TRADING STAMPS BILL

HL Deb 14 July 1964 vol 260 cc199-237

7.13 p.m.

Order of the Day for receiving the Report of Amendments read.

VISCOUNT COLVILLE OF CULROSS

My Lords, I beg to move that this Report be now received. I believe I shall be in order if at this stage I deal with four small points not covered by Amendments put down to the Bill, because they will not otherwise be ventilated, and I should like to make a little comment upon them. They were raised by noble Lords during the Committee stage and I promised that I would look at them.

The noble Lord, Lord Shepherd, raised the first point. It was about the Companies Act, and he asked why there were different lists of provisions in the Protection of Depositors Act of last year and Clause 1 of this Bill. He mentions specifically certain sections related to the responsibility of members, debts, provision for winding-up, and if the number of members falls below the statutory minimum. The loss of private status which is achieved in the Protection of Depositors Act would require that the minimum number of members became seven instead of two. I think the privileges of private companies really stem from the fact that a private company does not offer its shares or debentures to the public for subscription; but a deposit-taking company does something akin to that, in that it offers its own shares and debentures for subscription in a way very similar to public companies. It is for that reason that these deposit-taking companies have been deprived of their special protection.

A stamp company seems to me to be in rather a different category. It does not subject the public to anything like the financial risk that a deposit-taking company does. I think that, on balance, it is right to limit the deprivation to the cases set out in Clause 1. The Jenkins Report has recommended that in future the minimum membership of a company should be two. I should like to think that this Bill is in advance of Government thinking or policy and accepts the recommendations of the Jenkins Report. That is an additional reason why we should not alter Clause 1 as it stands, because it would make a difference to some stamp companies, and if we took away this special exemption some would have to alter their constitution. So, on balance, I think that it is probably right to leave the Bill as it is.

The noble Lord, Lord Shepherd, raised another point, about what happened when a stamp company closed down in what he described as an area, and he suggested that a special provision should be put in to protect stamp collectors in such an area. The definition of the word "area" is an almost impossible task in this context. Again, on balance, I wonder whether the noble Lord would not agree that, with the possibility of cash redemption and the probability that with the stamps already collected a customer will probably get something quite nice out of the catalogue—or, if she has set her heart on something that needs two more books or so, that it is not without the bounds of possibility that she will be able to get stamps elsewhere—it is not worth what would have to be an elaborate new clause in the Bill to deal with that. I am grateful to the noble Lord for raising the point but, on reflection, I think that it is probably better to leave it as it is.

The noble Lord, Lord Shackleton, who I am sure will be in his place in a moment, asked about the definition of the word "shop" and whether all the outlets for trading stamps would be covered. Of course "shop" applies only in Clause 6, which deals with catalogues and notices that have to be displayed. It is true that the definition as it stands might not cover 100 per cent. of the outlets for trading stamps, but in those cases not covered it would be probably difficult to display catalogues and notices in any event, and I am satisfied that the majority of places where stamps are given will be covered by this definition and that it will give the protection we desire. If a few outlets escape the net, I do not believe that the lack of a catalogue and notice will do irreparable harm. Again, I hope that the Bill can be safely left as it is.

The noble Earl, Lord Sandwich, raised the question of copies of the catalogue, which are statutorily required to be displayed, becoming dog-eared, dirty and impossible to read. I think that to try to deal with this sort of thing in legislation is going a little far, and if common sense cannot prevail to the extent that a shopkeeper who sees his catalogue getting into a sorry state will ask for a new one, I think that it is really impossible to deal with it. The noble Earl is not here, but I cannot imagine that he feels very strongly over the matter.

The last point I would clear up was raised by the noble Lord, Lord Airedale, who asked why a notice has to be put up in the case of every shop. Surely the noble Lord is anxious, particularly now that I have an Amendment down, which I hope will be accepted, to have the cash value of trading stamps put on the notices as well, to see that people know, before they go into a shop, the terms of the scheme in which they will be invited to participate. What is wrong with putting a notice outside as well as inside? I cannot see that there is any necessity to prevent a shopkeeper, as the noble Lord suggested, from putting a notice outside as well, or in the window, and I think that the words in the Bill are the right ones in that case. I hope that these points have been satisfactorily cleared up. I have looked at them but, on the whole, I think it is better to leave the Bill as it is. I beg to move that the Report be now received.

Moved, That the Report be now received.—(Viscount Colville of Culross.)

LORD SHEPHERD

My Lords, I am grateful to the noble Viscount for adopting this method of clearing up a number of points raised on Committee stage. I am sure that the House appreciates the difficulty of putting down Amendments to deal with them. I agree with the noble Viscount in his attitude to these points and accept what he says. I certainly agree that the noble Viscount, and many of us, on both sides of the House, are a good deal in advance of the Government in legislation. Our work would be infinitely easier if the Government would consider a little, but we shall see how far they can go on Report stage. I should like to thank the noble Viscount for his kindness.

On Question, Motion agreed to.

Clause 2 [Statements required on face of trading stamps]:

7.26 p.m.

BARONESS ELLIOT OF HARWOOD moved, after subsection (1), to insert: () The cash value of a trading stamp or the total cash value of trading stamps delivered by any person in respect of goods sold or services performed by him or on his behalf shall be not less than one-eightieth of the sum received for those goods.

The noble Baroness said: My Lords, I rise to move this Amendment, because I think we are all agreed that this Bill is concerned not merely with regulating stamp trading companies but with regulating stamp trading, in which the retailers play an essential part. During the Committee stage of the Bill we debated the importance of putting a minimum cash value for the redemption of trading stamps, and I produced a formula which my noble friend Lord Colville of Culross thought was too rigid and too complicated. He also criticised my proposal on the ground that my Amendment would not include the retailer, who was an integral part of stamp trading, and who might vary the number of stamps issued against the purchase of goods. This could penalise the trading companies. Therefore, I withdrew my Amendment and I have endeavoured to re-frame it to meet these criticisms.

I would remind your Lordships that in this business of stamp trading there are two main partners—first, the stamp company and, second, the retailers, who purchase the company's stamps and issue them against the purchase of goods. There is, of course, a third, if we include also the consumer, the buyer of the stamps. Therefore, whatever is contained in legislation must apply in all fairness to all the partners. The present Amendment, which is in a simpler form, would make the minimum cash redemption value roughly equivalent to the wholesale price of the goods bought by the trading stamp company, less 10 per cent. variation in price. This works out at 3d. for every 20s. worth of goods bought. It would also provide a ratio which would be able to deal with the variation of the value of money, due to inflation or variations in price, should they alter very much. The ratio of one-eightieth to the sum received for goods and services would be easily understood and would be constant. There is nothing to prevent a company or retailer from giving a higher redemption value, if they like, but they could not give less.

During Committee stage some noble Lords said they would be content to leave the question of redemption value to the competition of one company with another. In the United States, where stamp trading is more widespread, there is virtually no competition. This is referred to by Mr. Jameson in his Report, in the footnote on page 8. No retailer is forced to take stamps but, if he does, then in my opinion he is an integral part of the stamp-trading operation and should be included in the provision of cash redemption. In relation to competition, there is a tendency, if small companies show signs of failing, for large companies to buy them out—obviously for the sake of the good name of stamp trading with the public and the retailers.

It is important that the companies should be strong enough to be able to meet all their liabilities. In the modern world, the tendency is for companies of all kinds to amalgamate into much larger units, and I think that often this acts to the benefit of the consumers and manufacturers, although one could qualify that statement. I therefore think it is quite possible that in five or perhaps ten years the number of stamp companies operating in the United Kingdom may be reduced. There are not a great many companies now, but there might well be only three or four or half-a-dozen of the well-known ones in control of stamp trading in future. Obviously, competition will be reduced still further. I think it is most important that at the outset of this new form of trading, with a new Bill going through Parliament, there should be no confusion in the minds of the consumer, the retailer or the stamp company that the cash redemption value exists, and a cash redemption value which is fair to the stamp company, the retailer and the consumer. The figure in my Amendment fulfils this object, and I hope your Lordships will see your way to accept it. I beg to move.

