Lords Sitting of 29 January 1987

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Southwark.

Prisoner's Parole: Judge's Comments
Lord Boyd-Carpenter: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have studied the comments of Judge Norwood at Isleworth Crown Court in sentencing Joseph Hanson for offences which he committed after release from prison on weekend leave which he had been granted notwithstanding his having absconded when released on parole in 1985: why he was released on weekend leave: and who was responsible for the decision to release him on this occasion.
The Minister of State, Home Office (The Earl of Caithness): My Lords, we are aware of Judge Norwood's comments when sentencing Mr. Joseph Hanson for offences committed when he was unlawfully at large, having failed to return from home leave. Taking into account all relevant factors, the governor of the prison in which Mr. Hanson was serving his sentence decided, on the advice of the Home Leave Board, to grant Mr. Hanson two days' leave to help maintain his ties with his family and prepare him for his eventual release.
Lord Boyd-Carpenter: My Lords, does my noble friend not find it a little odd, as the learned judge who tried the case found, that a man should be released from prison within a year of his having absconded from a previous grant of parole? Is he aware of the fact that the decision to release him resulted in the commission of further offences; considerable wrongs being done to several members of the public; and very considerable police effort? Is it not curious that the previous absconding should be completely ignored in a decision to release the prisoner on this occasion?
The Earl of Caithness: My Lords, I can assure my noble friend that certainly on this occasion, as on all the other occasions, such previous behaviour of the prisoner is not ignored when it comes to the consideration for home leave or parole. All these matters were before the Home Leave Board. But, in view of Mr. Hanson's exemplary behaviour in an open prison, the decision was taken to let him go for home leave. We must all realise that it is a case where balance has to be struck between the risk and the benefit; namely, the risk to the public of failure, and the benefits to the prisoner of maintaining his family ties and easing his progress towards his eventual release.
Lord Mishcon: My Lords, does not concentration upon the exceptional case which is bound to arise—of which the noble Lord, Lord Boyd-Carpenter, is so fond—leave one with a misunderstanding of the advantages of the short home leave and the terminal home leave? Are they not very necessary for any hope of civilised resettlement for prisoners? Are we not behind many other countries, including the United States, Sweden, Denmark—and I could go on—in our generosity in this discretionary right?
The Earl of Caithness: My Lords, I disagree with the noble Lord on the point that he makes with regard to my noble friend Lord Boyd-Carpenter. It is very important that these matters are brought to our attention in order to make sure that the policy we have is right, and from whichever side of the House such comment comes it provides a very good check on the situation. For that reason, I support the noble Lord, Lord Mishcon, in saying that the present policy is the right one.
Lord Renton: My Lords, can my noble friend say how rarely or how frequently these cases do go wrong?
The Earl of Caithness: My Lords, we do not collect figures as a matter of routine; but I can tell my noble friend that figures that have been collected show that 4,400 prisoners were granted home leave in 1985–86 and only 203 prisoners failed to return in time.
Lord Elton: My Lords, will my noble friend accept that we regard him as absolutely right to welcome scrutiny of these cases? Will he also bear in mind that we are talking about offences committed on leave in preparation for final release, and that final release can be an equal opportunity for the commission of such offences? For the offence to be committed in an experimental period is a greater protection to the public than if the prisoner is finally at large.
The Earl of Caithness: My Lords, my noble friend has tremendous experience of these matters; and, of course, he is absolutely right.
Lord Harris of Greenwich: My Lords, is the noble Lord aware that first, this prisoner was in an open prison; secondly that there was no record of violent offences as far as he was concerned, and thirdly that home leave is an absolutely critical factor in the preparation for an offender to return to the community? Is the Minister aware that these are difficult questions of judgment which rightly should be left to the governor of each individual establishment.
The Earl of Caithness: My Lords, if I may say so: yes, yes, yes and yes.
Lord Campbell of Alloway: My Lords, would my noble friend the Minister agree that judicial comment on the circumstances of release can at times work very great mischief?
The Earl of Caithness: My Lords, it is not for me to comment on what anybody may say about this. We have justified the policy and the policy must be continued.
Lord Boyd-Carpenter: My Lords, is any administrative system not improved by the knowledge that if errors are made, as they were in this case, they will have attention drawn to them? Is it not a fact that this particular man was not due for final release until spring 1988? So, it was somewhat premature to regard this release, on which he committed these offences against two innocent girls, as having anything to do with preparation for final release.
The Earl of Caithness: My Lords, I disagree with my noble friend that errors were made. With hindisight one can differ with the opinion; but I do not believe that that justifies the contention that an error was made. As a result of the control review committee of 1984 we changed our policy on 1st April, 1986, to try and encourage improvement in the terms for a short home leave at four-monthly intervals. I think, as I proved to my noble friend Lord Renton on an earlier answer, that this has in the great majority of cases been of enormous benefit.
Lord Avebury: My Lords, does the Minister agree that examination of the factors involved in determining the eligibility for home leave is extremely complex? It is not a scientific matter amenable to mathematical calculation. Therefore, is it not quite wrong of the noble Lord, Lord Boyd-Carpenter, to describe as an error a process of careful judgment by the authorities concerned which occasionally leads to a prisoner absconding?
The Earl of Caithness: My Lords, I agree that all factors have to be taken into account. As I said earlier, it is a decision between the risk and the benefit.

Coolscar Quarry
3.14 p.m.
Lord Hunt: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the present position in regard to the extraction of limestone by Eskett Quarries Limited from Coolscar Quarry in the Yorkshire Dales National Park.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Skelmersdale): My Lords, before issuing a decision in this case my right honourable friend requires the parties to conclude an agreement dealing with certain off-site matters. Since my right honourable friend announced this as long ago as 22nd May he has now written to the parties informing them that, unless an agreement sealed by all the parties is sent to him by midday on 27th February, then a decision will be issued on that day which takes account of the fact that the matter which it was proposed to deal with by means of an agreement has not been so dealt with.
Lord Hunt: My Lords, I thank the noble Lord for that reply. Will he accept that I am glad to learn that this protracted affair is within sight of being resolved? Will he in advance accept my apologies for not feeling able to be quite as co-operative and friendly as I was
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during an exchange yesterday, and I ask him whether he recalls that I have twice previously raised this matter in your Lordships' House, on 28th November 1985 and on 8th April 1986? Is it not serious that two years on from the cessation of permission to a quarrying company to mine limestone in a national park that that company should have continued to do so to the great detriment of the purposes of the national park? Finally, are there not lessons to be learnt from this deplorable affair to prevent future flouting of planning regulations?
Lord Skelmersdale: My Lords, I am well aware of the interest of the noble Lord, Lord Hunt, in this matter, which, as he said, has surfaced on two previous occasions in parliamentary Questions. I accept straightaway that it has dragged on far too long, which is why my right honourable friend, through my mouth as it were, has made the announcement that he has today. I suspect that there are lessons to be learnt from this. When we have concluded this we shall be able to make an analysis of what lessons are to be drawn and what action we can take in the future.
Baroness David: My Lords, as the Minister agrees that this has dragged on far too long and far too much limestone has been quarried in that time, will he instruct his department to impose an output limitation of 175,000 tonnes a year, which was the figure given in the decision letter by the department in May last year, so that at any rate there is some control at the moment until the agreement is signed by both parties?
Lord Skelmersdale: My Lords, I did not say that far too much limestone had been quarried. I was careful not to say that. What I said—and the noble Baroness is quite right—was that this matter has dragged on far too long. Yes, the decision that my right honourable friend is minded to make is indeed for 175,000 tonnes a year. But, as I said, he will make up his mind when he finally makes the decision on 27th February.
Baroness Lockwood: My Lords, in view of the apparently special nature of the limestone being quarried in this area, which makes the area one of particular interest and beauty, can the Minister tell us what steps are being taken to try to establish the extent of the reserves of pure limestone and whether research is being undertaken into possible substitutes?
Lord Skelmersdale: My Lords, it has been suggested that a working party on chemically pure limestone should be set up, and this matter remains under consideration. We need to know the extent of high purity, high quality limestone in this country, but I rather suspect that by the nature of things this is likely to be in areas which will give rise to the same sort of public concern that this one has; in other words, high landscape value areas.
Lord Ironside: My Lords, can my noble friend say, in view of the fact that limestone is an important feedstock for the flue gas desulphurisation plants which are going to be built in this country in the future, whether this quarry has a significant part to play in the supply of limestone to the CEGB?
Lord Skelmersdale: My Lords, not to the best of my knowledge, but high quality, or chemically pure, limestone is comparatively scarce and is important in the manufacture of chemicals, pharmaceuticals and magnesia refractories. For most of those applications the limestone must be at least 98.5 per cent. calcium carbonate and have a very low concentration of impurities such as iron and aluminium.
Lord Diamond: My Lords, in view of the Minister's statement that this matter has been going on far too long, can he tell the House whether the letter that his right honourable friend sent with a view to bringing it to an end was sent prior to or after my noble friend Lord Hunt put down his Question?
Lord Skelmersdale: My Lords, I am answering the Question today and the letter was sent today, as I have already said.
Baroness David: My Lords, when will the results of the inquiry into Eldon Hill quarry be announced? That inquiry finished in March last year and I think the House would be reassured to know that there will not be the delay in announcements about that that there has been on Coolscar.
Lord Skelmersdale: My Lords, that is a rather different question. If the noble Baroness would like to put her question to me more formally, I shall be delighted to answer it.

Petrol Sales Promotions
3.20 p.m.
Lord Strathcarron: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Goverment whether they will encourage the oil companies to declare the date on which any particular petrol sales promotion is due to end.
Viscount Davidson: My Lords, this is a matter for the oil companies, but I am sure they will be sensitive to any concern my noble friend may have.
Lord Strathcarron: My Lords, I thank my noble friend for that reply. Does he agree that when motorists have saved up their vouchers for a particular item only to be told that the promotion ended yesterday, they feel they have been unfairly treated? That would not be the case if the completion date was clearly displayed, preferably on the poster itself.
Viscount Davidson: My Lords, when marketing petrol the oil companies will no doubt be concerned about their customers' reactions. I am sure they will take into account my noble friend's comments. If he is worried about a particular promotion he may wish to write to the chairman of the oil company concerned.
Lord Mellish: My Lords, is the Minister aware that oil companies' promotions, particularly with regard to sales, are rather extraordinary? When the price of oil
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goes down, it is a long time before petrol prices are reduced. We are told—the Government have told us from the Front Bench—that it is because of the stocks that are at the pumps. But when the price of oil goes up overnight they put up the prices of petrol? What is the reason?
Viscount Davidson: My Lords, I think the noble Lord should write to the chairman of the company concerned. The Question is about promotions. I understand that the unit cost of petrol sales promotions is generally very small and they seem to be popular with the motorist. But that again is a matter for the commercial judgment of the companies involved.
Lord Paget of Northampton: My Lords, does not the noble Viscount feel it may be more effective if he writes to the companies?
Viscount Davidson: No, my Lords.
Lord Swansea: My Lords, is my noble friend aware that many motorists find it a nuisance to have their cars cluttered with vouchers of one sort or another and that they may prefer to have the option of paying a little less for their petrol?
Viscount Davidson: My Lords, if my noble friend would like to meet me outside the Chamber, I shall tell him what to do with his vouchers.

European Commission: Action Against Airlines
3.25 p.m.
Baroness Burton of Coventry: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action has been taken or is proposed, jointly, by the European Community Transport Ministers and the European Commission arising from replies of the 10 European airlines concerned to the letter sent them by the Commission on 10th July: whether all replies have now been received and whether British Caledonian is the only airline to be removed from the Commission list: and whether they will explain the way in which the Commission and Transport Ministers co-operate in European transport matters.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, the Commission's action against European airlines under Article 89 of the treaty is a matter between it and the airlines concerned. The Commission is acting under powers conferred on it by the treaty. It is not required to act jointly with the Council of Ministers, nor is it doing so. I understand, however, that British Caledonian is the only airline so far to have been removed from the Commission's list following receipt of a reply from the airline which it found satisfactory.
Baroness Burton of Coventry: My Lords, I think the Minister has omitted to answer the last part of my Question. Will he be good enough to do so?
Lord Brabazon of Tara: My Lords, if the noble Baroness studies the answer I gave she will see that I covered her point about whether the Council of Transport Ministers co-operate in this matter. The Commission is acting under its own autonomous powers conferred by Article 89 of the treaty. This is because the Council has so far failed to adopt an aviation competition regulation under Article 87 of the treaty. Such a regulation forms part of the package of measures now under discussion. When an Article 87 regulation has been adopted the Commission will act in accordance with it and thus under guidelines from the Council. This is the normal procedure in most other areas.
Baroness Burton of Coventry: My Lords, is the Minister aware that it seems impossible to discover what is going on in this matter of air transport in the Community? The Minister does not know and we Members do not have a chance of asking anybody who seems to be aware of the position. Is he telling the House that there is no co-operation at all between the Commission and the Council of Transport Ministers on matters of mutual concern? Will he please tell me whether all replies have been received from the airlines by the Commission or does he not know?
Lord Brabazon of Tara: My Lords, I have attempted to explain how the Commission and the Transport Council operate together or separately—
Lord Tordoff: Which, my Lords?
Lord Brabazon of Tara: My Lords, if the noble Lord cares to read the reply I have already given, he will find the answer to that. As regards the answers from the airlines, this, as I have explained, is a matter between the Commission and the airlines. In broad terms I understand that the letters said that aspects of the relative inter-airline agreements were incompatible with Article 85. Most airlines asked for the original two-month deadline to be extended, and the Commission agreed to do this. However, even now a number of airlines have apparently not provided substantive replies.
Baroness Burton of Coventry: My Lords, I shall not say I am sorry to pursue this matter. But does the Minister realise that the best way to get rid of me is to give me a decent answer? Does he appreciate, first, that I really am interested, and I think the House is interested, in this matter? Secondly, does he realise the impossibility of asking him a question because he says he does not know the answer? When we ask him about the Commission he does not know about it because it acts by itself, and when we ask him about the Council of Ministers and joint co-operation he says that there is none at all. Does the House wonder that we get nowhere on this matter of liberalising air transport?
Lord Brabazon of Tara: My Lords, I am well aware of the interest of the noble Baroness in this matter. I have at all stages attempted to give full and complete
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answers to her questions. However, I am not able to stand up here and answer for the Commission. The Commission is acting under its own powers under the treaty. Questions to the Commission can be raised by Members of the European Parliament. That perhaps would be one way, and the noble Baroness may care to arrange for questions to be put in that forum to the Commission. I did not say that the Commission and the Council of Ministers do not co-operate. My right honourable friend the Secretary of State met the Transport Commissioner earlier this week, and I am sure that matters appertaining to air transport competition will have been discussed at that meeting. As I said, the next meeting of the Council of Ministers is in March, and again I am sure that air transport will be on the agenda.
Baroness Seear: My Lords, does the Minister agree that if we had a decent electoral system for the European Parliament, no doubt the noble Baroness would be there herself to ask the questions? That would relieve him of a great problem.
Lord Brabazon of Tara: I think my Lords, that the noble Baroness strays somewhat from the Question on the Order Paper. Under the present electoral system there is no reason why the noble Baroness, Lady Burton, should not be elected.
Lord Underhill: My Lords, the Minister has referred to replies from nine of the 10 airlines. Can he say in which way the British Caledonian reply differed? When the matter was last raised by the noble Baroness on 15th January, he said he would write to her. Can he tell the House in which way the British Caledonian reply differed from the other nine?
Lord Brabazon of Tara: My Lords, the only matter of concern to the Commission as regards British Caledonian was the arrangement on one particular route which it operated jointly with Alitalia. It satisfied the Commission as to the arrangements on that route and therefore it is in the clear, so to speak.
Lord Morris: My Lords, can my noble friend tell me which of the airlines has not replied to the letter sent to them?
Lord Brabazon of Tara: No, my Lords. I have already said that that is a matter for the Commission, but I can assure my noble friend and the House that British Airways is having full and useful discussions with the Commission.

Business
3.28 p.m.
Lord Denham: My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Consumer Protection Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment the Agriculture Fisheries (Financial Assistance) (Northern Ireland) Order 1987 will be taken.

City of London (Various Powers) Bill
Read a second time, and committed to an Unopposed Bill Committee.

Gaming (Amendment) Bill [H.L.]
Lord Harris of Greenwich: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Lord Harris of Greenwich.)
On Question, Motion agreed to.

Consumer Protection Bill [H.L.]
3.30 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Lucas of Chilworth.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 20 [Offence of giving misleading indication]:
Lord Gallacher Lord Gallacher moved Amendment No. 71:
Page 18, line 9, leave out subsection (4).
The noble Lord said: In moving Amendment No. 71, I should like, with the leave of the Committee, to speak also to Amendments Nos. 76 and 81. This amendment is the first amendment to Part III of the Bill which, as your Lordships will see, is concerned with misleading prices. In particular, it is directed at the status of the code of conduct, which is a very important part of the machinery being created under the Bill by way of regulating misleading prices and conduct generally by retailers.
Before moving on to the actual details of the amendment, I should like to seek information from the Government when the Minister comes to reply to the amendment about the state of play regarding some discussions which I believe have been taking place between representatives of national bodies covering consumers, retailers and the enforcement authorities. This point was raised on Second Reading because at that time speeches from various parts of your Lordships' Chamber expressed concern about the workability of the third draft of the code of conduct, the general view during Second Reading being that, as then drafted, the code was unworkable, unenforceable and therefore not likely to achieve the purposes which the Government had in mind for it.
I understand that these talks on a tripartite basis reached fairly speedy conclusions of a unanimous character which, in my limited experience of dealing
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with the three bodies in question, is in itself unique. When I was actively engaged in this kind of discussion between consumers, retailers and enforcement authorities we were all very gratified if we managed to achieve a "live and let live" basis of understanding. Apparently on this occasion such is the concern about the defects in the draft code of conduct that the parties in question have reached an understanding and, as I am informed, have communicated the outcome of that understanding to the Minister for his approval and, it is hoped for an amendment to be made to the code of conduct. That, I think, would meet the wishes certainly of a number of Members on all sides of the Committee.
With permission, I shall read the basis of the understanding to the Committee. It is that there should be a tripartite arrangement so far as concerns this section of the Bill. First of all, primary legislation should introduce a general prohibition on misleading price indications and include some general indication of the meaning of "misleading" as in Part III. The primary legislation should also establish the status of any code or codes introduced under its provisions. Regulations should be made under Section 26 of the Bill to introduce a few specific requirements to control actual abuses on the following issues: the 28-day-old; recommended retail prices; introductory offers; worth and value claims; and substantiation of price claims. Lastly, any code of practice introduced into the primary legislation should be of practical guidance, as stated in Clause 25(1)(a) of the Bill, and should be of evidential weight for both prosecution and defence in any legal proceedings. Compliance with the code should not constitute an absolute defence; nor should failure to comply with the code constitute a no offence.
Those three heads of agreement, so far as we are concerned, constitute a very practical, businesslike and acceptable basis for amending the code of conduct. It would be helpful to the Committee if, when the Minister replies, he can give some indication of the response which his Ministry is likely to make to what I say is a unique tripartite agreement on behalf of the three bodies most directly concerned with this particular matter.
We must however for the purposes of this amendment proceed on the assumption that the Government want the code as it is, and as it is we find it not particularly acceptable because we go along with the criticism that however much effort has been expended upon it, leading to this third draft, it still contains a mix of regulation and advice which is, first, unsatisfactory as a mix and, secondly, is likely to be unenforceable in the courts. Furthermore, the proposition that compliance with the code should constitute an absolute defence whereas non-compliance would not necessarily result in an acquittal seems to us to be a rather unusual basis for any document of this kind and is a further reason for querying the validity of the code and its likely effectiveness if and when it becomes part of the Bill.
One should have some sympathy with magistrates' courts, who may be called upon to operate the code as it stands. It is very likely that the high degree of certainty which compliance will give as a defence to traders will distract from the general prohibition, and

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it will be coupled with the proposition that if noncompliance is not likely to be acceptable as a defence then enforcement officers are probably not going to bring many cases before the courts under the code because the prospect of proving to magistrates' satisfaction that the code is an effective document is a remote one. Trading standards officers, who are very busy people with a whole range of duties to perform, are likely to feel that it is not worth their bringing many cases under this document because if they were to do that the courts would be faced with an impossible enforcement problem. Such an event would not enhance the reputation of the enforcing authority before the court.
In addition, I can see, without ever having been a lay magistrate, that confronted with this document as the basis of a prosecution one would have to place a very great deal of reliance upon guidance given to the magistrates presumably by the clerk of the court; and at the end of the day even the magistrates are likely to feel that they are being tested needlessly by a piece of legislation which should never have seen the light of day and which therefore is not one which would commend itself to the magistrates as being helpful to the consumer.
If the Government really want to proceed with the code, we feel that its status should be altered and it should cease to have the clout it is proposed to give it under the Bill as it stands; the document should become an evidential document like the Highway Code and in fact it should tend to guide the court either as to compliance or non-compliance but should not of itself constitute the basis of a conviction or a finding of not guilty.
Therefore in these circumstances we are proposing in Amendments Nos. 71, 76 and 81 to change the basis of the code to one of evidential only, and in that way I hope we would seek to make the code more acceptable to those who will be affected by it. However, as I say, the basic weakness remains, as I tried to outline at the beginning of this proposition, and I hope that when the Minister comes to reply to these amendments he will give this side of the Committee and also other Members some assurance that, if we are prepared to wait until the Report stage, then maybe there will be the prospect of something from the Government based on the approaches made to them by consumers, retailers and the enforcement authorities, which will be to everyone's advantage. I beg to move.
3.45 p.m.
Baroness Burton of Coventry: As the amendments selected deal with Clauses 20, 24 and 25, I should like to separate my brief remarks into two sections, the first dealing with Clause 20 on misleading prices indication and the second with Clause 25, to which the noble Lord, Lord Gallacher, has just been speaking, on the status of the code of practice.
As regards Clause 20, I paid tribute at Second Reading to the Department of Trade and Industry's summary declaring that Part III of the Bill has as its centre a general offence which is,
"The offence of giving to consumers a misleading price indication about any goods, services, accommodation or facilities"
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but saying that we should want to look carefully at the actual status of the code of practice. This is what we are now moving towards.
As the Committee is aware, under Clause 20 the present legislation will be replaced by a new general prohibition on false and misleading price information backed up by an approved code of practice, which would provide the necessary guidance on ways of complying with the new law. There is general agreement that the control of misleading price claims is a difficult area on which to legislate, since the "misleadingness"—the word used by the Consumers' Association—of a price claim depends upon the impact on people's understanding, which is not always easy to assess.
I wonder whether the Government would pay particular attention to a point which was made by the Consumers' Association, I think by the National Consumer Council and certainly by myself. We all believe that one of the reasons why the current Bargain Offers Order has failed to provide an adequate system of control against misleading pricing—the noble Lord, Lord Gallacher, was also, I think, referring to this—is that it ties the courts to examining the technical detail of the order instead of allowing them to make a judgment on whether the alleged misleading price claim is indeed misleading. I should welcome the comment of the noble Lord, Lord Lucas, or the noble and learned Lord the Lord Advocate on this narrow aspect, which I think is basic to the adequate system that we want.
Having said that, I should like to add that I believe that the Government's main proposals will allow more effective control over misleading price claims and I welcome the extension of the law to cover pricing on accommodation and services. If the proposals succeed, they will go a long way to removing the feeling among most consumer organisations that the law as it now stands is unclear, inflexible, difficult to understand and provides inadequate protection.
Looking back over the years, as doubtless other noble Lords have done, I come across many examples of damage to consumers caused by misleading prices. On the other hand, I believe that price comparisons are of value to consumers provided that control is adequate. In any trade, industry or profession, there is an unscrupulous minority bringing wholly reputable members into disrepute. The noble Lord, Lord Williams of Elvel, on Second Reading, recalled the late 1970s—when he was chairman of the Price Commission—and the problem of price indication of bargain offers etc. My mind went back to the notorious Bargain Offers Order in 1968. That was, of course, a disaster. How well I remember saying that one could drive a coach and horses through Section 11 of the Trade Descriptions Act and how unpopular I was with the government of the day for saying it.
A few moments ago, I said that consumer organisations felt the present law to be unclear. The National Consumer Council emphasised this point in saying that the Government proposals go a long way towards explaining to traders what is lawful behaviour but create much uncertainty as to what is not. The council wishes to be clear about the 28-day rule which it thinks should be addressed to the primary

