§ 4.21 p.m.
§ Lord AMPTHILL rose to move, That an humble Address be presented to Her Majesty praying that the Food (Prohibition of Repricing) Order 1978 [S.I. 1978, No. 1014] laid before the House on 24th July 1978, be annulled. The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. This order was considered by the Joint Committee on Statutory Instruments on 1st August, its last meeting before the 927 Recess. The order, among others, was held up as it was felt it required further elucidation from the Department of Prices and Consumer Protection. This the Department provided in a memorandum received during the Recess, and it was further considered by the Joint Committee at their first meeting of the new Session on 7th November. The Department's explanations were considered unsatisfactory, and they were invited to give evidence before the Joint Committee on 14th November. This they duly did. The Joint Committee reached the conclusion that the order should be drawn to the special attention of both Houses, and this they have done in their Second Report of this Session.
Unfortunately, owing to our printing difficulties, this report has been available only since this morning, and the memorandum and the oral evidence are not yet in print. This requires me to be rather more long-winded than I, and even more your Lordships, would wish; but perhaps I may deal first with the terms of the order and, as is usually the best way of approaching these Instruments, start at the end with the Explanatory Note, which in this case is commendably brief. It says:
This order prohibits the repricing of items of food which have been displayed for retail sale marked with a price. An exception is made for the withdrawal of special and introductory offer prices.
So far, your Lordships may well consider, not a bad idea: the Government mean to "clobber" the rogue retailer who, after fixing his selling price, proceeds to increase that price without (the Government are presumably assuming) just cause. Alas!, it is not so simple as that, and I must invite the House to delve into the order itself.
Article 1 says that the order should come into operation on August 14th last, and then proceeds to give a couple of definitions:
… For the purposes of this order—
We now come to the crux of the matter. Article 2(1) says:
Subject to paragraph (2) below, a person shall not, on any premises, sell by retail an item of food at a price which is higher than a price which he has previously marked on that item at any time when it has been displayed by him on the premises for sale by retail at that price.
I will return to this immediately, but to keep our troubles to the minimum would interpose that the rest of the order, dealing with special and introductory offers, is innocuous. The provisions of Articles 2(2) and 2(3) are complicated, but I do not believe the House need occupy itself with them. I should also make clear that no fault is found with the vires of the order, which is made under Section 2 of the Prices Act 1978. But this is the first order of its kind to be made under that section.
§ The effect of Article 2(1) of the order is to prohibit retailers from increasing the price of items of food on which the price has already been marked. But it applies only to an item or its container on to which a label or stamp is stuck or tied. Totally excluded from the order are prices shown by a shelf mark, by a printed price list or by notices displayed around the shop, or by the owner of a village store who carries a lot of the information in his head and, when in doubt, refers to a volume under the counter. Examples of the anomalies this throws up are legion, but I will give only one. The grand wine merchants trading in the neighbourhood of St. James's with hardly a bottle in sight can alter their prices at whim. On the other hand, the cut-price liquor store working to a margin as low as 5p on a £4.20 bottle of whisky is, if the shopkeeper marks the price on the bottle, caught. It seems eccentric. Thus the only people to be affected by the order are those who follow what one would have thought the admirable practice of marking each item individually. The Joint Committee were much concerned that this could have the effect of discouraging retailers from continuing what we all regarded as a most desirable practice.
My Lords, I turn to enforcement. In rebuttal of the Joint Committee's scepticism that the order was enforceable, we were told:
We think that the question of enforceability is at the centre of this because Ministers considered this very carefully. They were attracted by the idea of an order that went wider than
merely covering items which have been individually marked, but they were convinced that it would in practice be unenforceable to deal with this. For example, how could he have demonstrated that an item which itself bore no individual price marking whatsoever had in fact been the item which had been displayed previously at the higher price, and it was an attempt to avoid this sort of problem with enforcement that they were looking for a narrower order which was enforceable.
