Hallmarking

HL Deb 21 October 1991 vol 531 cc1398-411

8.40 p.m.

Baroness Gardner of Parkes rose to ask Her Majesty's Government what action they are taking to ensure that the high standards of the British hallmarking system will be maintained after 1992.

The noble Baroness said: My Lords, I am pleased to have the opportunity of raising this matter this evening. I wish to thank those noble Lords who have put down their names to speak in the debate. I know that they all have great knowledge of the subject and I am grateful to them.

A hallmark is defined in the dictionary as a mark used at Goldsmith's Hall and by UK assay offices for marking the standard of gold, silver and platinum. To most of your Lordships hallmarks will be so familiar that no further explanation is necessary. However, many people do not know exactly what a hallmark is, and what its value is. For that reason, I shall briefly describe how it comes to appear on, for example, a silver trophy. Be it a school cup, an award for the local flower show or the prize trophy for a horseracing classic, it goes through the same process of independent assessment. The cup is made and submitted to the assay office for testing. The definition in the dictionary for assay is, "trial of metal or ore for quality". A scraping of the metal is taken and submitted to chemical analysis. Although technological progress continues to improve the system, hallmarking has been in existence for nearly 700 years. Methods of assaying have stood the test of time.

For the mark to be placed on, for example, a silver cup, that cup must be proven by assay to be of the required standard. The marks identify the metal used —for example, the lion for sterling silver—the manufacturer by his mark, the assay office and an initial to indicate the year of the mark. Each assay office has its own mark: the London leopard; the Birmingham anchor; the Sheffield rose; and the castle of Edinburgh. Hallmarks are fascinating in themselves because they give an accurate record of the age of any piece and add special value to antique silver.

Most importantly, they protect the purchaser and ensure that the purchaser is purchasing the quality of metal for which he is paying. Hallmarking is probably the oldest form of consumer protection. It is impossible to tell from appearance what proportion there is of a precious metal in any article. Assaying is an accurate process. Hallmarking is visible confirmation of the standard. That means that the consumer has a sound basis for choice and confidence that value for money is being obtained.

The British hallmarking system is recognised and held in high esteem throughout the world. The usual standard for British silver is sterling; that is, 925 parts of silver per 1,000. Sterling is the name universally used for that grade of silver. On the Continent, 800 parts of silver per 1,000 is more usual.

Assay officers in Britain deal with about 20 million articles per year. If a gold piece is submitted claiming to be 18 carat but fails to meet the required standard, it would be stamped 14 carat, the next step down the scale. If it is claimed to be nine carat, that is the lowest gold standard. A failed nine carat article cannot be downgraded and is usually returned to the maker. Powers exist to destroy such a defective article but those powers are hardly ever used. The piece may still be sold in the United Kingdom but not as gold. That is the important point for the consumer. If it is not marked, then it is not gold or silver by UK standards. There are some rare antique exceptions.

A league table is published by the Hallmarking Council. In 1990 Italy was top of the league with the highest number of items rejected—18,196. Items were either rejected or marked at a lower standard. Thailand follows with a figure of 2,883; and then follow Hong Kong, the United States and Israel in that order. Although the Italian number seems high, the percentage of rejections scarcely differs from the others named, as Italy produces so much more. All manufacturers are having about 1 per cent. rejected.

Let us stop a moment to think. Those items are failing to reach a standard now at a time when the makers and importers know that standards must be met. What would it be like if everyone knew that standards were unimportant? It would be possible to call anything gold and get away with it.

Outside Knightsbridge tube station today—and I regularly see this sharp practice—salesmen are selling a "real" gold, as they call it, pair of earrings, bracelet and necklace, all for £10. Of course that is illegal trading and anyone who buys those items believing them to be real gold is foolish. There are always many customers. By the time the thin piece of gold plate wears through to show the base metal underneath and the metal goes green against one's skin, there is no hope of any comeback. However, at least the financial loss is not great.

