HL Deb 04 December 1967 vol 287 cc368-88

2.58 p.m.


My Lords, I beg to move that the House do again resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Winter-bottom.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD MERTHYR in the Chair.]

Clause 11:

False or misleading indications as to price of goods

11.—(1) If any person offering to supply goods of any description gives, by whatever means, any false indication to the effect that the price at which the goods are offered is equal to or less than—

  1. (a) a recommended price; or
  2. (b) the price at which the goods or goods of the same description were previously offered by him or are being offered by others;
or is less than such a price by a specified amount, he shall, subject to the provisions of this Act, be guilty of an offence.

(3) For the purposes of this section—

  1. (a) an indication that goods were previously offered at a higher price or at a particular price shall be taken, unless the contrary is expressed, as an indication that they were so offered for a substantial period within the preceding six months;
  2. (b) anything likely to be taken as an indication as to a recommended price or as to the price at which goods are being or were previously offered shall be treated as such an indication; and


moved, in subsection (1), to leave out paragraph (a). The noble Lord said: In introducing this Amendment, the first to Clause 11, perhaps I may be allowed to say first of all that this is one of the most difficult clauses, and that I have a later Amendment down—so has my noble friend Lady Elliot of Harwood—dealing with the whole of the clause. But because those Amendments are dealing with the generality of the principle, and because that clause to some extent incorporates the Amendment that I am now about to move, it seems appropriate that we should discuss, rather paradoxically, the details first. In so doing, we can clear out of the way the details, and when we get to the Question, That the clause stand part, deal with the principle. I hope that will be agreeable to the Committee.

The purpose of this particular Amendment is to leave out the words "a recommended price; or". The effect of that is that it removes from the clause the provision as regards a false indication to the effect that the price at which the goods are offered is equal to or less than a recommended price. Apart from pharmaceutical products, comparatively few goods can be said to be normally or usually sold at a recommended price; although food products of low unit values are an exception. In fact it is not really clear what is meant by "a recommended price"—it is not defined in the Bill or anywhere else.

The nearest to a definition is that contained in Section 1(4) of the Resale Prices Act 1964, which refers to prices recommended as: appropriate for the resale of goods supplied or to be supplied by the supplier. In fact, it is in some cases impossible to find any resale transactions taking place at the recommended price. There are certain branded products where there are no transactions which take place at the recommended price so far as anybody can find out. In other cases the list price, as has been found in the United States of America, is sometimes not taken, and is quoted purely in order to enable dealers to attract buyers by pretending that they are getting a bargain. Experience shows that it is not difficult for a dealer to get the person who supplies him to recommend a fictitious price. It is also found that prices are sometimes quoted, by way of comparison with list prices or recommended prices, from lists which are quite out of date. For that reason my Amendment seeks to exclude recommended prices altogether. I would only add that, if they are to be included, I would ask whether it would not have been desirable that they should be qualified by the words with which I qualified them on Second Reading, that is, "genuine and current". I beg to move.

Amendment moved— Page 6, leave out line 30.—(Lord Drumalbyn.)


I am grateful to the noble Lord, Lord Drumalbyn, for his explanation of the way he proposes that we should tackle this clause, which everybody agrees is complex and at the moment unsatisfactory. I make the following proposal to the noble Lord. As my noble friend intimated during the Second Reading debate, we are very conscious that we have not achieved the most satisfactory formulation of the clause as it stands at present. It may be it would be better to consider the approach then suggested by the noble Lord, Lord Drumalbyn, of barring comparative pricing altogether, except in defined circumstances. This would be quite a drastic step, but if it is desired to cover all the great variety of misleading claims involving imprecise and often meaningless comparisons, such as the usual retail price, or the price charged for comparable goods, direct prohibition may be the only effective way. What we should now like to do is consider the alternatives again, in consultation with the noble Lord and with others, with a view to putting forward a remodelled Clause 11 in another place.

