of its being honoured are important factors in competition.

If one manufacturer is prepared to offer a two-year guarantee while another will offer only a six-month guarantee, but the six-month guarantee costs £50 less than the two year guarantee, the consumer could choose between them. Extended guarantees cost manufacturers money. The consumer guarantee proposed in the Bill could, in some industries, add considerable costs. The consumer should have the right to choose between paying for the extended guarantee, knowing that he has that comfort, or paying a little less and taking the risk of having to pay for the repairs himself. I question whether it is right to introduce the law into that circumstance.

I am not convinced that there is no room for the law in this arrangement. I have a predilection or prejudice—which is mild at this stage—for allowing the consumer to choose. If there is no guarantee, the consumer can draw his own conclusion. It may be that the product has no guarantee but is well written up in consumer magazines. It may have a terrific reputation. Many of the consumer's friends may have bought it, and he would rather buy it without the guarantee.

Mr. Stern

Does my hon. Friend agree that the idea of having a choice of guarantees would be welcome, especially to those consumers who have been taken for a ride by the offer of guarantees by companies which have then gone out of business? Does my hon. Friend agree that if such extended guarantees were made more generally available, it would be useful to have legislation to ensure that they were independently insured?

Mr. Maples

That would be an attraction that a manufacturer could offer in his guarantee. If he were prepared to insure his guarantee, it would be an added guarantee of the product's liability. No doubt it would cost something to insure the guarantee, but again that should be a subject of consumer choice. The consumer should be able to choose whether to pay a little extra and have the insured guarantee. In certain circumstances, I would welcome that offer and choose it.

I have some difficulty about the guarantee scheme outlined in the Bill. It imposes a uniform guarantee—one either has this guarantee or no guarantee at all. It results from the National Consumer Council report. I have quoted the comments of my hon. Friend the Minister that, in the Government's view, it goes too far. In another debate, my hon. Friend said: I agree that guarantees should state their terms clearly and in plain English and I could support legislation that would make such guarantees legally enforceable. I fully endorse the view that any guarantee must be additional to existing statutory protection. But I do not accept that it is necessary to lay down detailed terms or procedures which would attach to specific products covered by consumer guarantees.

The Sale of Goods Act provides the consumer with a clear right of action against the supplier, who is normally a retailer. The NCC proposals would involve the manufacturer, who is not normally a party to the contract.—[Official Report, 14 December 1989; Vol. 163, c. 1302.] I do not want to go into that last point, but those comments sum up the case against such a scheme.

The objectives set out by the hon. Member for Clwyd, South-West and the NCC are not likely to be achieved by the Bill. The hon. Gentleman described his three objectives in a press release and later in an article:

  1. "(a) to give consumers a clear and simple indication of the quality and especially the reliability of products;
  2. 1215
  3. (b) to promote high standards of quality control; and
  4. (c) to seek fuller competition."
I should have thought that the hon. Gentleman was unlikely to achieve any of those objectives through the Bill. It is unlikely to promote high standards of quality control. It certainly will not achieve greater competition—if anything, it is likely to achieve less, because all guarantees will he the same. It will give consumers a clear and simple indication of their rights, but not of the quality or reliability of products. The fact that a product has a consumer guarantee no more guarantees the product's reliability than do existing guarantees.

Mr. Martyn Jones

I thank the hon. Gentleman for giving way again. I wanted to put him straight on one matter. The point is not that this guarantee will replace all other guarantees. That is arrant nonsense. It will give a minimum level of guarantee and replacement or refund provisions will be enshrined in law.

Mr. Maples

I understand that point. I certainly did not mean to give the impression that the guarantee in the Bill had some other effect.

The NCC's report describes one of the objectives slightly differently. It referred to the aim to provide consumers with a clear and simple indication of their rights of redress". That is an objective to be welcomed—consumers should understand exactly what kind of guarantee they have and what their rights are. I would have no problem in supporting that objective.

The NCC goes on to argue that this will help to promote competition, but I have doubts about that. The Bill will not make it easier to enforce guarantees. Consumers cannot enforce their rights under the Sale of Goods Act or their guarantees legally, and the Bill will not make it easier to do so. The exact form of guarantee is where I begin to have difficulties with the hon. Gentleman's Bill. A guarantor would have to repair any defects in a product, free of charge, although the obligation would not arise if the defect had been caused by misuse of the product. That would apply regardless of the time that had elapsed. The guarantor must provide the consumer with the use of a comparable replacement product free of charge, or must reimburse the consumer for any expenses that he incurred as a consequence of losing the use of the product, if the guarantor does not repair it within four relevant days.

If in any 12-month period—however late in the 12 months—the product is unrepaired for more than 21 days, a full refund or replacement must be offered. All those remedies must be provided free of charge within 12 months of purchase.

Those obligations are likely to lead to increased costs and a diminution of consumer choice between different forms of guarantee and are unlikely to be suitable for every type of consumer product to which they are intended to apply. We would be imposing one scheme on all products.

One criticism is that we would create a long-term right of rejection that would apply even if the defect were only minor, which would effectively give consumers free use of goods until unsatisfactory repair work triggered the right to a refund. The Law Commission in its review recommended that there should be no long-term right of rejection, as it would be unfair to sellers and would entitle consumers to full refunds for used goods, thereby creating major commercial uncertainties with adverse effects on prices. I think that is fair and trenchant criticism.

Other criticisms are that the Bill would create practical, administrative and bureaucratic difficulties for businesses, which would have to keep a history of the goods that they have sold. It would be anti-competitive, which is a point that I have made. It reverses the burden of proof because, although the supplier or manufacturer is not obliged to repair defects that are not his fault, effectively the burden of proof is on his shoulders.

There would be practical difficulties with the provision of loan goods. Perhaps that would not occur with an Amstrad computer, a video recorder of a compact disc player but it would be extremely unreasonable to expect a supplier to keep a stock of expensive motor cars on hand as temporary loan replacements to unhappy consumers.

A couple of other criticisms have been made of the Bill, and I should be interested to hear what my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs has to say about them. One is the impact of the Bill on credit agreements, which my hon. Friend the Member for Hornchurch (Mr. Squire) mentioned in his speech. The second is the EC implications of the measure, because many consumer protection requirements and regulations will have to apply throughout the EC. I understand that the Commission is considering the issue at the moment. I shall be interested to know whether this will make life difficult for us in the future.

Mr. John Marshall (Hendon, South)

My hon. Friend said that if we pass such a measure it may be regarded as being in restraint of intra-Community trade. Does he believe that we might be taken to the European Court and would that not be bad for Britain's reputation.

Mr. Maples

My hon. Friend knows more about the activities of the European Commission than I do. I understand that that is the nub of the problem. I have no objection to Europeanwide standards of consumer protection, and health and safety protection, and we do not want to get out of line. That would give rise to the consequences that my hon. Friend suggested, and we should not let ourselves in for that lightly.

I welcome in clause 14 the introduction of the small claims courts procedure for dealing with claims under guarantees. I suggest to my hon. Friend that he should extend the small claims courts' jurisdiction to actions under the Sale of Goods Act 1979 by consumers for the type of goods set out in the schedule, although that may create difficulties in the case of expensive cars.