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legislation. The present law states that the higher price must have been offered for 28 days. To remove this as a clear rule would be a retrograde and confusing step, and we all await the Minister's reply.
Moving on to my other section, many Members of the Committee have a long-standing interest in codes of practice. I looked up my files. I noted that in June 1984, I was pursuing the noble Lord, Lord Belstead, on trading codes of practice and the noble Lord, Lord Lucas, himself in July last year. As the Committee will remember, the House debated codes of practice a year ago in January 1986. I shall be most interested to hear the comments made in Committee today, because, personally, I am far from happy about the Government's proposal.
If I understand the matter aright, the main proposal being put forward is without precedent. It is that compliance with the code of practice will be an absolute defence to a charge of misleading pricing. I take the same view as the National Consumer Council; namely, that such a proposal has the effect of elevating the code beyond one of guidance and that it will detract from the general duty.
That brings me to the narrow point I made previously. I am sure that the noble Lord, Lord Lucas, will comment upon it. Is there not a danger in this Bill that we become too legalistic so that examination of technical detail overrides the necessity of making a judgment?
Coming back to my fears on this proposed code of practice, I believe that what the Government are proposing will encourage, as the National Consumer Council say, a narrow, legalistic interpretation of the code. I would support what I think the noble Lord, Lord Gallacher, proposed in his remarks, and say that I would accept the view that the code we are now discussing should have the same status as the Highway Code. I would accept such a solution, because I believe, in common with consumer organisations, that we have an important constitutional dimension to bear in mind. If the code is granted formal status, it will assume the importance of delegated legislation. But Parliament will not have had the opportunity to discuss in detail what behaviour should or should not be lawful in this area. This seems to me serious and, I should have thought, an unwelcome innovation both to another place and to our House.
On Clause 25, if I have got it right, the Secretary of State does not have to approve a code at all, but he can of course, by a provision in this clause, approve codes made by other persons. Again, if I understand it correctly, such codes also provide an absolute defence. I wonder whether the Minister accepts the interpretation that Parliament would be delegating to the Executive the power to give legislative effect to codes drawn up by interest groups whether in industry or elsewhere. Concern on this constitutional aspect is expressed by the National Consumer Council, by consumer organisations, and by myself. It will also, I hope, be expressed by many Members of the Committee today.
I think it relevant before I sit down to add here the concern expressed by the Association of County Councils and the Retail Consortium. The Association
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of County Councils has written to many Members of the Committee stating that Clause 25(3) provides that the code of practice relating to misleading price indications shall be admissible in evidence for the purpose of defence, but contravention of the code is not of itself an offence.
While the Government consider that this gives a degree of certainty to the trade, the Association of County Councils believes that it is a one-sided certainty. The Retail Consortium expresses the view that the code is a rogues' charter. Obviously, whatever our views, there are loopholes in the code. I support entirely what the noble Lord, Lord Gallacher, has said, and the Committee awaits the reply of the Minister with considerable interest.
Lord Campbell of Alloway: These grouped amendments, Amendments Nos. 71, 76 and 81, raise important questions concerning the principles of enforcement procedures under Part III of this Bill. I take it that it is in order to speak to the amendments as they are grouped.
Amendment No. 72, standing in my name and in the name of the noble Lord, Lord Henderson of Brompton, rests upon the assumption that Amendment No. 71 is well founded and that Clause 20(4) cannot remain in the Bill. Such is the extent of the common ground on the grouped amendments between myself and the noble Lord, Lord Gallacher, that in fact we excise Clause 20(4) in this Bill. However, the grouping of the amendments marks the gap which lies between us on Amendments Nos. 76 and 81.
If one accepts that Clause 20(4) must be deleted, the fundamental question is whether the Government wish to resort to contravention of a code of practice in any form as an aid to conviction under Clause 20(1) and (2) or, on the other hand, wish to adopt the traditional approach of introducing a statutory code of practice where breach of provision creates a criminal offence—this as an adjunct to Clauses 20 to 23, enforcement procedures—by the introduction of a statutory instrument under Clause 26.
The hope must be that my noble friend the Minister will not only accept that Clause 20(4) cannot remain for various reasons which I hope to give in a moment, but also that he will adopt the traditional approach. It is the provisions of Clause 25 of this Bill which will require fundamental recasting. That would be done on the assumption that Clauses 20 to 24 can stand, with the excision of Clause 20(4). There is no great feat of draftsmanship involved in this, because as soon as the principle is plain and has been accepted, then that can be done without difficulty.
Clause 26 stands, and here I would support the late amendment supplementary to the Marshalled List. I would therefore support Amendment No. 71 and I would oppose Amendment No. 76, which removes compliance with the code of practice as a defence under Clause 24(1)(a). However, I accept that the code will require some redrafting for such a purpose.
I oppose Amendment No. 81 and respectfully dissent from the views expressed by the noble Lord, Lord Gallacher, and the noble Baroness, Lady Burton, that the Highway Code approach is at all appropriate.

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What the noble Lord seeks to suggest is that the code should have a status akin to that of the Highway Code as introduced by Section 35(5) of the Transport Act 1972. It could then be relied upon for the purpose of establishing liability as an aid to conviction under Clause 20.
The reason why the Highway Code approach is misconceived is that the code as it stands is not in such a form as could be used for the purpose. Its content over 20 pages is wholly inappropriate as an aid to conviction under Clause 20(1) or (2), unless particulars of the part of the code to be relied upon by the Crown as relevant to the charge are given to an accused before his trial starts to enable him to know the substance of the case and even to prepare his defence and such particulars in a defended case in the criminal court were put to the accused in cross-examination and formed part of the evidence at the trial. Without such safeguards, Amendment No. 81 would work a substantial injustice—a concept which is of course germane to the resort to any code and which is covered by Amendment No. 72 which follows.
The second reason why the Highway Code approach is not appropriate was given by my noble and learned friend the Lord Advocate on 15th January 1986 in the debate to which the noble Baroness, Lady Burton, referred. I quote from col. 1099 of the Official Report:
"There are a few instances such as the provisions which introduce the Highway Code, where compliance or non-compliance with the code may have an important bearing on the outcome of civil or criminal proceedings, but these instances are, I think, exceptional and represent the extreme end of the spectrum of legal effect. Any obligation, breach of which would result in civil or criminal liability"—
and here we are concerned with criminal liability—
"I suggest, should be in the primary or secondary legislation: and it is breach of that obligation, and not breach of any code relating to the obligation, which results in civil or criminal liability".
I say in the presence of my noble and learned friend that that is advice of the highest order and advice which the Government should heed.
The reasons given by my noble and learned friend the Lord Advocate are relevant to support the excision of Clause 20(4) from the Bill. On objective analysis, the subsection is ill-conceived. It is neither requisite, nor is it apt; it is neither workable, nor is it consistent with criminal procedure. Furthermore, it is suggested that in any event it should be rewritten in two parts. Perhaps my noble friend the Minister can consider that suggestion. However, I do not expect any considered reply today.
As regards Part 1, one can extract from this rather loose verbiage in 20 pages about eight specific criminal offences. One then puts them into a statutory instrument and introduces that under Clause 26. Part 1 has then gone.
Then one is left with Part 2 and the rest of the material. Under these provisions compliance with the code affords a statutory defence under Clause 24(1)(a). So be it, but those provisions are not admissible for any purpose other than the question of the defence. For that purpose Part 2 of the code should be rewritten.
It is quite simple. One introduces Part 1 by means of a statutory instrument. It is then removed from the code. One redrafts Part 2 and introduces that in
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redrafted form under Clause 24(1)(a). This code of practice would have legal efficacy and would be subject to the approval of both Houses of Parliament—and I would support Amendments Nos. 83 and 84 in this regard—and it should be issued by the Secretary of State under Amendment No. 78.
If the Secretary of State wishes to issue a code of guidance to traders—this is another point taken by the noble Lord, Lord Gallacher—the Bill could provide for that. In a sense it does so already, although it is desperately confused as it stands.
If one looks at Clause 25(1)(b) and takes it out of its general context, there is the trigger clause to introduce a code of guidance which has no legal efficacy and would not be admissible in procedures for any purpose whatsoever, and as regards such equality of code the question of approval by Parliament would not arise. This third limb of what was called by the noble Lord, Lord Gallacher, the tripartite arrangement is totally misconceived. One gets to the stage where in one breath one is treating it as if it is a mere code of guidance and in another breath one is saying that it can be admitted in court proceedings. The two simply will not work.
The Bill would be workable as it stands under Clause 20(1) and (2), as applied by Clauses 21 to 23, and it would stand as primary legislation without any extraneous aid to conviction. The statutory defence of compliance with the code could remain under Clause 24(1)(a), and the Control of Pollution Act 1974 stands as an interesting precedent for this very thing. The other defences which are built in to Clause 24(1)(b) would remain.
In that situation, and holding to the primary legislation—the first point made by my noble and learned friend the Lord Advocate on 15th January—the Government could, if so advised, extend the ambit of primary legislation by introducing secondary legislation under Clause 26 in the form of a statutory instrument. There is ample precedent for that—the Health and Safety at Work, etc. Act 1974, the Radioactive Substances Act and so on. But what is not acceptable is this half-way house substitution for secondary legislation, whereby, although contravention of the code cannot as such constitute an offence under Clause 25(3), it may be used as an aid to conviction as proposed by Clause 20(4). I agree with the noble Baroness, Lady Burton, that this is ill-conceived; and there is no precedent for it in our law.
The mould from which Clause 20(4), taken in conjunction with Clause 25(3), was cast has been used for well over 10 years to establish the legal status of codes of practice introduced by statute. But this has been done in a wholly dissimilar context and not in a criminal context. One can cite as examples the codes under the Employment Act, the Sex Discrimination Act, the Race Relations Act and so on. The latest example is Section 67(11) of the Police and Criminal Evidence Act which introduced and dealt with a variety of police powers and procedural matters concerned with criminal law. But in this case the clause is being used in a totally unprecedented way, as has been pointed out by the noble Baroness, in order to show that contravention is an aid to conviction.

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It comes to this. Used as a shield by way of defence, under Clause 24 the redrafted code of practice would be a wholly acceptable safeguard for an accused trader. But if it is used as a sword under Clause 20(4), where contravention of the code serves as an aid to conviction, it is wholly unacceptable. In any event it is not appropriate that the present law regulating misleading price indications (Section 11 of the Trade Descriptions Act 1968 and the Price Marking of Bargain Offers Order 1979, as amended) should be replaced and extended in this way. If they are to be replaced, it is suggested for the consideration of the Government that the traditional approach of resort to the statutory instrument under Clause 26 would be more appropriate.
Lastly, the mandatory provision "if the court thinks" and "the court shall" is wholly inconsistent with any traditional concept of trial by jury and is totally unworkable. It is unacceptable in a summary trial. The court cannot think half way through a criminal trial: hence the proposals in Amendment No. 72 to avoid injustice to the accused and to safeguard some of the fundamental aspects of criminal procedure. This being a matter of general concern, the hope is—and I share the hope of the noble Lord, Lord Gallacher—that my noble friend the Minister will be able to accept, whatever else is accepted, that Clause 20(4) must go.
The hope is also that he will consider resorting to the simple, traditional approach which I have proposed, and which indeed was the second leg of the tripartite arrangement referred to by the noble Lord, that a statutory instrument should be introduced under Clause 26 if the ambit of the offences under Clause 20(1) and (2) is to be extended; and that my noble friend may accept retaining compliance with the code as a defence, redrafted albeit, and that it may not be relied upon at all as an aid to prosecution. In those circumstances the hope must be that, at this stage of the Bill, your Lordships' Committee will not divide on any of these amendments. I respectfully suggest that it would be to the mutual benefit of all of us to study what noble Lords have had to say on a very technical and difficult problem.
Lord Lucas of Chilworth: It may well be for the benefit of the Committee if I speak now. That is not to say that I shall not listen carefully to anything your Lordships may have to say following my remarks.
I am grateful to the noble Lord, Lord Gallacher, for the way in which he has put this group of amendments. I start by setting the scene, as it were, because the status of an approved code of practice is touched on at three points in Part III of the Bill. This group of amendments deals with all three points. The main provision is Clause 24(1) which makes it a defence for a trader to show that he has complied with the requirements of an approved code or practice. Clauses 25(3) and 20(4) deal with related matters, that is, the status of the code when it is not a defence. But they do raise slightly different issues. It might be helpful to deal with these first before coming on to the status of the code as a defence. They are relevant too, to Amendment No. 72 put down by my noble friend Lord Campbell of Alloway.
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The intention behind Clause 20(4) and Clause 25(3) is to establish what use can be made of the code of practice in proceedings where it is not being relied upon as a defence. We intend—and I believe this intention is shared by a number of noble Lords—that in those circumstances, it should be open to both the prosecution and the defence to refer to the provisions of an approved code of practice as part of their case. Where this is done and the provisions are relevant, the courts should take account of them in determining whether the price indication was misleading.
I said "we intend" advisedly, because I would like now to make clear that we have some doubts that the Bill as drafted in fact fulfils our intentions. For example, Clause 20(4) to which my noble friend has referred could be read as suggesting that the courts should take account of an approved code whether or not it is cited in evidence by either of the parties—a point I think the noble Baroness made. It also limits the circumstances in which the code is to be taken into account to those where there has been a contravention of relevant provisions, and this would clearly not assist the defendant.
I should like to assure my noble friend Lord Campbell of Alloway that we shall in any event be seriously considering the drafting of Clause 20(4) with the intention of bringing forward amendments to reflect our intentions more accurately and to make clearer what the status and effect of the code is in the circumstances I have described.
So much for that, because I have, surely, to address myself to the major point before the Committee, which is the status of the code of practice as a defence, and the point that the noble Lord, Lord Gallacher, made with regard to a document which we received. I confirm that we did receive on 22nd January—last Thursday—a set of agreed proposals concerning this part of the Bill. This document was from the Retail Consortium, the National Consumer Council and the Local Authorities Co-ordinating Body on Trading Standards. Looking at that document, I am glad to say that the concordat—if I may so call the joint body—endorsed the broad approach of the Bill now before the Committee; that is to say, they endorsed a general offence of giving a misleading price indication; and they endorsed a code of practice and a power to make specific regulations. However, the bodies concerned, the concordat, made it clear that among other things they had serious reservations concerning the status of the code of practice. Notwithstanding the time element of Thursday 22nd January, just a week ago, it would clearly be wrong for the Government to ignore the considered opinions of so many of those so closely involved. I am quite sure the Committee will agree that the proposals have serious and wide ranging implications. It has not been possible to assess all those in the course of just one week. In addition, the views of those not party to that concordat need to be heard.
Accordingly, we now propose to hold further serious consultations on all aspects of the question with all the parties involved. The matter is complicated and many interests are concerned. I hope, therefore, that the Committee will understand that this may take some time. While I have to say that at present we remain convinced on balance that the status of the code now in the Bill offers many advantages, I take the

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opportunity to assure the Committee that my right honourable friend the Secretary of State is prepared to reflect the outcome of the serious and proper consultations to which I have referred when this Bill is before another place. Therefore, I think it would be injudicious of me if I were to respond directly this afternoon to a number of points which have already been raised because of the relevance that my answers might have in any subsequent matters before another place or, indeed, your Lordships' House.
Having said that, and repeating that I should like to have the views of the Committee so that we can enter into these consultations knowing those views, and with the assurance that such a consultation is to be serious, I would ask the noble Lord, Lord Gallacher, whether, on reflection, as we come towards the end of our debate, he would care at this stage to withdraw the amendment.
4.15 p.m.
Lord Williams of Elvel: The noble Lord the Minister has made a very important statement in respect of the amendment moved by my noble friend Lord Gallacher. As I understand him, what he is saying in effect is that the Government are going to rethink this part of the Bill in the light of consultations which they will hold with all parties, including those who are party to the concordat which submitted certain proposals. Furthermore, I understood the noble Lord to say that the result of those discussions will not be available to your Lordships and that this will be incorporated in the Bill as and when it goes to another place. I find that procedure very odd. I find it odd that your Lordships can accept that a Bill which, by all standards and by the Government's admission, is imperfectly drafted should leave this Committee in the state that it is in and go to another place for the matter to be settled. It is up to noble Lords to decide what they will do and whether they wish to speak further on this. I shall be consulting with my noble friend about how we handle this particular amendment, but I cannot refrain from saying that I find this procedure quite extraordinary.
Lord Denning: I should like to approach this problem as a lawyer. Codes of practice are comparatively new in legislation. They have proved most valuable. For example, there is the Highway Code, the industrial relations code, the police code, and so on. However, their proper role is to give guidance and, if need be, illustrations as to the operation of the law. I have here Section 11 of the Trade Descriptions Act 1968, which came in long before this Bill. I quote from Section 11, and the Committee will see how difficult this would be to apply.
"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) 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".

That is the provision which traders, the public and the magistrates have to apply and it is a hopeless form of legislation for ordinary individuals.
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The code of practice should be illustrative. It should give guidance for the people who have to apply the law. However, it should not go further. It should not be part of the law itself. The code should not lay down requirements, as these clauses do one way or another. Reading the clauses as they stand, the code can require this or that. That is delegated legislation. It should not be done in that form in a code of practice. If there are to be requirements in the law they should be done by statutory instrument or by regulation.
Therefore, the requirements in this part of the Bill should go out completely. The code of practice should give practical illustrated guidance to the people who have to carry out the law—the traders on the one side and the enforcement officers on the other. The enforcement officer can then say, "Look here, is that description 'reduced by 10 per cent.' true? Have you really reduced your prices by 10 per cent. or are you saying that they are 10 per cent. lower than some other person's prices?". In other words, the code should give guidance to the trader when putting up his notices, and so on, and guidance on what the enforcement officer must do. The enforcement officer can advise the trader on what he can or cannot do and the trader can comply without referring to the magistrates. The code of practice should give guidance, with illustrations, and go no further.
We then come to the Bill itself. It should include the code of practice but should give it a proper status. Subsection (4) should not contain the requirement that for,
"any contravention of a requirement … the court shall take that contravention into account",
whether it is for the prosecution or the defence. That is not the proper function of a code of practice.
I was glad to hear what my noble friend Lord Campbell of Alloway said, and indeed, what the Minister said, but the Government should take this back and consider it in relation to the right standings of law. An Act of Parliament should contain statutory regulations to carry out requirements in relation to a code of practice. A code of practice is not an enactment of any law. It should give guidance and illustrations for the people who have to act on the law. Then when the matter comes to the magistrates or a court, you go by the actual statute provisions and let the code of practice come in evidentially to see whether there has been a breach of the law.
I have tried to give a simple explanation of what the law ought to be in regard to codes of practice and I hope that when the Government put forward an amendment it will conform to those principles.
Lord Graham of Edmonton: The Minister will
appreciate that many people in addition to the Front Bench spokesman in this debate have shown a keen interest in this subject. I believe that the Minister has seriously taken on board the views conveyed to him from major interests outside the House. He referred to the manner in which those interests have got together to form a concordat and produce a concerted view.
He was absolutely right in pointing out that they did not represent the sum total of all those whose views are entitled to be represented. That is absolutely right. However, if one wanted to look for a limited number

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of people who can best say that they represent the majority of views outside this place, then he has been in touch with that limited number of organisations. It is not an exclusive brethren but certainly the sum total of collective wisdom on this matter.
The Minister will recall that when we had this part of the Bill before us on Second Reading it was immediately picked upon by many speakers and he was reminded that we were not looking at the first draft, or even the second draft, but the third draft. We recognise the difficulties and the complexity in trying to get the Bill right, but I remind the noble Lord, with respect, that the Government took the view that they had it right in producing the wording on the face of the Bill. They took the view that this would be a unique code of practice because it was to have attached to it a status that did not make it a code of practice as we know it but a piece of legislation. However, it is not only a piece of legislation with power but also legislation that is lopsided in terms that are inequitable in its application.
I simply say this to the Minister. I do not understand precisely how this matter can be resolved, but if the Government thought fit after all the consultation that took place before we saw the Bill to put on the face of the Bill the words that they have, then quite clearly they were determined on what they intended to do. If the Minister is now telling us that they are in a mood to reflect, no one in this Committee wishes to inhibit the Government in reaching satisfactory arrangements with outside interests.
We do not have a timescale in this place which chops off a part of our province in order to meet a government timetable here or in the other place. We are not duty bound in this place to proceed to the Report stage and Third Reading. The necessity to, as it were, kick this part of the Bill into court is to meet a timescale which is not part of our doing. I imagine that the House can wait a very long time for the next stage of the Bill if in that interim period a satisfactory arrangement can be made.
I carefully noted what the Minister said. He said that his right honourable friend would look at the product of further discussions and see that they were reflected in other changes to the Bill which are brought forward in another place. The Minister shakes his head, not for the first time. I may have misunderstood what he said, but if the Minister in another place is to come forward with changes in the Bill which simply reflect views, he must understand that our bêete noire in this matter is the status of the code.
If, among all the provisions that appear in any amendment in another place, the status of the code still remains unchanged, then all that will have happened is that the battle will have moved on to another place and this Chamber will have been denied what I believe it wants; namely, to be able to tell the Minister in clear terms that what matters is the status of the code. As the noble and learned Lord, Lord Denning, pointed out, inclusion of the code in a piece of legislation dressed up, as it is, with the words that the Minister has used is not merely undesirable but unworthy of it.
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I very much hope that the Minister will reflect and seek further advice. Everyone is entitled to his views but I venture to say to him that on this matter the comments will not differ from the views that he has received from the Retail Consortium, the Cooperative Union, the Consumers Association, the National Consumer Council and the trading standards inspectors. There will be other viewpoints, but so far as concerns the quality and the status of the code the advice will be the same.
4.30 p.m.
Earl De La Warr: I should like to thank my noble friend the Minister for the extremely generous way in which he has listened to the arguments that have been put forward by the noble Lord, Lord Gallacher, and argued so brilliantly, if I may say so, by my noble friend Lord Campbell of Alloway.
Before I make any comments about the code of practice—and many of these comments are now superfluous because so much has already been said—I should just like to take up the point about the timing of the negotiations in relation to the timetable of this Chamber.
I understand the objections put forward by the noble Lords, Lord Williams and Lord Graham of Edmonton, but surely there are two important points to consider. The first is that these discussions between the Government and the trade have to be got right. I am talking perhaps more as a businessman than a politician, but I do not believe that this kind of negotiation can necessarily fit into government timetables. My noble friend said that this Bill will have to go to another place, and perhaps that is so, but maybe the negotiations will be completed more speedily than has been expected. However, let us remember that we are used to acting as a revising Chamber and being the second place to receive Bills. We constantly have the job of dealing with matters that have been ill-considered in the other place.
I believe that there are powerful arguments on both sides but I insist that the most important one is that which says, "Let these negotiations be carried out fully and completely and be got right". That is more important than the timetable of one House in this Parliament.
I said that many of my remarks had been rendered superfluous but I should like to point out that long before I heard the powerful legal arguments that were put forward by my noble friend Lord Campbell of Alloway, I had, as someone who for a number of years had a very large number of shops under my control, concluded that there was something in the highest degree impractical about this code of practice. I envisaged a shop manager, preparing for the sales the next day with his hands full of price cards and a third hand, presumably, holding on to this complex code, who would be wondering exactly where he stood.
I also took the point which was subsequently made so powerfully that this code really related to two different types of animal. There were the requirements and there were the pieces of advice. I should like to give one example of each. Paragraph no. 1.2.2, which deals with previous price comparisons and introduces what is known as the 28-day rule, is quite clearly a

