HL Deb 12 March 1987 vol 485 cc1140-57

3.26 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 Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.—(Lord Lucas of Chilworth.)

On Question, Motion agreed to.

Clause 20 [Offence of giving misleading indication]:

Lord Morton of Shunamoved Amendment No.42: Page 17, line 40, leave out ("of his").

The noble Lord said: My Lords, if I may, I shall speak to this amendment in the name of my noble friends Lord Williams of Elvel and Lord Gallacher. It is a simple amendment to delete two words, "of his". I shall also speak at the same time to an identically worded amendment, Amendment No.43.

This subsection makes it an offence to give a misleading price indication, and the crucial words are: in the course of any business of his". The words "of his" appear to be quite unnecessary and unnecessarily restrictive. What is to be the position of somebody who is giving a misleading price indication in the course of his employer's business, possibly unauthorised by his employer? Is that employee who is acting against instructions to be safe from prosecution? That is the way it reads.

There does not appear to be a necessity for the words "of his". The sense would remain if it is just in the course of any business", which would restrict the subsection to a business use, so to speak, but allow the prosecution of somebody who might say, "Well, it was not my business. I was acting for somebody else when I gave the misleading price".

No doubt the noble Lord or the noble and learned Lord, whoever who is to reply, will refer to subsection (3)(a) of this clause, but that does not give a complete answer. It says, whether the person who gives or gave the indication is or was acting on his own behalf or on behalf of another", shall be immaterial. All well and good, but what happens if the basic premise is that he was not acting on any business of his but on somebody else's business? For those reasons, I beg to move.

Lord Denning

My Lords, let me say a word in support of this amendment. The words "of his" are not only unnecessary but misleading. Take an ordinary private limited company, a £100 company. That is not the business of the man who makes the representation; it is the company's business. It is not the director's business; it is the company's business.

It seems to me that the matter would be entirely obscure unless you have subsection (3): For the purposes of this section it shall be immaterial—(a) whether the person who gives or gave the indication is or was acting on his own behalf or on behalf of another". He may be acting on behalf of another person's business. It would not be his business. He would still be liable. I see no reason whatever for these words "of his" to remain. It would be much clearer if the words were omitted.

Lord Campbell of Alloway

My Lords, I support this amendment. I shall be very interested to hear what my noble friend the Minister has to say in justification of the phrase "of his". Why this qualification? This puts the Crown to prove beyond all reasonable doubt that the trader, where there is a misleading price indication, is the true and rightful owner, even allowing for the incidence of subsection (3). What is the possible justification for that? The substance of the matter is whether there is a misleading price indication given in the course of business, and the definition of "business" in Clause 45(1) in no way mitigates or answers the problem.

If anyone in the course of business gives a misleading price indication he should be guilty of a criminal offence, full stop, subject to mitigation. For example, an assistant in a new job might have no idea of what is going on and there would be an absolute discharge. But the true owner would always be liable, as proposed by the clause as it stands, because the business was his and still would be even if "his" were excised. What does "his" mean? I ask my noble friend the Minister: is it supposed to mean rightful ownership? Does "his" mean possession? Does "his" mean a licence to use? What on earth does it mean? If there is no satisfactory answer to those questions surely it would be right for the amendment to be accepted.

Baroness Burton of Coventry

My Lords, the discussion that we are now having gives me the opportunity of making a point on the control of problems caused by the resale of electricity and, presumably, of gas. As the Minister will recall, we have had many discussions over past months and indeed over past years and we have made a certain amount of progress. But the Electricity Consumers Council has become worried about a particular aspect. I should like, on behalf of it and of all consumers, to ask the Minister for clarification.

Part III of the Bill contains the mechanism by which the Government indicated to me that they would control the problems caused by the resale of electricity. However, there is concern about Clause 20, which states: Subject to the following provisions of this Part, a person shall be guilty of an offence if, in the course of any business of his, he gives (by any means whatever) to any consumers an indication which is misleading as to the price at which any goods, services, accommodation or facilities are available (whether generally or from particular persons)". The worry about which the Electricity Consumers Council has written to me is its fear that many small landlords would not be caught within the ambit of these words, especially if they let, for example, only one or two rooms within the house that they themselves also occupy or argued that they let out flats not as a business but as a hobby, a sideline, a social service or something else. We feel that this concern is reinforced by the wording of the Explanatory Memorandum on page 3, which states: The provision does not apply to indications given otherwise than in the course of a business". We feel that that is even weaker than, in the course of any business of his". This implies that only those who act as letting agents as their main business—rather than being solicitors, farmers, greengrocers or whatever one likes, who happen to own a couple of properties which they let to others—are intended to be covered by the Bill.

I assure the Minister that these are very real fears. I am asking him whether when he comes to reply he can assure the House and all those affected that anyone who resells electricity for use in domestic circumstances falls within the ambit of this legislation. We hope that the Minister will give us a categorical answer on that point. We want an assurance.

