§ 4.30 p.m.
§ THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN)
My Lords, I beg to move that this Bill be now read a second time. There are two main reasons why this Bill marks an important step forward. First, the Bill brings together two previously separate tributaries of policy and legislation into one single channel. There have been several previous Statutes dealing with competition in commerce and industry, and others dealing with the protection of the consumer from malpractices, but this 45 is the first attempt to tackle these problems under the same Statute and through a unified structure of institutions. The second reason lies in the importance of the institutional innovation which the Bill introduces.
In the first two clauses we are setting up a new statutory office and a new public servant in the person of the Director General of Fair Trading. The Director General will have many sources of information; in particular, the feedback he will receive from local centres. He will also doubtless hear from individual consumers. All in all, he will have, or will be in a position to obtain, first-hand knowledge of where the consumer shoe pinches. He will also have a statutory power under Clause 114 of the Bill to disseminate consumer information and advice. The Director General will thus play a part in the process of information and education in which the noble Baroness, Lady Burton, has taken a special interest.
Even if the Director General were merely to exercise those functions already discharged within various organs of government, this fusion of duties would generate its own reaction in the way of new, integrated and more effective policies. But the Director General will have available a range of possible courses of action, some of which are entirely new, and he will also become a source of information and expert assistance to the Government on the use of existing powers. The appointment of the Director General and the setting up of his office is thus the keystone of the Bill.
My Lords, before I deal with the provisions of the Bill, it may be helpful if I say a word about its structure and the manner in which its various provisions supplement or replace existing legislation. Apart from the Director General's pervasive role, much of the Bill is essentially a consolidation or improvement of the existing law. The Bill falls conveniently into three broad divisions, to each of which I will return—namely, consumer protection, monopolies and mergers, and restrictive practices. First, I would draw your Lordships' attention to the provisions about consumer protection in Parts II and III of the Bill. The powers here conferred are new, and these Parts of the Bill constitute very nearly a self-contained set of provisions. The key 46 role is given to the Director General. It is for him to initiate the procedure for making new regulations against particular malpractices under Part II, and to initiate action against individual traders under Part III. The Director General's proposals under Part II are also subject to the check of having to be submitted and to he acceptable to the Consumer Protection Advisory Committee, established under Clause 3, which will itself be a new institution. I shall come back to these later.
Secondly, there are the provisions about monopolies and mergers and about references to the Monopolies Commission. These provisions are mainly to he found in Parts IV to VIII. What is meant by "monopoly situation" is defined in Part I. Clauses 6 to 11. Some important changes have been made, but there is also a good deal of consolidation and re-enactment. The existing monopolies and mergers legislation is repealed by the Bill. It is therefore necessary to provide for the continuation of the Commission and for all the requisite procedures. Thirdly, there are the provisions about restrictive practices in Parts IX and X of the Bill. These are supplementary to the Restrictive Trade Practices Acts of 1956 and 1968, which remain in operation.
The House will be relieved to hear that I do not propose to take your Lordships through the 130 clauses and 13 Schedules of the Bill, clause by clause. I believe that it will help to focus debate to-day if I concentrate mainly on what is new. But before I do so may I mention one subject which is, so to speak, even newer than the newest provision in the Bill. Pyramid selling has attracted a good deal of attention and criticism in recent months. I hope it may help your Lordships if I say now that, with your Lordships' agreement, it is the Government's intention to move Amendments to this Bill which will give power to bring—and keep—under control the objectionable features of pyramid selling.
May I turn now to the first of these three subjects—consumer protection—and the novel and important functions which the Director General is to exercise for that purpose. As consumers, your Lordships already have the protection of a large number of Statutes as well as your rights at Common Law. Leaving 47 aside measures related to more specialised areas, such as food and drugs, I would point out that in the field of the criminal law there are, for example, the Weights and Measures Act of 1964 which ensures that you get correct weight and measure; and the Trade Descriptions Act of 1968, which ensures that you are not given false or misleading information about what you are buying. These and other laws are effectively enforced by local authorities. In the field of the civil law, the Sale of Goods Act 1893 gives you a right, for example, to goods which are of merchantable quality. Last February, your Lordships gave a Third Reading to the Supply of Goods (Implied Terms) Bill, which has since been enacted and brought into operation. It renders the exclusion of certain basic rights of no avail so far as private purchasers of goods are concerned.
All this is valuable, as setting a firm statutory framework of fair dealing between buyers and sellers. But the framework itself must be capable of adaptation to meet changing needs and circumstances. As techniques of promotion and distribution change, it has been found necessary in the past decade or so to introduce legislation designed to deal one by one with particular problems as they become more prevalent—for example, in connection not only with implied terms, but with hire purchase, trading stamps, unsolicited goods and services, and so on. In some cases there is the additional protection of codes of practice adopted and administered by the businesses concerned—for example, advertising and mail order. Because of their flexibility, effective codes of this kind can often achieve more than legislation, not least in areas of good taste where Parliament fears to tread. We hope that the climate which this Bill establishes will encourage the development and use of such codes.
Clearly, there is no single or simple formula. The protection which the consumer can reasonably claim so as to maintain a fair balance between him and his suppliers will vary from time to time and from one situation to another. At the same time, it is important that as legislators we should not disregard or override the legitimate interests of manu- 48 facturers and distributors. To do so would not be in our own long-term interests as consumers. The object is not to tilt the scales in favour of one side or the other, but rather to redress the disproportionate advantage which organised business, large firms and remote institutions would otherwise have in dealings with individual consumers in the shops or in their homes. We thought about these problems and we came to the conclusion that what is needed now is a continuous study of the ever-changing commercial and consumer scene, with a view to taking action, and taking it promptly, to reinforce the effectiveness of the existing protections. This involves, also, assessing the scope for improving consumer information and education, and proposing, where appropriate, new statutory remedies to deal with particular malpractices as they emerge. This will be the Director General's task.
Under Clause 2 of the Bill, subsections (1) and (3), the Director General will be required to keep under review all aspects of commercial activities in the United Kingdom with a bearing on consumers' interests, and it will be his duty to give information and assistance to the Secretary of State and to make recommendations to him about any action, whether statutory or otherwise, which he considers it would be expedient for Ministers to take. The Director General will need to work closely with industry itself, with the institutions and organisations involved in consumer information and advice, and with the local authorities who are responsible for enforcing the existing protective law. Ought we to attempt to formalise this relationship in statute? We think not. It is something that will have to be nurtured by the Director General himself. I would expect that he would give high priority to developing a close and fruitful dialogue with these interests. I may add that the future shape of local consumer advisory services at the grass-roots level is at present the subject of consultation between my Department and those concerned, and I hope that a consultative document will be issued before very long.
Before leaving Clause 2 I should say a word about the history of this clause and the distinction which it is necessary to draw between the Director General's 49 functions in relation to the economic interests of consumers and their interests with respect to health, safety or other such subjects, which are normally treated as social rather than economic. Your Lordships may be aware that Clause 2 was substantially modified in another place in response to representations that the Director's terms of reference should be broadly drawn. As originally envisaged, the purpose of the Director's review was to identify malpractices which adversely affect consumers' economic interests and which could properly be the subject of orders creating criminal offences under the powers of Part II of the Bill, to which I will come in a minute. This remains the most important part of the Director's task.
It was argued that the Director should be able to protect consumers' interests in other respects, in particular in connection with dangerous goods. My Lords, the Government accept that there may be occasions when the Director can properly concern himself with the health or safety of consumers. Indeed, when we come to the action he can take under Part III of the Bill with respect to (in the words of the Bill) a,course of conduct detrimental to the interests of consumerswhere this involves breaches of criminal law or civil obligation, it has always been our intention that the Director should be able to act in respect of conduct detrimental to consumer interests (and here again I quote Clause 34),whether those interests are economic interests or interests in respect of health, safety or other matters".But the Director General's function under Part III will be that of reinforcing the provisions of the existing law.
The Director General's functions under Part II in promoting changes in the law are quite deliberately confined to practices which hit consumers in their pockets. Generally speaking, this must be his primary role—and for this reason. There would be no point in attempting to reproduce in the office of the Director General the expertise which already exists in those Government Departments responsible for dealing with the safety of food, drugs, consumer goods and the like. That is a highly technical field: regulatory statutes are already in force. To place 50 on him a general duty to scan that field with a view to formulating law and policy would duplicate the existing machinery. There, the most the Director can appropriately do, in our view, is to contribute intelligence, assistance and advice on the basis of the information he gathers. In short, in that field he will act in accordance with subsection (1)(b) of Clause 2, as contrasted with his more active role under subsection (1)(a) of that clause.
The Director's specific powers to initiate changes in the law are to be found in Part II. The Bill confers an entirely new power for subordinate legislation banning consumer trade practices connected with the supply of goods or services to consumers—practices which appear to the Director to have one or more of the objectionable effects listed in Clause 17. What is meant by "consumer trade practices" is defined in Clause 13. Broadly, it covers terms and conditions; it covers sales promotion, which includes canvassing, advertising and labeling; it covers packaging; it covers demanding or securing payments, and so on. It will be open to the Director General to formulate proposals for orders.
Such proposals will be considered by a Consumer Protection Advisory Committee of not less than 10 or more than 15 members, appointed for this special and limited purpose from persons suitably qualified to advise on the case for the orders proposed and on their practicality. If, and only if, the Consumer Protection Advisory Committee's view is favourable, will it then be open to the Secretary of State, at his discretion, to make an order, subject to the Affirmative Resolution procedure, under which the malpractice in question would become criminal. Such orders are to be enforced by local weights and measures authorities, broadly on the lines of the enforcement of the Trade Descriptions Act. This new and flexible procedure will avoid the delay which is unavoidable if each new problem has to be dealt with by a separate Act of Parliament. At the same time, what is admittedly a wide power of subordinate legislation is made subject to what we regard as appropriate checks on its use, including the need for positive Parliamentary approval.
51 My Lords, I have already mentioned the Director's powers under Part III. Whereas orders under Pant II would extend the scope of the criminal law and would be directed generally against a particular malpractice, the purpose of Part III is to reinforce the law as it already stands and to offer an additional sanction against persons who persistently disregard their legal obligations. The Director is to be empowered to seek written assurances from persons who persist in a course of conduct which is detrimental to the interests of consumers and unfair to them. If an assurance is refused, or if an assurance is given and broken, the Director may institute proceedings in the courts for an order requiring the person concerned to refrain from continuing that course of conduct. This is a new procedure, but we believe that it will afford an effective remedy against that minority of traders who are wont to steer as near the wind as they dare. Firms who keep within the law will have nothing to fear from the Director's activities. Indeed, they themselves have a direct interest in fostering a trading climate in which dishonest traders will find it difficult to survive.
