§ 2.54 p.m.
§ Order of the Day for the Second Reading read.
§ BARONESS PHILLIPS
My Lords, as your Lordships are well aware, the question of consumer protection is one which is very near to my heart. It is therefore not only a privilege but also a great personal pleasure to me to have the opportunity of opening this debate this afternoon for the purpose of putting on to the Statute Book what may well be one of the most momentous pieces of legislation of this century for the protection of the consumer.
I know that this Bill will be welcomed on all sides of the House, and certainly by organisations such as the consumer organisations, the Citizens' Advice 643 Bureaux, the British Standards Institution, and most certainly by all the women's organizations, The Protection of Consumers (Trade Descriptions) Bill is based largely on the recommendations of the Molony Committee on Consumer Protection, and your Lordships will remember that one of their recommendations was that the language of the existing legislation should be simplified. We must, I think, commend the Parliamentary draftsman who has so ably carried out this particular recommendation. We must not, however, be deluded by the slenderness of the Bill into thinking that it has little substance. It is a very substantial dish indeed and contains a great deal of meat In the short time available to me this afternoon I cannot possibly do justice to all that it contains. I shall, therefore, with your Lordships' permission, attempt only to sketch out the broad pattern of the proposed legislation. We shall have ample time, I hope, to go into greater detail at a later stage.
The point of departure for the new legislation is, of course, the present merchandise marks legislation, with its prohibitions on the use of false or misleading trade descriptions on goods. The Bill will carry this theme forward. It will continue the offence of applying a false trade description to goods and the accompanying offence of selling goods to which a false trade description is applied. The matters which may be the subject of a trade description, however, have been extended and now cover all physical characteristics of goods or other details which can be checked as matters of fact, such as age or previous history. We have also tried to deal with false claims to compliance with standards whether these exist or not. And we have introduced some very special provisions about that particular nuisance, dual pricing. All these provisions should go a long way towards protecting the ordinary shopper—I prefer the word "shopper" to "consumer."
I must now mention one matter which I know already from Press reports is likely to be contentious. The Bill goes beyond the present legislation in making oral misdescription of goods an offence. I cannot enter into lengthy argument here—the time for that will no doubt come later, I should, however like to make 644 two points. The first is that this provision simply brings the Bill into line with the Food and Drugs Act 1955 and the Weights and Measures Act 1963. In fact, to penalise oral misdescription is not an innovation. Secondly, if the dangers of shop assistants misleading the consumer are so great as Press reports might have us believe, is it not time the consumer received some protection against them? After all, the seller is in general not required to give information with the goods when he is making a sale. If he chooses to volunteer information, he ought surely to be expected to get it right.
Now I come to descriptions of goods in advertisements. For a long time it has been clear that in this respect the law has been deficient. The position has been, and still is, the peculiar one that, however false or misleading a description in an advertisement might be, a prosecution can be brought only if a direct link can be established between particular goods and a particular advertisement. In other words, the purchaser has to refer to the advertisement for the goods in such a way when making the purchase as to make it quite clear that the description in that advertisement relates to those goods. Clearly, since the ordinary purchaser cannot really be expected to understand all the intricacies of the law, this can happen—apart from mail order purchases—in only the rarest cases, and then probably merely by chance. Yet the buyer may well have been influenced to buy the goods by a description seen in an advertisement. If this happens to be a false or misleading trade description, and he is therefore disappointed in the goods, as the law stands nothing can be done about it. We hope to tidy up this position in the Bill by making it explicit that false trade descriptions relating to goods in advertisements at large shall be subject to the provisions of the Bill. We recognise that, from the advertisers' point of view, this could give rise to a number of practical and technical difficulties. We have tried to mitigate these by providing guidance for the courts as to the matters to be taken into account when considering an action brought relating to an advertisement. But, in the interests of the consumer, we must bring advertisements at large within the scope of legislation.