Amendment moved—

Page 2, line 15, at end insert the said subsection.—(Baroness Elliot of Harwood.)

7.31 p.m.

LORD SAINSBURY

My Lords, I should like to support the Amendment moved by the noble Baroness. As I said on Second Reading, I believe it is extremely naïve to suggest, on the basis of the American example, that competition will ensure a reasonable cash re- demption rate. I think the proposal in this Amendment of 3d. in the pound, which is half the average price paid by the retailer on his turnover to the stamp company, is essentially fair to the stamp company and cannot be attacked on that basis. What it amounts to is that the stamp company will get a similar profit on cash redemption as it makes when gifts are exchanged for stamps. I think this is essentially fair to the stamp company and a very necessary safeguard to the consumer.

LORD AIREDALE

My Lords, I should certainly support this Amendment, so far as it goes, and I agree with the noble Lord, Lord Sainsbury, that this is fair to stamp companies. But I am not nearly so sure that it is fair to the customers who go shopping. It seems to me a most extraordinary state of affairs that, the retailer having paid a certain sum for trading stamps which are then given to his customers, if his customers wish to redeem them for cash they receive a mere fraction of the price that the retailer has paid to the stamp company. The stamp company have done nothing whatever in the meantime to render any service to the person who is not interested in stamp collecting but merely wishes to redeem the stamps, and the stamp company have in the intervening time had the use of the money paid by the retailer for the purpose of running their business.

I wonder what your Lordships would say of a businessman who went to his bank for the purpose of obtaining an overdraft to tide him over in the running of his business and said to his bank manager: "I shall not be able to pay you any interest on the overdraft. Beyond that, I am not proposing to pay you back the full amount of the overdraft that is advanced to me, but I intend to pay back some fraction of the sum you advance." Suppose the bank manager replied: "Well, you have been a very good customer of ours for a number of years, and we might perhaps make an exception in your case and grant you, just for once, an interest-free overdraft. But we really do insist that you pay back the full amount of the money you borrow from us." And then the businessman replied: "Oh, but I cannot do that: that might ruin my business." That is what the stamp companies say, I understand: that if they have to give full cash value in redemption for trading stamps it is going to ruin their business.

This seems to me to be a most extraordinary state of affairs. I should have thought that if stamp companies could not make a living by distributing stamps, or getting them distributed to people who wanted to collect them, and could make a living only by forcing them upon people who did not want to collect them, the sooner the stamp promoters in this age of full employment gave up that business and entered another that was rather more useful to society, the better. I do not think these gentlemen are other than resourceful. I imagine that they know a good deal about the grocery trade and have worked in fairly close alliance with the grocery trade for some time. I imagine that if they wrote a nice, polite letter to the noble Lord, Lord Sainsbury, he might be able to find them profitable positions in the grocery trade; and when they went home at the end of the day they might feel that they had done a useful day's work, really for the benefit of society, whereas, as things are, that is not a feeling which is uppermost in their minds when they get to bed.

In so far as it goes, I am willing to support this Amendment. But what I do not understand is why we cannot have this matter of cash values settled once and for all by the Board of Trade coming into it, agreeing to consider stamp trading schemes and deciding, according to the terms of each scheme, what is a fair cash value in each case. In the light of the fact that Parliament has, in its wisdom, said that there shall be a cash value in trading stamps, I do not know what is holding back the Board of Trade. They set up the Consumer Council, and the Chairman of the Consumer Council has been pleading all through the passage of this Bill through your Lordships' House for some way of getting the cash values of trading stamps properly established.

Is this going to be a matter of expense? Is the Minister going to tell us that it would take more than part-time work for one civil servant at the Treasury to "vet" trading stamp schemes and establish fair cash values? The Board of Trade have their regional controllers throughout the country. Could not these gentlemen and their staffs perfectly easily go round inspecting from time to time to see that the Board of Trade's cash values were being properly observed in the interests of the customers? If the Board of Trade are interested in this matter, it is not too late. We could have an Amendment upon these lines at the next stage of the Bill in this House, and when the Bill goes back to another place, if they are in agreement, they can put the modest Financial Resolution into the Bill to make this matter workable; and if another place do not like it, then they can disagree with your Lordships' Amendment, send the Bill back, and your Lordships can consider the matter again.

I simply do not understand why the Board of Trade, having set up the Consumer Council and having heard all these pleas from the Chairman of the Consumer Council regarding the necessity of properly establishing cash values for stamps, remain completely reluctant, as they appear to be up to now, to come into this matter and lend their experience in order that there shall be proper consumer protection. That is what I understand the Government are after, just as much as the rest of us are. But, so far as it goes, I support the Amendment.

7.40 p.m.

LORD DRUMALBYN

My Lords, I am always at a loss to deal with the noble Lord, Lord Airedale, because he seems to be completely insatiable in his requirements that we should put upon trading stamp companies. We are considering an Amendment which would relate the value of stamps given by the retailer to the purchases from the retailer. The noble Lord now proposes that the Board of Trade should regulate the value of the trading stamp in each scheme. This goes far beyond anything that has been proposed so far.

We had earlier a proposal that there should be registration of stamp trading companies, which presumably would have been based upon the general respectability, reputation, and so on, of the individuals, the reserves that they could offer, and the like. This was not accepted, and the noble Lord now goes on to suggest that we should have each single scheme submitted to the Board of Trade, and that the Board of Trade, on some criterion which it is difficult to establish a priori, should say what is the fair cash value in relation to that stamp, or, indeed, what is the full cash value. Sometimes he talks about the one, and sometimes about the other. This is a long way from the Amendment, and I would urge the noble Lord, while he is giving support to this Amendment, not to venture too far on the lines of suggesting that the Board of Trade should exercise complete control over the operations of the actual schemes and operations of trading stamp companies in this way, because this is what it would amount to.

I think we all know now how the finances of these schemes work. The individual company which is promoting the scheme, from what it receives from the retailer, provides the gifts that are to be offered. It also has to find its administrative expenses, its promotion expenses and, possibly, a bit of profit for itself. In addition, it is now to be asked to give a cash value for those who do not wish to exchange stamps for goods but are content to cash them after they have saved 5s. worth or more. This is the position we are in at the moment.

The noble Lady now suggests that there should be a specific relationship of one-eightieth between the value of the stamps that are delivered to the individual purchaser and the total purchases which that purchaser makes at that time, irrespective (this may be just a drafting difficulty, and I do not complain too much about it) of whether all those purchases are entitled to trading stamps or not. This was a point made by my noble friend Lord Redesdale at an earlier stage, though I have no doubt that this is something which could be corrected.

Surely the main point here is to justify why, in the particular case of trading stamps, and in no others, Parliament should put on the retailer an obligation to give a particular size of discount as a minimum. This is something which it does not do in any other form of trading. The difficulty is to justify the proposal that Parliament should say that retailers handling trading stamps must give at least one-eightieth as a cash discount. This seems to be a remarkable intrusion into trading practices, and I suggest that nobody has made out a firm case for such a requirement.

I can well understand the noble Lady's feeling—which was also made clear by the noble Lord, Lord Sainsbury—that, unless there is a considerable amount of competition between trading stamp companies, there is some risk that the cash value which will be fixed by trading stamp companies will be derisory. But we do not share this view. The fact is that Parliament is laying on promoters an obligation to put the cash value on the stamps themselves, and I should have thought that, given that requirement, as a matter even of prestige the stamp trading companies themselves would not wish to put too low a value on those stamps.

Quite apart from that, I wonder whether my noble friend has considered this particular aspect of the matter. What she is doing here is relating the value of the stamp to the purchases. I quite see why she has done this: it is in order to get over the difficulty which was pointed out before, that it would not be possible to place on the promoter an obligation which he could not carry out, to see that the retailer gave a certain value. But what would happen as a result of this? It seems to me that the noble Baroness has been working on the basis that at the present time the relationship between the value of the gift and the general purchases—or, if you like, the relationship between the cost of the stamps to the retailer and his turnover—is a matter of 2½ per cent. But if the minimum value is fixed at a given fraction of one-eightieth, it means we are fixing for all time the minimum relationship and the value of the stamp, in terms of gifts and all the rest of it. Is this something we really want to do?

