HL Deb 13 March 1978 vol 389 cc1133-5

7.20 p.m.

Lord WALLACE of COSLANY rose to move, That the draft Hire-Purchase (Increase of Limit of Value)(Great Britain) Order 1978, laid before the House on 8th February, be approved. The noble Lord said: My Lords, the purpose of the order is simply to raise from £2,000 to £5,000 the upper limit of application of the Hire-Purchase Acts. The Hire-Purchase Acts give consumers very valuable protection in connection with hire-purchase, conditional sale and credit-sale agreements. Somewhat similar provisions apply to all three types of agreement but, for convenience, I will refer in my remarks only to hire-purchase agreements.

The Acts require agreements to contain certain items of information that the customer ought to know. These include the cash price and the hire-purchase price which is the price including interest and any deposit. Every agreement must also contain a notice of the hirer's right on certain conditions to terminate the agreement. It must also explain the restrictions on the owner's right to recover the goods. Regulations made under the Acts ensure that the terms of the agreements are clearly set out.

The Acts also give customers a right to cancel agreements signed elsewhere than at trade premises—at home, for example—and in these cases the copies of the agreement given to the customer must contain a notice of his right of cancellation and the way in which it can be exercised. A further protection for the consumer is that the owner of goods supplied on hire-purchase cannot repossess the goods without a court order once the hirer has paid one-third of the hire-purchase price. If the owner does recover possession of the goods without a court order, the hirer can sue him for all sums already paid under the agreement. I need not emphasise how important a protection this is in respect of mobile goods such as motorcars.

There are various other provisions in the Acts. I think however that those I have mentioned will illustrate their value to the consumer. The purpose of the order is quite simple. The provisions of the Acts apply only where the hire-purchase price does not exceed £2,000. This limit was fixed in 1965. The fall in the value of the money since then has meant that the extent of the protection has greatly diminished. The order will raise the limit to £5,000 which will restore the protection to approximately the previous level. If the order is approved, the consumer will once again have the protection which Parliament intended him to have.

Moved, That the draft Hire-Purchase (Increase of Limit of Value)(Great Britain) Order 1978, laid before the House on 8th February, be approved.—(Lord Wallace of Coslany.)

Lord LYELL

My Lords, we thank the noble Lord, Lord Wallace of Coslany, for explaining the order so clearly and concisely. As he pointed out, it is intended to give consumers the protection which the Acts, both in Scotland and in England, intended should be given to them. As he explained, where £2,000 was mentioned in regard to limits in Section 2 of each Act, this should be raised to the more realistic level of £5,000 and we are grateful to the Government for suggesting this figure.

I am not sure I fully understood the noble Lord's opening remarks. When he referred to the hire-purchase price of £2,000, was that the cash price or the price which would be paid inclusive of all charges after the period of hire had elapsed? I am thinking particularly of a motor-car or caravan—the noble Lord mentioned mobile goods. Would the limit apply to the cash price or to what I might call the gross price? This is a minor matter and the noble Lord may have explained it. We welcome the order.

Lord WALLACE of COSLANY

My Lords, I thank the noble Lord, Lord Lyell, for those remarks. As for the question he asked about the figure of £2,000, to which I referred, that is inclusive of charges. In due course the Consumer Credit Act will come into operation and then the £5,000 mentioned in the order will equate with the figure of £5,000 mentioned in that Act. I cannot at this stage say when that Act will come into force because a great deal of negotiation is still taking place.

On Question, Motion agreed to.