§ 2.47 p.m.
§ THE PARLIAMENTARY SECRETARY, MINISTRY OF PUBLIC BUILDING AND WORKS (LORD WINTERBOTTOM)
My Lords, I beg to move that this Bill be now read a second time. Some of you will no doubt remember that a previous Bill, which ran along very much the same lines as the present one, was given a Second Reading by this House in February, 1966. For reasons unconnected with its merits, that Bill did not reach the Statute Book; and for one reason or another it has not proved possible to renew these Government proposals to your Lordships before now. The need for better protection of buyers against misdescription impressed the Molony Committee on Consumer Protection. The Government are no less impressed, and I am particularly glad to have been given this opportunity to commend to your Lordships a measure which we believe will be of real value to the consumer and will prove to be a landmark in the history of legislation to protect him.
The Bill is firmly founded on the recommendations of the Molony Committee. That is not to say that we have followed their recommendations in every respect; but where we have departed from the advice they gave we have done so only after careful thought and in the firm conviction that we have found a better answer. We have, moreover, taken our proposals beyond the field covered by that Committee, where we believed that the facts of life in 1967 made this appropriate. And we have taken account of some of the helpful suggestions which were put forward in this House early in 1966. There will, I know, be a number of points of detail at which your Lordships will later wish to look closely—and, if I may say so without being thought presumptious, rightly so, for this is a measure which will touch the daily lives of all who buy or sell. But I feel sure, my Lords, that it will commend itself to you as an essentially sound and necessary Bill.
My Lords, it is many years since Parliament first legislated on the subject of misdescription. The general law on this 593 subject has from time to time been extended and amended, and now rests on the complex series of the Merchandise Marks Acts, 1887 to 1953. This Bill essentially seeks to do four things: first, to bring together this complex of laws and restate them, as simply as may be, in a single Statute; secondly, to redefine its scope so that, in the circumstances of to-day and for as far ahead as we can hope to see, it will prohibit all those deceptions concerning goods or services which, for the consumers' protection, deserve to be treated as criminal offences; thirdly, to enable us to act when need arises for more positive measures to resolve uncertainties or even require that information be given; fourthly, to ensure that the requirements of this law are positively and uniformly enforced.
It is not the purpose of this Bill to impose harsh or onerous requirements on traders. On the contrary. It asks no more than that all should observe the standards of honesty which I am quite sure that the great majority of traders already follow. In that sense it will serve to protect the worthy majority from the unfair competition of the unscrupulous minority. It is necessarily drawn in strong terms, and it demands a high standard of care from those who describe their wares; but equally it recognises that those who have observed this standard of care should not be penalise for happenings beyond their reasonable control. This, and no less, is required to safeguard the shopper and the honourable trader.
My Lords, this is not a long Bill, but it contains a great deal of important matter. In the limited time available this afternoon, I do not think that the House would wish me to review every aspect of its provisions, some of which—necessary though they are to the proper functioning of this legislation—are better examined at a later stage. But with your Lordships' permission, I will outline its plan, and the significance of its main features.
We begin by defining the two basic offences as regard the misdescription of goods. They are essentially the same as in the old merchandise marks legislation—in simple terms, misdescribing goods, and trading in misdescribed goods—but in the latter case the definition is widened to cover methods of disposal which are 594 not in the strict sense of the word "sale". It would have been possible, I suppose, to leave the offence of misdescription defined only in those very broad and general terms. But that would be most undesirable. If we embraced misdescriptions which are only marginally inaccurate, and misdescriptions which relate to quite unimportant characteristics or to matter on which the accuracy or inaccuracy of the description is not a matter of ascertainable fact, and provided no guidance as to what matters and what does not, we should not be strengthening but should be weakening the impact of this law. The resulting uncertainties could only create confusion and difficulty for trade, for enforcing authorities, and for the courts.
We have therefore taken care to define very clearly all those characteristics of goods which can be factually assessed and which are likely to be important to the buyer, and then made it clear that a misdescription of these characteristics is to give rise to an offence only if it is "false to a material degree". But we recognise that the misleading description can be as dangerous as the literally false one; so that, too, is covered, with a careful definition of what we mean by misleading. We also pick up the special case of the claim to comply with a standard when in fact no such standard exists. In these respects we are essentially following the pattern of the existing legislation, though refining and extending it in detail to match the needs of 1967. There are, however, two further provisions which I would especially stress, which your Lordships will find in Clause 4(2) and in Clause 5.
We propose to establish that an oral misdescription shall be an offence. From the consultations that have taken place before the introduction of this Bill, we know that this will not be universally welcomed. I dare say that we may have considerable debate about this later on. For the moment I will say merely this: that having taken careful note of what has so far been said to us about the alleged difficulties, we remain firmly convinced that they are far outweighed by the importance of establishing the principle that a misdescription by word of mouth is every bit as reprehensible—and every bit as damaging to the consumer—as a misdescription in writing. This is 595 not a piece of theoretical reasoning. It is borne out by the hard facts of the market place—and of the doorstep.
We are also proposing the necessary steps to ensure that misdescriptions in advertisements are brought adequately within the Bill's control. This has been a source of some difficulty under the present law, which can operate only where the buyer has taken special steps to link his purchase with the advertisement—steps which have little relationship to normal shopping practice. They have even less reality in present-day circumstances, when, as your Lordships well know, people walk into the shop and order branded goods on the strength of what they have been told by an advertisement on television or in the national Press. If such advertisements are false, the provisions of Clause 5 will make it possible to deal with them accordingly.
I turn now from these provisions regarding the misdescription of goods to the important new powers which Clauses 7, 8 and 9 would confer on the Board of Trade. The first would enable the Board of Trade to define terms used in describing goods. This reflects the advice of the Molony Committee, who drew attention to the way in which certain words may be used to suggest to the consumer that goods possess certain characteristics—which they do possess, but to nothing like the degree which the customer, not unreasonably, expects. Yet because the words cannot be shown to have a precise meaning, it has not been possible to bring the misdescription law to bear on them. A power of definition would enable the Board of Trade to remove such uncertainties.
