HL Deb 28 June 1990 vol 520 cc1803-6

8.30 p.m.

Report received.

Clause 1 [The Consumer Guarantee]:

Baroness Ewart-Biggs moved Amendment No. 1: Page 1, line 7, after ("guarantee") insert ("given in relation to a specified product,").

The noble Baroness said: My Lords, with the leave of the House and in view of the rather late hour, in moving this amendment, I should like to speak to the following amendments together: Amendments Nos. 1, 2, 3, 4, 5, 6, 7, 9, 10, 11, 12, 13, 15 and 16. The reason I do this is because this group of amendments deals with the consumer guarantee which was inserted into the Bill at Committee stage.

I am indebted to the noble Viscount, Lord Montgomery, and to the noble Lords, Lord Lucas and Lord Mancroft, who originally tabled many of these amendments, as well as to their advisers. I hope that, bearing in mind the background and history of this Bill, these amendments will find favour with the Minister. They do not substantially alter what has already been agreed in Committee and indeed in another place. In fact they are necessary because unless they are accepted we shall send back to another place a Bill which contains a number of technical flaws.

Amendments Nos. 1, 4, 11, 12 and 15 slightly modify the immediate implications of that consumer guarantee. First, they provide that the consumer guarantee shall only apply to such products as the Secretary of State may specify in regulations. They delay the implementation of Part I of the Bill until the first such regulations come into force. Part II of the Bill will come into force two months after Royal Assent.

These amendments do not alter the detailed terms of the guarantee. However, they permit those terms to be varied by regulation both generally and for any particular product. I am sure that that is the correct approach at this stage. Indeed, the National Consumer Council made its recommendations after extensive consultation. The evidence that it received is available in the Library of another place. Its recommendations formed the basis of the provisions which have found favour in both Houses.

Noble Lords will be aware of the views of the Retail Consortium about some aspects of the guarantee and in particular the period of time during which a consumer has to claim for a defective product is felt to be too onerous. The noble Lord, Lord Mottistone (who is not in the Chamber this evening) mentioned those concerns in Committee.

It must be said that this is a consumer guarantees Bill and not one to protect business. Its aim is to raise the quality of goods in our High Streets. The evidence made available by the National Consumer Council and the views of both Houses strongly suggest that the terms of the consumer guarantee as currently in the Bill strike the right balance for an optional guarantee. However, if the Minister is uncertain—after all, we have not had his views on this point—I would point out that these amendments allow the option to vary the terms of the guarantee.

The Government may well want to consult first and no doubt wish to get the correct balance. In my view, from all the evidence available, the Bill as currently drafted finds the right balance.

Amendments Nos. 2, 3, 5, 13 and 16 are drafting and technical amendments which do not alter anything that has been agreed at Committee. As such I commend them to the House.

Amendments Nos. 6 and 7 meet the worries of the Minister, expressed in Committee, that the Bill, as drafted, would require many products to come with a consumer guarantee. The effect of them is to make plain beyond any shadow of doubt that the consumer guarantee for which we are legislating is an optional one.

Amendments Nos. 9 and 10 introduce two new clauses which resolve two points that are not addressed in the Bill as drafted. Amendment No. 9 provides that, where both the producer and supplier offer a consumer guarantee, the consumer may only invoke one of them and, once he has made his choice, he cannot change it. Amendment No. 10 deals with the issue of title to the goods. It ensures that legal ownership in a product which is returned or replaced vests in the guarantor.

That is a very brief explanation of these amendments. I hope that they will find favour with the House. I beg to move.

Lord Trefgarne

My Lords, this Bill has had a chequered history. It has now reached Report stage in your Lordships' House and, not for the first time, a great many important new issues are proposed for debate. The rash of amendments that appear each time this Bill reaches a new stage is a poor indicator of its general state of health. The Government's anxieties are on record about the proposals on consumer guarantees. During the Committee stage in this House my noble friend Lord Ullswater made plain that the Government do not accept the policy behind this approach.

At the core of the Government's objection is the creation of long-term rights of rejection through refund and replacement remedies. This fails to strike a fair balance between the interests of the consumer and those of the producer or supplier. Some have said that there is no inequity in this approach because the regime is not a mandatory one. I remain sceptical that this is the case.