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requirement. On the other hand, paragraph no. 1.3.6 reads as follows:
"It is not practical to provide in this Code a generally acceptable length of time for which you could let an introductory offer … run on before it would become misleading … You should be careful to avoid letting these situations arise but what is a reasonable length of time must depend on the individual circumstances".
One cannot have that sort of statement coming up in a court of law. It is of an advisory nature.
When I heard this proposition that the important requirements (the abuses that are well known in the market-place already) should be taken out of the code and put into statutory regulations, it seemed to me that for the first time we were going along the right path. Although I shall not press this point, I for one conclude that there is no need for a code of practice at all. I shall not enlarge on that point because I think it has been covered already by implication. I appreciate that the Government have been working on this code for eight months and it might be a little hard on them to ask them to remove it altogether, so let us be charitable, and if the code must remain as a piece of good, homely advice, let it do just that.
I repeat that I am extremely grateful to my noble friend for what he has so generously said. If it be necessary—and I do not think it will be—I beg the noble Lord, Lord Gallacher, who has moved these amendments so well, not to press them.
Lord Ezra: All the Members who have spoken in this debate have expressed grave concern about the code of practice and the noble Lord, Lord Lucas, in replying to the discussions at an earlier stage, indicated that the Government were reviewing the whole position and were in the process of talking to interested parties. However, what worries me—as it has worried the noble Lord, Lord Williams—is that in the Government's present thinking we shall not have the opportunity of coming back to this question before the Bill leaves this Chamber. I feel that that is a matter of very grave concern.
We are a Chamber which prides itself on trying to get legislation right and any Bills that are discussed here first and are sent by us to another place should at least be sent in their entirety after our full consideration and not have one important part of the Bill left unattended to. I should like to ask the noble Lord, Lord Lucas, whether it is possible for the Government to come back to this issue at Report and give us an indication of what they intend to do so that we can then have a further debate on the matter before the Bill leaves us.
Lord Mottistone: I, too, should like very much to support the remarks that have just been made by the noble Lord, Lord Ezra, and from the Benches opposite. One gathers from listening to the argument that this is a. very difficult problem.
My noble friend Lord De La Wan has told the Committee that the department has been engaged upon this matter for eight months. I note that the draft of this code of practice, which is the third revision, is dated November. Surely it is not wise for Parliament as a whole not to give this very difficult subject a chance of proper review by both Chambers. If it comes to the fore first in another place, this Chamber cannot
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give it proper scrutiny when considering any' amendments that the other place may have made. It is not a stage at which one really gets one's teeth into the issues.
Personally, I should prefer it if, over and above what has been proposed, the section of the Bill concerning these various matters were brought back for recommitment so that we may have proper discussions to and fro. If this means that the legislation, for all sorts of reasons, will be much later than the Government intended, it would not matter in the same way that it did not matter in 1983 when some excellent Bills died and came back when Parliament resumed. It could even be thought of in those terms. It is that sort of legislation—not political with a capital "P" but the sort that needs careful consideration by many learned and expert minds such as the House can provide. I hope that my noble friend will persuade his right honourable friends that the Bill requires proper treatment by this House before it goes to another place so that Parliament as a whole can do its job properly.
Lord Henderson of Brompton: I wish to express an opinion contrary to that expressed by the noble Lord, Lord Graham of Edmonton, and the noble Lord, Lord Mottistone. Most Bills start in the House of Commons. They go to Standing Committees and, where possible, undertakings given in Standing Committee are fulfilled during consideration on Report. The Bill then comes here. Undertakings may also be given that cannot be fulfilled in time for consideration on Report in another place. Those undertakings are fulfilled in this House. We, too, have had experience of this. Exactly the same process occurred only the other day.
It sems to me eminently reasonable, the Minister having made such an important statement, that we should allow him and his department time for the highly complex consultations that will have to take place. I am sure that the noble Lord the Minister would wish to bring the results of those complex consultations to this House in time for Report and Third Reading. If not, it is surely better to get them right and put them into the Bill in the House of Commons rather than put them in, possibly in an unconsidered form, in this House. Therefore, I find myself in disagreement, I hope for valid reasons, with the contrary opinions that have been expressed hitherto.
I wish to deal with only one matter. As the noble and learned Lord the Lord Advocate knows, I have hunted with the noble Lord, Lord Campbell of Alloway, on the subject of codes of practice. It is close to the anniversary of the debate that we had last year when the noble and learned Lord, Lord Cameron of Lochbroom, answered and was extremely helpful. I remember having proposed that there should be a code of practice on codes of practice because they had got into such a muddle. I only wish that there had been such a code of practice on codes of practice. This dog's dinner would never have occurred. Perhaps the noble and learned Lord the Lord Advocate might yet reconsider having some guidance on codes of practice so that if specific criminal offences and the admissibility thereof in court proceedings have to be put into codes of practice, they are put in a separate

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part and subject to statutory instrument. I could not ask for more than that. That is, I think, what Lord Campbell of Alloway is after; it is certainly what I am after. The muddle that the department has got into on this occasion would be well sorted out if the noble Lord could give some undertaking that he will consider that suggestion carefully.
Lord Graham of Edmonton: Because we are in Committee, the noble Lord, Lord Henderson of Brompton, suggests that we are in an analogous situation to that in Committee in another place when the Government say that there are some matters that they will put right on Report. Some things they say they cannot put right on Report but undertake to put right in another place.
If we were considering an undertaking by the Government to put right in another place that which they say they cannot put right in this place, it would be an analogous situation. As I understand what the Minister has said, he is not telling us that he hears what we say, that the Government agree with what we want, but that they cannot put it right here, and so will put it right in another place. If that were the gravamen of what was being said, we would say: all right, we know that it is coming, not here, but in another place. With great respect, I did not understand the Minister to tell us that he was giving an undertaking that what we want—that is, a change in the status of the code—would be put right in another place.
If the Minister, when he speaks again, as I imagine he will, proceeds to tell us that he takes on board seriously that this, among other things, is what we want and that it will be put right in another place, then it puts a different complexion on the discussion. I may have misheard the Minister, but I do not think that that is so.
4.45 p.m.
Lord Campbell of Alloway: I should like to thank my noble friend the Minister for the magnificent gesture that he has made. Now that I have listened to the debate, I fully appreciate the difficulties that he has. Having had representations from the trade for some eight months, three drafts and a dog's dinner of a code in the end, he has my sympathy.
There are two separate points here, both valid and important. One is the objection in limine to Clause 20(4) for the reasons given by the noble and learned Lord, Lord Denning, and that I attempted to give myself. The other is the trade objection. I do not know whether my noble friend the Minister could meet one and take time on the other.
I am seeking to meet the the point made by the noble Lord, Lord Graham of Edmonton. It seems to me that subsection (4) must go, and the Government should accept that it must go. If the Government accept that and it goes, one needs no more and one can leave the matter to go ahead.
Lord Williams of Elvel: To summarise the Opposition's position on the Minister's proposal, it takes us somewhat by surprise that the Government have produced a Bill, laid it before your Lordships'
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House and suddenly in Committee, as a result of representations made from third parties, decide that they now want to change it. Yet that is the situation before us.
We would hope for—indeed, we would expect—two things from the noble Lord the Minister: first—I refer to what the noble Lord, Lord Campbell of Alloway, said—a statement in principle now about the direction in which the Government intend to move; secondly, on Report, to have some formulation of that intention. It may not be a final formulation, but we would like some formulation that the Committee with the great depth and breadth of experience that the members have, can then debate.
I shall be advising the noble Lord, Lord Gallacher, to withdraw the amendment; but I very much hope that the Minister can give us the two assurances that I have outlined. If he cannot, I am afraid that we will be under an obligation to move the same amendments on Report, and to repeat the debate.
Lord Lucas of Chilworth: I am grateful to all noble Lords who have taken part on this further debate on the substance of the amendments. As I said earlier, I shall of course give careful consideration to what they have said.
We seem to have spent some little while on matters of procedure. I do not complain about that, because it is important. I think that the noble Lord, Lord Williams was right, when I had finished, in drawing our attention to these procedural matters. He will perhaps agree on reflection that what I was proposing is not quite so unusual. It has been done before, and I think that we may be a little wiser for the benefit of the advice given us by the noble Lord, Lord Henderson of Brompton.
What it now comes down to is that I have to answer the two points the noble Lord, Lord Williams of Elvel, has just put to me. Against that background, he will I am sure accept that the Government had few doubts as to the principles that were endorsed in the Bill until last Thursday, when the document from the Retail Consortium and others was put before us. It was because of the weight of that representation that we felt that we had to give the matter further consideration. That is what I have offered to do, and that is what we shall continue to do.
I cannot make a statement as to the direction that we propose to take, because I then prejudge what may be said to me, my right honourable friend, my honourable friend or my officials. All of us will be involved in these serious and complex discussions. I cannot give the noble Lord an answer on that. The Committee will see that I am not being unreasonable.
On the second point, I believe that we may well have advanced sufficiently in those consultations by the time this place comes back to the Bill for me to give an indication of the progress of those consultations and possibly even the direction they are taking. I gladly undertake to advise this place at that time how things are going. With those two assurances, I ask the noble Lord not to press his amendments this afternoon.
Lord Gallacher: I thank all Members of the Committee who have taken part in the consideration

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of the amendment and in the subsequent procedural discussion arising from the Minister's statement. I thank the Minister for the statement which he made fairly early in our deliberations and which I think helped the committee. The spirit in which it was made is also appreciated by me.
When I spoke, admittedly from the Back Benches, on Second Reading on 8th December, I suggested a tripartite approach under the good offices of the Department of Trade and Industry. In his reply the Minister did not mention what I had suggested. In my innocence I took that to be a good sign and believed that he did not want to commit himself to anything that evening. I left the matter there. Unfortunately, it may have been better if I had pushed a little during the intervening period. We may then have been slightly further along the road than we find ourselves today; nevertheless, I respond to what has been asked of me. I accept what my noble friend Lord Williams said in his final comment on this matter. I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 72:
Page 18, line, 9, leave out subsection (4) and insert—
("( ) In any proceedings for an offence under subsection (1) or (2) above the charge shall contain particulars of the requirements of the Code of Practice as approved under section 25 below alleged to have been contravened.
( ) If it is concluded that any such contravention is relevant to any question to be determined in such proceedings it shall be taken into account in determining rich question.
( ) On trial on indictment the court shall direct the jury as to whether any alleged contravention can be relevant to any particular question arising for determination.").
The noble Lord said: This amendment, which I can speak to much more briefly, relies upon the assumption that Clause 20(4) in some form remains in the Bill, which of course is the antithesis of the true argument for which I contend. The amendment is worthy of consideration because it assumes that Clause 20(4) is deleted but that the words printed in the Marshalled List are substituted by way of safeguards. Those safeguards are, it is suggested, wholly essential if resort is to be had to a code of practice as an aid to conviction.
The mandatory provisions of Clause 20(4) provide that contraventions of the code shall be taken into account if relevant,
"to any question that falls to be determined in those proceedings".
That is unworkable without some qualification or safeguard as proposed by the amendment. For example, what is the "question"? We must identify that.
I have already referred to the form of the code. If the offences are not singled out (eight of them perhaps) and put into a statutory instrument but are left lying around in a code of practice (1.1.3 and 2.2.1 are two possible examples which I shall not cite to save time) one is in cloud-cuckoo-land when it comes to legal proceedings in the criminal courts. We have a 22-page document which is called a Code of Practice for Traders on Price Indications. That is a legitimate document. But if it is to be used in a court it would have to be totally rewritten and adapted.
Two fundamental principles of the criminal law do not appear to have been recognised by the draftsman of Clause 20(4). The first is that an accused must always know the substance of the case he has to meet with sufficient particularity to enable him to prepare his defence. The Bill provides for trial by jury on indictment.
The second point is that the draftsman betrays an ignorance of the respective functions of judge and jury in a criminal trial. At the close of the Crown case it is for the judge to rule whether as a matter of law there is evidence of any contravention of the code of practice which can go to the jury; having got past that stage, if there is, whether such contravention (if found by the jury to be a contravention) can be relevant:
"to any question that falls to be determined in those proceedings"
and it identifies the question.
That brings to an end the judge's function in summing up in a jury trial. Having ruled in favour of the Crown on both those issues in the absence of the jury, it is then entirely a matter of fact for the jury to decide whether such a contravention was relevant to such question and, if so, then to take it into account.
It is not the court which takes that into account; it is the jury who takes it into account if it thinks that it is relevant after having been directed by the judge. It is not for the judge to "think", as enjoined by Clause 20(4); it is a matter for the jury, who at the end of the day has to return a verdict not upon what it "thinks" but upon what it is satisfied about beyond all reasonable doubt. But the judge may indicate his thoughts on matters of fact under Clause 24(4), and that is as far as it goes. The form in which this is cast, to which I referred before, is wholly inappropriate to the conduct of criminal proceedings.
Referring to another part of the amendment, unless provisions of the code have been identified and particularised in relation to an alleged contravention, which is relevant also to the question to be determined, this would merely work an intolerable injustice, would be redolent of delay, and would serve as a source of confusion. The charge in this regard has to be laid as suggested in this amendment—specifically; and at all events, particulars must be given well in advance of the trial.
While we are discussing this purely legal question, proceedings for an offence under Clause 20(4) will not include appellate proceedings. So only to the extent that an identifiable provision of the code of practice, as supporting an allegation of contravention relevant to an identifiable question to be determined, has been led in evidence, has been put to the accused, and has become part of the material in the trial, may it be raised in the appellate court. The form of Clause 20(4) is totally flawed and utterly misconceived.
I ask the Minister this. After his deliberations, if he comes to the conclusion that he wishes to use a code of practice as an aid to conviction—namely contravention of the code—then instead of issuing a statutory instrument under Clause 26, would he then consider with an open mind the spirit of Amendment No. 72? However I would never dream of foisting upon him my drafting because as Members of the Committee know, I am no draftsman.
5 p.m.
Lord Lucas of Chilworth: I am most grateful to my noble friend Lord Campbell of Alloway for the way in which he has explained his amendment. I have said earlier that we accept that there are difficulties with Clause 20(4) as it is at present drafted.
Then we have to consider seriously the drafting of that clause and with it, Clause 25(3) with the intention of bringing forward amendments to reflect our intentions more accurately and to make clearer the status and the effect of the code in the circumstances that I have described.
I think my noble friend will recognise that the Committee has agreed that the Government should give much wider consideration to the matters touched on in his amendment. I assure him that will be so, and I hope that he will not feel that the brevity of my response is in any way dismissive of the very careful analysis which he has put before the Committee. With that assurance, I hope that he will be prepared to withdraw the amendment.
Lord Campbell of Alloway: I am extremely grateful to my noble friend the Minister for his magnanimity. It is quite something to take this all back at this stage. I do not think it should be underestimated. I am extremely grateful and I am fully content to withdraw my amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 20 shall stand part of the Bill?
Lord Monson: Before we leave Clause 20, perhaps I may put one question to the Minister concerning the prohibition of misleading price indications, and in so doing descend from the general to the particular.
Anyone who has glanced at the City pages of our national daily and Sunday newspapers will have noticed numerous advertisements for unit trusts. But, whereas the benefits and the alleged financial advantages of investing one or other unit trust are blazened across the page in bold type, the actual costs of so doing (by which I mean the initial and annual charges) are generally listed in a typeface so small as to be unreadable without the use of a magnifying glass.
Front-end loading ranges from 0 to 5 per cent., in the case of gilt trusts and from 3 to 5¼ per cent., in the case of equity-based trusts. The annual charges range from to ½ 2 per cent. plus VAT. Over a five to 10 year period this makes quite a difference on the assumption that the underlying performance of each trust is identical for the purposes of comparison. There is no guarantee whatsoever that high charges are compensated for by a superior performance. Sometimes this is the case, but quite frequently it is not.
We are not talking about a negligible matter, particularly bearing in mind the large number of unsophisticated small investors who are currently entering the market for the first time in the wake of the British Telecom and British Gas flotations. It would appear that investors in single premium bonds, which contain an element of insurance, are covered or
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protected by this Bill by virtue of Clause 21(1) (a) in combination with Clause 22(1)(a). Investors in unit trusts are not so covered, which is illogical.
I should like to ask the Minister whether or not he regards the listing of the unit trust initial and annual charges in minuscule type as tantamount to misleading price indications as defined in this Bill. Or, are the advertisers remaining just within the letter of law, even if not within the spirit of the law?
Lord Lucas of Chilworth: I think if the noble Lord, Lord Monson, addresses himself carefully to Clause 22 he will see that prices of investment such as unit trusts are covered by the Financial Services Act 1986 which was discussed by your Lordships last year. They are excluded from this Bill by virtue of that clause. I would anticipate that the regulations, or the rules as I think they are to be called, under the Financial Services Act will ensure that all relevant matters that an investor should take into account or to whose attention matters should be drawn will be reflected in those rules. I cannot really offer anything to the noble Lord under the terms of the Bill before the Committee this afternoon.
Lord Graham of Edmonton: I wonder whether under the Question whether the clause shall stand part of the Bill the Minister can help me with this problem? We are dealing with the first clause concerning misleading prices. I am certain that this will affect the interests of millions of people. We take on board the interests of traders and organisations, and also the legal profession, in guiding us. I should like to ask the Minister to tell us whether or not he or his department have in mind how they are going to publicise in an attractive way to the general public the net product of what will finally emerge at the end of the Bill.
The Government have quite rightly considered it apropriate that the Bill sees the light of day in 1987. I am most anxious that this matter is not left simply to traders, organisations, councils and others. I understand that the Government genuinely want to see the Bill work effectively. Perhaps the Minister can indicate whether this is the appropriate clause on which to raise the matter. I do not seek to amend the Bill. I want to publicise it as adequately and effectively as possible in the future. Can the Government give me some indication of any plans they have to ensure that it is in effect sold to the public once it becomes law?
Lord Lucas of Chilworth: I am grateful to the noble Lord. His question raises a fundamental matter. This part of the Bill on misleading prices is directed in particular to the consumer in order that he may have a proper choice—as it is simply put, that he is not misled.
We have a certain flexibility—indeed I might almost call it a fluidity—in our plans to advertise the outcome of Parliament's deliberations on the Bill in this clause in particular. We would hope to publish the code in an attractive form with sufficient guidance to the consumer. We would rely upon all those other agencies—the noble Lords knows of them; I need not spell them out—who have at all times been tremendously helpful to governments of all persuasions in disseminating useful information. I talk

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about radio, television and the other agencies. We would want to be talking with them on how best we can give effect to what the noble Lord asks.
Lord Monson: Let me briefly reply to the Minister. I am grateful to him for what he said. There is no reason why he should remember this point—he has a lot on his plate—but in the course of our debates on the Financial Services Bill I specifically brought up the matter of unit trust charges being printed in unacceptably small type and suggested that some rectification might be incorporated into that Bill. I was specifically told by the Minister that that Bill was not a suitable vehicle for so doing. I am now suggesting that it be incorporated into this Bill. But the noble Lord now says that this Bill is not a suitable vehicle.
I am not entirely satisfied with his reply. I shall have to consider carefully what to do at the next stage of the Bill. I merely give the noble Lord notice of that matter.
Clause 20 agreed to.
Clause 21 [Meaning of "misleading"]:
5.15 p.m.
On Question, Whether Clause 21 shall stand part of the Bill?
Lord Williams of Elvel: I should be grateful if the noble Lord can help me with one or two questions of interpretation. This is an exceedingly complex clause in its drafting. It is not an easy one for the layman to read. If I mention one or two examples of my problems I hope that the noble Lord will not think that I am being exhaustive. I am sure that many others can cite all kinds of instances where similar problems arise.
I quote Clause 21(1)(a), which says that the expectation might be:
"that the price is less than in fact it is",
and paragraph (b)
"that the applicability of the price does not depend on facts or circumstances on which its applicability does in fact depend".
Does this cover quantity discounts? Does it cover promotional offers where an offer is made to sell an object at, let us say, 20p plus a wine glass or something if one buys the object? That is not "a sum" as defined in the word "price" under Clause 20, but it is part of the consideration for the exchange of the object.
One can go further and refer to vouchers which have a monetary value. The noble Lord, Lord Strathcarron, mentioned this matter at Question Time. If one has a voucher which can be cashed in somewhere else for the equivalent of, say, 10p, which is given to you if you buy an object the price of which is 20p, what is "the price" under those circumstances and how is that covered by this clause?
Referring to Clause 21(1)(c) I ask the Minister this question. What happens if the price is quoted net of VAT? Clause 21(1)(c) says:
"that price covers matters in respect of which an additional charge is in fact made".
Does VAT constitute an additional charge and, if the price is quoted net, does that mean that the price is in some way misleading as defined?
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Those are the questions that I should like to start with. I do not wish to come back provided that the Minister can help us. If he cannot, perhaps he would be kind enough to indicate that he would prefer to write to me. I speak from considerable experience of having to deal with these problems, as I said on Second Reading, when I was at the Price Commission. It is immensely difficult to define what is a misleading price and how it might work. I am not for a moment suggesting that we oppose the general notion that misleading price indications should be an offence. I am trying to ensure that I understand what the legislation is meant to say.
Lord Beaverbrook: This is a complicated clause. The difficulties of defining the word "misleading" demonstrate very clearly the need for some kind of supporting code of practice. On the points that the noble Lord makes about quantity discounts, what is "the price" in Clause 21(1)(b) and so on, broadly, yes, the matters are covered. The noble Lord mentioned VAT, and there may be other hidden extras. These are a continuing problem. Subsection (1)(c) will make it an offence to state or to imply that such charges are included in the price when they are not. I hope that answer goes some way to help the noble Lord on that clause.
Lord Campbell of Alloway: Will the Minister accept that I am concerned at what he has just said? It seems to run totally counter to my understanding of the whole spirit of the concessions in this debate. I merely wish to register my concern. I seek no answer.
When the noble Lord says that a code of practice will be necessary, does he mean that in his ministerial mind he still understands that contraventions of the code of practice should be relevant and permissible as an aid to conviction under Clauses 21 and 22? If he does, we are back where we started.
Lord Graham of Edmonton: I should be grateful if the Minister could assist the Committee in clarifying this point. The clause is dominated by the word "facts". It includes "in fact", "the facts" and "on facts". For instance, where the Bill states that the applicability of the clause will be determined by the facts, who will determine them? Will they be determined by the courts? Where there is a dispute, or someone takes a trader to court, will the matter be determined wholly by the court or has the Minister any other mechanism whereby one is able to contrast what is alleged to be the price and what is purported to be the real price? Are we simply saying that in all instances this will need to be considered or clarified in the courts? In that case I venture to suggest that the courts will be very busy indeed.
Lord Williams of Elvel: Before the Minister replies, perhaps I may say that the noble Lord, Lord Campbell of Alloway, in a sense took the words out of my mouth. The point that I was going to make—which was referring to our last debate, and is contrary to the point of the noble Lord, Lord Henderson of Brompton, whose advice we normally accept on matters of this type—is that it now appears from this debate that the whole of Part III really depends on