I would only intrude: how is an inspector visiting a shop on two consecutive days and gazing upon a vista of tins of baked beans, and on his second visit finding them marked 1p more than the day before, to establish that they are the same tins of beans?
After many further questions on this aspect of the order we were told:
In circumstances that you have defined and in other circumstances which I am sure the wit of man could devise, I am sure that it is possible to circumvent the order. It is the belief, however, that it is very hard to think of a wider order that would be more enforceable and indeed that this is probably the best order that can be made that can be enforced in practice.
Your Lordships may possibly conclude that the Department does not sound too sanguine about the order's enforce-ability. Nor, the House might feel, does it sound as though the Department is very convinced about the necessity of the order —a subject which, under its terms of reference, could not be raised by the Joint Committee. I hope that when the Minister comes to reply he will be able to tell us if there is any evidence to suggest that the practice is sufficiently widespread to warrant the Government's action.
§ The last point which disturbed the Joint Committee is that there is no provision in the order for bona fide mistakes. The junior fresh from school (where one understands they nowadays do not always teach arithmetic as well as they might) will get the unenviable chore of marking thousands of items each day, and will inevitably make mistakes. If the proprietor rectifies his errors in an upward direction, he will have committeed an offence. The order should, without doubt, have dealt with this eventuality.
§ My Lords, there were four Members of your Lordships' House who were present at the three meetings of the Joint Committee when this order was discussed. The noble Baroness, Lady Vickers, has a long-arranged meeting in the country 930 today, and the noble Earl, Lord Cathcart, is abroad; but both have asked me to say that they entirely support my condemnation of this order. The fourth musketeer was the noble Lord, Lord Airedale. I had hoped, and he had indicated, that he was going to support me today; but I do not see him in his place.
§ In conclusion, my Lords, I would say that while recognising that Ministers are grossly overworked, they are, of course, aware of newspaper headlines. For about a year, "High Street Cut-price War", and its variants have been blazoned across the front pages. My Lords, this war is one between the supermarkets to get more business through lower prices. It is not a war against the natives. Napoleon's oft-quoted jibe that we are a nation of shopkeepers was meant rudely. If he were alive today he would find London packed with thousands of his compatriots and with tens of thousands of other nationalities, all doing their Christmas shopping. They are here, not because the present rate of exchange is particularly favourable, but because the British retailer is giving them better value. He does this by turning over his stock more rapidly, by giving better service, but, above all, by working to narrower margins of profit than shops abroad. It is the most competitive branch of commerce we have got, and it is ridiculous of the Government to harass those concerned with this unnecessary and unenforceable order. I beg to move.
§ Moved, That an humble address be presented to Her Majesty praying that the Food (Prohibition of Repricing) Order 1978 [S.I. 1978, No. 1014] laid before the House on 24th July 1978, be annulled.— (Lord Ampthill.)
§ 4.33 p.m.
§ Lord SANDYS
My Lords, the House will be grateful to the noble Lord, Lord Ampthill, for drawing attention to this order and, further, it will be grateful to the Joint Committee on Statutory Instruments for drawing the attention of both Houses to this particular order. This is Order No. 1014. It is fortunate, again, that we have the printed paper which was published on 15th November because, as the noble Lord, Lord Ampthill, rightly pointed out, the oral evidence has not been published to date; and contained within 931 that oral evidence some important factors have emerged. I am grateful personally to the noble Lord, Lord Ampthill, for giving me a copy of this evidence, otherwise I should have been but poorly prepared.
Your Lordships have heard of the unenforceability of this order, the number of exclusions and the strong possibility of bona fide errors occurring. I should like to examine in a few moments another aspect of it altogether which is quite outside the question of the merits or demerits of this order. That is the question of the Negative Resolution procedure. We have this afternoon a situation which has occurred before and we also have carried out a particular procedure this afternoon which may help remedy it in that the Lord Chairman has proposed the re-appointment of the Committee of this House to examine practice and procedure.
