HC Deb 17 June 2002 vol 387 cc21-37 3.32 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson)

I beg to move amendment No. 380, in page 239, line 40, at end insert—

'8A Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market ("Directive on electronic commerce").'

Mr. Speaker

With this it will be convenient to discuss the following: Amendment No. 195, in clause 204, page 147, line 4, after '(2)', add 'or (2A) or (2B)'.

No. 196, in page 147, line 26, at end add—

'(2A) An act or omission or course of conduct falls within this subsection if it amounts to the abuse by the person in question ("the supplier") of his superior knowledge or bargaining strength so that he:

  1. (a) unfairly induces consumers to enter into transactions which are not the result of free and informed decisions; or
  2. (b) unfairly hinders consumers from enforcing rights under any consumer transaction.
(2B) In considering whether an act, omission or course of conduct amounts to an abuse under subsection 2A, the court shall take into account all the circumstances, including the nature of the goods or services in question, the nature and extent of any commitments undertaken by the consumers in question and any lack of good faith on the part of the supplier, and the court may have regard to:
  1. (a) any representation made by the supplier, or failure to disclose information, which unreasonably prevents consumers from making adequate price or value comparisons between competing suppliers;
  2. (b) any exploitation by the supplier of consumers' inability to make free and informed decisions, or to enforce rights under contracts, because of physical or mental infirmity, inability to understand the language of the transaction or other vulnerability;
  3. (c) any failure by the supplier to comply with a consumer code of practice (as defined in section 8(4) of this Act) which he claims to follow;
  4. (d) any act or omission by the supplier which causes any unreasonable expense of time or money by consumers pursuing legitimate complaints or rights under contracts entered into with the supplier; and
  5. (e) any failure to keep consumers reasonably informed about matters relating to a contract for supply of services, or which might affect a decision whether or not to change suppliers.'.
Government amendment No. 375.

Amendment No. 373, in clause 208, page 150, line 18, after 'a', insert 'domestic or a'.

Government amendments Nos. 376 to 379.

Miss Johnson

Consumer protection, apart from consumer safety in relation to goods, is a devolved matter in Northern Ireland. The Belfast agreement gives the Northern Ireland Assembly the authority to pass primary legislation in Northern Ireland on devolved matters, subject to the Assembly's option to seek to include Northern Ireland provisions in United Kingdom-wide legislation, especially on devolved issues when parity is normally maintained.

The option was discussed in the Northern Ireland Assembly on 5 June when the Assembly agreed the motion: That this Assembly endorses the principle of extending the consumer protection measures in the Enterprise Bill to Northern Ireland". The Assembly agreed that such an extension is the best way to ensure that Northern Ireland consumers are not disadvantaged through their standards of protection when compared with consumers in England, Scotland and Wales.

Clause 273 means that part 8 already extends to Northern Ireland, but amendments Nos. 375, 376 and 379 are necessary to make appropriate provision.

I shall not go into detail about the amendments unless hon. Members wish me to do so. Amendments Nos. 375, 376 and 379 apply to Northern Ireland. The others are much more technical, and I do not believe it is necessary to go through them unless hon. Members seek clarification.

Mr. Nigel Waterson (Eastbourne)

I am grateful to the Minister for the quick guide to Government amendments. I agree that they are either consequential and minor or have the effect that she described. Amendment No. 378 is significant because it updates the definition of an associate. She was good enough to write to me about that and explain the reason for it. We therefore have no difficulty with it. I shall leave Liberal Democrat Members to speak about amendment No. 373. I principally want to speak about amendments Nos. 195 and 196. Unless the Minister has a concession up her sleeve, I intend to press amendment No. 196 to a Division.

Consumer protection is very much Tory territory. It was mapped out by the Conservative Government in the 1970s, and in particular by the then Sir Geoffrey Howe, in the fair trading legislation of that time. I even played a modest walk-on role, by helping to write a pamphlet, published in 1972, called "Square Deal for Consumers", when I was a very young, obscure, research assistant. Now I am an equally obscure middle-aged Front-Bench spokesman, and it is amazing to see what has happened in the intervening 30 years—except to my career, of course.

The principle behind our legislation in the 1970s was clear, and the view of our party has not changed since then. It is that consumers do best when markets are working properly and fairly. Not even Adam Smith took the view—although it is often ascribed to him—that markets could be completely unregulated. That translates neatly into my party's current approach, which is to try to help the vulnerable, right across the policy spectrum. In this instance, the vulnerable are consumers. That is in contrast to this Government's actions, which are those of a party dedicated to helping not the vulnerable but its cronies and its donors. We dealt with that matter to a great extent on Thursday in the context of the Express Newspapers Group takeover, however, and I do not wish to reopen that discussion today.