Do we want to have a fixed relationship, and to say: "For all time this is going to work only if the value to the consumer in terms of rebate is something of the order of 2½ per cent."? That would be the effect, as I understand it, of putting a minimum relationship which is designed to be 50 per cent. cash value of the stamp to the value of the goods that are available to the consumer ultimately. I wonder whether the noble Lady has considered that. I was talking about inflexibility in this at an earlier stage, and it seems to me that this would introduce a new inflexibility. Does the noble Lord wish to intervene?

LORD SAINSBURY

My Lords, I was trying to interrupt to seek elucidation. Surely this is related to what the retailer pays to the stamp company for the stamps. It is, in point of fact, at 3d. one-half the average price paid by the retailer to the stamp company in advance for the stamps. It seems to me, as I said earlier, that by putting this minimum value on the stamp you are ensuring a profitable transaction for the stamp company. So you are in no way penalising the stamp company by this.

LORD DRUMALBYN

I do not think the noble Lord has quite got the point I was trying to make—perhaps I have not made it clear. The point is simply this. If it is the case that the retailer who is using trading stamps pays 2½ per cent., and if the value of the stamp is to be fixed at a minimum of roughly half that, and this is established as the appropriate relationship, what you are doing is fixing the minimum amount that the retailer using trading stamps will pay to the promoter. I am asking if this is a reasonable way of doing it. I quite appreciate the noble Lady's difficulty, and I admire the way in which she has sought to get over it. But I think we are running ourselves into unnecessary difficulties if we try to establish a fixed relationship of this kind. I do not think anybody has yet justified putting on retailers, if they give a discount in the form of trading stamps, this requirement to give a minimum discount. I do not believe that that case can be made out, and therefore, I cannot recommend the House to accept this; Amendment.

LORD LINDSAY OF BIRKER

My Lords, I have recently spent some time in the United States, and my experience is that competition, which is considerable over there between the stamp companies, does not lead to any minimum establishment of a cash value. One occasionally sees stamps with a derisory value, like one-hundredth of a cent., printed on them. If you want to ensure to the consumer the right to get cash instead of having to take a gift, you must have some clause of this kind. The idea that competition will produce a gift in relation to the value of goods bought just does not work.

7.51 p.m.

VISCOUNT COLVILLE OF CULROSS

My Lords, I am very grateful for what Lord Drumalbyn has said. Other noble Lords and my noble friend Baroness Elliot of Harwood have doubted whether the effect of competition will be sufficient to keep up the value of the stamp. I should like to say with my noble friend Lord Drumalbyn that I am not as pessimistic as they are, but it is no secret. I think, that I should have liked to find some method of achieving what my noble friend Lady Elliot is seeking by this Amendment. I promised that I would have another look at this point. May I assure noble Lords that I have done so. I derived a great deal of assistance from the officials of the noble Lady's Council, and at one stage I thought there was a glimmer of light, and that there was the possibility of a formula coming forward which was really quite hopeful, although drafting it would have been formidably difficult. I see, unfortunately, that the noble Lady's advisers have not been able to draft anything quite on these new lines, and the noble Lady has put down the Amendment which is now before the House.

It seems to me that I am guilty of having caused not inconsiderable confusion about this matter, for which I must apologise; and I do not think I am altogether guiltless of misleading the noble Lord, Lord Sainsbury. May I make it quite clear what I believe this Amendment does? I believe that this Amendment relates only to what goes on in the shop which issues the trading stamps to the customer as well as giving him over the counter certain goods for which he or she pays. I believe that the whole ambit of this Amendment takes place between the retail shop giving the stamps and the customer. I do not believe that it has any bearing or is in any way intended to bite upon the contract, which is a totally different matter, between the stamp company and the retailer, by which the stamp company sells stamps in large bulk to the retailer, which I think is what the noble Lord, Lord Sainsbury, was thinking of.

Nor (and of this I am certain) is it possible to relate this particular Amendment to the transaction which goes on between the trading stamp company and the sources from which it buys the goods, probably at wholesale prices, which in due course go to the redemption centre and are exchanged for the stamps collected by the collectors. I believe that this Amendment does not relate to that latter situation. First of all, the wording would be inapposite. I think quite a lot of the wording in it is not applicable to that situation; nor do I believe that the fraction of one-eightieth would be the proper fraction if that were what was intended. I believe that this Amendment relates solely to what goes on in the retailer's shop.

It is perfectly true that the Amendment which the noble Lady put down on the Committee stage was one to which I objected because I said that she was proposing to fine a stamp promoter for something which came only within the control of the retailer who issued the stamps to the public for the goods they bought, because only the retailer could ensure that the correct number of stamps were given and that some of them would not be put into the pocket of the assistant or be misplaced in some other way. The noble Lady sought to cure this, and has cured this, because the person we fine under this Amendment is not the stamp company at all but the retailer who issues the stamps to the public. This is my basic objection on principle. I am sorry if I did not make it clear, but this is where I feel that this Amendment falls down. All the other points which are made by noble Lords are merely symptomatic of the bad principle which I believe underlies this Amendment.

Why, as my noble friend Lord Drumalbyn has said, should there be a minimum on the discount which can be given by the retailer? Remember, it refers only to the retailer; it has nothing to do with the stamp company. Or, indeed, why should not a stamp company come along with a scheme which does not give 2½ per cent. discount in terms of goods redemption, but, say, a 1¼ per cent. cash discount? Why should these things be prevented? Again, why should it be impossible for the retailer to tailor his scheme so that he gives rather fewer stamps for goods which perhaps have a high tax on them—wines and spirits, or cigarettes for example? Is there anything in the principle repugnant in the retailer having that flexibility? I do not think so. I believe that the noble Lady, in a valiant attempt to achieve a formula, which will do what I think everybody wants, has hit upon what I think can be described only as a device, and one which uses the wrong method.

The person who controls the cash face value of a stamp is not the retailer. It comes to the retailer with a cash face value on it. It is the stamp company who are in charge of this. They are the people who make the decisions about what is to be the cash value of the stamps, and all the other terms of the scheme. It must be upon them, and upon them alone, that the duty of putting the right cash face value falls. That is why I object to a device which attempts to do it through the retailer, and by means, if it goes wrong, of fining the retailer, whereas it may be the stamp company alone who are responsible and who should get into trouble if things go wrong. This Amendment, I am sure, is quite wrong for that reason.

I am very sorry to have to disappoint the noble Lady, but I cannot accept this Amendment. Although I agree to some degree with the noble Lord, Lord Airedale, that there might be other things that could be done, and that an Amendment might be put down, I do not think he will find it any easier to draft Amendments on this particular subject than the other people have done. I have tried very hard myself and I should like to see what the noble Lord could produce, because I am sure it would be very interesting. But I am afraid that even then there might be something wrong in it, particularly if a great responsibility were put upon the Board of Trade which would involve them with difficult and invidious matters of choice on the operation of which they would have no guidance from Parliament. It would be an unfortunate thing to do, to put the Board of Trade in that position without proper Parliamentary guidance. I do not see how we can overcome that particular difficulty.

LORD AIREDALE

My Lords, I always dislike disappointing in any way the noble and learned Viscount, Lord Colville of Culross, but I am afraid I shall not be able to give him the pleasure of my putting down an Amendment of this kind in the Bill. It is quite beyond my capabilities.

VISCOUNT COLVILLE OF CULROSS

I derive some relief from that, but I should have liked to see what the noble Lord would do. I am sorry about it, but I cannot accept the noble Lady's Amendment for the basic reason I have explained. I hope the noble Lady will feel that she can withdraw this particular Amendment, because, valiant though it is, I do not believe she is doing what she wants in the right way.

