House of Commons Hansard Debates for 14 Dec 1989

Mr. Henderson : Will the Minister give a commitment to the House that he will ask the Office of Fair Trading regularly to investigate this matter and report to him?

Mr. Redwood : I give no specific assurance of the kind sought by the hon. Gentleman, but it is the duty of the Director General of Fair Trading to keep all matters relating to competition under some kind of watching review. It is always open to the hon. Gentleman and his hon. Friends to make representations if they feel that major problems have been brought to their attention.

The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) said that he was disappointed that I had been so brief. I was simply trying to give my hon. Friends

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adequate time to make their points and myself adequate time to reply to them. I was disappointed in his speech because I came expecting a major parliamentary occasion. I had read "What's Brewing". It said that the Labour party planned to force a new major brewing debate. [Interruption.] It gets better. This great debate, manfully conducted by one Back Bencher, one Front Bencher and one silent Whip was going to be a huge occasion. "What's Brewing" tells us that

"the aim is to combine with pro-competition Conservative MPs, force the Government to withdraw the orders, and come back with something more impressive."

Where are the pro-competition Conservative Members wanting to unite with Labour on the grounds that the orders do not go far enough? I have not heard any of them speak. If anything, Conservative Members feel that the Government have been a little too firm with the brewers. Where are the serried ranks of Labour Members who are to bring about this amazing challenge to Her Majesty's Government? If they are not testing brews in the pubs of London, they are probably tucked up in their beds where all sensible people should be at this hour. Perhaps the hon. Gentleman's interview in the CAMRA publication is a case of him playing to the camera. Perhaps in future when he is about to savage the Government he will ensure that all his hon. Friends are on a one-line Whip. That seems to be the form here this evening.

The hon. Member for Newcastle upon Tyne, North also says that I stand accused of lacking enthusiasm for competition. I will defend myself with some spirit against that rum charge. Much of what I have said and written shows that I am not lacking in enthusiasm for competition, and much of what the Government are doing shows that they are committed to a firm competition policy. They are much more enthusiastic than the Labour party was when in office and than it advises us to be in individual decisions and problems brought before the House.

I promise the hon. Gentleman that there will be competition. The policies that he faintly outlined tonight would make matters worse rather than better. Competition will be seen in the creation of more free houses, the guest beer provisions and the breaking of the tie on soft drinks and low alcohol beverages. The publication of price lists, which he welcomed, will help competition, particularly from tenants and smaller purchasers who feel that they do not get a fair deal. I am surprised that he attacks the regional breweries. An important part of rigorous competition in the brewing industry is to give the regionals the chance to expand and produce their alternative wares. I hope that micro-brewers--the very small brewers about whom we heard earlier--will flourish. I am sure that there is scope for the good niche brewers whose products the public will savour and like to buy. There will be more chance for the public to buy such products under the arrangements set out in the orders.

Some of my hon. Friends accused the MMC of bad workmanship and my hon. Friend the Member for Weston-super-Mare said that the MMC should be strengthened in various ways. I remind him that the MMC already has a large number of experienced panel members from industry and commerce. They are there to provide a leavening of experience and expertise based on their business to go alongside the work of technical experts on the staff. I hope that he will bear that in mind when considering the way in which the MMC operates. He also

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asked whether there had been any case where wholesale prices had been revealed. Proceedings are usually undertaken as a result of inquiries. Two examples that come to mind are British Gas prices and the price of plasterboard. We are not singling out the brewers. The Government are reviewing the licensing system for the very reason identified by my hon. Friend the Member for Weston-super-Mare. One of the underlying reasons for the power in the market place identified in the report is licensing. But licensing also has benign consequences. There is a good reason why pubs are licensed, as all hon. Members will accept. The Government are aware of the problems. That is why the matter is being reviewed to see whether there need to be changes in the light of the problems identified by my hon. Friends and others.

