§ 5.17 p.m.
§ The Earl of SELKIRK rose to move, That this House takes note of the Thirty-fifth Report of the European Communities Committee of this session on Hallmarking and Precious Metals (R/3139/75). The noble Earl said: My Lords, I venture to call attention to the Report of the European Select Committee on Hallmarking. It is the practice of a Select Committee, having in many cases read a very large 911 number of papers, to draw your Lordships' attention to those which it thinks raise matters of importance. When the Committee thinks that matters are raised that require a reply from the Government, it asks for a debate. This is a case in point where we think that a debate is of importance. Of course, as must always be the way, we are critical of what the Directive says. I believe that we are helpful in being critical because, unless we insist that what the European Community does is pragmatic—that is, that it is based on sound administration—it will be like the house built on sand. Our particular task is to see as far as lies in our power that the foundations are sound. That is what we are trying to do today.
This subject is one on which, we, as a country—not myself—speak with exceptional authority. We have had hall marking for some six centuries and, so far as I know, the French are the only other nation which can show an equal or possibly a slightly longer period. We have seen in our experience and in three reports which have come out during the past century that there are three things which are essential: compulsory hall-marking, by an independent organisation, and effective enforcement. If one does not have those, there is no assurance that anybody knows what he is buying. It is because this particular Directive seems to me to go in the wrong direction I am bound to say that, in its present form, it is quite unacceptable.
There are two main reasons. The first is that it does not offer effective consumer protection. It would inevitably lower standards and it would reduce the degree of enforcement. That is something that we cannot let go. Secondly, I think that it is misconceived. The authors of the Report call on Article 100, which is the basis on which barriers to trade are removed, and say that hallmarking should come into that. Hallmarking is not a barrier to trade; it is a barrier to production of inferior quality, which is quite a different proposition. I go so far as to say that this is an abuse of Article 100; it is altogether the wrong use of this Article.
I should like to say how important this matter is. First, nobody can tell gold or silver either by looking at it or by touching it. I have seen in a gold mine 912 a seam, a yellow thing. Until it was chemically tested nobody knew what it was. No one could possibly tell what was the material of which it was constructed. That is the first point; it is undetectable. The other day I saw 16 carat white gold alongside metal and one could not possibly have told the difference between them.
Secondly, the vast majority of gold and silver articles are quite cheap; that is to say, their cost is probably nearer £10 than £100. They are not the lovely things one sees in the Mansion House or in similar places. This matter concerns a vast number of small people to whom these little articles are often treasured and valuable ornaments which may recall some great occasions in their lives. To let them be prejudiced would be a very anti-social act indeed. I am told that deception is extremely easy and extremely profitable. Of course I can only speak from second hand on this point. Added to this, 7,000 articles which were below standard, were brought into this country from Germany in three years. It is for all these reasons that I say that at present this Directive is not acceptable.
I should like to recall to your Lordships the position of the United States of America, which for 70 years now has tried to enforce hallmarking laws and has failed. The United States has not given up trying and we have given any help that we possibly could. Indeed, we have given help to other countries wherever possible. I have a note here of a number of countries—Iran, Malta, Sudan. Egypt, Turkey and Ghana—all of which I believe we have helped to set up their own assay offices.
The question we must ask is: how can we help the European Community? They have, I know, been discussing this matter for years, but they have probably been discussing it in the wrong context. They have been talking about harmonisation when they should have been talking about standards, and I think that they have got it wrong. In the Community, what President Giscard d'Estaing has called the two oldest nations in Europe, along with Holland and Eire, are the only countries with an effective assay office among all the European countries. Italy does it through the manufacturing companies, which we could not accept 913 for a moment. Denmark, I am told, does not control exports at all, and Germany, so far as I can make out, does absolutely nothing whatsoever.
One might say that it is fairly unfertile soil in which to set up hallmarking. It is not unfair to say that. As I have said, the United States has taken a long time, and if Europe set about it, it would still take a long time to do it. Furthermore, hallmarking is not a subject for compromise. In diplomacy, of course, one tries to compromise. But on this subject it must be strictly compulsory: it must be judged by completely independent organisations; and it must be rigorously enforced, because here the bad will inevitably drive out the good unless it is completely controlled. If that happened the public would not know what they were buying.
It so happens that I believe that we have an instrument to hand which is exactly what will be required to meet the particular circumstances. This is the convention, which we have signed and which came into force last month. We signed it in 1972 with our EFTA partners at that time, and it is now in force in this country. It meets the requirement of this particular commodity. All who signed it enforce standards which they accept themselves, and they also admit products of equal fineness from any other country, but they need not accept lower standards. What I believe, my Lords, is even more important than that is that it is open to any country in the world to join. I suggest that this is really a world market. Jewellery of gold and silver should be looked at as works of art. They do not really enter deeply into the economy of a country. One cannot eat them, one does not see them in factories, they are not a raw material in the ordinary sense of the term. They are a very specialised product which should be considered only on a world basis, and they need not have a special connotation in the European Community.
I very much hope that the Government will agree that this Directive is not acceptable. Frankly, we have no right to sacrifice qualities which we have built up over centuries. It would be quite wrong to do that, and to do so on a rather hazy ideal of harmonisation which, in my opinion, does not apply to this particular case. I do not know what the export 914 figures are, but I read those mysterious documents produced by the Department of Trade and it appeared to me that more than £50 million a year was exported from this country in gold and silver jewellery of one kind or another. These items would, of course, all be hallmarked. No doubt the noble Lord who is to reply for the Government can give more detailed figures.