I turn now to the changes made by the Bill in the provisions for investigations and reports by the Monopolies and Mergers Commission, as the Monopolies Commission is now to be renamed. Here, the interest of the private consumer may not appear to be the immediate consideration. But ultimately it is very much in his interest that the law should foster efficiency and competitiveness in British industry. In these Parts of the Bill—that is to say, Parts IV to VIII—the main change is the institutional one. In future, it will be the Director General who is to act as the focal point for research and information about monopoly situations and uncompetitive practices. That is in Clause 2. He will also be expected to keep a watchful eye on proposals which may lead to referable mergers and to make recommendations to the Secretary of State. That is in Clause 76. He will himself be able to initiate most monopoly references, subject generally to a reserve power of the Secretary of State to stop a reference (Clause 50). He is also to have powers to require the information he needs in connection with the making 52 of monopoly references (Clauses 44 and 45). However, it seems right that decisions whether or not to refer particular mergers should be taken by Ministers who are answerable to Parliament. Further, it is envisaged that the Director General will normally be asked by Ministers to follow up reports of the Monopolies Commission on monopolies and mergers. This means consulting with the parties over the action to be taken and, if necessary, recommending the use of the order-making powers. That is in Clause 88. The Director General's power to make monopoly references to the Monopolies Commission will cover, broadly speaking, all monopoly situations which are within the scope of the existing law.
In one way the Bill extends the scope of the existing law, for it does not reproduce the provision in Section 2(1) of the Monopolies Act 1948, which debarred the reference of monopoly conditions,where the prevalance of the conditions in question is expressly authorised by or under any enactment.In the past, one effect of that proviso has been to remove the principal activities of the nationalised industries from the scope for reference to the Commission. The Government have concluded that there is no reason in principle why public sector industries should not be open to investigation by the Monopolies Commission just as the private sector is, and the Bill will extend the scope for reference in this respect. Such references, when they relate to the activities listed in Schedules 5 and 7, are to be reserved to Ministers. I need hardly say that the Commission will not be asked to deal with the question whether a particular sector of industry should be publicly owned or should be part of the private sector. That is a matter for Parliament. Similarly, the Bill provides for Ministers, and Ministers only, to make general references to the Monopolies Commission—that is Clause 78—and to make references to them about restrictive labour practices, which is Clause 79.
The provision in Clause 79 about restrictive labour practices is for study references only. The purpose will be to establish and make known the facts about particular practices—no more and no less—whether a particular practice exists, whether it operates or may be expected 53 to operate against the public interest and with what adverse effects. There will be no power for orders to be made consequent on such a report of the Monopolies Commission. In the context of this comprehensive legislation it seems right that there should be provision for all restrictive arrangements which may adversely affect the public interest to be examined.
The Bill makes several other changes to widen the field within which monopoly and merger situations can be referred for investigation, and to sharpen the issue which is presented to the Commission, The Bill does not reproduce the proviso in Section 3(2) of the 1948 Act, the effect of which has been to debar reference of oligopoly situations arising from practices about employment. There will be new power to refer local monopolies, which is to be found in Clause 9. Perhaps the most important change is that the market share by reference to which monopoly is defined is to be reduced from one-third to one-quarter, and that starts in Clause 6. Both experience and economic expertise confirm that situations potentially damaging to the public interest can arise from the control of a quarter of the market. Whether they do or not in particular cases depends on the facts of the case.
Generally speaking, the Bill retains the familiar machinery of the Monopolies Commission and the procedure for investigations. From time to time there is criticism of the time which an investigation by the Monopolies Commission takes. But to be worth while an investigation must be thorough. Much can depend on a report by the Commission. To force the pace of investigations could undermine the credibility of the report's conclusions. Until the issues emerge in the process of investigation, it is impossible to be sure how much time is needed. Nevertheless, the Government accepted the suggestion in another place that all monopoly references should specify a time limit (subject to extension) and this provision will be found in Clause 55. For the reasons I have given, it may not infrequently be found necessary to extend such time limits. I make this point now, because it would be quite wrong to infer that any blame or reproach attaches to the Monopolies Commission if they ask for more time in order 54 that they may discharge their statutory duty properly.
I turn now to restrictive trade practices. The functions of the Registrar of Restrictive Trading Agreements are to be taken over by the Director General I do not propose to say much at this stage about the amendments which are to be made in the existing law by Parts IX and X, useful though they are. Some of these provisions are rather technical and can be better discussed and explained in Committee. I will simply mention in passing that in Part IX Clause 95 extends the obligation to register agreements about prices to be charged to cover recommended or suggested prices. Clause 98 makes patent or design pooling agreements registrable. Clause 102 will enable the Director General to apply to the Restrictive Practices Court for an interim order requiring parties to an agreement to desist from it until the court has given a final ruling on it, if the court is satisfied that it is likely to cause material detriment in the meantime.
The most important new provisions are of course in Part X, which extends the restrictive practices legislation to commercial services. The powers provided are mare complicated than the parallel powers in the 1956 Act relating to goods. But we thought it right to provide for greater flexibility in dealing with what may be more complex agreements in the supply of services—such issues brought to light by representations made on the draft order which the Secretary of State must publish in advance. The necessarily complicated provisions of the Bill will give the flexibility needed to deal with these issues without delaying the application of the legislation to other services where no such difficulties arise.
Noble Lords will be aware that the professional services listed in Schedule 4 are excluded from designation. The reason for the exemption is that we do not consider that the restrictive practices of the professions can properly he examined and justified in the same way as restrictions affecting the supply of goods and commercial services against the criteria set out in Section 21 of the 1956 Act as extended by Section 10 of the 1968 Act. This does not mean that all agreements between those who provide professional services will he exempt. Only agreements about the supply of the 55 professional services will be exempt. If they provide other services—for example, if solicitors make collective agreements about the terms on which they will act as agents for insurers—they are liable to be covered by an order designating agency services in relation to insurance business. Nor does it mean that the restrictive practices of the professions cannot be inquired into. Noble Lords will be aware that we have already had one reference to the Monopolies Commission on this subject—a general one resulting in a Report in May, 1970, and my right honourable and learned friend the Minister of Trade and Consumer Affairs has recently announced his intention of making three more references on the professions.
What it does mean is that Clause 14 of the Bill which enables the Director General to make proposals to the Consumer Protection Advisory Committee for orders to be made by the Secretary of State, and Clauses 103 and 104, which enable the Secretary of State to make orders bringing services under the control of the Restrictive Practices Court will not apply to the professions listed in Schedule 4. I dare say that this is a subject that will be pursued further in the course of the passage of the Bill.
My Lords, there is a limit to the claims that should be made for any institutional change. I have explained why I believe that a new impetus can flow from the establishment of the Director, from the integration of the functions of his office, and from the various changes and improvements which the Bill makes in the existing law on monopolies, mergers and restrictive practices. But having said this, it would be absurd to suggest that by appointing a new officer and setting up a new office we can dispose once and for all of the structural problems of a modern industrialised economy or the economic and ethical problems of mass production and distribution. There are tensions and incompatibilities built into the system which, it may be, in particular situations can never be perfectly reconciled. I have already spoken about the need to keep a balance between the short-term interests of consumers and the legitimate interests of manufacturers and suppliers. In dealing also with issues of competition and industrial structure, the Director will have to balance conflicting objectives.
56 My Lords, it is relatively easy for us as legislators to describe the public interest in the sort of terms used in Clause 84 of the Bill—the promotion of effective competition, the promotion of the interests of consumers, purchasers and users, the reduction of costs, the development of new techniques, the maintenance of a balanced distribution of industry and employment, the promotion of competitiveness in export markets and so on. The crunch comes in applying these broad general principles to the intractable facts of a real life situation. The United Kingdom economy is not a closed system. We are operating in a European, indeed in a world-wide, environment.
The Director's appointment will not, of course, supplant the ultimate responsibility of the Government. When it comes to the application of the statutory powers in the Bill—whether in dealing with consumer abuses or in connection with particular monopolies and mergers—the Director proposes, the Minister disposes, and orders are further subject to the normal processes of Parliamentary control. But the responsibility for initiation remains critical. The Director will operate at the point where the various strains, tensions and conflicts of interest come together and must so far as possible be resolved. It would be wrong for me to make exaggerated claims for the new machinery and the new powers contained in this Bill, but I make with confidence the sober claim that the Bill will enable us to tackle these central problems more effectively. In that confidence, I would commend the Bill to your Lordships. I beg to move.
§ Moved. That the Bill be now read 2a—(Lord Drumalbyn.)
§ 5.0 p.m.
§ LORD JACQUES
My Lords, I would first compliment the noble Lord, Lord Drumalbyn, on a lucid, precise and yet comprehensive statement on the Bill, which will be useful to anyone who is interested in the Bill. I believe that this Bill demonstrates how effective Parliament can be on some occasions in influencing the Executive. When the Consumer Council was dismantled in 1970 there were some indications that the Government were not disposed to put anything in its place. For example, we were told that the voluntary consumer organisations which were struggling 57 infants in 1962 were, by 1972, lusty adults. Also we were told that consumers had the initiative and the will to organise the necessary services themselves; furthermore, that they had the confidence to support those services out of their own purses. For good measure we were told that we had already a near comprehensive system of protective legislation. But Parliament dissented from that view and in a very short time Ministers were telling us that they were giving consideration to what could be put in the place of the Consumer Council. In due course we had the appointment of the Minister for Trade and Consumer Affairs and now we have this Bill. We welcome it as a measure of consumer protection. We shall facilitate its passage through the House and we hope for the co-operation of the Government Front Bench during the Committee stage when we shall try to improve the Bill.
There is a large measure of agreement as to the objectives and the measures which are necessary for the protection of the consumer. There are, however, differences of opinion as to what machinery is required. I have consistently advocated the appointment of a Minister for Consumer Affairs with Cabinet rank and I see no reason to change my view. I believe this is necessary because the consumer's view should be voiced at the seat of power. It should be advanced at the place where proper claims may be made for priority in legislation or any other action necessary for the protection of consumers. I prefer this to a running battle between a "Ralph Nadar" and the Government of the day. I believe this method is more civilised and, in the long run, very probably more effective.