As my noble friend Lord Ullswater said, the consumer's central concern is that goods should be of satisfactory quality, and that if they are not he should be able to get satisfaction from someone. The provisions on consumer guarantees would create a statutory framework which offers the consumer different remedies in different circumstances against different defendants in the manufacturing and supply chain. I remain sceptical that this is the right approach. The Government consider the Sale of Goods Act to be the proper framework for these issues.

There is a real risk that the practical effect of these proposals on consumer guarantees would be to undermine existing protection under the Sale of Goods Act and to discourage rather than stimulate the provision of guarantees with consumer durables.

My noble friend also indicated to the House that the Government considered these proposals seriously defective in technical terms. Indeed, I believe the sponsors of the amendments themselves acknowledge the technical difficulties inherent in addressing this issue in legislation. When he moved these amendments, the noble Lord, Lord Williams, asked whether the Government would be prepared to take away the amendments and to redraft them as appropriate.

We have considered the provisions on consumer guarantees and come to the conclusion that they are irredeemably flawed. For example, the provisions fail to address adequately how rights under the guarantee regime would relate to other rights under the Sale of Goods Act and other statutory provisions. There is no consideration of the extra-territorial implications of this regime, and the obligations of foreign producers and rights of consumers in respect of goods taken outside the United Kingdom. The Bill is silent about how refund and replacement remedies would operate in the context of purchases made under finance agreements. The creation of long-term right of rejection in the context of consumer guarantees raises many difficult questions about the basis of calculation of allowances for use and misuse and where the burden of proof would lie in cases of dispute, but the Bill fails to address those questions. Those examples are illustrative of the fundamental yet unsolved problems which lie at the heart of this approach.

In addition to the more basic problems, the proposals also contain a number of other technical defects of a less fundamental nature.

The noble Baroness, Lady Ewart-Biggs, proposed and has spoken to a number of amendments which touch on some, but not all, of these issues. While the amendments proposed by the noble Baroness address some of these points, they do not provide a complete solution and would not result in a piece of legislation which was coherent and consistent. The difficulties inherent in these proposals are such as to render them unworkable without fundamental revision. We consider the whole approach to be fundamentally and irredeemably flawed.

Baroness Ewart-Biggs

My Lords, the Minister has spoken of the Bill's state of health. I agree that it has had a very rumbustious background. However, I remind him that it was not the fault of the promoters that it took five hours at Second Reading in another place and three days in Committee. It was because at that time the Government appeared to favour the Bill. It was only at the very last instance that it was talked out in another place and only the rump of the Bill remained.

Since the Bill was still called the Consumer Guarantees Bill when it came to this House, we thought it right to reinstate a consumer guarantee in it. That is exactly what we have done during the different stages in your Lordships' House. The Minister still opposes the idea that consumer guarantee legislation must contain a consumer guarantee within it. That is all these amendments seek.

I remind the Minister that the guarantee that we suggest is optional for suppliers. It is not inherent for a supplier to have a consumer guarantee. We have made it optional in the Bill. The Minister stated that the Bill is defective in technical terms. I remind him that we still have Third Reading. If he finds that there are technical faults he will have an opportunity to put them right at that stage.

We have before us the Consumer Guarantees Bill. Unless it contains a consumer guarantee it will be a very contradictory Bill. I commend the amendment.

8.42 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 15; Not-Contents, 3.

Airedale, L. Hatch of Lusby, L.
Bonham-Carter, L. Jeger, B.
David, B. Listowel, E.
Dean of Beswick, L. [Teller] Meston, L.
Ewart-Biggs, B. Pitt of Hampstead, L.
Graham of Edmonton, L. Russell, E.
[Teller] Seear, B.
Grey, E. Tordoff, L.

8.49 p.m.

The Deputy Speaker (Lord Hayter)

My Lords, as it appears that fewer than 30 Lords have voted, in accordance with Standing Order No. 55 I declare the Question not decided and that further proceedings on the Bill stand adjourned.

House adjourned at ten minutes before nine o'clock.