Jewellery of gold and silver should be regarded on a world basis as a work of art, and I believe that the 1972 Convention, which is now in force here, would be of very real value to the whole world in this respect, in that each country would carry its own responsibility which it set for itself, and would accept the standards. But must say to the Government that if one wants the world to sign this Convention it is necessary to get rid of this Directive. If this Directive is put on one side I believe that other countries will in due course come to sign the Convention. I ask the Government to accept that this is an important subject to many people in this country. We want a clear cut answer and I hope that that answer will be without equivocation.
§ Moved, That this House takes note of the Thirty-fifth Report of the European Communities Committee of this session on Hallmarking and Precious Metals (R/3139/75).—(The Earl of Selkirk.)
§ 5.28 p.m.
§ Lord REDESDALE
My Lords, first I wish to congratulate the noble Earl's Select Committee on producing so excellent a report. I found it to be concise and informative; it laid out all the points most clearly. We have all had a mass of other excellent material from which to draw our conclusions. This is an extremely complicated subject, although the principle is fairly simple. On the technical side, I should be nervous of putting before an assay office any points which I raise in my speech, because I feel that they might not reach even the standard of 800. In a nutshell, I feel that the draft as it stands is unacceptable.
But let us take a constructive view on this point. In fact the matter could be handled quite simply and made acceptable if the EEC accepted the Convention. I appreciate that there are very strong objections to this by the two countries which produce most of the items; and as 915 the noble Earl said, these are in the lower price range but are vast in quantity. These countries are Germany and Italy. I believe that Germany has no intention of setting up an assay office, and so it would be very hard work for Denmark should this Directive be enforced, because I gather that most of their items would get shipped straight in there for assay.
My Lords, what is it all about? Hall-marking is really one of the oldest forms of consumer protection, and it has been going in this country for 676 years. I believe it was first brought in as a standard in 1300, and it has worked pretty well over those years. In fact, this is the one country where it has always stayed, and that is why our standards have had such a high value. But it is basically, as I say, a consumer protection measure, and, should this Directive be brought in, then I feel a lot of the consumer protection element would disappear, because nobody would really know what they were getting. The Directive uses the word " hallmark ", and, of course, this is incorrectly used, in terms of English at any rate. It is not really a quality mark—and this comes on to the main point of enforcement, which I shall deal with later.
As I was saying, we in this country have had two standards for silver: the sterling, which has lasted since 1300, at 925 parts per thousand, and going up to 950, the Britannia mark. It was rather interesting that the 925 mark was used because it was the same as money, and hence the sterling standard. I believe that in about 1540—but here I obviously stand to be corrected—money had to be debased because people were melting it down to make up silver items, and therefore we went up to the 950 Britannia standard. That is really a quite interesting point, and comes on to the fact, which the noble Earl raised, that if an 800 standard is brought in then the standard throughout would drop; we should be running on a much poorer standard, and not only would we not have the protection but I feel we would all lose out.
On the question of what is happening at the moment, I believe that in 1975 the British assay offices assayed British goods of a total weight of 91 tons of gold and 138 tons of silver. I quote these figures to put the position into perspective with the fact that the Italians produced 360 tons 916 of, as I say, so-called gold and 700 tons of so-called silver; but, in all fairness, their quality varies considerably from well below the 800 to some items which are very high in quality. But, as was said, the question of forgery comes in, and the Italians produce a very fine line in Georgian silver. It is beautifully hallmarked, but it is still forgery. I believe the question of enforcement was brought to the notice of the Italian police and not much was done about it. I believe that 5 per cent. of the items brought before the British assay centres were found to be below standard. It was known that those items were going to be assayed, so I dread to think what the level of quality was of those items which were going to miss being assayed. I believe that some of the Italian silver—and here again I stand to be corrected by the noble Earl—was of such a low quality that it had to be silver-plated to make it look good. Therefore, I believe that to go down below 800 makes it look quite evident that it is not proper silver.
Some of the objections which are being raised I have already covered; for instance, on the silver standard of 800. Gold is a little more complicated in that the standard in the EEC mark would be higher, but 9 carat has been used for a very long time and is well accepted throughout the world as the standard. Therefore, I do not really see the point of going up to the standard suggested in the EEC document.
On the question of safeguards and standards, I feel that the Directive is totally inadequate, mainly because of enforcement. We know that, in the past, America has tried to have a hallmarking system and that it has failed mainly because of the problems of enforcement. The Directive does not lay down, so far as I can see, any way in which the standards can be held, and it really comes on to the obligations of EEC Members. These obligations seem to be inadequate to enforce the standards. I believe that Article 10 could allow Members who are against hallmarking to weaken standards so that they are no longer a consumer protection. This is on the question of technical progress, where such Members could bring in reasons and perhaps outvote other Members. So I think this is an area which would need to be looked at very carefully. One other point is that the marks which are suggested are obviously 917 far too small and too intricate. They wear out and very quickly become unrecognisable.