To sum up my argument, substantial remedies are already available under the Sale of Goods Act 1979. The amendments proposed to strengthen those remedies and the consumer guarantee proposed by the Bill do not add to them and they will certainly incur costs. I am not at all sure that those costs do not outweigh the benefits of the guarantee. I welcome the provisions covering labelling, clarity and the small claims enforcement procedure, but I am concerned about the competition and expense implications of imposing a guarantee straitjacket on all these goods.

The central problem concerning consumer rights is not so much the nature of the rights but the difficulty of enforcing them. If we could encourage voluntary, industrywide schemes that gained credibility with consumers, and if we could extend the small claims procedure to the Sale of Goods Act, we should go a long way towards meeting the promoter's objectives. I am not at all sure that the consumer guarantee provisions meet their stated objectives. It is also possible that the costs and other implications outweigh the benefits.

12.45 pm
Mr. Ron Davies (Caerphilly)

On a point of order, Mr. Deputy Speaker. You were not in the Chair for the private notice question; Mr. Speaker was. Three quarters of an hour of the time that had been allocated to the Bill promoted by my hon. Friend the Member for Clwyd, South-West (Mr. Jones) was taken up by the private notice question. Mr. Speaker made a pointed reference to the fact that time had been lost, and appealed to all hon. Members to speak briefly. The hon. Member for Lewisham, West (Mr. Maples) was entitled to speak, but he has spoken for over half an hour. Previous speakers made brief speeches since a number of my hon. Friends want to make a contribution to the debate—

Mr. Deputy Speaker (Mr. Harold Walker)

Order. I understand the hon. Gentleman's point. I believe that Mr. Speaker appealed for brief speeches, since time was lost due to the private notice question at 11 o'clock. I hope that hon. Members will bear Mr. Speaker's appeal in mind.

12.46 pm
Mr. Roger Gale (Thanet, North)

I hope, Mr. Deputy Speaker, that I shall be commendably brief. There has been a considerable consensus, and I know that all hon. Members are waiting to hear the response of my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs.

I congratulate the hon. Member for Clwyd, South-West (Mr. Jones) and I thank him for his courtesy in inviting me to be one of the sponsors of his Bill, which has my fullest support. I hope that it will swiftly find its way on to the statute book.

The Minister has a reputation for being extremely robust when defending and promoting free trade. Normally I agree with him. I am therefore a little disappointed that, on the radio this morning, I heard him say that he does not consider that the Bill would promote competition and trade. I believe that it will. To take the Minister back a few months, he will remember his first appearance at the Dispatch Box. He will recall that he said that his duty—not a labour of love—was to seek to implement a miserable European directive that abolished the country of origin marking on goods. He most certainly did his duty formidably, as he always does, but I do not believe that his support for that measure was any greater than mine. His heart was not in it.

The Minister has an opportunity today to undo a little of the damage that was done on that occasion and to lend his support to a measure that will lead to the return of a little and much needed bit of consumer protection.

I speak unashamedly on behalf of my constituents in general and of two categories in particular—the first-time buyer, the home maker, and those who are about to retire. I have many of both categories of constituents. I am thinking in particular of the young married couple who are setting up home for the first time and buying their first washing machine, cooker, record player, video and car. I am also thinking of the last-time buyer—those who are trading down and moving to the home where they expect to end their days and who, perhaps for the last time in their lives, are buying new and quite expensive goods on very limited incomes: their last car, cooker and all the other items that I have mentioned. They are entitled to the best of everything when they buy new goods.

My hon. Friend the Member for Spelthorne (Mr. Wilshire) said that those people have rights, but they do not want the right to go to a solicitor or a small claims court. They do not want the right to have something repaired or to have a new car with a second-hand or replacement gearbox. They bought a new car. That is what they paid for and that is what they want. It is that simple.

I buy British whenever I can, and I do not believe that any British manufacturer has anything to fear from the Bill—far from it. I believe that the Bill will stimulate competition and increase confidence, especially in British goods. People will know that they are not buying second best from Italy or Taiwan but the best, which is made in Britain and which says so because it is guaranteed. If we put this measure on the statute book, we shall have given the consumer something that many consumers believe they already have and most certainly want. I hope that the Minister will find it in is heart to see the merit of that and to support it.

12.50 pm
Mr. Michael Stern (Bristol, North-West)

I join two other hon. Members in apologising to the House for the fact that the British winter is having its usual effect on my voice.

With my hon. Friend the Member for Lewisham, West (Mr. Maples), I am in a minority because I have considerable doubts about the Bill, although I welcome much of it. I congratulate the hon. Member for Clwyd, South-West (Mr. Jones) on introducing the Bill and on enabling us to highlight a number of areas of obvious public concern which carry a great deal of public support. In fairness to him, I should deal first with those aspects of the Bill with which I am a little unhappy.

When I started training in accountancy at the age of 16 as an articled clerk—what a pity it is that that phrase has now disappeared from the English language—one of the first principles of English law I learned was "caveat emptor"—let the buyer beware. However much we desire to protect the interests of the consumer, and however much we recognise that the consumer is so often fighting an unequal battle against the large corporation—the business that does not care because it is simply looking for market share and is not concerned about repeat orders—we must be very wary about inculcating into the consumer the idea that he need have no care, that, provided that he buys from a recognised manufacturer or retailer and provided that the packaging looks nice, he has no further duty to take care and consider his assets and his rights.

My first worry is that a basic guarantee as proposed by the hon. Member for Clwyd, South-West would mean nannying the consumer just a little too much. I would urge caution in setting up such a guarantee and relieving the consumer of the power and duty of perception.

Mr. Summerson

If someone were to buy a house, if he were prudent he would get a chartered surveyor to look at the house. Obviously a house is a large object and can be looked at by an expert. Does my hon. Friend agree that, if a consumer goes out to buy a video, for example, he cannot really get an expert to look over the product and give him an assurance that it is good enough for his purposes?

Mr. Stern

I entirely accept that. I am not trying to state an absolute principle that only the seller needs protection: I am saying that we must avoid legislation that might persuade consumers that they can afford to be careless.

My second worry is that the Bill seeks to interfere in the basic right of a seller and purchaser to enter into a contract. We should be wary of interfering in that right. It is basic to the Bill that, when a consumer buys goods he obtains rights against not only the retailer but the manufacturer, which is not aware who is buying its product, under what conditions and when.

I should like to instance the recent Monopolies and Mergers Commission report into credit card trading. It was news to me that, for many years, the high street banks had been secretly interfering in every contract between myself and the retailer from which I purchased, by saying that under civil law it is illegal for the retailer to make a different charge for goods depending on whether I used a credit card, which cost the retailer more, or cash. I strongly reject the principle that the high street banks had any right to interfere in a private contract, and I am delighted that the Government have decided to remove that right.

Mr. Gerald BowdenM

Does my hon. Friend accept that it is an established principle of English law, whether or not there is a contract between the manufacturer and ultimate user, that if, through negligence, a manufacturer produces goods that are so deficient and defective that they cause injury to the ultimate user, the manufacturer is liable? Should not a manufacturer, which knows how the goods are manufactured and has the technical knowledge to certify them, have a similar liability, whatever the chain of contract between it and the ultimate user?