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what direction the Government are going to take on the code of practice. The whole of Clauses 20, 21 and 22 of Part III depend on what direction the Government are going to take on the code of practice.
Until we know that, it is extremely difficult for us to debate these matters. If we are told that the interpretation of these points must be subject to the code of practice, explained in a code of practice or in some secondary legislation, or whatever, then we shall have to say that we shall have to wait until that occurs. I would argue most firmly, as I argued before, that we need some indication of the way the Government are moving before your Lordships' House takes this Bill on Report.
Lord Beaverbrook: May I deal with these few matters. My noble friend Lord Campbell of Alloway raised a point about the code of practice. I was merely pointing out the difficulties that we have indentified in this area. I wish to make no statement as to how we resolve those difficulties at this stage.
There was the point raised by the noble Lord, Lord Graham, about the courts being rather busy. Ultimately the courts have to determine the facts in the event of a prosecution, as with any criminal matter. Perhaps I may go back a little further to one of Lord Williams' earlier points, in that the price in relation to any goods is defined at line 40 as:
"the aggregate of the sums required to be paid by a consumer for or otherwise in respect of the supply of the goods or the provision of the services, accommodation or facilities".
Lord Williams of Elvel: Does "sums" under those circumstances mean sums of money plus money represented by vouchers of value?
Lord Beaverbrook: I think that in this instance it would be better if I considered the matter further and wrote to the noble Lord on these points. They are complicated, and I prefer to get them absolutely right for him.
Baroness Phillips: The Minister mentioned price and VAT, or not stated. As I understand the law, and I am subject to his correction, one is duty bound to state the price and the VAT separately.
Lord Beaverbrook: The point I was making was really about hidden extras in general in this case. For instance, VAT is one, as the noble Baroness pointed out; delivery charges are another example. As for the matter of VAT being pointed out separately, it is of course open for any consumer to ask for that information; but as the noble Baroness will know, many prices are shown as inclusive of VAT.
Clause 21 agreed to.
Clause 22 [Application to provision of services and facilities]:
On Question, Whether Clause 22 shall stand part of the Bill?
Lord Williams of Elvel: I apologise to the Committee for these numerous clause stand part debates; but I am sure that the Committee will
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understand that there are aspects of this Bill which are extremely difficult to understand and are not properly subject to amendment but to interpretation. I hope that particularly Members on the Front Bench opposite will excluse me if I ask certain questions on interpretation—I hope briefly.
Clause 22(1)(a) first, I fully understand that the provision of credit is subject to this Bill, but that credit has the same meaning as in the Consumer Credit Act. In other words, as I understand it, the charging of bank interest will not be controlled by this Bill. It will not come within the ambit of this Bill. I should be grateful if the Minister can confirm that I am right. It is only banking services that are caught by 22(1)(a).
In other words, if I go along to my bank and ask them to make me a loan and they say, "We will make you a loan at X per cent. over base"—and I would not dream of quoting the figure that the bank might charge me or any other Member in the Committee—and in addition they say, "We will charge you Y as an arrangement fee" (this is the common expression) does the Bill provide that Y is covered within the Bill and that X is not? This would be a strange application of the Bill. I should be grateful if the Minister can enlighten me on that point.
Now to the purchase or sale of foreign currencies. Again referring back to Clause 21, subsection (1)(d) says:
"that a person who in fact has no such expectation—

(i)expects the price to be increased or reduced (whether or not at a particular time or by a particular amount); or

(ii)expects the price, or the price as increased or reduced, to be maintained (whether or not for a particular period)".

Foreign exchange transactions are, of course, the subject of negotiation as to the price and spread, and all sorts of things come into it. Does this mean that if there is an indication that there is an expectation that the price might change—which indeed it would do from minute to minute, and possibly from second to second—that these transactions of a wholesale nature are covered by this Bill? Or is there the same exemption as we had in the Financial Services Act to exempt wholesale money markets and money transactions from this Bill?
The third point I wish to raise is on Clause 22(1)(d) which concerns,
"the provision of a place, other than on a highway, for the parking of a motor vehicle".
Does this mean that, for instance, local authority residents' parking permits and parking meters are not covered by the Bill whereas other parking facilities are?
Lord Beaverbrook: This clause sets out the extent to which Part III applies to services and facilities. Its coverage is wide. All services and facilities fall within Part III subject to a number of exceptions. Services provided to an employer under a contract of employment are not covered, as this is a matter for employment law. Neither are any services or facilities provided by an authorised person, or an appointed representative, in the course of carrying on investment business within the meaning of the Financial Services Act 1986. That Act already protects investors against misleading indications of the price of investments.

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The clause also provides for the sake of clarity that certain particular matters are to be construed as services or facilities; namely, credit, banking, insurance, and incidental services, the purchase or sale of foreign currency, the supply of electricity, and the provision of off-highway caravan and parking. Price indications about credit are covered but credit as such is not. But the prices of services, such as an arrangement fee for a line of credit, are covered by the Bill. Subsection (4) makes particular provision that the rate of exchange of foreign currency is, for the purposes of Part III, a method of determining a price. As regards wholesale money markets, the price indication is not given to consumers, and therefore it is not covered.
The noble Lord, Lord Williams, asked a question about parking meters. Parking meters are not covered. The reference in Clause 22(1)(d) to off-highway parking facilities is included because technically they involve the creation of a licence. Parking meters and other parking spaces do not involve a licence but rather a statutory right for a vehicle to remain subject to conditions including payment of statutory a fee. I hope that that covers the noble Lord's points.
Lord Williams of Elvel: I am grateful to the noble Lord. I understand that "an authorised person" in this clause means an authorised person under the Financial Services Act. However, as Members opposite know, there are certain exemptions in the Financial Services Act of people who do not need authorisation. When the noble Lord says that these people are not consumers, I have then to ask him what is a consumer? These people may be acting on behalf of a private individual. Indeed we had a long debate on Schedule 1 of the Financial Services Act—I remember it well—about private individuals going into the foreign exchange market via agents. I am slightly confused about the noble Lord's response and I should be grateful if he could look at this more carefully and perhaps write to me if he comes up with any different conclusions.
Lord Beaverbrook: I shall look at the matter and write to the noble Lord on the subject.
Clause 22 agreed to.
5.30 p.m.
Clause 23 [Application to provisions of accommodation etc.]:
Lord Gallacher Lord Gallacher moved Amendment No. 73:
Page 20, line 42, leave out ("his main or only") and insert ("a").
The noble Lord said: Amendment No. 73 arises from Clause 23(2), which we are pleased to see brings within the scope of the Bill the provision of new residential dwellings which are the only or the main residence of the purchaser. That raises the question as to why the limitation should be imposed in the Bill. It seems to us and to those who have written to us about this clause that there are probably other areas where similar protection is at least desirable, if not essential. For example, retirement homes are now very much in evidence.
Sometimes these are purchased well in advance of actual retirement so that the person or family in
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question can put down roots in the area to which they propose to retire. In addition to that, the purchase of holiday homes is now fairly popular. I think we can point to the recognition which holiday homes got for income tax relief in a Finance Act which, if memory serves, was passed about two years ago. I can recall that one had to show that the home was available for letting and had been let for at least 10 weeks in any tax year to qualify for mortgage interest relief on that holiday home.
It seems to us that there is a case for bringing those two categories at least—there may be others—within the scope of Clause 23(2). Therefore it seems appropriate to ask the Government for a view on this. I should have said at the outset that in moving this amendment I was also speaking to Amendment No. 73A with which it is grouped. I beg to move.
Lord Campbell of Alloway: I support the reasoning of the amendment, subject to anything that is said to the contrary as a matter of reasoning by my noble and learned friend the Minister.
The Lord Advocate (Lord Cameron of Lochbroom): I am grateful to the noble Lord for moving this amendment. While we are both agreed on the abuse that we are attempting to deal with in the subsection, the words to which he directs attention in the amendments may prevent the protection extending to the rare circumstances where a misleading price indication is given only to a consumer who does not intend to use the accommodation as his main or only residence. That being so, I am ready to consider the point. I hope in view of that assurance the noble Lord will agree to withdraw these amendments.
Lord Gallacher: I am grateful to the noble and learned Lord for his response and for the offer he has made, which I gladly accept. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 73A not moved.]
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 74:
Page 21, line 12, leave out ("(a) the freehold estate in the dwelling; or (b)") and insert ("in England and Wales and Northern Ireland, the freehold estate in the dwelling or").
The noble Lord said: This is purely a matter of drafting, perhaps with a little—the Committee may think too much—Scottish sensibility. The amendment deals with the definition of "relevant interest" in a dwelling. We start with paragraphs (a) and (b) between lines 10 and 15 which do not have any restriction on their latitude and therefore apparently apply to the whole of Great Britain. Then we have paragraph (c) relating to Scotland. All the amendments seek to do is to say that paragraphs (a) and (b) apply to England, Wales and Northern Ireland and the other paragraph applies to Scotland. That seems a better way of putting it. I beg to move.
Lord Campbell of Alloway: Again very briefly and subject to what is said by my noble and learned friend, may I be allowed to support the reasoning of the amendment?
Lord Cameron of Lochbroom: I am only too aware that it is but a short time since an anniversary of Robert Burns' birth. While I do not think this amendment has any substantive effect, and nor is it necessary to enhance the Bill's clarity, I should like to look at it again, though I give no undertaking whatsoever that I shall come back with any alteration. As I believe the noble Lord opposite accepts, it is important from the point of view of Scottish practitioners for there to be a separate paragraph for Scotland. His argument was directed perhaps to a slightly different target because he has what he needs. Obviously without giving an undertaking I shall consider this again, particularly in view of the fact that some support was given by my noble friend.
Lord Morton of Shuna: I am obliged. The difficulty is that as the Bill stands paragraphs (a) and (b) apply to Scotland, as well as paragraph (c). That is unnecessary. But in the circumstances I beg leave to withdraw the amendment
Amendment, by leave, withdrawn.
[Amendment No. 75 not moved.]
On Question, Whether Clause 23 shall stand part of the Bill?
Lord Graham of Edmonton: I should be grateful if the noble and learned Lord could explain why this is necessary. As I understand from the questions that have been asked and the Minister's replies, what we have here by virtue of the exclusions listed are two classes of consumer. At the end of the day all services are consumed, either once or twice removed. I should be grateful if the Minister could tell us why it is considered necessary to have a clause of this kind. The first two lines read:
"accommodation or facilities shall not include references to accommodation or facilities provided by means of the creation or disposal of an interest in land, except where".
The Minister may say to me that I should have understood the purpose of the clause earlier than the Committee stage. But the Committee stage of a Bill is where one asks questions such as this. Why is it felt necessary that this aspect needs to be caught by the provisions of the Bill? I should be grateful if the Minister would spend a little time (not too long, of course) on the genesis of this. I understand why many interests have felt it necessary to plead with the Minister and his colleagues over the years as to why their own interests should be included. I should genuinely like to ask what has been the pressure for this kind of clause, worded in this way, being put into the Bill.
Lord Cameron of Lochbroom: I shall be happy to attempt to satisfy the noble Lord's curiosity. In Clause 20 one starts off with a general reference to accommodation and facilities, but the purpose of Clause 23 is to deal with the extent to which this part applies to real property; that is, the provision of accommodation which involves the creation or the transfer of an interest in land.
I think the noble Lord will have understood from the debate we have just had on his noble friend's amendment that the application in that circumstance
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is only to the area of what are called new homes, to deal with a particular abuse that arises there. It is for that reason that Clause 23 commences in the way it does. Subsection (2) is important in defining the particular area to which this clause will apply in relation to real property. I think that becomes clear when one considers the terms of subsection (3), and particularly the definition in subsection (4). I hope that what I have said is of some assistance to the noble Lord regarding the intention behind this clause as against the general reference to accommodation in Clause 20.
Lord Graham of Edmonton: I am sorry to be "thick". I can hear what the Minister says, but my question was: why should these exclusions be thought necessary? If the exclusions cover consumers at one level or another, why are they not given the protection of the clause and the Bill?
Lord Cameron of Lochbroom: The abuse to which I referred—and perhaps I should have dealt with it earlier—is that in relation to new homes, or what I might term starter homes. These were being increasingly marketed in much the same way as any other product and typically there were offers made "free" in relation to such homes.
However, there were also a number of other considerations as to why it should not be extended. The sellers of what I might term "secondhand homes" rather than new homes are private individuals. They will not generally be in business and therefore would not be caught by these provisions. They would of course apply to their estate agents, who would become liable in respect of the actions of their clients over which they have no control. I do not think that that would be fair, as perhaps the noble Lord would accept.
The general character, furthermore, of a secondhand house purchase is quite different from the purchase of a new house. It proceeds by negotiation, during which there will usually be ample opportunity for a prospective buyer to establish all the circumstances which would bear upon the initial price indication. In that respect, again, there is a substantial difference between a new house and a secondhand house.
The noble Lord might also ask: why does it not apply to tenancies, because that is leasehold property? Again, there is a great shortage of private rented accommodation, and the Government have been concerned to take steps to encourage an increase in supply. But that will not be achieved by imposing unnecessary regulation.
The potential mischiefs we are concerned to remedy in this Bill are not really relevant to the rented sector and, as the noble Lord knows, there is already legislation to protect the general interests of tenants. It is for that reason that the clause is very carefully defined to deal with one aspect of what I might call the property market and house purchase; namely, that of new houses and in particular the abuse to which I made specific reference.
5.45 p.m.
Lord Graham of Edmonton: I am most grateful to the noble and learned Lord, but the more he goes on,

1493
the more questions he raises in my mind. It is not his fault: it is simply because I am curious. If what the noble and learned Lord is saying is that he and his advisers noted a particular manifestation whereby the consumer needed protection—that is the consumer of new homes and particularly starter homes—the point I start from is that all consumers need protection if they are at risk from people trying to take advantage of them. For instance, if we look at the top of page 21 a new home,
"means any building or part of a building which has been constructed or adapted to be occupied as a person's main or only residence".
Does that mean to say that if the new home is a person's second home or his third home, he then diminishes the quality of the protection of the law from having been induced, misled or in some way invited to part with his money? What I am trying to get at is: why is the variation in the quality of protection dependent upon whether it is a young person, an old person, a starter home or a second home?
I can appreciate that new first-time buyers may be more vulnerable and may need more protection, sometimes from themselves, because they might be eager to buy and thereby get caught. I still want to know why that person needs the protection of the law as opposed to a person who, for very good reasons, in 1987 may be buying a new home which is not a first home or indeed an only home.
Lord Cameron of Lochbroom: I think, with respect, that the noble Lord may have misunderstood my definition of a new home. It is of course that in the Bill. It is a new dwelling, which means any building as referred to in subsection (4). The noble Lord has referred to the words "main or only" and that point was dealt with during the debate we had as a consequence of his noble friend's amendment. I am going to look at that.
I think I have made clear that the reason for the differentiation is that in this clause we are talking about something that has been constructed and is put on the market for the first time, as against something which has already been occupied. I have indicated the distinction that arises because, in general terms, it is put on the market by a private individual. If such private individuals operate through estate agents the latter are simply acting as the agents for their clients. The occupiers are not in business in the same way as are those who are struck at in this Bill—the traders, if I may use the term rather loosely. It is for that reason that we make the distinction that we do.
Lord Graham, of Edmonton: I am most grateful.
Clause 23 agreed to.
Clause 24 [Defences]:
[Amendment No. 76 not moved.]
Lord Gallacher Lord Gallacher moved Amendment No. 77:
Page 22, line 8, leave out ("for the most part").
The noble Lord said: This amendment is concerned with Clause 24, and that clause is concerned with defences for publishers of catalogues and advertisements. As I am sure the Committee will know, this is a growth area, particularly since the
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advent of free newspapers and similar advertising matter. Undoubtedly the growth of this material in addition to that which is long established by way of advertising, has a significant influence on the market and therefore it must be of considerable importance to consumers who may be influenced by it.
One takes Clause 24 as a whole. It is certainly drawn very widely, and one accepts that in the circumstances to which the clause addresses itself, width is very necessary. However, reading the various subsections, one begins to feel that the cumulative effect of this clause is to give little or no protection, and indeed to exonerate completely the advertiser from any responsibility for what may or may not appear in his advertisements.
For example, when we come to subsection (4) (d) we get the words "for the most part" and, as I said, on reading the clause as a whole it seemed to us that it might be desirable slightly to narrow the width of exemption offered by Clause 24. The purpose of the amendment is to achieve just that. The narrowing of the clause in the minor way suggested in the amendment would constitute an additional defence for consumers and therefore it is worthy of consideration.
When I was thinking about what one might say further in support of this amendment I chanced upon a report in my local paper only last week that a vacancy advertised in a Job centre led a young woman into prostitution at a massage parlour. So a case was brought to court and subsequently sent for trial on that basis. I am happy to assure the Committee that so far as the young lady is concerned the case had a fairly happy ending, because it is also reported that she is now pursuing successfully a career in the Civil Service.
Although it may be that the point I am raising here belongs properly within the legislation which the Government may find it necessary to introduce at a later date to deal with the European Convention directive on unfair and misleading advertising, it seems to me that at this stage in our deliberations we should pause and ask ourselves whether we are perhaps giving excessive exemption to the advertising industry in this important area. The purpose of the amendment is to give the Government an opportunity of saying why in Clause 24, in general, the exemption is as wide as it is and why the modest restriction proposed by Amendment No. 77 should not be accepted. I beg to move.
Lord Campbell of Alloway: I wonder whether my noble and learned friend the Lord Advocate could possibly give further consideration to this point on the grounds of practicability, because we are talking about a defence to a criminal charge under Clause 21 and I ask the Committee to bear in mind that a case is being tried by a jury on indictment, as is proposed. I know not—and I am in the hands of my noble and learned friend who has greater experience than I—of any other statutory defence to a criminal charge which says, "For the most part, I did this". If there is some precedent for this sort of defence, so be it, but I have never come across it and it seems to me on analysis rather absurd and unworkable. If my noble and learned friend could just have a look at this one, I for my part would be very grateful.
Lord Beaverbrook: If the noble Lord's amendment were adopted, it would impose a very heavy and, I believe, unreasonable burden on traders who give the sort of price indications covered by this defence. The scope of the defence is already very narrow. It is intended to deal with the situation where manufacturers advertise the price at which their goods are available in the shops. Motor manufacturers, for example, often advertise the prices they have recommended to dealers to charge. It is available only when the alleged offence relates to an indication of a price which has been recommended to all those from whom the goods, services, accommodation or facilities are indicated as being available; the indication was misleading only because someone failed to follow the recommendation; and it was nevertheless reasonable for the person who both gave the indication and made the recommendation to assume that his recommendation was generally being followed.
This amendment creates, in my view, an unduly onerous condition in circumstances where it must be remembered that the indication is not given at the point of sale and the person who gave the indication is not involved in the transaction with the consumer. For that reason I am unable to accept the noble Lord's amendment.
Lord Campbell of Alloway: I wonder whether my noble friend might conceivably reconsider, because he read from a brief which was written by somebody who had not heard any of the argument. We can all be wrong. If the point I made is totally misconceived, it would be nice to have a reasoned riposte before being turned down out of hand.
Lord Mottistone: In many cases I would sympathise with my noble friend Lord Campbell of Alloway, but in this case I think what my noble friend on the Front Bench said was perfectly straightforward. I found it very easy to understand and I do not see why he should go any further.
Lord Beaverbrook: I am most grateful to my noble friend. The brief I have is intended to set out very clearly the reason why we feel that we cannot accept this amendment. But of course we always listen to whatever is said in your Lordships' House and will read what my noble friend Lord Campbell has said. But I have set out our case for being unable to accept this amendment.
Lord Gallacher: I am grateful to the Minister for his reply to this amendment. In particular, I am grateful to the noble Lord, Lord Campbell of Alloway, for his support. Like him, on first hearing I thought the reply to the amendment was somewhat terse. The mere mention of motor manufacturers' recommended prices made me almost wish that I was in another place. Nevertheless, I am grateful that the assurance was given that there will be some further consideration of it. Although we are not expecting that consideration to take a very tangible form at Report stage, I am nevertheless grateful to the Minister for what he has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 24 agreed to.
Clause 25 [Code of practice]:
Lord Gallacher Lord Gallacher moved Amendment No. 78:
Page 22, line 19, leave out from ("issued") to end of line and insert ("by the Secretary of State").
The noble Lord said: This amendment is one which has occasioned considerable discussion on this side of the Committee because it seems to us that Clause 25(1) is rather dangerously wide in that it would allow not merely the Secretary of State to approve a code of practice but "another person" for the purpose of the points which are contained in the remainder of the clause.
I do not want to reopen the discussion which we had at the beginning of this Committee stage on the status of the code of practice. But whatever its status, whether it has great legal status in the ultimate or whether it is merely an advisory document for retailers, it seems to us to be very undesirable that any person other than the Secretary of State should be allowed to approve codes of practice. That would apply even if the Director General of Fair Trading and the Secretary of State had a sight of the code.
We feel that this clause as it now stands is far too wide. It could give rise to all manner of abuses. Indeed, even where abuse did not take place the mere existence of codes devised by persons other than the Secretary of State could considerably mislead consumers. That, too, seems to us to be contrary to the spirit and intent of the Bill. For this reason, we feel that Amendment No. 78 which we are proposing is well worth consideration and I hope that the Government will be able to accept it. I beg to move.
Lord Campbell of Alloway: Irrespective as to whether contravention of the code is used as an aid to conviction, irrespective as to whether compliance with the code affords a statutory defence, and irrespective as to whether the third type of code, having no legal efficacy, were to be introduced, surely it would be within the proper remit of the Secretary of State himself, in an important area such as this—if the codes have legal efficacy—to be responsible for introducing the code.
Lord Mottistone: Surely we are talking here about the Secretary of State approving a code issued possibly by somebody else. The noble Lord, Lord Gallacher, earlier on in this general debate was talking about this tripartite-issued concordat, as it was described at one stage. Suppose that was accepted by the Government and was prepared and perhaps issued by the three parties concerned. The Secretary of State might then approve it. Is that not the circumstance in which the Bill as we now have it would be relevant? Is it necessary to have this change, since the Secretary of State does the final approving as the Bill is now written? It is only the issuing of such a document which is under question.
6 p.m.
Lord Lucas of Chilworth: I agree with the noble Lord, Lord Gallacher, that this amendment, dealing as it does with codes, stands on its own irrespective of the discussions of the Committee earlier today. I can