On a "Watchdog" programme on television recently a woman had paid £200 in Greece for a gold chain which was stamped 14-carat gold. It was found to be a thin piece of gold plate on a base metal. When the matter was looked into further it was found that that was one of many chains, and an £800,000 fraud was involved.

Instead of losing merely £10, how much worse is it if the buyer has paid a high price from what appears to be a reputable shop? The shop obtains its stock from a dishonest maker or importer which the shop had trusted to provide the genuine article. By the time the customer discovers the defective quality and has returned to the shop, the supplier of the goods may have made his pile and vanished.

An independent assay office with hallmarking prior to sale gives assurance to both retailer and customer. Recently Sweden has introduced a two-tier system with some articles being marked and some not. There has been quite a rise in the number of offences under trading standards law.

The situation of hallmarking in terms of the European Commission is far from clear. Is it the Commission's intention to issue a directive on the marking of precious metal? I hope that Her Majesty's Government will press it to do so in order to protect our consumers.

There are international standards. The International Standards Organisation—ISO—has a standard No. ISO 9202 which is recognised world wide as a standard for precious metal alloys. Those ISO 9202 standards would be acceptable to the UK if taken as a CEN norm. CEN is Le Comité Européen de Normalisation. That is important because initials are always so confusing.

ISO standard No. 9202 covers a range of grades including 800 and 835 silver which at present is not recognised in this country. The United Kingdom would need to recognise those as silver but there would be a mark to show the content. Therefore, it would be quite clear that sterling is 925 or has the lion mark but the 800 silver would be marked 800.

I point out that the ISO standard not only confirms the level of precious metal but plays a valuable protective role in that the inclusion in an alloy of noxious metals is not permitted. That can, particularly in the case of jewellery, produce an adverse reaction on the wearer.

I understand that in Germany a White Paper has been produced prior to consideration of a new law of compulsory hallmarking. Six EC countries already practise compulsory hallmarking the UK, France, Netherlands, Ireland, Portugal and Spain. Voluntary hallmarking exists in Belgium and Denmark. Not all of those countries use the same standards of metal, and that is where the ISO 9202 would be important as being universally acceptable.

The second essential is to establish recognised laboratory standards for testing. The UK system of an independent assay office is long established and reliable. On the Continent some manufacturers may be large enough to have their own laboratories capable of carrying out tests. They would need to be large and successful firms as extensive scientific facilities are required. However, it is necessary also that there should be an independent check on such laboratories. It is essential to avoid any system which would allow some "fly-by-night" maker or importer to stamp goods to suit themselves and then sell such goods as genuine.

Standards EN 29000, BS 5750 and ISO 9000 all exist and are all equivalents one of the other. They could cover the organisations undertaking the testing. The figures relate to the procedures for assessing the efficiency and effectiveness of the testing laboratories.

As your Lordships will be aware, I have had a long-standing interest in consumer affairs and I piloted a small Bill through the House. I was therefore pleased to see that the Consumers' Association carried out a survey in 1990 in which 59 per cent. of those questioned considered the UK hallmarking system to be "very important". The Consumer Associations' considered opinion is: the most stringent requirements should be applied to precious metals, not least because they are products where consumers are generally unable to judge for themselves the quality and value of the goods they are seeking to purchase. Moreover, any variance in fineness from the stamp or mark will significantly affect the value of the product".

Article 100a obliges the Commission to incorporate a high level of protection into any proposal that it tables on consumer protection issues. That would logically seem to rule out any undermining of an effective system of consumer protection which is well established in half of the Community's member states. Protection is needed particularly in this field as consumers are not in a position to judge the quality of articles of precious metal. Special techniques are necessary to assay and consumers would be vulnerable to spurious claims of quality.