This has been a good debate. It has revealed that the House is split between Labour Members--who want the orders toughened up and the brewers taken further to task--and my hon. Friends who feel that there has not been enough care taken in responding to the brewers' concerns. In that connection, the brewers have made many good representations in recent months and the orders now represent a sensible conclusion to those negotiations with several important modifications that I hope my hon. Friends will welcome.

It is important that the Government have taken out of the equation food chains which sell some beverages, perhaps alcoholic ones, as part of their general food service. They are not offering a general pub service to the public coming in off the streets. That was a mistake in the earlier versions and I hope that my hon. Friends will agree that it was a good idea to remedy that problem.

The reason why the Government have kept the full on-licence as the criterion is that a definition of a pub is that its service involves serving a drink and nothing else to people coming in off the street. That is the problem that the MMC identified, which is why the orders are drafted as they are. That does not make a huge impact on most of the chains concerned because the number with hotels of the size for which exemption is sought are few and the number of hotels is also few, so it does not have a material impact on the total number of pubs covered.

I hope that the House will vote for the orders, reject the Opposition's prayer against the one order and support the Government's positive resolution in favour of the other. The orders represent a good deal for tenants, for customers and for the brewing industry in the light of the MMC report, and I hope that my hon. Friends will support them.

Question put :--

The House divided : Ayes 54, Noes 8.

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Division No. 22] [12.7am

AYES

Amess, David Hamilton, Hon Archie (Epsom)

Arbuthnot, James Howarth, G (Cannock and B'wd)

Arnold, Jacques (Gravesham) Hughes, Simon (Southwark)

Atkinson, David Irvine, Michael

Bennet, Nicholas (Pembroke) Kennedy, Charles

Boswell, Tim Knight, Greg (Derby North)

Bowis, John Lyell, Sir Nicholas

Brown, Michael (Brigg & Cl't's) Mans, Keith

Burns, Simon Maxwell-Hyslop, Robin

Burt, Alistair Mills, Iain

Cambell, Menzies (Fife NE) Nicholson, David (Taunton)

Carlisle, Kenneth (Lincoln) Norris, Steve

Carrington, Matthew Paice, James

Carttiss, Michael Patnick, Irvine

Chapman, Sydney Porter, David (Waveney)

Chope, Christopher Redwood, John

Coombs, Simon (Swindon) Shaw, David (Dover)

Davis, David (Boothferry) Speed, Keith

Durant, Tony Stradling Thomas, Sir John

Fallon, Michael Summerson, Hugo

Fishburn, John Dudley Taylor, John M. (Solihull)

Freeman, Roger Wallace, James

Garel-Jones, Tristan Widdecombe, Ann

Goodland, Alastair Wood, Timothy

Gow, Ian

Griffiths, Peter (Portsmouth N) Tellers for the Ayes:

Gummer, Rt Hon John Selwyn Mr. David Lightbown and

Hague, William Mr. Nicholas Baker.

NOES

Golding, Mrs Llin Skinner, Dennis

Hayes, Frank Vas, Keith

Jones, Martin (Clwyd S £ W)

Lawrence, Ivan Tellers for the Noes:

Mcay, Allen (Barnsley West) Mr. Jerry Wiggin and

Riddick, Graham Mr. Roger Moate.

Question accordingly agreed to.

Resolved,

That the draft Supply of Beer (Tied Estates) Order 1989, which was laid before this House on 6th December, be approved.

STATUTORY INSTRUMENTS, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).

Medicines

That the draft Medicines (Intermediate Medicated Feeding Stuffs) Order 1989, which was laid before this House on 30th November, be approved.-- [Mr. Goodlad.]

Question agreed to.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).

Education

That the draft Education Support Grants (Amendment) Regulations 1989, which were laid before this House on 15th November, in the last Session of Parliament, be approved.-- [Mr. Goodlad.]

Question agreed to.

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Consumer Protection

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Alastair Goodlad.]

