§ 3.56 p.m.
§ Committee stage resumed.
§ On Question, Whether Clause 5 shall stand part of the Bill?
§ VISCOUNT SIMONI put down an Amendment to delete this clause from the Bill, because it seemed to me that the implementation of this clause will be largely impracticable, and, to the extent that it is practicable, its effect on balance may be more harmful than helpful. We have been in some difficulty over this clause because there has not really been a great deal of discussion about it. I seem to recollect it was mentioned by the noble Lord, Lord Harris of Greenwich, on Second Reading. It is a pity that one 33 cannot refresh one's memory by referring to Hansard. I myself raised one or two points in connection with this clause and believe my recollection is correct when I say that the noble Lord who was replying to the debate did not comment on them.
I know that I shall be told, and quite rightly, that this is a clause which only gives the Secretary of State power to do various things but does not require him to do them; and also any Order which the Secretary of State decides to make is subject to annulment by Parliament, provided that is thought to be desirable. However, I do not think members of the Committee would differ from me when I say that discretionary powers should not be given to the Secretary of State, unless there is good reason to suppose they will be used and, if used, that they will be both effective and beneficial. As regards Parliamentary control through the Negative Resolution procedure, I think that noble Lords will agree that it is not an effective method of controlling Secretaries of State. We all know how difficult it is to apply that procedure. It has always to be applied in arrears, so that if harm and confusion has been caused it will already have been caused before Parliament has an opportunity of putting it right. Therefore, I hope we may proceed on the assumption that this clause is intended to be operated; otherwise it would be wiser to leave it out of the Bill.
I should like some information from Her Majesty's Government on how the Secretary of State is to get the information which he will require traders to display in their places of business. The clause says that information will be required:
…with respect to the range of prices within which it appears to the Secretary of State that such goods are being commonly sold by retail in the United Kingdom, or in a particular part thereof,…I suggest that if the Committee decided to let this clause go forward the Government might consider between now and Report stage whether they should remove the reference to the United Kingdom. What is the use to anybody of having a range of prices put up in a shop in some area which relates to the United Kingdom as a whole, when either end of the range, or certainly the lower end, might not be available anywhere within the reach of the shopper. I mentioned this point on 34 Second Reading, but I do not think the noble Lord, Lord Jacques, replied to it. This seems a nonsensical arrangement.The customer is only concerned about where he or she can get goods which are reasonably priced, and that can only be in the nearby vicinity. I do not imagine for a moment that the Secretary of State herself, or through direct agents, will go to every part of the country and discover the right figures to put on these notices. I think there was a hint that the local weights and measures inspectors might be employed. I notice in the Explanatory Memorandum that it is said that outside Central Government service a small increase in the staff of weights and measures authorities is possible. That does not seem to go very far in the direction of monitoring the range of prices which are commonly in operation at any given time in any given area. The weights and measures authorities are also employed by local authorities, and I would remind the Committee that local authorities nowadays cover a wide area, much too wide for the convenience of a shopper. In any rural district authority there may be 30 or 40 miles between one end and another. In my part of Devonshire it would be no good telling a housewife in Moretonhampstead that she could get things cheaper in Kingsbridge, because she would not dream of going there to make her purchases. If this is to be effective it has to be done in units smaller than a district council. This will involve a great many people in trying to establish what the correct figures are.
How is the list to be kept up-to-date? This seems extraordinarily difficult at the lower end of the range, and particularly after we heard recently of the agreement which the Government have reached with the trade about special prices which, if I understood the Statement correctly—and there was a question from the noble Lord, Lord Leatherland, which brought this out—meant that there might be at one time a particular article given a special cut, but there might be a different article at another time. I imagine this might involve changes from day to day, and certainly from week to week. How are these ranges of prices to be kept up-to-date? After all, if a range of prices is put up with the authority of the Secretary of State, it is necessary for the Secretary of State, through her agents, to be at all 35 times responsible for the correctness of the statement.
There was one question that has not been touched upon: in putting up the range of prices is any account to be taken of such things as stamps, Co-operative dividends or special offers that accompany some goods offered for sale? All these things. within a small range, affect the price. I now come to another difficulty: where should notices of this range of prices be displayed? Whether one considers a small shop—sometimes called a "corner shop"—or a large supermarket, great difficulties will arise in the congestion which is bound to be created wherever these lists are put up. Whether the lists are useful or not, we may be sure that shoppers will, at least initially, tend to congregate around them to see what is written on them. Most of these shops—and this applies just as much to the big supermarkets as the small village store—have no room for the people to stand and stare; the shops are crowded already, especially on Saturday mornings and days like that. Confusion is going to arise with these notices. If the notice was displayed on the shop window there would be congestion on the pavements, and I should be surprised if the police did not have some views about that.
I suggested on Second Reading that it would be better that notices of this kind should be displayed in the post office or other public place where such notices are sometimes put up. My suggestion met with no response from the noble Lord, Lord Jacques, and the Government have not put down an Amendment, so I assume they reject that idea. It might perhaps be considered again because, thinking of shops that I know and which I am sure other noble Lords know, there will be difficulties in having these notices displayed.
Then, if I may leave the practical difficulties, I want to ask the Committee to consider what the effect of this is on the customer. Let us assume the practical difficulties are overcome. I concede that there is some value in knowing the price range of the article which the customer is seeking to buy, particularly if the price range is a reliable indication of the ability to buy within that range somewhere in the neighbourhood. Unless the cheaper prices can in some way be identified the 36 customer will not be very much better off. Most customers know that prices in the supermarkets are lower than those in the small village stores. They weigh up whether it is worth going to a supermarket or whether they should deal in the place to which they are accustomed. Displaying the prices does not tell them very much more than they know already. It may only cause frustration and despondency, because they will say, "Why should I have to pay 18p here when I see somewhere else I can get this article for 16p?". Apart from the frustration and despondency which it may create in the customer, there is likely to be created a certain amount of friction and unpleasantness as between the customer and the shopkeeper. Although customers are well aware of the differences in prices, it is rather throwing it in their faces to say that here is a shop where you can buy the article for 18p and somewhere else you can buy it for 16p. I do not feel this is going to create a happy situation. I do not think that this is going to give much advantage to the customer at all.
I doubt also whether it is fair visually to remind the customer—here again going to the corner shop—of the one factor that the price is a little bit higher there than somewhere else when you cannot remind them visually of the counter advantages which are recognised but some of which cannot be easily expressed in terms of money. Is the object—and I hope it is not—of this proposal, in a rather indirect and unpleasant way, to pressurise the small trader and make him feel a little ashamed that his prices are higher than the minimum quoted somewhere else? In that way he is put under an indirect pressure to reduce his prices when we know that the small shops are not making much profit these days. I hope that is not the intention because I would think it rather unfair.
I have only one other point I would make and it arose out of something the noble Lord, Lord Jacques, said in reply to the Amendment on Clause 2. The noble Lord referred in his reply to the noble Lord, Lord Aberdare, to this question of ranges introduced in Clause 5. I did not quite follow the relevance of this. Perhaps whoever is going to reply to this question will be able to say how the range proposal contained in Clause 5 really ties up at all with Clause 2, 37 because Clause 2 deals with the regulation of prices, whereas, as I understand it, Clause 5 is concerned merely with information and not with regulation at all. I hope that the Government will be able to give us a little more explanation as to how this clause is intended to work. Naturally, I shall listen to what the Government have to say and reserve until later any remarks I have to make about the course I would recommend the Committee to pursue.
§ 4.11 p.m.