7.59 p.m.,

LORD SHEPHERD

My Lords, before the noble Lady responds, may I say one or two words? First of all, I think we are in considerable difficulty. I believe we are united in all four quarters of the House. Whether the centre is included in that, I would not know, but I am pretty sure that from the four corners of the House this evening we would join together in an attempt to find some way of protecting the consumer in these transactions. We could have achieved this, I think, if at the earlier stages of this Bill we had been able to persuade the Government in regard to registration and the laying down of requirements of the conduct of the companies.

In regard to the Amendment of the noble Baroness, I would agree rather reluctantly, I am afraid, with the noble Viscount that it does lay specifically on the retailer. I do not think one can construe the words differently. If that is the case, you would by Statute say to the retailer, "You must give what is in effect a statutory rebate if you undertake stamp trading". On this point I turned to my noble friend Lord Sainsbury and said, "If I were to produce a Statute which said that grocers had to give a 3½ per cent. cash discount on their sales, what would you do?" And before he could give a reply I said, "Obviously you would have to uplift your price in order to give the cash discount if in the past you were not giving the cash discount". This, of course, is the difficulty when you are trying to deal with a point by Statute. I personally agree 100 per cent. with the endeavours of the noble Baroness, and may I again compliment her because she has done sterling work on this Bill, not only for this House but for the Consumer Council, and I strongly suspect that the noble Viscount in his own heart would like to see some provision.

VISCOUNT COLVILLE OF CULROSS

I said so.

LORD SHEPHERD

Yes. However we are not able to find it, and I do not believe it is now even within the bounds of the ability and resources of the Consumer Council, in the time available between now and the end of the Session, to find the necessary foolproof words. We are also in the difficulty we were in the other evening. As we well know, on Private Members' Bills neither major Party has a Whip and in consequence the House, particularly at this late hour, gets rather thin; and if the noble Lady were to call a Division we should have what the Daily Telegraph described as the farcical position of the House not being counted out but no decision being arrived at. What the numbers would be I do not know, but I am sure we should not have a sufficient number of Members present. If that were the case, we should have to delay the Report stage again, and again delay the Third Reading.

There are a number of useful Amendments down which were agreed at Committee stage. There is one of considerable importance, either No. 4 or No. 5, by the noble Viscount or the noble Baroness; one of these, I presume, will be accepted this evening. This will be a major breakthrough. Therefore, the Bill will be considerably better than it was when it was introduced. It does not match up to what we should like, but it is an advance, an advance we have had to make on our own with very little encouragement from the direction from which encouragement should have come. I should rather regret it if in trying to go for what is a small point, an important but a small point, we ran the risk of losing this Bill.

I will be quite frank: I have changed my mind in regard to this Bill. Originally when I saw it I could not have cared less whether it was passed or not; it was of little significance. But it has been improved and I think it now has considerable worth, particularly if Amendment No. 4 is accepted. I therefore would ask the noble Baroness not to press this Amendment this evening. She has our support; I know she knows that. But I would ask her not to press it for fear of losing the Bill. May I say to the noble Baroness that she will have her opportunities, perhaps in a few months' time, of bringing forward her own Private Bill, perhaps with this particular point in it and with others that the Consumer Council would have liked to see in this Bill; and undoubtedly there will then be a Parliament of a different political complexion which will look upon it with more interest and more sympathy than I am afraid Parliament of to-day will. Therefore, I think the noble Baroness need not despair if she does not succeed this evening; there is another day and another fight, and I am quite sure she will attain her victory in the end.

BARONESS ELLIOT OF HARWOOD

My Lords, I will, of course, respond to the appeal of the noble Lord, Lord Shepherd, and also the noble Viscount, Lord Colville of Culross. I will not press this to a Division. As the noble Lord said, it is late and there are few Members here to divide.

I should like to answer one or two points put particularly by the noble Lord, Lord Drumalbyn, as to why I want to do something to protect the consumer, and why the Board of Trade, so far as I can see from his replies, has no interest in protecting the consumer. I think that is not at all what I should have expected. The object here is quite simple. This is a new type of trade. It has its pitfalls. The pitfalls, we are told, have already been discovered in parts of the world in which this practice is being indulged in. I was very interested in what was said by the noble Lord who spoke about his experience in the United States of America, where competition in the matter of cash value is non-existent. I have been told that, too, though I have not learned it from experience. Therefore, I want to do something to forestall some of these pitfalls.

The noble Lord has asked why I want to fix a minimum. I want to fix a minimum for the simple reason that if you do not fix a minimum you are absolutely at the mercy of people who are going to whittle the thing down to nothing.

VISCOUNT COLVILLE OF CULROSS

My Lords, I do not want to interrupt, but I think it is important to get this matter right. I agree it would be desirable to fix a minimum cash value. I think the noble Lord, Lord Drumalbyn, was saying he wondered whether it was desirable to fix a minimum discount in the shop which a person taking part in the scheme, a retailer, was bound to adhere to.

BARONESS ELLIOT OF HARWOOD

My Lords, I think, if I may say so, the noble Viscount misunderstands me. The object of putting in a simple ratio of one-eightieth of 20s. was simply that if the value of money goes up or down this value will alter with it; you will still be dealing with 3d. in the 20s., and in so far as it is a fixture it seems to me a very low fixture and one worth having. It alters with the value of money or the price of goods. Therefore, it is not fixed in that sense. It is only fixed in the sense that the ratio is fixed. However, I do not want to argue this point again. That was the reason I wanted to have a minimum which would apply to retailers, and I think it should also apply to the stamp companies. However, we argued this just now and the noble Viscount does not think my Amendment would cover it. One cannot draft Amendments to cover everything.

What I find frustrating is that I was accused in the Committee stage of being unfair to the stamp companies. I have brought in something to cover the retailer, and I am accused of dealing with the retailers and not the stamp companies. I understood from my legal advisers that this Amendment would cover both. Apparently it does not, and I will not press it. But the frustration is very great, since on one day I am accused of failing to do something, and I do it on the next day and I am then told it leaves out what I did on the first day. It all could have been done—and I agree with the noble Lord, Lord Shepherd, and the noble Lord, Lord Sainsbury—far more simply if we had a simple scheme of registration, which we wanted in the beginning. We have not got that, and now we have not got a minimum. We have got no safeguard for the consumer. I hope that at some future date we shall not be at all disappointed; and the Board of Trade in my opinion might feel a little ashamed of the fact that they have not helped in any way to put a sound basis into this Bill. I am sorry to speak so frankly, but in fact that is what I feel, and I had better say what I feel. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 3: Redemption of trading stamps for cash.

3.—

(2) The holder may exercise his right under the foregoing subsection— (a) by presenting the stamps at any reasonable time at the promoter's registered office, or

8.11 p.m.

LORD AIREDALE moved, in subsection (2)(a), after "time" to insert: at a shop in which the trading stamp scheme is operated, or".

The noble Lord said: My Lords, the purpose of this Amendment is to secure that where customers wish to redeem stamps for cash they may do so in the shop where they get the stamps given to them, without, if the promoter of the scheme requires them, sending or taking the stamps to his place of business. I moved an Amendment along these lines on the Committee stage, but that Amendment made the retailer liable to redeem for cash equally with the promoter, who of course was liable to redeem for cash. I was told that this was unfair upon retailers, because the promoter might go bankrupt and then all the retailers would themselves be liable to undertake the cash redemption.

I have not been losing much sleep on behalf of retailers who may land their customers with a stamp trading scheme for a promoter who goes bankrupt, but I can see that some injustice may result if this happens, because inevitably one shop would be required to redeem more than its fair share of the stamps and other shops would get off more lightly, having to redeem less than their fair share. Therefore I have put down the Amendment on this occasion in this way. It still leaves the liability to redeem on the shoulders of the promoter, but nevertheless says that the redemption shall, if the customer requests or requires it, be conducted at the shop and not necessarily, if the promoter requires it, at his place of business.