The power proposed in Clause 8 is a labelling power. It would enable the Board to require classes of goods to be marked with prescribed information or instructions where this seemed necessary or expedient in the interests of consumers. There is no such general power at present, although there are some Statutes which enable marking to be required for particular goods or particular purposes. But we consider that the consumer's interest in having information about the goods which he is purchasing demands that such a power be taken, to be used if it is required. Like the Molony Committee, we hope that the enlightened policy of 596 manufacturers in introducing voluntary labelling will make its exercise a rare necessity. In this connection, I am sure your Lordships will join me in extending a warm welcome to the launching of the "Teltag" scheme by the Consumer Council.
This may be a convenient point to remind the House that one effect of the Bill would be to repeal the Merchandise Marks Act 1926, which among other things enabled orders to be made requiring indications of origin. Such orders as have been made under that Act will continue temporarily in force, in accordance with Clause 40 of the Bill. Your Lordships will observe that the terms of the enabling powers in Clause 8 are wide enough to enable orders requiring origin-marking to be made, subject to the rather different criteria specified in that clause and to the non-discriminatory provisions of Clause 10, which better reflect our international obligations.
As a corollary to the labelling powers, we are proposing in Clause 9 the creation of 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. Later in the Bill your Lordships will find provision to ensure that all these order-making powers are exercised only after due consultation with the interests affected and after due notice has been published.
The next group of clauses, Clauses 11 to 14, deal with certain sorts of misstatement which, while not constituting false descriptions of goods, may none the less cause the consumer considerable damage. I know that many of your Lordships will be pleased to see that we propose specific provisions to deal with the nuisance of dual pricing. It is not, of course, our intention to inhibit genuine price reductions; indeed, we should like to see a great deal more of them, with all due publicity. What we are trying to stop here is the false or exaggerated claim about such reductions—the claim that the price has been reduced when in fact it has not, or that the price has been reduced appreciably when it is only a trifling cut, and so on; and also certain deceptive practices whereby a customer may be deceived into thinking that goods are being offered more cheaply than they really are.
597 Clause 12 is basically a refurbishing elaboration and broadening of a principle established in the existing law. Clause 13 is, however, a major innovation. For the first time, it brings certain statements about services within the scope of this legislation. This subject was not considered by the Molony Committee, simply because it would have involved them in a mammoth task and delayed their Report unduly. The Government, however, are satisfied from the experience of departments, from cases brought forward in the Press, and from reports from many other sources, that an attempt must be made in this Bill to give the consumer some protection against mis-statements made about services. This is a tricky area to venture into, for a service is not tangible in the way that goods are. Its performance can often be judged only after the event, and many factors can enter into an assessment of it. I am not now going to elaborate upon the solution we have put forward. But I should like to emphasise that we have taken care to frame the clause so that it will bite only on those who deliberately or recklessly misdescribe the services which they are in a position to offer. It is supported by proposals for a power, similar to that which Clause 7 seeks in relation to goods, to define terms used in describing services.
Clause 15 provides an express ban on the importation of goods bearing false or misleading indications of origin. In the following clause are provisions enabling trade mark proprietors to enlist the help of Her Majesty's Customs and Excise to prevent the entry of goods which bear their marks without their authority. These differ from the existing provisions, which had in practice become of very little value. And here I might mention that the Bill—unlike the legislation it is designed to replace—does not include the unauthorised use of a trade mark among the matters which constitute a false trade description. Nowadays trade marks law gives the mark-owner adequate opportunity to defend himself against misuse of his mark, and we see no point in duplicating the law on this point.
My Lords, I think it is fair to say that the first sixteen clauses which I have been describing contain the pith and substance of the Bill. They protect the 598 consumer by establishing appropriate offences; they provide powers to be exercised in his interests, and they cover particular types of mis-statement which may do him damage. The remaining clauses fill in this framework. They provide the detail, say how it is to work, and who is to enforce it and how; they provide suitable enabling powers and supplementary powers, what powers the enforcing officers shall have, and so on. They include a clause laying a duty on the larger local authorities to ensure that the Act is properly enforced. All these are important provisions, and none more so than those which specify the defences which are to be available—defences, which as I said earlier, we have carefully tailored to safeguard the man who has observed the high standard of care which must be required in this field. To all these details your Lordships will doubtless wish to pay close attention at the appropriate time. But I hope that I have said enough to convince the House that this is essentially a sound, important and necessary Bill which we should try to get on to tae Statute Book as rapidly as due consideration permits. My Lords, I beg to move that this Bill be now read a second time.
§ Moved, That the Bill be now read 2a. —(Lord Winterbottom.)
§ 3.5 p.m.
§ LORD DRUMALBYN
My Lords, I should like to thank the noble Lord, Lord Winterbottom, for his careful exposition of this Bill. Your Lordships will greet it as an old friend, even if it has changed a bit in the intervening time. I am bound to say that on the whole I think it has changed for the better, and some of the changes, I am sure, will be welcomed as efforts to meet the views expressed here on the last occasion. Others we may want to look at rather carefully in Committee. But it is plain from what the noble Lord has said that careful consideration has been given to the Bill during the intervening time, to use his words, "in order to tailor the requirements to the requirements of the Bill".
Your Lordships will remember that we finished only ten clauses in Committee on the previous Bill, so there is a good deal that will have to be looked at with some care. It is fitting that this House should complete the job which it began 599 then before the Bill goes to another place, and I should like to thank the Government for re-introducing it in this House. The main content of the Bill remains much the same, and I certainly do not propose to repeat the speech that I made on Second Reading nearly two years ago. However, there are some things that I think I should say, and as there is to be only one Front Bench speech from this side, I hope that I may be permitted to cover rather more ground than I would otherwise have done.
I should perhaps say right away that I am independent Chairman of the Advertising Standards Authority, which some of your Lordships may know is a body set up by the advertising industry to supervise the working of the industry's own voluntary control system, and consisting of an equal number of persons with advertising interests and of persons with no stake at all in advertising. I need hardly say that I am not speaking to-day for the Advertising Standards Authority, but I can tell your Lordships that the Authority very much welcomes the strengthening of the law along the lines of the Molony Committee's recommendations.
In making its recommendations (I should like to treat this rather broadly) the Molony Committee envisaged an important part for the voluntary system to play once the Committee's main recommendations had been put into effect. It was a matter of great regret to us all that the last General Election brought the previous Bill to an untimely end while it was still in the womb of Parliament. I thought that the noble Lord was a little coy about this. It is only after this measure which we are discussing has been in operation for some time that it will be possible to assess whether the combination of the law provided in this Bill and the voluntary system is really effective.