My Lords, since many other speakers will have a much greater knowledge of this subject than I, I wish to touch only on the main aspect of our objections to the Directive as it stands. I believe that at the moment the draft Directive comes under Article 100 of the Treaty, and, therefore, the opinion of the European Parliament is mandatory. The draft Directive was referred in the usual way to committee by the president of the European Parliament, so the Economic and Monetary Affairs Committee has been designated the responsible committee and has a responsibility for technical barriers to trade.
I thought the point raised by the noble Earl was so true here, that hallmarking is not a barrier to trade; it is a consumer protection measure. The committee I have just referred to, the members of which include two Members of your Lordships' House, Lord Ardwick and Lord Gordon-Walker, have said that the draft Directive is really a consumer affairs matter and that the responsibility ought to be taken over by the Consumer Affairs Committee, or that it should give an opinion, at least, to the Economic Committee. Therefore, at the moment, I should like the noble Lord who is to reply to say that this question has not yet been resolved.
To summarise, the European Parliament has not given its opinion on the draft Directive, so the debate in your Lordships' Chamber today is really quite timely. I believe that the earliest plenary session to which the Committee report could be presented for approval is that in September, but I think that is probably unlikely and that it will be much later. I feel we must press our view at every stage. When this Directive comes before the Council of Permanent Representatives and, if it should go through there, when it finally comes to the Council of Ministers, I feel we must try to get it changed so that it takes the form of the Convention. I believe that in this way standards can be maintained and consumers protected.
§ 5.39 p.m.
§ Lord RHODES
My Lords, when I was a child we used to have a game on the last day of the month. When we 918 went to bed we said, " hares ", and the rules were that if you could go through to the following morning and say nothing except " rabbits ", then God would send you something good. I said " hares " last night, but I forgot to say " rabbits - this morning; and I do not know that up to date God has sent me anything good. This is a diamond anniversary for me, because at this very moment, shall I say, 60 years ago, I was standing in the ruined village of La Boiselle with 700 or so of my colleagues lying on the wire or severely wounded. All that in one day! For months afterwards I had a very cynical approach to military operations, I can tell your Lordships. From then to today is a very far cry. Our opponents of that time are now in the same organisation as we are in. It looks sometimes as though it is by a near miracle that this has happened. These things historically go only slowly.
We are discussing today the small item of the Directive about hallmarks. We have had the case put absolutely splendidly by our Chairman of the " B " Sub-Committee of the Select Committee for Europe. May I say at this juncture that I hope the House knows, and will pardon me for saying it, that a tremendous amount of work is being done on this Select Committee for Europe that perhaps is not appreciated by the average Member either of the other place or of this House, and that it would do some Members good sometimes to go up to Room 3B or 3A and listen to the investigations going on with the idea of making quite certain that nothing slips through that should not.
Practically every point has been touched upon and I do not propose to go over the same ground. I want merely to draw your Lordships' attention to one very important aspect which is critical but nevertheless of a constructive nature. If we need a separate system for hallmarking for the EEC, it would be simple to put it into operation by adopting the International Convention Agreement which was ratified on April 1st and put into operation on June 1st. Why on earth are we faced with a duplication of effort and with time wasted in witnesses coming forward to talk to the Committee and so on, when there is machinery at hand which, if put into operation—as it easily could be—would do the job very well indeed ?
919 It has been said that the manufacture of articles of precious metal is an art. It is also a craft. It is one of the industries which has both art and craft. In the trade that I was brought up in, the wool trade, you were able, if you were an expert, to identify materials by touch or by sight. I understand from better evidence than I can supply, evidence from the Hallmarks Council, that it is impossible to make positive identification either by feel or by touch. If that is the case, there is no doubt that an independent assessment of the article is absolutely and totally essential. If this Directive now before the House were to be approved, it would mean that we should have a whole lot of unidentifiable articles circulating in this country to the detriment of our artists and craftsmen.
My Lords, I believe this: that we should hang on to quality as long as we can. We should put up a fight when people are trying to put us off quality. We know how difficult it is to please our critics on the question of production and productivity and the increasing of the growth rate; we know that we are behind most of the Western countries of the world. But there is one thing on which we can hold up our heads and that is quality. Many of our industries have a long tradition and heritage of knowing how to make things; this is one of them. I hope, in conclusion, that when the Minister comes to reply, he will confirm what the Committee has put to the House, that this Directive should be rejected.
§ 5.46 p.m.
§ The Earl of PERTH
My Lords, when I saw on the Order Paper the word " hallmarking ", I did not know what it was about. It is, generally speaking, a subject that I know is very important and of great interest, so I took the trouble to get what I would not otherwise have got; that is, the Report of the Select Committee. I certainly want to join with the noble Lord, Lord Rhodes, and others in thanking the Chairman and other noble Lords who have brought this matter to our attention. I think the noble Lord, Lord Rhodes, is right when he says that many of us are not aware of the great work going on in these Committees. It is something for which we are deeply indebted to those who carry it out.
920 So far as I am concerned, I should like first to ask a question of the noble Lord who is to reply for the Government. In the Report it tells us about the legal implications, and it says that an amendment of the Hallmarking Act of 1973 will be necessary. It goes on to say that it may be possible to make the amendment, assuming that we accept this, by delegated legislation. I am not clear what that means. Does that mean that delegated legislation is not legislation which would come before the House?—because I would consider it a very serious point that something could go through without our knowing about it and without our having the opportunity to discuss it and, if necessary, if things go wrong, to turn it down. So much for the question.