645 This brings me to the next point to which I must draw your Lordships' attention, and I refer to statements about services. The Molony Committee did not tackle the problem of services, not from lack of interest, nor from lack of complaint, but simply because a full-scale investigation into complaints about services would have involved them in a mammoth task and delayed their Report unduly. The Government, however, have seen and heard enough about the shortcomings of some suppliers of some services—I must emphasise that we are not making a general criticism of all who supply services—to decide that an attempt must be made in this Bill to give the consumer protection in the field of services comparable with that which the Bill will give him in the field of goods. This is a tricky area to venture into. When one is dealing with goods, the goods have a physical existence and can be examined to see whether they comply with a trade description. A service is something nebulous: its performance can be judged only after the event, and many factors can enter into such an assessment. The matter at issue may simply be one of non-fulfilment of contract.
This Bill is not the right medium to deal with that question. To keep within the general pattern of the Bill, we think we must rely on the central theme of misdescription, which, when related to an offer to supply a service, implies some intention in the mind of the supplier. We have therefore made the offence relating to statements about services—but only about services—one of knowingly or recklessly making a false statement as to the matters set out in Clause 13 of the Bill. This will throw a burden of proof of intent or recklessness on to the prosetion; but in this very new field we think this is not unreasonable. Moreover, it should help the operator who is not sure whether for the purposes of the Bill he is offering a service or not, to know that if he is acting and speaking honestly he has no need to worry.
Before I leave the misdescription aspect of the Bill, I should refer to one other new feature. I know that many of your Lordships will be pleased to see that we have introduced specific provisions to deal with the nuisance (to use a very mild term) of dual pricing. It is not, of course, our intention to inhibit manufacturers or traders who genuinely want to make price 646 reductions from claiming credit for them. Indeed, we should like to see a great deal more of this. But we have introduced certain criteria against which any claim to a price reduction must be measured. Claims which fall short of these criteria will be exposed to the penalties in the Bill. We have also dealt with the irritating but none the less deceptive practice of making the price large and part of the statement of the quantity small, so that the customer thinks he is being offered more for his money than is the case. Under the Bill, this will be an offence subject to the maximum penalty.
I now turn from the misdescription provisions of the Bill to deal with its positive requirements. At present, although a number of Statutes contain provisions which enable marking to be required for particular goods, as in the Food and Drugs Act, or for particular purposes, as under the Merchandise Marks Act 1926, there is no single power to require marking of goods in general. The Molony Committee thought the consumer's interest in having correct information, instructions or warnings about the goods lie purchases demanded that such a power be created, although the Committee hoped that the enlightened policy of manufacturers in introducing voluntary labelling would make its exercise a rare necessity. We have accepted this reasoning, and the Bill contains the necessary power to require classes of goods to be marked with prescribed information. Like the Molony Committee, we hope that we shall need to use it rarely, and only when there is a clear consumer demand. I am sure the noble Baroness opposite, Lady Elliot of Harwood, who is Chairman of the Consumer Council, will be telling us later about the labelling scheme, of which I already have some knowledge, which the Council is developing. We all look forward to seeing the first Teltag label in the shops. Whether it is through this scheme or in some other way, the Government hope that manufacturers will do even more in the future than the progressives are doing to-day to tell the consumer about the goods he buys. Nevertheless, we think it right that there should be a compulsory power in the background.
I have already mentioned the Merchandise Marks Act 1926 in this connection. This Act contains power, subject to the conditions laid down in 647 the Act, to require imported goods to be marked with an indication of origin. Since the new legislation will contain a general labelling power, there seems little point in retaining a separate power relating only to marking with origin. The Merchandise Marks Act 1926 will therefore disappear, and origin marking will be treated as any other form of marking under the Bill. I think my noble friend will be developing this point at a later stage. I am concerned here merely to put before your Lordships the structure of the Bill.
The Molony Committee also recommended that the Board of Trade should have a power to give a statutory meaning to terms used in trade and as trade description where such definitions would seem to be in the consumers' interest. The Bill provides such a power in relation to both goods and services. This does not mean, of course, that if a term were defined its use would be obligatory, but only that, if it is used, the goods or services must comply with the statutory definition if its use is not to constitute an offence. As a corollary to the marking and definition powers, we are proposing a power to require advertisements for goods to carry specified information, whether or not there is a marking order in force in relation to the goods advertised. This could serve, for instance, to give the public information or warnings where it was impracticable to do this on the goods themselves.