I think it is plain from this Bill that the Government have decided to give the Molony Committee's conception a run—the conception of an amended and strengthened law on trade descriptions and advertising, coupled with, or rather backed by, the voluntary system which came into operation at about the same time as the Committee reported, and meantime to keep an open mind on what, if any, further changes may prove neces- 600 sary in the light of experience. We on this side believe in relying as much as possible on voluntary action, and we welcome the implementation of the Molony recommendations.
The noble Lord described the four main purposes of the Bill. Perhaps for the purposes of my argument I may say that I visualise this as making changes in three main directions: first of all, to ensure that what is said in advertising about goods by way of description conforms to the same rules as what is said about them in the course of selling them; and, in the language of the Bill, trade descriptions applied to the goods must not be false to a material degree. Secondly, the Bill would make it an offence also to describe goods in a way which is likely to mislead the customer to a material degree. Thirdly, it will cover not only goods, but services, accommodation or facilities provided in the course of business. I do not think there is much disagreement on any of these three objectives. The main source of disagreement may be on the means of supervision and enforcement in the case of misleading descriptions, and it is on this point that I should like to say a few words.
It can be argued that there is a fundamental distinction between deciding what is false and deciding what is misleading. As the noble Lord said, The one involves an objective appraisal, an objective appraisal of characteristics which can be factually assessed, I think it is said; and the other involves a subjective judgment: a subjective assessment as to whether a statement or presentation is likely to mislead. One deals with facts; the other with opinion. The problem, as I see it, is how to frame the law in such a way as to make that subjective assessment as practical, impartial and objective as possible.
I receive many complaints about advertising which is alleged to be misleading, in which the complainant says, in effect, "Surely this is misleading—but, of course, I myself was not misled". One may well ask in reply, "If you are not misled, what makes you think others will be misled?" On the other hand, I also receive complaints from people who have actually been misled, and one then has to consider whether it was the fault of the advertisement or their own fault, or a bit of both. It is not just a question of whether the 601 buyer has been misled, but of whose fault it is, his own or the advertiser's. In my experience it is well nigh impossible to say anything at all which is not misunderstood by somebody, as anyone who has ever held a Press conference will know. In most cases, someone will get it wrong.
The first conclusion from these considerations, I would suggest, is that there must at least be an objective test of whether a statement made in the course of trade or business is misleading. This, I take it, is what the words "to a material degree" are intended to provide. The test should surely be: Has the statement induced, or is it likely to induce, a purchase which the purchaser will regret? We shall have to consider in Committee whether the meaning of the words "to a material degree" ought not to be defined more closely. In any event, people say things genuinely believing that they can be interpreted in only one way, only to find that someone else interprets them quite differently; and it is impossible to get the author of the statement to see how what he said can be so misunderstood. Does it really make sense in such a case that he should be taken to court and fined; or, indeed, taken to court at all? Clearly, it seems to me, there has to be a mediator who can go to the author of the statement and say to him, in effect, "Look. Incredible as it may be to you, what you say is being, or is likely to be, misunderstood. Hadn't you better change it?"
To deal with all this we need provision both for enforcement and for mediation. At first sight, the idea of a statutory body to do both is attractive. I read that the Consumer Council are still advocating a statutory body to supervise advertising, presumably with powers to stop advertising practices of which the body may disapprove, subject, no doubt, to appeal to the courts. They say that what they want is something along the lines of the Federal Trade Commission in the United States. The Federal Trade Commission consists of five distinguished lawyers backed by a staff of 140 or so, whose primary function is the defence of free competition against monopolistic tendencies and unfair or deceptive practices in inter-State trade.
The Molony Committee considered this idea and firmly rejected it, in para 602 graph 794 of their Report. This is what they said—and I quote what appears to me relevant:Having regard to the nature and extent of the residual problem "—that is, after dealing with the legal side—we do not think it necessary to propose a further statutory control, whether as an alternative or as a supplement to the voluntary system … we do not relish the idea of a statutorily backed authority making up the law as it goes along … we are satisfied that the wider problems of advertising ought to be, and can be, tackled by effectively applied voluntary controls".There are, I think, decisive arguments against a statutory board, certainly at present. A case could be made out that, in place of this Bill, we should have a short measure declaring in general terms that it shall be unlawful to describe goods or services falsely, or in a way likely to mislead, and setting up a board to police the Bill. This is the kind of framework applying in America. The Government have clearly decided—and I agree with them—that in the field of goods and services we should stick to Molony, although I think it is fair to add that in the restricted field of drugs and medical devices they envisage something like a Federal Trade Commission kind of solution, precisely because, as they say in their own White Paper, drugs and medicines are not ordinary commodities. But no case at all can be made out for giving weights and measures authorities and a statutory board statutory powers to act over the same field. That is why I think the noble Lord, Lord Winterbottom, spoke about measures that would be positively and uniformly enforced. If we did otherwise, we should have chaos and confusion.
Nor, I believe, can any convincing case be made out for trying to divide the field, ether by laying the duty of enforcement, in cases of false description, on weights and measures authorities, and in cases of misleading advertising, or misleading description, on a statutory body; or else by leaving the duty of enforcement under the Bill to the weights and measures authorities, as provided in the Bill, and adding a statutory board with discretionary powers to tell the advertisers, the newspapers and the I.T.A., and so on, what to do and what not to do in matters not covered by the Bill. Either something is legal or it is not, and we really cannot have statutory boards stopping 603 people from doing what is perfectly legal. It is quite a different thing for professional and trade bodies to make rules of behaviour under which their members agree to abstain from unethical conduct.
Moreover, the functions of such a statutory board could not be confined to advertising. In practice, it is often impossible to separate advertising from trading methods. There may be nothing wrong with the advertising itself; the trouble may lie in the follow-up action. I simply cannot believe that Parliament would be willing to concede the very wide discretionary powers over trade and marketing as a whole which a statutory board would need if it were to be effective. If such a board were set up, it would disrupt, and probably destroy, the voluntary system. However hard such a board tried, it could never, in my view, establish the same kind of relationship of friendly co-operation and common purpose as at present exists, and is growing. It would, I am afraid, create antagonism where antagonism does not at present exist. And I must say that I see the whole of this operation as an operation of co-operation. It is wholly wrong to try to separate the interests of producers, on the one hand, and those of consumers, on the other. What we have to work to is a merging of the two interests, so that they can see for themselves the way in which things are considered and administered.