§ LORD JACQUESI would at once apologise to the noble Viscount for not having replied to the points he raised on the Second Reading. I believe I said that some of the points would be best dealt with in Committee. Let us assume that these points fall into that category. The clause makes provision which would be available to the Government on a permanent basis to provide factual information to shoppers about the range of prices at which goods are being offered As I explained at Second Reading, it is the Government's intention to use these powers in connection with subsidised foods for which the top of the range will he the maximum price prescribed under the provisions of Clause 2(1)(a). One objective of Clause 5 is to protect the small trader. As I said earlier in Committee, we appreciate that at one end of the scale we have the convenience shop which is of great convenience to the customer, to which he has not to travel and at which he can expect to pay a little more for the convenience. At the other end we have the supermarket which depends on cutting prices to obtain its trade; in order to cut prices it must have scale, and if it is going to have this scale it has to have a huge catchment area and consequently its customers are going to have some inconvenience. But of course in between is a great variety of shops. In particular there is what I would call the medium-sized shop, particularly in the suburbs of large towns. They have some merits of convenience in that a vast number of their customers can walk to the shop—the shop is placed in a congested area. They also have some of the advantages of scale in that they have a quite substantial turnover and therefore are able to some extent to cut prices. So we have this wide range of shops.
38 It is difficult to fix prices to cover the whole wide range without being unfair to somebody. The Secretary of State is trying to put herself in the position where she can fix a maximum which is fair to the small trader without encouraging other traders to climb up to it. For example, in the case of bread, I have no doubt whatever that when the Secretary of State fixes the maximum price, that price will almost certainly be a greater price than that at which some of the supermarkets are already selling, in order to cover the small trader and to be fair to him. But the Secretary of State is anxious that those stores which have lower costs should not climb up to the maximum price, and it is for that reason that she wishes to have the powers embodied in this clause. So in essence one of the objects is to protect the small trader. Outside the subsidised field my right honourable friend has made it clear that so long as the voluntary agreement is working satisfactorily the clause will be a reserve power only.
The noble Viscount suggested that a national price range will not be equally applicable to all areas. It is precisely because we recognise this that the clause gives us power to prescribe different ranges for different areas. Indeed, we shall probably have to do this in the case of bread. I can assure the noble Viscount that we are fully alive to this point. He also suggested that the shop was not the best place in which to display such ranges. While I think shoppers have a right to see information of this kind where it can be most immediately useful, I agree that other organisations have a valuable part to play in disseminating food price information. Indeed, it is the Government's earnest hope that it will be one of the functions of the consumer advice centres which we are encouraging local authorities to set up to collect and disseminate information about prices locally. This will be a most helpful voluntary service to supplement the national information the Government already put out. I hope therefore that the noble Viscount will be able to accept that we have broadly the same aims in view.
I should perhaps explain how the ranges will be determined and displayed. The ranges to be displayed will cover the prices at which the corner shop, with 39 its necessarily higher costs, and the most efficient supermarket are selling the goods in question. Shoppers will therefore have an objective standard of comparison for the prices of these key products. Information is available through Government sources which gives broad ranges of prices for about 80 food items. Ranges of these foods to which the provisions of the clause are to apply will be determined from this information. The range to be displayed will necessarily be a wide one, but not too wide. I understand that the present practice is to include within the range four-fifths of the sample excluding the extreme items in the sample at either end—which is reasonable. It is intended that the range will be displayed in a simple and conspicuous manner to ensure that the cost to shopkeepers of display is kept to a minimum and that the public is not confused by too many prices. The statutory consultations for which the clause provides will ensure that the trade's views on these matters are fully taken into account. That of course would also include some of the points which the noble Viscount mentioned, such as stamps. But I would say from a personal point of view that stamps should not be taken into account. The shopkeeper who offers stamps, whether a co-operative society or private trader, is implying that he is selling at competitive prices and that the stamps are something in addition.
I would direct the noble Viscount's attention to West Germany. In West Germany a range of prices for each of several commodities is displayed. We believe that West Germany's success in combating inflation is in part due to the way in which they have used such instruments. We are so convinced that we have taken the powers in this clause and, if need be, intend to use them. I hope the noble Viscount will accept that the clause will enable the Government to provide some much needed information to the public in an acceptable way; that the powers will be used sparingly and with discrimination, and that display will be simple and as inexpensive as possible for shopkeepers. I trust that he will accordingly feel able to withdraw his Amendment.
§ LORD MERRIVALEMay I ask the noble Lord, Lord Jacques, for clarification 40 on a purely local point? Let us take the area of South Kensington and Knightsbridge where one finds, regarding fruit, vegetables, tinned foods, a great range of prices and great differentiation. Can the noble Lord say how often there will be a change in the display of the range of prices? If one goes to one shop one gets a certain price, and if one goes to another shop one gets a much lower or higher price; and if one goes on a Saturday evening the price is considerably lower. There is a great discrepancy, and I do not think that the shopper has any guarantee that he is getting the best value for money.
Taking as an example what is done abroad—I will not specify any particular country—there seems to be a lack of control regarding price fixing. In order that the consumer or buyer has the feeling that he is getting the best value for money and that the range of prices is being kept up to date by the Department and the Secretary of State, can the noble Lord say that these notices are kept up to date and changed regularly?
§ LORD JACQUESIt would be necessary for the Department first to experiment in price ranging in those commodities which are not perishable and which do not change from day to day. Clearly, those are going to be the most difficult. so far as prices for perishable goods are concerned, the prices of which change from day to day, the telephone is the best way of dealing with them. The Department already has a telephone service for this purpose which consumers can use.
§ LORD ABERDAREI have listened with interest to what has been said in this short debate and to the noble Viscount who proposed this Amendment. In my view, it would be wrong to leave out this clause entirely. It seems to me that the more one can produce factual information for the shopper the better, and although there may be difficulties in operating the clause, in principle it would be wrong to omit the whole clause. It was fully discussed in another place. It has come to us and I do not feel able to support the noble Viscount in going so far as to remove it. What we are more concerned about—and this will emerge in the next Amendment—is the protection of the small shopkeeper.
§ VISCOUNT SIMONI am grateful to the noble Lord, Lord Aberdare, for explaining his point of view and to the noble Lord, Lord Jacques, for his full explanation. I cannot say that I am completely satisfied but it would not be my intention to press my point of view to a Division because by doing so we would lose the benefit of the noble Lord, Lord Aberdare's next Amendment.
Between now and Report stage may I ask the Government to consider one or two points. The noble Lord, Lord Jacques, said that it was only intended to use this provision in connection with subsidised goods. I do not suppose that he would think of confining the clause to subsidised goods. He recognised the irrelevance of a range covering the whole of the United Kingdom, and indicated that it would be done on a local basis. I hope that in this connection the localities will be small enough to be meaningful to the shopper. As he practically admitted that it would not be used, would the noble Lord consider an Amendment deleting the reference to the price range in the United Kingdom? Perhaps we could have a discussion about it between now and the next stage.
§ LORD JACQUESI am sure that my right honourable friend, to whom I should have to go and to whom I am answerable for all promises I make, would not be prepared to accept an Amendment to confine the clause to subsidised goods. Let us be practical. In negotiating with the trade you need to have muscle, and you have muscle according to the power which you have behind you. This is a reserve power. It is partly because of these reserve powers that my right honourable friend was able to obtain the voluntary agreement. She has given an assurance, having obtained that agreement, that she will not use these powers except in relation to subsidised foods. That is the happy and businesslike way to go about it. I could not give the kind of assurance for which the noble Viscount has asked.