12.17 am

Mr. David Porter (Waveney) : I shall start by thanking Mr. Speaker for giving me this opportunity to raise the subject of consumer protection. I also want to thank and pay tribute to Miss Susan Fleming, a third-year politics major student at the university of East Anglia. As part of her course she has been assigned to work on a project of my choice for one day a week this autumn term, and I am grateful to Miss Fleming for her research. I am grateful to my hon. Friend the Minister for giving me time to air some of my views. I also thank most warmly the staff of the National Consumer Council who have provided helpful assistance.

In order to make consumer protection a reality and not a pious intent, I call for the establishment of a CIA in Britain, a consumers' interests authority. Although I am reluctant to advocate more bureaucracy, I think that, parallel with the green revolution and in tandem with individual choice and responsibility, we need to go into the 1990s with strengthened consumer protection.

The proposals by the National Consumer Council for a consumer guarantee on cars and household goods costing over £50 go a long way towards providing the consumer with real choice and protection in the marketplace. That guarantee concept is at the heart of customer confidence.

Our trading standards service generally does a good job. Sometimes its members are limited by resources, and sometimes by their brief, the criminal side of the standards enforcement, which leaves a gap on the civil side, which has no protection.

An authority or agency such as the one that I propose would include the parameters of the trading standards service to some extent, some parts of the Office of Fair Trading, weights and measures, and the various schemes for independent arbitration and would reduce some of the work load of the small claims courts.

Local authorities should decide their priorities on trading standards. Consider the differences in spending per head on consumer protection last year--it ranged from £2.05 in Warwickshire to 64p in Lancashire. The projected range for the current year is from £2.62 in Warwickshire to 89p in Lincolnshire.

Local democracy apart, consumers are entitled to a more certain sign that local authorities, as enablers, are meeting their commitments. I accept that the figures could, to some extent, reflect the inefficiency of the statistical service. I do not want to go too far down that road, and talk about those figures, but they illustrate my point.

We hear daily about the rights of voters, the rights of women, the rights of workers and even the right to die. Surely, as consumers, we must expect a minimum agreed standard of manufacture and service. That is not too much to expect, is it? I do not think that an agreed standard that manufacturers of goods and suppliers of services have to meet is too much to expect.

Let us take the famous case of Mr. Bernstein. Some 27 days and 140 miles after he bought his Nissan Laurel car, the engine seized. He was forced to take the garage that sold it to him to court, but the judge told him that it was too late for him to reject the car, and that he was only entitled to compensation.

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The Supply of Goods (Implied Terms) Act 1973 gives the consumer the right of redress against the retailer if goods are faulty, but it is flawed, because the consumer is deemed to have accepted the car or the goods after an unreasonably short time. Therefore, the consumer loses the right to get his or her money back.

Let us take the case of Miss Cox and Mr. Flowerday, two of my constituents, who started a small business under the Government's enterprise allowance scheme. They bought a brand new Fiat for the business. From day one it was clearly a dud. Eventually, after endless repairs, an independent assessment and much citing of the Sale of Goods Act 1979, a solicitor advised them to accept £100 in compensaton, because they could not afford the court procedures. Why should they have had to go to the expense, the delay and the inconvenience of going to court? If they could have gone to a consumer interest authority, the court element might not have been necessary, but if it had been, the authority would have handled it on their behalf.

Under current legislation, a contract is established between the retailer and the customer. Last Session, I introduced a Ten-Minute Bill--the Public Service Contracts Bill. I sought to lay down the right to compensation when public services such as British Rail, the Post Office, and local authorities failed to deliver an agreed minimum standard, if possible a legal minimum standard. I still believe that that is right, and that it should apply to the sale of goods in the same way.

The Retail Consortium hopes to be able to support the concept of consumers' guarantees, a subject on which much has been said lately. It wants satisfied customers. After all, business depends upon satisfied customers. In millions of daily transactions, best practice prevails, and can be demonstrated to do so. Of course there are cowboy sellers, and unreasonable customers, but retailers are keen to protect consumers' rights.

