Consumer Guarantees Bill
Order for Second Reading read.
Mr. Dennis Skinner (Bolsover) : On a point of order, Mr. Speaker. In view of the storms and the extensive damage throughout the country, I wonder whether you have had any indication that there will be a statement today, and whether the Minister will pay tribute to the ambulance men and women who have given devoted service alongside the firemen. As a result, will the Government allow the linkage payment to be made to the ambulance workers so that we can get this thing settled once and for all?
It is a privilege and a pleasure to move the Second Reading of the Consumer Guarantees Bill. I was not sure that I would be able to be here today as I came down with cook-chill disease yesterday and was laid up for most of the day. I hope to be able to make my entire speech, although I shall not delay the House too long.
The Bill is widely supported in the House and outside, and I hope that we can give it the wholehearted support that it deserves. The Bill falls into two distinct yet complementary parts. First, it takes an idea developed by the National Consumer Council for a consumer guarantee, which has been reformulated in the light of comments from business, industry, legal experts and, of course, the Department of Trade and Industry. The second part implements the Government's changes to the sale and supply of goods laws. I have incorporated those changes into the Bill at the request of the Under-Secretary of State for Industry and Consumer Affairs, who supplied me with the official draft from his Department.
The two parts of the Bill are complementary because they are both concerned with consumers. One part deals with their rights and the other with remedies. It is equally true that one part is concerned with prevention and the other with cure. Hon. Members who have read the National Consumer Council's report, "The Consumer Guarantee" will know that that part of the Bill is a natural and logical development from the part implementing new formulae for the sale and supply of goods laws. This morning I shall talk principally about the consumer guarantee. That does not mean that the rest of the Bill is
Column 1168less important, but simply that more needs to be said about the consumer guarantee for reasons that will become apparent--if they are not already. The second part of the Bill should be uncontentious. First, I pay tribute to the National Consumer Council and its staff for what can only be described as an excellent job. Many people have been involved in the project, but I should like to single out Baroness Oppenheim-Barnes who was the driving force behind the idea. Her major contribution to the Bill emphasises that it is not a party political issue. I know that hon. Members from both sides of the House will support the Bill today, as their constituents would want them to do. In so doing they will reassert the sovereignty of Parliament and emphasise our role representing the interests of those who send us here. I believe, as someone who worked in quality control in industry for 19 years, that the Bill will be good not only for consumers but for British business.
The objectives of the Bill are to secure full competition in the high street, to provide consumers with a clear and simple statement of their rights and redress and to promote high standards of quality control. It will do so by defining a clear and simple guarantee, backed by legislation. That will allow consumers to choose a product by reference to its quality, reliability and after-sales service, not simply by its price. Businesses will not be required to give such guarantees, but producers of motor vehicles and major household appliances will be obliged to state whether they offer that protection. Consumers will be aware which manufacturers are prepared to stand by their products, and that will force manufacturers diligently to address the issue of product quality and customer service. As will be clear, the Bill will ensure that the benefits of legal protection and competition are harnessed to serve consumers and business.
The emphasis on the role of competition has caused some controversy. Many people have argued that the consumer guarantee should offer a minimum right. I have some sympathy with that view, but I have been persuaded that the National Consumer Council's approach to industry--"this is your last chance"--is right. Yesterday, I received a letter from Sir Gordon Borrie, the Director General of Fair Trading. He welcomes the approach that the Bill takes and wishes it success today. However, he has a number of detailed reservations which he hopes the House will consider. They are important, because Sir Gordon is not only an eminent lawyer but the guardian of competition and fair trading. He says :
"My basic worry arises from the attempt to proceed on a voluntary' basis."
That bold truth comes from the man behind many codes of practice and other examples of self-regulation, which many hon. Members believe leave much to be desired. He further says that the voluntary scheme could increase confusion. The solution that he advocates is that the consumer guarantee should be developed into a statutory mandatory right. Many hon. Members will treat Sir Gordon's advice with the respect that it warrants : his views can be adopted through amendments made in Committee, should the Committee agree. The House will want to know that I have received advice from other lawyers expert in this sector and in the intricacies of law reform. In the light of the few detailed concerns that they have expressed, I shall recommend three specific amendments in Committee to ensure that the regime is legally sound and has the endorsement of the
Column 1169most eminent lawyers in the land. The first detailed point that they make is about the burden of proof on the existence of the defect. That was the last point of the Confederation of British Industry when it made six criticisms of the original consumer guarantee report. Five of those criticisms were taken up by the National Consumer Council, and I intend to take up the last one if the Bill is given a Second Reading.