My Lords, I should like to make three brief points. The first is one that other speakers have made. When something has been in existence for many hundreds of years, then one wants to be careful before making a change. I do not know why in this case Scotland was slightly behind the English in introducing the hallmarking system. Perhaps it was because the English were quicker to realise the value of debasing and there had to be protection—which is after all the purpose of all this—before this was the case in Scotland. Be that as it may, I think it is very important that we should not rush into anything. Certainly, after (shall we say?) hundreds of years, we find two things on our plate in a short time. First, the EFTA Convention, which I understand is acceptable, and, second, this draft Directive. Why this sudden worry? As I understand it, there is no worry about the EFTA Convention which lets us go on as we are; but on the other hand it is because there is a misconceived idea of what this is all about. As the noble Earl, Lord Selkirk, pointed out in his original speech, the purpose of hallmarking is consumer protection, whereas the purpose of the draft Directive is increasing trade. Those two things may well not be compatible.
My second point is not only that our system has worked well, but that it has become part of the English language: we talk about somebody and say that he is a " sterling fellow ". What does that mean ? It means he is top quality. Here we are talking about something which may be 921 changed. No longer may we find that we have our own sterling quality but that possibly silver may be debased to the 800 out of a 1,000 parts level. On page 16 of the Report the consequences of that can be found. Colonel Grimsley, who gave evidence, was asked about the difference between the 925 and the 800 standard. He said that it had a more metallic look than the English sterling silver. This is something very significant. He went on to say this:… in order to make it more acceptable the Continental manufacturer plates it with pure silver ".That surely gives the whole case away; that shows that the whole idea of consumer protection falls to the ground. They take an object which is of a relatively base standard and deliberately cover it with pure silver to disguise what they have, and there is no longer any consumer protection. That, after all, is the whole purpose of our having the hallmark.
So whatever might be the rights and wrongs in some degree, what is clear from the evidence is that the thing could well be a fraud. If ever it reaches a point when such a situation arises, I hope that the trade will set their minds and hearts against an action which would in the end, under Gresham's Law, mean that the bad drives out the good.
My last point is on what I call the aesthetic side of this matter. One of the great attractions of silver is the hallmarks. They are put into a prominent place and they add to the whole look and distinction of the piece of silver. Those are placed with great skill. My Lords, if you have not seen that, I strongly advise you to do so because it is an art in itself. What are we being asked ? We are being asked to have yet another mark, one which seems confusing, one which will not add to the distinction of the article. Then there is something which is said to be secret—a secret mark. I do not know what that means. All I know is that it is very disturbing. For those reasons, I agree with all those who have said that the Government should plainly stick their toes in and not go ahead on anything to do with the draft Directive.
§ 5.54 p.m.
§ Lord LUCAS of CHILWORTH
My Lords, I cannot dissent from anything that 922 has so far been said in this evening's debate; neither do I want, if I can help it, to repeat the forceful argument put forward by the noble Earl, Lord Selkirk, who has said all that needs to be said from the point of view of the Committee, of which I had the privilege of being a member, regarding the principle. I think, however, it may he fair to remind your Lordships that the EEC started their work on hall-marking long before we became Members, and it may not be unfair to suggest that what has now been produced by them is but a pale shadow of our own system, a shadow so pale and so developed by the time we joined the EEC that it was not possible, in the four meetings that we were able to attend, to strengthen it.
This is not to suggest that our industry is against change, because the goldsmithing and silversmithing industry have been happy to accept the EFTA Convention. It is in many respects somewhat better than some of the more narrow aspects we enjoy under our hallmarking system. I think it is also necessary to remind ourselves that during May and June of 1973, we had the Hallmarking Bill before us, introduced by the noble Lord, Lord Sandys. The whole area of hallmarking was thoroughly investigated. It is also fair to remind ourselves that it was my noble friend Lord Drumalbyn who, as a Minister at that time, reminded us that some of the things we were discussing and deciding upon during the passage of that Bill might be contrary to those things which were then being discussed in the European Community. Nevertheless, the other place and your Lordships' House passed that Hallmarking Bill, and as an Act it stands as a very much improved piece of legislation.
Added to the EFTA Convention, there can be no reason why this country should have to engage in this harmonisation Directive. It does nothing for our gold-smithing, silversmithing and jewellery industry. The tolerances suggested are so wide of what we have become used to that it would make a farce of all that has been built up in this country and accepted throughout the world over the past 500, 600 or 700 years.
The growth of goldsmithing and silversmithing in this country has been enormous. It has been suggested that in recent times our exports have exceeded 923 £50 million. My understanding was that goldsmith, silversmith and jewellery products far exceeded that figure. In fact it goes into three figures of millions of pounds. Our products are sought after throughout the world; witness the recent exhibition and sale in the Middle East, when several thousand pounds of British designed, craft-made silver goods and jewellery goods were sold in a matter of days.
There are far more entrants into the crafts of goldsmithing and silversmithing than ever before. That industry is becoming more important and the English entries are more widely accepted throughout the world, so giving encouragement to craftsmen. There are a number of international exhibitions and competitions held each year. In successive years English craftsmen and English entrants have figured prominently in the list of award winners. There can be no reason why we should accept under any guise whatsoever any Regulation that reduces our own competitiveness and our own quality.