I shall not trouble your Lordships with all the other matters of detail, important though they are, with which we shall have time to deal more fully later. I cannot close my introduction to this Bill, however, without referring briefly to one of its most important provisions, that of enforcement by the local authorities. The Molony Committee found that one of the great weaknesses of the present legislation was the lack of enforcement. We are remedying this by placing a duty to enforce on those local authorities who are already weights and measures authorities for the purposes of the Weights and Measures Act 1963. In Northern Ireland the Ministry of Commerce will assume this duty. This will leave no doubt in anybody's mind that the Government intend this legislation really to be effective on behalf of the shopper.
648 As I said earlier in my speech, this is a major Bill. I have had to scamper through its main provisions in order to give the House some impression of its pattern and its content. I hope that our later discussion will help to fill some of the gaps, which I have been forced to leave in order that we shall have time for the fruitful discussion which I am sure is ahead of us. My Lords, I beg to move that this Bill be now read a second time.
§ Moved, That the Bill be now read 2—(Baroness Phillips.)
§ 3.10 p.m.
§ LORD DRUMALBYN
My Lords, I should like first of all to congratulate the noble Lady on her performance to-day, and to welcome her to the Box on the other side of the House. If I may say so, she has enlightened the House on the way in which the Government are proposing to operate this Bill, as well as setting out its main provisions. She has, if I may say so, made the dish which the Bill offers appear very appetising, and I think I shall be speaking for the whole House when I not only express a welcome to the Bill, but also express a welcome to the noble Baroness.
This is a second of three measures to bring the law up to date, in so far as it seeks to protect the customer from being cheated or deceived. There is nothing new, of course, in the conception that the customer should be protected by the criminal law as well as by his right of redress against the seller for damage due to fraud or negligence. Both are important. Your Lordships will agree that it is right that it should be an offence to cheat a customer by making false and misleading statements about the goods or services which he is offered. It is also right that the law should presume that the person who offers goods for sale should take due care to ensure that the statements he makes about them are not false or misleading. At the same time, we ought not to relieve the consumer of the ordinary responsibility to exercise due care in choosing which goods or services he will buy. But he can make an intelligent choice only if he is told the truth.
Other countries have laws which seem to go further in protecting the consumer than ours do. But the degree of honesty in a country does not depend on what 649 the law says so much as on the character of the people and on the spirit in which, and the effectiveness with which, the law is applied. The Molony Committee said categorically, in paragraph 680, that in BritainThe great bulk of traders conduct their business with probity and do not require the law to tell them what is right.Their code of conduct already requires that the statements they make about the goods and services they offer should not be false or misleading. It is in their interest, as well as in the interest of consumers that those who do not now behave in this way should be induced to do so.
As I see it, the main reasons for this Bill are twofold. First, it carries further and clarifies the old law. Secondly, the law about trade descriptions as it stands at present relates to their application to goods. It is not clear the extent to which, and the circumstances in which, an advertisement in a national newspaper for, say, a brand of chocolate applies a trade description to a particular quarter-pound bar which I may buy in a particular shop.
At this point, as the Bill deals with advertisements, I should declare an interest. I am Chairman of the Advertising Standards Authority, a company limited by guarantee, set up in 1962 and financed by the Advertising Association to supervise the working of the system of self-discipline which exists in the advertising industry. The Authority consists of an independent Chairman, myself, and an equal number of independent members appointed by the Chairman and of people with experience in advertising, whether in industry, in advertising agencies, or in the Press, television and other advertising media. I need hardly say that I am not speaking to-day for the Council of the Authority, still less for the advertising industry for which I have no right or claim to speak. But what I can claim is that my appointment has given me useful experience in trying, at any rate, to consider impartially some of the more difficult issues raised in this Bill.
We on this side welcome the Bill wholeheartedly. We thoroughly approve of its aims, although we reserve the right to criticise and to seek to improve the methods proposed to achieve those aims. The Bill is, of course, based on the Report of the Molony Committee on Consumer Protection. In the main, the 650 Government have followed the Committee's recommendations. Where the Government have departed from the recommendations we shall naturally want to know their reasons for doing so, not because there is anything sacrosanct about the recommendations, but because we have before us in the 324 pages of the Report the arguments for the recommendations, and we shall want to be convinced that the arguments for departing from them are sound.