Mr. Stern

I entirely accept my hon. Friend's point. I am not trying to deal in absolutes, but one must consider the principles on both sides. A manufacturer whose goods are designed to be sold in certain circumstances and conditions may find that a retailer is selling them under different circumstances and conditions, yet under the Bill the manufacturer would be at least in some danger of being liable.

My third worry is about the right of rejection, about which my hon. Friend the Member for Lewisham, West expressed some doubt. We are all aware of circumstances in which the right of rejection should apply. A constituent of mine, Mr. Ken Evans, has written to the hon. Member for Clwyd, South-West (Mr. Jones)—I shall refer to Mr. Evans later—about a car that he purchased. It was in such an appalling condition that any reasonable person would have said that it should be taken off the road straight away and should never be driven by anyone, let alone such a pertinacious gentleman as Mr. Evans.

Nevertheless, some consumers would use the right of rejection to obtain goods on free permanent loan. They would return to the retailer about every three months with a marginal defect which might have arisen from use or manufacture and in many cases obtain a new product because the retailer would have his reputation to consider. The long-term right of rejection has been questioned by the Law Commission, and many people have considerable doubts about it. For those reasons, I shall not support the Bill.

Let me deal briefly with the respects in which I believe the hon. Gentleman is entirely right—as witness the organisations and people who have attacked the Bill. I do not have a substantial motor manufacturer in my constituency but like anyone who has bought a lemon car at any time in his life, I can say that in principle any Bill attacked by the Society of Motor Manufacturers and Traders must have something good about it.

The reasons that the society has given for opposing the Bill suggest that the Bill may be necessary. The society refers to the problem of minor defects and suggests that it does not believe that a minor defect such as an intermittent fault in an interior light should allow the consumer to claim a refund or replacement. Taken out of context, one cannot argue with that statement, but we have all either purchased, or know people who have purchased, motor vehicles in which there has been not one minor defect but a different minor defect every day.

There are brands of car, regrettably manufactured in this country, which one knew one was buying for style and performance but certainly not for reliability. One knew that, every time one took the car in for a service, one would have to list not just the requirements of the service but 27 other faults that had to be put right. I accept the implication in the Bill that even minor defects can build up to the extent where there should be a right of rejection.

The purchaser of a particularly complex item should have the right to say to the retailer, and ultimately to the manufacturer; "This product is so bad that you should take it back and study it to find out why it went wrong." On a smaller scale, the personal stereo that I usually carry with me when I travel went wrong and the manufacturer had more use out of it than I did in the first year of my ownership, although admittedly, the manufacturer has the reputation of never repairing a product in under six weeks.

The right of rejection and it importation into law is necessary. My worry is that we have not yet reached the stage of research into consumer law at which we can lay down the circumstances in which that right should and should not apply.

As the Society of Motor Manufacturers and Traders rightly pointed out, the option of replacement or refund in the Bill gives rise to particular problems, especially with new cars. Many newly introduced cars are available only to those on a waiting list. When such a car is purchased and found to be defective, it would be wholly unreasonable to give the consumer the right to demand its replacement with an identical car. The only practicable remedy available to the motor trader to give in those circumstances is the right of full refund because he cannot get a replacement anyway and, even if he could, several other people would be waiting for it.

We have already referred to the fact that the society has offered help to draw up another Bill. I hope that, if the Bill goes into Committee, an amendment will be made to take into account not just the views of the manufacturers of expensive consumer goods such as motor cars but the views of a broad spectrum of experience of individual consumers such as Mr. Evans, who wrote to the promoter of the Bill. Those views would help us to arrive at a decision on what rights should be legally enforceable under the guarantees.

The British Radio and Electronic Equipment Manufacturers Association has also attacked the Bill, for somewhat specious reasons. It has said that it is generally the dealer who provides the repair service to the public. I suspect that any dealer in electronic goods who saw such a statement would immediately sue the manufacturers for libel. As we all know, the people who repair electronic goods that have to be sent away to be repaired cloak themselves in anonymity because they know of their reputation with the public. The poor dealer is usually the idiot who bears the opprobrium of the public for delays in servicing and for unsatisfactory servicing, when he is merely acting as a post office and sending goods away to the usually inadequate servicing facilities which are laid on by the manufacturer.

The hon. Member for Clwyd, South-West has received a detailed communication on the Bill from Mr. Evans, a constituent of mine. I should explain that Mr. Evans is indefatigable in his pursuit of the rights of the consumer, for reasons that are based at least in part on his own experiences. He has gained a reputation locally as a person who never gives up. Frankly, his experiences with a couple of motor cars that he purchased have convinced me that it is in every way right and proper for him to act in that way. I praise his pertinacity and wish that more consumers would show the same quality.

Mr. Evans has suggested—I believe that the suggestion has considerable merit—that, rather than proposing an enforceable guarantee which would be available to every consumer, we should examine the current powers and duties of trading standards officers, and should perhaps extend their statutory powers so that they would have the opportunity, the obligation and the resources to enable them to take up, on behalf of the consumer, the problems that the Bill is designed to redress.

If the hon. Member for Clywd, South-West were to pursue that line, it would be necessary to make the trading standards service a national rather than a county-based organisation, or perhaps a national organisation with county branches. It is possible that my constituent's proposal, which I commend for consideration at least, would enable us to avoid some of the undoubted legal problems which have been described this morning and which are implicit in the Bill. Mr. Evans's suggestion would also give rather more power to the consumer in arguments with large manufacturers.

I congratulate the hon. Member for Clywd, South-West on bringing this measure forward. I cannot support him, but I hope that there is a fair chance of the Bill going into Committee.

1.8 pm

Mr. Edward Leigh (Gainsborough and Horncastle)

I know that my hon. Friend the Minister is anxious to speak soon, so I shall restrict my comments to six or seven minutes, which will enable the House to come to a decision on the Bill.

We have heard much today about the Sale of Goods Act 1979. It is true that the Act looks rather frayed at the edges, although it has served the country well. I was pleased by the recommendation of the Law Commission that the phrase "merchantable quality" should be changed. When I was a law student, I always had grave difficulty in understanding what the phrase meant, but I was too shy to ask my teachers. If I was too shy, I fear that the public may be even more so, and may be confused. The phrase rings of the grand Victorian days when British goods sailed the world. Phrases such as "satisfactory quality" or "acceptable quality" would be much better.

Notwithstanding the fact that the Sale of Goods Act 1979 is looking a little frayed at the edges, I am sure that we can still address these problems of consumer protection. We are all consumers and we all want to protect consumers. I am not yet convinced that the complex problems cannot be addressed simply by amending the Sale of Goods Act. Although I shall not oppose the Bill's Second Reading, I am not sure whether it will solve all the problems.

From a legal point of view, the beauty of the Sale of Goods Act is that it is easily understood. The consumer understands that he has a right of rejection, but he must exercise that right within a reasonable time. That concept, albeit enshrined in statute law, goes back to common law times and is based on sound common sense.

My hon. Friend the Member for Bristol, North-West (Mr. Stern) made a fair point. He said that goods are much more complex in this modern era, so it may take some time for a defect to become apparent. Indeed, several defects might build up. In that case, is it fair to require a consumer to exercise his right of rejection within the reasonable time aspect of the Sale of Goods Act? That is one of the soundest legal points that I have heard today. I am not sure how that problem can be addressed in amending the 1979 Act, but I do not see why we should throw over the 1979 Act and adopt the proposals in this Bill.

