HL Deb 19 October 1999 vol 605 cc931-4

2.54 p.m.

Lord Razzall

asked Her Majesty's Government:

Whether they will seek amendments to the revised convention on jurisdiction to ensure both that e-commerce in the European Union fully benefits from the single market and that consumers can obtain adequate cross-border redress.

The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville)

My Lords, a draft proposal has been put forward by the European Commission to convert the revised convention to a regulation which says that a consumer who sues a trader can have the case heard in a court of the country where he lives if the trader has used a website to reach consumers. That seems to go further than the revised convention, and my department is consulting industry and consumers on what position we should take on this new development.

We are extremely keen to see e-commerce flourish in the EU, and with that in mind we shall seek in any representations we make to give consumers confidence and to minimise the cost to business.

Lord Razzall

My Lords, I thank the Minister for that reply. I am gratified that Her Majesty's Government have seized the problem. Will the Minister accept that, unless some change is made to the convention, the requirement to comply with the laws of a large number of European countries will place an unbearable burden in particular on small and medium-sized enterprises?

Lord Sainsbury of Turville

My Lords, the issue here is that we have to balance giving confidence to the consumer with not burdening business with costs. Those issues are almost in contradiction, so we must get the balance right.

I should point out that this is a question of jurisdiction and not a question of law. Therefore, the problem of having to deal with a whole series of laws does not arise in this case.

Lord Avebury

My Lords, is the Minister aware that one reason why more goods are not sold on the Web Europe-wide is the restrictive practice of manufacturers of allowing their warranties and guarantees to operate only within the country where the goods are sold? Is that type of big problem being tackled by the European Union?

Lord Sainsbury of Turville

My Lords, that is an entirely different question. The issue of where warranties and guarantees apply is presumably related to where the goods are sold.

Lord Pearson of Rannoch

My Lords, since the Question and the Minister's response so far seem to assume that there are indeed benefits to be had from our membership of the single market, will the noble Lord tell the House of any net benefits which we have derived from the single market—e-commerce included—which we could not have derived from within EFTA and the WTO?

Is the Minister aware that the latest government figures show that our trade with the EU is reducing and is in mounting deficit, whereas our trade with the rest of the world is increasing and continues in healthy surplus?

Lord Sainsbury of Turville

My Lords, I realise that the noble Lord would like to leave the EU, but perhaps I may assure him that the great mass of businesses are quite clear in this country that our economic prosperity depends on being part of the EU. That is where the great majority of our trade is, and the idea that we can leave and go and join NAFTA or any other body is a complete fairytale to most businesses which trade in the EU.

Lord Levene of Portsoken

My Lords, the City of London is concerned that if every electronic provider in Europe is made accountable to the individual laws of each country, the real benefit of an open and free market in Europe will be lost. Will the Minister therefore assure us that this new, critical and developing industry will not be smothered in that way at birth?

Lord Sainsbury of Turville

My Lords, I believe that there are two different issues here. One is the 1968 Brussels convention which deals with the question of jurisdiction. In this case, we are dealing with the question of private law between two people, one of whom is suing the trader for non-fulfilment.

Public regulation of e-commerce is controlled by the country in which the transaction takes place. Therefore, quite rightly, a seller needs to consider only the law of the country in which he operates.

Lord Mackay of Ardbrecknish

My Lords, I have two questions for the Minister. First, would those regulations also cover people buying goods advertised on satellite television; for example, on Eurosport—to name a channel I was watching the other day? Secondly, will the Minister assure the House that the Government will not just look narrowly at the European aspect of the matter, because e-commerce will be world-wide and people will be able to buy goods from the United States of America? Will the Minister assure me that the Government will be looking at e-commerce around the world, and not only in terms of Europe?

Lord Sainsbury of Turville

My Lords, I am afraid that the issue of e-commerce regulations applying to Eurosport and so on is one which needs to be cleared up in the drafting of the regulation. I am sure that a lot of thought will be given to ensuring that our position is absolutely clear, so that there is no doubt about that particular point.

As far as concerns the question of "world-wide", one of the great advantages of the EU is that we have the mechanism to tackle those particular issues, which we do not have on a world-wide basis. That is one of the many benefits of which I am sure your Lordships are aware.

Lord Geddes

My Lords, with particular reference to e-commerce and small and medium-sized enterprises, will the noble Lord assure the House that national standards of one member state are fully recognised in all other member states of the EU?

Lord Sainsbury of Turville

My Lords, that is a similar question about where the jurisdiction lies. As I said, as regards e-commerce, the question of the public law aspects—a different consideration—is related to the country in which the seller lives.

Lord Pearson of Rannoch

My Lords, perhaps I may ask the Minister to be so good as to at least make an attempt to answer the question which I put to him. Is he aware that in the reply which he gave to me he made the classical error of saying that the majority of our trade is with the EU, whereas according to answers which I have received recently from his department, only some 45 per cent of our overseas trade is with the EU, and only 14 per cent of our trade in general—that is, our gross domestic product—lies with the EU? Would he care to agree that correction in his remarks?

Lord Sainsbury of Turville

My Lords, with regard to my earlier answer to the noble Lord, as the Leader of the Opposition said, "Make my day". Let us go on talking about the EU because it is extremely important that we continue to understand British industry's concern about this.

I turn now to the noble Lord's question. The answer is: yes, our trade with the EU constitutes slightly less than half our overall trade but, as your Lordships know, it still comprises the great bulk. As far as concerns benefits, I find it extraordinarily difficult to understand that Members on the other side of this House do not realise the benefit of free, open-trade markets. I am sure that the noble Lord, Lord Cockfield, has ably demonstrated that point to the Conservative Party in the past.

Lord Marsh

My Lords, the Minister has twice now referred to business being virtually unanimously, or overwhelmingly, in favour of closer trade connections with the EU. Is he not aware that in this country some of the great family companies, including famous food retailers, have whole families divided on this matter?

Lord Sainsbury of Turville

My Lords, food retailers are obviously a very special case in this particular situation. However, I believe it is important to make a distinction between trading companies which trade world-wide and retailers. A retailer's position is very different, as indeed is the position of those such as importers. But I believe that your Lordships will find that the great majority of trading companies, on which our exports depend, are totally convinced of the value of the EU.

Lord Gisborough

My Lords, how can the noble Lord talk about free trade when there is a ring fence around Europe?

Lord Sainsbury of Turville

My Lords, quite clearly we live in a world of trading blocs. The great move forward has been to create a free market within Europe. I hope that in due course that will spread further. At least it is a step in the right direction.