The problem is that we have moved on since the 1970s. The need for consumer protection has moved on as well, and it keeps changing. That is why we are rightly revisiting the fair trading legislation, and why the Government are, sadly, missing this moving target. We heard many examples of this in Committee, but I shall resist the temptation to return to them on Report. I shall, however, cite just two which are indicative of the evidence that we have received from the National Association of Citizens Advice Bureaux, the National Consumer Council, the Consumers Association and many other organisations, about the scams and abuses that our constituents are having to deal with in the early part of this century as opposed to the 1970s.

One good example is so-called holiday clubs. The abuse of time-shares became apparent and was tackled some years ago. That is why many of the same personalities are now involved in so-called holiday clubs. As an observer of these matters, I find it difficult to see the difference between the two, although some of the current literature supporting holiday clubs carries a large disclaimer on the front saying, "This is not a time-share". But, of course, in many ways, they are.

Many of the abuses and many of the personnel have been carried forward from the old time-share cons to the so-called holiday clubs. In the last few weeks alone, we have read of one fraudster involved in time-shares and holiday clubs who had to pay some £36 million in compensation to his victims, and of another who was recently brutally murdered—or committed suicide, depending on one's view of events—in Spain. In that example, the law has slowly caught up with time-shares, only to find that these activities are now carrying on under a different name, largely outside the scope of the law. Moreover, I do not believe that they will be affected by the provisions in the Bill.

Another good example, of which we heard evidence in Committee, is high-pressure sales techniques in people's homes—often those of the elderly and frail. Age Concern produced an excellent report on this issue recently. The existing rules can easily be subverted by an individual being manoeuvred into inviting a salesman to visit them in their own home. In that way, the requirement for a seven-day cooling-off period and other regulations that would normally apply can be avoided. We heard an example of a lady who had had a salesman sitting in her home for five hours until she eventually signed on the dotted line to buy a very expensive orthopaedic chair that she probably did not need in the first place.

There are various ways of approaching this matter to ensure that the Bill will bite on these and the many other abuses that we debated in Committee. In Committee I tabled amendments Nos. 46 and 47, which were subtly different from these amendments but were part of the attempt to establish a general duty not to trade unfairly. As I think I conceded at the time, the terms of those amendments were quite wide; that is why we have now tabled amendments Nos. 195 and 196.

We must strike a balance between ensuring that there is some predictability, so that burdens are not placed on reputable businesses, and making the provisions flexible enough to catch the fraudsters and con artists who move on rapidly when the law is changed£as has happened in the case of time-shares—to another scam that is subtly different but outside the law. If we continue along the road that the Government seem intent on taking, the law will always trail behind some of the cleverer fraudsters.

In its briefing for the Bill, the Confederation of British Industry made clear its opposition to a clause providing a general duty in regard to unfair trading. It felt that such matters should be clearly identified and defined. It referred to discussions taking place in the European Union, with the aim of establishing a pan-European approach. It said: This has been criticised by the CBI and other business associations across other Member States as raising many practical and legal issues. It is premature to be considering such a clause in the context of national legislation at this stage, when there is wide ranging debate on the issue in the EU. We rely very much on the views of the main consumer protection organisations, however—particularly the National Consumer Council, to which I pay tribute for its substantial efforts in briefing, I am sure, not just the Opposition but the Government at both ministerial and official levels, in an attempt to deal with the problem. If we do not deal with it, we shall be passing legislation—with the best intentions in the world; I do not question the Government's intentions for a moment, at least in regard to this part of the Bill—that will not make life any better for the victims of scams.

The National Consumer Council thinks it important to stress the need for some flexible legislation to deal with new unfair trading practices as they emerge, particularly as Part 2 of the Fair Trading Act is being repealed in Clause 10 of this Bill. It has taken on board some of the points made in Committee on the earlier, more broadly drafted amendments. I suppose that that is how the system should work, ideally. It wants the new amendments to demonstrate that there is more than one way to produce a generally-worded, open textured approach to achieve a 'general duty'. It says that the amendments use the concept of a disparity in bargaining position". The NCC says, with some justification, that that is not a novel idea in English law. There has been legislation of that kind for some time—for example, the Unfair Contract Terms Act 1977, which contains a different set of rules and a different burden of proof, depending on whether a transaction is between two businesses or between a business and a consumer.

The NCC says that amendment No. 196 broadens the definition of a domestic infringement to include abuse of a bargaining position by a supplier in its dealings with a consumer, pursuing consumers to enter into transactions or hindering them from enforcing their consumer rights. 2B elaborates on the definition of abuse and sets out the factors which a court shall take into account. It refers to good faith, the nature of goods and services being supplied, the extent of any commitments to the consumer and any exploitation of the consumer's inability to make free and informed decisions or enforce his rights due to vulnerability". It gives the example of physical infirmity.

I do not think that the NCC and I are saying for a moment that this is the ultimate set of amendments with which to deal with the problem. We are saying that we have taken on board some of the criticisms made in Committee by the Minister and others and tried to produce a more rigorous definition. It is entirely open to her to concede the principle and say that the Government will consider carefully how to produce the same result in a way that is better drafted. That would avoid a Division.