I should have thought this was obviously convenient for shoppers. Parliament, in its wisdom, having said that there shall be an option to redeem for cash if the customer wants it, it should not be for the promoter of the scheme to place an obstacle in the path of the shopper by requiring the shopper to redeem not at the shop but at the place of business of the promoter. The shopper knows nothing about the promoter; they are total strangers to one another. The retailer is in continual contact with the promoter; the retailer has bargaining power with the promoter. The retailer can secure that the promoter meets his commitment to redeem for cash. There is no bargaining power as between the customer and the promoter. The shop is the obvious place where the cash redemption should take place, if the customer wants it to happen. That is the purpose of this Amendment, which I beg to move.

Amendment moved— Page 2, line 41, after ("time") insert the said words.—(Lord Airedale.)

LORD SAINSBURY

My Lords, may I say just a brief word? I think we are now swinging to being unfair to the retailer, because if I read this Amendment rightly it means that he buys stamps from the stamp company and then is under an obligation to redeem them for cash.

LORD AIREDALE

No. I must not make two speeches, but may I just correct this? That is what my last Amendment did on the Committee stage. What I am now seeking to secure is that although the cash redemption transaction shall take place in the shop if the customer wants it that way, the liability shall remain on the promoter, and the retailer is only the promoter's agent for the purpose of paying over the redemption.

VISCOUNT COLVILLE OF CULROSS

My Lords, it is perfectly true that the noble Lord, Lord Airedale has cured the major defect in his Amendment of the Committee stage. I think he will also agree that it is quite true that I agreed with him then, as I do now, that a convenient method by which the customer can get his or her cash redemption would be to go to the shop where the stamps are sold. It is simply a matter of deciding whether to leave it to the voluntary arrangements which I told the noble Lord I thought would come about, or whether this has to go in the Statute. If it goes in the Statute, every shop, or probably every outlet that issues these trading stamps, will have to be an agent for the trading stamp company and take on the cash redemption.

I am the last person to suggest that stamp companies will not have been "vetted", or indeed that any of these outlets for trading stamps will not have been carefully "vetted" by the trading stamp company, before the scheme is entered into. But the noble Lord's Amendment makes no provision for the transmission of the stamps or what would happen thereafter for the payment of the money to the customer, the collector of the stamps. I think that is something that ought to be in the Bill, and it is something which I feel would be dealt with carefully by any trading stamp company which used one of these outlets for stamps—one of the retailers—as an agent for dealing with this particular side of the business. I should like to leave it to the discretion of the trading stamp companies to make voluntary arrangements with the shops that they have decided should take on this side of the transaction. Although it is only a matter of balance and judgment I think, on the whole, it is better to leave it to the voluntary arrangements which I think will take place.

I would remind the noble Lord that on the first day of the Committee stage, when he was moving his Amendment, he said he would withdraw it in the light of what I had said about the possibility of voluntary arrangements being made between the promoter and the retailer. He went on to say that if before the next stage of the Bill there was a real and genuine possibility of a satisfactory voluntary arrangement of this kind coming into force, he would be satisfied. The noble Lord has put down this Amendment. I am certain that the House would allow him to make another short speech if he had evidence that satisfactory arrangements of a voluntary kind will not be made. If he has not got such evidence, I am puzzled by the noble Lord's reversion to this matter. Perhaps if he has evidence that this is not going to work satisfactorily he will give it to me, be- cause I shall be interested to hear it; otherwise, I hope he will agree with me that, on balance, it will be better to leave this to voluntary arrangements rather than to make every shop an agent for the cash redemption.

LORD AIREDALE

My Lords, it was the noble and learned Viscount who told us about the voluntary arrangements which he hoped were going to be made. I did not raise that issue at all. I think I said it would be interesting to see what happened on the next stage of the Bill. It was the noble and learned Viscount who brought forward this matter and raised these hopes that there would be voluntary schemes. I do not think it was for me to search around for evidence or to take this up. I hoped to hear from the noble and learned Viscount at this stage that perhaps some of these voluntary schemes, which had seemed to be rather in the air at that time, might have come down to earth. I appreciate that only a few days have intervened, and perhaps one cannot expect much. I do not feel so strongly about this matter as I do about some of the matters in this Bill, and certainly on this issue I do not wish to risk losing the Bill. In the circumstances, I can only ask leave to withdraw this Amendment.

Amendment, by leave, withdrawn.

8.19 p.m.

VISCOUNT COLVILLE OF CULROSS

moved, after Clause 3, to insert the following new clause:

Warranties to be implied on redemption of trading stamps for goods

".—(1) Subject to subsection (2) of this section, in every redemption of trading stamps for goods there shall be—

1. (a) an implied warranty on the part of the promoter of the trading stamp scheme that he has a right to give the goods in exchange,
2. (b) an implied warranty that the person obtaining the goods shall have and enjoy quiet possession of the goods,
3. (c) an implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party, not declared or known to the person obtaining the goods before or at the time of redemption,
4. (d) an implied warranty that the goods shall be of merchantable quality, except that if the person obtaining the goods has examined the goods before or at the time of redemption, there shall be no implied condition as regards defects which the examination ought to have revealed.

(2) The foregoing subsection shall have effect subject to the terms on which the redemption is made, so far as those terms expressly exclude or modify the warranties implied by that subsection.

The noble Viscount said: My Lords, I think it would be for the convenience of the House in the debate on this Amendment to take in the Amendment of the noble Baroness which immediately follows it. As noble Lords will realise, the point is almost exactly the same, although the noble Baroness has more in her Amendment than I have in mine.

It will be fresh within the recollection of the House that this was a subject debated at great length on Committee stage. I undertook to have a look at this point again because the feeling, particularly among noble Lords opposite, was that although it would probably not be right at this time to introduce the whole of the Sale of Goods Act, nor to introduce certain parts of it to limit any form of contracting out—which is a matter that I think ought to be dealt with in the sphere of the Sale of Goods Act as a whole rather than in this Bill—nevertheless, certain provisions of the Sale of Goods Act, 1893, could with advantage come into this Bill, and there should be freedom for stamp trading companies to contract out of those warranties if they wanted to. But it would have to be apparent in the terms of the scheme, perhaps in the catalogue or by some other method, that they were contracting out. This would turn the red light on for anybody who wished to become involved with that stamp trading company. They would think that it was not quite such a straightforward company as it might be.

There is a great deal in this point, and I have therefore put down these Amendments. They are based on Section 8 of the Hire Purchase Act, 1938, as amended by Clause 11 of the Hire-Purchase Bill, which has been going through Parliament during this Session and which is soon to become an Act. That amends to a considerable degree the old Section 8 of the 1938 Act. There are four warranties in my Amendment. Three of them, (a), (b) and (c) come from Section 12 of the Sale of Goods Act; paragraph (d) comes from Section 14(2) of that Act and deals in rather greater detail than in that Section of the 1893 Act: with the idea of merchantable quality. These warranties are not conditions, because in the type of transaction where the stamps are handed in and the goods are given in exchange, all at very much the same time, there would hardly be an opportunity for the condition to take effect before it turned into a warranty by the ordinary process of law. Therefore, all these are matters of warranty, and one could sue for damages in the ordinary way if they were not complied with.

It may be convenient if I deal with the differences between my Amendment and that of the noble Lady. First of all, the noble Lady in her first subsection has produced a contract for goods. This is another matter which was canvassed on Committee stage and I said I would look at it. I think that this is probably unnecessary in any event, because I believe there will usually exist in Common Law a contract between the stamp holder and the stamp company, and that some of the stamp companies are in agreement with this.

LORD SHEPHERD

My Lords, does the noble Viscount say he thinks a contract will exist between the stamp holder and the stamp company in spite of the fact that there may be conditions which say that the stamp holder has no right under the issue of the stamp?