My Lords, the industry is important to us, and it is fair for the noble Earl, Lord Perth, to remind us about the 800 standard. He quoted from the Report. I thought he was going to quote the piece of evidence which referred to reducing the standard from 925 to 800 under the guise of improved consumer choice. The witness said that it was a £25 item but only about £I would be reduced from the price. Therefore, in fact the consumer's choice is not widely enhanced but the craftman's choice is very, very badly damaged.
There was one other point which has not so far been made concerning platinum, and I should like to refer to this. In the draft Directive it suggests that the tolerance of platinum should be increased, but at one and the same time the addition of iridium should be allowed. Iridium is added mostly in platinum jewellery, and certainly in white gold jewellery, to give added strength to the claw mounting. I understand that it is not essential for it to be added because platinum is hard in itself and is technically capable of being used to make a satisfactory mount. If we accepted the idea that a certain percentage of additional material is to be allowed, then the whole value of the content of an item is even 924 further reduced: in other words, the tolerance is widened. if we allow such a thing to happen, we have little argument to bring to bear if in the future another material is found with similar qualities but of a vastly lower value, which in itself increases the tolerance and reduces the total value of the articles.
I do not believe that the members of the industry who gave evidence to us are being in any way narrow-minded about this. I believe, together with other noble Lords who have spoken, that the insistence upon those standards which are embodied in our hallmarking system are very definitely a consumer protection and a guardian of quality, which was the point made by the noble Lord, Lord Rhodes. Quality must be guarded and fought for, unless we are to sink lower and lower in all fields.
Notwithstanding that I am a very staunch supporter of the European Economic Communitty, I believe that we can afford to be parochial here. We have something in this country that is better than anything else in the world and I think that we should use all our endeavours to defend it, to hold it and to ensure that if any change is made throughout the world it must be better than what we have today. I hope that Her Majesty's Government will support this view, which is that embodied in the Report of this Committee.
§ 6.4 p.m.
§ Lord GLENKINGLAS
My Lords, I hesitate to thrust yet one more speech upon your Lordships' House, but I do so for two reasons. The noble Viscount, Lord Runciman of Doxford, who is Chairman of the British Hallmarking Council and who wanted to be here today to give his views, is unfortunately unable to be present, and I have been asked to express the views of the British Hall-marking Council during this debate. Secondly, I was President of the Board of Trade at the time when EFTA, which came under my broad aegis as the British Minister responsible, were busy hammering out the Convention. Therefore, I feel that I have been as deeply involved as anyone in your Lordships' House, and perhaps I might be forgiven if I make a short speech and try to point out particular things which I think are of importance.
925 As several speakers have said, hall-marking came in for reasons of consumer protection but—let us not make any bones about it—it was simply because silver and gold were the currency of the day. If you allowed your silver and gold articles to be debased, you put a tremendous strain on the people who wanted to save money—because there were no banks at that time, as some of your Lordships will know only too well. People used to order their silver from the merchants, not by saying " I want a beautiful tankard ", but by saying, " I want 60 ounces of silver." That was the way they saved their money.
Perhaps I may slightly correct what my noble friend Lord Redesdale said concerning what happened in the middle of the sixteenth century. That was the time when the lion first appeared on our hallmarking system, and it was meant to underline the fact that Henry VIII had debased the currency but that silver had remained of the same quality. This was extremely important then, and it remains so today. But the fact of the matter is—and I speak now as a member of the Hallmarking Council—the protection of the consumer is still quite definitely our No. I priority. We have a representative Council representing the unions, the " statutory women ", the manufacturers and everybody else, and we try to guide our rules so as to make everything as simple as possible for the people who manufacture the many hundreds and thousands of pieces that go into the jewellery and silver trade and to enable them to do so without unnecessary restrictions, but never at the expense of the consumer.
Several people, including my noble friend Lord Selkirk, in his opening of the debate, have mentioned the fact that this is done by the EEC on the ground that it is a non-tariff barrier to trade. As an ex-Minister at the Board of Trade, I bow to nobody in my knowledge of possible non-tariff barriers to trade that can be promoted if one wants to have them. There is very little that I do not know about them in almost every field—but this is not one of them. It would be perfectly possible to say, if one so wanted, that the prevention of forgery of currency is a non-tariff barrier to trade. Of course it is—in exactly the same sense. We should all be able to trade much more easily 926 with France and Germany if we could mint their coinage and print their money and trade with them in that way; but it would not last for very long. Nor, I suggest to your Lordships, would the trade in valuable goods, in silver, gold and so on, if one abolished the practical and sensible hallmarking system we have built up.
I should like to stress the point made by the noble Lord, Lord Rhodes, and by my noble friend Lord Lucas, about the quality which is guaranteed by the hallmark. It is not just—and I do not think it was meant in that sense—the quality of the metal which goes into it which is discovered from looking at the hallmark: it is the quality of the craftsmanship as well, because in nine cases out of ten you have the authenticity of the piece guaranteed by the hallmark. That has gone on, though not perhaps totally, for the last 600 years because there were pieces that slipped through perhaps with only the maker's mark, and sometimes without that but with other marks. In most cases, however, you can pick out a piece of silver made anywhere in the British Isles and see when and where it is made and who the artist, designer and maker was. This is of enormous value to the trade we do in the export field—sometimes rather sadly in this respect, because the best of our British products go all round the world.