3.45 pm

The NCC says that Kent county council is having a problem with itinerant tarmacadam merchants. I wondered where they had gone. They have tarmacadamed a large proportion of my constituency over the years, and now they have clearly moved on to Kent. This typical scam is especially serious in areas with a high proportion of elderly people. These characters turn up and talk people into having their drives tarmacadamed unnecessarily. They do the work shoddily and then demand more than they original contracted for. The NCC says that a general power would deal with that problem.

The NCC also describes how these matters are approached in the European Union and the United States of America. Very recently, the Commission issued a communication outlining key issues for a framework directive based on the wider concept of fair commercial practices, rather than on misleading practices. It suggests four possible categories: a prohibition on businesses engaging in commercial practices that mislead or are likely to mislead the consumer; a duty to disclose to the consumer all material information that is likely to affect the consumer's decisions; a prohibition on the use of physical force, harassment, coercion or undue influence; and effective information disclosure and complaints handling in the after-sales period. It also proposes, as a side issue, that the framework directive would be covered by the injunctions directive, so that such practices could be tackled quickly and effectively.

That approach may go too far for our purposes, and any solution that we come up with here will not simply be grafted on to a European directive; it must be properly bedded in English law. I repeat, however, that such concepts are not unfamiliar in legislation and regulations covering unfair contract terms, for example.

The United States Federal Trade Commission takes a somewhat similar view. It has a double mandate, to ensure fairness in competition and fairness in commercial practices in the interests of the consumer. That is not dissimilar from the approach that we are suggesting. Recently, the FTC took a case against Budget, which was apparently renting out cars that had been subject to recall notices. Consumers were not adequately informed about the risks or how to avoid injury.

Not surprisingly, the NCC argues that business should not he overly worried about these measures, because good businesses will benefit from measures that stamp out unfair competition from those who use unfair practices.

Another part of the Bill scraps part II of the Fair Trading Act 1973, which has fallen into relative disuse, largely because of the procedural problems that it poses. In principle, and in its day, however, it allowed the Secretary of State to prohibit a novel unfair practice that harmed the interests of consumers. Certainly, we need to extend protection, not to reduce it. The NCC cites the Consumer Transactions (Restrictions on Statements) Order 1976, prohibiting notices misleading consumers about their rights under the Sale of Goods Acts, such as no returns or no refunds for sales goods.

That takes us back to the essential difficulty with what the Government are trying to do. Of course we welcome the extension of stop now orders and the provisions on enforcement, but the legislation has to make a difference and it is no earthly good simply making it easier to enforce existing legislation. There is a large body of malpractices, abuses and, frankly, scams out there, which form a regular part of all our mailbags. They simply will not be tackled by this legislation as it stands.

I have given the example of the unsolicited visit versus the solicited one—a narrow distinction that can make all the difference. Those who invite a salesperson in are not covered; they do not enjoy protections such as the cooling-off period. That is a perfect example of how, over the years, tricksters and downright criminals have developed a fine ability to get round current law by making minor adjustments to the way they do their business.

Unless the law can get ahead of such fraudsters, rather than constantly banging along in their wake, I cannot see how we can clamp down properly on what the NCC and other bodies call shark practices. Indeed, we can all commend and support its "shark practices" campaign. The NCC's latest press release states that, according to its research, Fewer than one in…ten consumers think businesses do their best to treat customers fairly and a third"— a staggering figure— say they have been treated unfairly in the last two years. As Deirdre Hutton, chairman of the NCC, states: The Bill is very welcome and will do a great deal to increase consumer protection. But there will still be gaps in the coverage of the law that will allow shark practices to slip through. We agree, which is why we have tabled the amendments.

I stress that the amendments are new. We and the NCC have taken the trouble to narrow their wording as much as possible, but we will in no way get upset if the Minister thinks that the drafting could be improved. All that we need is an assurance that she agrees with what we are trying to achieve, and that—perhaps in the Lords—the Government will produce specific amendments to deal with these precise issues. However, unless she gives clear undertakings and makes clear promises in response to these amendments, I intend to divide the House.

Mr. Alistair Carmichael (Orkney and Shetland)

Amendment No. 373, which is in my name and those of my colleagues, is short and technical, and deals with an issue on which we would not seek to divide the House. However, I would welcome the Minister's explanation as to why paragraph (b) refers to conduct which constitutes a Community infringement", but not to conduct that constitutes a domestic infringement. That seems a simple point of consistency, and if the Government have chosen to be inconsistent, it is incumbent on them to explain why.

The Liberal Democrats broadly support the thrust of amendments Nos. 195 and 196. The hon. Member for Eastbourne (Mr. Waterson) comprehensively outlined the thinking behind them, and on this occasion I am pleased to associate myself with the bulk of his comments, particularly those relating to the NCC, which offered invaluable assistance to me and my colleagues in Standing Committee. The more I consider the consequences of repealing part II of the Fair Trading Act 1973, the more I recognise the need for protections such as those offered in the amendments.