The noble Lord has attempted to remodel the clause, as has the noble Baroness, Lady Elliot of Harwood, and I can give an undertaking that we shall, in the light of to-day's discussions, try to recast this clause in a more acceptable form. This may be a somewhat lengthy piece of work. I hope your Lordships noticed that I said that we propose to table a remodelled clause in another place. We must obviously have conversations with people interested in the subject, which will take time, so I do not see that we shall be able to do anything with this clause in this House. This is not necessarily true of, for instance, Amendment No. 14 which I undertook to have another look at. I hope that we shall be able to produce an Amendment at a later stage in the passage of the Bill in this House, but this clause is so complex an affair that we shall have to give time for discussion, and so on. But as the noble Lord suggested let us take the various Amendments to the clause as part of the business of remoulding it.

The noble Lord has, in fact, drawn on the American practice to argue that we should leave out the words "a recommended price". I presume we can argue that in marketing matters we tend to follow the United States and that what we are afraid of is that the practice will grow in which unrealistic price lists will be issued so that retailers can say that they are selling at below the recommended price, and thus get "phoney" publicity for what they are trying to do. The noble Lord says that because this is an extremely uncommon practice it is unnecessary that we should alter this clause, but since this form of mis-statement exists, and can grow in this country, we are anxious that we should have the power to control a mis-statement of this type. There are two positive reasons for retaining this provision. In the first place, there are cases in which a false claim to be undercutting the recommended price is a serious mischief in itself and ought to be penalised; and secondly, even where a false claim to be undercutting the recommended price is also the means of giving a false indication that the prices of others are being undercut, it is going to be much easier to bring home the offence of undercutting the recommended price. I think we all realise that it is not always going to be easy to prove the offence of making a false claim to be undercutting the prices of others. For this reason, I think that Clause 11 will be seriously weakened if the reference to a recommended price were omitted.


With regard to the general statement of my noble friend, I should like to offer my humble congratulations to the Government for the course of action which they propose. I have never been happy about Clause 11, and while very strongly supporting the principle of what it is endeavouring to do, I said on Second Reading that I had had discussions with people who were knowledgeable in this matter and that they felt that this clause needed re-writing. I should like to congratulate my noble friend very much on what he has decided to do.


If it is in order to do so, I should like to support what has been said by the noble Lord, Lord Drumalbyn, about recommended prices. As a retailer, I think that to-day there is a tremendous lot of unreality about recommended prices, when in towns there is not a single retailer selling at the recommended price. This is a Consumer Protection Bill, and to talk in this connection about recommended prices is, to my way of thinking, of no great aid or help to the consumer.


I greatly welcome the statement of the Minister that he intends to withdraw this clause, because this is one clause which I thought to be rather sillier than most in a Bill which, as the noble Lord knows, I think a rather silly Bill. I am not quite sure that what the noble Lord, Lord Sainsbury, has said applies universally. It definitely applies, of course, in his line of retailing, but if I am going to buy, say, a bottle of whisky, or something of that sort, I cannot carry in my head what is the full price; and I like to be able to be told that the full price was so-and-so, and that the price asked was a reduction of so much on that figure. So I do not think there is much in that point.

When we get on to some of the rest of the phrases in the clause I think we shall have the greatest difficulty in producing a clause which is in the least workable. I can quite see the object of the exercise, but when I suggested to the female element of my entourage that this was one of the objects of the Bill they were all rather pleased, until I pointed out (which made them have serious thoughts) that it was a "spoil-sport" clause; because if there is one thing that the female sex really enjoys it is sallying off to the sales, and using knees and elbows, and possibly hatpins. They derive great pleasure from bringing back an armful of spoils which have been heavily marked down from a fictitious price, probably, to the proper price. But if the noble Lord is going to make that sort of thing completely illegal, he will be killing one of the joys of life for a great many of very harmless respectable ladies. That would be a very great pity, and, I think, a quite impracticable thing to try to do.


I would make only one point in reply to the noble Lord, Lord Hawke. I did not wish to withdraw the clause, but was undertaking to make certain that it was remodelled before it reached another place. I believe that for technical reasons we have to let the clause stand part, otherwise we have nothing to talk about.