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understand some of the concern which I believe has prompted the amendment.
Rather like my noble friend Lord Mottistone, I think that the amendment is misplaced because the power for the Secretary of State to approve codes issued by other persons does not mean that anyone can approve a statutory code of practice. As my noble friend has said, any code must be approved by the Secretary of State. Should he wish to approve a code issued by someone else, it will be subject to the same careful consideration as that which he would give a code of his own.
The Bill requires that any code be the subject of consultation with the Director General of Fair Trading. He has a special interest in codes of practice. It would also be the subject of consultation with other appropriate persons. Having cleared those hurdles, the Bill then requires the order approving the code to be laid before Parliament, thus once again providing an opportunity for consideration by both Houses.
Perhaps I should attempt to assure the noble Lord, Lord Gallacher, of our plans. We have no plans to approve more than the code drawn up by my department, and that code has been placed in the Library. Whatever may happen to that code, the same principle applies. However, a case may emerge for having a code relating to a specific sector, in which case a trade associations' code might be suitable for approval. Again it may be submitted to the Secretary of State, he may approve it and it may, as I have described, come before both Houses of Parliament. Therefore, there is no great opportunity for excess here.
If the Committee passes the amendment, I believe that it will deprive the Bill of a really useful tool for dealing with particular matters which might arise. I hope that the noble Lord, Lord Gallacher, will be reassured as regards his points and that he will feel able to withdraw his amendment.
Lord Campbell of Alloway: having heard the explanation given by my noble friend, may I say that I am, for my part, entirely satisfied with that.
Lord Gallacher: I am grateful to the noble Lord the Minister for the remarks that he has made in connection with this amendment. I could not help smiling to myself when he spoke of the time it will take to redraft this code, on the assumption that redrafting is necessary. We were all very lenient with him. Now we find that in certain circumstances—though not in these circumstances—codes can be drawn up by other people, submitted to the Director General of Fair Trading and the Secretary of State and, subject to parliamentary approval, they are A1.
If time is of the essence, perhaps I may say without disrespect to the Department of Trade and Industry that the three members of the concordat could quickly put together a code which I think would satisfy them, although it might not satisify the Secretary of State. We might then find ourselves able to do our proper duty as a revising Chamber at Report stage and send the Bill to the other place in a form that the Committee would feel satisfied with and which would not put them in the unenviable position of waving goodbye knowing that we disliked intensely a major part of the Bill.
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I say that because it seems to me to be justified on the basis of the reply which the Secretary of State made to me. However, in the light of what he has said and in view of the safeguards which he says are firmly built into this particular clause, I beg leave to withdraw the amendment.
Lord Lucas of Chilworth: Before the noble Lord sits down, he tempts me and I cannot resist that temptation. When he speaks about speed, he will recall that when I spoke earlier I said that the document of the concordat would have to be discussed with a wide range of people who have not had the opportunity of putting their views on the paper of the concordat. Therefore, I am not too sure that the analogy which the noble Lord draws is entirely fair.
Baroness Phillips: Before my noble friend replies, I should say to the Minister that, as regards speed, the manufacturers of small electrical goods drew up a voluntary code of practice (and an excellent one) which was submitted to the Office of Fair Trading about 18 months ago, as I recall. They have been operating that code of practice in any case. However, they cannot move at all. My experience of the department is that it is incredibly slow and cumbersome. Therefore, how they can be so speedy over something else is a puzzle. I hope that this Bill means that they will speed up their efforts as regards some of the people who have been trying to do the right thing and who only need the blessing of the Government.
Lord Gallacher: I thank the noble Lord the Minister for his further clarification of the attitude of the Government to the amendment. I can only say that if this wide range of additional consultation is necessary in respect of the code which is occupying our prime attention then much the same considerations would apply to any code because the mere fact that it came from the trade association or a body equally representative of the sector would not mean that all the constituents of that sector had played a part in the formulation of the code. Neither would it mean that other parties who may be interested or affected by it would take a similar view. That leads me to think that the wording of the clause as it stands would have been improved by the acceptance of the amendment proposed. Nevertheless, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Campbell of Alloway Lord Campbell of Alloway had given notice of his intention to move Amendments Nos. 79 and 89:
Page 22, line 21, leave out ("giving practical guidance with respect to").
Page 22, line 22, leave out ("section 20") and insert ("sections 20 and 24").
The noble Lord said: Amendment No. 79 is grouped with Amendment No. 80. Both amendments were moved for clarification and are probing amendments. In view of the most helpful concession made by my noble friend the Minister to reconsider the whole position in Clause 20(4) and to take on board the representations and points made in debate of the status of the code, there is absolutely no object

1499
in detaining the Committee further with the matter. These amendments have been overtaken by events. The only point which arises is the one to which I referred, in that under Clause 25(1) (b) we have perhaps an ideal type of trigger to introduce the third type of code which is the one of mere recommendation having no legal effect. I shall therefore not move these amendments.
[Amendments Nos. 79 and 80 not moved.]
[Amendments Nos. 81 to 84 not moved.]
Clause 25 agreed to.
Clause 26 [Power to make regulations]:
Lord Gallacher Lord Gallacher moved Amendment No. 84A:
Page 23, line 32, leave out ("annulment") and insert ("approval").
The noble Lord said: With the leave of the Committee, I shall speak also to Amendment No. 84B.
Clause 26 is concerned with the power to make regulations. As the clause now stands, the power,
"shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament".
As we are dealing here with regulations, and as we are quite certain from what was said earlier in this stage of the Committee's proceedings that the regulatory procedure is likely to be used quite significantly under this clause, it is our opinion that those regulations ought to be subject to the affirmative procedure in your Lordships' House. That is the purpose of the amendment.
We believe that the negative procedure does not adequately reflect the importance of regulations which may be quite far reaching. They may have considerable significance and of course they have legal force. In these circumstances we believe that the affirmative procedure is fully justified. It may be argued that the affirmative procedure should be used sparingly. Indeed we are not advocating that that principle should be departed from. But, wearing another hat, I sometimes assist a colleague from this side of the House with agricultural matters. I am always quite amazed at the extent to which the affirmative procedure is necessary over a wide range of agricultural affairs, some of them not nearly as potentially significant as the regulations which may be made under this Part of the Bill.
In those circumstances, and in order that Parliament may know fully what is being done and may have the opportunity to approve what it is proposed will be done, we wish to bring the affirmative procedure into the Bill as concerns the making of regulations. That is the purpose of Amendments Nos. 84A and 84B. I beg to move.
Lord Campbell of Alloway: I intervene briefly to support the amendments. Whatever happens, the code of practice will have legal efficacy akin to that of a statutory defence under Clause 24. In those circumstances it is a matter for Parliament to consider and discuss by affirmative resolution before any such form of law is introduced. I should have thought that
1500
my noble friend the Minister might well accept this. As I understand it, this is the wish of the Retail Consortium and it seems to me to be an entirely reasonable wish. I wonder whether my noble friend will consider it without giving any form of commitment.
6.15 p.m.
Lord Lucas of Chilworth: The negative resolution procedure is quite appropriate for regulations which may be made under the powers conferred in this clause. There are a number of precedents. Indeed one of the precursors of this Bill, the Price Marking of Bargain Offers Order, was itself made under that procedure. The same applies to regulations made under the Trade Descriptions Act, the Fair Trading Act and the Consumer Credit Act. All these provisions may impose requirements contravention of which will be an offence.
In any event the wide-ranging consultations that are required by the Bill will have to take place before any regulations can be introduced. The wishes to which my noble friend Lord Campbell of Alloway referred were taken rather out of the context of all that the Retail Consortium proposed in its package. I should not like to separate one from the other, particularly having offered to go into these consultations.
I think it is unnecessary to require Parliament to debate regulations when demands on its time are already excessive. I understand what the noble Lord, Lord Gallacher, said about using the affirmative procedure sparingly. There may well be particular significance in the matters we are discussing but with the precedents I have quoted I do not think they are sufficiently significant for us to depart from what has proved to be an adequate practice.
If there are strong feelings about certain draft regulations there may be an opportunity for debate if arrangements can be made with the business managers. I do not think that there is a lack of opportunity for Parliament to discuss regulations. I am not persuaded that any change in the procedure to which we are now accustomed and which we are able to accept is warranted in this Bill.
Lord Williams of Elvel: I hope that the noble Lord the Minister is taking our amendment as seriously as it warrants. The clause as presently drafted states:
"The Secretary of State may…by regulations make provision"—
I am missing out certain words which seem to me not to be relevant—
"(a) for the purpose of regulating the circumstances and manner in which any person in the course of any business of his—

(i)gives any indication as to the price at which any goods, services, accommodation or facilities will be or are available or have been supplied or provided; or

(ii)indicates any other matter in respect of which any such indication may be misleading".

In other words, this clause gives to the Secretary of State power to amend the Bill by redefining in certain circumstances what may or may not be a price and what may or may not be misleading. Under those circumstances my noble friend is perfectly justified in asking that if this is to be an effective amendment to the Bill it should come before your Lordships' House before it is passed in draft.
Lord Lucas of Chilworth: I take all the amendments that are put down by noble Lords opposite with the seriousness they deserve. This amendment is a serious matter. Of course it is a serious matter. The noble Lord, Lord Gallacher, has ensured that the Committee recognises the seriousness of it. But I have to say that the suggestion of the noble Lord, Lord Williams, that the Secretary of State can, of his own volition, amend the Bill is wrong. He has to consult and he has then to lay regulations which are subject to the approval of both Houses of Parliament.
Parliament can refuse to accept those regulations, although it would be very unusual. The noble Lord the Leader of the Opposition may recall that about five or six years ago regulations that were placed before your Lordships had to be withdrawn because there was a technical error. They were reintroduced two or three days later but had to be withdrawn again for another reason. Only on the third occasion, after noble Lords had drawn the Government's attention to these matters, was the House prepared to accept the regulations. That is just a modest demonstration of the fact that both Houses of Parliament have authority and have the power to accept or reject regulations.
Lord Mottistone: Perhaps I may supplement what my noble friend has said. In my experience, on the two or three occasions when I have prayed against a negative order I have got a better debate going at a better time of day than when we have debated an affirmative order. We have had long arguments about this, and I know it affects the status, but, as for the practicality of stopping the Government doing something that looks nasty, the negative procedure is just as good and I think in some ways better.
Lord Gallacher: I thank the noble Lord the Minister for the reply he has made. I have taken very careful note of all that he has had to say. However, on this side of the Committee we feel that the affirmative procedure is appropriate in these circumstances, particularly having regard to the additional remarks made by my noble friend Lord Williams of Elvel when he drew attention to Clause 26(1) of the Bill. I think that the affirmative procedure gives the House the opportunity that it needs and, if an order has passed the other place, this House has a code of conduct of its own in regard to these matters which I am happy to say is strictly observed. Nevertheless, even within the code there is an opportunity for discussion, for comment and for the passing of opinions upon the content of the regulation, as well as its validity and, indeed, its necessity.
In all those circumstances, I think we should test the opinion of the Committee on this. I beg to move.
6.22 p.m.
On Question, Whether the said amendment (No. 84A) shall be agreed to.
Their Lordships divided: Contents 46; Not-Contents, 84.

DIVISION NO. 1

CONTENTS

Airedale, L.

Kilmarnock, L.

Ardwick, L.

Llewelyn-Davies of Hastoe, B.

Bonham Carter, L.

Bottomley, L.

Longford, E.

Brockway, L.

Monson, L.

Burton of Coventry, B.

Morton of Shuna, L.

Carmichael of Kelvingrove, L.

Nicol, B.

Northfield, L.

Cledwyn of Penrhos, L.

Phillips, B.

David, B. [Teller]

Ponsonby of Shulbrede, L. [Teller.]

Dean of Beswick, L.

Diamond, L.

Robson of Kiddington, B.

Elwyn-Jones, L.

Seear, B.

Ennals, L.

Shackleton, L.

Fitt, L.

Stewart of Fulham, L.

Gallacher, L.

Strabolgi, L.

Graham of Edmonton, L.

Tordoff, L.

Hampton, L.

Underhill, L.

Hanworth, V.

Wallace of Coslany, L.

Hooson, L.

Wells-Pestell, L.

Irving of Dartford, L.

White, B.

Jeger, B.

Williams of Elvel, L.

John-Mackie, L.

Winterbottom, L.

Kennet, L.

Ypres, E.

Kilbracken, L.

NOT CONTENTS

Aldenham, L.

Hesketh, L.

Aldington, L.

Home of the Hirsel, L.

Alexander of Tunis, E.

Hooper, B.

Ampthill, L.

Killearn, L.

Auckland, L.

Lane-Fox, B.

Bauer, L.

Lawrence, L.

Beaverbrook, L.

Layton, L.

Belhaven and Stenton, L.

Lindsey and Abingdon, E.

Belstead, L.

Long, V.

Boyd-Carpenter, L.

Lucas of Chilworth, L.

Brabazon of Tara, L.

Lyell, L.

Broadbridge, L.

Macleod of Borve, B.

Brougham and Vaux, L.

Marshall of Leeds, L.

Bruce-Gardyne, L.

Maude of Stratford-upon-Avon, L.

Butterworth, L.

Cameron of Lochbroom, L.

Merrivale, L.

Mersey, V.

Campbell of Alloway, L.

Milverton, L.

Carnock, L.

Molson, L.

Cathcart, E.

Mottistone, L.

Colville of Culross, V.

Mountevans,L.

Cork and Orrery, E.

Munster, E.

Cowley, E.

Murton of Lindisfarne, L.

Craigavon, V.

Newall, L.

Cullen of Ashbourne, L.

Norfolk, D.

Dacre of Glanton, L.

Rankeillour, L.

Davidson, V. [Teller]

Renton, L.

De La Warr, E.

Renwick, L.

Denham, L. [Teller]

Russell of Liverpool, L.

Derwent, L.

St. Davids, V.

Digby, L.

Saltoun of Abernethy, Ly.

Dormer, L.

Sandford, L.

Dundee, E.

Selkirk, E.

Eden of Winton, L.

Shrewsbury, E.

Elles, B.

Skelmersdale, L.

Elliot of Harwood, B.

Somers, L.

Elliott of Morpeth, L.

Strathclyde, L.

Ferrier, L.

Sudeley, L.

Fraser of Kilmorack, L.

Teynham, L.

Gibson-Watt, L.

Thurlow, L.

Glanusk, L.

Trumpington, B.

Halsbury, E.

Ward of Witley, V.

Hardinge of Penshurst, L.

Whitelaw, V.

Resolved in the negative, and amendment disagreed to accordingly.
6.31 p.m.
[Amendment No. 84B not moved.]
On Question, Whether Clause 26 shall stand part of the Bill?
Baroness Burton of Coventry: I should like to raise two separate matters on Clause 26. At the moment I am merely seeking information, so I have not put down an amendment on these two points, but I gave notice to the noble Lord, Lord Lucas, that I would be raising them.
The Committee will be aware that for some considerable time I have been concerned about the position on the resale of gas and electricity to tenants by landlords with secondary meters. The Committee will know that the maximum permissible resale price for a therm of gas is now controlled by the Director-General of Gas Supply and landlords must not charge more than that figure. At present tenants who believe that they are being overcharged have to take civil action against their landlord, which most are unwilling to do.
The Gas Consumers Council feels that a more effective measure is needed to prevent overcharging. The council wrote to me stating that both during the House of Lords' debate on the Queen's Speech and on the Second Reading of the Consumer Protection Bill the Government gave assurances about their intention to introduce under Clause 26 of the Bill appropriate regulations on the resale of fuel. The noble Lord, Lord Lucas and I well remember those discussions and I appreciate the help he gave in getting us to the stage that we have now reached.
The council welcomed these assurances and the requirement for landlords who resell gas or electricity to provide their tenants with itemised accounts stating the number of units consumed and the statutory maximum price. While this should be sufficient to deter unscrupulous or ignorant landlords from overcharging, the council feels that action against landlords who fail to provide an itemised bill or who give a false price should not depend on civil action by the tenant. Consequently, the council wishes to see specific mention of regulations regarding the resale of gas and electricity included in the Bill itself. The council also wishes to be consulted about any draft regulations produced.
In view of the importance accorded to the Gas Consumers Council by the Government following the privatisation of the industry, I believe that its views should be taken into account. I should be glad to have the Minister's comments. Perhaps we may return to this matter on Report.
The other matter that I wish to raise is somewhat different. I note what the Government said about Clause 26 at Paragraph 32 in their layman's guide to the Bill. I should be glad if the Minister could clear up a matter that has been brought to my attention and which may or may not be correct. It puzzles me and I should like to have an answer. I have been informed that for some time the Department of Trade and Industry has been discussing with interested parties detailed provisions for a price indications code which would provide a number of rules expressed in plain, easily understood language which would help traders to avoid making misleading claims about prices.
1504
The courts would be entitled to take these rules into account in determining whether a particular claim is misleading but a breach of the rules would not be conclusive evidence of an offence; and traders would have a good defence if they could show that they had followed the code in making a price claim. According to my information this appeared to everyone concerned in those discussions to be a good practicable solution to a particularly tricky area of trade.
My indignant—or perhaps I should say perplexed—informant asked me what we find in this Consumer Protection Bill. He declares that we find a substantial and, in places, obscurely drafted Clause 21 setting out the respects in which a price indication may be misleading. Whether or not a claim is misleading is obviously a question of fact, and the proposed code was advanced on the basis that it would help in determining such questions. Why then, my informant asked, do we want Clause 21 at all? It opens the problem of legal interpretations on what may be misleading and in practice may impede the courts when they take into account the code's provisions.
It seems to me that my informant was right in asking: what do we find in Clause 25? We have already mentioned today that the Secretary of State does not have to approve a code at all. He may do so if he chooses, and in the light of Clause 21 the courts could rule on misleading price indications without the help of a code. Probably all this needs a lawyer to unravel it, and I notice that the noble Lord, Lord Lucas, has one sitting next to him now. I raise this matter because I respect the knowledge and experience of my informant and because I, and doubtless the Committee, will welcome the Government's response to two questions.
First, is it correct that in the light of Clause 21 the courts could rule on misleading price indications without the help of a code? Do the Government consider this as a possible option? Secondly, is it the intention of the Government to approve a price indications code?
Lord Lucas of Chilworth: By way of introduction perhaps I may say that Clause 26 gives the Secretary of State the power to make regulations governing the manner and circumstances in which price indications or any associated information are given by a person in the course of any business of his. Regulations may also make provision for the enforcement of Clause 20 or of any regulations made under this clause.
The purpose of the regulation-making power is to enable specific and detailed requirements to be imposed in any area where this proves to be necessary. For example, it was found that in several sectors recommended retail prices were well out of line with market prices; and the bargain offers order imposed a ban on comparisons with recommended retail prices in the relevant sectors. We intend to use the powers given by the clause to retain those bans.
I accept—and I think the noble Baroness ought to be reasonably pleased—that the regulation-making power is a wide and a general one. Subsection (2) lists certain specific matters for which the regulations may provide. They may prohibit reference to specified matters in a price indication. They may require that a price indication be accompanied by a specified

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explanation or additional information. The power may be used to prohibit the use of disclaimers or to provide that expressions used in a price indication shall be construed in a specific way for the purposes of Part III. They may make contravention of the regulations an offence and provide for the mode of trial and penalties; and they may apply to an offence created by the regulations any provisions of the Bill relating to a criminal offence. That list is not exhaustive but it gives the noble Baroness an indication of our thinking in this area.
I turn to one of the specific points made by the noble Baroness, Lady Burton, concerning the resale of gas. Let me say here and now that I am sure the Committee is appreciative of the efforts of the Gas Consumers' Council and indeed of all the consumer councils. I think that we are all aware of the pressure that they have brought to bear in relation to the price of gas.
We intend to make regulations under Part III of the Bill to require landlords who resell gas and electricity to give itemised bills to their tenants stating the number of units consumed and the statutory maximum price. If there are any other matters the noble Baroness wishes us to consider in regard to that point I am sure that she will make them known to us.
Perhaps I may add one small observation in regard to short term holiday flats or caravans. I accept that in the case of a short-term holiday flatlet or caravan, it could be burdensome to provide individual bills. On the other hand, we have to balance that against a reasonable expectation that the visitor should know exactly how much he is being charged for any gas or electricity that he uses. It may be preferable in those circumstances if regulations were to require a statement of the charges for gas or electricity to be made to the guest on arrival, or perhaps declared by means of a notice on the meter itself. At this stage, I cannot say with total certainty exactly what form the regulations will take but I think that I have given a clear enough indication of the way in which we are moving.
The noble Baroness gave me notice that she intended to raise the question of a price indicators code. In fact, I think that her correspondent was referring to the code of practice. Clause 20 is necessary to set out the basic general offence and the courts must look at Clause 21 when deciding whether a price is misleading. How they use the code will depend, of course, on its status. These are matters that we have put aside for the moment. I think it is clear that we all agree—and certainly the concordat agreed—that we need a code. It is its status that is at issue.
I believe that the noble Baroness's informant has perhaps misunderstood. Some people have called this a code of practice; some people have called it a guide. All sorts of names have been attached to it. I can see that there may have been confusion. If, however, the noble Baroness's informant has a different view, I hope that she will get in touch with me, when I shall try to answer her points. However, that is what I believe has happened in this case.
Baroness Burton of Coventry: I am most grateful to the Minister and I should like to study what he has said. I think, however, that paragraph 32 in the
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layman's guide speaks quite definitely of price indications as well as the code. I do not believe my correspondent was mistaken and I shall take the opportunity of writing to the Minister. However, I thank him for what he has said.
Clause 26 agreed to.
6.45 p.m.
Clause 27 [Enforcement.]
Baroness Robson of Kiddington Baroness Robson of Kiddington moved Amendment No. 85:
Page 23, line 46, leave out subsections (2), (3) and (4).
The noble Baroness said: This is an amendment standing in the name of my noble friend Lord Ezra who is very sorry that he is unable to be here owing to a long-standing previous engagement. It is a probing amendment, tabled in the hope that the Minister will be able to put our minds at rest. We are concerned about the wording of subsection (2) (a). That refers to the power of the Secretary of State by regulations to:
"wholly or partly transfer any duty imposed by subsection (1) above on a weights and measures authority or a district council in Northern Ireland to such other person"
whereas subsection (4) refers to:
"or any person".
We feel that the wording is much too loose, not specific enough. The Minister may remember that my noble friend Lord Ezra raised this subject at Second Reading. The Minister very kindly replied, saying among other things:
"This subsection is in fact in the existing 1978 Consumer Safety Act". [Official Report, 8/12/86; col. 1059.]
I am sure it is, but the fact that it is in the 1978 Consumer Safety Act does not mean that we have to reproduce in this new Consumer Protection Bill something that is not very precise.
The Minister also attempted to reassure us that the transfer of responsibilities for specific regulations would be to such bodies as the Health and Safety Executive. I can see why, on occasions, the Health and Safety Executive would be the appropriate body to enforce the regulations, but I believe that it is perfectly possible for the Government to lay down in the Bill itself the bodies that might enforce the regulations.
We are concerned about the words "any other person" or "such other person" which in our view open the floodgate. We think that the wording should be much more specific. I wonder whether the Minister can assure the Committee of the possibility of such amendment to the clause.
Baroness Nicol: We support the spirit behind this amendment. I shall refer to the wording a little later. The Association of County Councils is concerned about the wording of the Bill as it stands and is anxious that it should be changed and this provision removed. We agree with most of the arguments put by the noble Baroness. We feel that if the Government mean the Health and Safety Executive, or any other bodies, they should say so in the Bill.
We strongly support the intention of the amendment, but, looking at the wording, I have to say that subsection (4) will need to remain because it