VISCOUNT COLVILLE OF CULROSS

Yes, I think that is the case, but I will come to that in a moment. Noble Lords might like to look up a most charming case which occurred at the end of the last century, called Carlill v. The Carbolic Smoke Ball Company. This is one of the basic cases in the law of contract, and I remember it well as a law student. It is quite clear from the decision, both in first instance and in the Court of Appeal, that the elements of a contract are capable of existing in the type of situation which is set forth in a stamp company's conduct of its business. There is a clear offer to anybody who performs the conditions of the scheme by collecting the stamps and sticking them in the book. I think this ripens into acceptance of contract when the person fulfils those conditions and sticks his stamps in the book, and I think that the company will be sufficiently notified of acceptance if the person turns up with the stamps at the redemption centre. That would be sufficient notification that he had taken their offer at its face value and performed the conditions; or, alternatively, it might be held in law that the stamp company had waived any requirement on the part of the collector to notify them that he had accepted their contract. There would be the doctrine of consideration and that would be fulfilled.

It would be advantageous to the stamp company to have the stamps accepted by the collector used, and probably publicised. Equally, the collector himself would be put to a certain amount of time and trouble in sticking them in the book and going to the redemption centre in due course. This fulfils the definition that I found in that case of consideration which was: Any action of the plaintiff from which the defendant derives a benefit or advantage or any labour, detriment or inconvenience suffered by the plaintiff with the consent, either express or implied, of the defendant. If noble Lords consider that that is difficult, then perhaps when they read it in the OFFICIAL REPORT in the morning they will see that there is the element of contract present in most of these cases, although I will not say it is present in all of them. If that is so, I do not believe there is point in making a statutory contract where that is not the case. If it is a bad company which does not provide a proper contract for goods the likelihood is that, when the stamps have been collected and sufficient books filled up, the catalogue will have been changed and the goods available to the collector will be shoddy. In this case he would be better to go for the cash option which is already provided for in the Bill.

In regard to a contract on goods which can only take effect at the time when sufficient stamps have been collected to go and redeem one of the articles in the catalogue, I do not believe that to have that type of contract written into the Bill is going to give any extra protection at all. So I think the noble Lord, Lord Shepherd, was wrong when he said in Committee stage that he did not think most collectors of stamps had any rights under the present system. I think that most of them have contractual rights directly with the stamp company.

There is the further point as to the title to the book and to the stamps. If there is a contract it does not matter a fig whether the holder of the stamps has ownership of them or not. Those stamps will be evidence of his performance of the offer which has been put out by the stamp company. That is enough. There is another point which justifies leaving the ownership of the stamps and the books with the stamp company: if they were not in the stamp company's ownership, it would be difficult for the stamp company to do anything about somebody who started to forge them—and tried to cash in on the genuine stamp company's scheme. Considerable opportunities for fraud might occur in that way, and they can be prevented if the ownership of the stamp books and the stamps is retained by the company. I am sorry to go on about this but I believe I ought to deal with these points for they are important.

The noble Lord raised the question of the second hand Hoovermatic. Nothing in the Sale of Goods Act will help on this: it will have to be left to a matter of contract anyway. If the goods were advertised in such a way as to lead the stamp collector to believe that they were new goods, and he or she redeemed them thinking that, and then they turned out to be second-hand goods, the remedy would lie, I believe, in the ordinary law of contract. Nothing we could import from the Sale of Goods Act or hire-purchase legislation is going to make any difference. Nor is there any note of a prohibition of such practice in the hire-purchase field. The Advertisements (Hire-Purchase) Act, 1957, does not deal with that matter, so there is no precedent. It supports me in the view that this would be dealt with by the ordinary law of contract. Where collectors go along to the redemption centre they will see the goods. They have not at that stage committed themselves to any contract; they are not bound to the stamp company to accept any Hoovermatic which turns out to be second-hand, and they can choose something else.

I do not think we can deal with this matter in this Bill although it is something people must look out for, in order to see they are not deceived. I may say in connection with that point that if a stamp company made a practice of giving second-hand goods for redemption, when it appeared from its shiny catalogue that the goods were new, its name would become fairly disreputable in a short length of time, and I do not believe the company would find it profitable.

The last point with which I should like to deal, which is in the noble Lady's Amendment and not in mine, is that the noble Lady has attempted to stop contracting out of the warranties that are in her Amendment and in mine. I do not believe that this is the right place to do that. I think the noble Lady agreed with my noble friend Lord Drumalbyn on the Committee stage that an ad hoc arrangement of this kind, in advance of the general survey of the Sale of Goods Act in the light of the Molony Committee's Report, is not a good thing; and that it would be better to leave it, in the way the noble Lord, Lord Shepherd, put it, as a "warning light" if a company tried to contract out, and not try to deal with a limitation on contracting out in this Bill. I hope, therefore, that my Amendment will be considered to do a sufficient amount to improve this Bill, and that the noble Lady—although, of course, I shall be very interested indeed to hear what she says on this matter—will not insist upon her Amendment. I say that because I think her Amendment has more in it than really ought to go in this Bill at the moment, and that mine is about right. My Lords, I beg to move.

Amendment moved—

After Clause 3, insert the said new clause.—(Viscount Colville of Culross.)

BARONESS ELLIOT OF HARWOOD

My Lords, it is very agreeable to be able to get up from this Bench and agree with something which the noble Viscount has just said, as we have both been working on the same lines—namely, to try to find an Act which will cover what we want and which has already been passed. The Hire Purchase Act, 1938, on the basis of which both he and I have been working, is already law. As your Lordships know, another Hire Purchase Bill has passed through our House, and some Amendments have been made to it. What I tried to do by bringing in more subsections than the noble Viscount has done was to make my Amendment rather broader, because we do not know at this early stage of stamp trading how it may develop.

Subsection (6) of my Amendment, which comes from the Hire Purchase Act, allows for future reform of this part of the law if it is required. All this is already on the Statute Book. It is a question of whether or not we should wait for the future revision of the Sale of Goods Act, which the noble Viscount has just mentioned. That is, of course, a point of view. I do not feel strongly enough to fight on this matter, although I think it is a pity, when there is an Act on the Statute Book, that we should have to stop now at this moment and wait for the Board of Trade.

I think this "Waiting for Godot" attitude is a pity. We have not got to pass any new legislation; it is already in the Hire Purchase Act, 1938. I understand that has worked very satisfactorily, and I think it could be applied immediately. So I consider that the noble Viscount's Amendment should have brought in this subsection to cover this point, which will now, as he rightly says, have to wait for the reform of the Sale of Goods Act. I think that if he could have seen his way to accept my clause and to forgo his, the point could have been covered immediately. I do not know what the noble Lord, Lord Drumalbyn, will have to say about it. I suspect that Clause 2 is in the Bill because the Board of Trade do not want to bring in sections of the Hire Purchase Act, 1938, which would have the effect which I should like to see in the interests of the consumer.

VISCOUNT COLVILLE OF CULROSS

My Lords, perhaps I may be permitted to answer that. I do not think the situation is comparable. As the noble Lady said, this limitation in the Hire Purchase Act dates back to 1938. In those days there was no Molony and there was no prospect of a general survey of the Sale of Goods Act, but now it is different. My noble friend, Lord Drumalbyn has said that this point will receive consideration, but I think that the circumstances are different. This is entirely my responsibility, but I think it is right to wait and not to put in that limitation.

BARONESS ELLIOT OF HARWOOD

My Lords, that is the only point on which I disagree with the noble Viscount. So if the House feels that Amendment No. 4, which he has moved, is the one which it would like to accept, I will not oppose it.

LORD SHEPHERD

My Lords, I have looked very carefully at Amendments Nos. 4 and 5, and, without appearing to be ungallant, ungentlemanly or ungenerous to the noble Lady, I must say that I prefer Amendment No. 4, so far as it goes, if only because it is briefer and, I think, clearer to those persons who may read the Act. But I hope that at an early stage in the next Parliament we shall see some legislation on the Sale of Goods Act and that this will cover not only this particular Bill but also the hire purchase legislation.

I noted what the noble Viscount said in regard to a contract. I am not a lawyer, but I presume that he was referring to a contract under Common Law, and that therefore any provision or agreement that a holder has accepted, merely because he has taken the stamps, will not in fact make the contract void. If that is the case, I will accept it. Therefore, I presume—and I am putting this point only for information—that in Clause 3(7) the words, Any agreement under which the rights conferred by this section on holders of redeemable trading stamps are surrendered or modified shall be void are there because we are giving cash redemption under Statute, and so it is necessary to write into the Statute that any agreement is null and void. If that is the case, then I do not need to detain the House any longer. My own feeling—and I have consulted with my noble friends on this side—is that we really prefer Amendment No. 4, although we should like later on to see some extensions.