I regret, however, that the new Ministry is to be part of the Department of Trade and Industry. I believe it to be possible that within that Department it will be inhibited by pressures for what is supposed to be necessary for industry and commerce. I should much prefer an independent Ministry. Industry is responsible for a great deal of pollution, but the control of pollution is separate from the Board of Trade. Industry is responsible for all consumer grumbles and I believe that the consumer legislation should be administered by a Depart- 58 ment which is separate from the Board of Trade, either as an independent Ministry or, if it has to be in a group of Ministries, in the same group as local government.
There is one particular point on which I commend the Bill to the House. It is the flexibility which has been introduced. We live in a changing world and there are undesirable practices which change from time to time. Under the provisions of this Bill it will not be necessary to wait for legislation to deal with them. It would be possible for the Director General, once he has come to the conclusion that some action is necessary, to make proposals to the Advisory Committee which will report to the Minister who can make Statutory Orders dealing with the new developments. These Orders will have to be approved by the Affirmative Resolutions of both Houses. I would say that is an ideal way to deal with consumer problems in a changing world.
There is a great deal to be said on the question of the Office and the functions of the Director General, but I will leave that to my noble friend Lady Phillips. I should like to comment on the status of the Advisory Committee. We on this side of the House are somewhat disappointed that the Advisory Committee will have no independent staff. It will not he able to exercise any initiative whatever. It will consider only those questions which are referred to it by the Director General. Indeed, the Advisory Committee will consist of three elements: representatives of suppliers, representatives of those concerned with enforcing consumer legislation and representatives of consumers. In fact there is no guarantee that consumers will be in the majority on the Committee. We regret that, as well as we regret the lack of independence of the Committee, and we shall return to this matter during the Committee stage.
My Lords, I should like to say a word on codes of practice. I hope that the Director General will have the power, and also the will, to encourage the trade associations to promote codes of conduct within their respective industries. Codes of conduct can do a great deal to protect the consumer. and even when they do not protect him they are a good guide to those who have to settle consumer complaints. I would especially compliment 59 the Association of the Manufacturers of Domestic Electric Appliances. In the past many consumers have complained of difficulty in getting an after-sales service in respect of electric appliances. This Association has prepared and obtained the agreement of its members to a code of conduct for service after sales, and I would go out of my way to compliment it. I believe this is to the advantage not only of the manufacturers but also of the consumers. If the code is applied as it ought to be we shall get fewer complaints from consumers in this connection. But in the long run the greatest deterrent to undesirable practices is the danger of being caught and the publicity which follows. Therefore a great deal of responsibility falls on local government which has to enforce the legislation, whether by Statute or by Order.
Shortly we shall be completing the first stages in the reorganisation of local government and the number of local authorities responsible for enforcing consumer legislation will be reduced from 300 to 60. At this stage we have an excellent opportunity to make necessary changes and there are two changes which I should like to mention. The first is a small one but it is psychologically important. The Government should use their influence to persuade local authorities to change the name of the Department which deals with consumer matters. "Weights and Measures" is a name which is years out of date. A very small part of the work of the Department is concerned with weights and measures. A consumer feels very doubtful about whether he should go to the Weights and Measures Department with a complaint that has nothing to do with weights and measures. A small change of name would be helpful to consumers and I should like the Government to use their influence in that direction. I suggest a name which has been generally advocated: "Trading Standards Department" with a "Head of Trading Standards Officer". It is as good as anything else.
The second change I would advocate is that we should act positively as well as negatively. We should try to minimise consumer complains by giving pre-sale as well as post-sale advice. I should like to see the Director General have the power and the will to commission leaflets, from 60 both consumer organisations and trade associations, framed in simple language to explain to consumers the advantages of the use of certain materials, certain manufacturing processes and certain designs for particular purposes. This could be done without mentioning or harming any manufacturers. For example, one such leaflet telling the consumer the advantages and disadvantages of using different kinds of carpet for different rooms of the house could be most helpful. That is the way in which the advice can be collected. It can be done in the first place by the Director General, and the distribution can be done through the local authority. But if this kind of positive work is to be done by the local authorities, then we shall have to give attention to both the number and the quality of the staff. I hope that this matter will receive careful attention by the Government.
My Lords, on the part of the Bill which deals with restrictive practices, mergers and monopolies, there is to some extent a mere restatement of the law. I believe that at least partial codification, and minor changes are necessary. In so far as these changes are an improvement, we welcome them. In particular, we welcome the reduction in the market share before the company is regarded as a monopoly.
There are only two other observations that I should like to make under the heading of restrictive practices, mergers and monopolies. First, the law is being extended to commercial services, but not to professional services. As I understand it, the law in regard to monopoly applies to the professional services, but restrictive practices in the professions, which are usually to maintain income, cannot be referred to the Commission. But the very same Bill, by a specific provision, authorises the Director General to remit to the Commission restrictive practices by workers in factories.
§ LORD DRUMALBYN
My Lords, I think the noble Lord said that they could not be referred to the Commission. Did he not mean that they are not registrable with the Restrictive Practices Court? They can be referred to the Commission.
§ LORD JACQUES
My Lords, as I understand it, in so far as the professional associations are monopolies, there are grounds for referring to the Commission; but in so far as they are concerned with 61 restrictive practices, the Director General cannot refer these restrictive practices to the Commission. But by a specific provision in the Bill, the restrictive practices, or suspicion of restrictive practices, by factory workers can be referred by the Director General to the Commission. If that is so—and from my reading of the debates in the other place, to the best of my knowledge and belief, I would say that it is—then I would say that it is, to say the least, a grave psychological error, and it is certainly something to which we shall return on the Committee stage.
The other point I would raise under this heading is the anomaly that exists in retail distribution. At the present time, the large multiples can have uniformity in prices, promotions, opening hours and in policies generally throughout the whole of their branches. In competition with the multiples are the independent retailers and the independent co-operative societies. Very frequently the independent retailers and independent co-operative societies, in order to improve their efficiency and to enable them tot compete with the multiples, form voluntary groups. They form these groups and do collective buying; they have collective publicity; they exchange information on techniques; and they have joint use of machines, such as computers. But to make this work effective it is essential in some respects that they have a certain amount of uniformity in prices and promotions, for example, throughout their shops. But they are inhibited once they start having uniformity in their shops on prices and promotions: it is a restrictive practice; there would have to be an agreement, and they would have to be registered. I have before me a copy of a letter from the Minister to a Member of the other place in which he agrees that there is scope here for amendment; he has detailed the Amendments he was prepared to put forward; he was hoping to get them at the Report stage in the other place, but they were not put forward then. I should like an assurance that they will be put forward in this House.
I should like to welcome the Amendments which will come along dealing with pyramid selling. I believe that they are absolutely necessary, although this is not entirely a consumer matter. It is the agents who are more seriously affected in 62 that respect; but because they are affected, it could be passed on to the consumer.
My Lords, in conclusion, I should like to remind the Government that there are two great needs of consumers which are not dealt with by this Bill. The first is the need for legislation arising out of the Crowther Report on credit. A recent research in one town showed that the rates of interest being charged in that town varied from 14½ per cent. per annum to 71 per cent. per annum. But what is worse, five inquiries were made of one retailer, and the price which was given on each of the five occasions was different: in other words, different prices were included for the credit on each occasion. This would seem to indicate that some retailers are instructing their salesmen to get the best bargain they can from the customer. This is an undesirable practice which can be stopped only by legislation arising out of the Crowther Report.
The second need of consumers not covered by this Bill is the need for small claims courts to settle consumer claims without the need for lawyers. It is not sufficient to reform the administration of our county courts. So far as business is concerned, the county courts are largely places which facilitate the collection of debts. They are not places where consumers can go to get their claims settled. A working-class consumer cannot afford to go to the county court and risk losing £100 to £150 for the sake of saving £50. That is the present picture. I would commend the Government to have a look not merely at the Manchester arbitration system, which has been operating only for a short time, but also at the New York State Court, which has been operating for a longer time. The small claims courts in New York State now deal with 60,000 claims a year. It may well be that there is something here from which we could learn so that this need for a small claims court to facilitate claims of consumers could be met. In the meantime, we welcome this Bill. We shall do all we can to facilitate its passage, and we hope to be able to improve it at the Committee stage.
§ 5.20 p.m.
§ LORD AIREDALE
My Lords, I combine with the noble Lord, Lord Jacques, 63 in welcoming the lucid explanation of the Bill that we have received. We needed lucidity from the Minister this afternoon, because what he was expounding to us is really a very complex piece of legislation indeed. This was recognised in another place by the Minister himself. He said—and I had better paraphrase rather than attempt to quote his words—that he was preparing a document which would set out the origin of each of the provisions and indicate briefly where there had been a change from previous provisions and what the nature of such changes was. It would identify the provisions which were new and the Committee to whom he was speaking would be able to trace the legislative parentage of each of the provisions. I should have thought that document would have been most useful not only to members of the Standing Committee in another place but also to your Lordships, and in particular to those of your Lordships taking part in the Committee stage of this Bill. I have made the most strenuous efforts I can to get hold of a copy of the document referred to by the Minister in another place and I have totally failed. I do not understand this at all. It cannot possibly be a secret document. I very much hope that this document, which would be of the very greatest assistance to us, will be made available in good time before the Committee stage.
In our debate on the Crowther Committee's Report I ventured to suggest that this was the age of the special commissioner. First of all, we had the Ombudsman or the Parliamentary Commissioner; then we had the Health Service Commissioner; and then we had the Crowther Committee recommending a consumer credit commissioner. Now we have not a Commissioner of Fair Trading. as one might have supposed, but a Director-General of Fair Trading. Why Director-General? One does not have a Director-General of Public Prosecutions, though I suppose I shall be told that we do have to have a Director-General of the B.B.C. But why not "Commissioner"? If this gentleman is going to do the same kind of work in the fair trading field as the other commissioners do in their fields—that is to say, to champion the cause of the small man in his dealings with vast organisations—why not call all these people 64 "commissioners" so that instantly the word would ring a bell and people would appreciate what kind of person is being referred to and the kind of work he does?
I very much agree with what the noble Lord, Lord Jacques, said about bringing forward the legislation that will be necessary consequent upon the Crowther Committee's Report, and for the additional reason that I do not believe, now we have this Director-General—call him what you will—of Fair Trading, that the Crowther Committee's consumer credit commissioner is ever going to function, because consumer credit is so much a part of fair trading and so intermingled with it that the same gentleman will surely deal with both topics. Therefore the Director-General, when he takes office, is going to be in a very unsatisfactory position with regard to this important matter of consumer credit. He is going to take office knowing that the present law on consumer credit is acknowledged to be unsatisfactory. He will be loth to take action on the basis of the existing law, which is known to be unsatisfactory. He will be frustrated in not being able to take action because of the delay in bringing forward the new legislation to reform the consumer credit law. Surely it is incumbent upon Parliament to bring forward this new legislation on consumer credit so as to give the Director-General, when he is appointed, a chance to deal with this important topic in the light of the latest thoughts of Parliament upon this subject.