As I said earlier, although the provisions in the Sale of Goods Act are easily understood by the public, nothing in the Act affects the right of the public to damages, and that is important. Similarly, nothing affects the rights of the consumer under various guarantees. The public must be aware that, if guarantees are given, they in no way remove rights under the Sale of Goods Act.

Self-regulation by manufacturers has achieved a great deal and many of the proposals in the Bill are already enshrined in codes or practices. I am not saying that it would not be useful to enshrine codes of practice in law, but we should not assume that much has not already been achieved.

I understand that my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs is worried about the long-term right of rejection, which is the fatal logical flaw in the Bill. I do not believe that my hon. Friend the Minister was right to say that the Bill would be unnecessarily bureaucratic and restrictive. I hope that he will refer to that later, because I believe that he is not on sure ground there. I have tried to explain as simply as I can that the Sale of Goods Act is so clear that the Consumer Guarantees Bill, if enacted, might confuse the public.

My hon. Friend the Member for Bristol, North-West referred to minor defects—a point that was also made by the motor manufacturers. Perhaps we should not place too much credence on what the motor manufacturers say. However, perhaps my hon. Friend the Minister can tell us what happens if a car's interior light does not work. Under the Bill, would someone have the right to reject the whole car? That may be a philosophical point, but it is of interest.

When my hon. Friend the Minister describes the Bill as unduly bureaucratic, perhaps he is thinking of guarantors needing to monitor repair histories of individual products to protect their interests. Any trends towards liberalisation of servicing might be set back by that. That is a fair point, and I hope that the Minister will refer to it.

I promised that I would sit down before 1.15 pm, so I shall conclude by saying that I am extremely worried about the reversal of burden of proof. We lawyers take that extremely seriously in the criminal and civil courts. I am not entirely convinced that we should proceed as far as the Bill suggests. Although the guarantor is not obliged to repair defects that are not his fault, proving so is an onerous burden on him. This is particularly serious as such radical remedies create an incentive for potential consumers abuse.

I am not suggesting that the Bill is not courageous; nor am I suggesting that it was wrong to introduce it. I believe, however, that we must consider it carefully in Committee.

1.14 pm
The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth)

I begin by joining in the congratulations that have been offered by hon. Members, including many of my hon. Friends, to the hon. Member for Clwyd, South-West (Mr. Jones) on achieving the number one position in the private Members' ballot. That is a much coveted position each year and it occupies an important place in the parliamentary calendar.

I thank the hon. Gentleman for taking the trouble to see me early on in his considerations of this matter and for the discussions that we had. I hope that he agrees that they were friendly and constructive and I hope that we made each other's position clear. I made it clear to the hon. Gentleman that were he to proceed to amend the Sale of Goods Act 1979 he would have Government support and help. I made it equally clear, however, that I had serious reservations about the guarantee proposals in the National Consumer Council report, and I told him that if he proceeded with those proposals, the Government would have to express their reservations.

Mr. John Marshall

My hon. Friend is giving us an interesting insight into his thought process. I congratulate him on the statesmanlike approach that he has adopted towards the hon. Member for Clwyd, South-West (Mr. Jones). My hon. Friend made it clear that he would not object automatically to the proposed Bill.

Mr. Forth

I am grateful to my hon. Friend.

I have given the background to the Bill because I wanted to make two things clear. The first is that from the start I have been prepared to be as helpful and open as I can. I hope that my hon. Friends will agree that that was the right position to adopt. The second is that it would be equally fair to the hon. Gentleman, however, to make it clear to him that were he to proceed down a certain route the Government would, inevitably, have some reservations about his Bill.

Another factor that has permeated our proceedings today gives a clue to the strength of my reservations. Speaker after speaker, including the promoter of the Bill, the hon. Member for Truro (Mr. Taylor), and my hon. Friends the Members for Dulwich (Mr. Bowden), for Portsmouth, South (Mr. Martin) and for Newark (Mr. Alexander), said that they liked the Bill, but that it was seriously flawed. They said, "It does not do quite the right thing, but never mind, it can be amended in Committee."

That is a worrying attitude to adopt when setting out to introduce legislation. It is especially worrying when a Bill has received such little detailed consideration at this stage of its proceedings that even its supporters admit that it will require considerable amendment in Committee.

The truth is that we have no means of knowing, even remotely, at this stage, in what form the Bill will emerge from Committee. Some people want to strengthen it and others want to include other bits and pieces. That is all understandable, but it makes the process unpredictable and that is not the ideal way in which to legislate.

Mr. Robert Maclennan (Caithness and Sutherland)

I am grateful to the Minister for giving way, particularly as I have not participated directly in the debate, but I heard the speeches to which he referred. He did not characterise those speeches fairly when he said that those hon. Members said that the Bill was fundamentally flawed. Hon. Members, including the hon. Member for Dulwich (Mr. Bowden), were calling for matters of detail to be considered in Committee, but they did not call into question the principle of the Bill.

Mr. Forth

Our examination of Hansard will demonstrate where the emphasis lies. The House may want to bear in mind the fact that many hon. Members who were ostensibly in support of the measure felt obliged to express reservations about it. That seems an odd way to embark upon legislation.

To set in context the Government's view of the Bill I shall quote, as I often like to do on these occasions, the Department of Trade and Industry White Paper published in January 1988 which remains our bible and guiding philosophy. We said of the Government's approach: In consumer protection the policy emphasis will reflect the Government's view that the best form of protection comes from consumers making well informed choices and acting in their own interests. To achieve this, information can be more effective than regulations. However where the case is made out for regulation on safety or other grounds, the Government will not hesitate to act. Recent history has demonstrated that that is true. It is the correct, responsible and balanced approach to the matter and it will guide us in our response to the Bill. A balance must be struck between what regulations can offer and what the market place can offer through the power of the consumer.

Several hon. Members referred to the Law Commissions' review of consumer protection. I shall do so in more detail because it will be of help to the House. Hon. Members who are lawyers, solicitors or barristers and are familiar with the legislation will realise that what the Law Commissions say is vital to our understanding of the Bill. That has been said, before, but I wish to make sure that the House is aware of it.

In 1987 the Law Commission and the Scottish Law Commission completed a review of certain aspects of the law governing the sale and supply of goods. They examined the present statutory provisions for implied terms in contracts for sale, the remedies for breach of those terms and the present rules governing the loss of right to reject non-comforming goods. My hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) referred to that a moment ago. One can imagine the depth and thoroughness with which they examined the subject if I tell hon. Members that the deliberations were under way for some eight years, before publication of a comprehensive report which runs to over 100 pages. The list of people and organisations who submitted comments on the Commissions' working paper runs to over 100 entries and covers, among others, representatives of industry and commerce, manufacturers, retailers, finance houses, consumer bodies and lawyers. That gave rise to the Law Commissions' recommendations which were published in May 1987.

The main change that was recommended, to which several Members referred, was to replace the present implied term "merchantable quality"—the phrase which gave my hon. Friend the Member for Gainsborough and Horncastle such trouble when he was studying law—with an up-to-date term that recognises the aspects of quality that are important for consumers as end users of the goods in question. The hon. Member for Clwyd, South-West emphasised that.