Lastly, it would be expensive to have such a board. Proportionately, it would probably cost more than the Federal Trade Commission—and I think the cost of the Federal Trade Commission is around £2 million. It deals only with inter-State trade, the various States being responsible for their own trade and consumer protection legislation. I have ventured to deal at some length with this proposal because of its respectable origin. I have no doubt it will be given an airing to-day, and after that I hope it will be put away in the cupboard until we can all see how the present Bill works out in practice.
May I touch on one or two particular points? The noble Lord said that there were many points of detail, and I should like to deal with one or two. The first is the omission of the so-called "bypassing" provision, which appeared as 604 Clause 23 in the previous Bill but has disappeared from this Bill. It permitted a defendant to notify the prosecution of the name and address of a third party who he claimed was responsible for the offence. It reproduced, in substance, Section 113 of the Food and Drugs Act 1955, and was included on the recommendation of the Molony Committee. What is left of it now appears as Clause 22. The National Chamber of Trade considered that the previous clause did not give enough protection to retailers. I wonder whether the noble Lord, Lord Brown, who is to reply, can tell us why the clause has been so drastically changed.
Retailers, in particular, feel that the Bill as drafted exposes them to prosecution unfairly. A retailer cannot be expected to know whether a statement on a manufacturer's tag, for example, that goods will not shrink is true. Retailers therefore feel that it should not be possible for someone to take them to court and make them prove what is perfectly obvious: that they did not know, and could not with reasonable diligence have ascertained, that the statement was untrue. Nor do they think that they should run the risk of being brought before the courts for orally telling the consumer what is on the label, instead of saying, "Read the tag for yourself".
I am not saying that it is wrong altogether to regard oral misdescriptions as being an offence, although I thought the noble Lord went rather further than the Bill appears to go. He said, if I understood him aright, that oral misdescription shall be an offence, whereas the Bill is a good deal more moderate than that. It says in Clause 4(2):An oral statement may amount to the use of a trade description".That does not seem to be quite the same thing. We shall have to look carefully at the defences—and I am sure the Government want to do this—in order to ensure that they are fair for all; the manufacturer, wholesaler, retailer, advertiser, advertising agent and publisher.
The clause relating to offences originating outside the United Kingdom has also disappeared. I would ask the noble Lord how it is now proposed that offences due to an act or default which took place outside the United Kingdom are to be dealt with. The present situation is unsatisfactory. The Chief Inspector 605 of Weights and Measures for Cheshire County Council said in his last report:In those cases where the goods were imported it was not possible to bring the actual offender before the court as the legislation makes it possible for an importer to plead a warranty defence, even when the warranty had been given by a person outside the United Kingdom. The number of such cases has increased considerably in the past year and it is observed that where such a state of affairs has existed legal proceedings could not be instituted.It is clearly necessary that someone should be called to account in such cases, if only to ensure that home producers are not placed at an unfair disadvantage vis-à-vis foreign producers. It is surely up to the importer to satisfy himself when he buys goods that they comply with the requirements of our law and to obtain an indemnity to that effect to protect himself.
I must tell the noble Lord that we shall call for full justification of the power conferred in Clause 27(1)(d) on weights and measures inspectors to seize and detain any goods which they have reasonable cause to believe are liable to be forfeited under the Act. The circumstances in which a court would be likely to order forfeiture under this Bill do not seem to be likely to occur often enough to justify so sweeping and general a provision. The Government really ought to make up their mind as to the circumstances in which forfeiture would be justified and put them into Clause 17. This is quite different from food and drugs, where seizure may be necessary to remove a risk to health. If so, the goods can be seized under the Food and Drugs Act, and no powers for that purpose are needed under this Bill.
The noble Lord referred to Clause 11, which deals with comparative prices. I think this is the most difficult clause in the Bill. There is probably almost as much deception through dual pricing as in all trade descriptions put together. As the noble Lord said, where a trader has recently reduced his own price, it is quite legitimate for him to give the old as well as the new price. Also, so long as recommended or list prices are permitted, it is clearly permissible to quote them, provided that they are both genuine and current. I stress "current" because it is a common enough deception to refer to a producer's list price, the list having 606 long since been superseded and the producer having reduced his price in subsequent lists. But as soon as a trader starts to compare his prices with the price at which he says the goods are offered by others, beware! Some itinerant traders, it seems, do not bother to find out the normal price; they just "think of a number"—and a pretty high one, too!
The main defect of Clause 11, so far as I can see, is that it only bans false price comparisons of certain kinds and by implication permits all others. For example, to say that goods are "made to sell at" such and such a price really cannot be genuine at all, and I suggest we shall have to consider in Committee a quite different approach—limiting the kind of price comparisons which are to be permitted. There is a strong case for insisting that only the price at which goods are offered for sale should be stated, except where the trader has himself recently reduced his price for the identical goods, or where there is a recommended price.
A good deal of misgiving has been expressed in trade circles about Clause 9, to which the noble Lord attached considerable importance. This empowers the Board of Trade to impose requirements as to the inclusion of information or instructions in advertisements where the Board thinks it is in the interests of the customer to do so. There are many forms of advertising in which it would be manifestly absurd to impose any such requirements—from neon lights to lead pencils, from cinema flashes to book matches. Also, one cannot say much about a product in a 30 second TV commercial, and if one were to prescribe what was to be said it would fill up quite a bit of that 30 second period. I personally believe that the Board of Trade do not intend to impose unreasonable or inappropriate requirements, but I should be grateful to the noble Lord for an assurance to that effect and for any indication he can give as to how it is intended to use the power. This is a very sweeping power which in the wrong hands could do a lot of harm, and Parliament generally dislikes conferring greater powers than the Government can show to be needed to meet particular foreseeable circumstances.