It will be no good regarding the Director-General of Fair Trading as a sort of nursemaid, holding the hand of the more gullible consumer who is being "bounced" into buying something he does not really want. The maxim "Let the buyer beware" is just as good a watchword to-day as ever it was. It is only the inequality of bargaining power at the present time between the consumer, on the one hand, and the vast organisation, on the other, that makes necessary any commissioner to help the consumer in his battle against the big battalions.
I am glad that the Director-General is going to operate largely through the Inspectorate of Weights and Measures, because it is no use expecting the average consumer to write a letter to somebody in or under the central Government. 65 Indeed, it is hardly any use expecting the average consumer to write any sort of letter to anybody at all. Merchants know this very well. People who want to get their bulb catalogues to amateur gardeners do not simply say in their advertisement, "Write to us for our glossy catalogue". They include a coupon with their advertisement saying, "Please send me your delightful bulb catalogue", so that all the consumer has to do is to write his name in the space provided and send off the coupon. That shows how little the average consumer is inclined to sit down and write a letter; and I very much rejoice that he will be able to confront the local weights and measures inspector with his problems in the field of the Fair Trading Director-General. The noble Lord, Lord Jacques, can take comfort, because I believe it has already been agreed that the weights and measures inspectors are to have a change of title now that it is recognised on all sides that mere weights and measures are a decreasing part of the work these gentlemen do.
I am alarmed by one of the powers given to the weights and measures inspectors under this Act—a power which I do not think they deserve to have and one which I do not think for one moment they would seek. Clause 29(1) says that an inspector, without necessarily having any cause to suspect that an offence is being committed may, for the purpose of ascertaining whether any offence under this Act has been committed,…inspect any goods and enter any premises other than premises used only as a dwelling;".If that merely meant that an inspector could go into a shop and have a good look round, there would not be much complaint about that; but is he to be empowered (as this subsection would appear to empower him) not to confine his activities to the shop but to wander into the stock room behind and into the warehouse behind that, and to go searching about among the merchandise quite at random on the offchance of discovering that an offence under this Act had been committed? I do not believe that the weights and measures inspectors do behave like that. For one thing, I believe they are too busy, and I do not believe that they want any such powers. I very much hope that when we come 66 to the Committee stage we shall not give them that unnecessarily wide power to go searching in premises without reason to suspect that any offence has been committed.
The noble Lord, Lord Jacques, referred to codes of fair trading. It would be too much to expect the Director (at any rate in the first few years) to collect a comprehensive code of fair trading, but if this could be done in collaboration with the trading associations, chapter by chapter, and over the years a comprehensive code of fair trading could gradually be accumulated, this would be of very great benefit.
There is one specific matter which is not mentioned in the Bill: it is the matter of the date marking of perishable foods. We had a report from the Food Standards Committee about this subject some time ago; and also some time ago we had a promise from the Government that they were going to publish their findings and what they proposed to do about the Food Standards Committee's Report. Do the Government consider that packeted perishable foods should be stamped openly with the date by which they must be sold and, in particular, is this to be allowed to be done in code so that the retailer knows the final date for sale but the consumer is deliberately denied the information? The consumer is the person who is going to be, at worst, poisoned or, at best, dissatisfied by the stale food that he finds because the date stamp is in code. It is time we had from the Government a statement of their thoughts on this matter and I hope that this will be quickly forthcoming.
Finally as to publicity. I do not believe this Bill will achieve very much unless a good publicity campaign is mounted in the early stages as soon as the Act comes into force. The necessary publicity campaign will be expensive; I hope the expense will not have to be met entirely out of the budget of the Director of Fair Trading. That would very much cramp his style in the early stages when he will have many other expenses to meet. I hone that a special grant will be forthcoming out of public funds which will pay for the necessary publicity campaign in the early stages. If the Bill, when it becomes an Act, is publicised satisfactorily I believe that 67 consumers will have much to be thankful for.
§ 5.33 p.m.
§ LORD SAINSBURY
My Lords, as a retailer of some 50 years' experience, and also as a Member of your Lordships' House, I have long been concerned with consumer affairs. Some 11 years ago I made my maiden speech on the Molony Report which has been acknowledged in another place as having given rise to the Trade Descriptions Act 1968, which in turn paved the way for the Bill we are now considering. Perhaps because of my retailing backround I have always looked at the problem of consumer protection in a practical rather than in an abstract way, and it is in this spirit that I take part in the debate. Although the Bill is not perfect (and I shall outline my reservations in a few minutes) I believe that it deserves a positive response. It is a welcome measure partly because it provides yet another indication that the Government have been forced to drop their 19th century laissez faire dogmas that we heard so much about during and immediately after the General Election.
As an unrepentant middle-of-the roader I have never accepted the nonsense that was propagated by the Government in their first flush of youth about unbridled competition being the best protection for the consumer. That was why I was glad that the Minister, when introducing the Bill in another place, acknowledged that competition was not an automatic panacea and that it could, and sometimes did, work against the consumer's interest. My only regret is that it has taken so long for the Government to see the light and that during this rather slow process of reeducation the consumer has received very little official attention. However, I am sure that the right reverend Prelates would agree, if they were present, that conversion is better late than never, and I willingly concede that the Bill is a great step forward.
I do not wish to comment on the provisions relating to monopolies and mergers except to say that I regard as encouraging the close co-operation envisaged between the Director General of Fair Trading and the Monopolies and Mergers Commission in regard to mono- 68 poly situations. This implies a recognition that monopolies have a direct effect on the individual consumer which is as important as the broader but less tangible national economic considerations. However, mergers have an equally close effect on the consumer, yet the Directorate's function in regard to these is limited to advising the Minister rather than, in the case of monopolies, making references to the Commission. It is difficult to see the justification for this unless one argues that the Director will already have enough to do if he is to fulfil all his functions. Indeed, the question arises whether the Government have committed the mistake of overloading the Directorate, and whether they are prepared to provide the resources to ensure that it becomes a powerful body that can make its influence felt without undue delay. Certainly an estimated annual outlay of £675,000, of which some £200,000 is allocated to the functions previously fulfilled by the Registrar of Restrictive Trading Agreements, seems to be on the low side.
A similar question arises with regard to the ability of the weights and measures inspectors—or, as my noble friend Lord Jacques suggested they should be called, trading standards officers—to enforce compliance with the orders that may be made under the Bill. In the past some parts of the country have suffered from a shortage of weights and measures inspectors. It would be interesting to know what steps the Government are contemplating to ensure that the intentions of the Bill are not frustrated through a shortage of trading standards officers.
I also have some reservations concerning the role of the Consumer Protection Advisory Committee. It seems to me that by virtue of its composition this body is likely to bring together considerable knowledge in regard to trade practices and the interests of the consumer, and therefore I agree with my noble friend Lord Jacques that it seems a pity that its functions will be limited to tendering advice and preparing reports only when it is asked to do so by the Director or by the Minister. In my view, it would be desirable to promote a two-way traffic between the Committee, the Director and the Minister, so that the former can act as a catalyst and press for action when it considers it desirable.
69 I also regret that the Bill does nothing to create a network of local consumer protection outposts and I hope that the consultative document to which the Minister referred will be available as soon as possible. Local consumer protection outposts can provide advice to the consumer and deal simply and quickly with any problems. The success of the few consumer advice centres operated by some local authorities and voluntary organisasations shows that in addition to a strong centre which this Bill provides there is a need for such outposts. Inevitably a central body that is mainly concerned with broad policy issues is unable to react to individual complaints quickly and must appear remote from the everyday problems of the consumer. Nor is it in a position to ensure that those who most need help are aware of their rights and the ways of obtaining redress.
In conclusion, my Lords, I wish to stress that in my opinion the responsible trader has nothing to fear from this Bill. We should remember that many retailers who value the trust of their customers have been working hard to provide better and more information in advance of legislation. Take the question, which has already been raised, of unit pricing. The firm with which I am associated has been unit pricing meat, cheese and many other perishable products for as long as I can remember, and we are now introducing a similar system for detergents and biscuits, as well as for a number of our own label products. However, contrary to the impression sometimes given, there is no justification for unit pricing all products. As noble Lords know, the essence of the system is that it shows both the price of the pack in question and the price per pound. This is only of benefit to the consumer when competitive products are sold in a large and often bewildering variety of sizes which makes it difficult to work out which product offers the best value in terms of quantity. However, where products are sold in a few recognised sizes—and this is true of the great majority—no problem arises, and unit pricing has little, if anything, to offer. Another example, already referred to, of better information for the consumer is open-dating which we are now extending to a large number of perishable and other products in place of the code dating previously used. 70 My Lords, one result of the long-term rise in living standards and the relentless march of technology is that consumers are confronted with an ever-increasing variety of products. Inevitably this makes the task of consumer protection more complex. However, it is impossible and undesirable to hold the hand of the consumer all the time. What the Government must do is to ensure that consumers are protected against unscrupulous practices and the undesirable features of competition. The Government and the trader must see that consumers are given all the information necessary to make a rational judgment of the products or services offered. In the final analysis, however, the consumer must be allowed to make his own choice.
§ 5.48 p.m.
§ LORD NATHAN
My Lords, the Bill seems to me to be divided broadly into two sections rather than three, and the first head, of which the noble Lord, Lord Sainsbury, has spoken with such good qualification, is the consumer and consumer protection. The other section, concerning restrictive trade practices reform and monopolies, is of course devoted to the protection of the consumer, but less directly. I would rather define it as being directed towards the promotion of competition with a view to protection of the consumer—and I believe that there is a distinction to be drawn. I would not dream of trespassing on the field in which the noble Lord, Lord Sainsbury, is so expert.