The amended Act would state explicitly that the relevant aspects in determining acceptable or—this would probably be preferable—satisfactory quality include fitness for purpose, the appearance and finish of the goods, their freedom from minor as well as major defects and their safety and durability.

The Law Commissions also considered the present rules governing acceptance and rejection. However, they proposed that no change be made to the customer's right to reject non-conforming goods. I have no doubt that they gave very careful consideration to all the arguments surrounding this issue. Their report comments that this issue attracted considerable comment during consultation and that their conclusion was generally—although not universally—supported. They recommended—this is crucial to the debate—against creating a long-term right of rejection. They considered that such a right would create major commercial uncertainties and would be extremely unfair to sellers.

The Law Commissions also recommended several other minor changes to the Sale of Goods Act 1979. I shall not mention them all today, but I draw particular attention to their recommendation for extension of some of the provisions of the Supply of Goods and Services Act 1982 to Scotland. The situation has never been completely clear regarding the rights of consumers in Scotland when goods are hired, acquired as part of a trade-in, or received as a commercial gift. This extension would make it absolutely clear that consumers in Scotland who receive faulty goods in such circumstances would have exactly the same rights as though it had been a cash sale. As such, the proposed reform has the full backing of the Scottish Consumer Council.

The Government have announced their support for the Law Commissions' recommendations and their intention to introduce legislation to implement the recommendations, subject to some minor clarifying amendments. The amended Act will set a high standard for the quality which the consumer is entitled to expect, and will clarify and strengthen consumers' rights. These provisions are reflected in part V of the Bill and I thank the hon. Member for Clwyd, South-West for that because it is a major step forward.

The subject of guarantees forms the bulk of the hon. Gentleman's Bill, which is probably one of the most substantial private Member's Bills to have been laid before the House for some time. That fact must also give us cause to wonder how it would fare in Committee because difficulties always arise when the House sets out to consider a Bill of substance and complexity in a private Member's Bill Committee. That is another source of my reservations. Nevertheless, the subject of guarantees has been scrutinised considerably over the years by the Office of Fair Trading and recently by the National Consumer Council, whose report gave rise to the Bill.

I turn now to a detailed consideration of the proposed legislation, especially in relation to guarantees, on which the bulk of the debate has concentrated. There is much common ground among all hon. Members who have contributed to the debate about the sale of goods part of the Bill, so I need not dwell on it at any length. However, it is right to consider the guarantee provisions in detail.

The Bill seeks to create the provison in law for a consumer guarantee. The essence of the proposed approach, as we see it, is to provide additional remedies against the guarantor, which would be enforceable in law. The measure would provide for rights to free repair of all defects and in some circumstances to refunds or replacements. The remedies would be against the manufacturer rather than the retailer, as under the Sale of Goods Act 1979. The Bill sets out a list of minimum terms—a prescription in fact—for a consumer guarantee. Although the offer of the guarantee would not be mandatory, consumer durables within certain categories would be required to carry a prominent indication of whether they are covered by a consumer guarantee. That might create some burdens and difficulties that have not been fully anticipated.

The supporters of the Bill have argued that it will strengthen consumers' protection against shoddy goods, that when disputes arise it will clarify the position to the benefit of both consumers and suppliers, that it will lead to improved quality control—a point stressed by the promoter of the Bill—and that it will stimulate competition between manufacturers on quality grounds. Of course, I support the objectives of such a proposal and share anyone's commitment to transparency of information for consumers, to improved product quality, and to free and full competition between producers. Few—and certainly not I—would argue with those objectives.

Nor would I dispute that guarantees are a subject that might merit further examination. It has been argued that the law is at present unclear about the exact status of a guarantee and whether it confers rights that are enforceable in law. The report published by the Office of Fair Trading in 1986 draws attention to a number of other practical aspects of the operation and enforcement of guarantees offered to consumers, which merit further consideration in the light of developments even since the publication of that report.

That much is common ground. I have indicated throughout to the hon. Member for Clwyd, South-West that I believe that the whole area of guarantees merits further examination. We differ on whether either the National Consumer Council report or the Bill is the correct way to proceed and that is a legitimate area of difference between us. For that reason, I am sceptical about the proposed approach for consumer guarantees. I doubt whether the Bill will provide the benefits that its advocates and supporters have put before us. It is easy to be attracted to it because it sounds good. Reference has already been made to the MORI poll in which people were, in essence, asked, "Do you approve of motherhood and apple pie, if not of guarantees?" Surprise, surprise—a lot of people said, "Yes, we do."

Mr. Bob Cryer (Bradford, South)

Has the Minister no heart?

Mr. Forth

For the benefit of the hon. Member for Bradford, South (Mr. Cryer), I think that I implied, if not said, that I rather approve of motherhood.

The thought occurred to me that if we are to determine policy based on opinion poll surveys, and Opposition Members are saying, that there is such enormous support for consumer guarantees, they would presumably agree that we should reintroduce capital punishment on exactly the same basis. If I can produce a MORI opinion poll that demonstrates overwhelming support for the reintroduction of capital punishment, to be logical and consistent, Opposition Members should say that we should legislate accordingly. I do not see any takers.

Mr. John Marshall

My hon. Friend the Minister referred to opinion polls. Obviously, in opinion polls, someone must answer yes or no. They often say yes, but they do not feel particularly strongly about the issue. How many people have written to my hon. Friend the Minister asking him to support the Bill? That would give an indication of positive support for it.

Mr. Forth

I do not have an exact number for my hon. Friend.

Mr. Barry Jones (Alyn and Deeside)


Mr. Forth

The hon. Gentleman should not get too excited. Let him contain himself. If I have time, I will give my hon. Friend the Member for Hendon, South, (Mr. Marshall) some details of those who have said that they have reservations about the measure. Many claims have been made about it. My hon. Friend put his finger on an important point. It is easy to ask, "Do you think that better guarantees are a good idea?" Most people will say yes. The best way to ask the question is, "Do you believe that measures of this kind will be desirable, given the effects that they may have on increased prices, for example? The next question should be, "Would you be prepared to balance possible benefits of the extension of guarantees against a probable increase in prices?"

Mr. Allan Rogers (Rhondda)

The Minister's discourse is extremely interesting, but it is quite time-wasting. Will he refer to the intrinsic matters of the Bill rather than the merits or otherwise of public opinion polls?

Mr. Forth

The hon. Member for Rhondda (Mr. Rogers) must not tempt me. He drifted into the Chamber a few minutes ago, is obviously anxious to get away, and has tried to suggest that I should skip quickly over the arguments on this important measure.

Mr. Rogers

Discuss the arguments.

Mr. Forth

I ask the hon. Gentleman to stop interrupting from a sedentary position. I am anxious to get on to the arguments.

Mr. Leigh

My hon. Friend the Minister mentioned questions that may not be covered in a simple opinion poll. One matter which is germane to our discussion is that, under the United Kingdom approach, only parties to a contract may enforce it. If, under the Bill, a consumer is allowed to enforce a contract against a manufacturer with whom he may not have a direct contractual relationship, it could lead to complex disputes involving, perhaps, finance houses, retailers, manufacturers and consumers. That problem is not addressed in simple opinion polls.