I certainly welcome the noble Lord's intention of remodelling the clause. I am not quite so happy about his broad suggestion that comparative prices should be banned, except in defined circumstances, because the difficulty will be to define the circumstances in which they are permitted. I am not clear about the reasons why the noble Lord is rejecting this proposition. If it is because he is of the opinion that it may be permissible to give a false indication of a price in relation to a recommended price if we take out the words "recommended price". I had formed the impression that this would not be so in the light of subsection (2). I go further and say to him that if this is his objection, then I think that a much easier way of avoiding that difficulty could be found. If the noble Lord makes a specific reference to a recommended price here, I think he is asking for trouble. I will not put it higher than that just now. But if he wants to avoid a false indication in relation to recommended price, then he could do it in another way. I thought that this was already done in the clause, without a specific reference to recommended price, but if that is not so, I would ask leave to withdraw my Amendment on the supposition that this will be one of the matters that will be looked at generally in connection with the remodelling of the clause.

Amendment, by leave, withdrawn.

3.15 p.m.


moved, in subsection (1)(b), to leave out "goods or goods of the same description" and insert "same or comparable goods". The noble Lord said: This Amendment seeks to leave out the words "goods of any description" and insert "same or comparable goods". This is a good deal more than a drafting Amendment, though it has a drafting aspect. The heading of the clause is: "Misstatements other than false trade descriptions". In the very next line are the words "any description", which clearly have a different meaning from "false trade description". That itself seems a little undesirable. The description on line 26 is likely to be taken as meaning the same as the words in line 25, although I doubt whether it is intended to be so taken. But in this Bill we are not dealing with what the person who supplies the goods or the Government intend; we are deal- ing with the way in which the Bill is going to be construed. The same word is used in line 31 and presumably refers back to line 26, but whatever it may be I suggest that it is not appropriate. It seems to me that the word can only mean the sum of the trade descriptions—that is to say, all the physical characteristics and other things mentioned in Clause 2.

There are three kinds of price comparison. There is price comparison between two sets of goods which are identical—that is, of the same brand or quality. Secondly, there is price comparison between two sets which are not identical but similar enough to be comparable. Thirdly, there is price comparison between two sets of goods similar but not comparable. If the comparison were false in the third case it would be because the rival goods were mis-described, because to say they were comparable was, by implication, to apply a false description to them, and if I understand the Bill correctly it is equally wrong to apply a false description to somebody else's goods as to apply it to one's own. If I am right in that, this would be caught under Clause 3, even under Clause 2. The reason for putting in "same or comparable" is that there does not seem to be any reason why comparisons should not be caught by the clause if, in fact, they were false. As the clause is drafted at the moment, that would not be so, unless there was a very wide and woolly interpretation of the word "descriptions", which I cannot believe is intended in this connection. I beg to move.

Amendment moved— Page 6, line 31, leave out from second ("the") to ("were") in line 32 and insert ("same or comparable goods").—(Lord Drumalbyn.)


I support my noble friend fully on this Amendment, but I have another reason for doing so. The words "goods of the same description" are taken from the Trade Marks Act 1938 and are possibly some of the most obscure words in that "fuliginous" Act, to Use a word used by Lord Justice Mackinnon about one of its sections. To define "goods of the same description" is a matter which usually takes one to the Courts of Appeal of the House of Lords. I can give your Lordships some examples. Shoes and shoe polish were held to be goods of a different description. Mustard and semolina were held to be goods of a different description. On the other hand, ice-cream and jelly were held to be of the same description and so were wines and spirits. Strange to relate, by a recent description rum and rum cocktails were held to be goods of a different description. I hope that my noble friend will not retain this phrase in the Bill because I am sure that lay magistrates are going to have a lot of trouble with it. Otherwise, I am glad that my noble friend is going to withdraw his clause and that it will be remodelled, and I hope that note will be taken of the point. I beg to support my noble friend.


I am certain that the lucid explanation of his point of view by the noble Lord, Lord Drumalbyn, will be helpful to the Parliamentary draftsmen who will have to work on this clause. I agree with him that the problem is to get the Bill drafted in such a way that it is easy to construe. It is the construction that we put on these clauses that will be important when the Bill is turned into an Act. If I may give the point of view of the Department concerned, it may be helpful to the noble Lord to understand what we are driving at. The word "description" does not frighten us unduly. It has been used as a perfectly common word equivalent to "class" or "kind", and has no technical meaning in this clause. In the opinion of the Government, the Amendment as drafted would unduly extend the scope of this clause. In subsection (1) the expression "goods of the same description" means goods that are identical in all respects. To replace it by the expression "comparable goods" would mean that a retailer would be liable to prosecution in a much wider range of cases.