So far as the United Kingdom is concerned, we have power within the clause to give different prices for different areas. As I have said, we shall almost certainly have to do so in the case of bread.
§ Clause 5 agreed to.
42§ 4.27 p.m.
§ LORD ELTON moved Amendment No. 4:
§ After Clause 5 insert the following new clause
§
Exceptions.
.—(1) No order made under subsection (b)of section 2 or under sections 4 or 5 of this Act (except an order relating exclusively to food subsidised under section 1 of this Act) shall apply to a person who carries on the business of selling food by retail in or from a shop and who:—
(2) This section applies to sales where:
(3) It shall be a defence to any person prosecuted under paragraph 5 of the Schedule to this Act to show that he is a person to whom the provisions of this section refer.
§ The noble Lord said: This is a more formidable Amendment than the last Amendment I spoke to and I have to open with an apology. Your Lordships will see that there is a reference in the first line of the proposed amended Bill to "subsection (b)of Section 2." This should read "subsection (1)(b) of Section 2"; otherwise your Lordships will find that it has no meaning. I apologise for this piece of over-hasty drafting which has arisen out of the difficulties which have also produced the rather odd form in which all the Amendments are now before your Lordships.
§ This Bill aims to regulate the prices at which goods are sold and to keep them as low as possible, which is an estimable aim. Also it aims to provide a wide range of information to the shopper, which in itself may be an estimable aim. But what I wish to point out to your Lordships at this stage is the unlooked-for effect that this will have upon the small shopkeeper and upon his customer. It is those people whom we, by this Amendment, are seeking to protect.
43§ If I may begin by defining what is meant by a small shopkeeper, since this must be done in a mathematical form which can be understood by the law, it refers to shops where the annual sales amount to £25,000 or less. We pitched on the phrase "annual sales" because in another place there was difficulty about identifying the meaning of the phrase "turnover". Therefore the phrase "total annual sales" has been taken from an Order—Statutory Instrument No. 785 of 1974—which was made by the present Government under the Counter-Inflation Act 1973; and as this phrase is used by them we can safely assume that the meaning of it is clear. The meaning may be clear legally, but it may not be clear to your Lordships' House exactly what kind of a shop it is that we are talking about. The simplest mathematical way of describing it would be to say that the best advice I can get is that a shop with sales of that order would be unlikely to be making an annual profit of more than £1,200. Your Lordships, especially those who would be sitting on the Bishops' Benches, were they here, could equate that with the now quite well known stipend of a newly appointed curate, or perhaps would find it more illuminating to realise that this brings the small shopkeeper himself within the bracket of the less well-off whom the Minister, by this Bill, is seeking to help. That is something to bear constantly in mind and there is an irony in it, as we shall see.
§ The next thing we have to do is to decide how many of these shops there are. There was loud alarm in another place about the enormous number of shops which would be affected by this. The honourable Member the Under-Secretary for Employment stated categorically in another place that a total of 25 per cent. of all food shops have an annual turnover of less than £25,000. This figure of one shop in four produced surprise, amounting almost to incredulity, among those in the trade with whom I discussed it. Therefore I came to reflect upon what might be the source of these figures. Apparently, no up-to-date figures are currently available to the public. The only ones that are more or less up to date which I can discover are those arising from the business census of 1971 and these are not yet available to the public. 44 I understand that they will be published in September, Presumably, however, they are available to Her Majesty's Government.
§ If that is the case and if it is upon these figures that the number of one in four—that is, about 25,000 shops—has been arrived at, I would draw your Lordship's attention to the fact that these are rather elderly figures. Inflation has been galloping on since they were accumulated and a shop which had a turnover of £25,000 in 1970, the year in which the figures were collated, would have to make a great deal more now simply to stay in the same place. This is the effect of inflation. It is a treadmill and one has to run faster and faster to stay where one was to begin with. So the number of shops concerned is small, but what is a great deal smaller is the amount of food that they sell in comparison with the amount of food sold by other food shops.
§ Mathematically that is the description of the shop, but I think one could describe it, in order to get it clearly in one's mind, more as the kind of shop which goes "ping" as you open the door, and from the edge of whose counter small children anxiously peer up at sweets. Some are cheerfully modern and some are cluttered; some specialise in food and more are general stores and a few aspire to be post offices as well. Such a shop is usually located in the centre of a community, very often a rural community, in which it retails gossip as well as goods, and to which it gives a great deal of the feeling of the identity of the community, which will vanish if it vanishes. Again I would remind your Lordships that the proprietor is probably getting a salary—for want of a better term—of £1,200 a year. So this is not an opulent and scarcely even a secure concern. Some would say that it was not viable already; in fact this shop that I am speaking of is in the position of a camel overloaded with straw. and the aim of this Amendment is to stop the last straw being dropped incontinently upon its back.
§ Let us consider first the disadvantages of the position of a small shop. Of course, the first and most obvious, is the disadvantage of concentrated overheads, with which your Lordships will be familiar; the bigger the size of the concern the more you can spread its expenses. 45 Secondly and more formidably is its exclusion from the discount benefits on large orders. This is a handicap which is increasing, and I wonder whether I might explain. First, most concerns wholesaling to such shops sell their goods at a lower price for a large quantity. This is perfectly normal.
§ There is a minimum case rate below which you get no discount and above which in steps (as it were on a ladder) you get increasing discount or a lower price per unit according to the number of units you buy. For instance, 1 lb. tin of Cadbury's Bournville cocoa at the 10-case rate, at present, so far as I can understand it, comes at 41.25 pence exclusive of V.A.T.; at the 400-case rate (and can your Lordships imagine 400 cases of Bournville cocoa in the shop that I have just described?) 37.50 pence is the price. Thus, there is a difference of 3.75 pence per tin on every tin sold over that counter and it is a disadvantage to that concern as against the large concern down the road. Does the noble Lord wish to intervene?
§ LORD JACQUESCan the noble Lord bear in mind that one half of the independent retailers in the grocery trade are part of voluntary groups and, therefore, enjoy bulk buying?
§ LORD ELTONSo much the stronger my argument for saying that not too many shops will be affected by this Amendment. In reply to a request to the trade I was given a number of these sheets from which I took the first example which I have just quoted. The average of them, between the top and the bottom case rate, showed a difference of between 10 per cent. and 13 per cent. in the actual cost per unit to the purchaser. It goes further than that, because there is a minimum quantity, as I said, below which one does not qualify to get this reduced rate, and that minimum quantity is now being remorselessly raised. For instance, if I may quote another informant, John West's salmon for the 15½ ounce tin comes out at about £1 a tin wholesale; the minmum case rate used to be 20 cases of 24, i.e. one had to buy 480 tins in order to get the case rate. The minimum is now 50 cases of 24, which is 1,200 tins and, please note, a capital outlay of a minimum of £1,200 to stay in the game if you are to get the 46 discount. Other firms do not raise this minimum, but they charge an amount for delivery on the lower rates.
I will not go on with too many examples, because I think I have made the case and I am certain that the noble Lord, Lord Jacques, is better equipped with examples than I am. Therefore, I need only to jog his memory rather than drive the point home. However, there is another disadvantage to which the small retailer is subjected. He is really boxing in the dark because, although he has these lists, from which I have been quoting, giving the rates at which he might assume the competition is buying its own supplies, when he goes into the town on early closing day he sees prices marked in the windows of the supermarket which are below what apparently they could have been bought for. These are not loss leaders; they are wholesale goods bought at a private contract between the multiples and the suppliers direct.