My experiences as a solicitor in private practice and since becoming a Member of this House have shown me that, after a contract has been perfected, the struggle between the consumer and the supplier is very unequal. I have seen many examples of it causing great distress to some of the most vulnerable people in our society. Elderly people, perhaps for reasons of politeness, are not prepared to show pushy salesmen the door. However, as the hon. Member for Eastbourne said, if they invite them in, they thereby forgo even the benefit of the small protection that the law currently offers.

The fraudster will always stay one step ahead, no matter how inventive or ingenious we are in the protections that we seek to give the consumer. The fraudster will always try to find some way to negate the work that we do here. My experience is that two main types of fraudsters are operating. The hon. Gentleman mentioned the drive tarmacadamers. I am alarmed to hear that they have moved from Eastbourne to Kent, but I am somewhat comforted by the thought that if they are on a northward march we have some time to go before we have to suffer them north of the Pentland firth. In the meantime, I hope that we will be able to put the necessary protections in place.

At the other end of the spectrum is the large commercial organisation that operates by sending a targeted sales force to people's homes and having them sign up on the spot to something that they subsequently are not able to honour. My experience of that was prior to the election, when I wished to install double glazing in my house in Aberdeenshire before selling it. The sales techniques of the double glazing companies were remarkable. I could not believe the number of salesmen who came to the house while I was away politicking in the northern isles and who told my wife that they could not enter into a contract unless her husband was home. That was all the more remarkable because anyone who knows the Carmichael household will know that the soft touch was the one in the northern isles, not the one who had to stay at home.

I have given one small example of the techniques used by such companies. The most vulnerable individuals need some protection from the worst excesses. I hope that the Minister will give us some assurance that the necessary protections, which would be the teeth of the Bill, will be given serious consideration in the other place. The amendments tabled by the Conservatives have our support and the blessing of the NCC. Their acceptance would be an important signal from the Government that they are prepared to protect the rights of vulnerable individuals in their homes.

Mr. Mark Field (Cities of London and Westminster)

I wish to speak briefly in support of my hon. Friend the Member for Eastbourne (Mr. Waterson) and the amendments he has tabled. I hope that the Minister will consider the points that he made. When all is said and done, I suspect that we do not disagree on much. We had a robust debate on the issues in Committee, but it was also a friendly debate. I know that the Minister has received briefings similar to those we have had, both from consumer bodies and from business representatives

I am a little less idealistic than my hon. Friend about our ability to change the law for ever more. I fear that whatever changes are made, there are some who will always look for loopholes. Both my hon. Friend the Member for Eastbourne and the hon. Member for Orkney and Shetland (Mr. Carmichael) made it quite clear that there are a number of rogue traders who will abuse any loopholes in the law.

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My hon. Friend the Member for Eastbourne referred to the comments of the CBI, which acts on behalf of business organisations. It has opposed the concept of unfair trading on the basis that it is insufficiently well targeted and gives rise to a degree of legal uncertainty. Having crossed the Rubicon and decided to go ahead with some degree of unfair trading in the Bill, we should ensure that these provisions have some teeth. Our main concern is that we would quickly find that protection of the consumer under the Bill proved illusory. For that reason, we are keen to press amendments Nos. 195 and 196 to a Division.

Reference was made earlier to the Unfair Contract Terms Act 1977. It has worked very well for the past quarter of a century; under its terms, individuals are, by necessity, treated differently from businesses. The concept is that in any trading bargain there could be a disaggregation between the bargaining powers of a large or even a small business and an individual who may be subjected to a doorstep sale or one by mail.

There has been no feeling that the 1977 Act should be repealed and no concerns about its provisions. There is, therefore, an acceptance of the potential inequality of bargaining power that needs to be entrenched within the law. Amendments Nos. 195 and 196 do not seem to go much further than the Government have been willing to go to date. They would ensure, as far as possible, a culture of fairness and fair trading between businesses that will also allow consumers a fair share of any resulting benefit, as the NCC has pointed out.

The last thing that any Government want, when putting new legislation on the statute book, is many hundreds or thousands of claims. It has been made quite clear that the unfair practice envisaged in our amendments would have to affect a group of consumers before any action could be taken. In other words, an individual could not clog up the legal system.

I shall be interested to hear what the Minister has to say in this regard. I agree with all Opposition Members who have spoken so far that the amendments require further buffing up. We would be comfortable with the Minister reconsidering the wording and finalising it before the Bill goes to another place. I hope that she will not only answer some of these points but go some way to ensuring that this very important procedural protection is included in the Bill.

Mr. Michael Weir (Angus)

I support amendment No. 196, tabled by the hon. Member for Eastbourne (Mr. Waterson). If he cares to push it to a vote, we will support him in the Division Lobby.