There is much room for argument about when goods are comparable, as the noble Lord, Lord Cawley, has reminded us. Indeed, the effect of the Amendment might well be to bring in claims which are not really claims to reduce prices, but claims to be offering better value for money and, as we know, this is impossible to define. In the view of Her Majesty's Government, the result would be a wider, vaguer and less easily enforced provision. For this reason, I should be grateful to the noble Lord if he would withdraw his Amendment.


If we are giving hints and tips to the draftsmen on how to draft the replacement clause, would they look at this phrase "or are being offered by others". I think that by trying to bring in that particular concession he is landing himself in a lot of unnecessary difficulty, because, presumably, subsection (3)(a) qualifies that the same as everything else. It means that if a trader—and I believe it is rather unethical, and is not usually done—puts up a notice saying that something is two guineas cheaper than the one sold by the chap up the road, he has not only to satisfy himself that that is so to-day, but also that it is two guineas cheaper than the one the chap up the road has been offering for a substantial period. The whole conception has become so complicated that I should be inclined to leave it out.


I find it a little difficult to understand exactly what the noble Lord, Lord Winterbottom, has in mind, because he has said two things. At one time he was saying that "description" was understood as "class"—in fact, I think at one time he said it did not have a meaning.


If it will help the noble Lord, I will say again what I said. "Description" is a perfectly common word equivalent to "class" or "kind" and has no technical meaning in this clause.


I see: it has no technical meaning. It is a general word like "class" or "kind".




The trouble is that "class" or "kind" is much wider than the words "the same goods". If you take in the class or kind that is bound to comprise goods of different size and different in quality. "Class" is not a very narrow thing: it is wider than "same". "Class" is really considered as being more than goods absolutely identical. Yet the noble Lord said that the comparison here is intended to catch only goods that are absolutely identical. The noble Lord has now understood what the clause is intended to mean, and we have to consider whether it is right to have a class confined so narrowly as that. All I can say is that a great many of the abuses concern comparisons of price as between comparable goods, and if this is not to be caught, it will mean that it is left outside the legal prohibitions altogether. I think this is something that has to be carefully considered in its implications. Again, I do not think it would be right to pursue it at this stage, but, for my part, I shall certainly be pleased to accept the invitation of the Government to discuss this matter with them further. On that understanding, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

3.24 p.m.


moved, after subsection (2), to insert: ( ) A person shall not be convicted of an offence under this section if an indication appears on any goods which he supplies or offers to supply for re-sale or any container or advertisement for those goods that the price has been reduced by a specified amount, if he has reduced his price by an amount sufficient to allow the goods to be re-sold at a price reduced by the specified amount.

The noble Lord said: This is an attempt to deal with what some people regard as an abuse that is certainly widespread; that is, the technique of marking goods "3d. off", or anything of that sort. People are inclined to say that it tells them nothing, and they ask, "Off what?". I have always felt that a moment's thought would tell them the answer. If we may just occupy a moment or so, let us see what it is.

It seems to me that "3d. off" is an indication put on by the manufacturer, and not by the retailer. Furthermore, as everybody knows, the manufacturer can no longer dictate to the retailer the price at which he must sell. The words, therefore, can mean only that the manufacturer is claiming that he has reduced his price by enough to make it possible for the retailer to reduce his price by 3d. If that claim is true, then the manufacturer ought not, in my view, to be taken to court and convicted simply because the retailer may have pocketed the difference—not that that is likely to happen very often. But the retailer is perfectly entitled to vary his price, and could, for example, offer the goods for more than the 3d. reduction one day and then return to the 3d. reduction the next. Every shopper knows that, or ought to know it, by now. All the manufacturer is doing is to say what he has done with his price, as a rule for a limited period, and sometimes in a limited area.

At a time when it is important that prices should not rise in the shops, and when manufacturers are expected to cut their prices if they can, to me it makes sense to allow manufacturers to continue this practice, because it pretty well forces retailers to pass on to their customers any reductions made by manufacturers. That being so, it seems to me to be against the public interest that manufacturers should be forced to discontinue this practice for fear of falling foul of this clause. Of course, if the retailer did pocket the difference, and did not reduce his price, he might well be prosecuted. If he does not choose to run the risk he has his own remedy, in that he need not accept goods marked in this way. But at least the manufacturer ought not to be prosecuted if he has played his part and done enough to justify the claim. The point in moving this Amendment is to find out what is the Government's attitude and their intention by this Bill in regard to what is a widespread and, I would almost say, established practice. I beg to move.