The other point that I would make in commencing is that I hope we are not deluding ourselves by creating the appointment of a Director General of Fair Trading. I do not see how a man can direct everything that he is required to direct under this Bill. I can see that we shall have to have a registrar of restrictive trading agreements, as we have at present. I can see that, in effect, we shall have to have a registrar relating to monopoly and merger situations, and we shall certainly have to have one or more senior persons dealing with consumer problems falling under the first part of the Bill. Therefore, I think if we are to have a Director General we must understand the capacity of any man, however much a paragon he may be. It seems to me that his prime function ought to be 71 not so much in administration as in public relations. The success which will attend the introduction of the provisions of the Bill will depend very largely upon the success which the Director General has in obtaining public support. This is perhaps particularly so, and particularly obviously so, in relation to the consumer section. A good public relations job done by him in relation to good trading practices will clearly achieve far more than the exercise by him of his statutory powers.
I propose to restrict myself to a tiny part of this Bill, relating to the Restrictive Practices Acts that has received little attention, but which is significant. From what I have said I hope I have made it clear that I think "Director General" in this context is an unfortunate title, because I do not believe he can be a Director General. I would much prefer the suggestion made by the noble Lord, Lord Airedale, of "Commissioner"; he has a much greater overall responsibility particularly in his relationship with the public. So I would say a word about public relations in relation to Part IX of the Bill concerning restrictive trade practices. I would suggest that he should devote himself to the promotion of competition; that he should define those types of restrictive agreement which will be of assistance in promoting competition, and I shall seek to show that there are some and that that situation is well accepted at the present time. Of course, there are certain restrictive agreements which are specifically exempt under this Bill—and I am thinking of Clause 96: it is a minor one but it exists. I accept that it is difficult to legislate for specific exemptions because the types of agreement are so varied.
At the present time there is a provision under Section 9(2) of the 1968 Restrictive Practices Act, which really replaces Section 12 of the 1956 Act, enabling the Registrar of Restrictive Agreements to make representations to the Board of Trade (as it then was) to accept that certain agreements should not be the subject of court proceedings because they are of no significant economic consequence. No guidance has ever been given, so far as I am aware, for the public generally as to the circumstances in which those powers would be exercised 72 But I have looked in the context of this debate at the Registrar's Report for 1969–72, and there are of course a number of such agreements in respect of which directions have been given. The first question I should like to ask is whether the Government would be prepared to indicate broad categories of agreement in respect of which directions under the section would be given. There are two weaknesses under Section 9(2) which provide for these directions. One is that the agreement must in itself be of no economic consequence to the country as a whole, and the second is that it is framed in an entirely negative way; it is so insignificant that we do not have to worry about it.
So far as our current experience is concerned we are gaining it, if from nowhere else, from Brussels; and there, as your Lordships are aware, there are two types of exemption (if I may call it so) which are provided for in connection with Article 85 of the Rome Treaty which itself relates to these restrictive agreements. There is the procedure under which an expressed legal exemption is given, and there is the announcement, an expression of view, as to those types of agreement which will be acceptable as promoting competition. What I would suggest is that there should be a code of conduct, prepared probably by the Director General, in relation to those forms of restrictive agreement which he would consider would promote competition. Such agreements as are accepted by the Community, for instance, include co-operation agreements, and I should have thought that the co-operation between small to medium-sized firms in this country would enable them to compete far more effectively against the industrial giants than would be possible if they were unable to enter into such agreements except under the special provision to which I have referred. That is certainly the view of the Commission.
This of course touches upon the point which the noble Lord, Lord Jacques, raised in connection with co-operatives and agreements as to procedures between them. There must surely be a vast number of cases where such agreements would be advantageous. I think it is fair to say that the ordinary businessman and the ordinary person advising him consider that a restrictive agreement under which 73 two United Kingdom organisations accept mutual restrictions is prohibited and they are not consciously aware that this problem can be overcome in the rather complicated way I have mentioned. I hope that the Government will look at this matter in an affirmative way and that the Director General will have an indication given to him that this is something desirable to do.
There is the further point, the much broader point on which I should not wish to detain your Lordships, concerning the current most unsatisfactory position arising from the European Communities Act, under Section 10, and the Restrictive Practices Act, and I hope that some consideration may be given later to sorting out what I think is an anomalous situation: that there are certain agreements which appear to be perfectly lawful under Common Market law but the Sword of Damocles is held over them by our own law, including Section 10 of the European Communities Act, for an indefinite period. This is a point which arises in practice in a case of this kind. Assume, for instance, that a United Kingdom company wished to enter into a restrictive agreement of a particular kind with a French company, and assume that this was acceptable under the announcements made by the Commission in relation to Article 85 of the Treaty. No problem arises at all. But suppose that two English companies want to enter into that co-operative enterprise, then all hell is let loose because the Registrar has to be notified under the Statutory Instrument, laid before Parliament only yesterday; one has to register here; one does not know whether the Registrar is going to refer one to the court; one does not know whether the court here is going to take jurisdiction or not. It seems to me it would be infinitely to the advantage of traders here, and to the promotion of competition, that this point should be cleared up.
§ 5.58 p.m.
§ BARONESS BURTON OF COVENTRY
My Lords, way back in 1967 I registered a protest, when we were the Government, as to the way in which consumer affairs always got pushed to the back of the business of the day. I hope that the noble Lord, Lord Drumalbyn, will not mind my reminding him that he supported me on that occa- 74 sion. So I am raising this point now before we reach the Committee stage. Without belittling in any way the business which preceded this debate to-day, and not of course dealing with any which went through "on the nod", I wish to register a protest that the Second Reading of this Bill, which the Government believe to be a most important Bill—an opinion on which we concur—should not have been first business of the day; and I hope that the noble Lord, Lord Drumalbyn, will perhaps draw the attention of the powers-that-be to that remark before we reach any further stages of the Bill.
My Lords, on November 14, 1962, which is a long time ago, when I had the privilege of introducing the first Parliamentary debate on the Molony Report, I did, with considerable trepidation, use a phrase in what I was told was dog Latin. The trepidation was because my Latin was practically nil and the present Lord Chancellor was with us in his capacity of Lord President of the Council. The phrase was to the effect that we were no longer having the caveat emptor of the '50s but the caveat vendor of the '60s. About ten years later, on December 2, 1972, The Times, on the present Bill, headed its leader comment: "The Trading (Caveat Vendor) Bill". So I felt that dog Latin at last had been accepted.
In common with most people studying consumer affairs, in Parliament and outside, I thought the Government behaved badly in the way they disbanded the Consumer Council. But, as the House knows, I had felt for some time that basic reorganisation was essential. Well, we have here a complete recantation by the Government and certainly basic reorganisation. I for one am glad that the Government have changed their approach and their attitude towards consumer affairs. We shall be looking at the details later in Committee but, in general, what are we offered? If I may say so, I believe we are fortunate in the Minister for Consumer Affairs and in his adviser, Miss Rosemary McRobert. I have known Miss McRobert for many years. She has knowledge, judgment and independence. So I welcome the change in policy and I welcome the Minister. What am I hesitant about? I think everything—and I mean everything and 75 would underline the word "everything"—will depend on the appointment of the Director General who is to be designated before the Bill is on the Statute Book, on the appointments to the Consumer Protection Advisory Committee and on the status of both. It seems that the Director General will be given the status, but will the Advisory Committee? If we are to have just another consumer council (and I am not being offensive to my noble friend Lord Donaldson of Kingsbridge) then we shall have missed a great opportunity.
Concerning membership, I agree with what was said in Committee by the Minister for Consumer Affairs, that members would be chosen not as representatives but because of the contribution they could make to the general quality of the Committee's work. I am sure that is right, just as I am sure that the fundamental necessity is that the Advisory Committee be recognised as completely independent. But if it is as good a Committee as we all hope, then I think it should be capable of reaching decisions in less than three months. Given a competent secretariat I would hope that three months would prove to be the maximum time taken and that the Director General would press this matter. When affairs drag on they are apt to lose impetus.
On March 1 and November 8 of last year I tried to outline what I hoped would be Parliamentary developments in the world of consumer affairs. Perhaps I may start by saying that I have not got the establishment, by Royal Charter, of an Institute of Consumer Affairs. This I envisaged at the centre of my proposals. Later in my remarks today I should like to return to what we have got at the centre; namely, the Consumer Protection Advisory Committee and the Director General.
May I now turn to what I call the periphery? I had drawn two circles on a piece of paper. The inner circle was my Institute of Consumer Affairs (now the Consumer Protection Advisory Committee) and the outer one obviously is my periphery. Movement was from the periphery to the centre. On the periphery—and the list was by no means complete—I placed, for example, industries and the trade associations. It 76 seemed to me then, and still does, that we should aim at trade associations drawing up codes of practice which would be accepted by their members, and then subsequently be accepted as fair trading practices by my central Institute of Consumer Affairs. I am glad that other noble Lords who have spoken today have referred to this particular matter. I hope very much that the noble Lord, Lord Drumalbyn, will feel that this matter can be looked at further. I have studied what was said in Committee, as I am sure other noble Lords have done, and I appreciate the problem of seeming to give any such codes of practice statutory authority. But I believe that encouragement to trade associations to establish codes of practice could go a long way towards removing that small minority of traders who are a menace to everyone, customers and traders alike.
Then I placed the Citizens' Advice Bureaux as dealing with the complaints side of consumer affairs, and I was glad to note that the Minister for Consumer Affairs said that he would not discount the Citizens' Advice Bureaux as being untrained voluntary workers. He stressed (and I have always thought this) that in certain places, while people might not be enthusiastic about going to a council-run advice centre they might more readily go to a C.A.B. in the community because it was run by someone who was not—and who was known not—to be employed by the local authority even though the local authority might have helped to finance the establishment.
With the Citizens' Advice Bureaux on my periphery I placed the information and advice centres being set up by the Consumers' Association, in conjunction with the local authorities. I thought that these centres should be established throughout the country; they are quite excellent. Sir Geoffrey Howe said that he was anxious to move towards the establishment of a network of local advice centres. However these might be established he thought it would be a good idea that all should have—and I quote:a common house style in terms of a publicly identified description for themselves… they might work towards a common telephone number… they would certainly improvise their own two-way linkage with the Director General to become more effective.If I may say so, my Lords, that sounds excellent.
77 I placed the Advertising Standards Authority and the advertising associations out on my periphery and there I gave them a two-way flow, from the periphery to the centre and vice versa. Next to them were the research organisations and those occupied mainly with testing. I did not believe—and I do not believe—that we need to set up new organisations here. It seems to me that we have enough, of repute, to cover the needs and requests from the periphery and from the central body. I thought, too, that the consultative councils must be drawn in.