I was interested in the comments of the hon. Member for Orkney and Shetland (Mr. Carmichael). If I were him, I would not be too sure about the tarmacadamers; they have reached from Eastbourne up to Angus. I have often had them at my door, along with people wanting to cut my trees, install double glazing and paint my windows. I suppose that that may say more about the state of my house than anything else.

The hon. Member for Eastbourne slightly undersold amendment No. 196. It seems to me that his amendment would lay down certain principles for deciding whether an action had been unfair. That is important because, as has already been pointed out, changes can occur rapidly—con men have a habit of getting around regulations quickly.

Like the hon. Member for Orkney and Shetland, I was a solicitor in private practice prior to my election to this place, and often came across the problems of victims—especially elderly people—of power salesmen who came to their door. One very elderly client of mine, sadly now deceased, was subject to periods of confusion and I was constantly having to extricate her from contracts that she had signed after the visits of salesmen who had persuaded her to buy all sorts of strange and wonderful things of which she had no need and which she would never have bought in normal circumstances.

Some of the worst offenders were the privatised utility companies; salesmen constantly tried to persuade people—especially the elderly—to change their electricity and gas suppliers. Those salesmen often used methods involving extreme pressure. On one occasion, I went home from my office at lunchtime to find one of those people on my doorstep trying to convince my wife. In my brief conversation with him, he told me three things about the contract that he was trying to sell that I knew were untrue.

That salesman was quickly shown the door, but many elderly people are not able to do that. The client to whom I referred earlier changed her electricity supplier and then became utterly confused about who she was getting her electricity from. Worse than that, however, because she had changed to a gas company, the electricity company salesman appeared at her door a couple of weeks later trying to persuade her to change to that supplier. The matter went on and on and the poor lady got into an utter fankle. I had to sort it out and get her back to suppliers that she could recognise and understand.

That situation arose because people are allowed to engage in that type of doorstep selling. Although amendment No. 196 is not perfect, it would go some way towards laying down principles that a court could consider in dealing with such techniques. If we are too restrictive, it will be easier for con men to get around the regulations. General principles allow the courts more latitude to interpret actions as they occur.

Mr. Tony McWalter (Hemel Hempstead)

The general debate on amendment No. 196 was conducted in a fairly laid-back way by the hon. Member for Eastbourne (Mr. Waterson), who suggested that if there was general Labour support for the aims of his proposal, he would not divide the House. I hope that he does not do so, as his proposal could almost be described as a wrecking amendment.

We all understand and accept that a number of people suffer from high-pressure salesmanship. There are a huge number of victims, so it is right to do what we can to protect people. However, once we make high-pressure salesmanship illegal, we might begin to bring the process into disrepute—a law that applies almost all the time is difficult to apply at any particular time.

Subsection (a) states that a person must not unfairly induce consumers to enter into transactions which are not the result of free and informed decisions. Let us consider that in relation to decisions about purchasing a holiday on the basis of brochures which, as we all know, bear little relation to the actual circumstances that obtain at the holiday resort. It is understood that a certain distortion is part of holiday companies' modus operandi. That is a form of high-pressure salesmanship, but it does not typically result in people complaining bitterly when the resort turns out to be more overcrowded than expected, with fewer loungers, less clean water—or the sewage being used to water the plants, as was my experience at one holiday venue—and so on.

Mr. Waterson

I am grateful to the hon. Gentleman for giving us all a sneak preview of his holiday plans, but how would he approach the case, raised in the NCC's briefing, of the holiday brochure that quite truthfully said that the holiday hotel was 25 metres from the beach, but sadly did not mention that there was a motorway in between?

Mr. McWalter

I am grateful to the hon. Gentleman for his intervention. We could probably all exchange enjoyable anecdotes about these matters. Clearly, there is deception, but the issue is at what stage that deception becomes more than something that could be addressed by a compensatory payment from the holiday company if it were a member of the Association of British Travel Agents. At what stage do we move from an informal framework for resolving bitter disappointment at the quality of the venue to requiring the power to take strong legal action? That is my worry with amendment No. 196.

One needs to understand what would count as an informed decision. There is an onus on consumers at least to conduct their proceedings as wisely as possible. I understand that the current framework could be much extended, and I agree with the hon. Member for Eastbourne, who made this point in Committee, that selling people products in their own homes is perhaps not so much high-pressure salesmanship as almost putting the seller in such a dominant position that gainsaying the transaction is not feasible. If we can somehow produce a form of words that would prevent that, we might perhaps have an amendment that would be worth pressing to a Division.

Many decisions that people currently take are not fully informed, but informed enough, and many of them are not free, but free enough. If we try to elaborate too strongly in general terms on whether there is a legal right to take such matters to the Office of Fair Trading or others, there is a real danger that we could end up with a completely unworkable law. I suspect that the Opposition know that amendment No. 196, which they drafted, would be unworkable. However, the motives behind it are good and it would be sensible not to divide the House but to engage in what I hope would be constructive discussions.