I shall make one further point with which I am sure the Minister will agree. Whether the Bill is implemented by regulation or by code of practice may ultimately be somewhat academic if because of the wording and the drafting of Clause 20 many of the people who resell fuel fall outside the legislation.

Lord Beaverbrook

My Lords, I am most grateful to the noble Lord, Lord Morton, for his explanation of the purpose of this amendment. Before answering the detailed points made by noble Lords on this amendment, I should like to say to the noble Baroness, Lady Burton of Coventry, that later government amendments to be moved to Clause 26 by my noble friend will ensure that regulations on the resale of gas and electricity apply to landlords whether or not they are in business.

Baroness Burton of Coventry

My Lords, I am glad to have that assurance. May I take it from that that all the people whom I have mentioned—I did not give the noble Lord notice of this—will be included in the Clause 26 amendments?

Lord Beaverbrook

My Lords, I cannot give the noble Baroness that assurance at the moment because I am not sufficiently familiar with what my noble friend will say later. If he does not cover the ground no doubt the noble Baroness will have something to say at that time.

On the main point of this amendment as set out by the noble Lord, Lord Morton, it is a general principle of law that employers are largely responsible for the actions of their employees. I believe that it is especially right that this principle should apply in the case of misleading price indications. Policy on price indications in an individual store is rarely in the hands of individual employees, but it is more often a matter of centrally determined company policy. It is for the employer to ensure that his procedures and staff training are adequate and appropriate to prevent misleading price indications being given to consumers. I therefore think it is right so to draft the Bill that proceedings are directed against employers—that is the corporate body standing behind the misleading price indication—rather than individual employees. Accordingly we have included the words "of his" in the Bill to ensure that individual employees will not be prosecuted.

It is of course for employers to institute systems and staff training to ensure that their employees do not give misleading price indications. If, in spite of all these precautions, a rogue employee nevertheless gives a misleading price indication, then the defence of due diligence, as set out in Clause 39, is likely to be available to his employer. But I have to say that I see little point in prosecuting individual employees in these circumstances.

It is a matter of where to draw the line, and in the case of Tesco v.Nattrass the House of Lords found that the manager was not identifiable with the company. If the company had exercised all due diligence, it would not be liable for the act or default of one of its subordinate managers. Clause 40(2) of the Consumer Protection Bill, however, provides that where a body corporate is guilty of an offence, any director, manager or other similar officer of the body corporate to whom the offence is attributable shall also be guilty of an offence. In the light of this explanation I hope that the noble Lord opposite will feel able to withdraw his amendment.

Lord Morton of Shuna

My Lords, I am very much obliged for the support I have received from the noble and learned Lord, Lord Denning, and from the noble Lord, Lord Campbell of Alloway, both of whom put the difficulties raised by this matter much more clearly than I was able to do. The difficulties they have raised and I endeavoured to raise have been wholly missed by the answer that we have received from the Government.

This clause about misleading price indications does not apply only to Tesco, Woolworths or that kind of shop. It applies to the travelling employee salesman and it applies to the person going round selling insurance. If the only person who is responsible is the employer, there is a huge gap left. Surely a liability and a responsibility in respect of misleading prices must be placed on somebody who deliberately disobeys instructions. This is a matter at which the Government might look again. It is clearly something which is not a party issue and which we have to get right. I very much hope that we shall have an indication that the Government will look at this again.

Lord Campbell of Alloway

My Lords, before the noble Lord sits down, may I associate myself with the plea that this might be looked at again?

Lord Beaverbrook

My Lords, with the leave of the House, I entirely take the argument put by the noble Lord, Lord Morton, and supported by the noble Lord, Lord Campbell. On that basis, I think that we would like to look at this again carefully to see whether something has been missed and whether it can be looked at further.

Lord Morton of Shuna

My Lords, I am very much obliged, and in the circumstances I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn

[Amendment No.43 not moved.]

The Chairman of Committees (Lord Aberdare)

I have to point out that if this amendment is agreed to I cannot call Amendments Nos. 45 and 46.

3.45 p.m.

Lord Gallacher moved Amendment No.44: Page 18, line 15, leave out subsection .

The noble Lord said: My Lords, in moving Amendment No.44, with the leave of the House, I shall speak also to Amendments Nos. 61 and 62. In order to consider this group of amendments in the round, so to speak, it is necessary to recall the events at Committee stage on the 29th January when we discussed Amendment No.71, which is germane to the amendments now before us.

The discussion at Committee stage led to the withdrawal of Amendment No.71, because the Minister then acknowledged the existence of a new factor which had arisen since the Bill was drafted: namely, a request from a body, which he described as a concordat, to reconsider the code of practice so that it became a guidance document only and not, as it then stood, a document which is a mixture of regulation and guidance.

In fairness to the Minister, when making that statement he also made it clear that the decision to have a further look at the document meant there would inevitably be a delay, a consequence of which might be that at this Report stage of the Bill the House of Lords would not be able to consider the matter in the exact form in which it would finally be placed before another place, because the discussions with the concordat might not be concluded by that time. Although sympathetic to the approach made, the Minister did not in any way indicate that the Government were of a mind to concede the representations made to them without fairly detailed consideration of them. I understand that subsequently the members of the concordat have met with the Minister for Corporate and Consumer Affairs, in particular on 9th February last.