If this Bill is to be regarded as a consumers' charter it should be intelligible to consumers, and I think that the noble Baroness can claim some credit for the Government for trying to make the drafting simpler. But the Bill is, perhaps, not as clear as it appears to be on first sight, and we shall seek to make it clearer. Dropping the phrase "merchandise marks" and using "trade descriptions" certainly helps. The ordinary customer can understand what is meant by a trade description, and I welcome the change. I welcome, also, the proposal that the protection given to customers against misstatements should be extended to cover services as well as goods.
The Bill is not so clear about the extension to oral misrepresentations of the protection at present afforded against false trade descriptions given in writing. The Molony Committee concluded in Recommendation 155, that on balance thelaw should not be extended to oral misdescriptions".and in paragraph 659 they give three practical reasons. First, there is the encouragement which the extension would give to spiteful or cantankerous consumers (I use my own language); and consumers are not all angels or innocents; secondly, the difficulty of getting evidence of the alleged misrepresentation; and, thirdly, the likelihood that the extension would make traders hesitate to give as much information and advice to consumers as they would otherwise do.
The noble Baroness said in the course of her remarks that if the trader chooses to volunteer information he should get it right. But, of course, he may be pressed for it, and it may not always be easy for him to give exact information. But whatever the law is to be on this matter, I think I ought also to mention 651 the possibility that an unscrupulous competitor who might be intending to prosecute, or other intending prosecutors, might seek to trap a supplier into an oral misrepresentation. Whatever the law is to be on this matter, it should be clear and enforceable. I doubt whether the provision in the Bill, thatAn oral statement may amount to the use of a trade descriptionhas sufficient clarity. Personally, I feel that oral misdescriptions should be covered, if practicable. This is, therefore, one of the points that we shall have to examine in Committee.
Another is Clause 1 itself. The law at present makes it an offence to apply to any goods a trade description which is false in a material respect. The Bill leaves out the qualification, despite the Molony Committee's strong recommendation that it should be retained. As Molony put it:to support a charge under the present law… broadly the error must be of such substance that it could fairly be regarded as capable of inducing a purchase. We would not interfere with this limitation.I would readily agree that false trade descriptions should not be given, even if the falsehood is only a little one. But ought we to encourage a multitude of prosecutions for infringements which could not influence a customer to make a purchase and therefore do no harm to anyone? My own attitude on this will depend a good deal on the enforcement arrangements, to which I shall come later.
Before I turn to Clauses 4 and 5, I should like to welcome the provisions for definition orders and marking orders. I am not so sure about the provision for information or instructions in advertisements, although Parliament can always reject an Order; but we are grateful to the noble Baroness for the light that she has shed upon this particular clause. I am prepared to assume that the power will not be used to interfere unduly with the advertiser's right to present his case in the way he believes will best serve his purpose. After all, an advertisement is not a prospectus. It is part of the process of selling; that is, of persuading people, by every fair and legitimate means, to buy. One does not tell a barrister how to present his client's case. One gives him the brief, and leaves him to get on 652 with it. In the same way, one should not tell an advertising agent, for example, how to advocate the merits of particular goods. It is a skilled job of persuasion, like the barrister's. One can warn him of what not to do, but one should be wary, think, of dictating what he shall do and how he shall do it.
I also welcome Clause 11 which seeks to deal with comparative pricing, dual pricing. I am not quite sure that this clause goes far enough. Clause 6, on the other hand, seems to go too far; and Clause 34 seems to invite widespread evasion of civil liability, to the great detriment of the consumer. It seems to allow any seller to protect himself against civil actions for damages for breach of implied warranty. This goes far beyond Molony's recommendation for the protection of auctioneers and those selling second-hand goods.