To revert to a theme to which I have referred several times in these discussions, one has to try to make clear to what extent we should seek to combat unfair trading under the Bill and to what extent we should bear in mind the fact that there would be huge repercussions for the rest of the law, including the criminal law, in trying to tackle some of the other issues that result in people trading not just unfairly but viciously.

I hear what hon. Members have said about the tarmacadam merchants. Funnily enough, they have even appeared in Hemel Hempstead. One of the things that I have been trying to do is to get the Treasury to break down the barriers between Customs and Excise and the Inland Revenue. It is clear that much of the activity that goes on is illegal under current tax law, but we have an absurd situation in which information is insufficiently shared between two departments of the Treasury. Consequently, just when it might become apparent that a driveway layer is in breach of his obligations under Customs and Excise regulations, corroboration is needed from the Inland Revenue—whose records are completely different—and nothing gets done.

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People who are quite sophisticated, at least in terms of having no fixed abode and having other mechanisms for evasion, end up not being brought to book even though there are laws which should bring them to book and which if implemented would result in their no longer being in business. We must therefore try to ensure that the framework of law outside this Bill—which, after all, is important in promoting and setting a framework for fair enterprise—also delivers an appropriate range of laws to combat various kinds of malpractice.

Having spoken so far in favour of the Government's line, I want to conclude my remarks—this may not surprise those few Members who are present—by saying that I am reluctant to support Government amendment No. 380 as I understand it. I am worried about it on two grounds. First, it refers to directive 2000/31/EC. I have not been able to get hold of that document. It is not in the Vote Office, and I feel reluctant to nod such matters through. I should also be grateful if the Minister confirmed whether the directive—which I have not read, but which I have read about—says, for instance, that there is potential for considerable interference with what one might call domestic communications of an electronic character. Will the Minister reassure me that that is not involved in directive 2000/31/EC?

Miss Melanie Johnson

If I may, I shall start in roughly reverse order, and deal with the two other amendments outside the issue of the general duty to trade fairly or not to trade unfairly, and the issues raised in the substantive part of the debate this afternoon.

Amendment No. 373—as the hon. Member for Orkney and Shetland (Mr. Carmichael) raised the question—would enable an enforcer to make an application for an enforcement order against a person who it believed was likely to engage in conduct that would constitute a domestic infringement. That is already the case in respect of community infringements, as we believe that that is a requirement of the injunctions directive. Officials have discussed this matter with the Office of Fair Trading and the Local Authorities Co-ordinating Body on Regulatory Services—formerly the Local Authorities Co-ordinating Body on Trading Standards. Although I fully understand the argument in favour, we have not yet been provided with sufficient convincing cases in which it might be used to merit extending the scope of domestic infringements in this way. A power to prevent infringements before they occur is likely to be the most useful in advertising, where a single misleading advertisement has the potential to harm a large number of consumers. That would be a community infringement. As I mentioned, the Bill gives enforcers the powers to take action to stop likely community infringements—if necessary, by applying for an interim enforcement order. I hope that that addresses the hon. Gentleman's point.

Before I deal with the wider issues, I shall deal with the anxieties of my hon. Friend the Member for Hemel Hempstead (Mr. McWalter) about amendment No. 380. The amendment seeks to add the e-commerce directive to schedule 13, which lists the individual EC directives to which the definition of a community infringement in clause 205 applies. This is required by the EC injunctions directive. My Department's consultation on the extension of the stop now regulations to cover the e-commerce directive ends on 5 July. Regulations implementing the other provisions of the directive will be made shortly. I am not sure what my hon. Friend's anxiety is, but I hope that my explanation will have allayed it.

I now come to the substantive debate and to amendments Nos. 195 and 196. They would enable enforcement action to be taken against some conduct that may be unfair but that is not currently unlawful. We debated the issue at length in Committee, and the amendments that we debated then were modelled on the approach taken in the Unfair Terms in Consumer Contracts Regulations, and contained an indicative list of conduct that may be but is not necessarily held to be unfair.

The amendments seek to achieve a similar result by preventing suppliers from unfairly taking advantage of their superior knowledge and bargaining strength vis-a-vis the consumer. We all recognise the imbalance in the relationship and several Members have referred to it. The nature of the conduct that would be covered by this wording would be fairly limited, but I appreciate that, as some Members have acknowledged, it is the principle of the general duty that they wish to debate. I shall therefore consider that point.

I certainly agree that businesses should not abuse their superior bargaining position to take unfair advantage of consumers. Indeed, businesses that treat their customers honestly and fairly are much more likely to prosper by building up a loyal customer base. The hon. Member for Cities of London and Westminster (Mr. Field) made the point that he thought that there was not much between us on this issue, and he is entirely right. The question is how to achieve the goal that many of us share. Like the hon. Gentleman, I recognise that business has some concerns.

I also accept that a small number of unscrupulous traders take a much more short-sighted view of their customers than do decent businesses. However, as I have told hon. Members before, I am not convinced that enshrining in the Bill a general duty not to trade unfairly is the best way of ensuring that consumers receive a fair deal. I shall explain why that is so and what I propose to do next.

