§ Mr. Terry Walkerasked the Secretary of State for Prices and Consumer Protection whether he will now announce his proposals to control bargain offer claims.
§ Mr. MaclennanMy right hon. Friend today laid before the House an order under section 4 of the Prices Act 1974 prohibiting a range of bargain offer claims which are misleading or uninformative. When the order becomes effective, it will be illegal for a claim to be made which compares a price charged for goods with a value ascribed to the goods, or with various unspecified claims as to the price of the goods. These prohibitions will apply to both goods and services, and will affect all forms of price indication at the retail level, whether initiated by manufacturer, retailer or advertiser. In addition, in particular sectors, the order will prohibit comparisons with recommended or suggested prices. The first sector to be subject to this prohibition will be beds, but the Government intend to act similarly against other sectors where the use made of comparisons with recommended retail prices is likely to mislead. Consultations are to start immediately with a view to prohibiting comparisons with recommended retail prices in four such sectors: domestic electrical appliances and similar goods using other fuels, electronic consumer goods, carpets and furniture. To ensure that comparisons with recommended retail 93W prices are not the subject of abuse in other sectors, the Price Commission is to be asked to monitor, as a standing reference, the use of recommended retail prices. In addition, sectors where pricing practices, including comparisons with recommended prices, are suspect will be referred to the Price Commission for examination.
In choosing to restrict those sectors where comparisons with recommended prices are to be prohibited, the Government have taken account of agreements voluntarily entered into by manufacturers in the soap, detergent and toiletries industries. Under these agreements, the manufacturers have undertaken to limit the proportion of their product accounted for by "bargain packs" to not more than 50 per cent. of the total deliveries of any brand size in any year. This represents a significant advance on the present position, by which commonly 80 per cent. and in some instances 99 per cent. of a product is claimed to be on special promotion. In view of these agreements, the Government have not taken action to prohibit comparisons with recommended retail prices for the products covered by the agreements. These include toothpaste, where the Price Commission suggested in its recent report that recommended retail prices should be prohibited. The Government have, however, commended to the trade the Commission's observations on discounts and rebates and have told the trade of their wish that these should be seen to operate fairly.
The order will take effect from 2 July, subject to transitional arrangements to cover a range of products and promotions where that date would cause disruption or expense. Later dates are therefore specified for certain prepacked goods, and for various forms of advertisement.