I have one general comment, and that is on the Title of the Bill. No doubt, numerically, consumers will be the largest beneficiaries from the Bill, but the protection it affords against false trade descriptions extends to any customer—manufacturer, wholesaler, retailer, institution or the like. Some clauses seem to have little, if anything, to do with the consumer. I should prefer the Bill to be called, simply and briefly, the Trade Descriptions Bill. Incidentally, the article on the Bill in last week's Board of Trade Journal starts off:The Government's Bill on trade descriptions was published on January 26…My Lords, I turn now to perhaps the most important change in the law—namely, Clause 4, which deals with trade descriptions in advertisements. This is greatly to be welcomed. It is curious, however, that "advertisement" is nowhere defined in the Bill. It has been defined among other places; in the Cancer Act 1939, in the Food and Drugs Act 1955, and subsequently in the Advertisements (Hire-Purchase) Act 1957. In each case the definition is different. The Bill does not venture further than to say in Clause 38 that the word includes catalogues, circulars and price lists, which presumably, in turn, include those menus in which the prices of individual dishes are given. Considering that the Bill gives the Board of Trade power to make regulations about what information should be in advertisements, surely it 653 would be just as well to make it clear what is meant by the word "advertisements", at least so far as this Bill is concerned.
Trade descriptions are defined in Clause 2. Matters covered by the expression "trade descriptions" are mainly matters of ascertainable fact, but not entirely so. For example, two of the matters are performance and fitness for purpose. The performance of a machine is a matter of fact; but the performance of a patent medicine is a matter on which doctors often differ. It is often a matter of opinion, rather than of fact. I mention this point now because it is of importance when we come to enforcement.
Perhaps the most difficult clause in the Bill is Clause 5, which deals with misleading indications treated as false trade descriptions. Here, again, we are in the realm of opinion, rather than of fact. The composition or strength of a product can be ascertained fairly readily. It is a matter of fact whether it is truly or falsely stated, just as it is a matter of fact whether the net weight stated on the label is the actual weight of the contents. But the question whether a statement, be it a trade description or not, is misleading, in the sense that it is likely to be taken as an indication of any of the matters covered by the definition of "trade description", is generally a matter of opinion. In this case, truth or falsehood is not the test—indeed, truth can itself be so expressed as to be misleading. For example, the watch and clock importers have complained that some merchants advertise the number of jewels—that is to say, industrial jewels, which are of little intrinsic value—to suggest that a watch is of a much better quality than in fact it is.
Such action is clearly calculated (and by "calculated" is meant "deliberately planned") to mislead. But one has to distinguish from the calculated deception, wilful or deliberate, the description which is not intended to mislead but which others may think is capable of misleading some people. Certainly suppliers and advertisers should take care not to mislead; and most do. But even those who do take care may from time to time say or write things which could, and perhaps do, mislead somebody. Indeed, there is almost nothing one can say that is not capable of being misinterpreted or interpreted in a sense 654 different from the intention of the person who says it.
Clause 5, as drafted, does not make the offence depend on the intention of the supplier or advertiser, although the ordinary reader would think that it does. The ordinary reader would think that, for an offence to be committed, the deception must be calculated—and in the Concise Oxford Dictionary the definition given for "calculated" is "deliberately planned". But Molony interprets "calculated" as meaning "likely"—an artificial legal meaning common enough in Statutes, but none the less likely to mislead the ordinary person. I hope we shall put that right. A clause dealing with misleading should not itself be capable of misleading. Of course, what matters to the consumer is whether he is misled, not whether the supplier or advertiser intended to mislead him. If the supplier or advertiser did intend to mislead, he should certainly be punished. But what I would ask your Lordships to consider is whether in other cases, where there was no such intention, prosecution is the best method of dealing with the case.
May I recount a recent experience of my own? The Advertising Standards Authority spotted an advertisement which was, in its opinion, misleading in a particular respect. The Authority approached the advertising agent, who said that he saw nothing misleading in it and showed the Authority the results of a consumer survey related to that advertisement and others in the series. The survey did not indicate that there was anything misleading in that or any other respect. The advertising agent, however, agreed to carry out a further survey, and did so. The further survey showed as a fact that the advertisement did mislead in the respect in question—it was no longer a matter of opinion—and the advertising agent, with the consent of the advertiser, promptly amended the advertisement.