I remind your Lordships that the concordat is a representative body, comprising the National Consumer Council, a body appointed by the Secretary of State for Trade and Industry, which reports to him and which is financed by him. It consists also of the National Federation of Consumer Groups, which takes care of the voluntary sector of consumerism in this country. The Retail Consortium claims to speak for 90 per cent. of the retailers in this land, including some of the most famous names in retailing. The Institute of Trading Standards Administration is the professional body of those who would be called upon to enforce the code of conduct on behalf of local authorities. Finally, the Local Authorities Coordinating Body on Trading Standards, known by its initials as LACOTS, is also a member of the concordat. In consultation with the concordat, the Consumers' Association and the Confederation of British Industry are also involved.

The outcome of the discussions which the concordat had with the Minister resulted in a consultation paper which was issued to interested parties by the Department of Trade and Industry on 27th February. A copy of the document was placed in the Library on 3rd March. 1 understand that the process of consultation with interested parties involves no fewer than 200-plus organisations and persons and in consequence there is likely to be some delay before the outcome of the consultations is known.

The consultation paper gives two options. First, it offers consultees the opportunity of either adopting the code which the Department of Trade and Industry originally prepared in its third edition—that is to say, a code of practice which combines regulations and guidance—or of following the concordat's proposal to the Minister, which is to take regulations out of the code of conduct, leaving the subsequent code as a guidance document only. As a guidance document, it would have evidential status only in the courts and not the higher status which it has at the moment in the Bill.

Some disappointment was expressed by the concordat at its failure to change the Minister's view at that stage, particularly in view of the Minister's sympathy with self-regulation in general. We certainly know in this House that so far as corporate affairs are concerned he has been a consistent advocate of the value of self-regulation. As I say, it is a disappointment to the concordat that in this instance the Minister apparently was not sufficiently convinced of the case to concede what it was asking at that stage.

The document which has now gone out gives the DTI's view, which is that separate regulations—that is to say, taking the regulations out of the code of practice—would be a complex affair, would lead to rigidity and might create an undesirable technical situation. On the other hand, the document expresses the concordat's fear that a code which mixes regulations and guidance may not be enforced by trading standards officers and, to that extent, may become a somewhat discredited document. Furthermore, it believes that the combination of regulation and guidance gives the code an unwanted status—unwanted, that is, by consumers, retailers and enforcement bodies.

Having got a list of the organisations and persons that have been consulted, I must confess that, first. I was amazed at the number of bodies to be consulted, which was over 200. I was also somewhat surprised to see that many of the organisations involved are represented by bodies which comprise the concordat. For example, there are retail companies which are members of trade associations that are in the Retail Consortium, and in addition to that there are other less well-known bodies. There are also individuals, no doubt with a special interest in consumer law, such as professors in universities.

The width of this consultation process and its importance for the future, having regard to the choice which will inevitably be made between the two points of view, leads me to ask the Minister when he comes to reply to tell us what weighting his office of consumer affairs is going to give to the replies. If there is still a difference of view as between the Department of Trade and Industry's version of the code of conduct and the concordat's wishes, it may be important to know whether, for example, the views of a professor of law in an academic institution will carry as much weight as those of significant retailers and significant local authorities that will be directly involved. Is it to be on the basis of one reply, one vote or will the office concerned with consumer affairs attempt in taking account of the replies to give weight to the importance of the body which is giving it the information it is seeking?

A timetable has been set by the Department of Trade and Industry for replies to this consultation document. So far as the principles are concerned, replies are required by 25th March. But detailed comments are not being asked for until 21st April. So far as I can find out, on the assumption that we complete the Report stage of the Bill today, the Third Reading is scheduled in your Lordships' House for 19th March. On that basis, your Lordships will see that there is no effective way in which this House can take any decision on this matter before sending the Bill to another place. It seems highly probable therefore that the main decision will need to be taken in another place. That point was, I believe, made clear by the Minister at the very outset; and the timetable has confirmed what he told us when we last discussed the matter.

However, the question arises—and this is really the subject of the three amendments—as to what this House ought to do in the meantime about the three references in the Bill to the status of the code. The purpose of the amendments is, in effect, to neutralise the position pending a final decision by the Minister, so that the Bill, if your Lordships agree to the amendments, contains no definitive statement as such and it is left to the other place, in the light of the replies which the Government receive to their consultation document, to decide on the merits of the issue. No doubt the matter will then come back to your Lordships' House to agree or otherwise with Commons amendments. What the amendments suggest as regards deletion is fair and reasonable. I hope that in the light of that the Minister may feel disposed to accept the amendments. I beg to move.