We have here a man—or very often a woman—who is already overburdened and under-rewarded and the Bill lays upon him the prospect of even more work, some of which has the effect of requiring him to advertise, at no cost to them, the competitors' prices in a local town. The noble Viscount, Lord Simon, referred to this earlier and I am grateful to him for doing so. If this has the effect which one cannot help expecting the Minister to foresee, some of those customers in the rural community who have transport of their own, or who are blessed with public transport, will remove their custom to the town—in fact, if they do not do so there seems little point in the exercise. If they experiment in that way, if only for a short time, this will bring the village shop into grave danger. Therefore, what Her Majesty's Government have achieved for the shopkeeper is not a smaller fur coat for his wife, not that he has to keep his large motor car for an extra year or take a shorter holiday in Greece, because this man is one of the much less well-off that Her Majesty's Government wish to help. They have given him an extra couple of hours' work each week, and I suspect those hours would have been spent in well-earned rest because these men are already overworked and under-rewarded. The chances are that as a result the man or woman will say that the game is no 47 longer worth the candle and will shut up shop. That is a very definite possibility.
So now we come to the consumers, that other less well-off group which Her Majesty's Government are seeking to assist in the Bill. Your Lordships are familiar with the acute problem of rural transport; many facets of it were rehearsed in a recent debate in your Lordships' House, where your Lordships wisely returned to the Road Traffic Bill some provisions which had been dropped from it since it was last seen here. You are therefore aware that the least likely person to have a motor car is that less well-off person. In a Norfolk survey not so long ago it was found that in five parishes only 29 per cent. of the retired and 30 per cent. of farm workers had transport of their own. These people will either have to go at an average rate of about 30p for a 10 mile return trip to the local town to get their goods at the rates which are advertised in the village store, or else they will be stuck without being able to get them at all.
Thus, if Her Majesty's Government wish to help the elderly and less well-off they are going an odd way about it. The retired and the farm workers are among these people; many of the former and just about all of the latter live in rural communities, served by the kind of shops of which I have spoken, and many of both categories have no private transport and no public transport either. Her Majesty's Government, professing for them their undying sympathy, obligation and regard, introduce a measure which will have for many of them the effect of closing down their only supply of food. Therefore I ask the Committee to consider carefully this Amendment which will remove from the small shop keeper one of the largest administrative, and, from the point of view of the Government, the least expensive, burdens. I beg to move.
§ 4.40 p.m.
§ VISCOUNT AMORYI think that the case made by my noble friend for the small shopkeepers is one we ought to regard with great sympathy. Small shopkeepers in general render great service to the community. From my experience, very few of them make an extravagant income out of the services they render. In fact, if their time per hour were worked out, very often it would come to 48 to a very modest rate indeed, as was hinted by my noble friend. To me, all was made instantly clear when my noble friend mentioned the shop that went "ping" when one opened the door. At first sight, I thought his Amendment could be abbreviated somewhat by confining the exemptions automatically to a shop that went "ping", but I realise that that would carry the necessity of putting the instruments that make the "ping" under licence, with terrible penalties for anyone whose shop went "ping" without a licence. So perhaps the Amendment of my noble friend as it stands is the right one. In principle, I am sure we should do well to pay great attention to everything that he has said. These small shops generally, at the end of the day, have extremely modest margins non-existent in many cases. If they were not able to stay in business, most of the communities concerned would be very much worse off.
§ LORD ORR-EWINGMay I add a word or two on behalf of the village shopkeepers. In my own village there is a single village shop which is open seven days a week—it has to be, in order to provide a living—although I do not know whether that is correct. I have seen three separate owners give up and others take over the shop because the increasing load of administration is too much for a husband and wife. V.A.T. has added to this burden. I asked the previous Government whether they could not raise the level of V.A.T. in order to bring some of the small shops under the turnover—a figure of £5,000 a year at present—which has no V.A.T. levied on it.
In our small village in Hertfordshire, the public bus service was withdrawn. In rather significant and unpleasant circumstances we were told that the rumour was totally untrue, but suddenly we found one Saturday that all the bus stops were being removed. On the following Monday morning, the bus service was stopped so there was no possibility for the 70 per cent. enumerated by my noble friend Lord Elton to make other arrangements. We "ganged together" and subscribed to a minibus. We then found that many of the old-age pensioners were turned off it because it was not allowed to carry more than five or six passengers. The old-age pensioners could not even go out of the 49 village to do their shopping in the town of Hertford.
So we have seen a steady but slow eroding of village shops all over the country. I know under the new Transport Bill we have now allowed minibuses to be operated. We are to have post buses, a very successful experiment in Switzerland. I filled up a form over this week-end, in which the Post Office asked whether there was a case in our household (I am glad they are taking this into consideration) for running a post bus from our village to the county town of Hertford. I noticed from the timetable that a 10-mile journey was timed at 50 minutes. Here again, if we drive the local shop out of business, we are going to put an extra burden on the less well off, in that they will take 50 minutes to do the journey, and the bus would have taken only 15 minutes. Time and time again we are putting an added burden on the less well off and the village shops in particular, so I hope the House will take very seriously the sensible and humane Amendment of my noble friend to this clause.
§ LORD SOMERSMay I also bear witness to the truth of what other noble Lords have said. In Epsom where I live, we have very few shops where one can buy anything at all. There are a few left and they are small, privately owned shops. One of them is definitely of the type which could he called the local village shop, where one can buy practically anything. I am quite certain that the owner of the shop does not make a large income, but it is absolutely invaluable to the poorer people who live in the immediate vicinity. Incidentally, it is extremely valuable to the rest of us who live in Epsom. If that kind of shop were to go, we most certainly should be very much worse off, and I really do not know where we should go.
§ VISCOUNT HANWORTHI have every sympathy with the small retailer, but one has to consider what effect the Bill as it stands will have. It may have an adverse effect in two ways; first, because it may make it more clear that the village shop is charging more. I do not view that very seriously. I think people are already well aware of this. Those who are not possibly will benefit by being told and by being given the option. I admit there 50 is a point here, but I do not attach a great deal of validity to it.
The second disadvantage may be the extra work entailed in setting out the prices. Here again, from all we have heard, I do not believe that this is a very serious objection. So on balance, I do not think I would support this Amendment because it makes an exception to the Bill which is undesirable. I do not believe it is really necessary.
§ THE DEPUTY CHAIRMAN OF COM MITTEES (BARONESS EMMET OF AMBERLEY)Before the Minister replies, and with the permission of the House, I should like to read an alteration in the Amendment which is:
… No Order made under subsection (1) (b)of Section 2 or under Sections 4 or 5 this Act…".That is in the first paragraph. I do not know whether it is any clearer to your Lordships than it is to me, but perhaps the Minister will be able to explain.
§ 4.48 p.m.
§ LORD JACQUESI understand it, and will be dealing with that point. This new clause deals with a subject very fully debated on two occasions during the passage of the Bill in another place. Before I come to the details of the clause, perhaps I may say a word about the general objectives of the Government in this area. We are all aware that there is widespread concern about the cost of living. The Government have embarked on the important tasks of holding down the prices of essential foods of particular importance to the elderly and others on low incomes. They are providing better information for shoppers. That is the primary purpose of the Bill. In operating its provisions, we shall try to achieve a balance between the genuine needs of the consumer and the very real interests of the shopkeeper. This includes the small shopkeeper.