I believe it is right that the very considerable craftsmen that we have today, such as Leslie Durbin, who makes as fine silver as anybody ever produced in the British Isles, should be able to rely in two or three hundred years' time on people saying: " That's a piece made by Durbin ", in exactly the same way as people now pay enormous sums of money for a piece made by Paul Lamerie. They have the same right to be protected, and to be encouraged to pursue their craft and their skills.
But, of course, this is a tiny piece of the whole hallmarking operation. As my noble friend Lord Selkirk said, the vast majority of pieces that go through the halls have values of the order of £10 or £15. Many of them are not craft work in any real sense. There will be tens of thousands of cases for gold and silver watches and things of that kind, which are a run-of-the-mill operation, but in regard to which the consumer has the 927 right to demand a proper standard of protection. On all these things we are working with the British Hallmarking Council.
If I may, without duplicating what has been said, I should like to say a quick word about the Convention. I think it was the noble Lord, Lord Rhodes, who said that it would be quite easy to drop this Directive and get the European Common Market countries to accept the principles behind the Convention. I do not want in any way to bring unnecessary difficulties before your Lordships, but I assure you that it would not be easy. It would be right, but it would not be easy. It took, I think, four years to get the Convention hammered out, and I do not entirely agree with my noble friend Lord Lucas that it is better than our system; I think it is slightly worse. We had to make one or two concessions which, quite honestly, from the strict point of view that we have maintained for 600 years, I do not think we were quite entitled to do, but we reached an agreement and it is acceptable.
However, that was in EFTA, and those of your Lordships who have ever worked in EFTA will no doubt agree with me that, on the whole, they are the nicest community of people with whom one could work. There was a great community of interest and feeling. Every single one of the countries wanted to establish a practical and sensible method of regulating hallmarking. It took us four years to do it, and it is a success. It will certainly not be so easy to achieve this within the Nine. Three of the Nine were in the EFTA Convention and therefore were on our side, so to speak. But there are very many countries—Germany and Italy have been referred to, and Luxembourg is another—where there are no regulations, and Belgium and Denmark have voluntary regulations. But in at least two or three of these countries there is the greatest possible opposition, because they like producing what I will not call shoddy goods, but goods which are not up to the standard to which we and our public have been used, and it will be quite a problem. But this is what we should aim for.
May I finish by saying that, much as I appreciate the Report which my noble friend Lord Selkirk has made to your 928 Lordships' House, and much as I enjoyed his speech, I believe I am speaking on behalf of the whole Hallmarking Council when I say that I could wish that we were not today just taking note of this Report, but that we were saying firmly and clearly to our partners in the EEC, " We will not accept this Directive, because it is inferior and is a bad compromise." There are a very small number of disreputable makers of jewellery and silverware in this country who would drive a horse and cart through this Directive. If they could do it, then a very much larger number of disreputable jewellers and silversmiths in Europe would be driving not a horse and cart but 400 London buses through it. I hope so much that the Government will make this view absolutely plain to Europe when they discuss this subject with them.
§ 6.15 p.m.
§ Lord DAVIES of LEEK
My Lords, I apologise to the House for intervening. I wish to declare an interest in the platinum trade, and I shall take up only two or three minutes of your Lordships' time. Valuable information has been given to the House about the hallmarking system. There seems to be a wild and fantastic desire in the EEC not to give mankind time enough to assimilate what this striking watershed in economic, social and other affairs is doing to European man. They also seem to want to justify their existence by controlling hops, by getting mountains of things and suddenly interfering in different matters. There is nothing in the world that is better than our hallmarking system, and we have had a reiteration of the problem of quality, Gresham's Law and the bad driving out the good.
We can be proud of the platinum industry, which is fairly new. The biggest buyer of platinum for making jewellery is Japan, and when we talk about solder for making jewellery, and claws for setting stones in a piece of platinum craftsmanship, we must be very careful about adding iridium. What is the ultimate quality of the piece to be ? We were very proud of the fact—and it is all there at the back of the Vienna Convention—that only a year or so ago we established for platinum a hallmark that is recognised all over the world. I had the privilege to be at a great convention in London only a month or so ago, where we had hundreds of platinum dealers from all over the world looking 929 towards this as one of the areas where there is absolute integrity, so far as that is humanly possible, and we are building all this up.
At this juncture, we should he grateful to this Committee—I do not want to make an anti-EEC speech—for watching over our interests and preserving Britain's " know-how " of 600 or so years in the field of gold, silver and, more recently, platinum. I appeal to the Committee to try to find a formula whereby the common sense and " know-how "—and I am not being chauvinistically British—of craftsmen, which we have acquired in precious metals, will be listened to in the committees of the EEC. I have had my three minutes, so I will keep my word to my noble friend on the Front Bench and sit down.
§ 6.18 p.m.
§ Lord ARDWICK
My Lords, if your Lordships will pardon a brief intervention from me, I am here by happy coincidence because a Committee collapsed just before lunch in Brussels today, largely, I think, because the chamber in which we were sitting was far less well air-conditioned than this one. But since my name has been mentioned by the noble Lord, Lord Redesdale, perfectly correctly, and that of my noble friend Lord Gordon-Walker, may I explain that when those of us on the Economic and Social Committee steered this matter towards the specialist committee dealing with consumer affairs we were not just trying to slough-off the problem. We thought that was the most effective political way of dealing with this problem, about which there may be more than one view when the matter is debated before Parliament.