Baroness Burton of Coventry

My Lords, it is difficult to avoid repeating what was put forward at the Committee stage. At that stage, in my opinion, we got exactly nowhere. There was general agreement that the control of misleading price claims is a difficult area. I asked the Minister whether the Government would pay particular attention to a point on which 1 felt strongly and which was supported by the Consumers' Association and by the National Consumer Council.

We were of the opinion that one reason why the Bargain Offers Order has failed to provide an adequate system of control against misleading pricing 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 thought that this somewhat narrow aspect was basic to the adequate system that we want.

I listened carefully to what the noble Lord, Lord Lucas, said on 29th January. I have since re-read Hansardbut I can find no reference to the point raised. I am hoping that the noble Lord will feel able to remedy that omission today. Consumer organisations feel that the present law is unclear; indeed, the National Consumer Council made the point. It believes that the Government's proposals go a long way towards explaining to traders what is lawful behaviour, but create much uncertainty as to what is not.

I must repeat a point made in Committee concerning the 28-day rule. The National Consumer Council considers that this should be addressed to the primary legislation. The present law states, as the House will be aware, 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 so today, on our last Report day, I ask the Minister whether he will give the Government's reactions on three points—the technical detail of the order, the clarity of the explanation given to traders, and the 28-day rule.

Before moving on to the status of the code of practice, I must deal with what the Minister actually said at col. 1473 of Hansardof 29th January. Personally, I was amazed. The noble Lord, Lord Williams of Elvel, found the remarks quite extraordinary. I found them an insult to your Lordships' House. The noble Lord, Lord Lucas, said: I take the 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". While admitting that this Bill is imperfectly drafted, the Minister actually proposed that it should go to another place to be settled. I should like to ask the noble Lord, Lord Lucas, whether he considers that that is the proper way to treat this House, when the Bill has actually started its parliamentary journey here and when we have revealed its shortcomings.

I imagine that we have all received the letter from the Retail Consortium dated 25th February referring to the meeting held on 9th February. At that meeting, the Minister said that his officials would issue a consultation letter to all interested parties to ask them to decide between the Government's proposals and the alternative proposals. The Minister asked also for further arguments in support of the latter. A reply was requested by 19th February.

I expect that most of us sitting in this Chamber have now received a second letter from the Retail Consortium dated 5th March, stating its disturbance that a number of concerns felt by the concordat—which is of course an umbrella term for all the interested parties—were not resolved during the Committee stage. The Minister received a letter developing further arguments for the alternative proposals on 19th February as requested. These he was unable to accept and on 27th February his officials invited further comments in still another consultation letter. Initial comments on this are required by 25th March and detailed ones by 21st April.

In this letter of 5th March, which many of us received from the Retail Consortium, the consortium states that it seems most unlikely that this matter will be resolved before the Consumer Protection Bill passes to the House of Commons. It does indeed seem most unlikely. It seems to me also to be an entirely wrong procedure, when we learn from the consortium that the whole concordat believes that certain provisions of the Government's draft code should be put into regulations and, in some cases, redrafted, as rogue traders cannot realistically be expected to comply with a voluntary code of practice. The remaining parts of the code should be of practical guidance only. That is quite an indictment, and coming from the members of the concordat and the Retail Consortium I think it is a very serious indictment.

In conclusion, I am sorry if I seem to be in a complaining mood, but it is difficult when one receives no reply to points raised after considerable study of the problem. I am not objecting to whether or not what has been put forward is acceptable. I am objecting to getting no answer at all. The points are just swept under the carpet and ignored.

On the matter of the proposed code of practice and its status, I am far from happy about the Government's proposal. As I understand, and as I said in Committee—and perhaps the Minister will correct me if I am wrong—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 took 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.

I repeat a point made previously—one has to keep on repeating until one gets an answer—is there not a danger that this Bill will become too legalistic, so that examination of technical detail overrides the necessity of making a judgment? As I explained—I apologise for the necessary constant repetition—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. The noble Lord gave me no answer on this matter at the Committee stage.

If the code is granted formal status it will assume the importance of delegated legislation, but Parliament will not have had an opportunity to discuss in detail what behaviour should or should not be lawful in this area. That is serious, and I should have thought it would be an unwelcome innovation both in our House and in another place.

This time, when the Minister comes to reply, doubtless he will comment on the points made in our House. I should like to stress to the noble Lord the Minister, because I feel very strongly about this, that I say "our House" because I believe that your Lordships' House has been most grieviously offended and, indeed, slighted by the action proposed by the Government; namely, that the Secretary of State is prepared to reflect the outcome of the serious and proper consultations that we have been discussing when the Bill is before another place.

4 p.m.

Lord Campbell of Alloway

My Lords, I support all these grouped amendments, as I supported the same theme at Committee stage. Unlike some other noble Lords, I represent no trade interests at all. That does not mean to say that I am not interested in trade, but I represent no one.