It may be interesting in this connection to recall that the smaller shopkeepers have been among the greatest enthusiasts for the concept of lower margins on essential foodstuffs and other goods. Indeed, it was one of the voluntary groups of smaller grocers, Spar, Vivo, which made the original proposal for a voluntary agreement on price restraint of the kind which the Government have succeeded in negotiating. Therefore, it 51 is clear that among this important sector of the independent grocery trade, at least there is no fear of what the Government are trying to do. Outside the subsidised area, as your Lordships may be aware, the Secretary of State has already made it clear that she does not intend to use her powers under this clause while the voluntary agreement with the trade is working satisfactorily, so there is no risk there.
Retailers with an annual turnover of less than £250,000 a year—not £25,000 a year as mentioned in this clause, but ten times that amount—are excluded from the 10 per cent. cut in gross margin reference levels. These traders are participating in the voluntary agreement. Their representatives have assured the Secretary of State that they will be asking their members to co-operate to the fullest extent possible. The shopkeepers themselves feel more able to help the Government in their vital task of combating inflation than noble Lords opposite give them credit for.
§ LORD ELTONBefore the noble Lord leaves that point, I should point out that this Amendment has nothing whatsoever to do with price fixing, about which the noble Lord is speaking. Repeatedly he has made the point that the small shopkeepers are exempted or favourably treated, or are asked to do something in relation to price fixing. But this Amendmene is about price labelling and price range displays.
§ LORD JACQUESI was just coming to that point and was going to say how astonished I am at the line the debate has taken. If this Amendment were carried, it would not make one penn'orth of difference to the profits of the small trader. This Amendment is dealing merely with the display of prices under Clauses 2, 4 and 5. It does nothing to prevent the Secretary of State from regulating prices. The Secretary of State can regulate prices under Clause 2. All this Amendment says is that they shall not be displayed. I do not see what sense there is in that. If the Secretary of State can regulate prices, surely she has a right to say that those prices should be displayed so that the customer as well as the shopkeeper knows what they are.
52 Let me come to the effect on Clause 4. Clause 4 is in no way concerned with price regulation; it is concerned only with the display of traders' own prices, whatever they may be. I hope there will be a general measure of agreement that better price information for shoppers constitutes a valuable measure of assistance for all concerned. The marking of prices, and the giving of the unit price where this is helpful, is something which I am sure most noble Lords will agree should be available as widely as possible. It is the Government's intention that orders providing for price marking or unit pricing should be framed in such a way that few, if any, food shops will find it difficult to comply with one or other of the agreed alternative forms of marking. There have already been some preliminary discussions with retail organisations representing small grocers and other food retailers about the operation of Clause 4. They have been assured that there will be opportunities for them to comment on specific proposals for accommodating the special problems of their members, and to recommend how their interests might best be served. There should, therefore, be no cause for concern so far as Clause 4 is concerned.
We have already had a debate about the third clause, Clause 5, to which this Amendment would apply, so I shall not weary the House by repeating the arguments that were put then. Noble Lords will understand that the concept of Clause 5 is very similar to Clause 4, in that both are designed to improve the price information available to the shopper. I sought in my comments in relation to Clauses 2, 4 and 5 to show that the fears of noble Lords opposite about the operation of this part of the Bill are unfounded, and that they are not, generally speaking, shared by representatives of the trade to whom we have spoken. In moving this Amendment, the noble Lord said that the figure of one-quarter of all food shops with a trade of £25,000 a year is now out of date. Why is it out of date? It is because of the rate of inflation. This, I suggest, merely shows the need for the kind of Bill which is at present before the Committee.
I recognise, of course, that the new clause does not seek to deal with all food shops, and deals only with the independent food shops. Nevertheless, it is a fact 53 that a substantial number of shops could be exempt from the provisions dealing with price regulation, price marking and the display of price range information. In 1973, 39 per cent. of the grocery trade was in the hands of independent shopkeepers, many of them with a turnover of less than £25,000 a year. This would be a fairly considerable incursion into the protection for the consumer which this Bill affords. Indeed, in some parts of the country the effect would be even more damaging, since outside the large towns it is probable that a much larger proportion of the food shops have a turnover of below £25,000 a year. This means that the benefits of better price information would be very unevenly distributed throughout the country, which would be to the detriment of the trade and consumer alike.
Moreover, research invariably shows that it is the elderly, the infirm and those with low incomes who tend to go to the small grocer for food, rather than to the multiples who employ much more sophisticated systems of pricing and price display. It would be quite wrong to deprive these people automatically of the consumer benefits to be derived from Clauses 2, 4 and 5.
§ VISCOUNT SIMONI apologise for interrupting the noble Lord, because I am going back a little way. When he was starting his last passage, did he say, and did he really mean, that the effect of the Amendment would be to remove these small shops from price regulation? I do not think he meant that, because the Amendment does not refer to price regulation.
§ LORD JACQUESIf I said that, I was wrong and I apologise, but I do not think I said that. I said that the effect of the Amendment would not be to remove the small shops from price regulation; the Secretary of State would still be able to regulate the prices. What this Amendment does is to remove the necessity for the small shopkeeper to display prices under Clauses 2, 4 and 5, and I hope I said that earlier. I also added that I thought it made little sense for the Secretary of State to he able to regulate the prices, but not to insist that the customer be informed of the price.
54 I should also like to emphasise to the Committee that a very large proportion of the specialist shops—in butchery, fish and greengrocery—are independent shops. A very large proportion have a turnover of less than £25,000 a year because they are specialists, because they trade in a restricted range of commodities. These are the trades where unit pricing is essential from the consumer's point of view. These are the trades where there is no sale by prescribed quantities. These are the trades in which the customer asks for a fillet of fish or a piece of steak, or even specifies a weight and says, "I want half a pound of cooked meat". The shopkeeper often replies, "It is a little more than half a pound. Will you take that?", and the customer usually takes it, which is to the advantage of both the shopkeeper and the consumer.
But in those circumstances the customer has a right to know not merely the amount she has paid, but the price per pound, the price per unit that she is being charged, and the shopkeeper has a moral obligation to supply that information by simply putting a ticket upon the goods. We are asking for the powers to insist that that be done. This Amendment is to avoid our having those powers so far as the small shopkeeper is concerned. I am sure the noble Lord did not have this in mind, but the effect of this Amendment in the area of unit pricing is this. There are a few who fiddle. Let them fiddle in peace and not be disturbed. We want to stop the few who fiddle by enabling the consumer to be fully informed.
This new clause would make much more difficult the enforcement of orders in the remaining shops. In practice, it would not keep out only the shops with a turnover of £25,000 a year or less. It would keep out far bigger shops, because the inspectorate service would naturally keep away from all shops which they thought might have a turnover of only around £25,000. They would not want to waste their time because they would know that that would be a defence. They would not want to be involved in an argument as to whether the turnover was £25,000 or £30,000 per annum. So that in practice you would exempt a much larger number of shops because of this attitude which would inevitably be taken by the Inspectorate.
55 The Institute of Trading Standards Administration is strongly opposed to provisions of this kind for practical enforcement reasons. Why are they opposed to them? They are opposed to them because in provisions of this kind you always have anomalies, and sometimes you have injustices. Can I give one or two examples. I have already said that 39 per cent. of the grocery trade is done by independent shopkeepers, most of them having a relatively small turnover. One half of them are symbol shops—that is to say, one-half of the independent shopkeepers involved in this 39 per cent. of the food trade have given up some of their independence, have joined in a chain. They have joined in a chain in order to get the benefits of bulk buying. But very often the matter goes far beyond bulk buying: as part of the price that they pay for their goods, they make a contribution to advertising. The advertising is concerned very largely with prices, and consequently they lose control of prices policy, which passes over to the chain.