I am not suggesting, of course, that all questions as to whether an advertisement is misleading can be resolved in this way. Advertising's self-disciplinary system gives advice on matters of doubt, and obtains expert advice where appropriate—for example, from doctors or specialists. Where it is felt by the Code of Advertising Practice Committee that advertisements are misleading, advertising agents, 655 usually readily and always in the end, alter them. If a difference of opinion should arise, it would be for the Authority, which is neutral as between consumers and producers, to resolve it.
The crux of the Bill is the manner of enforcement. In matters of fact, no special difficulty arises. But the question whether an advertisement is misleading is in most cases a matter of opinion—in the first instance, under the Bill, the opinion of the person who brings the prosecution; in the second the opinion of the person or persons who decide the case. It is therefore extremely important that those to whom these responsibilities are entrusted should be well qualified to discharge them, and that there should be available to the prosecutor panels of expert and well-balanced advisers.
The Molony Committee recommended, and the Bill provides, that in England and Wales prosecutions should be brought by local weights and measures authorities, while in Scotland all prosecutions are brought by the Crown. But the Bill seeks to lay upon these authorities the duty of prosecuting not only on matters of fact—a duty which local weights and measures authorities are well qualified to discharge—but on matters of opinion; that is to say, they will have to take a view not just as to whether a false trade description has been given, but as to whether a description, though not false, and whether or not it is a trade description, is likely to mislead people on matters covered by the definition of "trade description" in Clause 2. And they will have to deal with services, with which they are relatively unfamiliar.
As the Bill stands it would be possible for one of them to bring a prosecution against a firm of national and international repute in a magistrates' court because he thought that there was something in the firm's national advertising that was misleading, albeit not intended to mislead. The firm, its advertising agency and its legal advisers might all have been quite satisfied that the advertisement was not misleading—and, indeed, they would be foolish in their own interests to embark on a costly advertising campaign if they were not so satisfied. Yet, to take an extreme case, a local weights and measures inspector might persuade the local magistrates that the 656 advertisement was just capable of misleading some rather benighted person, and the directors and managers responsible—possibly Members of your Lordships' House—would become criminals. And I am far from sure that the defences in Clause 22 would help them, because they are not designed to assist the accused who remains convinced that he is right in a matter of opinion.
It is true that Clause 30 of the Bill requires the local weights and measures authority to give the Board of Trade not less than fourteen days' notice of their intention to prosecute. But can the Board of Trade prevent a local authority from prosecuting even if the Board of Trade disapprove of the prosecution? In Scotland all prosecutions will be brought by the Crown; but in England and Wales the local weights and measures authorities are not the sole prosecuting authorities and no notification to the Board of Trade is required if other persons choose to prosecute. So under the Bill the Board of Trade's control of prosecution would not be complete.
My Lords, I hope very much that we shall in the course of dealing with this Bill be able to improve the machinery at present prescribed in the Bill to deal with matters of opinion. In this respect the experience in America is relevant. Perhaps, at the risk of speaking a little too long, I may give the House some impression of what happens in America. In the U.S.A., wherever inter-State trade is involved, the Federal Trade Commission can issue an alleged complaint and order against an advertiser. The advertiser can then choose, within ten days, whether to dispute the order or to discuss the matter with the Federal Trade Commission with a view to a consent orderbeing made within 30 days, the effect of which is that the advertiser agrees to stop doing what the Commission objects to. If he disputes the matter, formal complaint is made and the case is referred to a hearing examiner of the Commission. An appeal can be made to the Commission against the hearing examiner's finding in the form of a petition for review. If the hearing examiner finds against the advertiser and the Commission confirms his finding, the Commission issues a "cease and desist order" against the advertiser, who has 60 days in which too comply or appeal to the courts. Once the order is made final, 657 if he disobeys it and does what he was told to stop doing, he is liable to a fine of 5,000 dollars, or nearly £1,800.
On matters of opinion (I am not talking about deliberate deception) that is a civilised procedure compared with the provisions in the Bill. Under this Bill, a manufacturer, a travel agent or an advertising agent, for example, may be brought to court and punished although he had no intention of deceiving; although there is no evidence that anyone has suffered any harm, although he is firmly of opinion that his advertisement is not misleading. The American procedure implicitly recognises, in a way that the Bill does not, that there may be cases where advertisers are firmly convinced that their statements are not misleading, and yet someone else may think that they are, at least in some circumstances and for some people. Under the Bill, if someone else does think so, that may be enough to brand the advertisers, however reputable and well-intentioned, as criminals. Moreover, much damage to the good will and reputation of firms is done when the prosecution is brought, whatever the outcome may be.
