§ 2.48 p.m.
§ Lord KILMARNOCKMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether they have come to any conclusions on the recommendations of the Law Commission's Report on Interest (Cmnd. 7229) regarding the introduction of a statutory entitlement to interest on outstanding commercial debts.
§ The LORD CHANCELLORMy Lords, the Government are at present considering the comments of interested bodies on the main recommendation in the Law Commission's Report that there should be a statutory entitlement to interest and a decision will be announced in due course.
§ Lord KILMARNOCKMy Lords, while thanking the noble and learned Lord for that not discouraging reply, may I ask him whether he is aware of the 723 opposition of the CBI to these proposals and whether he considers that this opposition is well founded? May I further ask him whether he would not agree that, if these proposals were accepted, statutory interest would become the norm in the absence of other contractual arrangements and the onus or odium of opting out would fall on the stronger party, who would have to insist upon express exclusion as part of his trading conditions? In those circumstances, would the noble and learned Lord not accept that the proposals embodied in the Law Commission's Report would have a beneficial effect on the position of the small sub-contractor vis- -vishis larger customers?
§ The LORD CHANCELLORMy Lords, I can think of a great number of arguments on both sides, both good and bad, but I must tell the noble Lord that so far, as a result of the various consultations with the parties alleged to be interested, no very clear consensus has been arrived at. The Law Society, the Association of British Chambers of Commerce and the NFU are apparently so far in favour; the CBI, the National Chamber of Trade and most parties representing consumers dislike the proposals, and reservations have been expressed generally about the inflexibility of a statutory scheme. The noble Lord asked me for my private opinion, but I cannot give that; otherwise I would.
§ Lord ELWYN-JONESMy Lords, is it not the case that this report has been in the hands of one Government and then another for a very substantial period of time, and is it not desirable that there should be some decision with regard to it? Furthermore, are we not now, with great respect, in danger of falling behind in the implementation of, or at least even announcing a decision about, the reports of the Law Commission? We have had a very good record about that until recently. Let us not forget the valuable service the Commission renders, and the discouragement when inaction follows the receipt of their reports by the Government and by the House.
§ The LORD CHANCELLORWell, my Lords, what is a substantial period of time is as long as a piece of string. I 724 think half of the time was spent under the noble and learned Lord, and half under myself. As he knows, our common predecessor, Lord Campbell, once said that law reform is either by consent or not at all, and the noble and learned Lord knows as well as I do how difficult it is to deal with Government departments and colleagues, as well as with other people. I do not know that I can say much more than that.
§ Lord ELWYN-JONESMy Lords, perhaps the noble and learned Lord can at least give encouragement about other reports about which there are not similar disagreements among all parties who might be affected. I thought he might be encouraged by my exhortation rather than discouraged.
§ The LORD CHANCELLORMy Lords, I am vastly encouraged.
Lord SPENSMy Lords, is the noble and learned Lord aware that in all the countries of the Common Market, except for the United Kingdom and Ireland, interest can be charged as a statutory right, and is it not time that we caught up with the rest of the Common Market in this respect?
§ The LORD CHANCELLORMy Lords, I was aware that in most European countries a proposal similar to that contained in the Law Commission's report was already law, and that those countries have not suffered so far from any moral, social or economic disintegration. But other people apparently take a very different view from me.
§ Lord KILMARNOCKMy Lords, may I finally ask the noble and learned Lord whether he will assure the House that he does not accept the extraordinary recommendation of the Confederation of British Industry that suppliers should adjust their prices upwards because of the high proportion of assets tied up in debt? Would he not consider that this was inflationary?
§ The LORD CHANCELLORMy Lords, I am terribly sorry; I only heard the first three words of that supplementary question, which went, "Can the noble and learned Lord assure the House…?" From then onwards everything was 725 drowned in the humming of the fans. Can the noble Lord repeat his question?
§ Lord KILMARNOCKMy Lords, I apologise to the noble and learned Lord. My request was for an assurance that he did not accept the extraordinary recommendation of the Confederation of British Industry that suppliers should adjust their prices upwards in order to take account of the high proportion of assets tied up in book debt; would he not consider this to be inflationary and therefore against the policy of the Government?
§ The LORD CHANCELLORMy Lords, I have got the question now. It is a very common practice to offer discounts for cash and that, I think, is common throughout industry. It is also, I think, occasionally the practice to insert in a contract penalties for delayed payment. Obviously if in fact there are a number of bad debts that will reflect itself in an increase in prices, but whether that in itself is inflationary or deflationary I shall leave it to the economists to argue about.