At what point does the independent trader cease to be independent? Surely we must take that into account? In many of our villages just a few years ago the principal competitors were the local cooperative societies and the independent traders. Both of these institutions have had to give up some of their independence in their fight against the supermarkets. The independent trader has joined in the voluntary chain. He has given up some of his independence to obtain bulk buying. He has given up the independence of fixing his own prices, and so on. Similarly, the local village co-operative society has had to give up some of its independence in order to get the advantages of bulk buying. It has had to join with the bigger co-operative society in the town.
But what does this Amendment say? It says that if you are an independent trader then you are exempt from all these conditions laid down in this Bill, but if you are a co-operative society you are not exempt. That is an anomaly; indeed, it is an injustice. I am not prepared to argue that the co-operative stores should be exempt; I am arguing that all should be included. I would point out that the small trader is included in every other 56 law that affects the trade; for example, any law which affects hygiene or weights and measures involves the small trader. Why should not the laws relating to consumer protection also involve the small trader? After all, we are only discussing the display of prices, not price regulation.
I should like to give one more example. A few years ago I was in America and I came across a remarkable chain, and it was not the only one of its kind. It was supposed to be a chain of independent traders, but in point of fact the owner of the warehouse owned all the shops. He rented the shops to individuals, and it was one of the conditions that the individual bought all his goods from the central warehouse. The goods from the central warehouse were charged out at retail less a commission. So in point of fact the so-called independent retailer received a commission out of which he paid his expenses, including the rent, and the balance that was left was his. It was a kind of "lump" inside the retail trade. Is it the intention that that kind of chain should be exempt? It would be under this proposed clause. If that chain came to this country—and that is not an outlandish idea, because we already have American chains in our High Streets—under the proposed clause it would be totally exempt from these elementary needs of the consumer regarding the display of prices under Clauses 2, 4 and 5. Indeed, we need not go so far as America to find the case of a chain being in the position that it can get away from the needs of consumer protection. The independent trader who wishes to open another shop, but wishes to be exempt from the elementary needs of consumer protection, can form another company, and that company can own the second shop. Another company can own the third shop, and so on. By having each of his shops owned by a separate company—which is a person, in law—he would escape the elementary needs of consumer protection contained in Clauses 2, 4 and 5.
In conclusion, I can assure the noble Lord that we shall consider fully the position of the small shops, and particularly the specialist retailers, and we shall be in close consultation with them. We are as anxious as noble Lords opposite that Orders under these clauses should not place unduly onerous obligations on small shopkeepers, or drive them into financial 57 difficulties; but we do not believe that it would be right that they should play no part in the Government's efforts to help the consumer. Any exemptions should not be in the Statute; exemptions should be in the Orders. Each Order is different; each Order covers an entirely different subject and entirely different sets of circumstances. In come cases the small trader should be included, in other cases he need not be included. Surely that is the way to grant exemption, not in the Statute. I hope in the light of the explanations I have given noble Lords opposite will feel inclined to withdraw this Amendment.
VISCOUNT COLVILLE OF CULROSSI do not want to go into the points that the noble Lord has just made in an impassioned speech on the merits of the new clause, but when a proposal of this sort was put forward in another place various technical difficulties were raised on the way it was then drafted, and we have carefully sought to go through these piece by piece in order to remove the disadvantages which were then seen by the Government. I observe that the noble Lord is extremely fully briefed on this clause by his advisers, so could he advise us whether there are still technical difficulties of a major nature, because I am sure that we would not wish to put something in which is wholly faulty? I rather gather from what he said that we have now got over the difficulties of defining turnover, and the difficulties of the inspectors having to look at all the books before they decide whether or not a shop is exempt, because we have put the burden of proof on the shopkeeper. Whether the noble Lord likes it or not we have at any rate produced a definition of "independence", which was previously not very well dealt with. Has the noble Lord other technical criticisms? If so, we should like to know in order that we may be able to put them right.
§ LORD JACQUESI have no technical criticisms other than those which I have given.
§ 5.9 p.m.
§ LORD ELTONThe noble Lord, Lord Jacques, has carried an impressive head of steam an impressive distance in his objections to this Amendment. I have paid great attention to what he said. I would point out that in phrasing this 58 Amendment we have embraced the smallest possible number of shops of the smallest possible size, and limited the area of our intereference with the action of the Bill to the minimum possible area. I would repeat what I said when the noble Lord kindly gave way to me, that the earlier part of what he said lacked force because we seek to do nothing to interfere with the price-fixing arrangements of the Bill. One could make out a case even for that, but we have not done so.
I would really like noble Lords to consider the burden of work which is being placed on these unfortunate people. If you have not had the onerous task of pricing a great number of things in the commercial way, then think of the running of a parish bazaar and tombola stall, and imagine that every ticket had to have on it the numerous extra provisions which the Minister has power to insist upon under paragraph (d) of Clause 4(2), where different provisions are made in relation to different circumstances and may contain such supplementary provisions that the Secretary of State may think necessary or expedient. This could be no small task. The noble Lord has experience in this form of trade, although I suspect that it was in a larger unit than that which we are now looking at so sympathetically. Only in the last phrases of his eloquent and moving speech did the noble Lord show the first vestiges of sympathy towards the small trader. He suggested that, unintentionally though it may be, we were aiding and abetting the fiddler. Far be it from us to do any such thing.
§ LORD JACQUESBut the noble Lord is doing it, whether he wants to or not. I said plainly that although it may not be the purpose of the Amendment, the effect was to allow the fiddler to get away with not unit pricing and to do it in peace.
§ LORD ELTONI have two points to make on that. First, a fiddler who has a turnover of only £25,000 a year is not a successful one. On the larger scale, I perhaps gave way too soon, because I was about to say that the noble Lord had not suggested any way in which the Amendment might be altered in order that the fiddler could be excluded under the unit pricing. This would be possible but it has not been suggested. That is 59 why I feel that Her Majesty's Government are hostile to the small trader, which they should not be.
All it comes down to is that Her Majesty's Government are laying upon the small trader, who performs a valuable and not very remunerative service to many people in scattered and isolated communities, extra hours of work and the danger of a reduction in an already small return. At the end of his speech, the noble Lord, Lord Jacques, said with some passion that the exemptions should not be in the Bill but in the Order. I hope very much that he will be able to amplify that statement and give some form of undertaking which will give us reason at least to take the Amendment away and reconsider it, and give him an opportunity to tell us, in what way, upon what grounds, within what guidelines and at what standards these exemptions would be operative. If he could tell us what these would be, how he will arrive at them and to what extent we can count on their continuance, then it would be possible for us to think again and discuss the matter between today and this day week when I understand the next opportunity for debate will arise.
§ LORD JACQUESFrom hard practical experience I would say that there is nothing in the Bill which will increase the burden of work in pricing. The burden of work in pricing has nothing to do with the things in the Bill. The burden of work in pricing arises first of all in the calculations that will have to be made in putting the on-cost on to the buying price and arriving at the new price. The placing of the ticket upon goods is not a major fact of work. It was suggested that I had not shown how fiddlers might be excluded. I can tell noble Lords how fiddlers might be excluded. There is only one way of dealing with fiddlers, be it in this area or not; that is, to make it an offence, no matter what the alternative is. That is what the Government want to do.