The British hallmarking system has worked well for almost 700 years. Quality is guaranteed as marked. I ask Her Majesty's Government to press the Commission to introduce a directive on the marking of precious metals based on the criteria of the UK's hallmarking system under three headings. First, all articles of precious metal should be presented for random testing to an independent EC accredited laboratory. Secondly, they should be presented prior to placement on the market. Thirdly, the articles should be stamped by the independent testing laboratory. The mark should attest to fineness, identify the manufacturer, the laboratory and the year and be recognisable throughout the Community.

8.55 p.m.

Baroness Fisher of Rednal

My Lords, I thank the noble Baroness, Lady Parkes, for introducing the debate this evening and for the competent way in which she presented the case. I declare an interest, though not a financial one. I was a warden of the Birmingham Assay Office for over 10 years and I sit on the hallmarking council.

Perhaps I can start in the same way as did the noble Baroness. Seven hundred years ago it was recognised in this country that consumers needed protection with regard to the silver and gold being manufactured at that time. Bearing in mind that in those days silver and gold were a form of currency, it was important that the currency was of the value of the precious metals contained in it. Therefore the first consumer Act placed on the statute book in the UK was a consumer protection Act connected with hallmarking.

The debate today asks Her Majesty's Government to defend our long-held precious metal safeguards. As the noble Baroness said, hallmarking in the UK is performed by the four assay offices which she mentioned. It is important to remember that the prime purpose of the Act and of the assay offices is the protection of the consumer, although coincidentally it protects members of the trade from unscrupulous competition.

The Act uses the assay office but it also uses the trading standards officers. Those officers are the enforcers of the Act and their's is a wide role. Last year 3,178 infringements of the legislation were detected and 548 instances of formal caution were issued to traders. One of the main problems is the traders that commit a technical offence by not displaying to the general public in the places where they are selling items of precious metals, the statutory notice. It should be displayed for the customers to inspect so that they can look at the hallmark. It is a large notice and should be easily available for all customers. In addition to those infringements three persons were imprisoned for failing to honour the Act.

All that protection for the consumer may change and the whole system is under threat due to the difficulties experienced by the Commission. It is true that the Commissioner, Herr Bangaman, is perhaps not very sympathetic to the idea of hallmarking. Hallmarking is independent testing of precious metals to decide the metal fineness. Therefore it gives a guarantee of quality. No doubt the noble Lord, Lord Cockfield, when he was Commissioner, was rather more sympathetic to the idea of hallmarking of precious metals. He asked the relevant service to study the matter and to make recommendations for a common policy on the free circulation of precious metal articles. That reported at least two years ago and the suggestions included the proposal that precious metal articles being placed on the EC market after 1992 should carry identification for metal fineness and the makers' or importers' marks.

Further, there was the Progress Report on completing the Internal Market issued by DG III in November 1988. That put greater emphasis on the consumer. Paragraph 64 states: Consumer protection provides an example of a policy area which will take on an enhanced importance in the completed internal market. Consumers will need to be reassured that their interests are properly represented". That is what hallmarking is all about—the proper safeguarding of the consumer.

As I said, an international convention with seven members is already operating. The convention was originally part of EFTA. When the convention met it was in Vienna and the Vienna Convention is open to all member countries of the United Nations which agree to use agreed common standards to determine whether or not a quality guarantee mark should be applied. So it is not a difficult process to make quite sure that the customer, the purchaser, gets value for money.

As the noble Baroness said, it is impossible for lay persons to be able to test whether they have bought an item which is nine carat or 22 carat. One cannot bite and spit out such products because that is horrible. They are not products that are worn for two days and then fall in rags around you; though they can go green on the skin, as the noble Baroness said.

It is crucial that any proposals which the trade, consumers, manufacturers or the trading standards officers put forward to the Government regarding hallmarking, because they feel that deregulation will be damaging, should command the support of the Department of Trade and Industry. Its Ministers should argue the UK case more forcefully at the European Commission. There is no barrier to trade, as we often hear from those people who are not thinking of hallmarking.