The hope must be that my noble friend the Minister may find his way to be able to accept Amendment No.44, to get rid of Clause 24, for the reason given at Committee stage so that contravention of the provisions of a code cannot be used as an aid to conviction for a criminal offence. Also, the hope must be that my noble friend the Minister will accept Amendment No.61 to Clause 24, which provides that compliance with the provisions of the code affords a defence to criminal proceedings. Again for the reasons given at Committee stage, the document is not suitable for such purpose in court. Lastly, the hope must be that my noble friend the Minister will accept the consequential amendment to Clause 25—that is Amendment No.62—by excision of subsection (3) which renders the code admissible in criminal proceedings.

If my noble friend could take such a magnanimous course, this would afford an important and praiseworthy reflection of the value of the revisory role in your Lordships' House at Committee stage, and the noble Baroness, Lady Burton of Coventry, could have scant complaint. On all sides of the House there has been an attempt to improve the quality of this legislation, and if my noble friend the Minister were able to take that course the revisory role would have been discharged.

For my part, I well understand the difficulty in which my noble friend the Minister finds himself, in that he has not been able to implement his intention as stated in col. 1472 of the Official Reportfor 29th January, of, bringing forward amendments to reflect our intentions more accurately and to make clearer what the status … of the code is in the circumstances". I understand that, because the reasons for the inability are not, if one is fair about it, because of some obdurate unwillingness on the part of my noble friend the Minister. The reasons lurk in Annexes A and B to that departmental document of 25th February. Annex A is the government proposals and Annex B is the concordat proposals. Comment is invited. With the greatest respect, both sets of proposals are totally misconceived, the government proposals because they still maintain the structure of Part III, and Annex B, the concordat proposals, because they contain muddled concepts of the status of the code, in particular paragraph 2.4, which even led the noble Baroness, Lady Burton, to speak of the Highway Codestatus, which I have sought to suggest would be wholly inappropriate, and then to acquaint that to delegated legislation. That is a sort of terror of error which permeates Document B.

Again, the reason is not far to seek. If you have 200 parties all whirling around in consultations and overlapping as between one trade association and another, it is not to be wondered at that a fairly confused result ensues. It is a confused result, and I have considerable sympathy with my noble friend the Minister in trying to unravel it. I cannot. Annex B is in such a state of muddle that it could not be put into legislation in its present form. Furthermore, to say in it that the essential status of the code is consultative, when it is a code which lacks any legal efficacy but is to be used evidentially, is nonsense. I sought to try to point that out at Committee stage.

I listened with admiration to the way that the noble Lord, Lord Gallacher, sought to explain Document B, but I was unable to follow. With the greatest respect, I wonder how many of your Lordships were. Therefore, when my noble friend the Minister is asked "What are you going to do with these replies? What sort of weighting?" I would hazard the suggestion that it is the quality of the reply not the weight of the body that will assist the trade in the long run and assist the Government to produce some decent legislation which is effective.

The general comment on both Annex A and Annex B is that although it is common ground that there should be effective enforcement procedures, neither Annex A nor Annex B achieves that purpose. The only appropriate approach is the straightforward approach. That involves the three principles of which no due account has been taken either in Annex A or in Annex B. They are quite simple: first, to create the offence, leave Clauses 20 to 23 as they stand; take out Clause 20(4) and, if you wish, supplement by statutory instrument under Clause 26 as amended. The second principle is: for the defence, if you are going to use a code of practice, redraft the code of practice with the use in the criminal courts in mind. The third principle is: that the status of the code in terms of legal efficacy must be defined with total clarity in the primary legislation; that is to say, must be on the face of the Bill before it receives Royal Assent, or subsequently it is too late.

At Committee stage, in the light of the debate on Amendment No.71 and Amendment No.72, which was in my name, the Minister said that he accepted that there were difficulties with Clause 24 as drafted. I therefore do not think, with the greatest respect, that the noble Baroness, Lady Burton of Coventry, was quite fair to my noble friend the Minister. The Minister said that the Government would consider seriously the drafting of Clause 20(4) and, with it, Clause 25(3) with the intention of bringing forward something to reflect Government intentions more accurately and to clarify the status of the code. In other words, the Minister said in terms that he would take back Part III for further consideration.

In these circumstances, if my noble friend the Minister was prepared to accept this set of grouped amendments, his way would be free to exercise any of the options which were discussed by your Lordships at Committee stage within those three principles. An effective, simple and acceptable enforcement machinery could then be devised.

On the point taken by the noble Lord, Lord Gallacher, as amendments introduced in another place would return to your Lordships' House for further consideration, there could be no question of circumventing the revisory role. We should have discharged that revisory role and I respectfully suggest that if my noble friend the Minister were to take such a course, the criticisms of the noble Baroness, Lady Burton, would lose some of their sting.

Lord Graham of Edmonton

My Lords, perhaps the Minister can deal with what I regard as the quite extraordinary process which he has adopted in dealing with very powerful forces—that is, the concordat, added to by the CBI who came along after the concordat began to work—which include consumers, industry, local authorities and enforcement officers. The Minister has told us quite fairly that he wishes to widen consultations. I believe that trade bodies will need to look carefully at how this Government view their status and stature, as well as their ability to represent their members. In all good faith, they consult with their members and produce what they consider to be the opinion of their members for the Minister. The Minister may then say that in that case (or is it only that case?) he has consulted not merely representative bodies but also many individual members and others.