My Lords, I have expressed my misgivings about the enforcement procedure proposed. Now may I indicate what, in my view, is needed if the confidence of producers and suppliers of goods and services is not to be undermined, to the detriment of consumers? In the first place, I suggest that the Board of Trade must exercise a tight control over the whole system. Local weights and measures authorities are well suited to deal with false statements by advertisers about matters of fact. Even in this field, however, the Board of Trade will have to issue guidance to them, particularly on such matters as performance and behaviour of goods, the procedure for testing and the availability of testing establishments and so on. The Board of Trade will also, in my view, have to have panels of expert advisers, and I very much hope that on matters on which opinions are divided no prosecutions will be brought until the appropriate advisers have been consulted.
On the subject of guidance, it is significant that after 25 years' experience of the Wheeler-Lea Act in the U.S.A., which gave the Federal Trade Commission 658 power over "unfair or deceptive acts or practices" whether or not they interfered with competition, the Federal Trade Commission are now, to quote the opening words in their 1964 Report:placing unprecedented emphasis on the use of industry guidance methods, as alternatives, wherever possible, to formal adversary actions.That is their language, not mine. Their declared aim is:to guide business into legal channels without bringing down upon it the menace of the law.This is why they now accept "assurances of discontinuance".
We seem to be going in the diametrically opposite direction. The Federal Trade Commission have expressed their aim asto prevent violations of law rather than to achieve a statistical record for stopping them.They often do so by giving warnings rather than by taking formal action. In the field of misleading statements, as opposed to false trade descriptions, at least—that is, where it is a matter of opinion and not a matter of fact whether there is anything deceptive—this seems to me sound common sense. I hope that the noble Lord will be able to assure me that the Board of Trade do intend, wherever appropriate, to issue warnings in lieu of prosecuting. The Federal Trade Commission have also been greatly expanding their efforts to forestall breaches of the law by giving advice to individual businesses on the legality of what they are proposing to do—advice which then becomes binding on the Commission themselves. They are also issuing guidance pamphlets. We have a precedent here in the guidance that was issued in 1949 by the last Labour Government on the food and drugs legislation.
I also hope that the Board of Trade will take over all prosecutions resulting from national advertising, and I should like to be assured that it has the powers to do so. For one thing, such prosecutions might be far too costly for local authorities to envisage undertaking. Where matters of opinion are concerned, I hope very much that prosecutions will not be instituted unless and until advertisers have had an opportunity to amend their advertising. If advertisers are so firmly convinced that they are right that they prefer to be challenged in the courts, 659 then if they cannot convince the prosecuting authority, a test case will result, and that will take a long time.
Finally, I hope that voluntary self-discipline will receive still further encouragement. If, as a result of the Bill, the present movement to increase the number of local publicity clubs—not unlike the American "Better Business Bureaux"—each with its own vigilance officers, throughout the country is strengthened and accelerated; and if these clubs work in close co-operation with local weights and measures authorities, I believe that a most valuable partnership for the protection of consumers against false and misleading advertising can be established. As for national advertisers, I suggest that the same kind of partnership can and should be established between the Code of Advertising Practice Committee and the Advertising Standards Authority, on the one hand, and the Board of Trade and other Government Departments concerned, on the other. In passing, I would express my personal appreciation of the help and encouragement that the Advertising Standards Authority has received from the Board of Trade.
This measure can be handled in one of two ways by the Government. It can be improved and operated in such a way as to command the support and co-operation not only of consumer organisations but of the organisations representative of those who sell goods and services, and to encourage them to improve their own self-discipline; or it could divide and produce conflict. I hope very much that it is the intention of the Government to choose the first and not the second course. The Bill has received, as it deserves, a general welcome in principle in the country. Apart from the enforcement provisions, and apart from the one major blemish to which I have referred, it has the makings of a good Bill.