COMMONS AMENDMENT (Hansard, 23 May 1968)

§ LORD WINTERBOTTOM
My Lords, this Amendment is designed to strengthen the prohibition in subsection (1) of false comparisons with a recommended price, by stipulating the meaning which is—in the absence of an express indication to the contrary—to be attached to references to a recommended price. The first subparagraph of the Amendment provides that an unqualified indication of a recommended price is to be treated as referring to a price recommended by the manufacturer or producer of the goods. This is what most people think of as the ordinary meaning of a recommended price. The provision would not prevent the quotation of other kinds of price recommendation. But if the recommendation quoted was by someone other than the manufacturer or producer—that is to say, by a wholesaler or an importer—it would be necessary to say so expressly. The public would then be clear about the origin of the recommended price.
The second sub-paragraph provides that a recommended price—by whoever it is recommended—shall normally be taken to be a price recommended generally for the retail sale of the goods in the area where the goods are offered. If anyone quotes a recommended price which has not been so recommended, he will, again, be obliged to make the limited nature of the recommendation clear. This Amendment is, as I am sure my noble friend will agree, by no means a complete answer to the problem of "phoney" recommended prices. We have regretfully concluded that there is no practicable way of dealing, in this legislation, with the case where a manufacturer recommends a price to all retailers but at an unrealistically high level. But it would help to check the sort of deception where a grossly excessive price is recommended by a complaisant supplier to just one or a few retailers. Consumers will obviously be better able to assess the worth of claims related to recommended prices if it always has to be clearly stated when the recommendation has been made by someone other than the manufacturer or producer and when it has been made, not to the generality of retailers, but only to selected people.
I should explain that the reference in the second sub-paragraph of the Amendment to the area in which the goods are offered is intended to cater for those 866 commodities where marked differences in costs of distribution lead manufacturers to recommend retail prices at different levels in different parts of the country. I beg to move.

§ BARONESS BURTON OF COVENTRY
My Lords, I realise that when we are discussing these Amendments of course we have to keep strictly to the Amendment, but did not know this meant that the Minister did not reply to questions asked. I find myself somewhat nonplussed in regard to the previous remarks I made, in which I asked questions in all sincerity and got no answer at all. There is obviously nothing I can do about it, but I should be glad if my noble friend, if he does reply, could perhaps answer the points I wish to put now concerning Amendment No. 5.
I am not proposing to repeat to-night the examples of "phoney" recommended prices that I have given in previous debates on the Bill. These were quite unanswerable, and the Government did not try to answer them or to excuse them. I gathered from what the Minister has said that these phoney recommended prices, which I gave last time and which others gave are not covered by this Amendment No. 5 because, I am informed, the Government cannot do so. I do not think this is good enough. I must confess that I find myself completely nonplussed about the attitude of a Government which is against resale price maintenance and yet so in favour of protecting recommended prices. This seems to me quite extraordinary. I am against resale price maintenance, and I am against "phoney" recommended prices, because I think these are an invitation to defraud the shopper. If it seems impossible to the Government to differentiate between "phoney" recommended prices and genuine recommended prices then what I have been saying for a long time is that the phrase "recommended price" should not have the protection of the law.
I do not know whether it is a case of the Government being slow of understanding or whether I am bad at explaining, but I should have thought that if the Government wished to keep the term 867 "recommended price", all right; anybody should be able to use it. You can say that something has wonderful value. What I am objecting to is that the term "recommended price" should be able to be used by a defendant at law; because I maintain that the "phoney" recommended price is absolute dishonesty.
I have here, and I will show it to the Minister afterwards, if he wishes, a price ticket of 39s. 11d. for a shirt. This particular price ticket is a completely "phoney" one. It is used all over the country on shirts which are sold retail. Great emphasis is laid in these shops and in window displays and at the point of sale, that "The retail price here is only £1"; that, "This is a great bargain. Shop here and save money". Regarding the price of £1, experts tell me that this is probably just about right although a little on the high side, for which, will the Minister note, the recommended price is 39s. 11d.
These price tags, of which the one I have here is an example, are tags that come with the boxes of shirts from the manufacturer to the retailer. The shirts are boxed and each shirt has one of these tags tucked inside. These tags are recommended prices from the manufacturers to the retailers. I am sure, as all men will know much better than I do, although they may not buy this particular type of shirt, that in the shop these shirts have a price tag tucked into the front inside a most attractive box or packet in cellophane. I believe that men find it difficult to get the cellophane off, but that is beside the point. On this tag it says 39s. 11d., but the price to the customer is only £1—due to the generosity of the retailer, presumably selling at a loss. This really is a complete nonsense, my Lords. What is more, I think it is fraudulent nonsense.
If I could have an answer to this point I should be glad: I wonder whether the Government realise that all these people will have to do when this Bill becomes an Act, if this Amendment we are discussing now goes through, is to take the price tag here of 39s. 11d. and put on it the words "Recommended price", or "Made to sell at", and they will be home and dry under this Bill. This sort of abuse will be repeated over and over 868 again. I need not tell everybody that; we know it will.
I protest most strongly that the Government—I am sorry that it is my Government: I should be equally sorry if it were a Tory Government, but it seems to me that it is even worse that it should be my Government—should allow this sort of abuse to go on the Statute Book. Would my noble friend tell me whether I am right in saying, with regard to price tags like this, that if this Amendment is passed it will allow them to put on "Recommended price" or "Made to sell at" and be home and dry? Further, does he not agree with me in all honesty that such fraudulent practices should be stopped?