The noble Lord, Lord Campbell of Alloway, says that what we are concerned with is the quality of representation and not the weight. Well, we certainly had the weight and the quality from those bodies. What we are going to get is the Minister producing the views, not merely of the four or five central bodies, but also the views of perhaps 200 individuals and individual organisations. I think that the least the Minister should promise to the House is that at some stage we shall know not merely who is consulted but what those whom he has consulted have said. We need to see the views of those organisations. I ask the Minister, at some stage in these proceedings, whether he will agree that it would be fair for the views to be made known, not merely collectively but also placed in the Library so that we can see the plethora of views. I venture to suggest that he will he not one whit further forward than he is now in genuinely representing the views of consumers, enforcement officers, councils and industry if he does not follow that course. I am puzzled and amazed that the Minister has not decided to use the opportunities presented to him by such organisations in the past.

4.15 p.m.

Lord Denning

My Lords, may I speak for a moment in support of this amendment? It seems to me that these amendments are absolutely necessary and that the Bill as it now stands, in giving special status to the code of practice, is a constitutional monstrosity. Having been a judge and having considered such indictments as would be put forward for the offence of giving misleading indications—such as, for instance, saying that a price is being reduced by 10 per cent. when it is not—I believe that that is a simple indictment and charge, to which the jury would be asked the simple question, "Guilty?" or "Not Guilty?". The jury would answer that one question in the ordinary trial before a judge and jury for indictable offences.

Such a simple course would not be permitted under the code of practice. It is quite plain that in addition to that simple indictment one will have to have the particulars of the contraventions of the code. My word, what a task that will be! I have before me the draft code of practice—I think it is the third draft code—and an example of the sort of clause which is in the code of practice is as follows: You should be clear about your meaning and should not leave your customer to guess whether you are making a price comparison or not". Another example is: You should also be clear about the nature of the comparison you are making". What a hopeless provision it is which makes any charge of contravention. The first difficulty, therefore, lies in giving the particulars of the ways in which the provisions have been contravened. There are all sorts of difficulties which follow. Section 25(3) says, A code of practice … shall be admissible … but a contravention of any such code shall not of itself render any person liable to any proceedings". It is not enough to say simply that the code has been contravened. Something else must be put forward as well.

In the end, it is a complete defence to show that one acted in accordance with the code of practice. Those are quite impossible issues to sum up to a jury or to leave with a jury. A jury should, in those cases, be asked to decide the question which they have always been asked throughout our history: "Guilty" or "Not Guilty". A jury could not give such a verdict when it is trammelled with a code of practice of many pages which is set before them. This code of practice ought to disappear altogether as part of the legal code. If you like, it could give guidance. So far as a legal code and legal offences are concerned, they can be dealt with by regulations. They should not he dealt with by a code of practice and anything relating to the code of practice should go out of the Bill altogether.

Lord Sainsbury

My Lords, I welcome this amendment because it gives us an opportunity to discuss the status of the code of practice. I was very interested in the debate at Committee stage and regret not having been able to participate in it. It reflected the tone of the comments I made on Second Reading, to the effect that the code should be a practical guidance worked out in conjunction with retail organisations and other interested parties. I am therefore delighted that in the interim it has been possible for a very significant measure of agreement to he achieved between the representative bodies of those who are going to be most intimately involved in putting the provisions of the Bill into practice.

The proposals of the so-called concordat, and the members of the concordat who have already been mentioned, are also supported by other important organisations such as the CBI and the Consumers' Association. I do not see why there should be any difficulty in accepting these proposals. As I understand it, they fit very easily into the framework of the Bill. Indeed, they focus directly on the words "practical guidance" used in Clause 25(1)(a). The Government are consulting further on these proposals. Frankly, I am not sure what the Government seek to achieve. They have had plenty of time to react to this practical approach. I am worried that the Bill will leave the House without any adequate response from the Government to the concerns that have been expressed.

Your Lordships will no doubt recall the White Paper Lilting the Burden,published in July 1985, in which the Government set out their policy to simplify some of the laws affecting businesses. This measure was promised as part of their effort. I support the concept of a general prohibition against misleading price indications but I have to say that I quail before the detailed drafting of Clauses 20 and 21, some three pages of text. It will require a great detail of explanation and practical guidance for them to be understood in the high street.

In conclusion, I hope the Government will listen to the views of those who have to apply the law and adopt the proposals that have been recommended to them.

Earl De La Warr

My Lords, I too should like to support the amendments of the noble Lord, Lord Gallacher, and I should like very briefly to tell your Lordships why I agree so strongly with the concordat that certain of the provisions in the draft code should come out and go into regulations under Clause 26 and so become—I shall not put it technically—part of the law with the code thereafter in a redrafted form serving only as guidance. I shall not try to guide your Lordships as to the exact evidential form it should take other than to say that I agree with the noble and learned Lord, Lord Denning, that I rather wish it was not there at all.