If I may take, once more, the example of POUNC (the Post Office Users' National Council), where my noble friend Lord Peddie has done such an excellent job of work, what is done and decided by POUNC must be coveyed to the centre so that they know officially what is being done in that field. And so on, right through the orbit of consumer affairs. It would be disastrous if people were simply told what to do: I want them to co-operate. It was good that the Minister for Consumer Affairs recognised the possibility of linkage with these consultative councils of the nationalised industries. I regard such linkage as essential.
While I am on this aspect I should like to know from the noble Earl, Lord Limerick, when he replies—if he has sufficient time to find out—whether Sir Geoffrey Howe believes that the nationalised civil aviation industry should be the one nationalised industry to suffer from the handicap of having no users' council and that consumers in this area are to have no means of obtaining justice from a body independent of the industry concerned. In the proposed set-up resulting from this Bill, are air travellers to be the only consumers with no such reference available? The noble Lord, Lord Drumalbyn, must know that all airlines are planning for a vast increase in the number of air travellers. In this new area of concern for a consumer why do the Government insist, here only, on isolating the seller from the customer? Is it that they have taken up a stance on the matter and feel that they will lose face if they give way? After all, they have completely reversed their attitude on consumer affairs. I want to know why air travellers should be exempt from this change of policy.
78 What I want is quite simple, and I am sure the noble Lord knows this. The Government say they have a policy whereby,Nationalised industries are expected to discuss the broad outlines of any major changes of policy with the bodies representing consumers before taking final decisions.The civil aviation industry is a nationalised industry: it carries millions of people on millions of journeys each year. It has consumer problems of many complexities: business problems and holiday problems. Fares are expensive and rising, particularly on European flights from this country. Then, although it is off the point, I wonder whether the Minister has seen the advertisement of T.W.A. which says that it is cheaper to fly first-class in America than tourist in Europe. But to come back to the point I was making, passengers pay millions of pounds each year. They have a right to raise points about the service they get in return, and I believe that they have a right to see for themselves that these points are given a fair and independent hearing. As I put to the noble Lord, Lord Drumalbyn, some time ago, I want to see established an air travellers' national council similar to the Post Office Users' National Council, so that air users' suggestions, complaints and criticisms may be adequately considered. I want to see that established so that such a council may form part of the link envisaged by Sir Geoffrey Howe when he speaks of the nationalised industries and their responsibility to consumers.
My Lords, as Sir Geoffrey will obviously read this debate, and as I have received no satisfaction at all from Ministers in this House on this matter, I propose to explain to the Minister for Trade and Consumer Affairs the injustice inflicted on air travellers in so far as his own particular field is concerned. I think that the House will support me on this. I am not on merit, but on the simple fact that I have been fobbed off for months on a consumer need and I think it quite disgraceful that one cannot obtain a hearing on an important consumer deprivation. I think it even more disgraceful when that deprivation, without reference to anybody, is based on an implication that is simply not true. Those are strong words and I propose 79 to give my evidence to the Minister for Trade and Consumer Affairs.
The House will recall—I doubt whether it will ever forget—the year-long battle that I have been waging on the withdrawal of check-in facilities at the West London Air Terminal. I do not propose to weary noble Lords with detail, but it will be common knowledge that this matter has not been referred to any independent body. B.E.A. have been judge and jury on their own action. It will be common knowledge also, I think, that we customers have been told that this check-in service is to be withdrawn for two main reasons: first, expense; and secondly, late-running buses to Heathrow delay the punctual take-off of planes.
Concerning the first, B.E.A. told me that they expected to save £400,000 a year, although the minimum amount brought in by B.E.A. passengers alone using these facilities is £40 million per annum, and by all passengers using these check-in facilities, £70 million per annum. B.O.A.C. intend keeping on their own check-in facilities because they wish to help passengers and, presumably, because their own buses are able to run to time. Concerning the second point, punctuality, the House will recall that B.E.A. felt unable to continue with this service, or to guarantee passengers catching their plane whatever bus they may catch from the West London Air Terminal to Heathrow, because buses run late.
The House will also recall that I said in the debate on April 2, last, that when I asked B.E.A. for figures of late-running buses they were unable to provide me with any. In view of that fact, it will be imagined with what surprise I heard the noble Earl, Lord Ferrers, in that debate suddenly produce a figure of 435 delayed flights out of Heathrow in October, November and December of 1972. And he even painted the lily by telling us that this was an average of 5 flights a day. For a moment I was completely taken aback, because if delays were of this nature why not produce the figure to me prior to the debate? That would have taken the wind right out of my sails. Luckily, the noble Lord, Lord Harvey of Prestbury, took part in this debate, and he rose to point out that this 80 was no normal running of buses but that one of the tunnels at Heathrow was out of action for those three months: nobody got there in time whatever their transport, not even the pilots.
The intended implication was that by the late running of B.E.A. buses, as exemplified by this figure of 435, continuance of these passenger services was made impossible. It was a dishonest implication, and I think that the noble Earl, Lord Ferrers, should have looked at it very carefully beforehand. Since then, however, I have had a letter sent to me by the representative of the B.E.A. coach drivers which stated that Lord Ferrers's remarks had aroused much anger among the men who operate these vehicles. The writer said:We cannot let this go unchallenged, and your suggestion that failure of coaches to arrive on time at the airport prompted the decision by B.E.A. to close check-in facilities is a complete misunderstanding of the position, as we know that a very small number of coaches indeed are so delayed as to cause inconvenience to passengers or hindrance to aircraft.One further interesting point from the letter:If late coaches did reach the appalling level suggested it poses an interesting question or two—why was the staff not informed, and what action was taken to assist them?The letter was sent to the noble Earl, Lord Ferrers, and he let me have a copy of the reply. That did not deal with any of the matters involved. I do not believe that dishonest implications should be accepted as a basis for deprivation of an important consumer service, and I am asking the Minister for Trade and Consumer Affairs, through this debate if I can get no better satisfaction from Ministers in this House, (a) to have these matters looked into by an independent body; and, (b) to establish an air travellers' national council.
Of course, the consultative councils of the nationalised industries would be part of what Sir Geoffrey referred to as a national network linked to the Director General who would be the focal point. Reports would come in to him from local authority trading standard organisations: advice and information would go out from him. The noble Lord, Lord Drumalbyn, said something about that. I believe that our greatest need is consumer education, but if we look for a 81 recognition of that in the Fair Trading Bill we have to turn to Clause 114, which was the one mentioned by the noble Lord, Lord Drumalbyn, and which seems to appear as a short afterthought under "Miscellaneous and Supplementary Provisions". May we have an assurance from the Minister when he comes to wind up that this is no afterthought but is an important aim of this legislation?
My Lords, just a final word concerning that November 8 periphery of mine. Here I left a wide section for the European aspects of consumer affairs as they affect this country and as we affect Europe. Some of that section is being filled by the Consumers' Association. As other Members have probably seen in the May issue of Which?, the European Consumer Bureau has set up a small but high-power and multi-national secretariat in Brussels, and I quote:able to enter into constructive dialogue with the E.E.C. Commission".Miss Eirlys Roberts, head of the Consumers' Association research department and editor-in-chief of Which?, has been appointed part-time chief executive of the secretariat. All in the consumer world know Miss Roberts and have the utmost confidence that no better person could have been found. Her appointment was announced two months ago. In addition the Consumers' Association are building up a new research unit here—the European Consumer Unit. This will study the domestic application of E.E.C. policies and draft legislation, and will keep in regular touch with other interested organisations in this country. In addition, as of course the noble Lord, Lord Drumalbyn, knows, its conclusions and recommendations will be made available to the Government, which will pay a contractual fee for this consultancy service.
Preceding the announcement of Miss Roberts's appointment by about a week was another one, that of Mr. John Braun, the Secretary of the British Advertising Standards Authority, who has moved to Brussels to head a new division in consumer affairs at the E.E.C. It seems that this country has much to offer Europe in the consumer field, and that this is recognised.
My Lords, as other speakers, I wish the Fair Trading Bill a good passage and a constructive one. I have always 82 believed, along with the Molony Report, that whatever set-up we have here it must be a co-ordinating agency and it must have a supreme position in consumer affairs. We must see to it that the Director General, the Consumer Protection Advisory Committee and this Bill produce just that.
§ 6.23 p.m.
§ BARONESS PHILLIPS
My Lords, I should like to thank the Minister for introducing the Bill in such a clear and concise way, particularly as I had rather dreaded it, with its 123 clauses. It is difficult not to appear ungracious, but this Bill is unique in one sense. As I understand it, it has not been preceded by either a Green Paper for consultation, or indeed a White Paper. In our discussions on the major Bill we are dealing with, the Social Security Bill, we were able there to make certain comparisons and to offer certain suggestions. We were not always sure that the Government took any notice. But in this instance we have had this Bill given to us, as it were, cold, and I must say it has made life a little more difficult for those of us who wish to study it carefully.
My Lords, as I have said a little while ago, I knew that at some stage we should have the Year of the Consumer. Everything moves in fashions, and 1973 is certainly proving to be the Year of the Consumer, so it would be very wrong not to welcome this Bill. It is an important advance in the field of consumer protection, and I applaud the basic philosophy behind it. No one would disagree with the argument that consumers have to be protected from monopolies and from price-riggers. One of the weaknesses of the Monopolies Commission has been that it can examine only those trades where a third of the business was in the hands of one firm, while the Restrictive Practices Court could examine and rule only in collective agreements; and that of course produced some difficulties. I therefore applaud the procedure in this Bill whereby traders who persist in breaking the law concerned with consumer protection can be prevented from doing so, if need be through the Restrictive Practices Court. Also I am delighted that the definition of a monopoly situation is to be a proportion of the market defined as 25 per cent. as compared to the old 33 per cent.
83 The Minister used the phrase that the Director General—or the Commissioner, whatever we are going to call him finally—was the keystone of the whole Bill, and anybody who has studied the Bill would, of course, concur with that view. Indeed, the real power and the successful operation of the whole Act, when it becomes an Act, rests very fairly and squarely on the shoulders of the Director General, since he is also the Registrar of restrictive trading agreements. He takes over the dual responsibility. He is also, I see, to bring proceedings before the Restrictive Practices Court against persons who persistently maintain a course of conduct unfair to consumers.
Those who have followed the debate in another place will have seen that the Government have clearly not made up their own mind about the precise character of this office. The Minister described this new Director General as a man of immense personality and very high calibre. He would need to have considerable width of vision, because he has not only to cope with day-to-day problems but must also think about ways in which problems will arise in the future. I will not weary your Lordships with all the other qualities he must have. Many aspects of consumer problems, we are told, will be solved not only by a frontal attack, but by being able to obtain agreement with manufacturers and other sections of the trade that certain practices which may be seen or certain approaches that may be current will not be in the best interests of the consumer.