The greatest number of wares that come into this country and are marked to start with but which are sent to assay offices are the chains from Italy. These are the attractive chains that one sees around the necks and wrists of young girls. Unfortunately I only have one. But one sees girls on the tube with as many as four or five chains jingling away. That is terribly worrying as the chains may be stolen. Most of those chains come from Italy and the importer automatically sends them for halimarking. I see thousands of them going through the Birmingham assay office so it is no barrier to trade. They still keep sending them in because traders know they can sell them once they are hallmarked.

In the United Kingdom around 30,000 people are employed in an estimated £2 billion retail trade in jewellery and around 13,000 people on the £16 million manufacturing side. On the manufacturing side, a number are small businesses. When I was a member of the other place, in my constituency in Birmingham was an area known as the jewellery district. It was in the very centre of the city. If when visiting Birmingham and the international convention centre you take a walk along the canal—an area which has been made very pleasant—you will come to the jewellery district. The district is now becoming a real tourist attraction as visitors can see manufacturers at work and the many shops and exhibitions in the area.

I feel I have to speak very strongly about this because I am a Brummie and I do not want us to lose what is a vital part of industry in the city of Birmingham and one of which we are very proud. It was Matthew Bolton who made Birmingham an area for silver when he began his silver-smithing. He appealed to the House of Lords for an assay office to be built in Birmingham because many of his wares which were travelling from Birmingham to Sheffield to be hallmarked were often either stolen for the silver content or stolen for the patterns, because his patterns were very fine.

Those people working in the jewellery district in Birmingham and in similar places throughout the country, and those who work in assay offices, make as great a contribution to the community as anyone else. We must fight for the retention of the industry. I am not saying that the British system, or the United Kingdom system, should be introduced throughout Europe. However, a compulsory system which is independent of the manufacturer is necessary. That is the important point. It requires a strategic approach to ensure that the level playing field is achieved in the interests of the consumer, consumer protection and fair competition for business. While harmonisation could be described as desirable the fear of the lowest common denominator is a very real possibility in this case.

I hope that having listened to this debate the Minister will express the Government's sincere support for the continuation of hallmarking. I finish as I began by saying that the value of compulsory hallmarking rests overwhelmingly on its function as a safeguard for the interests of the consumer. To destroy 700 years of unbroken consumer protection which compulsory hallmarking has provided is not, in my view, the answer to European unification.

9.7 p.m.

Lord Broadbridge

My Lords, in view of the complete disarray within Europe on hallmarking, this debate is timely and I thank the noble Baroness, Lady Gardner of Parkes, for introducing it. I declare an interest in that I am a Liveryman of the Goldsmiths Company which runs the London Assay Office, I am an amateur silversmith with my own hallmark and a collector of early English spoons.

Hallmarking has been with us in this country since 1300 when a statute passed by Edward I required that all silver articles were to be of the sterling standard, the same as the coinage, but also that they were to be assayed by the Wardens of the Goldsmiths Guild, as it then was, and marked with a leopard's head before they left the hands of the workers. Furthermore, gold articles were to be 191/5 carats. That was 691 years ago, and halimarking has continued here ever since.

As a general principle it is with some trepidation that hallowed practices should be abandoned and then surely only if they do not meet present requirements. The primary purpose of hallmarking, as we have already heard, is to protect the public. Surely the present is the very age of consumer protection, a time when labelling is every day becoming more and more informative. How perverse it would therefore be to abandon a 691 year-old practice which does just that.

Not only does it protect the public but it serves the interest of the trade since it creates a favourable image and shields the genuine manufacturer from unfair practice by less scrupulous competitors, for a hallmark is a complete fingerprint. In 1300, the place of assay mark was first made, in that case the leopard's head for London. Today we also have the anchor for Birmingham, the rose for Sheffield and the castle for Edinburgh. In 1363 makers were ordered to stamp their own distinguishing mark alongside the leopard's head. In 1478, a date letter, changed annually, was added. Finally, in 1544, a lion passant—rampant for Edinburgh—was added. Thus, in that year, 447 years ago, the four distinctive marks of the fingerprint were in place: town, maker, standard of metal and date.