The Retail Consortium is part of a monitoring group on misleading prices, which was set up by the Minister, who, I think, prefers a code to regulation when there is detailed agreement within a trade and with enforcement agencies. Perhaps the role of the DTI in those matters needs defining.

The convention that the retailer is liable stems from the clout that he presumably has with his own suppliers and the difficulty of the individual taking on the large manufacturers. Consider the Philips fan-assisted oven that did not reach roasting temperature unless the fan was disabled. It was a straightforward design fault, but Philips denied responsibility and passed the buck back to the retailer. The customer was left out of that entirely.

We also have the case of the Honda motor bike, the brake of which would seize in snowy weather--with obvious consequences. Honda did not see it as a manufacturing problem, but blamed the British practice of salting roads in icy weather.

They may be isolated and extreme cases, but an enforcement agency could make even giant manufacturers more responsive to consumer demands. We should never under-estimate the power of consumer demand. The marketing of products in aerosol cans, for example, is being changed out of all recognition because of it.

I believe that there is a growing tide of demand for a legally enforced, reasonable minimum standard for goods and services. In Britain, up to 6 million people a year fail to get adequate satisfaction when something they have

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bought goes wrong. It is not just the purchaser who loses out. As consumers, we all pay for the production and marketing of shoddy, if not useless, goods.

A potential buyer looking at a line of washing machines or fridge-freezers has nothing to tell him or her how much faith the manufacturer has in the reliability of his product or how efficient the after-sales service will be. That means that British manufacturers are missing a vital element that would help them enormously.

The NCC consumer guarantee would cover the entire product for 12 months at least, and any fault would be repaired at no cost to the consumer, provided that the consumer had not caused it. If the item were not repaired within five days--three days for cars--the consumer would be loaned a similar one, or compensated for loss and expenses. A fault would be put right in three attempts and the product would not be out of use for more than 30 days in any 12-month period, or there would be a choice of a refund or replacement.

The idea is not to cause manufacturers to mark the goods with a guarantee, but to oblige those without it to be clearly marked "This has no consumer guarantee." What an incentive for improvement that would be. What an act of faith it would be for quality manufacturers. What a death sentence it would be for most of the cowboys. Details are subject to debate, but what about the principle? Even then, things may still go wrong. We have independent arbitration schemes, and banks and building societies have ombudsmen. There is talk of the tourist industry having an ombudsman. Ombudsmen have the good will of the industry and the support of the public. We should have a high street ombudsman for the consumer in the street. Sweden has an independent arbitration scheme in its Public Complaints Board. It deals mainly by post with civil claims, at very little public cost. The board gives an advisory judgment which, if not accepted, is sent to arbitration. Names and details are widely publicised, which has proved effective. Power of public embarrassment is an additional tool on the consumer's side. Sweden's system is less bureaucratic than our small claims court, and I hope that it commends itself to the Minister.

There is a model in the United States. Most states have a utilities commission with power to refer to the district attorney complaints of violation of legal service standards. In effect, the district attorney can prosecute on behalf of individuals, and most get compensation out of court as a result. It is a principle that can be adapted here--legal minimum standards without being too complex, expensive or off-putting.

A CIA would be customer-friendly and be seen as such. It would present not an obstacle course in the minefield of consumer legislation but a powerful ultimate sanction in a society in which the Government have given the individual choice and responsibility. I ask two things of the Minister. First, he should give periodic remits to the NCC. It has independence written into its constitution, but it is funded by taxpayers. Will he ask it to explore the issue of redressing the high street and how it may be made more effective? Secondly, if the hon. Member for Clwyd, South-West (Mr. Jones) or any other hon. Member brings forward a consumer guarantee bill as

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a private Member's Bill, will the Government maintain benevolent neutrality or support the guarantee concept, even if they want to amend the details?

I shall end by paraphrasing Lord Palmerston who, you will remember, Mr. Deputy Speaker--from history lessons, not from memory--said in 1850 :

"a British subject, in whatever land he may be, shall feel confident that the watchful eye and the strong arm of England will protect him".