I should like to suggest from this Dispatch Box that one of the practices and procedures which is worthy of examination at an early date is the Negative Resolution procedure. That is because we have this situation. The time will expire on this order, as I understand it, at the end of this week. Another place will not have the opportunity of debating this order and, therefore, the order will become law unless your Lordships take another decision or the Government choose to withdraw the order or some other course is adopted.
It is a situation in which very important matters can pass into law without the opportunity of discussion; and here is where your Lordships' House is fulfilling a public function in drawing attention to what might otherwise be a very unfortunate procedure during a period of business, the Christmas shopping period, in which a great many problems could occur. Only two courses are open under the procedure. The House may accept or the House may reject the order. There is no third course of amendment and I would respectfully suggest that this is a point which may well be looked upon by the Practice and Procedure Committee; otherwise the situation may well cause even more serious problems in the future.
932 I should like to suggest to the noble Lord, Lord Wallace of Coslany, that the Government should reconsider these regulations and withdraw them. Your Lordships will have heard from the noble Lord, Lord Ampthill, that the Joint Committee on Statutory Instruments have already examined this order three times: on 1st August, on 7th November, and again on 14th November. On each occasion they have been most dissatisfied with the procedure. No substantial Amendments have been made to them by the Government and their advisers. I think that one very important matter should be reconsidered by the Government even at this stage because it is the burden of this side of the House that it is a totally unnecessary piece of legislation. It is over-legislation of the worst sort because it is our submission that in Section 11 of the Trade Descriptions Act 1968 the necessary powers already exist; and this order is quite unnecessary.
This often occurs. It occurs, unhappily, because the state of the law is so complicated. And here is a newly-fledged Department, the Department of Prices and Consumer Protection, stretching its wings, seeking powers from Parliament to bring into force an order which is wholly unnecessary. Ten years have elapsed, 10 years' practice; and the Conservative Government of 1970 did not overturn this section of the Trade Descriptions Act 1968. They had no cause to do so because the terms in which it was expressed were deemed at that time to be satisfactory.
The problem is very considerable. If I may delay your Lordships a little by quoting from Section 11 of the Trade Descriptions Act, I think it would be for the benefit of understanding the problem. The Trade Descriptions Act included this special clause which is headed, "Misstatements other than false trade descriptions":11.—(1) If any person offering to supply goods of any description gives, by whatever means, any false indication to the effect that the price at which the goods are offered is equal to or less than—
- (a) a recommended price; or
- (b) the price at which the goods or goods of the same description were previously offered by him;or is less than such a price by a specified amount, he shall, subject to the provisions of this Act, be guilty of an offence.".933 These are very wide powers. Very wide powers are in existence on the Statute Book. It applies not only to food, as this order does, but, as the Act says, to "goods of any description". I cannot believe that the Government have examined that section of the Trade Descriptions Act with sufficient assiduity, otherwise they would have noticed that it is applicable to the situation which they have in mind. We do not quarrel with a very careful examination of consumer affairs. Far from it. But we believe that this order is unnecessary.
§ 4.40 p.m.
§ Lord AIREDALE
My Lords, I should like briefly to support this Motion, particularly in relation to the fact that the order does not provide for bona fide mistakes. This is referred to in paragraph 7 of the Second Report of the Joint Committee. One can understand the basic idea behind the order: that shopkeepers, having bought goods at the old wholesale price, ought to be satisfied with selling them at the old retail price. When there is a price rise, the shopkeeper should be discouraged from withdrawing the old stock and taking advantage of the increased price so as to sell stock at a greater profit which he has bought at the old wholesale price. One can sympathise with the idea behind that, but it seems a very sad lacuna that the order does not provide for the bona fide mistake. I do not know how many thousand items of food supermarkets sell, nor do I know how frequently prices change. But I know it is practically impossible to go into a supermarket without finding sales assistants pricing goods and putting them on the shelves and, at the same time, being asked questions by customers and interrupted in various ways. One simply cannot believe that bona fide mistakes will not sometimes occur. Surely this ought to be provided for.