On the other hand, at a later stage in the Committee the Minister said that the Director General's duties are limited in any event. He has no general duty to go "fishing around". How, then, is he going to discover what action is to be taken, if he is not actually to seek out something in the interests of the consumer? I was very heartened to see that this magnificent creature is possibly going to be a woman; I notice the Minister gave some assurance on that. It seemed to me that, since the Director General is going to have specific powers, certainly one of them must be the power of initiation, and several of your Lordships have emphasised that point. As the Bill goes through Committee stage we can probably clarify this very important matter.
84 Then I see that the Committee is to be—again I quote the Minister's words—representative and effective, and not manned by "middle-class do-gooders". I do not know quite why "do-gooder" is a derogatory word, speaking at the moment as a do-gooder of many years standing, though possibly not a middle-class one. I should say that many people who have worked in the consumer field, whether described as middle-class do-gooders or not, have done a remarkable job, particularly in the period when the Government left the consumer totally unprotected. The Consumer Protection Advisory Committee in my opinion must be a dynamic body, not a fallback for the Minister when a difficult question is put to him. I wish it were not called "advisory". I always feel there is some, thing very negative about advice. After all, you can offer advice, but no one, including Governments, has to take it. The Committee does not appear to have powers of initiation—perhaps the Minister will correct me if I am wrong in this —nor does it have power to make references itself or take direct action. Despite the weaknesses of the, now of blessed memory, Consumer Council, it was able to initiate and take action, and I think it is very important not to give less power to this newly-created body. I am not quite sure whether the Director General is answerable to the Minister or answerable to Parliament. I searched through the Bill, but I was not quite clear on that point. Perhaps we could be told that, too.
One of the other important issues which has arisen during the course of the Bill has been the position of the professions. Anyone who has suffered from the inefficient services of, let us say, a solicitor—I must take some profession—will have appreciated the monopoly situation which appears to exist The average person, I believe, is still very intimidated by the professional and does not always recognise that the advice of a bad practitioner is worse than no advice at all. I should not like to elaborate on some of the experiences I have had personally in this connection. I feel that as the professions were originally exempted from the Bill but a successful Amendment changed the situation, it was wrong that that exemption should have been restored at the Report stage. I give warning to 85 the Minister that we shall seek to include the professions. I believe that in this day and age more people have bad service than bad buys in goods. Therefore, the professions should certainly be included in the Bill. In any case, anybody who is a good professional has nothing to fear. I believe that this was always the advice we gave to the trader.
There is surely something inconsistent in that the Monopolies Commission covers the professions while the Consumer Protection Advisory Committee will not. As I see it, in the future there will be more and more services which we shall need to look at, whether they are of a professional character or of a commercial character. It is vital that we should have value for money, and not be misled or confused, or have withheld from the consumer "adequate information of their obligations", to quote the Bill, as in the case of manufacturers.
I noticed that in the other place a great number of debates took place on the duties of the Director General in relation to matters affecting the economic interests of the consumer, but he was only to receive and collate evidence when it concerned health and safety, though when it was economic he could keep it under review. In view of what we constantly read in our newspapers about some of the articles we buy, I really cannot see why the Director's duty should have this very artificial division, and I shall seek to include the health and safety clauses in the Bill.
I should like thoroughly to endorse all that my noble friend Lord Jacques said about the need to implement Crowther. I introduced a debate on the Crowther Report in this House. It was the first time it had been talked about in either House, and it was nearly two years after the issue of the Report. There are still very undesirable practices going on in consumer credit, and the average person is very much at the mercy of the unscrupulous individual in this field.
I would also underline the need for the small claims court, and for my noble friend Lord Sainsbury's suggestion of the network of consumer outposts. I should like to tell your Lordships that I am at present, under another hat, engaged in trying to set up a consumer outpost in the Midlands, and this is proving a very useful exercise.
86 I await with great interest this consultative document. I am delighted to know that the Director will have an exchanging and interchanging study of the consumer scene. This is absolutely vital, because all the time there are new methods of selling new goods coming in the shops. I will certainly not in any way impede the passage of this Bill through the House. Let us hope that the year of the consumer will bring forward still other legislation.
§ 6.33 p.m.
§ THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF TRADE AND INDUSTRY (THE EARL OF LIMERICK)
My Lords, this has been a wide-ranging and fascinating debate. I am now attempting—and it is no light task—to deal with some of the questions and comments that have been raised by the Bill. This is a comprehensive and therefore necessarily complex Bill, and I am conscious of the fact that at this hour I must not speak for too long. Before turning to the particular, may I make one general point in elaboration of my noble friend's opening remarks. He gave a natural emphasis to the provisions which are new. Certainly the importance of the Director General's consumer protection functions must not be underrated. Equally I should like to say a few words about the crucial significance of the work on monopolies, mergers, industrial structure and rationalisation, which the Director will not have to develop de novo but will be taking over from existing institutions.
The Department of Trade and Industry, and its predecessors, have come in for some sniping from time to time, and under successive Governments, over the administration of policy on monopolies and mergers. This is not the time or the place to deal in detail with such criticism. Some of it has undoubtedly been well informed, but on other occasions it has shown remarkably little appreciation of the considerations which are entailed, and even ignorance of published material on how the policy is interpreted and applied. A reference to the Monopolies Commission is a serious matter. It has been the Department's duty in the past, as it will be the Director General's duty in the future, to assess the facts of each situation on its merits, in the full knowledge of the burden which 87 investigation must inevitably impose on the firms concerned. The costs incurred in an investigation are not negligible, but they have been accepted as the price for a thorough assessment of situations which are judged to be potentially damaging in the public interest. If an investigation is called for it must be undertaken, and after the Commission has completed its investigation there remains the equally important task of following up the Commission's recommendations. At present both phases of this work—the pre-reference and the post-reference phases—fall to the Department of Trade and Industry, with such assistance from other Departments as a particular case may require.
In looking forward to the beneficial effect of centralising much of this work in the Director's office, I am in no sense apologetic about the record of the past. The empirical approach towards these problems of industrial structure has happily been a bipartisan policy, followed by successive Administrations and administered under successive Statutes. I believe that our record stands comparison with that of any other industrialised country in attempting, to administer comparable policies. The Director, when he takes office, will continue to administer a policy which is, in essence, pragmatic and which does not lend itself to simple answers or to rules of thumb. He will need to develop a relationship with industry which will ensure that the decision whether or not a situation calls for reference to the Monopolies Commission is soundly based. He will throughout need to keep in mind the general objective by which we have been guided in the past; not one of needless harassment or niggling, but of increasing efficiency and international competitiveness. The problem will remain one of steady, continuous pressure within a framework of law which influences the behaviour of firms in the direction we all want to see and in which the scope for abuse is minimised.
Equally where the restrictive practices legislation is concerned, the record—and it is a very brief one—speaks for itself. The most recent report of the Registrar of Restrictive Trading Agreements indicated that of the 2,875 agreements entered on the register, 2,620 had expired or been determined. This shows that the 88 legislation is effective, but it is also flexible. This leads me to a point touched on by the noble Lord, Lord Nathan. In his recent reports the Registrar has gone out of his way to emphasise his readiness to enter into discussions with firms about their problems. Agreements containing insignificant restrictions do not need to be referred to the Restrictive Practices Court. Since 1968 there has been a provision under which the Department can absolve the Registrar from the duty of referring such agreements to the Court, and over 100 agreements have been dealt with in this way.
I anticipate, too, that the Director will wish to make full use of the flexibility which the law provides in the future, and to advise firms as to the likelihood that their agreements will qualify for relief from reference to the Court. In all these matters the Director will have to steer a careful course between the natural desire of the trading community for certainty and the wider public interest considerations which are built into this Bill. This lends weight to my noble friend's point about the qualities to be sought in making the appointment. To sum up, the provisions that we have been debating add up to an important and coherent measure for the protection of the consumer.
I should like now to deal with some of the many interesting points which were raised during the course of our debate. The noble Lord, Lord Jacques, told us that he has been urging a Minister of Cabinet rank. We have a Minister of Cabinet rank but I appreciate, as the noble Lord said, that he is not independent of the Department of Trade and Industry and is within the D.T.I. But the D.T.I. is the only Department in the Government which has two Cabinet Ministers, and that affords some recognition of the point which the noble Lord had in mind. More generally, there are advantages in dealing with these areas functionally (the noble Lord will appreciate the large areas of overlap and interface that occur), rather than attempting to isolate a consumer interest, which will inevitably interface again with other Departments.
The noble Lord was concerned with the status of the Consumer Protection Advisory Committee, as indeed was the noble Lord, Lord Sainsbury, and several 89 of the subsequent speakers, and with the fact that it will have no power of initiative. This Bill deliberately gives the Committee a limited role, because it is the Director who is the initiator and the watchdog, and the C.P.A.C. will be there to work with and assist him in relation to his functions under Part II of the Bill.
The noble Lord then talked about pre-sales advice and codes of conduct. Here I entirely agree with him. If we had a completely satisfactory series of codes of conduct, then we probably should not need a Bill of this sort at all; and the more that can be done voluntarily in this area the better it will be for all concerned. Of course, the Director will be free to foster these helpful voluntary codes and to publish consumer advice under Clause 114. I believe that the noble Baroness, Lady Phillips, was concerned about the position in the Bill of this important provision, but the fact that it appears at this point does not in any way detract from its importance. Then there was the question of the enforcement authority's title. Many local authorities are already talking in terms of trading standards, rather than about weights and measures, as the noble Lord said, which is a useful trend. I am told that the Institute itself has also anticipated the trend by changing its name, and it is now the Institute of Trading Standards Administration. The noble Lord asked me about an Amendment which was discussed in another place, relating primarily to the activities of the co-operative societies. I can give him the assurance for which he asked: that voluntary groups of retailers' agreements are dealt with by existing legislation and Amendments of similar effect for co-operative societies will be tabled at the Committee stage.
The noble Lord, Lord Jacques, and several of the subsequent speakers referred to Crowther. Answers have been given by Ministers in another place, indicating that a Consumer Credit Bill will be introduced as soon as Parliamentary time permits. I do not think the House will expect me to go further than that, but I can add that when I was speaking on May 3 at the Institute of Credit Management I re-emphasised this commitment on behalf of the Government. It was indicated that it was the Government's intention to introduce comprehen- 90 sive reform in the immediate future, which I was careful to qualify by saying that that should not be taken to mean a long time ahead, and I said that it was hoped that within a short period—a matter of months, perhaps—there would be a Bill before Parliament to implement the recommendations of the Crowther Report.