I believe that there are two aspects and issues to be fought for in the continued marking of precious metals: first, what the marks are; and, secondly, who puts them on. To my mind our present system in this country is ideal. It lacks nothing and nothing could reasonably be added that would be beneficial. But a number of European countries do not mark precious metals nearly so informatively. I would argue to the Government, who I believe are sympathetic, that anything less than our present full set of four marks would be to the detriment of the protection of the public and the trade. It is one of those curious accidents of fate that a system set up as long ago as medieval times is nonetheless ideally suited to the modern requirement that a manufactured article should clearly state what it is made of, who made it and where and when. Anything less is partial and for practical purposes ranges between the flawed and the totally inadequate. I urge Her Majesty's Government to strive to continue what I have called the complete fingerprint which has historically been and continues to be the glory of English silver and gold and, more recently, platinum.

Secondly, my other concern is with who does the hallmarking. The alternatives are by an independent authority, as in this country with our four assay offices, or by the manufacturer. It is to me the regrettable practice in a number of EC countries that the maker also does the marking. Human nature does not change much with time, and very large sums of money are involved here. This is endorsed by the fact that today, under the Hallmarking Act, counterfeiting or transposing a mark carries a maximum penalty of 10 years' imprisonment. The penalty for infringement of the laws of halimarking has always been severe. At one period in the 18th century the death penalty could be invoked for forgery, although the pillory, with the severing of ears, was more common. That was the fate of silversmiths John Moore and Robert Thomas in the reign of the first Elizabeth. My point is that if makers have been prepared to take the risk in the past, surely in an unregulated market they will do so now in view of the financial gain involved. The noble Baroness, Lady Gardner, has already told us about Italian imports. It is independent halimarking which has found them out in the past, so what of a future without it?

Marking one's own production is to be an unregulated market in this rather special field. For example, if one of your Lordships buys a fairly heavy signet ring for £200 in the belief that it is 18 carat gold and it is in fact only 9 carat, then he has only half the gold he has expected. He has been swindled out of approximately £100 and an unscrupulous maker has pocketed that sum. But how many of us, by simple inspection, could tell 18 carat from 9 carat?

However, there are watchdogs, as some of your Lordships may feel. Yes, indeed, but first the London Assay Office alone handles some 50,000 items a day; and, secondly, such other consumer watchdogs as there are are hardly geared to the examination of precious metals, an extremely exacting art developed over centuries. For example, the laboratories of the Consumers' Association may be well equipped to investigate a tin of baked beans or the fireproofness of a sofa, but are they really likely to be prepared to equip themselves with furnaces and crucibles and, more important, the great skill needed to use them effectively? I am sure that they are not, and I mean no disrespect to them.

I deprecate maker-marking because I believe that in a real world some people are always prepared to take risks to make money at the expense of the public where large sums are involved and members of the public are unable to judge the quality of what they are being offered. That is the observed position throughout history, and surely present day o City financial pages almost daily attest to the fact that human weakness continues.

In conclusion, therefore, I also urge Her Majesty's Government to maintain our present practice of independent assay offices testing the quality of precious metals to be offered for sale rather than trusting makers to do it themselves. The latter is to offer temptation to the unscrupulous, and offering temptation is bad law. Broadly in life we hope that we get what we deserve, and unregulated marking is a recipe for temptation and swindle, albeit by the few; but a few is a few too many. We have an excellent and well-tried regulatory system. Let us stick to it.

9.15 p.m.

Lord Mulley

My Lords, I share the views of previous speakers in thanking the noble Baroness, Lady Gardner of Parkes, for raising this issue tonight. As 1992 draws nearer and the prospect of a free market in these matters is likely to come about, I believe that it is important for us to understand the issues at stake. I do not think that there is any great danger in our having to abandon our hallmarking system. Those who are battling for that have really not understood the dangers and disadvantages which we are likely to face.