§ LORD DONALDSON OF KINGS-BRIDGE
My Lords, I should like in a more pale and far more gentle way to echo some of the remarks of my noble friend Lady Burton, but I should like to take issue with her shortly. I do not think the solution to her problem is to remove from the Bill the recommended price, because that means that if there were a recommended price and you told a lie about it you would not necessarily be caught. I think it is necessary to keep in the recommended price. But we feel that the Government were a little too easily discouraged by the difficulty in finding a legal formula. Lawyers do sometimes take a long time, but I think that if given time, they eventually find an answer. We believe the Government wanted the answer as much as we did, but, frankly, we think they were fainthearted. We feel fairly certain that new legislation will be required within the next year or two. We freely offer our services to assist the Government in finding a formula that will catch this real evil which my noble friend has so vividly illustrated. We hope that something of the kind will eventually be done.

§ LORD DRUMALBYN
My Lords, this is a case where I am bound to say that I regret that the Government did not accept my original suggestion, that we should use the words "genuine and current recommended price". I should have thought that the courts would have been quite capable of interpreting those words. But we should like to hear from the noble Lord whether in fact the recommended prices will have to be genuine and current.

§ LORD WINTERBOTTOM
My Lords, I hope that my noble friend Lady Burton of Coventry will not accuse me of discourtesy. I was trying to inform myself adequately so that I could give her an adequate reply to her questions. At this late stage of the Bill I believe that both Houses of Parliament have done their best to provide a text, which is as rascal-proof as is possible. After all, we had a most thorough debate in this House. I remember at this stage the contribution of the noble Lord, Lord Hawke.
Clause 11 is probably one of the most difficult clauses to define; its intentions are the most difficult to legislate for. Both Houses of Parliament have done their best to produce a text which is as rogue-proof as possible. My noble friend has accused us of incompetence and of not in fact achieving that particular end. All I can say is that we in both Houses have done our best to draft a Bill, and when it becomes law I presume that it will be up to the various organisations who set out to protect the consumers to institute prosecutions under the Bill if they think that the Bill is being evaded; and presumably the adequacy of our definitions will then be proved or disproved in the courts. I cannot see any other way out of the difficulty at this moment.
The offer of my noble friend to assist the Government after the Bill has passed into law in the drafting of future or amending legislation I accept with gratitude. He, too, will doubtless watch the interests of the consumer and will perhaps institute prosecutions if he finds that this particular clause is being evaded by the methods which have been described by my noble friend Lady Burton. I think that today I cannot do more than commend this particular Amendment to the House as it is, as the best draft that we can produce for your Lordships after the Bill has passed through both Houses. I am sorry I cannot do more than that.

§ BARONESS BURTON OF COVENTRY
Perhaps I might say that I would never accuse my noble friend of discourtesy, but I am sure that, even with the utmost courtesy, he cannot think that he has answered the point I put to him. I asked a specific question as to whether, if these "phoney" recommended prices had put on them "recommended price" or "Made to sell at" when this Bill became law, they would then be outside the scope 870 of this Bill. I asked for an answer on that. With the greatest respect, I have not had it.

§ LORD WINTERBOTTOM
My Lords, the best I can do is to take legal advice on the subject and write to my noble friend subsequently.

§ BARONESS BURTON OF COVENTRY
My Lords, that will not affect the Bill.