We already have a well-established and comprehensive framework of consumer protection legislation which on the face of it would appear to cover many of the cases that hon. Members have mentioned. I cannot go through all of them because, although the Whip to whom I spoke was happy for me to speak for a few minutes, he was unhappy at the prospect of my going on for three hours. I have therefore eschewed that course of action.

Mr. Waterson

I can assist the Under-Secretary. Presumably she wants to avoid spending a quarter of an hour or more having one or more Divisions. That consideration might weigh in her discussions with the Whip.

Miss Johnson

I appreciate what the hon. Gentleman said earlier.

Several big issues are involved, one of which is how we define fair or unfair. There is much work to be done on that and it is by no means obvious that enshrining such terms in the Bill is a straightforward process that would make the provision and the definitions of fair and unfair clear to all and sundry.

We also face substantial considerations involving practicality. I shall touch on a few of the examples cited in which it is obvious that recourse is currently available, because that directly touches on the issue of practicality. Practicality involves enforcement, and many pieces of legislation impact on the cases about which Members have rightly said something should be done; I agree with them entirely on that. However, it can in practice be difficult to prove that pressured selling has taken place, for example, and in many cases it might be more sensible to improve the enforcement of existing legislation. We need to consider the evidence and the extent of the problems before we rush into legislating.

The hon. Member for Eastbourne (Mr. Waterson) referred to the Kent county council itinerant tarmackers who have passed through everyone's constituency. Indeed, like my hon. Friend the Member for Hemel Hempstead (Mr. McWalter), my constituency in Hertfordshire is also plagued by such people.

Mr. Mark Field

Perhaps I should point out that the streets of my constituency are paved with gold. There is no risk of tarmackers coming to Cities of London and Westminster.

Miss Melanie Johnson

There are many opportunities for a riposte to that, but in the spirit of a more consensual debate, I will not take them.

The doorstep selling regulations provide a seven-day cooling-off period if a visit is unsolicited. Builders are required to carry out work with reasonable care and skill under section 13 of the Supply of Goods and Services Act 1982. Taking money for little or no work is covered by obtaining property by deception under the Theft Acts. We are also building up a quality mark scheme for reputable builders and tradesmen. There are a number of recourses. It is therefore a matter of what the consumer does to enforce legislation, and that would be the case were we to broaden the measure or not.

On the Trade Commission case and the hiring out of unsafe cars, in the UK that would be a breach of a term of contract, implied by statute, that a car should be of a satisfactory quality and fit for its purpose. That problem would he covered by part 8.

I am trying to illustrate the difficulties with some cases before setting out our approach. In relation to the elderly lady cited by the hon. Member for Eastbourne—it could, of course, have been an elderly gentleman, but for some reason it never is, although I am sure they are just as frail—because the visit was unsolicited it would be covered by the doorstep selling regulations, with the statutory cooling-off period and cancellation rights. The same cooling-off period would apply if the consumer had agreed to a visit from a salesperson as a result of an unsolicited visit or call.

Mr. Waterson

To save the Minister time, the point is that what typically happens is that the elderly lady—as she said, elderly gentlemen do not seem to feature in such stories—fills out and sends in a coupon in, say, Saga Magazine, a perfectly reputable publication, and that is construed as an invitation to the salesman to visit her. As the visit is not unsolicited, it is outside the protection to which the Minister referred.

Miss Johnson

I do not want to give too much complicated legal advice from the Dispatch Box for fear of coming up against the lawyers when I leave the Chamber. Obviously issues arise if someone buys something that they have not requested or set out to buy in the first place. That was cited in a number of examples. If people request a home visit for one product but are sold something else, they are also covered by the doorstep selling regulations.

Mr. Carmichael

I am listening to the Minister and wondering how anyone could possibly think that there is a problem, but we all know from our constituency experience and the experience of bodies such as the NCC that there is. I suggest that, rather than dealing with it through subordinate legislation such as that described by the Minister, it would be infinitely preferable to establish general broad principles capable of definition and enforcement by the courts, and that is what the Conservative amendments would do.

4.30 pm
Miss Johnson

I am not trying to suggest that there are no problems, and I shall go on to make points which will, hopefully, help the hon. Gentleman. I was illustrating the fact there are practical difficulties in some of these cases. Many of the problems faced by consumers are already covered in consumer protection legislation, and the difficulties arise in awareness of the law, in enforcement and in the empowerment of the consumer to secure enforcement through the appropriate route.

I shall not take up the time of the House by going through all the examples given by the hon. Member for Eastbourne, but he mentioned the time-share directive, and asked whether time spent on a canal houseboat is covered. There are provisions covering such arrangements, and in further discussions with the European Commission we shall seek to extend the directive to time-shares of less than three years' duration and time on canal houseboats. Because many people spend their holidays abroad rather than in the UK—many in other EU member states or areas covered by EU legislation—it is important that we look to the European dimension of all these matters.