Mr. Forth

I am grateful to my hon. Friend. I had hoped to refer to that matter in a moment, but my hon. Friend has already done it for me, and much more elegantly.

Mr. Alan Williams

The Minister is mounting a substantial part of his case upon a fictitious opinion poll that asked whether people are in favour of guarantees. He is now enjoying himself deriding that opinion poll, but that is not what was asked. What he has been saying until now is irrelevant. The NCC report referred to questions about the need for information on reliability and durability of certain products. The term "life expectancy" was used. There were questions about assessment of the way in which that information is currently provided. That is very different from the simplistic opinion poll that the Minister has just demolished. Perhaps he will now address the Bill.

Mr. Forth

I am anxious to continue with that—perhaps now I will be given the chance.

Mr. Brian Sedgemore (Hackney, South and Shoreditch)

When I used to be a civil servant and a private secretary to a Minister, it was usual for Ministers, when they commented on documents, opinion poll surveys and information provided by the National Consumer Council or the Consumers Association, to read the information and then to give informed comment to the House instead of filibustering at the Dispatch Box.

Mr. Forth

The hon. Gentleman observes that in my hand I have the MORI opinion poll referred to by the right hon. Member for Swansea, West (Mr. Williams). It has been at my side throughout the debate. 1 have refreshed my memory of its contents at times during the debate and feel entitled to comment on it. If the hon. Gentleman would like a copy, I should be happy to let him have one after the debate, whenever that may be. I am being hampered in making progress by Opposition Members who seem determined to slow the pace of the debate. I cannot understand why they should do so, but no doubt the reason will emerge at some stage.

I shall now deal with the points of my hon. Friend the Member for Gainsborough and Horncastle, to which I have not yet been able to respond. His comments went to the heart of the matter. One danger of the Bill is that it might interfere with the delicate relationship between consumers, manufacturers, retailers and the providers of finance—a point made ably by my hon. Friend the Member for Hornchurch (Mr. Squire) who, due to indisposition, has offered his apologies for leaving the debate. He made some telling points to which I shall return if I am given the opportunity, about the relationship between the financial institutions—through hire purchase and leasing—and consumers. That point is crucial. My hon. Friend suggested that it may be a fundamental flaw in the Bill, and I am inclined to agree. That may not be resolved adequately in Committee. I am worried at the glib assertions that if only we give the Bill a Second Reading, we can resolve everything in Committee. That is not the correct way to proceed in this case.

The core of the matter—in addition to what I have just said—is the long-term right to reject. That has been considered carefully by the Law Commissions and, after much serious consideration, they set it aside. The consumer guarantee within the Bill, including a compulsory provision for the remedy of refund or replacement at the election of the buyer, would create a long-term right of rejection that would apply even if the defect that triggered the remedy was only a minor one. The attempts to meet the inherent problems in this long-term refund or replacement remedy give rise to many of the complexities in the Bill and the burdens to which I referred before this debate, which a number of hon. Members have queried to

day. I remind all hon. Members that the Law Commissions gave the matter careful consideration but rejected the long-term right of rejection in the context of sale of goods legislation. They argued that such a right would create major commercial uncertainties and would be unfair to sellers. Consumers who bought a defective product would, in effect, get free use of the goods until the defect appeared.

My hon. Friend the Member for Bristol, North-West (Mr. Stern) mentioned that point, although it was not picked up by anyone else. One of the possible effects of a Bill of this type, paradoxically, would be the possibility of consumers abusing the Act, if it became law, frivolously for mischievously to seek replacement of goods. That raises the important point——

Mr. Alan Williams

I have never heard anything so preposterous in my life. The Minister, whose post is a substitute for the Department of Prices and Consumer Protection which we had under the Labour Administration, is not at all worried about consumers. Consumers are thought to be the evil people in the market place and it is the poor innocent producers who need protection. The hon. Gentleman should go out into the real world.

Mr. Forth

That is pretty rich, coming from a member of the party that argued—and may, for all I know, still argue—for public ownership, nationalised industries and inherent monopolies. Of course, a Labour Government had to set up a Department to counteract the effects of the very monopolies that they had created. This Government do not have that sort of problem. We have the market place and competition, which will do the job extremely well.

The point that seems to have escaped all Labour Members is that we must seek a balance. No one wants to alter unduly the delicate balance in the law between consumers and suppliers and the intermediaries in the market place. One of the great risks is that this measure may do just that.

Mr. Wilshire

My hon. Friend said that there are members of the public who are determined to take advantage if they are given a chance. I would have been able to say that in my speech because I was involved in running a retail business before becoming a Member. As the Opposition are keen to waste so much time, I guess that I will be unable to make my speech. I should reassure my hon. Friend that some members of the public will take advantage of every opportunity. I know that for the simple reason that, over 17 years, I have had to help my wife serve such people—[Interruption.]

Mr. Deputy Speaker

Order. Noise from sedentary positions does not help our proceedings. I hope that there will be less of it.

Mr. Forth

My hon. Friend the Member for Spelthorne (Mr. Wilshire) has reinforced, from his knowledge and experience, a point that has been made before. All hon. Members would do well to pay attention to this fact. We have heard from our legal experts and we have just heard from an hon. Member who has direct experience in the market place in the retail sector. His views, should therefore, be heard carefully. I hope that my hon. Friend the Member for Spelthorne has the time to make a brief contribution. I shall try to ensure that that happens if I can press on.

The Law Commissions considered the long-term right of rejection against sellers. I believe that the arguments are even more persuasive in the context of the buyer-manufacturer relationship. Provision for compulsory refund and replacement remedies would be grossly unfair to manufacturers because they would be obliged to refund the purchase price in full—not just the cost price to the manufacturer, but the price that the consumer paid when buying the goods from a retailier, who in this case is a third party over whose pricing policy the manufacturer has no control.

If the goods are bought under a finance agreement, the situation becomes even more unclear and potentially more unfair. The guarantor may be obliged at the customer's election to refund not just the full purchase price but any further sums outstanding on the credit agreement. The House should bear in mind that the guarantor is not necessarily party to that agreement and can exercise no control over the terms agreed. The guarantor who issued a consumer guarantee would, in effect, come close to writing a blank cheque in favour of the consumer. That is in itself reason enough for us to have serious reservations about the Bill.

Mr. Maclennan

The Minister makes it sound as though the manufacturer is obliged by the Bill to do something. The Bill makes no such provision. It allows manufacturers to decide whether to subscribe to a scheme. It is similar to the John Lewis Partnership saying that if a customer finds a cheaper product, it will reduce the price of its product accordingly. No one forces John Lewis to do that; it does it to boost its position in the market place. This reinforces the free market, of which the Minister pretends to be in favour.

Mr. Forth

I am surprised at the hon. Gentleman's last comment. My support for the free market is certainly not pretence—it is wholehearted and real. I am simply trying to remain somewhat consistent.

The hon. Member for Caithness and Sutherland (Mr. Maclennan) has put his finger on an interesting point; it is entirely up to those operating in the market place—whether retailers or manufacturers—voluntarily to introduce what measures they believe will make their products more attractive to the consumer.