I am glad that the Government have increased the number of days' notice of 607 intended prosecution which a weights and measures authority will have to give, from 14 under the last Bill to 28. This, of course, does not apply to anyone else who may choose to prosecute. It is quite possible that several prosecutions for the same alleged offence could be brought simultaneously by several weights and measures authorities in different parts of the country, and by other persons as well.
What do the Government propose to do to avoid this risk of public time and money being wasted by multiple prosecutions, not to mention the time of manufacturers? This risk is not remote; it is very real. When this measure was last discussed my noble friend Lord Cawley quoted a case where successive prosecutions were brought by a private person in different parts of the country on the same facts until a conviction was obtained. Speaking as an ordinary citizen, I would say that there is something radically wrong with a legal system which permits this. I am sure it could not happen in Scotland! Surely something should be done to prevent it happening in England and Wales. If a prosecutor does not see fit to appeal against an acquittal, the defendant should be free from further proceedings for the same alleged offence under this Bill. I should also like to ask why the old Clause 40, which related to the defraying of expenses, has been left out of the Bill. I hope this does not mean that the Board of Trade will not itself be able to bring prosecutions under the Bill. It is not difficult to envisage circumstances in which the Board of Trade could best do so.
Finally, does the term "services" include those of tipsters, whether in the area of horse-racing or football? Will the Government consider whether provision should not be made in the Gaming Bill, which I understand they are likely to bring forward? Perhaps the noble Lord will say whether this is to be considered, because it is an area where a great deal of deception goes on.
In a highly technical Bill of this kind there are bound to be many points on which there is room for difference of opinion. I have referred to some of the points on which I find myself in doubt or disagreement. But I support the broad 608 structure of the Bill, which not only follows the recommendations of the Molony Committee, but, as I have said, is very much the same as the Bill to which your Lordships gave a Second Reading in February, 1966—indeed, somewhat improved to meet the views which your Lordships expressed in Committee. May I wish the Bill a fair passage. I believe the test of its success will lie not in the number of prosecutions brought under it, but in its general acceptance and implementation, and the extent to which the enforcement authorities and the voluntary systems work together to ensure fair competition and a fair deal for all. It is for this reason that I hope that when the Bill finally emerges on to the Statute Book it will be called the Fair Trading Act, so that it will not appear to be a restrictive measure directed against any sections of the community, but a positive one in the interests of all who buy and sell.
§ 3.30 p.m.
§ LORD AIREDALE
My Lords, I should like to join with the noble Lord, Lord Drumalbyn, in wishing this Bill a fair passage, but I am bound to say that I think that the task of Second Reading speakers this afternoon is rather a difficult one. If it does not sound too conceited, I think I may say that broadly I am still of the opinion that I expressed in my Second Reading observations on the ill-fated Bill of two years ago. On the one hand, I would not presume to invite any of your Lordships to read any speech of mine of two years ago, but, on the other hand, I should not wish to inflict the same speech upon your Lordships again. That creates rather a void for this afternoon. However, I think I could perhaps usefully put forward two warnings that we might bear in mind as this Bill goes through this House.
The first is to resist the temptation, which I think exists rather strongly in this class of legislation, to be too grandmotherly towards the consumer. We shall not, I think, do the consumer much good if we legislate in any way which would encourage him to lower his guard in his dealings with the seller and to forget that very fine common-sense maxim which has been in existence for some centuries, "Let the buyer beware". If we were to lull the consumer into a sort of false sense of security we should not be doing him a service in the long run.
609 Secondly, I think we should be very careful in Committee not to get bogged down in too great detail. I do not know what your Lordships who attended the Committee stage of the last Consumer Protection Bill felt about it. I notice that the noble Baroness, Lady Burton of Coventry, is to be the next speaker, and the noble Baroness did attend the Committee stage on that former occasion, very assiduously. I wonder whether she will agree with me that we seemed on that occasion to get so bogged down in technicalities and detail that for some of us the General Election came as something of a merciful release from the morass in which we found ourselves.
I am sorry to say that I quarrel with the Title of this Bill. The ill-fated Bill was called the Protection of Consumers (Trade Descriptions) Bill. Who are consumers? Consumers are not a separately identifiable class within the community, like dentists. We are all consumers. So this Bill is for the protection of the whole of society. But then nearly all criminal legislation—and this is criminal legislation—is for the protection of the whole of society. Surely it is more important that the Short Title of a Bill should describe what the Bill is actually about; and what this Bill is about is trade descriptions. I should have thought that the proper Title for this Bill was the Trade Descriptions Bill. But if the noble Lord, Lord Drumalbyn, is going to move an Amendment in Committee to call it the Fair Trading Bill, I shall be very pleased to agree with that, because I feel it would be vastly superior to calling it " Consumer Protection."
There are one or two points I could raise which I think would really be Committee points, but there is one which I might go into in some small detail because I believe it to be fundamental. The earlier Bill, the ill-fated Bill, was peppered with two notable defects. To begin with, it was peppered with the word " calculated", and nobody knew whether "calculated" meant "likely" or whether it meant " intended." We succeeded in Committee in deciding that it meant " likely", and the word "calculated" disappeared from the Bill in a large number of places.
This Bill is still peppered, as was the ill-fated Bill, with the device of deeming something to be something else. Criminal 610 legislation, it has often been said, should be framed in language which ordinary people can understand; it should be absolutely clear and as precise as human wit can make it. The device of draftsmen of deeming something to be something else does not conduce to that end. May I give what I believe to be the most glaring example of this? If your Lordships will look at Clause 6 of the Bill you will find that it says that a personhaving goods in his possession for sale shall be deemed to offer them for sale".Consider the position of a merchant who has a warehouse and a shop. He receives into his warehouse a consignment of goods, probably imported from abroad, and the moment he starts to examine the consignment he realises that the goods are packed in such a way that they would infringe the Consumer Protection Act. So he decides those goods shall remain in the warehouse and shall not be placed in the shop and offered for sale until he has had time to get them properly repacked.