On the question of the order giving exemptions, I see great possibilities in that. For example in making an order it might be possible for the Secretary of State to decide that the range of prices need not be shown in shops below a certain turnover. For example, in the case of subsidised foods, the Minister is 60 trying to prevent the large supermarket from raising its price to the maximum price which has been determined bearing the small shopkeeper in mind. If the Secretary of State is, through price ranging, trying to put pressure on the larger shopkeeper, she could decide that that kind of range of prices need be displayed only in the largest shops and not in all shops. There are so many possible alternatives and so many different circumstances that each one would have to be considered entirely separately.
If there is to be any exemption for the small trader, I believe that all the circumstances must be borne in mind. Since they vary considerably, each case will have to be considered on its merits; that is each order and not the Statute as a whole. I remind the Committee that the question before it is not whether there should be price regulation; not whether small traders' profits should be affected one way or the other. The question is whether the small trader should carry out those practices which are necessary for consumer protection, such as the display of prices and unit pricing. That is what the Amendment is all about.
§ LORD ELTONIf the noble Lord would be kind enough to undertake before the weekend to give us some more detailed indication of the standards of exemption or application of orders we could consider them before we meet again on the Report stage. In other words, such further information would help to expedite the business of the House if it should allow us to withdraw the Amendment. I should like to know whether I could meet the noble Lord, Lord Jacques, and extract a little more detail from him direct.
§ LORD JACQUESI give an assurance that I will discuss this question with my right honourable friend. I will then make contact with the noble Lord, Lord Elton, and hope to be able to satisfy him.
§ LORD ELTONI am most grateful to the noble Lord. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 6 [Power to abolish Pay Board]:
§ 5.18 p.m.
§ On Question, Whether Clause 6 shall stand part of the Bill?
61§ LORD ABERDAREI cannot let Clause 6 pass without a brief comment. I do not intend to repeat what I said on Second Reading. The clause only gives power to the Secretary of State by order to abolish the Pay Board, and the order would be subject to the Affirmative Resolution of both Houses. In those circumstances we will have an opportunity to debate the Order itself.
During the Statement on London Weighting this afternoon I commented that it seemed odd to abolish the Pay Board and at the same time to praise it for a useful Report on London Weighting. The noble Lord, Lord Beswick, told me that it was another example of a guideline being given for the new regime of voluntary wage bargaining. We take the view that these guidelines, admirable as they may be in themselves, are unlikely to stick. All the evidence that one sees daily in the papers is that every trade union takes the view that the social compact is a fine idea, but that in its own case there arc so many anomalies and difficulties that it is a special case, and until its own special case has been put right it does not feel happy with the proposed guidelines. We have debated this subject thoroughly in the past and will go on doing so in the future. It would not be appropriate for me now, other than to make these few remarks, to oppose the clause.
§ VISCOUNT AMORYI wish to add a word or two to what my noble friend has said. The clause deals with an important matter. I realise that this is not the occasion to debate again the principle behind it. I realise, too, that the power given by the clause is not mandatory but permissive. But there are many of us who feel that if the Price Commission is to be operated while the Pay Board is abolished, it will leave a hopelessly unbalanced system. There is so much we do not know about the future. We do not know what the vacuum will be, whether there will be an intention to fill it in any other way, or whether incomes will be allowed to rise freely when the dam is removed. It would not be out of place to say that there are many of us who are very unhappy about the proposal to abolish one of these boards, while continuing to operate the other.
§ LORD HARRIS OF GREENWICHAs the noble Lord, Lord Aberdare, indicated, your Lordships will have an opportunity to discuss this matter again under the Affirmative Resolution procedure if the Government produce it—as indeed they will. But I would make one point to the noble Lord. I recognise that the last Government had a number of particularly difficult problems in this field and that, especially in the last year of their life, they had the exceedingly difficult problem of rapidly escalating commodity prices. Nevertheless, the existence of a statutory policy in the last twelve months of their life coincided with the highest degree of price inflation we have ever known in this country. I say no more than that I do not think it behoves any of us to be too self-righteous about this problem, which is one of exceeding and considerable difficulty.
The statutory policy of the Labour Government certainly did not succeed. I think it is also true that the statutory policy of the last Conservative Government did not succeed. The present Administration is at the moment attempting, with the co-operation of the T.U.C., to fashion a voluntary policy, and all we can say so far is that, as the noble Lord will be aware, we have had the statement made by the T.U.C. last week—which was a very welcome statement so far as the Government are concerned—expressing the strong approval felt by the T.U.C. of the economic and social policies being pursued by the present Government. All I would say is that none of us on this Bench would under-estimate in any way the difficulties of pursuing successfully a voluntary policy. But I do not think any of us should forget our experience of the very substantial and real difficulties of a statutory policy. With that relatively short statement of the position from this Bench, I shall sit down, aware of the fact that we will return to this matter within a week or so.
§ Clause 6 agreed to.
§ Remaining clauses agreed to.
§ Schedule [Enforcement]:
§ 5.22 p.m.
§
LORD ABERDARE moved Amendment No. 5:
Page 10, line 7, after ("may,") insert ("provided that he has reasonable cause to assume that an offence has been committed,").
§
The noble Lord said: It might be helpful if we discussed Amendments Nos. 5 and 6 together. We have not had very great success as the Government have not been showing their usual flexibility this afternoon, and the least we can hope, therefore, is that we shall be able to persuade them to make these very useful Amendments in the Schedule. Their object is to put a modest limit on the very sweeping powers of enforcement that are in the Schedule as at present. Paragraph 3(1) talks about:
A duly authorised officer of the Secretary of State or of the Minister of Agriculture, Fisheries and Food",
who may operate these powers. Then, under paragraph 4 the powers conferred by paragraph 3 shall
… also be exercisable by any officer of a department, board, authority or body with which the Secretary of State has made arrangements … and who is designated for the purposes … by the Secretary of State".
So there is a wide range of people who can use these enforcement powers.
§
The powers are very sweeping. Under paragraph 3(2) they are,
(a) a power to inspect and take samples of any goods and to enter any land or any premises other than premises used only as a dwelling; and
(b)a power to require any person carrying on a business, or employed in connection with a business, to produce any documents relating to the business",
and so on. These seem to be enormously sweeping powers. We realise that certain enforcement powers are necessary, but all we are attempting to do by these Amendments is to limit them in two ways.
§ Amendment No. 5 is to ensure that before an officer uses these powers he has reasonable cause to assume that an offence has been committed. I should have thought that that was self-evident. I should have thought that these authorised people would not in practice want to snoop around in these shops and take samples of flour, or whatever they are going to do, unless they think that there has been some offence committed. So I hope that the noble Baroness, who I think is to reply, will be able to assure me that these authorised persons will not be entering shops, taking samples, looking at the books and taking extracts, unless they really think that an offence has been committed before they go there.
64§ The second Amendment, No. 6, merely makes the point that if they are going to take documents or copies of documents then, at least, they should take copies of relevant documents. Otherwise, the paragraph as it stands at the moment gives them power to require a person to produce any document relating to the business. I should have thought that the word "relevant" was very relevant in this instance. I beg to move.
§ BARONESS BIRKI do not know whether I can be as flexible as the noble Lord opposite asked me to be. But I can assure him that the very sinister-sounding list of things which he read out at the end really do not apply to this Bill, and that his Amendments, while he may consider them relevant, are in fact quite unnecessary because the effects do not follow from what he has pronounced as the causes here. I can understand quite clearly the reasons why these Amendments have been moved, because on one reading there may be some concern felt that powers should not be given which allow access to premises and documents without any reason for such intrusion being given. I believe, and will show, that in fact this is not so, by the way the Bill has been drafted.