Amendment moved— Page 6, line 40, at end insert the said subsection.—(Lord Drumalbyn.)


I should like to support the noble Lord, Lord Drumalbyn, on this Amendment for the reasons that he has given, and also for an additional reason: that this method of reducing prices, to which the noble Lord referred as "3d. off", is a useful form of manufacturers' promotion in introducing customers to new lines, and is used extensively and quite openly in respect of fast-moving consumer goods. As the noble Lord has said, there is grave danger that the clause as at present drawn may put such promotions as I have indicated at considerable risk. Following the noble Lord, I, too, shall be interested to know what my noble friend has to say, and what form of interpretation he puts on to this clause and the implications which the noble Lord, Lord Drumalbyn, and I have raised.


My noble friend has asked me what interpretation I put upon this clause, and I will say at once that it happens to be completely the opposite interpretation put upon it by the noble Lord, Lord Drumalbyn. As I see the situation, no retailer would display in his shop a packet with "3d. off" printed on the packet in large letters unless it was part of a promotion campaign agreed between himself and the manufacturer.

It is the view of the Government that the noble Lord's view is based on a misconception. Take the case of a manufacturer of soap powder who makes up his product in the packets in which they will ultimately reach the consumer, and marks those packets "3d. off". We believe that when the manufacturer sells such packets to the retailer he is not indicating that his price to the retailer is 3d. less than that at which he previously supplied him with soap powder—


I did not say that. I said that he cut the price sufficiently to enable the retailer to take 3d. off.


I am saying the contrary. He is saying in this statement that he is not indicating that he has reduced his price to the retailer.


Not at all.


Not at all. It is the same as before, but it is part of the promotion campaign. The retailer is taking a lower margin than before. Therefore, there is no question, in those circumstances, of the manufacturer's committing an offence under Clause 11. The same is true where the manufacturer advertises a price reduction and it is clear that the price referred to is the price to the consumer and not the price to the retailer. In so far, therefore, as the Amendment seeks to protect the manufacturer or wholesaler in such cases, it is unnecessary. It is for this reason that I ask your Lordships to reject this Amendment.


I was glad to hear the noble Lord, Lord Winterbottom, disagree with the interpretation put on this by my noble friend Lord Drumalbyn, because I could not make head or tail of the clause. As expounded by the Minister it certainly makes slightly more sense to me than it did when explained from this side. Could we have a distinguished neutral on the subject? Could the noble Lord, Lord Sainsbury, say how he interpretes it, because I imagine that he has spent much of his waking hours on it.


I am grateful to the noble Lord. I think his particular interpretation might well be something that happens occasionally. My information is that it is not something that happens normally. This illustrates how very wide is the spectrum we have to cover in cases of this kind. I am afraid the upshot of this is that very little guidance is given as to the legality or otherwise of this sort of practice. All the noble Lord has said, in effect, if I understood him correctly, is that it will depend on the circumstances; and the circumstances he indicated, he said, would be legal. He did not pronounce on the circumstances I indicated. But again I think we have done enough in airing this problem to enable the Government to continue studying it. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.


moved, in subsection (3)(a), to leave out "the contrary" and insert "a different meaning". The noble Lord said: This Amendment is very nearly a drafting Amendment. The words that appear in the context are "the contrary", and the clause at present states that an indication that goods are being offered at a higher price by others shall be taken, unless the contrary is expressed, as an indication that they are being so offered by others carrying on a business which is comparable as respects prices at which goods are offered in the course thereof. It seems that what is intended is that it will be perfectly lawful for the person offering the goods to attach to the price comparison any different meaning from the meaning that is implied here; and, as that appears to be the intention, it seems to us that "a different meaning" would be the right words to use, rather than "the contrary". There is no contrary of "a substantial period within the preceding six months". There might be a contradiction, but not a contrary. I think the present wording is wrong in logic, and in the English language, and I think my words are simpler. I beg to move.