An inspector from the Board of Trade arrives, goes into the warehouse and finds those goods, and he says to the merchant, "You have committed an offence under the Consumer Protection Act, Section 6". The merchant says, "I am not worried about that, because I was not going to offer those goods for sale in the shop until I had got them properly repacked". The inspector says, "unfortunately for you, the section of the Act says that you shall be deemed to offer the goods for sale". The trader comes before the court, and the moment he starts to say to the court, "But I never placed those goods on offer for sale in my shop", the court will be bound to say to him, "But Parliament has said, under Section 6 of the Act, that you shall be deemed to have offered those goods in your warehouse for sale, and we cannot hear you say anything to the contrary". Nobody in England is going to think that that trader has had a fair trial, a fair hearing, in those circumstances. I hope that we shall be able to amend Clause 6 in Committee and have a searching look at all the examples in this Bill of something to be deemed to be something different. All the other points that I could make would really be Committee points. I am sure that we shall have a lengthy, useful and interesting Committee stage, and I very much look forward to it.
§ 3.40 p.m.
§ BARONESS BURTON OF COVENTRY
My Lords, November 14 has particular significance for me because five years ago exactly to this date I had the privilege of introducing in your Lordships' House our first discussion on the Molony Report. We were unfortunate that day, in that our discussions were interrupted by the Vassall case, and I was anticipating that we should be interrupted by something else to-day before I spoke. I am sorry your Lordships have to be detained in this manner, but it is no fault of mine.
Perhaps before I begin it would be fitting to declare the general interest I have in such matters. As I think the House knows, I am a consultant to Courtaulds and I am a member of the Independent Television Authority. As was the case with the noble Lord, Lord Drumalbyn, I should hope that this makes me a little more knowledgeable, but neither would influence me in what I have to say. In common with other speakers to-day, I would welcome this Bill which, of course, lapsed during the last Session of Parliament. I should like to express appreciation to the Government not only for including the Bill in this Session's legislation but also for bringing it up so soon and for letting it start its passage in your Lordships' House. We are most grateful.
One new item greatly to be welcomed is that it will be an offence to make false statements about services, accommodation or facilities, provided these are made knowingly or recklessly. The decision to deal with comparative pricing, a subject which other noble Lords have already mentioned, should be a boon not only to shoppers but to industry and trade alike. As we know, in the past genuine price reductions made by reputable traders have frequently been regarded with suspicion because of the fraudulent practices of the dishonest minority. This is a much needed reform. But I would join with the noble Lord, Lord Drumalbyn, in what he said, for the people with whom I have discussed this aspect and who are really knowledgeable tell me that one could drive a coach and horses through this particular clause of the Bill. I do not know whether you can drive a coach and horses through it, but I think it needs rewording if it is to be strengthened and to be effective. I hope 612 that the Government will take note of that.
Coming now to the Title of the Bill, I am always glad to agree with the noble Lord, Lord Airedale. We agree, I will not say on most things but on a great many. I want to ask the Government about this matter. This time I see that the Bill is called simply Consumer Protection Bill. Last time we had the Protection of Consumers (Trade Descriptions) Bill. There are two points that I should like to raise on this subject. The first is, why the change in title?—why the deletion of " trade descriptions "? Secondly, I should have hoped that we could dispense with a title of " Consumer Protection". I would ask the Minister who is to reply why, if we could dispense with the words " Trade Descriptions", was it impossible to make other changes?
I think that the term "Consumer Protection" belongs to a bygone era; it does not belong to our modern society. Those of us interested in this work believe that we have now moved on to " consumer education", and, as both noble Lords who preceded me have said, we want to see industry in its widest sense, trade and consumer organisations, retailers and shoppers alike working together on consumer affairs rather than discussing consumer protection. I should like to stress this to-day, because I think that we shoppers have responsibility as well as those on the other side of the counter. I personally dislike the term "consumer protection" because I believe we should be rendering a disservice to ourselves and to everyone else if we conveyed a false feeling of security, a feeling that everything would be taken care of even if we shoppers did nothing about it. To me, the word "protection" conveys this impression. On the other hand, "education" implies, I think, that there is a job of work to do.
As the House will know the local authority is now taking a much larger part in this field, and this I am sure is welcomed by us all. I think the House might be interested to know something of the developing co-operation between the local authorities and the citizens' advice bureaux. It is the declared policy of the Council of the Citizens' Advice Bureaux that their Service would welcome more help from local authorities in the 613 field of consumer protection; but also the Council hope that developments will be aimed at supplementing and strengthening, rather than overlapping the work of the bureaux—in other words, here is an opportunity for partnership which has been recognised already in some areas where local authorities have been willing to discuss consumer services with the citizens' advice bureaux.
I have been discussing with the Council of the Citizens' Advice Bureaux informatinon obtained from a questionnaire sent out by them to twenty-one bureaux. These were selected (a) on a regional basis in England, Scotland and Wales, and (b) for their known interest in consumer work. I think we must recognise that because of this known interest these bureaux are likely to have developed a better working relationship with their local authorities than might be the case in other places.
To-day it is possible to mention only a few of the questions in the questionnaire and I have selected five. I am giving only the affirmative replies—those with no qualifications. Two general questions were:Is your Weights and Measures Inspector prepared to talk over with you consumer problems outside his immediate province?Fourteen bureaux answered " Yes". The second question was:Have they ever offered to take action in any of these inquiries?Eight bureaux answered " Yes".
Three questions on independent testing and appraisal were:Is your Weights and Measures Inspector prepared to assist with other aspects of independent testing, for example, advising you about testing facilities, or making transport available to take bulky products to a testing laboratory?Eleven bureaux said "Yes" to this, but three had reservations. Secondly,Would the Weights and Measures Inspector be prepared to visit an inquirer's home to carry out an on-the-spot inspection of, for instance, a worn carpet; and would he give an opinion about whether it might be worth having the article tested?Ten bureaux said "Yes" to that. The third question was:Would the Weights and Measures Inspector be prepared to help with an independent appraisal, for example, asking someone from the Surveyor's Department to look at a prefabricated shed or extension building about which a complaint had been made?Nine bureaux said " Yes".
614 It would not be fair to the House—it would be even more unfair at this moment—to take up more time on such detail, but it is evident from this questionnaire that local authorities are willing to help. The extent to which they are willing to help obviously varies, as one would expect. I believe I am correct in saying that the Citizens' Advice Bureaux would like help throughout the country, presumably at county and county borough level, on the lines indicated by the questions. I find these questions and answers, and in particular the background information that I have had the opportunity to study, particularly interesting and significant in relation to the legal aspect that I hope to develop later in my remarks.