The provisions that we are discussing consist of a small number of well-known abuses in the marketplace. The noble and learned Lord referred to one of them. The abuses are used not by responsible retailers but by the rogue traders—and there are some—who are prepared and indeed anxious sometimes to mislead shoppers by their pricing methods. It is those people this Bill and this part of the Bill should seek to nail. If that he so, then the present draft of the code, which is a mixture of prohibition on the one hand and simple advice on the other, is not the right tool to achieve this end. That is why the concordat says rightly that the code as it stands is both unworkable and unenforceable.

I repeat that its main argument is that the important provisions that are at present in the code should come out of it and go into regulations. That is why I so strongly support the amendments of the noble Lord, Lord Gallacher.

4.30 p.m.

Lord Lucas of Chilworth

My Lords, I am grateful to the noble Lord, Lord Gallacher, for the way in which he explained the purpose of and the reasoning behind the three amendments which he has put before your Lordships this afternoon.

I shall begin by fulfilling the commitment I gave during the Committee stage to give the House an indication of the progress of the consultations on the code of practice which I then undertook to begin. It is necessary for me to be somewhat repetitive and I hope that the noble Lord opposite and your Lordships generally will forgive me for that.

Perhaps it may help if I remind the House of the history of the subject. The legislation contains three basic elements: a general offence of giving a misleading price indication; a code of practice; and regulation-making powers. There is at this time no disagreement on that basic structure.

Following extensive consultations, the Government introduced the Bill in November and simultaneously laid before the House a draft of the proposed code of practice. On 22nd January, a week before consideration of Part III of the Bill in a Committee of this House, the Retail Consortium, the National Consumer Council, the National Federation of Consumer Groups, the Local Authority Co-ordinating Body on Trading Standards and the Institute of Trading Standards Administration (which have come to be called the concordat) presented jointly agreed alternative proposals. These proposals suggested a change in the status of the code of practice—that is, that it should no longer be a defence but only be of evidential status—and suggested that rather more matters than we had envisaged should be covered by regulations.

Noble Lords will recall that I gave the Committee an undertaking that, although we were not persuaded that our approach was wrong, we would hold further consultations on the question with all interested parties. There are some people concerned with price indications who are not represented by the concordat. I also undertook that the outcome of those consultations would be reflected in the Bill when it reached another place. My honourable friend the Parliamentary Under-Secretary of State for Corporate and Consumer Affairs met representatives of the concordat on 9th February. The purpose of the meeting was to explore how that further consultation should be carried out. As a result of that meeting we received a further more detailed paper setting out the concordat's proposals on 19th February. That paper, together with a restatement of the Government's proposals and an agreed covering letter, was sent out to some 240 consultees on 27th February. I announced the issue of the consultation document in a written parliamentary reply on 3rd March, and a copy of the consultation document has been placed in the Library of the House.

The questions that we have asked our consultees are inevitably a little complex, and it seems to us that a little time is needed to consider them. Accordingly we have asked for replies on the main question of the status of the code by 25th March. We shall be happy to receive comments on matters of detail up to 21st April. Perhaps I should say here that we envisage the comments to be on those matters which may be better covered by regulations or should remain in the code.

That is where we stand at present, and as yet we have had very few replies to the consultation document. I have said before, and I repeat today, that my right honourable friend the Secretary of State for Trade and Industry will reflect the overall outcome of the consultations in the Bill in its later stages in another place.

I appreciate the desire—indeed the right—of your Lordships to be assured of being able to return to this issue at a later stage. This was very much in my mind in not bringing forward at this stage all the amendments to clause 20(4) which I had said in reply to my noble friend Lord Campbell of Alloway would be made. That would have ensured that whatever the outcome of the consultations, your Lordships would have had a further opportunity to discuss the status of the code. But the noble Lord opposite, together with the noble Baroness, Lady Burton, proposed an alternative—in some ways, if I may say so, a more neutral alternative. It is a procedural device to ensure that your Lordships should have an opportunity to consider these matters. I am content to go along with that approach and to accept Amendments Nos. 44, 61 and 62.

However, these amendments leave Part III of the Bill in a rather odd and unsatisfactory state, which may convey a misleading impression to some people outside your Lordships' House. I therefore emphasise that my acceptance of these three amendments is based soley on their function as a procedural device. I would not like noble Lords, or again anyone outside your Lordships' House, to believe that this acceptance is in any way an indication that we accept the arguments put forward by the concordat and others for a change in the status of the code. We are not persuaded at this time that the alternative status that is proposed offers advantages over the status currently in the Bill. However, we shall be bound on this by the outcome of the consultations.