Amendment moved— Page 6, line 44, leave out ("the contrary") and insert ("a different meaning").—(Lord Drumalbyn.)


Her Majesty's Government in fact agree that the noble Lord's wording is somewhat superior to their own, though equally complex. It is not certain that the Amendment would alter significantly the practical effect of subsection (3)(a). Nevertheless, if the noble Lord is willing to withdraw it, we will certainly consider his Amendment in the context of our proposed further examination of the clause as a whole.


I am much obliged to the noble Lord. On that understanding, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.


moved, in subsection (3)(a), after "period" to insert "appropriate to the goods". The noble Lord said: This Amendment deals purely with the interpretation of the word "substantial". Some misgiving has been expressed that the courts will tend to give a rather fixed meaning to the word "substantial" in relation to the period of six months. I think it is intended by the Government that it should be a relative and not an absolute term. What is a substantial period in relation to some kinds of goods may not be substantial in relation to others. It is not the same, for example, for cabbages as for motor cars; not the same for ladies' ready-made fashion goods as for gentlemen's bespoke suits. It seems desirable, therefore, that the wording of the clause should draw the attention of the courts to the relative character of the word "substantial", and that is the purpose of this Amendment. I beg to move.

Amendment moved— Page 6, line 45, after ("period") insert ("appropriate to the goods").—(Lord Drumalbyn.)


I am not sure that this is the essence of the "spoil-sportness" of this particular clause, because it means that if the goods have had to be at a certain place for a "substantial period", in the preceding six or eight months, or some period as defined by my noble friend, they will have had to be there in fact. As your Lordships are well aware, most goods in sales, in shops that have sales, have never been there before. In fact, I have often made the department manager of a certain store blush when I have walked into his department in the middle of a sale and asked him, "Are there any goods here not brought in specially for this sale?". He has generally had to confess that there were not; or at any rate that there were remarkably few. Therefore, this is the clause which, so far as I can see, is going to "kill" the idea of having a sale at all.


When I listen to the noble Lord, Lord Hawke, I have the greatest possible sympathy with him. When I tried to study my share of this Bill, I felt that much the best thing to do would be to pass a single clause which enforced all retail establishments to put over their doors a notice, "Let the buyer beware", and leave it at that; and I think we should get just as good results. Nevertheless, we must do our duty.

In reply to the noble Lord, Lord Drumalbyn, I think there is something in what he says. Clause 11(3)(a) provides that an indication that goods were previously offered at a higher price, or at a particular price, shall be taken as an indication that they were offered at that higher or particular price for a substantial period within the preceding six months. I agree, of course, that what amounts to a "substantial period" must be affected by the nature of the goods concerned—the noble Lord referred to the difference between cabbages and cars—and this is obviously relevant. I suggest, however, that the Amendment is unnecessary. What amounts to a "substantial period" in this context must depend on al] the relevant factors, of which the nature of the goods is only one. It is undesirable and unnecessary to specify just one of the factors to be taken into account—this limits things unnecessarily—and for this reason I ask your Lordships to reject the Amendment.


I wish to comment on what the noble Lord, Lord Hawke, said. I do not dissent in general from his remarks about sales, but I think it would be good to place on the Record that, certainly in London, and I imagine in some provincial cities, there are stores which take a contrary and very reputable view. I should like to pay tribute to the Retail Trading Standards Association, which has asked its members, when they hold sales, to put on their price tickets, "Member of the Retail Trading Standards Association", which carries with it a guarantee that the price crossed out is the real price of the goods sold in that store prior to the sale, and that the cheaper price is a real sale price. I can think of one large organisation in this connection—there may be others. I can remember seeing in the stores of the John Lewis Partnership, when the sales were on last autumn, cards in the various departments which explained to customers how goods for sales were obtained. They explained that they were goods held in the stores which, for some reason or other, had not been sold. Or perhaps it was that the buyer wanted to get a new range. It explained the whole system of reductions. While I am not dissenting from the fact that, I think, there are many fraudulent practices in sales, I believe that some reputable stores do a very good job in this respect, and I think we should pay a tribute to them.