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excludes Scotland from the provision. We also feel that there should be a facility to allow the Secretary of State to make regulations. That is removed by this amendment. Having said that, with improved wording, we support the intention of the amendment.
Lord Lucas of Chilworth: I am very grateful to the noble Baroness, Lady Robson of Kiddington, for moving the amendment which she describes as a probing amendment. I am of course glad to hear what the noble Baroness, Lady Nicol, said in general support, although I think that she may like to go a little further than the noble Baroness, Lady Robson, indicated.
The noble Baroness reminded the Committee of what I said earlier when the noble Lord, Lord Ezra, raised the matter. It is a little difficult for me to do much more than pad out what I said at that time. In essence, that said it all.
I can understand that some local authority associations may be unhappy about the power. Indeed they have expressed a certain amount of unhappiness about the power already conferred by Section 5(2) of the Consumer Safety Act 1978. I do not know why that should be, because the power under that Act has not been used to date. Nevertheless, it exists.
One can understand that arguments may be produced that the power to transfer enforcement duty to persons other than what I would call local weights and measures authorities—I put it that way because they have so many different names in different areas, but I think Members of the Committee understand to whom I refer—is unnecessary and inappropriate. However, we think that the power is necessary. Although it is not a new power and, as I suggested, it has not been used, we feel it is necessary to keep it.
The Government have no intention of transferring this enforcement duty wholesale either to central government or to some other body. The power is there for use in exceptional cases. It might be appropriate in respect of goods primarily used at work but also available to consumers or where safety regulations require inspection at factory level.
In some instances the Health and Safety Executive may be the most appropriate enforcement agency in these areas. If one takes the case of medical products other than controlled drugs, which fall within the scope of the safety regulation power, the Secretary of State may be the most appropriate enforcement authority.
It is not practical to require us to list other bodies to which the powers may be transferred. It would be difficult to ensure at this stage that such a list is complete or would even remain complete. We may be able to foresee this evening or next week a role in specialist areas such as I have suggested for the Health and Safety Executive, but I do not think that we can be totally sure about others. With fast-changing technologies it may be that we have to go to a body that is respected and regarded as having particular and specific expertise, a body that may not yet have been formed.
Since the passing of the Consumer Safety Act 1978—and here we are eight or nine years on—there
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has been no demonstration that this power has opened a gate too wide—I believe that was the expression used by the noble Baroness—and so we should like to keep it.
I wish to touch on the point raised by the noble Baroness, Lady Nicol, about Scotland. I am somewhat diffident in doing this when I see the noble Lord, Lord Morton of Shuna, sitting beside the noble Baroness. We do not believe that the deletion of Clause 27(4) will enable weights and measures authorities to bring proceedings. They do not generally have these powers. Subsection (4) is for the avoidance of doubt only. Nor do I think it desirable that the weights and measures authorities should have these powers. I am advised that the Procurator-fiscal is the prosecuting authority in Scotland, and we see no advantage in bypassing him.
Having replied to what the noble Baroness asked me, I ask her to withdraw the amendment on the understanding that I take the point that she has raised.
Baroness Robson of Kiddington: I thank the noble Lord very much for his long and full reply. I am also grateful to the noble Baroness, Lady Nicol, for her support of the amendment.
I said in introducing it that it was a probing amendment to discuss one specific aspect of the enforcement regulations. I heard with interest what the Minister said. I shall take this away and reconsider it. After discussion with my noble friend Lord Ezra, I may bring it back at a future date. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 27 agreed to.
Clauses 28 and 29 agreed to.
Clause 30 [Provisions supplemental to s. 29]:
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 86:
Page 27, line 3, leave out from ("liable") to end of line 4 and insert—

("(a) on summary conviction to a fine not exceeding the statutory maximum; or

(b) on conviction on indictment to imprisonment for a term not exceeding two years or to a fine or to both.")

The noble Lord said: The amendment deals with the sanctions available against a person who pretends to be an officer of an enforcement authority under Clause 30(5). It relates also to a pretence under Clause 29. Clause 29 provides the powers for authorised persons to enter premises other than a residence and to obtain certain records. Clause 30 authorises officers to seize goods and records and to act on a warrant. The only penalty provided by the Bill for a person who engages in one of these activities while pretending to be an enforcement officer is a summary charge and a level 5 fine.
In Clause 38 one finds the penalties that may be imposed on an enforcement officer who goes wrong. Under subsection (5) he may be liable:
"on summary conviction, to a fine not exceeding the statutory maximum;
"on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both".
Looking at the earlier part of Clause 38, one sees what he may be up to. He can disclose information that he has obtained, he can find out secret manufacturing processes and disclose that information and he can disclose anything which was obtained by him in any activity under Part IV.
As I said on Second Reading—and I think this is one of the questions about which the Minister said he would write to me, but it was not included in the answer that I received on the first day of Committee—it seems strange to me that somebody who pretends to be an officer and in this way obtains a secret manufacturing process is liable to a less severe penalty than an authorised officer who discloses information. The one seems just as dishonest as the other.
One can visualise circumstances where it is a serious matter for the possessor of the records, information or process if someone pretending to be a trading standards officer goes in and whips away his records and uses them in competition with or to destroy his business in some way. Why should not the penalty be the same for both? That is the purpose of my amendment. I beg to move.
7 p.m.
Lord Lucas of Chilworth: First, I express my sorrow and tender my apologies to the noble Lord, Lord Morton of Shuna, for any omission in the correspondence we have had since the Bill came to this place. I should not want him to go without the benefit of our view on these matters.
As the noble Lord says, Clause 30(5) makes it an offence to impersonate an enforcement officer. He contrasts that with Clause 38(5). I suggest that that is different, because it would be an abuse of a position of trust for an enforcement officer to disclose confidential information. I think I understand the thinking behind the amendment. The noble Lord has put it clearly. I do not see the necessity for such a provision when the courts and prisons are already overstretched.
I am sure that the impersonation of the enforcement officers will be extremely rare. I ask myself, rather than the noble Lord, what motive would incite someone to act in such a way. I do not deny that such motives may exist, nor do I seek to suggest that impersonation will never occur, but so far as I am aware the penalties contained in the Consumer Safety Act 1978 have not proved to be inadequate. I do not therefore see that there is any point in putting greater burdens upon the courts when there is a measure in force which has proved to be satisfactory. For those few but sincere reasons I suggest that the noble Lord does not press his amendment.
Lord Morton of Shuna: I always find the answers given by the Minister interesting. In Scotland, and I suspect elsewhere in Britain, considerable trouble is caused to the elderly by people pretending to be council officers entering their houses and stealing their property. That is a method that thieves frequently use. I am sure that among the dishonest the relevant section of the Consumer Safety Act 1978 is not general knowledge. If it gets around that all someone who pretends to be an enforcement officer can be penalized
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by is a level 5 fine, people may find it more attractive to try that.
All I am suggesting is that the maximum penalty, not the minimum, should be higher. It would be up to the prosecuting authorities and the courts to decide whether to deal with the matter summarily or on indictment. This provision gives a wider discretion, and that is all that I am asking for. Under the threat that I may come back to this, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 30 shall be agreed to?
Lord Graham of Edmonton: I wonder whether this is a suitable moment to invite the Government to look again at one of the most misleading passages of the Bill. It is the one which deals with the financial and manpower implications. We are discussing Clause 30 and considering the range of duties contained in Clauses 30 and 31 where responsibilities will be laid upon the authorities to ensure that the Bill works.
It is stated:
"There are not expected to be any implications for public expenditure or public service manpower".
I raised that issue on Second Reading, and the Minister made one or two points. He did not accept my strictures. The Association of County Councils has said that the Minister dissembled. I realise that that is a delicate word for anyone to interpret. I leave it to the Minister to draw his own conclusions as to what it means.
All the Minister said was that if extra duties flowed from the Bill, the authorities would have to find from their budget and by the dispersal of their manpower ways in which they could be carried out and that something else may have to go. I am sure the Minister does not intend that we should improve consumer protection by forcing local authorities to squeeze some other service.
We yet again ask the Minister to say something to satisfy the people at the sharp end—the councillors and the council officers—who are running tight ships and who have a wide range of responsibilities. They are worried that without any additional finance, they will be asked to carry a considerable additional burden. I await the Minister's comments.
Baroness Nicol: I wish to reinforce what my noble friend has said. I shall quote what the Minister said on Second Reading:
"Local authorities have the responsibility of directing their energies to enforcement as to other of their responsibilities as they see fit. This has always been so. What effort they put into the enforcement of trading standards is their business".—[Official Report, 8/12/86; col. 1060.]
That statement on its own is all very well, but taken in conjunction with the passage from the Bill that my noble friend quoted it becomes almost cynical.
If the Bill's success or failure is to depend upon the success or failure of the enforcement proceedings, to say that local authorities must find extra money—I think the Minister in his reply was allowing for the fact that there may be extra expenditure—from overstretched budgets is not good enough.

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We are all behind this Bill and behind increased and improved consumer protection. Given the wide-ranging powers contained in the Bill, that means that there will have to be increased supervision by local authorities and trading standard authorities. It is not good enough to say that they must find this money out of existing budgets. I hope that the Minister will give a more sympathetic answer than he did last time.
Lord Lucas of Chilworth: I anticipated that the noble Lord, Lord Graham of Edmonton, might return to this. I confess that I thought he might have moved an amendment which would have enabled me to give more detailed consideration of the response that he now invites me to make. I have to be very careful. I do not underestimate for one moment the work and the dedication of enforcement officers. They have wide-ranging responsibilities in a number of very different areas. Their time is extremely precious.
The noble Baroness quoted what I said at Second Reading; I do not have Hansard with me. However, when I talked about the balance that a local authority had to make with regard to its expenditure, that was a perfectly true statement. They have a budget, and it should be noted here and now that the amount allocated to local authorities for consumer protection and trading standards activities in the rate support grant settlement has increased in recent years—in Great Britain anyway. The allocation was £68·5 million in 1984–85, £70·6 million in 1985–86, and £77·6 million in this financial year. I therefore suggest to the Committee that there is no real shortage of resources for enforcement.
The enforcement authorities already have responsibilities for safety regulations, as we know. The 1986 Act provides for improved enforcement procedures.
A general safety requirement provides a new sanction against unsafe consumer goods and involves enforcement responsibilities.
However, having said that, our trading standards departments are often involved in dealing with complaints and problems about goods not covered by regulations. The general safety requirements that we are introducing into this Bill will facilitate taking more effective direct action in such cases. In other words, I am suggesting that there may indeed be a lessening of the load. Part III replaces Section 2 of the Trade Descriptions Act 1986 and the Bargain Offers Order. The new provision takes account of the difficulties of enforcement encountered under the present law. Again, I am suggesting to the Committee that this will enable more efficient and effective enforcement.
We have given very careful consideration to these matters to which we had to address ourselves, after the noble Lord drew our attention to them. However, we feel fairly satisfied that on balance the new provisions do not have any implications for public expenditure or public service manpower. I do not think I ought to go on further about the general resources—the adequacy or otherwise—made available to local authorities. I do not want to suggest that the report issued today by the audit office has a relevance. There are matters in this Bill which we think have relieved the load to some
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extent. We believe that the job can be done more effectively. We believe that with a greater element of good management and practice the fears which the noble Lord expresses will not be realised.
He asks me to make a comment, and to have a little mini debate on the Question, That the clause stand part. Those are the comments I should like to make. But I should not like the noble Lord or the noble Baroness, or anybody else who may read these proceedings to think that there is any reduction of the standard or standing of enforcement officers in this very difficult and delicate area.
Lord Graham of Edmonton: I am grateful to the Minister. The noble Lord has assured us that he and his colleagues anticipated the possible criticism. They have satisfied themselves on balance with a diminution in some responsibilities and a reallocation of officers. I can understand the argument. Those outside the House inform us of the situation, and not those in Whitehall. From their knowledge they say that this will impose additional burdens. They could be wrong; only time will tell.
On this side of the House we have sought to underline the points raised not only by the ACC but by other authorities. I am not aware of comments or briefs from the enforcement officers themselves. I believe that they will try to do their best, as they have always done, within the limit of their resources. An amendment might have provided a more structured debate but it could not have given us more information than we have from the Minister. The noble Lord knows very well that there is a potential danger but he does not think that it will arise. Those outside the House will have to reflect on the position and advise us if they wish us to do anything else at Report stage.
Clause 30 agreed to.
Lord Beaverbrook: Perhaps it will be for the convenience of the Committee if we do not return to the Committee stage until 8.15. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Local Government Finance Bill
7.16 p.m.
Brought from the Commons; read a first time, and to be printed.

Advocates' Widows' and Orphans' Fund Order Confirmation Bill
Brought from the Commons; read a first time, and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read a second time and reported from the Committee.

Agriculture and Fisheries (Financial Assistance) (Northern Ireland) Order 1987
7.18 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell)The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell) rose to move. That the draft order laid before the House on 13th January be approved.
The noble Lord said: My Lords, I beg to move that the Agriculture and Fisheries (Financial Assistance) (Northern Ireland) Order, a draft of which was laid before your Lordships on 13th January of this year, be approved.
The purpose of the order before your Lordships tonight is quite straightforward. It will effect the transfer of accounting responsibility for certain agricultural and fisheries expenditure from the Ministry of Agriculture, Fisheries and Food to the Department of Agriculture for Northern Ireland.
At present, the Minister of Agriculture, Fisheries and Food is responsible for expenditure within Northern Ireland under certain schemes, although they are largely administered by the Department of Agriculture in Northern Ireland, on an agency basis. In the interest of improved financial management and above all control and in accordance with the principles of the Financial Management Initiative, the Department of Agriculture for Northern Ireland will now become fully accountable for its actions in administering the scheme in Northern Ireland, thus putting Northern Ireland on a similar footing to the treatment of parallel expenditure in Scotland and in Wales.
The transfer of what we call financial responsibility can only be effected by re-enactment in respect of Northern Ireland of the relevant provisions contained in the United Kingdom Acts. Where appropriate, the Northern Ireland element of the provisions within these Acts will be repealed.
I have nothing further to add about the order before us this evening. I stress once again that the order does not amend any existing legislation. I would wish to add that we have had very little comment during the period when the order was available for consultation. With that, and hoping that your Lordships may be able to raise one or two questions that I can answer, I beg to move.
Moved, That the draft order laid before the House on 13th January be approved.—(Lord Lyell.)
Lord Graham of Edmonton: My Lords, I am sure I have not been speaking for 13 minutes as the clock indicates. I am sure there is going to be an adjustment to the time. I see that the message has got through, the time has been altered.
I appreciate the swift, clear and precise manner in which the Minister has drawn and moved this amendment. No doubt when the Minister responds to the spokesman on the Liberal Benches and to myself, he will confirm that what we are concerned with here is a piece of financial mechanism. It is a straight transfer, not of functions but of accounting
responsibilities. It also brings Northern Ireland into line with practising procedure in financial accounting
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and management which at present is laid on Scotland and on Wales. To that extent all we are concerned with is approving the order as quickly as possibly.
Can the Minister tell us whether or not all the various parts that we have are analogous with other legislation and in effect that nothing new has happened? Perhaps he can also confirm that this is the skeleton or framework that facilitates the carrying out of government responsibilities in one way or another as it affects agriculture and fisheries matters in Northern Ireland. I should be grateful if the Minister can comment on two aspects of the order. Concerning Part III, Farm Structure Grants, having read Article 9(6) I am in favour of what it is to do; namely, to make more efficient use of the land and all that flows from it.
Is the Minister able to tell us whether or not his department has had some experience or illustrations of problems that make this clause not only relevant, but actually of use? It is not just a piece of dead legislation.
Concerning the provision in Article 15, Grants for purposes connected with co-operative activities, perhaps I may ask this question. Is the Minister able to say a word of commendation (I don't want statistics because they can mean anything), or support and approval for the use of the mechanism of cooperatives whenever it can be sensibly applied to the problems of agriculture in Northern Ireland? I am well aware of the number of co-operatives, namely supply co-operatives or creamery co-operatives. I do not refer to the consumer side, although there are consumer co-operatives as well. The farming community is well aware of the value of using a co-operative form of organisation to serve its needs in many ways, for example credit, and certainly supply and marketing, come to mind. If the Minister can help me to better appreciate his understanding and sympathy for the co-operative sector, I should be very grateful. Those are the only observations that I wish to make.
Lord Hampton: My Lords, I thank the Minister for introducing this order. As we are told, it re-enacts the provisions of a number of agricultural Acts with amendments as they apply in Northern Ireland. The principal amendments are those which transfer to the Department of Agriculture the relevant functions formerly exercised by the Ministry of Agriculture Fisheries and Food, or by the Secretary of State.
I am intrigued by paragraph 4 of Article 2 which states:
"For the purposes of this Order, the definition of 'agriculture' in the said section 43(1) shall have effect as if the words 'osier land,' were inserted after the words 'meadow land',"
I do not dispute that, nor do I dispute anything in the order. But I would seek some clarification, particularly about pototoes.
Part II has six sections headed Guaranteed Prices And Assured Markets For Potatoes. One must be thankful that we are not back in the desperate potato famines of the 1840s.
I have two questions to ask the Minister. First, what is unique about Northern Ireland that it needs six sections now, and a whole part of this order to deal with the question of potatoes just for that region? Secondly, if there are such special problems in the

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Province, is it not sad that people on the spot cannot sort them out for themselves? With that, we support this order.
Lord Lye11: My Lords, we are grateful for the close attention paid by the noble Lord, Lord Graham of Edmonton, and the noble Lord, Lord Hampton. I hope that we are able to go through the order fairly quickly and effectively.
The noble Lord, Lord Graham of Edmonton, wanted me to confirm that there was nothing new. I do confirm indeed that there is nothing specifically new in the order that is now before us. All that the order is seeking to do is to transfer the financial responsibility from my right honourable friend, the Minister of Agriculture, Fisheries and Food to Northern Ireland, to my right honourable friend the Secretary of State. I understand that the funds will be precisely the same but they will be labelled slightly differently.
There should be no effect at all upon the agriculture scene in Northern Ireland. As far as that aspect is concerned, I stress once again what I said before. The Department of Agriculture for Northern Ireland will carry out much of the work on the scheme and will incur expenditure on an agency basis.
The noble Lord, Lord Graham, also asked me about paragraph 9, the farm grants. I had one comment in the financial appendix which is part of my notes, this was just "closed". I understand that we are dealing in this part with a scheme which is closed to new entrants but there are still funds outstanding and there is still expenditure which is incurred by participants in this scheme. It is not an insignificant amount, I think it is approximately between £39,000 and £40,000 for this financial year. This is the estimate that we believe may need to be spent.
The noble Lord also asked about the question of co-operatives and had a query about the schemes. Part III enables the Department of Agriculture for Northern Ireland to make schemes which will provide grants for the farm amalgamation, or the boundary adjustments of farms. It will provide grants also for outgoers, those farmers who wish to cease farming activities because their farms are either not sufficiently viable to support them and their families or they would wish to leave under one of the other terms of this scheme. It enables the department to incur expenditure as part of that scheme.
Lord Graham of Edmonton: That relates to No. 9, not to the co-operatives?
Lord Lye11: Indeed it does, the noble Lord is quite correct. The noble Lord also asked me about support and approval for the co-operative movement and I think that was No. 15?
Lord Graham of Edmonton: Yes.
7.30 p.m.
Lord Lye11: My Lords, I certainly had short thought on this particular aspect.
Article 15 enables the department to make schemes for the payment of grant for the encouragement of
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co-operative activities in agriculture or horticulture. I understand the total sum that we are thinking about as far as this order is concerned, is in the region of £60,000. I understand this sum will be split into two heads. I understand that the article that we have before us re-enacts Section 61 of the Agriculture Act 1967 which covers England and Wales. The paragraphs go right through providing grants made under the article. Paragraph 1 enables the department with the approval of the Department of Finance and Personnel in Northern Ireland to make varying schemes. Paragraphs 2 to 8 I hope will be reasonably clear for the noble Lord. Certainly I would wish to add our good wishes and our support for the co-operative movement in Northern Ireland. I have been down to at least two of these co-operatives and seen for myself what they do, and I would add my support to the strong words of the noble Lord.
The noble Lord, Lord Hampton, asked me about potatoes. He also asked what was unique about the order. So far as potatoes are concerned, the noble Lord took me to task on Article 4. The detailed arrangements for the support of the potato market in Northern Ireland are currently contained in an agreement between the Ulster Farmers' Union and the Ministry of Agriculture, Fisheries and Food. The system of support for potatoes is not the same, so far as I know, as it is in Scotland and in England and Wales, but we envisage that the same arrangements that we have had until now will continue with the transfer of financial accountability to my own department, which is the Department of Agriculture for Northern Ireland.
The noble Lord, Lord Hampton, will be aware that the Potato Marketing Board is a body which works in Great Britain. The workings of the Potato Marketing Board do not extend to Northern Ireland. The arrangements before us in Article 4 will be operated by my own department in Northern Ireland. The noble Lord asked what was unique about this order. All it does is to allow the financial responsibility to be exercised in Northern Ireland. It does not, I am afraid, give us any more funds for Northern Ireland, much as that may seem attractive. All it does is alter the financial responsibility.
I think I have a note here—although I must have missed it—about, is it "osier"? This is inserted as a technical and legal necessity to make sure that the definition of agricultural land in Northern Ireland is exactly the same as that in Great Britain. I hope that we can leave it there. I hope that noble Lords will agree that we can leave the definition of "osier" there tonight.
If there are further details that either noble Lord requires, perhaps we may pursue those matters in writing. We cannot, I think, go on discussing definitions of land tenure, land law, and other activities of that ilk tonight. I hope that I have covered the points raised by the noble Lords, and with that I beg to move.
Lord Graham of Edmonton: My Lords, before the Minister sits down, and I am not pursuing the matter strongly, he was kind enough to tell us that the department has in mind expenditure of £60,000 in

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pursuing Article 15—that is, the establishment of cooperatives. If £60,000 is an increase from £10,000, it sounds a lot. I am bound to say that £60,000 does not sound to me like a large sum of money. Is the Minister able to tell us whether it is the same as in last year's accounting? Or was it £40,000 last year, which means that this is a modest increase? What is the position?
Although one hesitates to talk in terms of the expense of establishing co-operative schemes, I am not certain how many one would be able to establish with £60,000. Having said that, £60,000 is better than nothing. We accept that. The beneficiaries of the £60,000 will always be grateful for it. The Minister may feel that he can write to me and include a sketch of the financial provision for establishing these cooperatives. It may even be that we do not have to waste the cost of a postage stamp. There may be other means whereby the Minister can answer my query.
Lord Lyell: My Lords, I am advised that the £60,000 I have mentioned is only one element. The total is £175,000. Those are the figures that I have. The noble Lord asked whether this was the total expenditure on Article 15 of the order. I did not bring into the equation some groups who will be called "forage groups". For these, according to the calculations I have, a sum in the region of £113,000 is provided. When I mentioned the figure of £175,000 in total, that is the total sum for what we see as our prepared expenditure on Article 15. The £60,000 is only one element. This is split. But may I write to the noble Lord? It should be a fairly short note, because I do not think that there is a lot of subdivision. The total sum that we see is in the region off 175,000. And three words: we understand that this will be "broadly the same". I think it was broadly the same last year and will be broadly the same over the foreseeable future, as the public expenditure survey forecast for the years ahead. That is how we would see it. I am grateful to the noble Lord for his courtesy.
Lord Kilbracken: My Lords, before the noble Lord sits down, may I come in for a moment on the subject of osiers to which the noble Lord, Lord Hampton, referred? The noble Lord is possibly not aware exactly what osiers are. They are members of the salix genus which are planted for the production of basket work, and so on. They are usually coppiced and produce rods every seven or eight years. They are one of the few ways in which forestry can bring some return without a wait of inordinate period. I have never seen them growing in Northern Ireland nor indeed anywhere in Ireland, but I think that their growth should be encouraged even though that is not implied in their insertion in the order.
Lord Lyell: My Lords, as always, I am indebted to the noble Lord for his technical knowledge. I seem to remember that on a previous occasion the noble Lord gave me great technical knowledge about curlews and what could be done with curlews. I am grateful for his help on osiers tonight. If I can find anything further, I shall write to noble Lords. For all I know, I may be able to write to the noble Lord, Lord Kilbracken, if there is anything to add. I think, however, that the
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balance is on his side, and I am sure that your Lordships will be grateful for his erudition this evening. With that, I beg to move.
On Question, Motion agreed to.
Viscount Long: My Lords, I beg to move that the House do now adjourn during pleasure until 8.15 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The sitting was suspended from 7.38 until 8.15 p.m.]