I turn to some of the points which have been made in the debate this afternoon. I say straightaway that it would be absolutely wrong of me to take up all the points which have been made with regard to the status of the code because that is precisely what this consultation is about. Contributions have been made by the noble Lord, Lord Gallacher, by the noble Baroness, Lady Burton, my noble friend Lord Campbell of Alloway, the noble and learned Lord, Lord Denning, and the noble Lord, Lord Sainsbury, and they make their contribution to this consultative process. The noble Lord, Lord Gallacher, asked me why we had gone to this extent in consultation; why we had gone to a list of some 240 consultees. The reason is largely because they asked to be consulted. They include bodies such as chambers of trade which are not parties to the concordat and many other groups. In the course of our earlier consultations prior to November last year we built up a list of interested parties, so they have been consulted.

The noble Lord, as well as my noble friend Lord Campbell of Alloway, asked me whether the results of the consultation were to be on a head count.

Lord Graham of Edmonton

My Lords, am I correct that the noble Lord said that chambers of trade had asked to be consulted? If so, does he not understand that the National Chamber of Trade is a member of the Retail Consortium and to that extent the collective view of chambers of trade is conveyed through it? Are we to understand that if any one body in a constituent body asks to be consulted, in effect it gets the same weight as the others?

Lord Lucas of Chilworth

My Lords, I think the noble Lord is confusing two issues. I have not even come to discuss the matter of weighting, I was merely answering the question of the noble Lord, Lord Gallacher, as to why there were 240 consultees. I have not discussed weighting at all. I said, "For example, chambers of trade". If any chamber of trade, if any individual person or if any individual company belonging to any society, association or institution writes to us and says, "Please may I have copies of this consultative document? I should like to make representations", we would not deny them and I do not think the noble Lord, Lord Graham, would either.

To return to how we deal with this, certainly it is not one head, one vote. That is not the proper way of doing things. We would have to take account of what is said and the representation it brings; in other words, the weight of the body or person concerned. The views of all those directly affected are especially important. It will not be an easy job.

Perhaps I should just say this to the noble Lord, Lord Graham. He asked whether the views of all those consulted would be published and placed in the Library. No, we are not proposing to do this. We do not believe it would be right to make public correspondence which is sent to us in confidence and which the authors may not wish to have made public in this way. We shall of course have to make public the overall result. It is this listening process, to which the noble Lord, Lord Sainsbury, referred, that is part of the consultation. This is what it is about: to listen to the people who are concerned and one would hope to reach a consensus.

I failed earlier to include in my list of noble Lords to whom I was not going to respond in detail my noble friend Lord De La Warr. I believe his contribution, as with others, is part of the consultation process.

The noble Baroness, however, raised two other points. One was the so-called 28-day rule and whether this rule and other matters covered in the code of practice would continue to be covered in that way or were to be covered in regulations. This is part of the consultation which is now going on. The technicalities of enforcement were raised by the noble Baroness, and she suggested the new approach would not become bogged down in technicalities. Again, it would depend on whether the indications were misleading. The Bill provides in Clause 20 a general offence of giving a misleading price indication. That is the foundation of Part II of the Bill.

I am sorry that the noble Baroness felt that I had in any way slighted your Lordships' House. I think it was the noble Lord, Lord Henderson of Brompton, who told us at an earlier stage when we were discussing these matters—I was speaking about the way forward, which has been moderately changed by the noble Lord, Lord Gallacher, as a way out of the predicament; that of ensuring that your Lordships had an opportunity to debate these matters further—that the course I proposed, broadly being followed by the noble Lord, Lord Gallacher, was a proper course, with precedent, and the House would not be denied its rightful role as a revising Chamber. I think that, on reflection, the noble Baroness will feel that this is the right way of dealing with matters.

Finally, I should say that since my Amendment No.45 falls within the acceptance of these three amendments, I take the opportunity to assure the House, and particularly my noble friend Lord Campbell of Alloway, that I have not overlooked my commitment to bring forward amendments to Clause 20(4) and that will be taken into account as appropriate in another place.

With that rather long explanation—and I apologise to the House for it—I commend to your Lordships the three amendments commencing with Amendment No.44 in the name of the noble Lord, Lord Gallacher, and other noble Lords.

Baroness Burton of Coventry

My Lords, before the noble Lord sits down, will he be kind enough—because I have raised these matters several times—to look through the remarks that I made and write to me on the points that he has not been able to answer today? Do I take it that the noble Lord will do that? I see he indicates his assent for which I thank him.

Lord Gallacher

My Lords, I first thank all those who have taken part in the debate and I particularly thank the Minister for the very patient and detailed reply which he has given to the proposition put forward in Amendment No.44. I note that in accepting that amendment he also accepts Amendments Nos. 61 and 62.

I have only one point I should like to make. I listened carefully to the qualifications which he attached to his acceptance and I note that the Government, in those qualifications, still reserve their rights in the matter. However, I feel that the consultations in which the noble Lord's Ministry is engaged, involving some 240 consultees, indicate a willingness on the part of the Government to move from their original position on this matter if, in the light of those consultations, movement is both indicated and justified. It is in that spirit that I accept the noble Lord's offer to agree to my amendments.

On Question, Amendment agreed to.