Supposing there is a dispute between the enforcement authority and the shopkeeper as to whether in a particular instance it is a bona fide mistake, and supposing the court either entirely believes the shop-keeper or at least gives him the benefit of the doubt, the court will be advised, as I understand it, that because it is an absolute prohibition they have to record a conviction. That is not satisfactory. Admittedly, they will not impose a very 934 heavy penalty, but every time somebody is convicted where it is quite clear they were not intended to be convicted, and they are only being convicted on a technicality, this tends to undermine the rule of law and to bring the law into disrepute.
I join with the noble Lord, Lord Sandys, in regretting that the evidence that was before the Joint Committee is not yet available to your Lordships. As I remember it, those arguing in support of the Minister were contending that, if there is a bona fide mistake, if the shopkeeper marks 50p on a packet of biscuits and that is a mistake, that 50p marked on the biscuits is not a price because it is not the figure at which he intended to sell the biscuits. It is not a price; it is only an amount. All I can say about that is that I would not back myself to persuade a bench of magistrates that that was a convincing argument. I hope that this order will be taken back at least for the purpose of providing for the case of the bona fide mistake.
§ Lord BALFOUR of INCHRYE
My Lords, may I for a moment speak upon this order not from the point of view of its contents but from the point of view of Parliamentary procedure, which has already been mentioned by noble Lords. Here we have, under the Negative Resolution procedure, an order; the timetable in the other place is such that it cannot be discussed there; we are told by the mover of the order—and there is no dispute about it—that it is a bad order, in that it cannot be enforced and it has various loopholes in it. Yet tonight we are asked as a House to pass a piece of legislation for which there will be no turning back. It seems to me almost an insult to Parliament that the Executive should expect this House to assent to the passage of such an order. I do not know the authority which the noble Lord on the Front Bench has, but I would appeal, if necessary, to the Leader of the House to come here and give the authoritative decision that this order should be withdrawn in the interests of proper, respectable Parliamentary government.
§ Lord MONSON
My Lords, I should like strongly to support my noble friend Lord Ampthill. I had not seen or heard of this order until about an hour ago, I admit, but, having read through it 935 quickly and heard my noble friend's admirably clear and full explanation, it seems to me to be nothing more than an electioneering gimmick and a snooper's charter. After all, it would require an elaborate and expensive spy network to discover whether a retailer had illegally slapped one penny on to the price of a tin of luncheon meat by surreptitiously peeling off one label after closing hours, and sticking on another. Any slight saving that there might be in the house- wife's weekly shopping bill—and it would be very slight indeed—would be more than counter-balanced by the increased taxation necessary to pay for a swollen bureaucracy.
§ 4.46 p.m.
Lord WALLACE of COSLANY
My Lords, it is not my day today: I have already dealt with two very unpopular measures and now I have another one! I do not think that we should make too much heavy weather over this particular order. Thanks to the noble Lord, Lord Ampthill, I am glad to have an opportunity to refer to the background to it and explain, if I can, some of the things which the order does not do and why we had to limit it in the way we did.
A practice in the retail trade which infuriates consumers—and I can assure noble Lords that it does, my wife is one and I am another—is the pricing upwards of goods. This may take several forms, but the commonest is often referred to as the sticky label problem. Prices— especially in supermarkets—are often marked on goods by means of printed sticky labels which a shop assistant attaches to individual articles such as tins, bottles and packets. In some cases, it is even more blatant. Customers have actually seen shop assistants sticking new higher priced labels over the old ones.
The customers complain, understandably, that there is no justification for charging higher prices for goods which have been standing on the shelves. This has been going on. A few years ago it was even worse under the Conservative Government. I have had many complaints and received articles to which three or four labels have been attached, one after the other, always increasing the price. The situation is a little better 936 now; but, my Lords, remember this: When we talk about the consumer, especially on this issue where some people say it is only a small matter, it affects the housewife. I can assure your Lordships (if you do not know already) that a ha'penny added to the price of an article is like a red rag to a bull so far as the housewife is concerned. Consumers are far more incensed to complain about this than about many other issues. About 100 complaints have been made each quarter to the Department, of which some 10 or 20 are about food prices.
