§ 2.35 p.m.
§ LORD LUCAS OF CHILWORTHMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government if they will introduce legislation to fix the "down payment" and the length of time over which instalments may be paid in respect of all hire-purchase agreements.]
LORD ST. OSWALDMy Lords, the existing legislation, the Emergency Laws (Repeal) Act, 1959, provides for the introduction of controls on hire-purchase transactions as part of the measures for restricting excessive credit. This legislation expires in 1964. Her Majesty's Government consider it adequate for the purpose for which it is intended and see no present reason for extending it for other purposes.
§ LORD LUCAS OF CHILWORTHMy Lords, does the noble Lord really think that such a vital matter, affecting the whole of the British commercial economy, should be subject to alteration and annulment by a Defence Regulation of 1939? Would he not agree with me that it would be far better that this vital matter should be controlled by an Act of Parliament, on a basis that is economic, after discussion by Parliament, and altered only by the will of Parliament? At the present time it can be altered by an order made one day and coming into force the next and subject only to the Negative Resolution procedure.
LORD ST. OSWALDMy Lords, I think I understand what the noble Lord has in mind. Permanent legislation to control hire-purchase agreements in the 464 sense apparently desired by the noble Lord would, of course, prevent in future the removal of hire-purchase restrictions as a means of stimulating the economy. It would be difficult to fix permanent percentages for deposit and permanent periods of repayment which would not either be so high as to impose an unnecessary burden upon consumers or be so low as to require augmentation in times of emergency. The former alternative would invite continuous evasion, which could be kept in check only at considerable expense, and the latter would upset forward planning.
§ LORD LUCAS OF CHILWORTHMy Lords, I do not know whether the noble Lord noticed the look of horror that went over my face when he said that this could be used to "stimulate the economy"—I think I heard him correctly. Is the noble Lord aware that the last time the Government tried to stimulate the economy by removing all hire-purchase restrictions, in October, 1958, it was a tragic thing for many trades and industries in this country? Does he appreciate—and I would ask him if he would put this point of view to his right honourable friend—that the Government are powerless to stimulate the economy by lowering hire-purchase terms or the initial deposit, unless they have the acquiescence and support of the hire purchase houses? The Government could remove all hire-purchase controls to-morrow, and the change would be ineffective if the Hire Purchase Association, the big operators in the hire-purchase field, refused to carry it out.
May I ask the noble Lord one last question? Does he think it feasible for the Government to pass any regulation or enactment that forces private enterprise to lose money? That is the only way they can stimulate the economy—by removing hire-purchase controls.
LORD ST. OSWALDMy Lords, I think the noble Lord will agree that it I were to attempt to answer all the questions contained in that supplementary, it would take more time than the House would willingly allow me. I will say this. The noble Lord referred to the pant that the big finance houses play in all this and, as I understood it, expressed some anxiety about what might take their place if they would not 465 "play". Quite clearly, the dislike of the established concern for the parvenue is understandable and understood, but we think that that does not mean that when credit is not excessive the newcomer should not be allowed to compete in his own way and on his own terms. Those who use his services will balance the advantages of dealing with a newcomer against what may be the higher costs of dealing with an old-established firm, just as there is enough room for either Harrod's or the barrow boy for those who want to buy apples. I will willingly take the noble Lord's point of view to my right honourable friend, who will, I am sure, treat it with the seriousness and consideration which one would expect.
§ LORD LUCAS OF CHILWORTHMy Lords, may I express my gratitude to the noble Lord? As he quite rightly said, this is a most difficult question to be dealt with by question and answer across the Floor of the House. If he will convey to his right honourable friend what I have said, I am quite certain that he will give it his due consideration.
§ LORD SHEPHERDMy Lords, arising out of the first reply the noble Lord made, am I to understand that, when he referred in his last few words to planning, that was Government planning or planning in industry? If it is planning by Government, I think we on this side of the House should take note that the Government are changing their policy.
LORD ST. OSWALDMy Lords, although I am quite sure that the noble Lord, as usual, spoke with great clarity, I am not quite able to follow him in that question. It is general planning—economic and industrial planning.
§ THE EARL OF IDDESLEIGHMy Lords, may I ask whether Her Majesty's Government will also take into consideration the sometimes serious social effects of hire-purchase arrangements?
§ LORD STONHAMMy Lords, could I ask the noble Lord, when he refers this matter to his right honourable friend, whether he would speak about what is really the crux of the matter; that is, that since December, 1952, in the motor industry there have been eight changes in hire-purchase deposits, and 466 in the furniture industry six changes, ranging from nothing to 50 per cent.? No one in those industries objects to hire-purchase deposits. What they do object to is these drastic changes, which are merely an outlet for the Government's policy which they have to bear. That is the importance of my noble friend's Question. Let us have a settled deposit.
LORD ST. OSWALDI will certainly bring the noble Lord's point to the attention of my right honourable friend.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, would the Minister kindly ask his right honourable friend especially to have a consultation with the big banks who are now substantial shareholders in the hire-purchase finance firms? Perhaps they could give a real guidance as to the minimum deposit they require.
LORD ST. OSWALDMy Lords, I am quite certain my right honourable friend will call upon any advisers he feels necessary.