FALSE AND MISLEADING PRICE INFORMATION (Hansard, 4 March 1985)

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)

As indicated in the announcement in another place by my honourable friend the Parliamentary Under-Secretary of State for Corporate and Consumer Affairs on 3rd May 1984, consultation took place on the recommendations in the Working Party's report and on his comments on some of those recommendations. The responses from a wide cross-section of trade and consumer interests showed general agreement on the need for improved legislation in this area with a view both to removing the complexities of the existing law and to controlling more effectively certain practices which are widely held to be potentially misleading.

A strong majority of those responses were in favour of the central recommendation of the report that the existing legislation should be replaced by a general prohibition on false and misleading price information with the necessary supporting detail being provided by a statutory code of practice. A clear majority view also emerged in favour of each of the other provisional proposals on which my honourable friend's statement of 3rd May 1984 had invited views.

The Government will introduce legislation which cslosely follows the majority view emerging from these consultations as soon as parliamentary time is available. The basic provision of the Bill will be a general prohibition on false and misleading price information. Provided that a sufficiently clear and precise code of practice can be established (and discussions on this with representatives of interested parties will now be held by my department), most of the necessary supporting detail will be in this form rather than in the legislation itself. The Bill will therefore include powers for the Secretary of State to draw up a statutory code of practice (admissible in evidence, but not in itself mandatory) with the advice of the Director General of Fair Trading and in consultation with representatives of interested parties; and a reserve power to make regulations by order. The Bill will also provide that any such code will be laid before Parliament and be subject to negative resolution before coming into operation.

On the other points on which the consultation invited comments, the Bill will provide for enforcement of the legislation to continue to be by trading standards officers only (prosecution in Scotland remaining in the hands of the procurators fiscal); for a single defence of having taken all reasonable precautions and exercised all due diligence, though without prejudice to the availability of other general defences under the criminal law; for the option of trial on indictment (in England and Wales) to continue; and for the coverage to be wider than the present legislation.

One important aspect of this proposed wider coverage is that the new framework will extend to the display by bureaux de change of commission charges and of both buying and selling rates, an area where some practices have evoked criticism from many overseas visitors.

The proposed extension to land transactions will relate only to price indications for new residential property offered by builders to private individuals.