Complaints will continue to be made and therefore we have to take some action, unsatisfactory as it may be to some. The Government share the customer's view and regard the practice as an abuse. Up to the end of July, retailers repricing goods in this way were in breach of the Price Code. However, we felt that control of the practice should be put on a more permanent basis. Therefore an order was made which is the subject of this debate and which came into force on 14th August.
The effect of the order is that when an article of food or drink for human consumption has been displayed for sale with the price marked on it, it may not subsequently be sold at a higher price. The only exception is that goods may be repriced once on the expiry of a special or introductory offer, provided that the offer has been identified as such during its currency, that it does not last for more than three months, and, in the case of a special offer, the new price does not exceed that prevailing before the offer commenced.
I should at this stage explain briefly what the order does not do. It does not require retailers to display their prices either generally or in any other specific manner. That is the function of the Government's Price Display Programme, under which the requirement to display prices is being extended progressively to cover a wide range of goods and services. The relevant part of that programme is the Price Marking (Food) Order, which came into operation on 1st July this year. The general effect of the price marking order is to require shops and other outlets to display their food prices so that customers can read the prices at the time when they choose the goods. It is 937 important to note that under the price marking order it is left to the retailer to decide how to comply with the order, using whatever method or combination of methods of display best suits his circumstances. The relationship between the price marking order and the re-pricing order we are now debating is that, if a retailer subject to the price marking order marks his prices on individual articles, those articles are then subject to the provisions of the Food (Prohibition of Reprioing) Order.
In view of the various points that have already been raised, I shall explain the precise scope and effect of the order in a little more detail. Why is the order confined to food and drink for human consumption? There are essentially two reasons for that: first, the food sector was in the past responsible for a significant proportion of the complaints and, secondly, the powers given under Section 2 of the Prices Act 1974 are limited, and a more wide-ranging order would be extremely difficult for consumers and retailers to understand and for trading standards departments to enforce. We believe that by laying down clear rules in a sector which concerns all shoppers we shall give a lead in helping to eradicate the practice altogether.
Why is the order confined to articles which have been individually marked with a price? We were concerned here with rules which were enforceable. We could certainly have included goods for which the price has originally been shown by other methods, such as shelf marking, price lists or hanging signs, but it is clear that it would be almost impossible to prove that a particular item bearing either no individual price indication or a single price indication had previously been subject to a lower price indication by way of, say, a shelf marking. We preferred a narrower, but enforceable scheme to a wider order which in practice might have been flouted.
I think all the speakers have raised the question of mistakes. All people make mistakes, and I suppose that does not exclude shopkeepers. As to what happens if a shopkeeper makes a mistake, that is a subject on which the noble Lord, Lord Airedale, has gone into great detail: he has had correspondence and interviews with 938 civil servants and so on, and is still unrepentant and unconvinced. May I say that his very persistent attitude is not surprising. But what happens if a shop-keeper does make a mistake and puts an incorrect price on an article which he places on display for sale? Is he liable to prosecution if he then corrects his mistake? I should like to make it quite clear that we have no wish to prevent people correcting genuine mistakes; nor do we believe that the order does this. It would be open to a retailer charged with a contravention of the order in such circumstances to give evidence that he never had any intention of marking the lower price as his price on an article. Consequently, there is no price with which, in the terms of the order, a comparison could be properly made. It is, of course, for the court to decide in the light of particular facts whether to accept the retailer's evidence that an item was displayed at a price which was not the price at which he intended to do business. In view of this, no specific defence seems to be necessary, but I must point out that in any event the enabling Act does not give my right honourable friend any power to create defences, so that it would not be open to him to include in the order the defence of a mistake to cover the sort of circumstances to which I have just referred.