I can see that noble Lords may envisage businessmen being harassed by inspections which have no bearing on the food subsidy payments, and also that information obtained under these powers may be used for other purposes. Noble Lords have also observed, I am sure, that the powers given in paragraph 9 to a duly authorised officer of a local weights and measures authority are exercisable only for the purpose of determining whether an offence has been committed, and I imagine that it is this which has led the noble Lord to feel that a similar limitation should be set on the powers in paragraph 3(2). I shall try to explain why a limitation which is appropriate in paragraph 9 of the Schedule is not appropriate in paragraph 3.
In paragraph 9 it is possible to speak of,
… determining whether an offence … has been committed",because if there is reason to think that a price regulation order has been breached there is then suspicion of an offence; if not, there is nothing to investigate. But 65 in paragraph 3 we are not only taking powers to investigate suspected offences, but are also providing for checks that payments have been correctly made and that breaches have not been committed. In fact, I am drawing a distinction between an offence and a breach or, if you like, an abuse. Your Lordships are well aware that considerable sums of money have been committed to these food subsidies, and what paragraph 3 of the Schedule does is to confer powers on duly authorised officers to check on the proper operation of the subsidy schemes. Here the officers in question, probably the audit staff of the Ministry of Agriculture, may, for example, need to satisfy themselves that a baker in receipt of subsidy has used the subsidised flour for the manufacture of bread, and not for Bath Oliver biscuits.The subsidy funds are aimed at helping those in need and I am quite sure, from what has been said throughout the passage of the Bill, that your Lordships would agree that all appropriate measures should be taken to ensure that, so far as possible, they are not diverted to other purposes. Whether or not there is evidence to suggest that a firm has breached the conditions of a subsidy scheme, inspection on a spot-check basis may be necessary. In most cases, one cannot find out whether there has been abuse or a breach committed until a check has been carried out. I believe that the Department would be failing in its duty if it were not prepared to conduct these checks in the case of any firm which has been in receipt of public funds.
The second reason for resisting the Amendment is that a breach of subsidy conditions will not necessarily constitute an offence, and I do not really think that your Lordships would want us to create more offences than are necessary. At the moment, it is a question of discovering whether there has been abuse of the use of the subsidy—and there is one concerned that the subsidy should be repaid to the Secretary of State—which is more important than creating an offence and taking proceedings under the erosion. However, steps have been taken to allow certain conditions relating to subsidy payments to be made enforceable by Order and paragraph 2 of the Schedule provides that such conditions will apply not only to the claimant but also to subsequent 66 sub-purchasers prior to the retail level. A breach of the conditions contained in an Order would constitute an offence. However, if the Amendment was passed it would limit the powers of inspection to cases where an offence was suspected and it would not be good enough for the inspectors' hands to be tied in this manner where the Department is to be accountable for the correct expenditure of subsidy funds. In this case, there would be no alternative but to incorporate in Orders all the conditions which at present exist in contracts so that every breach would become an offence. I am quite sure that the noble Lord would not consider this desirable.
Having said this and having said that this is the reason why I shall have to resist the Amendment, I should also like to emphasise that an inspector does not have a right to exercise his powers of entry and inspection completely at random and that the Bill as drafted has already clearly circumscribed the powers which are given in paragraph 3(2). In paragraph 3(1) it is stated that there are two purposes for which the powers may be exercised. On the one hand, they may be used to determine whether the subsidy payment has been correctly paid or whether a repayment is due because a condition has been breached or the food has been exported. On the other hand, the powers may be used to determine whether conditions relating to subsidy payments, which are prescribed by Order, have been contravened. This is the parallel to the phrase in paragraph 9 to which I have referred and which the Amendment seeks to introduce. Rights of inspection do not exist outside these purposes and, as the purposes are defined in this way, the further safeguard condition proposed in the Amendment is not necessary and would indeed defeat the object of the exercise.
In the light of this explanation, I hope that the noble Lords will not press their Amendment. The noble Lord, Lord Aberdare, was kind enough to take the two Amdenments together. They are interlinked so that, if noble Lords will hear with me for a moment, I will go on to speak of the second Amendment, which introduces the word "relevent" to the production of any documents. I imagine that it is a similar concern which links the two together, so I will not go over 67 the ground again. I should have thought that it was quite clear from what I have already said as a background to the explanation of the conditions covering both the clauses, that the Bill as drafted gives an officer no power to demand totally extraneous documents. For example, he could not possibly demand to see the Managing Director's gas bill or anything like that. The documents must be "relating to the business", as stated in paragraph 3(2)(b). Secondly, the power to require the production of documents, like all the powers under paragraph 3(2) is limited by the overriding provisions of paragraph 3(1). In the case of orders under Sections 2, 4 and 5 concerning the regulation of prices, and the display of information about prices, the purpose must be that described in paragraph 9(1).
The introduction of food subsidy schemes has required the close-cooperation of the trade, so that they are already aware of the kind of document which will be required for inspection. Claimants of subsidy give an undertaking to keep records and to make them available for inspection. In the case of price regulation Orders, there is a statutory obligation to consult with representatives of the trade before the introduction of any Order, so that, at these consultations, the trade will have the opportunity to inquire in more detail about the documents which they might be required to produce to "duly authorised officers" It seems to me that it is at that level—with the trade organisations and through their own journals—that this could be completely clarified wherever necessary and that when individuals want information they will be able to go to their own trade organisations who will have been consulted throughout.
The introduction here of the word "relevant" implies a subjective judgment, and although there is no indication in the Amendment as to who should decide what is or is not relevant, it could, on the basis of the way in which it is drafted, only be the person who has the documents in his possession, so that the authorised officer would have no means of knowing whether or not all the relevant documents had been produced. If a person feels that he is being asked to produce something that is not relevant he has only to refuse to do so 68 and, if he refuses to produce something which turns out to be necessary and which it transpires should have been produced, the officer can take the means of going to court to obtain production of the document.
I also draw the noble Lord's attention to paragraph 12 of the Schedule which places restrictions on the disclosure of information supplied in the course of the exercising of the powers conferred by the Schedule. Again, there is no danger of any information which becomes available, even as a result of the restricted powers, being abused. In conclusion, I think that I should point out that the powers of entry and inspection are not completely new in the Bill. They are similar to those contained in recent legislation such as the Counter-Inflation Act 1973, the Fair Trading Act 1973 and the Trades Description Act 1968. They are necessary, I repeat again, for adequate safeguarding of the considerable sums of public money which are committed to food subsidies. However, they do not go beyond that purpose or seek to introduce any novel incursion into the rights of the individual. Therefore, while appreciating the motives behind the Amendments, I hope that the noble Lord will accept the explanation and will not press the Amendments.
§ LORD ABERDAREI am most grateful to the noble Baroness for the assurances which she gave me in the course of her speech and for the explanation that these powers are not so far-reaching as I had thought. As she rightly says, they have been included in other legislation, which has been legislation of both Governments, but I think that this is one reason why one should be suspicious of all the powers given to inspectors. I know that the grocers, for instance, now have six different authorities which have access to their shops for inspection purposes, and two of those authorities provide two different inspectors for different aspects of their subject, so that there are eight different authorised people—now to be nine—dodging in and out of grocers' shops inspecting them for one reason or another. However, I am grateful for the explanation which the noble Baroness has given me and I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
69§ Schedule agreed to.
§ House resumed: Bill reported without Amendment.