I assure your Lordships that there are remarkably strong feelings among the British delegation, on both the Conservative and Labour sides. I cannot speak for the noble Lord, Lord Gladwyn, the one Liberal there, but he is a civilised man and I am quite sure that he will share our feelings. What is remarkable is that, no matter how poor we are, each one of us has some piece of silver which is a memento. We value it not only for its sentimental virtues, but also because silver is a singularly beautiful and tactile metal and everybody feels strongly about it. I assure your Lordships that when this matter eventually goes before the European 930 Parliament the British delegation, of all Parties, will be united, even those who are the most ardent Europeans or very dedicated harmonisers, like my noble friend Lord Davies. They will all be together opposing this draft Directive. The evidence contained in this Report and in the speech of the noble Earl, Lord Selkirk, will fortify us in our resolve.
Lord SAINT OSWALD
My Lords, in case the noble Lord is referring to me as Lord Gladwyn, I must protect Lord Gladwyn!
§ 6.20 p.m.
My Lords, as so often happens when your Lordships' House is dealing with a specialised subject, as I think we can call this one, there becomes quickly evident in one quarter or another a great deal of expertise which can be brought to bear upon it. This has certainly proved to be the case in the short but fascinating debate that we have had today. There is the example of the noble Lord, Lord Glenkinglas, a member of the British Hallmarking Council, who, in a most expert way, was able to bring his experience to our notice. Other noble Lords have displayed an expertise not necessarily derived from their direct association with a trade or problem, but from their diligent attention to work on one or other of your Lordships' Committees, in this case the Scrutiny Committee. In other cases—let it be said starting from scratch in some cases—noble Lords have pursued diligently their own research and have become experts almost overnight. Sometimes that happens with me!
We have had an extremely useful debate. I am sure that we are all indebted to the noble Earl, Lord Selkirk, as chairman of the committee that has produced this report, for having taken the initiative to bring it on to the Floor of the House and to give us this opportunity to debate it. I would join with those who have paid tribute to the excellent work that this and other similar committees have done. Indeed, I would also join the noble Earl in his insistence that this is the duty of these committees and of Parliament. Whatever our attitude may be to what goes on in general in Brussels, as the noble Earl so rightly stressed, it is our duty to put forward firmly and 931 strongly such criticisms of what emerges from Brussels as we feel we should, after discussion and debate. I am glad, therefore, to be able to indicate on behalf of Her Majesty's Government that I agree with practically everything that has been said by your Lordships in this debate. To some extent I shall need to repeat some of the points which have been made. I do not apologise for doing so, because it is necessary to repeat these points, just to emphasise that Her Majesty's Government agree with them.
I did not necessarily follow the point made by my noble friend Lord Rhodes about rabbits, but I agreed with everything else that he said. Certainly we all agree with him that what is at stake is British quality and that it is up to us to insist that we want to maintain standards of quality.
Hallmarking in one form or another dates from the Middle Ages. Indeed, I believe that the report of the Scrutiny Committee states that it dates from the reign of Edward I, and in Scotland since the Act of Union. It is almost certainly the oldest known form of consumer protection, a point that has been stressed by a number of noble Lords. Therefore it is of particular interest to the Department of Prices and Consumer Protection whose spokesman on this occasion I am. In the field of the production of goods made of precious metals, British products have a world wide reputation for their quality standards, and are a credit both to those who make the goods and to those who are responsible for ensuring that standards are maintained.
Hallmarking in this country is governed by a comparatively recent Act—the Hallmarking Act 1973—and the responsibility for applying the standards derived from that Act rests with four independent assay offices. This Act of 1973 was in part designed to anticipate the ratification by the United Kingdom of the international Convention to which so much reference has been made—the Convention on the Control and Marking of Articles of Precious Metals—which came into force on 1st June, 1976. The other States which have ratified so far are Austria, Finland, Switzerland and Sweden, while Portugal and Norway have announced their intention of doing 932 so. The Convention is open for signature by all countries. It is true that it has an EFTA origin, but it is open for signature by other countries and in that sense is truly an international Convention; that is to say, all those countries can sign it whose hallmarking arrangements are consistent with its provisions, and I hope that in due course many other Governments will decide to accept it.
Perhaps I should point out the main features of the Convention. First, it provides for the acceptance by signatory States of articles assayed in other signatory States. Thus it helps to promote international trade. Secondly, it permits individual States to maintain their own existing standards of fineness. Thirdly, it contains technical provisions which, as I understand it, are fully compatible with those used in this country. The fourth point is that while the Convention obviously does not permit routine and everyday checks on marked articles, it allows occasional checks to be made by the enforcement officers. There is a specific procedure if it is discovered that there is repeated evidence that articles coming from a particular assay office overseas are of a lower standard of fineness than the standard marked upon them. Therefore it allows for both testing and action.
In this debate we are concerned mainly with the draft EEC Directive on articles of precious metals. This would require the free movement of articles which have been tested and marked by an assay office notified by any Member State—marked, that is to say, with an appropriate mark indicating that they comply with certain Community standards of fineness. The proposal, which was submitted to the Council of Ministers in December 1975, is based on optional harmonisation. It would allow Member States to retain their existing hallmarking systems and standards of fineness and to adhere to the international Convention, or it would enable them to do without any system of control. But—and I think this is the point that has troubled so many noble Lords—States would have to admit articles bearing the " E " mark, even if the standards were lower than their domestic or the Convention's standards.