Of course I fully support our system and if it could be the same in all member countries of the EC that would be perfection. Moreover, if there were an equivalent system in the other countries that would also be satisfactory. However, all the signs are pointing the other way. That is the nature of the problem. The noble Baroness told us about the countries in the EC which have similar systems to our own. She mentioned two of them which had adopted them voluntarily. However, she did not mention the four which do not have any system of independent classification or hallmarking; namely, Germany, Italy, Greece and Luxemburg. Germany and Italy in particular are substantial manufacturers of precious metals. As things stand, if we are obliged under Article 30 of the treaty to permit such items to come into the country unrestricted, the Italian necklaces to which my noble friend Lady Fisher referred would not need to be hallmarked; they could be sold as silver without that protection. Indeed, who is to say what the standard of the gold or the silver in them would be? That is the nature of the problem.

I understand that the Commissioner, Martin Bangemann, announced to the International Confederation of Jewellery, Silverware, Diamonds, Pearls and Stones in November 1990 that the Commission would not be advancing a proposal for a directive on articles of precious metals. The reason was that the Commission thought it fit to have such a directive only if there was a question regarding the safety or health of consumers. Otherwise, it was to be left to the market and to the old doctrine of caveat emptor. But, as the noble Baroness, Lady Gardner, pointed out, it is a difficult, if not impossible, matter for the ordinary customer to decide. Indeed, I think that many of the experts in the trade would be hard put to identify precisely on sight whether the amount of gold in an article was 800 or 925, which is the standard required. Under Article 30 of the treaty we would be required, without the establishment of minimum criteria, to allow the free passage of such items.

Our French friends, always ready and vigilant to maintain the interests of their people, have already refused to accept German goods on the ground that there is an inferior consumer protection system there. The Commission has taken the French Government to the European Court of Justice because they are not prepared to allow unregulated, unmarked goods into their country. The result of the crazy system that exists is that that decision is not likely to be known for at least two years. The whole question is difficult.

As the noble Baroness said, as well as the fineness and quality of such articles, one of their characteristics is that they are readily transportable across frontiers. The hallmarks can be sent by post and put on in a third country. The goods do not need to be physically present in that first country. They can be shipped to another country and sold as German or Italian goods and so forth.

I compliment the Consumers' Association, which has been active on this matter. I am sure that the Minister will be able to answer many of my questions because I understand that on 29th May this year the Department of Trade was sent a copy of the letter that I have which raised all these points. The DG III (the direct orate concerned) has apparently said in discussion with the European Bureau of Consumer Unions that there could be some rethinking. That was way back in May. Will the Minister tell us what has been the outcome of that rethinking? Will he give us an assurance that our people in Brussels, especially the DTI man there, are keeping a close eye on what is going on in DG III and are reporting regularly on what in going on in that department? There is nothing to show that it is prepared to move. The Consumers' Association has, as the noble Baroness, Lady Gardner, said, made clear the three points which it finds the minimum acceptable. Even that will mean a complete revolution in our hallmarking system.

The Government must tell the Commission that the hallmarking system is good—something with which we all agree—and that it is what we want. There is no sign at the moment that we shall succeed. We want to know what the Government are doing in that direction. A German manufacturer went to the Dutch courts and argued that their system was a contravention of the Treaty of Rome. He received a dusty answer. When the Minister's colleague answered Questions on this subject in the summer he informed us that there was a case before the courts in this country. Will the Minister tell us whether it is continuing? I hope that the DTI will stir itself on this case, unlike many others, and keep an eye on what is happening, and that the Minister will keep the House informed.

This is a matter that is being dealt with by the Commission behind closed doors. It is not a matter that goes to the Council of Ministers. I do not believe that the European Parliament—active as it is, especially in respect of overseas visits—has concerned itself much with this issue which is of importance to consumers and the trade. I hope we can receive a positive answer tonight from the Government. To say that hallmarking is splendid is not good enough. We wish to know what they are doing to make sure that when the free market comes other people will not use Artick, 30 to put us all at a grave disadvantage.