What worries me is that if we overburden the guarantee with complexities and costs, as I believe we are doing in the Bill, we could end up dissuading manufacturers and retailers from providing the guaranteed cover that everyone must believe is a good idea. That is one of the great drawbacks of the Bill.

Another problem is the dilemma created by a full refund for used goods. It is proposed that, under some circumstances, the right to full refunds or replacement could expire and may instead be subject to an allowance for use. The formula proposed for determining when that right expires is not particularly straightforward and differs for different products. I mentioned earlier the Law Commissions' reports, which highlighted some of the pitfalls of this approach. It is also likely to lead to uncertainty for consumers and may leave the consumer vulnerable in some circumstances.

I shall be as quick as I can because I realise that the passage of time may create some problems later.

A number of contributors have asked me what comments I have received about the legislation. I have received many. I will quote some of them so that the House can get a flavour, and know what the experts on the subject have said.

The Confederation of British Industry has described the proposals as "unnecessary and unworkable". The Finance Houses Association asked some serious questions about refund and replacement in the context of financed purchases—my hon. Friend the Member for Hornchurch (Mr. Squire) spoke expertly on that subject during the early part of the debate. The Law Society said that it does not agree with the proposals set out in the consultation paper, and the Society of Motor Manufacturers and Traders, quoted by one of my hon. Friends as being in favour of the measure, on reflection said that the Bill revealed a misunderstanding about how the motor industry operates.

During a visit to the United States last year I had extensive discussions with those involved in the American legislation and I found the extent to which the law has sought to intervene in the relationship between consumers and suppliers rather alarming. I have always thought it odd that so many hon. Members, in particular Opposition Members, should seek to import extensive elements of United States law. I yield to few in my admiration of the United States, but I have always thought that an attempt to introduce their rather litigious approach would hardly benefit British consumers—although it might benefit our lawyers. That is another major source of my reservations about the Bill.

Mr. Leigh

Has my hon. Friend received any representation from the European Commission? To what extent do the proposals in the Bill, given that they are burdensome on importers and manufacturers, run contrary to article 30 of the treaty of Rome? This is a serious problem that could snaffle the Bill before it becomes law.

Mr. Forth

My hon. Friend makes an important point. I was going to come to that later, but I shall try to deal with it now. There is at least a danger that the type of measure contained in the Bill could get us into some difficulties with the European Commission and the European Community. We must bear that factor in mind. My hon. Friend and I may not be enthusiastic about that aspect of our legislation, but it is nevertheless a fact. We have to bear the requirements of the European Community in mind.

Mr. Rogers

The Minister has answered a rather silly remark by the hon. Member for Gainsborough and Horncastle (Mr. Leigh). How will the Bill be affected by European legislation or vice versa?

Mr. Sedgemore


Mr. Deputy Speaker

Order. We cannot have interventions during interventions.

Mr. Forth

Perhaps if I say a few words, that will allow the hon. Gentleman to intervene. Does he wish to intervene now? He shakes his head. I am glad because we want to make progress. I have found that more difficult than I anticipated, but the House is always capable of surprising us. May I give just a few more examples?

Mr. Leigh

Will my hon. Friend give way?

Mr. Forth

No, I must resist giving way to my hon. Friend on this occasion.

Mr. Leigh

It bears directly on this point.

Mr. Forth

If my hon. Friend insists, I shall give way to him.

Mr. Leigh

My hon. Friend may not have heard the sedentary intervention by the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) about voluntary arrangements. We are talking about compulsory labelling.

Hon. Members

No, we are not.

Mr. Forth

We should avoid getting bogged down dealing with matters that would take up an excessive amount of time, even in Standing Committee, were the Bill to receive a Second Reading.

The exchanges illustrate my earlier point: that the Standing Committee proceedings on a measure such as this—a long and complex measure for which Standing Committees on private Member's Bills are not entirely suited—would lead to even greater problems that might be very difficult to resolve. I am grateful to my hon. Friend the Member for Gainsborough and Horncastle for having highlighted the point. Opposition Members have highlighted it, too.

The Consumers Association, no less, said that it would support the proposals, but without any great enthusiasm. The association's approach focuses on the Sale of Goods Act rights for buyers. We hope that those rights will be extended and not confined to buyers. One would have thought that the Consumers Association's support for such a measure would be unrestrained, but it has expressed considerable reservations about it.

Representations have been made to me by many other bodies, including the Norwich and Norfolk chamber of commerce. It says that the disadvantages outweigh the advantages of the proposals. There have been many other representations of that kind, but I shall not weary the House with them. However, I hope that I have given sufficient of the flavour of the representations to suggest that those who are knowledgeable about such matters have serious reservations about the Bill.

My hon. Friend the Member for York (Mr. Gregory) dealt with the notorious Bernstein case in detail. Mr. Bernstein's car broke down with an engine seizure after about 140 miles and three weeks on the road. It is worth considering the case a little more closely, for reasons to which I shall come in a moment. The outcome of the case was that the engine was repaired without charge. The judge found that Mr. Bernstein was also entitled to damages for the cost of the petrol, five days without a car and something to make up for his spoilt day out—a total of £237.50. That was not what Mr. Bernstein wanted. He wanted to reject the car and get his money back. I have looked carefully at the proposed terms of the consumer guarantee in the Bill, but I think that it is unlikely that it would have left Mr. Bernstein any better off. The proposed consumer guarantee would have entitled Mr. Bernstein to free repair of the engine and to compensation, or to a replacement on loan while his car was under repair. It is interesting that one of the most notorious cases that has so often been quoted in recent years would not, under the terms of the Bill, be much altered and there would not be a great improvement in Mr. Bernstein's compensation.

Mr. Gale

Is not the fundamental difference that under the Bill Mr. Bernstein would not have had to go to court to obtain redress?

Mr. Forth

The provisions of the Bill attempt to make matters much easier, but there are doubts as to whether it would. During his recent Adjournment debate, and again today, my hon. Friend the Member for Waveney (Mr. Porter), proposed a new body to deal with these matters. He said that the present arrangement was overbureaucratic and that his new body would remedy that defect. It is risky to set up a new bureaucracy to overcome the problems of an existing bureaucracy. My hon. Friend has a strong desire to help consumers, but I doubt whether his proposals would necessarily have that effect.

In view of the time, I must bring my remarks to a premature end although I had much more to say. I believe that the Bill contains many good elements and I pay tribute to the hon. Member for Clwyd, South-West for introducing it. But it also has serious difficulties and flaws. I am not convinced that if the Bill were given a Second Reading it would necessarily emerge from Standing Committee in sufficiently good order for the House to want to support it.

Mr. Alan Williams

That is for the House to decide.

Mr. Forth

As the right hon. Gentleman says, that is for the House to determine and it always has that opportunity. I regret that the hon. Member for Clwyd, South-West was not more modest or less ambitious in his aims. He has introduced a complicated and ambitious Bill that contains many provisions and, as I and many of my hon. Friends have pointed out, many difficulties. Therefore I hope that the House will consider those matters carefully in deciding how or whether to proceed with the Bill. The National Consumer Council has laboured long and hard on the matter and has produced comprehensive proposals, but I do not know whether it carried out the detailed consultation work that the Department of Trade and Industry always undertakes to establish the feasibility or workability of a Bill.