We have come a long way from 1962 when the Molony Report was first discussed in this House, and the work of the Citizens' Advice Bureaux in the consumer field has developed a great deal. I need not remind the House that this work was put on the Citizens' Advice Bureaux by the Government of the day, and the House may be interested to know that the financial position in the current financial year, 1967–68, is as follows. The estimated expenditure of Citizens' Advice Bureaux in the United Kingdom is £74,000. The Board of Trade grant to the Citizens' Advice Bureaux is £42,000. The Board of Trade grant to the Consumer Council is £190,000. I would hasten to say to my noble friend Lady Elliot of Harwood that I am not suggesting a reduction in the grant made to the Consumer Council. But I would ask the House to note these figures: expenditure £74,000, grant £42,000, to which we have to add a grant of £12,000 from the Ministry of Housing and Local Government, making a total of £54,000. But that is £20,000 short of expenditure at the moment—not expenditure in the future, but expenditure to-day. Even allowing for the fact that local bureaux are grant-aided by the local authorities, this gap of £20,000 is certainly not closed.
I raise this financial aspect to-day on my own initiative and not at the request of the Citizens' Advice Bureaux, but I am quite convinced that more money is needed for this work which, I repeat, was laid on the bureaux by the Government of the day. I believe that the Council of the Citizens' Advice Bureaux is quite unable, because of the financial problem, 615 to develop as it should, and indeed to appoint the staff actually needed now to deal with this burden. I would ask the present Government to have a look at this matter and to see whether my fears are correct. The work being done is first-class, and we should at least make sure that the bureaux are equipped financially to staff themselves adequately.
There are various matters which obviously many of us will wish to raise on the Committee stage. For example, I hope that this time we shall be told clearly and simply who is responsible for advertisements. In the case of contravention, who will be held responsible? This, I believe, is a fundamental point of general principle and not one for the Committee stage. Last time many of us tried to get an answer on this point. I do not know whether I am missing out any people, but the noble Lords, Lord Peddie, Lord Tangley, Lord Strabolgi, Lord Airedale and myself, all of us supporting the idea that responsibility should be defined, were unable to get an answer. I accept that the detail can be left to the Committee stage, but the wording of the present Clause 9(3) and that of the past Clause 9(3) appear to be exactly the same. I am quite sure that the Government will realise that we shall obviously hope to be enlightened this time about the meaning of the words, "any person".
To some of us it appears that as the present Clause 24 is exactly the same as the last Clause 25, what the noble Lord, Lord Tangley, said (in column 451 of the OFFICIAL REPORT of February 24 last year) is, unfortunately, still relevant. The noble Lord said, referring to Clause 9(3):The important thing is to say how much is subtracted by Clause 25, and it passes the wit of man to say.My Lords, I hope very much that it will not pass the wit of the Front Bench to tell us this time. I want this Bill to succeed in the widest possible field, and if possible I want it to avoid ambiguity. I hope very strongly that we shall not include in it any provisions incapable of enforcement.
As an example of the type of clause which I believe cannot be enforced, I would cite oral misdescription, which is in Clause 4(2). Here I may well be in the minority—I do not know. The Lord 616 Chancellor does not agree with me, and neither do the Government. I will not quote the Molony Report on this matter because we all remember that Molony, too, thought that it was not feasible. But, even when confronted by such opposition, I remain unshaken in my belief that this subsection is unenforceable. As I said, the Lord Chancellor does not share my view. He has told the House that this aspect is being dealt with all the time in oral contract cases. But surely, in general—and I say this with some temerity—such cases are limited to fairly expensive goods, perhaps a car, where the assistant concerned is easily identifiable. I do not see this being satisfactory where a small purchase is made over a shop counter and where no independent witnesses are available.
Therefore I would ask my noble friend Lord Brown how this provision is to be enforced. Are we to take somebody with us when we go shopping so that we have a witness—and how reliable is that witness? If we have no witness, and the shopper says one thing and the shop assistant another, what is to be done? I suggest that it is not good enough for Government spokesmen to say that nobody has ever suggested that it will be easy to prove or disprove offences which are based on oral misdescription, but this is no reason for leaving out of the Bill an important and useful provision. I maintain that if something cannot be enforced, any Bill is weakened by its inclusion. I have said many times that I agree with what the subsection is trying to do. I agree with what my noble friend Lord Winterbottom said in opening, that it is just as reprehensible to say something that is misleading as to write something that is misleading. Wrong information should not be given. But that is different from having a remedy that will not work.
To turn to another aspect of this matter which I raised last time, we have the difficulty that even the best-intentioned of employers may well feel wary of assistants' giving information to shoppers. And I repeat, I think that we may get less rather than more help when we ask questions about merchandise. It is all very well for people to say that it is better to have no information than to have wrong information. But I believe that, unless we look at this point very carefully, we may well start a trend of 617 less information for shoppers. Everyone in this House to-day will be conscious of the problem of staff training. Certainly the House does not need me to say that there is a considerable turnover of staff in the retail trade. But I would ask noble Lords to remember that the average turnover of staff in the retail trade in the stores to-day is 40 per cent. The whole problem of information at the point of sale is something we have not yet been able to solve, and I would ask the Government to think again before making it more difficult.
Last time and on various other occasions I have raised the question of guarantees, and I make no excuse for returning to it briefly to-day, for a specific purpose. This is obviously a matter of great importance to all shoppers, and with this my noble friend the Lord Chancellor concurs: we have only to study what he said at column 419 on June 23 last year to appreciate that. But could the noble Lord, Lord Brown, give us a progress report? I realise, of course, that the Law Commission marked down for urgent study the general question of exemption by contract from Common Law liabilities, of which exclusion clauses in guarantees is one facet. We accept that we must leave this to be dealt with as part of that larger question. On the other hand, it would be helpful if we could have some idea as to where these matters stand today.
How near are we to decisions on this whole aspect? I am regarding this part of what I have to say today as the legal aspect. To continue with this, I saw in the Sun newspaper recently a statement to the effect that under the regulations we are discussing a housewife or organisation would be able to take a case to court. As the House knows, this was the position before the introduction of this Bill, but I should like to pursue this aspect because it is one of considerable importance. On June 23 last year (at column 414 of the OFFICIAL REPORT for the day), I drew attention to the problems and cost of bringing cases to court. I am quite sure that all of us are too unaware of our legal rights, but, in addition to that, the difficulty, the cost and the uncertainty of enforcing them by legal action deters us from making the attempt. I think that we are also deterred from making this 618 attempt whether or not the merchandise costs a lot of money. We laymen believe quite definitely that to go to law can be expensive, whether or not we are right.