Consumer Protection Bill [H.L.]
House again in Committee.
Clause 31 [Power of customs officer to detain goods]:
Lord Gallacher Lord Gallacher moved Amendment No. 87:
Page 27, line 44, leave out ("forty-eight hours") and insert ("seven days").
The noble Lord said: In moving this amendment I shall speak also to Amendment No. 88.
We have had considerable representations made to us on this side of the Committee about the wording of the Bill in Clause 31(1) and (3). The view which has been expressed to us is that the proposal that suspect goods can be stopped at the port of entry for 48 hours is an insufficient time for enforcement officers properly to assess whether the goods in question comply with the safety provisions. It is pointed out to us that the fact that the Bill now extends this provision to goods which are not specifically covered by safety regulations means that it is all the more important that enforcement officers are given at least a reasonable opportunity to ascertain whether goods are safe. This needs to be done by testing them in laboratories which are in private ownership and are not open at weekends.
It is also important that enforcement officers are not prevented from exercising their powers over dangerous imports that are arriving at weekends. It is of further importance that the period of 48 hours should be extended. The view is that at least 72 hours are necessary, being the minimum appropriate time in which enforcement officers can perform their duty.
The Treaty of Rome permits restrictions on the importation of goods where such restrictions are justified in the interests of safety. This it is felt is an important argument in support of the amendments we are proposing. The Association of County Councils supports the views I have expressed and has suggested that the period during which customs may hold goods for this purpose should be extended to seven days, which includes five working days.
The Association of Metropolitan Authorities is of a similar mind and has pointed out to us that on Third Reading in another place when the Consumer Safety (Amendment) Bill was being considered the Government tabled and carried an amendment to reduce the detention period from 72 hours to 48 hours. The Association of Metropolitan Authorities was opposed to that move and similarly is concerned to see that 48 hours has been placed in this Bill because

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it regards it as being an insufficient time for the discharge of its functions.
We are suggesting that the period of 48 hours should be extended to seven days and in Amendment No. 88 we are suggesting that the phrase "working day" be defined as meaning,
"any day other than Saturday, Sunday or a Public Holiday".
It seems to us that what we are asking is reasonable and I should like to feel that the Government will make a constructive response to both amendments. I beg to move.
Lord Monson: As the noble Lord is speaking to Amendment No. 88 as well as to Amendment No. 87, let me point out what appears to be a technical defect in Amendment No. 88. The amendment reads:
"In this section 'working day' means any day"—
and so on. In Clause 31, to which the amendment refers, the phrase "working day" appears nowhere, nor will it appear anywhere, even if Amendment No. 87 is agreed to. The word "day" will appear but not the phrase "working day". I do not believe you can have a subsection referring to a "working day" if that term does not appear earlier in the section.
Lord Lucas of Chilworth: I am grateful to the noble Lord, Lord Gallacher, for explaining the reason for putting down this amendment. In fact I believe it to be misconceived and I may take some little time to explain why. The Committee will remember that this issue was debated at some length during the passage of the Consumer Safety (Amendment) Bill last year. We initially thought that 24 hours was sufficient for this limited purpose. We were then persuaded by very strong arguments from the National Consumer Council and local authority associations that up to 48 hours may be necessary to deal with awkward cases.
The amendment would increase the length of time during which goods may be detained at ports without cause to suspect that they are unsafe and without compensation in the event that they are subsequently found to be safe from two to seven days. That is a considerable increase, and it seems to me to be an unreasonable and unnecessary one.
In considering what limits should be imposed on this potentially sweeping power, it is important to look at the purpose of the detention provision. That provision is quite limited and it is in addition to the very much wider powers of enforcement authorities to seize or suspend goods suspected of being unsafe for up to six months. The customs detention provision is not intended to be sufficient to enable enforcement authorities to subject goods to detailed scientific tests or to detailed examinations but merely to allow them to make preliminary inquiries about imports, to arrive on the scene and, if appropriate, to exercise their powers to seize or suspend the goods. To allow goods to be detained for a longer period would in our view put the Bill at risk of challenge from the European Community under Article 30 of the Treaty of Rome.
Precisely where the line can be drawn between what might and might not be acceptable to the European
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Court, given that any measures to impede trade on the grounds of health and safety, as permitted under Article 36 of the Treaty, must be strictly proportionate to the health and safety risk in question, is not easy to establish. Everything will depend on the facts of a particular case. It is therefore the views of the European Court and not those of the Commission which matter in this regard.
It is our view, based on experience of past Community intervention, and given the existence of the other powers available to enforcement officers under this Bill, that an extension of this provision to seven days could well be successfully challenged in our courts on the basis of non-compliance with Article 30 of the Treaty of Rome.
I repeat that the period of 48 hours is there so that an immediate halt can be made to goods moving into the marketplace in order to allow a preliminary view to be made. If that preliminary view suggests that further attention is necessary—the technical examination to which the noble Lord has referred—there are provisions to enable that to take place. We believe that the extension which the amendment seeks is neither practicable nor reasonable and, as I said, it could well be in contravention of our obligations under the Treaty.
Lord Gallacher: I thank the noble Lord for that reply. My first response is that there appears to be a reliance upon what the European Court might say about a longer period of detention under Article 36. On the other hand, one is conscious of the fact that the Commission of the European Communities, in its desire to protect consumers of the Community effectively, has set up machinery whereby unsafe goods are notified by member states through the Commission so that in effect the Community states are all protected by a prior system of notification. Whether that system of notification can be safely triggered on the basis of the kind of inspection to which the Minister has referred—that is, taking place within a period of 48 hours—is a moot point. I should like to consider that in relation to his further reference to Article 30.
The noble Lord did not give me any reason to suppose that if we had been more modest in our amendment—that is to say if we had proposed 72 hours rather than seven days—it might have found favour with him. That, too, will be reflected upon in the light of what we read in the Official Report. We may return to the question on Report, having fully considered what has been said this evening. If we do so return then, we shall take account of the criticism legitimately made by the noble Lord, Lord Monson, on the drafting and the use of the words "working day". I give my assurance that that will not be repeated; and I now beg leave to withdraw the amendment.
Amendment, by leave, withdrawn. [Amendment No. 88 not moved.]
Clause 31 agreed to.
Clauses 32 and 33 agreed to.
Clause 34 [Compensation for seizure and detention]:
Baroness Nicol Baroness Nicol had given notice of her intention to move Amendment No. 89:
Page 29, line 25, at end insert ("and
(c) it is shown that the officer did not have reasonable grounds for exercising the power.").
The noble Baroness said: This amendment was spoken to in our discussion on Part II of the Bill on the last Committee day. I simply want to say that our discussion then was rather shortened because it was late at night and we were hurrying through. We were not entirely pleased with the answers we received then and I wish to inform the Committee that we are likely to come back to this at the next stage of the Bill.
[Amendment No. 89 not moved.]
Clause 34 agreed to.
Clauses 35 to 37 agreed to.
Clause 38 [Restrictions on disclosure of information]:
On Question, Whether Clause 38 shall stand part of the Bill?
Baroness Nicol: I have a question to put to the Minister which has been suggested to us by the Chief Officer of the Trading Standards Department of Cambridgeshire. It refers to the fact that this clause seems to preclude the giving of public warnings in relation to unsafe goods. It is a very long and complicated clause. This aspect of it has just been drawn to our attention; otherwise we should have put forward a probing amendment earlier about this. I give notice to the Minister that we should like an answer to this question. He may not be able to answer it tonight and of course we shall quite understand that. However, the trading standards officer for Cambridgeshire says:
"It is my view that I should be able to offer warnings in a public safety issue, at the same time as pursuing inquiries into a criminal offence. Public safety advice is not a matter which is included in Clause 38(1)".
We should welcome an answer from the noble Lord on that, if not tonight, at a later stage.
Lord Beaverbrook: This is a complicated clause. As to whether trading standards officers are prevented from notifying problems or warning the public about unsafe goods, the answer is basically no. However, I should like to consider the matter further and perhaps respond to the noble Baroness in writing.
Clause 38 agreed to.
Clause 39 [Defence of due diligence]:
[Amendment No. 90 not moved.]
Clause 39 agreed to.
Clauses 40 and 41 agreed to.
Clause 42 [Reports etc.]:
8.30 p.m.
On Question, Whether Clause 42 shall stand part of the Bill?
Lord Williams of Elvel: I raise again a point which was raised on a number of occasions in your Lordships' House on Second Reading and which was raised once or twice in Committee. Clause 42 lays the onus on the Secretary of State to lay a report before each House of Parliament, but in doing so he has obviously to call for reports from the various enforcement authorities and this lays yet another burden on the enforcement authorities.
There is a general point here which we made on Second Reading as to whether finance will be available to enforcement authorities to meet their obligations under the whole of this Bill, if it is passed. I raise this matter on Clause 42 stand part because throughout the whole Bill there are a number of obligations placed on the enforcement authorities but in the Financial Memorandum there is no provision at all for extra public expenditure. It seems to me that there is a case, to which we shall come back when time permits, for ensuring that those enforcement authorities on which obligations are laid should be properly funded by the central authority.
Lord Brougham and Vaux: May I come in here as the noble Lord has raised a subject which I raised in Committee at col. 916 of the Official Report for 20th January? I shall not waste the time of your Lordships' Committee by going through it again, but if the Minister will take note of what I said then in relation to what the noble Lord, Lord Williams, has said, perhaps we can return to the subject at the next stage.
Lord Lucas of Chilworth: I am quite happy to hear from the noble Lord, Lord Williams, and indeed from my noble friend Lord Brougham and Vaux, that they both have some concern in this matter. At this time there is little I can do other than draw to the attention of the Committee, and in particular the two noble Lords, what I said in relation to the point that the noble Lord, Lord Graham of Edmonton, and the noble Baroness, Lady Nicol, raised in an earlier discussion on resources available to the enforcement services.
Members of the Committee should take on board the fact that similar provisions to the provision which is embodied here about a report are contained in Section 8(2) of the Consumer Safety Act 1978. The Committee may recall that the Secretary of State submitted a report to Parliament in October 1986. We do not believe that any further provisions are needed because those that are already in that Act appear to be working well, and I do not believe that this obligation raises any greater burden than the obligation now upon the enforcement services in relation to the Consumer Safety Act. If the noble Lord, Lord Williams, or my noble friend Lord Brougham and Vaux wish to raise the matter at a later stage, we shall of course respond. But I thought it might be helpful if I gave a preliminary view of our feelings in this matter.
Lord Brougham and Vaux: My noble friend referred to the Consumer Safety Act 1978. On my reading of Schedule 5 to this Bill, that whole Act is being repealed.
Lord Williams of Elvel: I am grateful to the Minister for his reply and for the intervention of the noble Lord, Lord Brougham and Vaux. I am very surprised that the Minister should quote in evidence an Act passed by a previous government under a previous administration with a different attitude towards local authority finance. If it were the case that the present Government were going to adopt the attitude of the previous Labour Government to local authority finance, I should be quite happy that he quotes in evidence the Act that we passed. But the fact is that the present Government have shown a pretty stingy attitude towards local authority expenditure and I am surprised again that the noble Lord seeks to pin in some way the responsibility on us for what is after all government policy.
Clause 42 agreed to.
Clauses 43 and 44 agreed to.
Clause 45 [Interpretation.]:
Lord Airedale Lord Airedale moved Amendment No. 91:
Page 35, line 8. at end insert—
(""Community obligation" means a legal obligation arising from the United Kingdom's membership of the European Communities;"
The noble Lord said: I think that "Community obligation" is a widely understood expression, but it probably needs definition according to the rules which govern these things. I beg to move.
Lord Lucas of Chilworth: Again I am grateful to the noble Lord, Lord Airedale, for the way in which he has put his amendment to the Committee this evening. It defines "Community obligation" in Clause 45. In this clause we have defined those words which need defining or interpreting for the purpose of the Bill. The phrase "Community obligation" is relevant to the defence in Clause 4(1)(a) that it shall be a defence for a producer of a defective product to show,
"that the defect is attributable to compliance with any requirement imposed by or under any enactment or with any Community obligation".
There is no need in this Bill to define "Community obligation". The term is already defined for any Act of Parliament. It is defined by Schedule 1 to the European Communities Act 1972 and Schedule 1 to the Interpretation Act of 1978.
For the benefit of the Committee, perhaps I may quote this short definition. It reads:
"'Community obligation' means any obligation created or arising by or under the Treaties whether an enforceable Community obligation or not".
Therefore, I do not think there is any case for introducing a different definition for the purpose of this Bill. I hope that the noble Lord and other Members of the Committee will find that explanation satisfactory and that he will be persuaded not to press this amendment.
Lord Airedale: That sounds a very good answer and I am persuaded not to press the amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 45 agreed to.
Clause 46 agreed to.
Clause 47 [Savings for certain privileges]
On Question, Whether Clause 47 shall stand part of the Bill?
Lord Williams of Elvel: This is perhaps a small point. We note in Clause 47 that there are savings for certain privileges, and privileges as defined are,
"barrister, advocate or solicitor of a record … or in Scotland a confidential communication made by or to him in that capacity".
The problem is that there are other professions that have a confidential relationship with their client, and I am thinking particularly of the accountancy profession. I should be grateful, if the noble and learned Lord the Lord Advocate is to respond to this point, if he would consider whether or not some provision should be made for professions that are in possession of confidential—particularly commercially confidential—information. I refer particularly to Part III of the Bill which concerns commercial confidentiality. I should be grateful if he would let us know whether the Government have considered the possibility that other professions should be protected in the same way as the legal profession.
Lord Cameron of Lochbroom: I am grateful to the noble Lord opposite for having made clear the reason for his query. I think that it has always been recognised that in relation to legal proceedings there is a special privilege that attaches which does not attach in general to other communications between advisers. I believe that the best thing I can do this evening is to say that I shall take note of what the noble Lord has said. I am not persuaded that there is in fact any similarity in the matter of privilege between what is covered here and the privilege which may attach in commerical dealings between an accountant, for instance, and his client, when it comes to legal proceedings. I make that absolutely plain. However, I should like to consider the matter further since the noble Lord has raised it, and perhaps I may write to him.
Lord Williams of Elvel: I am grateful to the noble and learned Lord. I hope he accepts that I am speaking because of representations that have been made to me by certain accountants that, particularly under Part III on misleading price indications, auditors may get involved, may have confidential communications, if you like, and may be in a position in which lawyers would normally find themselves as a matter of practice.
Clause 47 agreed to.
Clause 48 [Minor and consequential amendments and repeals]:
8.45 p.m.
Earl De La Warr Earl De La Warr moved Amendment No. 92:
Page 37, line 44, leave out ("Acts") and insert ("Act").
The noble Lord said: In moving Amendment No. 92 I hope I have the leave of the Committee to speak also to Amendments Nos. 93 and 108. Amendment No. 93 is the substantive amendment. These amendments are to be taken as probing amendments, at least this time round.
The Trade Descriptions Act 1972 requires that imported goods bearing a United Kingdom mark, name or anything likely to be taken as such should be marked with the country of origin. Clause 48(2)(a) repeals that Act. My amendment seeks to reverse that.
It is my profound belief that the present practice is regarded by many people when they are shopping as an important aid to the often difficult question of choice. Happily there are still many people who would rather buy British if they possibly can, and I insist that, coming as it does in a brand new consumer protection Bill, the repeal of the 1972 Act will be regarded as a retrograde step. In my opinion, that is the correct view.
We know that the decision by the Government to repeal this Act has been taken reluctantly following an adverse decision as regards the 1981 marking order in the European Court. What we do not know and what we would very much like to know is whether the Government are going to find a means of repairing the damage and, if so, how; for damage it is, not only to consumers but also to not a few British manufacturing companies. I instance in particular, although there are many others, the case of the Sheffield cutlers.
I must reiterate that I base my questions, as is proper in a consumer protection Bill, primarily on the need to protect consumers or shoppers. I shall therefore boldly venture one suggestion to my noble friend. It may be unavoidable that we should stop insisting on country of origin marking of goods manufactured or assembled in Community countries. But surely the requirement to mark can still apply in law to goods made in other countries, such as Taiwan.
I hope that by now my noble friend will have perceived that I am going short on criticism and long on a request for answers. I hope that the answers he will be able to give will be of help to the Committee. I beg to move.
Baroness Nicol: We have the greatest sympathy with the amendment moved by the noble Earl, not only because we feel that it is right that people should be able to buy British when they wish to do so, and not only because buying British usually means that one gets better quality. People also often wish to avoid buying from other countries for a variety of reasons. For example, there are many who would not wish to buy toys from Taiwan, where the safety record is not good. There are many who would not wish to buy goods from South Africa for reasons of which the Committee will be aware. There are many countries which, for a variety of reasons, fall on to the black list of many people who do not wish to support them. However, above all many people wish to buy British where they can. I think that opinion is widely held in this House.
I hope that there will be a sympathetic answer, although I do know there is a difficulty with Common Market legislation. However, I feel that we must find a way round that because we are now in a situation
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where, even if we accept the suggestion of the noble Lord that countries within the Common Market should be excluded from the need for labelling, there is nothing to stop someone, say, in West Germany from importing goods from an outside country, relabelling them and then selling those goods in this country. It would be impossible in those circumstances for the goods to be identified. I hope that the noble Lord the Minister will find a clever answer.
Baroness Elliot of Harwood: I should like to support what my noble friend Lord De La Warr has said. Years ago when I was chairman of the Consumer Council, this was one of the things which continually cropped up. People wanted to know the origin of goods which they were buying. In those days things were nearly always marked with the country of origin. That is information which everybody wants and it does seem to me unfortunate that we have to give that up now.
The noble Baroness mentioned the European situation, and I realise the difficulty. On the other hand, there is the possibility of making arrangements which may not in any way offend the EC but which will make it perfectly clear that what the British public is buying is labelled as to country of origin. It is something which everyone wants to know, and apart from the patriotic angle of buying British (which I am sure most of us should like to do) I think it is important that we know where goods come from and do not find ourselves buying goods from countries of which we strongly disapprove. That could well happen.
I do hope that the Minister will consider this and see whether or not some arrangement can be made to safeguard consumers against buying goods from a country whose products they do not wish to buy.
Lord Lucas of Chilworth: I can readily understand the concern which has prompted these amendments, but I ask the Committee to accept that the repeal of the Trade Descriptions Act 1972 is necessary in order for the United Kingdom to comply with its Community obligations. I should also like to reassure the Committee that the Government are leaving no stone unturned in their efforts to identify further measures which might be introduced to mitigate the effect of that repeal.
The European Commission has formally challenged the legality of the Act under the Treaty of Rome and, were it not to be repealed, the matter would come before the European Court of Justice. We have most carefully studied an earlier judgment on similar legislation and this has led us reluctantly to conclude that we could not hope successfully to defend the Act in the Court of Justice and that no useful purpose would be served by attempting to do so. We are therefore currently consulting interested parties on the scope for successor arrangements, consistent with Community law, which might be introduced by order under the Trade Descriptions Act 1968 to coincide with the repeal of the 1972 Act.
Perhaps I may assure my noble friend Lord De La Warr that we are well aware of the cutlery industry's concerns, as we are of other industries' concerns, and we shall certainly be consulting them closely about the successor arrangements. Having said that, I should advise the Committee that our consultations with

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interested parties on the scope for the successor arrangements are already in hand in some areas.
I should also explain to the Committee that even if it is not possible to replace the 1972 Act with further measures—and I hope that it will be possible—there will be nothing to prevent manufacturers from marking their goods as "Made in Britain"—and indeed I hope they will do—which I am confident that most British manufacturers will wish to do. There is nothing wrong in that. There is nothing to prevent them from doing it. It will remain an offence under the Trade Descriptions Act 1968 to describe goods as made in this country if in fact they are made abroad.
In proposing the amendment to the Committee my noble friend suggested that one solution to meet the constraints of Community law would be to exempt goods made in the Community from the requirement for origin marking but to continue to require this for goods from outside the Community. The Government conducted consultations on the merits of such a solution in the case of the 1981 origin marking order which was revoked last year after an adverse judgment in the European Court. It was clear from the views expressed that to exempt Community goods would create a highly confusing situation for traders, consumers and enforcement officers.
The treaty requires that any such exemption would have to apply also to goods from outside the Community which enter the United Kingdom via another member state—exactly the point made by the noble Baroness. This would create the absurd situation whereby a shirt made in Taiwan—I shall stay with something rather anodyne if I may—would have to be origin marked if it arrived direct from Taiwan but not if it reached this country via a wholesaler in Antwerp.
The Committee will be interested to know that last year the French Government completely revoked some of their origin marking legislation dealing with textiles, after earlier simply exempting Community goods. I say in the friendliest of terms to our French partners that they are not perhaps generally reckoned to be backward in these matters. They concluded that the solution did not work and I have no doubt that the same would be the case in this country.
One can foresee the situation—and I stress this point to my noble friend Lady Elliot—that if we made it obligatory for goods to be marked "Made in Britain" or "Produced in Britain"—and I pick by chance, because I was talking about France, the French position—it might work adversely in the area of the fruit industry. Perhaps the French prefer French Delicious to British delicious apples. We run into a number of difficulties in making some of this marking obligatory. I hope that the United Kingdom manufacturer will be sufficiently proud of his product to so advertise the fact if it is in his interests, especially in export markets.
I have no clever answer. We continue to study the matter; we hope to find a solution and we shall work towards that. I conclude by saying that we are not blind to the point of view put forward by my noble friend, nor indeed to the points put forward by other noble Lords.
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I hope that my noble friend will not condemn the United Kingdom to certain defeat in the European Court of Justice by persisting with his amendment. I am sufficiently optimistic from his earlier remarks that it is a probing amendment that he will not do so.
Lord Williams of Elvel: Yet again the Minister says that consultations are in progress and that in the course of time something will come out of them. May we please have an indication from the noble Lord—because this matter was raised at Second Reading and he gave, if I may say so, more or less the same reply then as he has given this evening—as to when his consultations will come to a conclusion and when he can bring before the House some indication to his noble friend that his problems have been met?
Lord Lucas of Chilworth: I do not know whether the noble Lord is trying to tease me this evening. He knows, because he has experience of these matters, that I cannot put a date on it. The consultations may take a long time, and I mean a long time; and I hope he is not going to ask me what I mean by "long". We usually have this in terms of "short".
It is not easy to find a solution. We have to ensure that, by virtue of an amendment of this nature or by virtue of our taking appropriate steps such as the Bill does in the repeal of that Act, we do not find ourselves in default over our obligations in the Community. We seek to find an alternative to that which we have generally regarded, if I may use the term, as protective. I hope we can. We have been consulting. We seek a number of avenues and we have then to study what our proposals might be in relation to our obligations. Again we have to consult in Europe. We would want to carry our EC partners with us, and that is one of the reasons why I described the position in France.
I have to say to the noble Lord that I am sorry, but I cannot give him an indication. I said at the outset that we regard this matter as important and urgent. With all the obligations that my officials in the department have, not least with regard to the Community, I have to say that we cannot pick and choose as to which receives highest priority. We try to treat all with a high priority.
9 p.m.
Earl De La Warr: I am extremely grateful to my noble friend for the trouble that he has taken to answer me as fully as he can. I am possibly a little more optimistic than the noble Lord, Lord Williams of Elvel, so I can now tell him that I shall be coming back at Report stage to find out how the Government are getting on. Believe me, I do not underestimate the difficulties.
My noble friend mentioned the Act of 1968. He has not mentioned something else which I understand was mentioned in correspondence from his department; namely some food regulations, expanded suitably. He made a point about the manufacturers in Britain wanting to have "Made in Britain". With the greatest respect, I think that is something of an irrelevance. However, he has told us that the Government are addressing themselves to that and will be inquiring again in three weeks time. In view of what he has not been able to tell us, perhaps I may leave him with a few thoughts.