I say that, in whatever high street, market stall, corner shop or out-of town shopping centre, and whatever service a consumer pays money for, he shall have the strong arm and watchful eye of the CIA--the consumers' interests authority--and the consumers' guarantee available to him.

12.30 am

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth) : I congratulate my hon. Friend the Member for Waveney (Mr. Porter) on securing the debate. The House should be grateful to him for giving us an opportunity to discuss an important subject that represents a major part of my portfolio and for drawing our attention to his constituents' concerns. I acknowledge the presence of the hon. Member for Clwyd, South-West (Mr. Jones), who has taken the trouble to be in his place, to whom my hon. Friend referred. Also present is my hon. Friend the Member for Great Yarmouth (Mr. Carttiss), who has shown an interest in these matters and who is with his parliamentary neighbour this evening to give him support.

I shall examine any proposals that come forward in the form of a private Member's Bill, or any other form, to give effect to the National Consumer Council's recommendations. I shall do so with a critical eye because I am concerned to ensure that any proposals are workable and not over- bureaucratic. My hon. Friend the Member for Waveney prays in aid the United States, and I admire that country more than most hon. Members. I am aware, however, of the differences between the United States and the United Kingdom. I would be reluctant to take this country down the rather litigious route that the United States has taken in many instances. The costs of remedy often exceed the benefits either to consumers or producers. My hon. Friend the Member for Waveney rightly laid stress on the importance of giving protection to the consumer. That is a principle to which the Government and the Department of Trade and Industry have always been fully committed. I remind my hon. Friend of a passage in my Department's White Paper of January, 1988 :

"In consumer protection, the policy emphasis will reflect the Government's belief that the best form of protection comes fom consumers making well- informed choices and acting in their own interests. To achieve this, information can be more effective than regulation. However, where the case is made out for regulation on safety or other grounds, the Government will not hesitate to act." That remains our position.

The consumer already enjoys the protection of a comprehensive and well- developed framework of legislation, backed by effective and equitable mechanisms for redress. The Government provide support to the National Consumer Council and the National Association of Citizens Advice Bureaux, which provides an important source of advice, information and research to consumers.

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Legislation, and even the new type of bureaucracy that my hon. Friend the Member for Waveney has suggested, is not necessarily the answer to every perceived problem. New legislation takes time and can often be over-bureaucratic, and that is a danger that exists with my hon. Friend's suggestion. Voluntary response by industry is often quicker and more effective. Consumers have benefited considerably from industry initiatives to develop codes of practice and to provide mechanisms for the resolution of disputes, driven, as ever these matters are, by the need for it to compete in the marketplace and to attract and retain the confidence of consumers in the products that it is offering. An effective consumer policy is a combination of statute law, self-regulation and information.

My hon. Friend the Member for Waveney has spoken about the importance of protecting consumers' rights when goods are bought. The Sale of Goods Act 1979 sets out what the consumer is entitled to expect and provides him with remedies if things go wrong. The Act is one of the most fundamental pieces of our statute law, covering everything, as has been said, from a box of matches to a nuclear submarine. I do not know how many claims have been made under the heading of the second item, but it is one that we like to quote. No statute can have been more frequently effective--it is usually unseen in its operation--in everyday life. If the average shopper made only three purchases a day, for example, the number of daily transactions governed by the Act would be over 100 million. Under the Act, traders are required to sell goods which are of merchantable quality, which are fit for the purpose and which correspond to their description. Traders cannot exclude these provisions from their contracts with consumers. The Act allows the buyer, if he acts within a reasonable time, to reject goods which are not of merchantable quality and to receive back the purchase price.

If a latent defect comes to light later, after the goods have been in use for some time, the buyer is still entitled to claim damages and this right is not subject to any time limit except the normal rules which apply to the limitation of actions. In awarding damages, the courts would take into account the use the consumer had had from the goods.

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