For all those reasons, I urge hon. Members to give the most careful consideration to the Bill before they decide how they will vote.

1.56 pm
Mr. Nigel Griffiths (Edinburgh, South)

I first pay tribute to the National Consumer Council for producing the Bill and for the valuable information and proposals that it contains. I pay tribute also to my hon. Friend the Member for Clywd, South-West (Mr. Jones), who has done so much work on the Bill and has done so much to gather support for it. It is sponsored by four Labour Members, six Conservative Members and two Alliance Members, and we are extremely pleased about that. There have been many speeches in support of it, including that of my right hon. Friend the Member for Swansea, West (Mr. Williams), a distinguished former Minister and champion of consumer rights. The hon. Member for Waveney (Mr. Porter) articulated the views -of most hon. Members when he said, Rarely has a Bill been more timely. The Bill is necessary to give the buying public a clear indication that the goods they buy are backed by genuine guarantees. It comes in the wake of current legislation which has failed to offer comprehensive protection to the public. Currently, many warranties cover parts but not labour, or labour but not call-out charges. They cover some parts for three months and other parts for six months and fail to cover key machinery which is subject to normal wear and tear.

The Bill provides for a 12-month statutory money-back guarantee on a wide range of expensive goods. It ensures a refund or replacement for faulty goods which are out of commission for 21 days in the first year and it guarantees the replacement of products which are out of action for four days consecutively or two in the case of cars, so that buyers are not inconvenienced as they are at the moment. Because it is voluntary and not manatory, as the hon. Member for Newark (Mr. Alexander) stressed, it cannot be accused of placing burdens on business.

The Minister has given us details of his objections, which are mainly ideological. For him, the producer, not the consumer, is king. He outlined his solution, which lies in consumer choice in the market place, but he then moved on with undue haste to talk about the Law Commission.

The Minister was much more loquacious when talking to the Daily Telegraphabout how consumers can exercise their rights. He said: If consumers don't like what they are getting from…one shop, they need only change their buying habits." Perhaps the Minister moves in circles where people can easily change their buying habits—a washing machine a week, a television a month or a car every three months—but for ordinary members of the public the failure of a cooker or washing machine all too often brings misery as they fight but fail to get satisfaction. Last year, there were 14 million such people.

On Monday, in an answer to a parliamentary question, the Minister refused to list the groups that support or oppose the principle of the Bill. I have a list of companies that support it, from which I have drawn some examples—Hotpoint, Argos, the Retail Consortium and Volvo. The best companies offer no-questions-asked guarantees; Marks and Spencer was founded on that principle, yet the Minister calls it unworkable.

The architect of opposition to the Bill is not the Confederation of British Industry or the retail community but the Minister. A former Tory Member of Parliament wrote in The Times of the Minister's appointment: His appointment as Consumer Protection Minister is some kind of joke. The Minister has been closely associated with a small but influential group of Conservative Members called "No Turning Back". His message to the consumer is simply, No handing back. To articulate his opposition, the Minister feels for his phrase book. It contains only one phrase, but it is his favourite-placing burdens on the business community. In his interview with the Daily Telegraph he embellished that phrase by saying that the Bill would place an absurd burden on the business community. The CBI says that it would prefer an amendment to the Sales of Goods Act 1979. The Consumer Association says that it will not oppose the Bill. Consumers and most hon. Members support it, and we have the opportunity to ensure that it is given a Second Reading.

Mr. Ron Davies

rose in his place and claimed to move, That the Question be now put.

Question put,That the Question be now put:

The House divided: Ayes 108, Noes nil.

Division No. 52] [2.2 pm
Alexander, Richard Crowther, Stan
Allen, Graham Cryer, Bob
Banks, Tony (Newham NW) Cummings, John
Barnes, Harry (Derbyshire NE) Dobson, Frank
Battle, John Doran, Frank
Bennett, A. F. (D'nt'n & R'dish) Dunnachie, Jimmy
Bidwell, Sydney Dunwoody, Hon Mrs Gwyneth
Bowden, Gerald (Dulwich) Emery, Sir Peter
Bradley, Keith Ewing, Mrs Margaret (Moray)
Brown, Gordon (D'mline E) Field, Frank (Birkenhead)
Brown, Nicholas (Newcastle E) Flynn, Paul
Campbell, Ron (Blyth Valley) Foot, Rt Hon Michael
Campbell-Savours, D. N. Foster, Derek
Cartwright, John Fraser, John
Clwyd, Mrs Ann Gale, Roger
Cohen, Harry Garrett, Ted (Wallsend)
Cook, Frank (Stockton N) Gould, Bryan
Corbyn. Jeremy Greenway, Harry (Ealing N)
Cousins, Jim Griffiths, Nigel (Edinburgh S)
Cox, Tom Griffiths, Win (Bridgend)
Grocott, Bruce Randall, Stuart
Hargreaves, Ken (Hyndburn) Rathbone, Tim
Hayhoe, Rt Hon Sir Barney Redmond, Martin
Haynes, Frank Rees, Rt Hon Merlyn
Hefter, Eric S. Rhodes James, Robert
Hoey, Ms Kate (Vauxhall) Richardson, Jo
Howells, Dr. Kim (Pontypridd) Rogers, Allan
Hughes, Robert (Aberdeen N) Ruddock, Joan
Hughes, Roy (Newport E) Sedgemore, Brian
Hughes, Simon (Southwark) Shepherd, Richard (Aldridg)
Hunt, Sir John (Ravensbourne) Shersby, Michael
Jones, Barry (Alyn & Deeside) Shore, Rt Hon Peter
Jones, leuan (Ynys Môn) Short, Clare
Jones, Martyn (Clwyd S W) Skinner, Dennis
Kaufman, Rt Hon Gerald Smith, C. (Isl'ton & F'bury)
Leadbitter, Ted Smith, J. P. (Vale of Glam)
Livingstone, Ken Smyth, Rev Martin (Belfast S)
Lloyd, Tony (Stretford) Soley, Clive
McKay, Allen (Barnsley West) Summerson, Hugo
Maclennan, Robert Taylor, Mrs Ann (Dewsbury,)
McWilliam, John Taylor, Matthew (Truro)
Madden, Max Thomas, Dr Dafydd Elis
Martin, David (Portsmouth S) Thompson, Jack (Wansbeck)
Michael, Alun Townsend, Cyril D. (B'heath)
Mitchell, Austin (G't Grimsby) Turner, Dennis
Morgan, Rhodri Ward, John
Morley, Elliot Wardell, Gareth (Gower)
Morris, Rt Hon A. (W'shawe) Wareing, Robert N.
Morris, Rt Hon J. (Aberavon) Welsh, Andrew (Angus E)
Morris, M (N'hampton S) Williams, Rt Hon Alan
Orme, Rt Hon Stanley Winnick, David
Pendry, Tom Wise, Mrs Audrey
Pike, Peter L.
Porter, David (Waveney) Tellers for the Ayes:
Prescott, John Mr. Ron Davies and
Quin, Ms Joyce Dr. John Marek.
Tellers for the Noes:
Mr. John Marshall and
Mr. David Wilshire.

Bill read a second time and committed to standing committee pursuant to Standing Order No.61(Committal of Bills)

Question put accordingly and agreed to to.