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One matter was touched upon almost completely by the noble Baroness, Lady Nicol. It is well known that in certain European countries—perhaps it is better not to mention names—companies are importing goods from Taiwan and other places in the Far East and re-exporting them, but they are marking them—perhaps I dare say it—"Made in Holland" or "Made in Germany", as the case may be. I do not want to impute anything too much in the way of bad faith, but I now see why some of our partners do not like this 1972 Act because they are constantly in breach of it. That was the point that the noble Baroness reached, but I do not think she mentioned the final sting. That may be something which my noble friend could consider during the next three weeks.
He may also like to think about Article 36 of the Treaty of Rome because it relates to it. That article is concerned with the protection of industrial property rights; therefore, by definition, it seeks the protection of those rights against unfair trading practices. I use the words "unfair trading practices" deliberately in view of the practices to which I have just referred.
I repeat my thanks to my noble friend for all that he has said so far. At Report stage I hope to hear the next thrilling instalment in this saga. With the leave of the Committee, I shall now withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 93 not moved.]
Lord Lucas of Chilworth: Before we leave Clause 48 I should like to respond positively to my noble friend Lord Brougham and Vaux. I am sorry that he is not in his place because he specifically asked about the repeal of the Consumer Safety Act 1978. We moved on rather quickly and I should have told him that, although the 1978 Act will be repealed, its provisions will continue in the Bill. In this regard the Bill is a consolidation measure. I think he should know that before he proceeds in the way that he indicated.
Lord Williams of Elvel: On the noble Lord's point, do I understand that the whole of the 1978 Act will be consolidated in this new Bill or only parts of it?
Lord Lucas of Chilworth: My understanding is that only parts will be consolidated.
Clause 48 agreed to.
Clause 49 agreed to.
Clause 50 [Short title, commencement and transitional provision]:
[Amendment No. 94 not moved.]
Clause 50 agreed to.
Schedule 1 [Limitation of Actions under Part I]:
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 95:
Page 40, line 21, after ("knowledge") insert ("or should reasonably have had knowledge").
The noble Lord said: Now we come back to Part 1 in the directive which for some reason best known to those on the other side of the Committee was not dealt with with Part I. This concerns the provisions
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regarding limitation of actions, and it is unfortunate that the Committee is as crowded as it usually is when discussing something as abstruse as this, because in fact it causes much more difficulty than may be realised by those who are not lawyers.
My Amendment No. 95 is a fairly straightforward attempt to add, with such respect as I should properly have for the law of England and Wales, to the provisions in the schedule the words in the directive,
"or should reasonably have had knowledge".
The directive by Article 10 says:
"The limitation period shall begin from the day on which the plaintiff became aware or should reasonably have become aware".
It is to bring in that "reasonably have had knowlege" that this amendment is proposed. Otherwise it does not appear to me that the provision as drafted, in spite of Clause 5(7), meets the requirements of Article 10 of the directive. I beg to move.
Lord Cameron of Lochbroom: The schedule is of course being considered at its proper time, as was explained at the outset of the Committee's discussions. Let me say that, while I appreciate the reasons why the noble Lord raises this matter, it is as well to see where the provision falls which his amendment seeks to amend. It is of course in Section 14 of the 1980 Act. As the noble Lord will be aware from his study of that Act, Section 14(3) reads as follows:
"For the purposes of this section a person's knowledge includes knowledge which he might reasonably have been expected to acquire".
It then proceeds from there. That will remain unchanged. The effect of the present proposals in the schedule is to add something which will refer to knowledge and which will by reference take in the words:
"might reasonably have been expected to acquire".
The view is, as I think the noble Lord will understand, that that is equivalent to what the directive is seeking to achieve. For that reason we take the view that the schedule as drafted is adequate.
Lord Morton of Shuna: I am obliged to the noble and learned Lord. It is always interesting for two Scots to be discussing possible amendments to English law.
I have the curious notion that it is easier to say what is required in one sentence. To say,
"had knowledge or should reasonably have had knowledge",
conveys the idea rather more quickly than to wander from one section to another. As usual at this time of night, I have to say to the noble and learned Lord that I shall study what he said and I may well come back at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 96:
Page 41, line 1, leave out paragraph 6.
The noble Lord said: In one sense this is a probing amendment. One wonders at times—especially perhaps when one is told at this end of the kingdom how well the economy is doing but in Scotland one has rather a different picture—why the Department of Trade and Industry adopts a different attitude to England than to Scotland. What the department has

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done in this Bill is to give in the English part of the limitation provisions the discretion which exists in the Limitation Act to extend, for adequate reasons, the three-year limit.
When the Government were drafting the provisions in relation to Scotland they cut that out. Therefore, no discretion is given in Scotland to extend the three-year limit, although there is to be a discretion in England. If the Government can convince the Committee that there is reason to believe that they can get away with the discretion not being in contravention of Article 10 of the directive, I should be in favour of it. However,
I would then ask why should it apply only to England and not to Scotland. In that sense it is a probing amendment. If the noble and learned Lord can convince me that it is proper to have this discretion, no doubt he will have to say that he will come forward with an amendment which will give that discretion to Scotland, too. I beg to move.
9.15 p.m.
Lord Cameron of Lochbroom: The noble Lord started with an irrelevancy and proceeded to deal with a matter that is not, of course, strictly before the Committee tonight with regard to the discretion in Scotland. However, I take the serious point that he made. He asked me why this discretion is given in England. Article 10 of the directive, which deals with the matter of limitation, provides that,
"The laws of Member States regulating suspension or interruption of the limitation period shall not be affected by this Directive".
This permits, in respect of the law in England, the discretion which is already provided, as the noble Lord recognises, in the limitation Act to continue to affect actions arising out of Part I of the Act.
I have to say that the text "suspension or interruption" has been used in similar contexts in other international instruments. It is apparent that it has been interpreted in a commonsense way to cover all the cases in which the limitation period in exceptional cases might be suspended and so extended under domestic law. I give one example which is that found in the Maritime Conventions Act 1911, in particular in Section 8.
For that reason, the view has been taken that Article 10 does not prevent the existing law—so far as concerns suspension or interruption of the limitation period, which, of course, applies to actions for personal injury—from applying to actions for such injury arising under Part I of the Bill. However, the noble Lord opposite pointed out what at first sight would appear to be a distinction that is drawn in Part II of this schedule. We shall be dealing with that shortly. I can say to the noble Lord opposite that I am very sensible of that matter and indeed there is a somewhat similar discretion already operative in Scotland in relation to personal injuries actions.
While not wishing to anticipate what I may say if the noble Lord opposite moves amendments directed to that part, there are aspects of it that we would wish to consider in the light of those amendments together with the more general matter which arises in relation to the point he has made on this amendment. I hope that, in view of the explanation that I have tendered,
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the noble Lord will feel that there is ground for using the present discretion, which is granted to courts in England and Wales (and, I suspect, probably Northern Ireland, though I only suspect it) to extend the operation. I accept, of course, that Northern Ireland would have to be brought in by way of order. That discretion would be covered by the article in the directive. Perhaps with that explanation, the noble Lord opposite may feel able to withdraw his amendment.
Lord Morton of Shuna: Certainly on that undertaking and awaiting eagerly an explanation as to why in the second part of the schedule there is no reference to Section 19A of the Prescription and Limitation (Scotland) Act—which no doubt we shall have in a few minutes—I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 97:
Page 41, line 23, leave out paragraph 8 and insert—
("8. In section 7(2) after the words "not being" there shall be inserted the words "a liability to which section 22A of this Act applies or" ").
The noble Lord said: It may be for the convenience of the Committee if I deal with Amendment Nos. 97, 98 and perhaps 99 in the one group.
The amendment has sought to take up what is dealt with in Part I of the Bill, and in the directive. That is, "a liability". The schedule is framed in a way which speaks of an obligation in a kind of lay sense. It could perhaps be argued that an obligation is the mirror image of a liability, but that is not strictly the same. If one wanted to be strictly accurate in dealing with the directive in Part I, one should deal with a liability because a liability can be different from an obligation, and it is a liability with which the directive (and therefore Part I of this Bill) deals and not an obligation. Therefore the prescription and limitation provisions should deal with liabilities rather than obligations. It is for that purpose that I have endeavoured to draft these amendments. I beg to move.
Lord Cameron of Lochbroom: I think the noble Lord recognises from what he said that there is no real distinction to be drawn between the "liability" and "obligation".
I should point out to the Committee that this part of Schedule 1 deals with amendment of the Prescription and Limitation (Scotland) Act 1973. That Act—Part I in particular—deals with prescription and limitation in respect of prescription of rights and obligations. It does not provide for the prescription of liabilities.
It is fair to point out to the noble Lord the list of obligations set out in paragraph 1(d) of Schedule I of the 1973 Act, which refers to:
"any obligation arising from liability (whether arising from any enactment or from any rule of law) to make reparation".
For that reason it seems to the Government that this matter is properly described as an obligation arising by virtue of the liability that attaches in Part I of the Act where damage is caused wholly or partly by a defect in the product. I cannot therefore accept the amendment. The noble Lord may like to consider what I have said, and withdraw the amendment.
Lord Morton of Shuna: I will of course (without any promise that I will not come back) withdraw Amendment No. 97.
Amendment, by leave, withdrawn.
[Amendment No. 98 not moved.]
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 99:
Page 41, leave out from beginning of line 40 to end of line 3 on page 42 and insert—
("(2) Section 9 of this Act shall apply in relation to the meaning of "relevant claim" as if the person liable under section 2 of the 1987 Act were the debtor and the person entitled to reparation were the creditor.").
The noble Lord said: I wish to take the opportunity of raising a point that I should have raised earlier on the question of a relevant claim. A relevant claim is defined in Section 9 of the 1973 Act as including certain steps in the bankruptcy provisions. I am asking whether the Government are satisfied that this is a relevant claim in the meaning of the directive. Article 11 states,
"unless the injured person has in the meantime instituted proceedings".
If one lodges a claim in a bankruptcy, in no sense that I understand does one institute proceedings. I take the opportunity of the amendment to inquire whether the Government are satisfied that they have covered the question of a person putting in a claim in a bankruptcy. I beg to move.
Lord Cameron of Lochbroom: I am grateful to the noble Lord and I apologise to him because I had meant to cover that point, as he spoke to this amendment with the previous one. The view is that reference in the directive to "instituting proceedings" would allow a provision to be made for the interruption of prescription by the making of a claim in "appropriate proceedings" and even in bankruptcy. However, it is doubtful whether the execution of dilgence, which is also referred to in Section 9(1) of the 1973 Act, could be described as "instituting proceedings", and it has not been included in the definition of "relevant claim" for the purpose of the Bill.
However, consideration of that matter as a result of the noble Lord's amendment has drawn attention to the possible need to incorporate something similar to Section 9(3) of the 1973 Act, which defines when a claim may be said to be made in arbitration proceedings. If that is found to be necessary, an appropriate amendment will be brought forward on Report. I am grateful to the noble Lord for having brought this matter forward.
Lord Morton of Shuna: I thank the noble and learned Lord for his answers. In those circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 100 not moved.]
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 101:
Page 42, line 14, leave out from second ("the") to end of line 21 and insert ("pursuer in the action became or on which in the opinion of the Court it would have been reasonably practicable for him in all the circumstances to become aware of all the following facts:
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(i)that the damage or injuries were sufficiently serious to justify his bringing an action of damages on the assumption that the person against whom the action was brought did not dispute liability and was able to satisfy a decree;

(ii)that there was a defect in the product;

(iii)that the damage or injuries were attributable in whole or in part to that defect;

(iv)that the defender was a person liable under section 2 of the 1987 Act.").

The Deputy Chairman of Committees (Lord Airedale): If the Committee were to agree to Amendment No. 101, I could not call Amendment No. 102.
Lord Morton of Shuna: I heard what was said about Amendment No. 102. I shall have to think about that. In speaking to Amendment No. 101, I shall speak to the almost identical amendment, Amendment No. 104. The purpose of Amendments Nos. 101 and 104 is to try to tie back the requirements of knowledge contained in the Prescription and Limitation (Scotland) Act 1973 with the requirements of the directive in what I hope, with all due diffidence, is perhaps happier language than occurs in the Bill as presently drafted.
It would be unfortunate, in what has always been for lawyers most difficult and case-producing legislation, to start using different words and phrases when, after 14 years, we are beginning to understand what is meant by the words in the 1973 Act. If one introduces new words, one introduces a new 10-year period of litigation for the courts to tell us what they mean and why different words are used in different sections of the same Bill.
I shall mention Amendment No. 102. The purpose of that amendment was merely to comply with the directive because the directive says that the three necessary items that one must be aware of in Article 10 are the damage, the defect and the identity of the producer. It is therefore necessary to say somewhere that the potential pursuer must he aware that there is a defect in the product. I beg to move.
Lord Cameron of Lochbroom: It is always difficult, particularly in the light of the Deputy Chairman's ruling, to decide whether to dangle the carrot now or later. Were the noble Lord in due course to move Amendments Nos. 102 and 105, I would have little difficulty in accepting them. On Amendment No. 101, I recognise that he has raised two important points. The first concerns the test of a claimant's constructive knowledge. The amendments follow a test set out in the 1973 Act, as amended. To explain the Government's thinking, I have to say that what is set out there is in somewhat different terms from Article 10 of the directive, which refers merely to the date on which the plaintiff should reasonably have become aware, and so on. As drafted, the schedule was considered to be safer in giving effect to the directive, in that it followed the wording of Article 10 rather than attempting to gloss its meaning by adopting the test which was in the 1973 Act.
The second point, a similar one, arises with regard to the description of the damages of which the pursuer has to be aware or reasonably aware. Again the

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amendment of the noble Lord follows an approach in the existing legislation, whereas Article 10 of the directive simply refers to knowledge of the damage without reference to the significance of it. Again in these circumstances it was considered that it would be safer in giving effect to the directive to follow closely the wording of Article 10 rather than glossing its meaning by importing a qualitative test of the damage.
Nevertheless, I am persuaded by what the noble Lord said that we should give further consideration on this matter. As a result, if it is thought that it would be both possible and preferable to bring forward amendments, appropriate amendments would be brought forward at a later stage.
I should perhaps say to the noble Lord that his second amendment, Amendment No. 104, is defective. At present a claimant in a fatal accident, whether an executor or a dependent relative, has three years from the date of death or from the date of his actual or imputed knowledge, whichever is the later, in which to commence proceedings. This amendment would have the effect of preventing the three-year period running from the date of death of the injured person. I suspect that that was not the intention of the amendment but unfortunately, as printed, that is the consequence of it.
Having explained what I would wish to do if the Committee were so minded. I invite the noble Lord to withdraw his amendments at this stage to allow further consideration.
9.30 p.m.
Lord Morton of Shuna: I am much obliged to the noble and learned Lord. Perhaps in relation to Amendment No. 104 it would have been preferable if those advising him had looked at the corrected amendment. The original amendment had a misprint—no doubt due to my very bad writing—which referred to line 34. On the Marshalled List it is line 36. The date of death of the injured person remains. It is the later of the two dates. I believe that the noble and learned Lord has been wrongly instructed. I spotted that error earlier.
Lord Cameron of Lochbroom: I merely say mea maxima culpa.
Lord Morton of Shuna: Having scored that very small point, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees: My earlier reference to Amendment No. 102 was to point out that it is an amendment to line 18 and had Amendment No. 101 been agreed to there would not have been a line 18 to be amended. Amendment No. 102 remains available to be debated.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 102:
Page 42, line 18, at end insert—
("(aa) that there was a defect in a product;")
The noble Lord said: The noble Lord the Deputy Chairman is perfectly right. Amendment No. 101
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contains the words in sub-paragraph (ii). They are now being sought to be put in under paragraph (aa) in the amendment. In view of the unusual but pleasurable response that I received from the noble and learned Lord, all I have to do is move this amendment. I am also speaking to Amendment No. 105.
On Question, amendment agreed to.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 103:
Page 42, line 25, at end insert—
"(5) For the purpose of this section, knowledge that any liability which was enforceable under section 2 of the 1987 Act was or was not as a matter of law actionable is irrelevant.")
The noble Lord said: In speaking to this amendment, I shall speak to Amendment No. 106 as well. By Section 22(3) of the Prescription and Limitation (Scotland) Act, this clause, or something along the same sense, is put into Sections 17 and 18 of that Act. It is a necessary clause on the basis of the legal theory that ignorance of the law is no excuse. It would appear to have been omitted inadvertently from the new provisions 22B and 22C. It is in an endeavour to put that right that these amendments are put forward. I beg to move.
Lord Cameron of Lochbroom: I can assure the noble Lord opposite that the fact that this was not put in was not through inadvertence. At the time it was felt that is was unnecessary by reason that if liability would be enforceable under Section 2 of the 1987 Act as his amendment has it, then it must, almost by definition, be actionable and therefore it would be unnecessary to include that. Having said that, there is a problem which can arise; for instance, the question of whether or not the defect was of such a nature as to give rise to liability under Part I. I am bound to say that it would be proper that we should give further consideration to that question. It may be that at the end of the day something very akin to what is already in the 1973 Act as amended, may be brought forward. If such provision is required, I shall certainly come back to your Lordships on Report for that purpose. On that understanding, perhaps the noble Lord may feel able to withdraw this amendment.
Lord Morton of Shuna: I certainly intend to withdraw the amendment. However, before doing so, perhaps I can bring to the attention of the noble and learned Lord the difficulty that arises if there is the same provision in Sections 17 and 18 of the 1973 Act, but it is left out from Sections 22B and 22C. Are you not opening the way for somebody to say: "I have never even heard of the 1987 Act, therefore I did not know I had a right"? Then you might be in trouble. But, in the certain knowledge that the noble and learned Lord will consider that point, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 104 not moved.]
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 105:
Page 42, line 37, at end insert—
("( ) that there was a defect in the product;").
On Question, amendment agreed to.
[Amendment No. 106 not moved.]
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 107:
Page 43, line 9, leave out paragraph 11.
The noble Lord said: This amendment is really in the nature of a probing amendment. Why in Schedule 1, which is an attempt to bring the limitation provisions into line to comply with the directive, is it necessary to take out a section of the 1973 Act which says:
"The enactments specified in Part 2 of Schedule 4 to this Act shall have effect subject to the amendments specified in that Schedule being amendments consequential upon the provisions of this Part of this Act"?
No doubt somebody has some reason for taking it out, but I fail to understand why it has to go. I confess I do not follow at all. Therefore, my amendment is to leave out this rather extraordinary provision. I beg to move.
Lord Cameron of Lochbroom: Perhaps I may say that my sympathies were with the noble Lord when I first saw this particular part of Schedule 1, but I am advised that it is necessary because it is a drafting device to ensure that the new Part II of the Prescription and Limitation (Scotland) Act 1973—whose provisions to which we have already referred in our discussion earlier—is inserted immediately before Part III of that Act, which seems to be a suitable place for it to be.
Paragraph 11 provides for the repeal of Section 23 of that Act, which is the last section in Part II, so as to make space for the new Part IIA, and the effect of Section 23 is retained. This unusual provision is drafted in this way because of the difficulty left by the manner in which the 1973 Act was amended by the Prescription and Limitation (Scotland) Act 1984. The 1984 Act inserted a new Section 23A at the beginning of Part III. However it was intended in this Bill to insert a new Part IIA after the end of Part II and before Part III; that is to say, between Section 23 and Section 23A. In these circumstances it would be difficult to provide appropriately for the numbering of the sections in the new Part IIA.
I trust that the noble Lord opposite is with me so far. In these circumstances it was considered by the parliamentary draftsman that the most appropriate way of giving effect to what was intended was to provide for the repeal of Section 23, because that was a purely formal provision which provided for the amendments and repeal of certain amendments. In so far as Section 23 repealed certain enactments it is spent. In so far as it affected consequential amendments it may be argued that it is also spent. However, there is no clear authority on the latter point, and it is the practice of the draftsman to assume that such a provision is not spent, and hence the saving of these amendments, "for the avoidance of doubt".
I trust that, with that somewhat lengthy and convoluted, but I hope on the whole reasonably acceptable, explanation the Committee are clear as to the need for paragraph 11 and are satisfied that the
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amendment, which would remove it, should not be accepted. I have to say that, like the noble Lord, I asked when this matter was first brought to my notice why we should do it this way. However, I am satisfied that, because of the peculiarity of the way in which the 1973 Act has been amended, and the juxtaposition of the various parts and sections of that Act as amended, it is unfortunately necessary to go about the process of amendment in the way that I have already outlined. I should also say that I have to commend the draftsmen upon their ingenuity in securing the end that was asked of them.
Lord Morton of Shuna: I also commend the ingenuity of the draftsmen. The last time they were faced with this situation, if my memory is right, was in some consequential amendment to the Financial Services Bill, as it then was. We had a section, so to speak, 23 zero. Why the draftsman has to work out a second way round the roundabout I do not quite understand. Whether one calls it 23 alpha or 23 zero, or whatever, there surely must be a clearer way of doing it.
I have heard the explanation. I am sure that there must be a simpler way sometimes of drafting some of our legislation. However, it was an interesting explanation, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Schedule 1, as amended, shall stand part of the Bill?
Lord Morton of Shuna: There is another small point testing the ingenuity of draftsmen. How do we have in paragraph 12 of Schedule 1 the insertion of a new sub-paragraph in paragraph 2 of Schedule 1 of the 1973 Act labelled "(gg)", when the draftsman was well aware that the noble and learned Lord opposite put in by the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 Section 12(5), a paragraph (gg)? Should it not be (ggg) or something else?
Lord Cameron of Lochbroom: The noble Lord is, unfortunately, I have to say, correct. We must move from one horse to a second and, that being so, I shall take note of what the noble Lord has been kind enough to say and that will form the basis of an amendment at a later stage.
Schedule 1, as amended, agreed to.
Schedules 2 to 4 agreed to.
Schedule 5 [Repeals]:
[Amendment No. 108 not moved.]
Schedule 5 agreed to.
House resumed: Bill reported with amendments.
House adjourned at thirteen minutes before ten o'clock.