I agree with the tribute the noble Baroness has just paid to the majority of stores. So far as what my noble friend Lord Hawke has stated is concerned, of course if the goods are brought in particularly for the occasion, then the question of the comparison with the price at which those goods were sold previously can scarcely arise. That is not what we are talking about on this particular Amendment. In view of what the noble Lord has said, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

3.40 p.m.


moved, to leave out Clause 11 and insert the following new clause:

"11.—(1) If any person offering to supply goods of any description gives, by whatever means, any false indication, direct or indirect, of the price at which he was previously supplying the goods or at which any other person is offering the same or comparable goods he shall, subject to the provisions of this Act, be guilty of an offence.

(2) For the purposes of this section—

  1. (a) any such indication that goods were previously offered at a higher price shall be taken, unless a different meaning is expressed, as an indication that they were so offered for a substantial period within the preceding six months;
  2. (b) a person advertising goods as available for supply shall be taken as offering to supply them;
  3. (c) in considering whether or not the period is substantial in relation to the goods, regard shall be had to their nature."

The noble Lord said: We now come to consider the clause as a whole, and I am afraid at this stage I must trouble your Lordships with a wider consideration of the clause. I think it is important to recognise, and it is of course emphasised by the heading, that it differs in character from the previous clauses. We have been dealing with the attributes of goods, characteristics which are ascertainable as a matter of analysis or historical inquiry, and what is said or implied about them. Goods are offered for sale by description or by brand name, which is a shorthand way of describing them. It is assumed that all cartons of a particular pack of washing powder have identical characteristics. It is assumed that all cars of a particular type are the same, except possibly for colour—or as nearly the same as the limits of man-made machinery and human error will permit.

But price varies from time to time, from town to town, and from shop to shop—and even from transaction to transaction. Indeed, this is what the Resale Prices Act sought to achieve. The price marked on the goods is the price at which they are being offered for sale. It is always open to the purchaser to make a counter-offer. Of course, if one made an offer at a self-service store one would probably get a dusty answer, unless the goods were obviously damaged; and in the same way if one wrote and offered a lower price for goods that were advertised in a bargain space advertisement one might wait for ever for a reply. But the fact remains that the price tag is an offer to sell at a price not higher than that marked, and it is no argument to say that most consumers will either buy at that price or go elsewhere. Of course they will; but that does not alter the nature of price, which must be agreed, even if under duress on the part either of the seller or of the buyer.

It is perfectly legitimate for the supplier to tell the public that his price is lower than it was, or is lower than the price at which the public can buy elsewhere, and it was on this point that I was slightly concerned with what the noble Lord said about banning comparative prices except in certain defined cases. It is, after all, in the interests of the public to be told when they can get a good "buy". The difficulty is that a statement made at nine o'clock in the morning may be falsified at five minutes past nine when the shop down the street brings its price into line. What happens if a weights and measures inspector comes along at ten minutes past nine? It so often happens that the price from which an article was originally reduced, and which is used to compare the price at which it is now being offered with the price at which it is sold elsewhere by other persons, is reduced also in the other shop, and so a false statement is being made, the statement having been falsified by the fact of the shop next door altering its price.

The clause as drafted implicitly admits the difficulty. What is meant by the price at which goods "are being offered by others"? Even if the goods are identical—a particular brand of goods of the same vintage, so to speak—how many others must there be? Does the plural include the singular? Are two others enough? All this is vital to the interpretation of the clause. I suspect that the Board of Trade would have liked the clause to refer to the normal or usual price. But how do you establish the normal or usual price—even in a particular locality? The object of the Resale Prices Act was to ensure that there would be no normal price. In a competitive market, prices do, and should, vary from day to day, and from hour to hour.

It might be possible for the Board of Trade to define by order what is meant by a normal or usual price under Clause 7, so that the public would know that the "normal" or "usual" price meant the price at which the supplier himself usually sells, and nothing else. Is not what is said about price an "expression used in relation to goods"? Perhaps the Bill should make clear that this applies to prices but, if it did so, it could relate only to identical goods and not to similar or comparable goods, although I recognise that the Government do not intend that it should relate to comparable goods.