I think we should congratulate the noble Viscount on his tremendous industry and ingenuity in producing this Amendment. Having given him credit, may we on this side of the House also take some credit, because it was three of us, plus the noble Lord, Lord Airedale, who very late called a Division? That gave us an opportunity on another day to consider the noble Lady's Amendment with fresh minds, together with the speech which the noble Viscount himself delivered setting out the issues. It was because we were then able to specify what we wanted and to agree that we have now got this Amendment. Therefore, all of us, except the noble Lords on the Government Front Bench opposite, can be congratulated on this important step.

LORD AIREDALE

My Lords, as we are all fighting every inch of the way, I would just say one or two words about this matter. It really surprises me, if we are here to protect the consumer—and this is what I understand we are here for this evening—that this long Amendment of the noble Viscount says right at the beginning, in subsection (1)(a), that the promoter has a right to give the goods in exchange for stamps. I should have thought that what we were here to secure was that the customer had a right to receive the goods in exchange for stamps. But I suppose it is all right.

VISCOUNT COLVILLE OF CULROSS

My Lords, this is a totally different matter. This is a question of title on the part of the promoter to give the goods. He is warranting that they do not belong to somebody else, and that he is entitled to give them. If it were a matter of creating a contract with the right to receive them, I would have drafted the Amendment in a totally different way. May I say that the noble Lord, Lord Shepherd, is very kind, but I have, of course, received a great deal of assistance from the Board of Trade on this. I could not have done it all on my own.

On Question, Amendment agreed to.

Clause 6 [Display of information in shops]:

VISCOUNT COLVILLE OF CULROSS

My Lords, this Amendment is also the fruit of your Lordships' discussion during Committee stage and, I think, the insistence of the noble Lord, Lord Shackleton, that a certain alteration could with advantage be made to a proposal put forward by the noble Lord Lord Airedale. It provides that the notice in the shop which is required under this clause in the Bill shall also state the face value, the cash value, of a trading stamp which is being issued under this scheme. May I add that I have taken account of the point that the noble Lord, Lord Airedale, made about the word "associate" in the advertising clause? If the Amendment as I have put it down is drafted in the way it is, then there will be no danger of conflict between the two. I beg to move.

Amendment moved—

Page 4, line 30, after ("notice") insert ("stating the cash value of the trading stamps issued under the scheme and").—(Viscount Colville of Culross.)

On Question, Amendment agreed to.

8.41 p.m.

LORD AIREDALE moved, in subsection (1)(a), after "ascertain" to insert:

1. "(i) whether they are entitled to a cash discount in lieu of trading stamps on any purchase or other transaction, and the rate of such discount, if any, and
2. (ii)".

The noble Lord said: My Lords, the object of this Amendment is to encourage shopkeepers to give cash discounts in lieu of trading stamps to those of their customers who do not wish to become stamp collectors. One of the first things we were told about this Bill by the noble Viscount during our Second Reading debate, which seems a long time ago now, was that stamp trading is a form of deferred discount. I would say that it is a form of deferred discount involving a very considerable rigmarole which has to be gone through by stamp collectors.

I am not going to make another long speech about how long it takes to stick 1,260 stamps into a book. The fact remains that there must be a great many housewives, shoppers, who simply have not enough spare time to devote to all this fiddling about with stamps, but who nevertheless feel that they ought to be entitled in their trading with their grocer to terms as good as those received by those people are who have more time in which to go through all this rigmarole. It seems to me that no useful purpose whatever is served by a retailer handing stamps to a person who does not wish to collect them. He might just as well, it seems to me, hand over a discount equal to what the trading stamps cost him. Admittedly, if you are running a business, trading stamps may help you to attract new customers, but I see no object at all in annoying your old customers who do not wish to become stamp collectors. I should have thought the obvious thing, instead of foisting upon them stamps that they do not want, was to give them a discount equal to the price that you, the retailer, have to pay for the stamps.

My Lords, I think the superficial answer to this point is that if customers do not like stamp trading they can take their custom to some other shop that does not go in for this sort of thing. But I think that is, as I say, rather superficial. If your nearest petrol-filling station gives stamps, are you really to be expected to drive your car further, to the next nearest petrol-filling station that does not give stamps, in order to escape from the clutches of the stamp scheme? And are ladies who have been shopping at a particular shop because they like it, and because it sells the kind of things they like to buy, expected, when that shop starts stamp trading, to take their custom elsewhere, perhaps at great personal inconvenience, to escape the clutches of the stamp promoter?

LORD SHEPHERD

Would the noble Lord not agree that the lady who goes into a shop to buy goods where there are stamps, if she does not wish to take the stamps, merely has to refuse them?

LORD AIREDALE

She certainly can refuse them; but if she refuses them she will not get as good a bargain as her companion who has enough time on her hands to stick the stamps in the books. I should have thought it was not right that the busier lady, who has not all the time to spend in this rather hapless way, should not get as good a bargain. That, I think, is the answer to that.

LORD SHEPHERD

But does the noble Lord think that, by Statute, you can say to a retailer that he must give a cash discount? I should not have thought that it was possible.

VISCOUNT COLVILLE OF CULROSS

Hear, hear!

LORD AIREDALE

If the noble Lord will read the Amendment, he will see that it does not tell the retailer that he must give a cash discount. What it says is that, on the notice to which the noble Viscount referred us on the last Amendment, the retailer shall state whether or not his customers are entitled to a cash discount. That means that, if they are not, the retailer will have to stick up a notice saying, "No cash discount in lieu of stamps".

I am hopeful that, when some of the more thoughtful of his non-stamp collecting customers read that, they will start asking questions. They will say, "Why no cash discount in lieu of stamps? How much do you pay the promoter for these stamps? What is the point of foisting stamps on me? I do not want them. Why not hand me a discount equal to the price which you pay for the stamps, instead of foisting the stamps on me?". When this has been said to the grocer about twenty times, by twenty of his valued customers, I hope that he will begin to see that there is some point in not annoying his old customers, who do not want to collect stamps, and that he will stick up a notice saying that those who do not wish to collect stamps can have a 2 per cent. discount off their bills, equivalent to the amount which he was paying for the stamps that he was distributing to those others of his customers who did wish to collect stamps. That is the purpose and object of this Amendment. I hope it is not quite so silly as the noble Lord, Lord Shepherd, seems to think it is. I beg to move.

Amendment moved—

Page 4, line 31, after ("ascertain") insert the said words.—(Lord Airedale.)

VISCOUNT COLVILLE OF CULROSS

My Lords, there are no doubt many people—or, at any rate, some people—in this country who will follow beneath the banner held by the noble Lord, Lord Airedale, and who will follow it to the degree of going many, many miles out of their way specifically in order to avoid trading stamps. I am sure many people will do this. On the other hand, there are undoubtedly a large number of people who do not take the same furious objection to trading stamps as the noble Lord does. He is attempting some gentle persuasion. By means of Statute, he is attempting to do something which in my view is a quite unwarrantable interference in what a retailer can do in his own shop. There is nothing in the world to prevent a retailer from doing something like this if he wants to—and, for all I know, some retailers may act in the way the noble Lord has foreshadowed. But I cannot see that it is the right thing to put in this Bill, and I believe that it takes the whole ambit of this Bill miles beyond the limit of the common-sense approach to this type of problem. The noble Lord has a point of view, but I really do not think that we are justified in doing it in this way.

May I add this? The noble Lord really has an ulterior motive behind this. He puts it like this: that the retailer will be forced by public opinion or persuasion into giving a cash discount instead of the stamps. If the noble Lord is right, I think it would have been better to put down an Amendment which would have required the retailer to do that—because that is what the noble Lord is after; that is the real purport of what he is trying to do. That, I feel, is entirely objectionable; and if this is only a device to achieve it, then I feel the device is objectionable, too. I hope the noble Lord will not press this Amendment. I feel that it is quite wrong.