§ BARONESS PHILLIPS
My Lords, may I ask the Minister when that speech was made, so that we can work it out?
§ THE EARL OF LIMERICK
This year. This point was also of concern to the noble Lord, Lord Airedale, who referred to the position of the Credit Commissioner. The Credit Commissioner would have a different function from that of the Director General of Fair Trading, but I have noted the noble Lord's remarks, which I should like to study, and also his preference for the title "Commissioner" rather than "Director General", a point which was also raised by the noble Lord, Lord Nathan. I am not sure that this is more than just a question of words, but I should like to look at what the noble Lord said on this point.
That brings me to another point raised by the noble Lord, Lord Airedale, who sought what one might term a concordance to help guide him through the passage of this Bill. There was such a document available to the Committee in another place, and certainly it can be revised and made available to Members of this House who wish to have it in connection with our proceedings here. I should say that I have no record of any request from the noble Lord for such a document, but I undertake to tell him as soon as the revision has been completed, and I will let him have a copy. I shall be very glad to hear from any other noble Lords or Ladies who would also like a copy. It was not possible to revise it before the Second Reading debate. As the House will appreciate, there has been a substantial change in the numbering, which has necessitated a fairly substantial up-dating exercise.
The noble Lord, Lord Airedale, then expressed concern about the powers given to the weights and measures inspectors, 91 under Clause 29(1), to enter premises and inspect books. These powers go no wider than the powers under the Trade Descriptions Act which have operated since 1968, and they are in fact identical with the powers under Section 28 of the 1968 Act. To my knowledge, they have occasioned no difficulty, and if there had been any difficulty I should no doubt have been told.
The noble Lord then raised the question of date marking on food. This matter is being looked at in another way, and it is primarily a question for my right honourable friend the Minister of Agriculture, Fisheries and Food. I understand that in February of this year he set up a steering group on food freshness which is considering, among other matters, the best method of implementing the recommendations of the Food Standard Committee's Report on Date Marking. The steering group represents distributors, weights and measures authorities, public health authorities and consumer organisations and it is getting on with its work. It is not yet possible to say when its report will be ready, but that matter is currently being looked at with some urgency.
The noble Lord then talked about the role of the Director. Of course the sort of issue which he had in mind is not excluded from the Director's broad terms of reference under Clause 2, but since action is already in train it is doubtful whether the Director will find it necessary to involve himself.
The noble Lord, Lord Sainsbury, spoke from his great experience and I was particularly grateful for his wise comments. He linked two questions, which illustrated the dilemma of judgment which one constantly has in a Bill of this type. He asked: Why had we limited the initiative of the Director General? Then he went on to ask: have we overloaded the Director General? I think the answer to the first question is that, of course, proper powers for Parliament and for Ministers must be reserved. One cannot give too much power to the Director General. On the other hand, of course, policy—the question whether he is overloaded—is something which will evolve with the practice, when we see how it works out. We are naturally inclined to think, having introduced the Bill in this form, that we 92 have got the answer as nearly right as it can be to start with. The noble Lord then asked about the resources of local authorities for enforcement. We have no reason to think that, in general, the local authorities foresee any problems arising from this measure; and, on the whole, they have given it a welcome. Questions on the general resources of local authorities, of course, would go much wider than that. The network of local centres was, I think, dealt with by my noble friend at some length in his opening speech. The consultative document which was referred to will be avail. able fairly soon.
The noble Lord, Lord Sainsbury, also made some remarks, which I am sure the House very much welcomed, saying that good retailers have nothing to fear from this Bill; and he referred to the questions of unit pricing and open dating, in which the company with which he is so much concerned have been pioneers. I think these were most interesting comments, coming from someone with his experience and from an institution which is a by-word for value in these fields. He then asked about a two-way (or perhaps it was a three-way) traffic of ideas between the Director General, the C.P.A.C. and the Minister; and this underlines the whole concept of Part II of the Bill. But each component has its own distinctive part to play and, as my noble friend said, it is the Director General who initiates, the C.P.A.C. which vets the practicality of the proposals and which gives its advice, and the Secretary of State who finally disposes.
The noble Lord, Lord Nathan, made a very interesting speech. It was something of a lawyer's speech, and I think he will forgive me if, as a non-lawyer, I do not follow him too far down the technical byways. As to the role of the Director General, of course very much will depend on the man and how he approaches his function. I am sure that when he comes to consider his duties he will be aware—and what the noble Lord has said will reinforce this point—of the necessity for good public relations, and clearly he will need a substructure. He will need people to do much of the work which will arise from the functions which he is now assuming. On the title, as I have already said, I am not sure whether this is more than just a question 93 of words. As to the restrictive practices provisions, I have already in my opening remarks said something about the role of the Registrar here, and the interpretation of Clause 9(2). As to precise criteria for eligibility for relief, the agreements which have been the subject of directions under Clause 9(2) are far from homogeneous. It is not possible to categorise them except to say that such agreements contain restrictions of no significance, which I do not think gives us much guidance for the future. But, as the noble Lord has noted, the Registrar's latest report does give on pages 7 and 8 such guidance as it is possible to obtain.
The noble Baroness, Lady Burton, was also concerned about the role and the function of the Director General—who he should be, and how he should set about his work. I have noted everything that has been said about the desirability of appointing a Director General and of bringing the Bill, once enacted, into operation as soon as possible. To this end, the personality and the qualification of the Director General will be all-important, so this is an appointment that needs the most careful consideration. For obvious reasons I cannot say anything at the moment about the sort of names which are in the field, and I am afraid I cannot give any promise as to when the appointment will be made, except to underline our desire that the Director should be selected as soon as possible. I cannot do more than repeat the assurances given by my right honourable friend the Minister for Trade and Consumer Affairs in another place; that is, that if the appointment could be settled before the Bill receives Royal Assent, then the Government would consider an early announcement so that so far as he is now able the Director could begin to get into the saddle. I cannot go further since the appointee is not yet known; and, as the House would appreciate, he will have his own commitments to dispose of—or she.
The noble Baroness then referred to the question of the three months, hoping that the maximum would not become the norm under Claunse 20(1). Indeed, that is a hope we would all share; but, of course, proposals for subordinate legislation, creating criminal offences (if such arc to emerge), may need a good deal of chewing over, and it may not be possible to 94 dispose of them in a matter of a few weeks. In other cases one would hope that it would be possible.
The noble Baroness then referred at some length to the problems of air travel. Of course, she has made these very much her own. I think this is not a point I can pursue in a Second Reading debate, but I note that the noble Baroness has a Question down for answer on Thursday which I think may be not unrelated to this point. The only other thing I would say is that, as she has doubtless noted, the drafting of Clause 2 of this Bill is very wide. This is not commenting on her specific request, but of course I cannot make any hypothetical anticipation of what the reaction of the Director General might be in a particular case. Clause 114 we have already noted.
The noble Baroness, Lady Phillips, chided us for having produced no Green or White Paper. She also referred to this as the "Year of the Consumer". I hope it will be a vintage year. I think we have some reason to believe it has started with the requisite amount of sunshine. Policy was evolving fast, and without making any further comment on the fact that there was no Paper I would just point out that the Bill has now been available for six months and it has been widely discussed. It has been discussed, for instance, by my own Department with the C.B.I., the T.U.C., the Retail Consortium and representatives of the enforcement officers; and there were 26 Sittings in Standing Committee in the other place. So whatever may once have been the case here, it has now been somewhat dispelled by the amount of public disclosure we have had on this issue in the last six months.
The noble Baroness then asked whether the Director General would be answerable to the Minister or to Parliament. Here, it is my clear understanding that as he is appointed by the Secretary of State he must be answerable to the Secretary of State. The noble Baroness also raised the question of the professions, and announced at the same time that this matter would be reverted to in Committee. This is a question of a judgment, my Lords. It was fully argued in another place, and I do not think it would be particularly helpful if I were to rehearse the arguments again at this moment
95 I might just point out—I think it is a very valid point—that when the Monopolies Commission reported in March, 1970, on the general reference given on the professions, the Commission said they thought the time was not ripe to make the professions answerable to the restrictive practices legislation. The professions (and this answers a point raised by the noble Lord, Lord Jacques) are fully answerable to the Monopolies Commission, and have been so from the start. The practices of the professions have always been referable. There was a general reference which gave rise to the report of March, 1970, and my right honourable and learned friend the Minister for Trade and Consumer Affairs has announced other references which will be coming forward. He says that he proposes to refer the practice of barristers and advocates in the United Kingdom (known as the "two counsel rule") and the regulation of charges by scale fees on the part of architects and surveyors. He also proposes to refer certain restrictive activities relating to advertising by solicitors and accountants and veterinary surgeons. The reference to solicitors cannot be made until the Bill becomes law because the restrictions have a statutory basis in the Solicitors Act which precludes them from being referred under the existing Monopolies legslation. When this Bill becomes law that bar will be removed. My right honourable friend also intends to refer restrictions on advertising by stockbrokers. That, the Government think, is the right way to go about it—to attack the practice where it seems to need attack.
§ BARONESS PHILLIPS
My Lords, I should not like the noble Earl to think that that was my point. It was not. I recognise that the Monopolies Commission already included the professions. What I said was that if you do not get value for money, for instance if an accountant (saving the presence of the noble Earl), actually told a business man that he was bankrupt when in fact he was not, the accountant would be a bad accountant, but the business man would have no redress in law. That was my point.
§ THE EARL OF LIMERICK
My Lords, in that case whatever the scale fee may have been, I guess it may not have been 96 paid. I apologise if I created confusion. I was answering a point raised by Lord Jacques. I think there was some misunderstanding on this point.
I think that at this hour I have talked for long enough. I have taken up many of the points; doubtless there are some that I have not. We shall have an opportunity to revert to them at a later stage. I note with gratitude the general welcome afforded this Bill. There was not a single speaker who spoke in a different sense from that. The Bill represents a great stride forward in what the noble Baroness referred to as "the year of the consumer". It is a Bill about people—people who consume, people who produce and people engaged in various forms of marketing and distribution; a Bill which sets out to ensure fair dealing between these different classes of people. It is an important measure for the protction of consumers and the promotion of industrial efficiency. On that basis I invite your Lordships with confidence to give the Bill a Second Reading.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.