9.25 p.m.

Lord Williams of Elvel

My Lords, the House will be grateful to the noble Baroness, Lady Gardner of Parkes, for raising this important Question. We on these Benches have little to add to what my noble friend Lady Fisher of Rednal said. We believe that compulsory hallmarking should be a feature of any future European arrangement.

I understand that, as my noble friend Lord Mulley said, there is legal action by a German company, Kohle, which failed in the Netherlands. Also, the Commission is taking France to the European Court on these matters. I should be grateful if the Minister could tell us exactly what is the state of those court suits. I believe that in the Netherlands the case has failed.

As the noble Baroness, Lady Gardner, remarked, Germany relies merely on mandatory marking by manufacturers and does not favour the continuation after 1992 of the British system of independent hallmarking in the precious metals which we are discussing. Britain, France, Holland, the Republic of Ireland, Portugal and Spain require compulsory independent hallmarking. In Belgium and Denmark hallmarking is voluntary; in Germany, Italy, Greece and Luxemburg only a mandatory manufacturer's mark is required. There is a clear difference between these practices.

In pursuit of trade harmonisation within the European Community, unless I am mistaken all Community countries other than Germany voted at the Dublin conference in June 1990 for a compulsory uniform system of British type hallmarking for 1992. I should be grateful if the noble Lord could confirm that my information is right.

However, then Dr. Bangemann, the vice-president of the Commission, said that there would be no directive on the subject. It was decided that the present law would continue to prevail, Britain running the risk of being taken to the European Court by foreign manufacturers of jewellery because we were imposing unfair trade barriers as a result of the failure of the Commission to implement the decision at Dublin in June 1990.

It seems to us that independent hallmarking of gold, silver and platinum, in whatever form, as my noble friend Lord Mulley said, is absolutely essential for the protection of the consumer. If there are different forms, as he suggested, then let us discuss them. However, we cannot be put at a disadvantage simply because Germany votes against us because it has different views and different manufacturing imperatives.

I believe that the Question of the noble Baroness, Lady Gardner, was directed essentially to the Government. We from the Opposition have made our point clear and I hope that the Minister will be able to give the noble Baroness and other noble Lords reassurance on the points I have raised.

9.30 p.m.

Lord Henley

My Lords, like the noble Lord, Lord Williams of Elvel, and other noble Lords I wish to thank my noble friend for raising this matter as it gives me the opportunity to reaffirm the Government's support for the British hallmarking system. I also thank my noble friend for her description of the process of hallmarking and for giving a history of the process. That has saved me the trouble of providing that information.

The House shows a great depth of experience and knowledge on this subject. The noble Baroness, Lady Fisher, declared her interest as a member of the Hallmarking Council. The noble Lord, Lord Broadbridge, declared his interest as a liveryman of the Worshipful Company of Goldsmiths. I believe I can say in response to the noble Lord, without pre-empting anything that the Queen's Speech may contain, that we have absolutely no plans to bring back the robust sentences that used to be meted out for fraudulent hallmarking in the past.

I shall now deal with the specific points raised by my noble friend. She asked what the Government intended to do to defend hallmarking after 1992. My noble friend Lord Astor informed the House in June, in response to a Question asked by the noble Lord, Lord Mulley, that there were at present no Community proposals to end or modify the British system of hallmarking. As the noble Lord, Lord Williams, remarked, there are no plans to introduce a Community-wide regime. I wish to reassure the House that the completion of the single European market in 1992 will not in itself have any effect on the legislation currently in force in this country and in the other member states regarding this matter. That means that all precious metal articles, including imports, will still need to be hallmarked before being put on sale, just as they do at present.