Having said all that, it is important that we look again at the question of what we should do next. Policies for any new laws should be founded in fact and on a robust evidence base to ensure that they address issues of significant consumer detriment in a way that existing legislation does not.

It is important that new legislation should not create undue or unnecessary burdens on business, and I know that some hon. Members are concerned about that. For that reason, I have decided that the next step should be to invite key stakeholders from consumer groups, enforcers and business to a seminar with me in the summer. I want to use that occasion to look in more detail at the cases cited by consumer organisations in support of a general duty to trade fairly or not to trade unfairly—the very cases that hon. Members have raised in the House. Once I have a clearer picture of the problems, I shall consider what further action would be appropriate. At the moment, however, because many of the problems concern infringement and enforcement, we are in danger of simply legislating without giving consumers more effective recourse to the law.

I agree with hon. Members on both sides of the House that there are issues that need to be addressed. We agree that the consumer needs to be protected, and we share the same ends. However, I also agree with the hon. Members for Cities of London and Westminster and for Orkney and Shetland that the law will never catch up with the fraudster. That, I am afraid, is almost bound to be the case, but it is incumbent on the Government to do our very best to make sure that the law works as effectively as possible for consumers. There is already a great deal of consumer protection legislation, and if we can identify genuine loopholes, where problems exist that do not arise from enforcement, and tackle them separately, I will be happy to have further meetings with all the interested parties to see what steps would be most appropriate.

Mr. Waterson


Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. The hon. Gentleman does not have a right of reply.

Mr. Waterson

With the leave of the House, Mr. Deputy Speaker.

Mr. Deputy Speaker

If the hon. Gentleman wants to indicate whether he will press amendment No. 196 to a vote, he may do so, but a speech would not conform to the convention of the House. I ask him to understand that if one Member who has tabled an amendment seeks the leave of the House to speak, other Members may feel that they have the same entitlement.

Mr. Waterson

I am grateful to you, Mr. Deputy Speaker. I shall speak strictly on the basis you set out, but I thought it might be worth outlining my approach to the amendments, especially amendment No. 196, on which I said that I might seek to divide the House.

Our amendment is not a wrecking amendment, as the hon. Member for Hemel Hempstead (Mr. McWalter) claimed it was. It is a genuine attempt—our second—to deal with a practical problem. Our aim is not to ban high-pressure salesmen, as he put it, but to deal with situations in which there is an imbalance in the bargaining positions of the parties.

The Minister was rather fatalistic. Rather like Stanley Baldwin, who said in the 1930s that the bomber would always get through, in her final remarks she seemed to suggest that the fraudster would always get away with it, no matter how much we tried.

Miss Melanie Johnson

The hon. Gentleman has gained a mistaken impression. As I think the hon. Members for Cities of London and Westminster (Mr. Field) and for Orkney and Shetland (Mr. Carmichael) would agree, although it is impossible to close for ever every possible avenue that fraudsters might find or invent for themselves, it is incumbent on the Government to give the consumer as much ready protection as possible. It is our intention to do that, and I believe that the hon. Member for Eastbourne (Mr. Waterson) shares that intention.

Mr. Waterson

Let me put it another way. This is not a situation in which the best should be the enemy of the good. If there are things the Minister can do that would cause an immediate improvement in the position of consumers, albeit without closing every conceivable loophole, those things should be welcomed and pressed forward with.

Mr. Carmichael

Does the hon. Gentleman agree with me that the best way to deal with future loopholes—if I can put it like that—is to construct a framework that is based on principle? That principle can be applied to future cases, and the effect is simply to extend the principle. The alternative is a narrow, legalistic approach wherein the remedy precedes the right.

Mr. Waterson

I agree, with one proviso, which I am sure the hon. Gentleman accepts, which is that that framework should be firmly bedded in the structure of our existing legal system.

The Minister touched on the difficulties of defining fair and unfair, but I thought that I had explained where the concept of fairness had already appeared in legislation and had not caused any great difficulties. She talked about difficulties of definition and of practicality and enforcement, although she agreed that something should be done.

The Minister appears to think that the matter is more one of improving enforcement of existing legislation—no one could disagree with her on the need for that—but the key point is that many of the scams are simply outside the scope of existing legislation. It does not matter how much effort is put into enforcing existing legislation if the scams are outside it. I commend to her the report by Age Concern on the sale of assistive products, which documents a great many cases—almost invariably involving elderly ladies—which arise almost daily.

Finally, the hon. Lady said that she sought to extend the time share directive. My point is that by the time that directive has been extended, the tricksters and fraudsters will be doing something else just as damaging to consumers under a different label.

What can the Minister offer us? An invitation to a seminar—at least I hope that I am included on the guest list. If the Minister invites me, I shall be delighted to attend. In the meantime, the fact that all she has in mind is a seminar suggests that her Department's thinking has not moved on. On that basis, I shall press amendment No. 196 to a Division.

Amendment agreed to.

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