I do not want to give the impression hat I am in any way opposed to steps which will protect the consumer from being misled as to price. Far from it. Nor do I differ from organisations which seek to protect traders from other traders who try to obtain an unfair advantage by misrepresenting their prices in relation to those charged by others. What I want is that any legislation should be both rational and enforceable, and I have serious doubts whether the clause as it now stands is either. At present the voluntary control requires that price claims, like all other claims, should be capable of substantiation. Admittedly, the voluntary system does not work perfectly, any more than any statutory system does or could, but it is gradually becoming more effective. Its strength lies in the fact that it has the support of decent traders. I think the noble Lord and I are at one in seeing the voluntary system and statutory controls not as alternatives but as complementary to each other.

In the matter of price—and I am here talking only of price and value—there is a serious risk in the field of advertising that if the law proved unenforceable the consumer would be worse off than he is now, because there would be an opportunity for dishonest traders (and there are some, though they are proportionately few) and even for honest traders who had made an honest error of judgment, to refuse to comply with the rules of the voluntary system and the decisions of the Advertising Standards Authority as to their application, and to say, "I am doing nothing against the law. If you disagree, prosecute me". Therefore, if the law proved unenforceable—and there is a strong body of opinion which says that as at present drafted Clause 11 would prove unenforceable—the last case would be worse than the first. The voluntary system would also be weakened and dishonesty would increase. I think that is the great difficulty of this clause.

To summarise, I hope the Government will look at this clause again and will consider these points. I think there are good grounds for believing that the clause drafted as loosely as it now is would seldom prove enforceable. It could be argued that it would be better to leave it out altogether. That is not my view. But I do submit that it should be confined to misstatements of ascertainable fact and not extended to matters of opinion.

To some extent this is a matter of degree. If the clause is to cover comparable goods, it may be difficult to say that a price comparison is false if the differences are small. On the other hand, there may be no doubt at all if the trader states that his price is 25 per cent. below that at which comparable goods can be obtained elsewhere. There is an element of opinion here, but it lies within the range of trade description, not price. As the Bill is drafted, a person commits an offence if he applies a false trade description to any goods, not merely to goods which he himself is supplying or offering to supply. The range of prices for goods of different quality can be ascertained as a fact, though not easily; but to ascertain the normal or usual price would require a full survey. Opinion, then, may enter into a comparison of quality, but on price I hope that the Government will confine the clause to what can be ascertained as facts. It will be difficult enough even then.

Finally, is the clause intended to catch statements as to value or worth? I ask this because if it does not, its effect will undoubtedly be that less scrupulous traders will cease to compare the prices of their goods with the prices charged elsewhere and will rely on statements such as "Worth £50; our price £30". It is difficult to see that if anyone were prosecuted for such a statement under Clause 11 (3)(b) he could possibly be convicted. But doubts have been expressed. Therefore, I hope the noble Lord will give an answer to that particular question and will make clear the intention of the Government. I beg to move.

Amendment moved— Leave out Clause 11 and insert the said new clause.—(Lord Drumalbyn.)


I think the value of the noble Lord's speech on his Amendment is his statement of his view of the problems of drafting such a clause and his approach to it. May I get one point out of the way before replying to that Amendment? It is on this question of value and worth: statements like "Value £4 for 35s."; or "Worth £5". As of now, we do not believe we can catch this mis-statement. As of now, "value" and "worth" used in this way are outside the scope of the Bill, as drafted. If the noble Lord can think of any way of overcoming this difficulty we shall, I know, be grateful; but it is difficult. I agree with him completely that legislation of this sort must be rational and enforceable, and that it should be based only on cases where there has been a mis-statement of an ascertainable fact. I would say that these are very important principles which should lie behind the drafting of this or any similar clause.

One point made by the noble Lord which struck me as being extremely important was the point about a claim which may be correct at 9 o'clock in the morning but may be falsified, and therefore false, by 9.15. If a statement is made saying, "10 per cent. cheaper than any shop in this street", this can, of course, be corrected very quickly by the neighbouring shopkeepers. It is obviously a state of affairs for which the actual shopkeeper cannot be blamed. I think I have stated Her Majesty's Government's attitude to this clause. We are asking for the help of this House to study and comment upon it, and we shall be turning to the noble Lord opposite and other interested parties in the light of to-day's discussion to provide a new clause which we hope will be a better clause by the time the Bill reaches another place.

House resumed.