It is that point, I know, which is behind the Committee's recommendations and 933 behind the anxieties which the trade have expressed. Indeed, it would mean that domestic manufacturers would in practice have to be given the same facility of operating a lower standard. At present the United Kingdom, Ireland, France and Holland have compulsory hallmarking; that is, imported articles must be tested and hallmarked on arrival even though they may already bear marks applied in other countries. Germany and Italy have no hallmarking by independent assay offices. Belgium and Denmark have only voluntary hallmarking. I thought it was perhaps useful to summarise the position in that way.
The Department of Prices and Consumer Protection has received a number of representations on this Directive. It appears to us from this correspondence that the Commission's proposals as they stand would operate to the disadvantage of our trade, and would also undermine the protection for the consumer provided by our present hallmarking system. The Scrutiny Committee in Appendix 2 to its Report has set out very clearly the detailed criticisms of the Commission's proposals, and as it will not take too long I think it is worth my mentioning four or five of the points that the Committee has made as being ones which I think are of some special importance.
First, the draft Directive omitted to prescribe reliable and accurate methods of assay for normal use by all assay offices; secondly, it allows unjustifiably high tolerances in determining fineness; thirdly, it provides inadequate safeguards against the circulation of articles which might not comply with the standards marked on them; fourthly, it does not specify that assay offices must be fully independent of trade interests; fifthly, there are a number of more technical criticisms particularly in relation to the ability of the consumer to distinguish one mark from another.
These criticisms, which I thought were worth repeating, represent fears which are, I believe, shared by representatives of both trade and consumer interests in this country. It sometimes happens that the trade has one point of view and the consumer interest has a conflicting point of view; but I believe it is true to say that on those points that I have listed there is common ground as between trade and consumer interests. I believe this was borne 934 out in the evidence that was brought before the Scrutiny Committee. I am sure that noble Lords would also share my view on the need to ensure that our existing arrangements which work both in the interests of the consumers and of the British trade interests involved should be maintained to the maximum degree possible.
Several noble Lords have referred to the question of standards, and particularly the EEC proposal for a standard for silver of 800 degrees of fineness, which would be inconsistent with the standard of 925 degrees in use in the United Kingdom at the present time. I know that there are varying views on the best standard to be adopted from the consumers' point of view. I believe the Consumers' Association made some points in this connection, but I am sure that we must take serious account of the view of the United Kingdom trade that their interests would be significantly damaged by the acceptance of an 800 standard for silver—all the more so since the EEC's proposal makes no mention of a 9 carat standard in the case of gold.
It seems clear to us that the Convention is preferable to the proposed Directive in a number of respects. It has a specific procedure for dealing with inaccurately marked articles. Its technical provisions are more consistent with our own. It permits signatory countries to maintain their present standards while, as I have stressed, by being open to acceptance by all countries, it has an important advantage in relation to products of this kind in which there is a significant international trade. In view of these advantages of the Convention over the Directive, we feel bound to question the need for any further international system by EEC countries which might indeed be confusing, both to traders and to consumers, unless its provisions are brought much closer to those of the Convention.
Two specific points were raised by noble Lords to which I should like to refer. The noble Earl, Lord Perth, referred to the words in the Committee's Report about delegated legislation. That implies that Statutory Instruments would be involved which would he laid before both Houses of Parliament. In some cases, according to the particular part of the Act, it would be the Negative 935 Resolution procedure and in other cases it would be the Affirmative Resolution procedure; but in either case of course the matter is in the hands of Parliament.
The noble Lord, Lord Redesdale, made an interesting point, quoting the efforts of my noble friends Lord Ardwick and Lord Gordon-Walker. I listened with particular interest to the suggestion that in Brussels we should urge that it be dealt with as a consumer protection matter. As I understand it, it has not yet been decided which particular body in Brussels deals with this. I may be wrong on that, but I do not think it has yet been decided, and certainly I can assure the noble Lord that not only did I listen with interest to the point that he made, but I shall urge that the point be taken forward to Brussels in order that we may get it regarded as a consumer protection matter and dealt with appropriately in Brussels in accordance with that.
Of course, discussion of the draft Directive is at an early stage and I am sure noble Lords will not expect me now to indicate categorically how far on particular questions we might go during the course of discussions with our EEC partners. However, in welcoming the Report—and I hope I have made it clear that I do welcome the Report—by the Scrutiny Committee I can assure the House that we intend to make it clear to our friends in Brussels that the draft Directive as it stands cannot receive our support. Indeed I would say that Her Majesty's Government will have gained considerable and welcome support from the vigorous and expert opinions that have been expressed in this debate this afternoon. I end as I began, by commending and thanking the noble Earl, Lord Selkirk, for his initiative in the matter.
§ 6.40 p.m.
The Earl of SELKIRK
My Lords, it is seldom that we in this House have such 936 a wholly satisfactory reply from the Government. I should like to thank the noble Lord, Lord Oram, for his extremely robust reply. I would merely say that if by any chance there is difficulty in Europe, I hope he will not hesitate to inform us so that we might rise again. I am so glad to see that we have with us the noble Lord, Lord Ardwick. May I thank noble Lords for supporting me in this, and beg leave to withdraw the Motion.
§ Motion, by leave, withdrawn.