LORD AIREDALE

My Lords, if I were to press this Amendment to a Division I think that not only would there be no quorum, but I should lose it, even with the small number that are here. So I think I had better ask leave to withdraw it.

Amendment, by leave, withdrawn.

LORD SHEPHERD

moved, in subsection (1)(a), after "transaction" to insert "including credit transactions". The noble Lord said: My Lords, on behalf of my noble friend Lord Shackleton, whom I think we can forgive for not being here, in view of the heavy pressure of the previous debate, I move this Amendment. Might I draw the Committee's attention to Clause 6(1)(a) which says: …there shall be kept posted a notice giving such particulars as will enable customers readily to ascertain the number of trading stamps, if any, to which they are entitled on any purchase or other transaction,". The Amendment is to insert, after the word "transaction", the words "including credit transactions". I think it is quite clear that the purpose of subsection (1) is that the customer should know the number of stamps he should receive on a purchase, a purchase being the taking of an article in the shop. The "other transaction", of course, could include a number of things. I am told that stamps are now being given if you book a holiday or even your air passage through a particular organisation. So I would presume this is what is meant by the words "or other transaction".

There are, as I think the noble Viscount will agree, the cash, purchase, the credit purchase and even the purchase under hire-purchase agreement. In the case of cash purchases the matter is straight-forward; but when we get into the field of credit it may be more complicated. I have heard of instances where stamps were available on a cash purchase but not when the purchase was undertaken on credit or hire-purchase terms. I suggest that if we are to have a notice in the shop in regard to the number of stamps, then if the right to that number of stamps is lost because the customer purchases by credit or by hire-purchase agreement, he should be so informed. I think it would be in the interests not only of the stamp holder but of the retailer.

One must also consider another point. It is the custom in certain areas for people to buy vegetables or greengroceries over the counter and receive a bill on the second or third day of the month for the previous month's purchases. This is credit. Those people would have been given stamps for cash purchases; and I should have thought the persons who have credit agreements with the shopkeeper ought to be entitled to receive stamps when they pay their weekly or monthly bill, unless it is clearly so stated in the notice.

We must take into account, not only that this notice gives the number of stamps available, but the fact that the stamp company itself is undertaking publicity by notices in the dealer's shop. In fact, I would suggest that this is perhaps where the contract could well start: between the stamp holder and the stamp trading company. Because I should have thought the stamp company by its advertisements in the shop is, in fact, making an offer. I am thinking particularly of the Green Shield Company, which posts a notice saying, "Green Shield Stamps available here". I should have thought that that is, in fact, one of the beginnings of a contract. If that is so, and there is some variance in this offer because in the retailer's estimation stamps are available only for cash, and not for credit purchases, then I think it should be clearly stated. But my own feeling is that, if an offer is being made and a person is induced into the shop because stamps are available, then they should be available whether the goods are paid for by cash or by credit, so long as the credit is agreed between the customer and the retailer.

There is one other point. I am not quite sure what would be the effect, if my suggestion was agreed to in principle, of the person failing to pay his bill within three or four days. Should the stamps be lost? I think there might be a case for saying that the understanding between the customer and the retailer has been broken because the customer has not paid on the due date. Whether that will stand up in law, I do not know. But I hope that the noble Lord will give an assurance that "other transactions" includes credit terms. If it does not—and I have some doubts whether the words would be so interpreted, because it is connected with purchase, and also because people have discussed "other transactions" in the terms of holidays and other services for which stamps are given—it might be wise to include the words "credit transactions" as I suggest in this Amendment.

Amendment moved— Page 4, line 33, after ("transaction") insert ("including credit transactions").—(Lord Shepherd.)

VISCOUNT COLVILLE OF CULROSS

My Lords, I entirely agree with the point of view put forward by the noble Lord—at any rate, the principle of it. I think probably the noble Lord put this Amendment down as a probing Amendment to see whether the point was covered. I am advised that it is; and I would point out to him that "purchase" is defined in Clause 9(1) as including hire-purchase. Credit, of course, is a different matter. This would, I am told, be covered by the words "other transactions"; and in case some of those other transactions do not attract stamps is the whole point of putting in the words "if any" in Clause 6(1)(a), and I think it would be perfectly clear on the notice board.

The noble Lord elaborated this point and went on with certain combinations of things that might happen in the credit field. I hope the shopkeepers will put up and invent their own notices for this purpose, but also I hope that they will not put so much on in the way of possibilities that might occur, and cases to be taken into account, that the whole thing will be too much to read and therefore stultify the whole object of the exercise. It may be that the shopkeepers will want to include terms of the way they operate their stamp trading schemes; but I would not encourage them to put all these complications on their statutory notice, because it is going to have the opposite effect to that intended—which is to clarify the issue in the minds of the shoppers. I assure the noble Lord that I have looked at this matter and I am advised that it is covered.

LORD SHEPHERD

My Lords, I am grateful to the noble Viscount. I think, after reflecting on what I have said, that it is true to say that if the retailer does not put anything on his notice the stamp holder would be entitled to receive stamps on credit purchases as well as on cash purchases. In any case, I thank the noble Viscount and beg leave to withdrawn my Amendment.

Amendment, by leave, withdrawn.

VISCOUNT COLVILLE OF CULROSS

moved, in subsection (2), after "posted" to insert "in such characters and". The noble Viscount said: This Amendment is one that meets one of the other points that was made on Committee stage and is to ensure that the notice in the shop is clear and legible. I have found some words—or they have been found for me—out of the much-spurned Section 138 of the Factories Act, 1961, which my noble friend Lord Airedale did not care for very much the other day but which I hope will cover the point. I beg to move.

Amendment moved— Page 4, line 38, after ("posted") insert ("in such characters and").—(Viscount Volville of Culross.)

LORD AIREDALE

My Lords, I cannot help feeling that this Amendment stems from the valiant efforts made from these Benches in another connection by my noble and learned friend Lord McNair, to secure that all kinds of notices and documents which are required by law shall be legible.

On Question, Amendment agreed to.

Clause 10 [Short title, extent and commencement]:

VISCOUNT COLVILLE OF CULROSS moved, in subsection (3), to leave out "(advertisements referring to value of trading stamps)" and to insert: warranties to be implied on redemption of trading stamps for goods)".

The noble Viscount said: My Lords, I will now give my peroration, because this is really the last Amendment. This is a drafting Amendment, to bring the new clause into line with the administrative portions of the Bill at the end of the first year after the Bill becomes law, as I hope it will.

I should like to take this opportunity of thanking my noble friend Lord Drumalbyn, who has given me great assistance throughout all the stages of the Bill, and my noble friend Baroness Elliot of Harwood, who I see is not in her place but who has done a great deal to draw these difficult problems to the attention of the House and to find solutions to many of them, and noble Lords opposite, on both the Liberal and Labour Benches, who have also been most fertile of ideas. I hope that if I have been too intransigent with some of the suggestions put forward, they will forgive me. At least they will be glad to feel that the Bill has been improved I beg to move.

Amendment moved— Page 7, line 15, leave out from ("section") to second ("of") in line 16 and insert ("warranties to be implied on redemption of trading stamps for goods)").—(Viscount Colville of Culross.)

LORD SHEPHERD

My Lords, I gather from the remarks of the noble Viscount that he hopes there will be nothing to be said on Third Reading. May I say that I hope he will not be disappointed? May I express the appreciation of the House for the way in which the noble Viscount has handled the Bill, and not only in the Chamber, because some of us have had a good deal of conversation and debate outside and he has always made an effort to try to meet the points raised. We all appreciate the difficulties under which he has been working. We shall be glad to see the Bill returned to another place, where I am sure the Government will see that time is provided for the Amendments of this House to be considered. I hope that we shall shortly see it at a Royal Commission and that the noble Viscount will be present to see it pass into law.

On Question, Amendment agreed to.