Several other points have been made —very important ones, if I may say so. So far as the Negative Resolution procedure is concerned, naturally this is a matter for the House. It seems very obvious to me that this is a suitable matter for the Committee to consider and, as a Member of the House, I certainly have no objection to this. Then the general attitude was: what about the Government reconsidering withdrawing the order? The noble Lord, Lord Balfour of Inchrye, was a little more specific. I cannot claim any tremendous power in this matter, and indeed it would be wrong for me to-indicate any decision; but what I will do is to ensure that the views expressed and the whole of these proceedings this afternoon are conveyed to my right honourable friend as quickly as possible.
This is not a very big order, I must frankly admit. I know from practical experience, because I am one of those "sticky label watchers" myself as a sort of assistant housewife, that this sort of 939 thing goes on and does irritate people. I will not say that it is widespread today— I would not claim that—but it does exist. There are a few bad eggs who carry out this practice, but the mere fact that this order is in operation, will, I think, have a deterrent effect. I would not claim in any case that it is a great issue, but at the same time I will certainly put the views of the House to my right honourable friend as quickly as possible in order that some possible reconsideration might take place. I am not in a position to take that decision and I am sure the noble Lord will accept that fact.
Therefore, I do hope that the House will not proceed to involve itself in rejection. As I have explained, I know it is limited. On the other hand, limited as it is, it is a valuable measure for protecting consumers againt a form of sharp practice by some—a very small minority—of retailers. As that is the case, I hope the House will not seek powers to annul the order but will let it go into operation and allow the views of the House be considered by the Minister, with the possibility that some amending action can be taken. I am not in a position to reach that decision myself.
§ Lord BALFOUR of INCHRYE
My Lords, may I ask the Minister just one question: he dealt with the point I raised as to whether the Government would not withdraw this order. He said there were two courses: one was to approve it and the other to reject it. Surely a third course would be the one which the Minister is half-way going to take: he is going to forward these proceedings to the appropriate quarter. Surely he could go somewhat furtthr and save the dignity and the efficiency of Parliament by not asking us— Members on all sides—to pass an order which is admitted to be full of failures, as has twice been adversely reported by the Joint Committee.
Lord WALLACE of COSLANY
My Lords, I cannot go as far as that, but the point is that the noble Lord and others have, with some justification, pointed out the need for some reconsideration of procedure. That is all right, and I would not object to that, as a Member of the House. I really cannot go any further, 940 except to give a pledge that a report of what has been said today will go to the Minister. My right honourable friend takes the decision: I do not. Whether the House approves the resolution of the noble Lord, Lord Ampthill—he is a Content and I am a Not-Content, put it that way —is therefore a question for the House Members can say "Not-Content" to the noble Lord, Lord Ampthill. But we are not asking for that, if it is at all possible, thus giving us a chance to pass the matter to the Minister for reconsideration.
§ 5 p.m.
§ Lord AMPTHILL
My Lords, I am most grateful to everyone who has participated in this debate. Good points were made by every single speaker, and I do not think the noble Lord, Lord Wallace of Coslany, has disputed that they were good points. The dilemma in which I now find myself is this. My feelings are that the whole House would rather care to divide on the Motion, but I am advised that never before has there been a Division upon a negative order. I am rather a newcomer to your Lordships' House, and it might be a little unbecoming on my part to set that precedent.
§ Lord AMPTHILL
My Lords, I thank the noble Baroness very much indeed. The noble Lord, Lord Wallace of Coslany, will forgive me, I hope, if I say that I do not think he has made a convincing case at all. I gave notice that I would ask whether there was serious evidence that this was a practice that took place and, if I heard him correctly, he said that there are 10 or 20 complaints per quarter. If that is all that they amount to, then it absolutely confirms my belief that this is a totally unnecessary and unenforceable order. Having said that, I really feel that I must bow to the customs of the House and, with the greatest regret, beg leave to withdraw the Motion.
§ Motion, by leave, withdrawn.