Taking the example of an organisation active in this field, the Retail Trading-Standards Association has rendered real service to shoppers, to reputable traders and to the Government of the day since 1950. Personally, I thought they were doing a job of government, but that is incidental at the moment. We all know that prosecutions which are won are a deterrent, but I want to ask my Front Bench whether it is right that such a service should cost the Association money. By September of this year the R.T.S.A. had taken 48 cases to court, and won 47. The cost since the first prosecution in 1950 has been about £6,200, of which £3,595 has been recovered by way of costs to the Association. So, in other words, the Association is £2,605 out of pocket as a result of this service.
Obviously, the minority of dishonest traders are influenced by successful deterrents; but should private organisations have to meet the cost?—and I am using the term "private" as being distinct from governmental. If we leave organisations of any kind aside for the moment, what about the private individual? What does it mean to him or to her to be able to take a case to court? If an association as skilled and practised as the R.T.S.A. can find itself out of pocket when it has won 47 out of 48 cases, what ordinary shopper is going to take a similar risk?—because obviously it is not sufficient to be proved right.
So before contemplating that step, what can the most persistent and aggrieved shopper do? He can complain to the shop, he can complain to the manufacturer, he can complain to his Member of Parliament, he can complain to the Citizens' Advice Bureaux, he can complain to the Press. If all these steps have been taken, if all of them have failed from the point of view of the aggrieved person, what remains?—the right to take the case to court. But I would ask my noble friend Lord Brown: what is this worth to the ordinary person?
For many years now I have been convinced that the legal machine has failed to provide satisfactory remedies for this class of complaint. If we go back some two and a half years to April 8, 1965, 619 there was an article in the New Society by Mr. Robert Egerton called " Cut-Price Justice". I do not know the author, nor do I propose to deal with the whole of the article, but I was interested in one part. Starting from the point that court procedure has not been able to solve the length and cost of actions, which are both far too great to deal with the problem of small injustices, Mr. Egerton moves on to one specific field: that of the sale of goods.
It is always easier to take an actual example, so even though the House is waiting to get on to other business I am afraid that I am going to consider an upholstered suite which has frayed at exposed places after a year's wear. The contention here is that the facts could be ascertained, and that from these an experienced person could form a sound opinion as to what the legal decision ought to be. I want to ask those experienced in the law: need we go through the panoply and expense of the law to deal with such matters as we do now? I feel that, obviously, only the Lord Chancellor can help us here.
But is it really necessary in the case of my upholstered suite, where agreement cannot be reached by any of the steps mentioned earlier, that we must have a procedure under which one needs to employ a separate set of solicitors, furniture experts and, probably, counsel on each side? Because it is to the advantage of the plaintiff to give the impression that he will stop at nothing to get redress, and to the advantage of the defendant to use every possible argument and delay to complicate the matter. I maintain that no measure of consumer legislation can fail to deal with this aspect.
So I am back again to my original question. If the organisation or the individual cannot afford to take a case to court because of the cost, then of what use is the right so to do? I informed the Minister that I should be raising this particular question, and I gave him details of the article in the New Society. We laymen have a great deal of faith in the Lord Chancellor, and we know that he, particularly, does not take the attitude that what has been must necessarily continue. So I am wondering whether he 620 can help us in this matter of common justice to all consumers.
I come now to the last general matter which I wish to bring forward to-day, and it is not long. The President of the Board of Trade, speaking at the Consumer Assembly arranged by the Consumers Association to celebrate the 10th Anniversary of the publication Which on Friday, November 3, last, was quoted in the Press as saying:Governments only do what they should under constant pressure from the consumer movement.Gaining a small amount of encouragement from that attitude, I want to raise something which has been causing me considerable concern. I want to ask my noble friend Lord Brown: what is the attitude of the Government and of the President of the Board of Trade towards the grading of merchandise of any kind? I ask this because it had not seemed possible to me that different Government Departments could have different attitudes. A Government must have a collective attitude and a collective responsibility for something so vital to all shoppers—and shoppers are what we are talking about to-day.
I am sure I must carry Ministers with me in the affirmative when I say to them: Do we not buy merchandise that has a minimum shrinkage? Do we not buy garments that are non-flammable? Do we not buy materials that are colour-fast? I cannot believe that any Government would maintain that it is wrong or unreasonable or too expensive to have materials available with these properties; or that because everyone does not want them or cannot afford them, then they should not be available. Yet in the House on October 24 last this seemed to me to be the argument advanced by the Government. I gave notice, both to my noble friend Lady Phillips and to the Minister, that I would be raising this to-day. I am not concerned with fruit and vegetables and I am not, needless to say, attacking the noble Lady. But on her own words, at column 1635, she was speaking for the Government, and I am attacking what she said.
At column 1637 the noble Lady actually told the House that, because it would cost a shopper extra money to be offered a guarantee of quality, be this Class 1 621 or Class 2, the Government could not support grading for the shopper. Furthermore, the noble Lady went on to say that when she had asked some shoppers whether they would buy something marked " Class 2", they seemed a little doubtful. I hope they did. But the only deduction to be made from this remark is that it is all right to buy Class 2 merchandise provided that you do not know it is Class 2, and I should have thought that such a philosophy ran counter to every belief held by the noble Lady, by the Government and by myself. I hope the Government spokesman will be able to disentangle the Government from such an apparent policy, because it really is complete nonsense. If you have grading anywhere of any merchandise, the object of the exercise is to grade, and as a result there must be various grades either numbered or described as in the Bill to-day.
As I think the House must know, I wish the Bill well. I have tried to be constructive in raising basic aspects which in my opinion any Bill dealing with consumer problems must take into account, and I have given notice of these where I thought it might be helpful. I hope the Minister, when he comes to reply, will be able to deal seriously with the points which I have taken a lot of trouble to make. I thank the House. I have never had such a good audience. I appreciate the reason and I apologise for taking up time.