Nevertheless it is clear that agreement on a Community-wide regime for precious metals will have to be reached at some stage so that gold and silver articles accepted for sale in one member state are accepted in another. Many noble Lords are aware that the precious metals industry has been active both in this country and in Brussels in pursuit of its aim to have a harmonised Community system in precious metals established through the medium of a directive. However, the Commission has not brought forward any proposals, nor has it yet indicated that it intends to do so. It is therefore important that the Commission is made aware of the need for a system of compulsory—I stress the word "compulsory"—marking of precious metals, preferably by third parties. I believe the noble Baroness, Lady Fisher, referred to that.

The Government have strongly supported the principle of hallmarking in Community discussions when the opportunity has arisen, and will continue to do so. Moreover I urge all those who are concerned about the future of the UK system of hallmarking —that is, manufacturers, assay offices, retailers and consumer groups—also to press the case for compulsory third party marking in Brussels. However, I suspect that the Commission itself will not move in this area until the trade gets its act together. As things stand at the moment it would be almost impossible to put forward proposals that could be acceptable to all member states.

I wish to reaffirm that the Government's objective in any negotiations which may be held in the future within the Community will be to retain as much as possible of the UK hallmarking system. At the same time noble Lords must recognise that hallmarking is an area subject to the rules on majority voting. Therefore to achieve our objective in any Community negotiations will require extensive lobbying of the individual member states and of the European Commission.

I wish to say a few words about the White Paper from Germany that my noble friend Lady Gardner referred to. As I understand it, this was not a government White Paper but was a document produced by the trade and it has no official standing. We do not believe that the German Government are prepared to proceed with a hallmarking law at the moment.

The legal challenges in the Netherlands were referred to by the noble Lords, Lord Williams and Lord Mulley. Therefore it might be appropriate to say a little about those challenges. I understand that the German case mounted in the Netherlands by a German company, Kohle, failed. However, I understand that an appeal has been made and therefore it is not appropriate for me to say anything more about that case at this stage.

I can say that the Government will strongly defend the British hallmarking system against any challenges which are made against it in the courts, either in this country or in Europe.

In response to the Question from the noble Lord, Lord Mulley, my noble friend Lord Astor reported to this House on the application for judicial review which had been made by that same German jewellery manufacturer which challenges, among other things, the compatibility of the Hallmarking Act with Article 30 of the EC treaty. He stated that the case raised complex legal issues and the Government were considering their legal position. Those issues have yet to be resolved, but I repeat that the Government will strongly support any defence of the British hallmarking system.

I can certainly give the assurance that the noble Lord requested that the Department of Trade and Industry will, as the noble Lord, Lord Mulley, put it, stir itself on this issue.

It is not clear how Community agreement on the marking of precious metals will be brought about or the precise form that it will take. One thing is certain: the Government are in no doubt that hallmarking has served the consumer and the trade well over the seven centuries to which noble Lords have referred. It will therefore be our objective in any discussions on a harmonised Community-wide regime to retain as much as possible of the British hallmarking system. However, as I said earlier, it is a matter which is subject to the rules on majority voting and it is therefore a matter of defending our own interests.

Lord Mulley

My Lords, I am obliged to the Minister. Is it not surprising that the application for judicial review should give rise to so many complexities, and that some five months later the Government are still uncertain as to what their position is? Secondly, since the noble Lord has been good enough to refer to these matters, can he say whether any thought has been given to effective changes in the future in relation to items which will be alleged to have been made many years before 1992?

Lord Henley

My Lords, as I said, any legal case raises complex issues. The Government are considering their position but will mount a strong defence of the British hallmarking system, which we believe is a good system.

I hope that industry and consumer organisations will support the Government and keep stressing both in Brussels and throughout Europe the value of our hallmarking system and the need for a very strong consumer protection regime in the precious metals field.

I am grateful for the remarks made from all sides of the House. We speak with some unanimity on this matter. I hope that that will strengthen our position and indicate the unanimity of this House and the country as a whole on this issue.