The second point that lawyers made was the right of the consumer to notify the retailer of a claim against the guarantor. I shall drop that point to avoid the confusion that the Minister apparently fears. The third is the risk that a business man might be able to recover financial losses, say from a lost contract, due to a defect in a car. I am sure that the House will agree that those matters should be carefully considered.
I do not want to bore hon. Members with the detailed principles of something which I am sure they support, but I shall deal with some of the points that the Under-Secretary of State for Industry and Consumer Affairs may make. First, in the Today newspaper on 22 January, the Minister said that he is not aware of support for these measures. I find that odd, and I ask the Minister to listen to my hon. Friends today and to remember an Adjournment debate in December initiated by the hon. Member for Waveney (Mr. Porter). Secondly, I refer the Minister to his written answer of 22 January, which clearly mentions bodies that support these measures. Thirdly, I refer him to the results of a MORI poll, of which he and the Department have been informed, showing that 87 per cent. of people think that the guarantee is important and that 96 per cent. of voters want their Members of Parliament to support the Bill.
Fourthly, I refer the Minister to editorials in Today, the Daily Express, the Sunday Express, The Guardian, the Western Daily Press and the Newcastle Journal, not to mention other regional papers for East Anglia, Wales and many other parts of the country. Fifthly, I ask the Minister to pay attention to views expressed by hon. Members and their constituents which have been forwarded to him and to which he has replied. Sixthly, I refer him to about 100 written responses that the National Consumer Council has given to his Department, showing support from consumer groups,
manufacturers--including Hotpoint and Volvo--and retailers such as Comet, Argos, the Co-op, and the Retail Consortium.
I suspect that the Minister may select aspects of various responses to show some opposition to the Bill. The Consumers Association is delighted that it incorporates the Law Commission's amendments to the Sale of Goods Act 1979, and I am sure that that eminent body is equally satisfied with the changes that the Bill makes to the National Consumer Council's report.
I gather that the CBI still has some reservations about the Bill. No hon. Member would expect it to call for legislation to protect the consumer, but it would be a matter of considerable concern if it opposed a measure aimed at securing full competition, especially as all its detailed objections have now been met. Like most individuals, I should like to know what it believes should happen if I am sold a car or washing machine that turns out to be a lemon. If it believes that the seller rather than
Column 1170the manufacturer of a defective product should be liable, let it so persuade the House by moving amendments to part V of the Bill. I understand that the Minister thinks that the guarantee may be a burden on business. I find that a strange argument, because no business will have to offer the guarantee : only certain manufacturers will have to state whether they offer it. It is not a burden but an incentive to compete in quality.
The Minister is reported as saying that the Bill is unnecessary. I refer him once again to Sir Gordon Borrie's letter, which could not be clearer. He says :
"There is undoubtedly a need for greater clarity and transparency about the rights of consumers faced with defective products." I refer the Minister to a 1986 report, "Consumer Dissatisfaction", for which one of his senior officials at the Department of Trade and Industry was responsible when he was at the Office of Fair Trading. It shows that each year 14 million people are dissatisfied with products that they buy ; that only half will have their problems resolved ; and that over £5 billion is spent each year on products that turn out to be unsatisfactory. That is an appalling indictment of our industry.
I beseech the Minister to listen to the views of experts, colleagues, advisers, constituents, Baroness Oppenheim-Barnes--it matters not who-- because anyone with eyes, ears and a modicum of intelligence can see that this is a necessary change in the law.
Mr. Peter Viggers (Gosport) : I am listening carefully to the hon. Gentleman's case. Concern has been expressed about the Bill, especially about its breadth of application. Much of the earlier discussion was on the Bill applying to cars and "brown" goods, but not necessarily to "white" goods or television sets. Manufacturers of those items believe that they offer satisfactory guarantees. If the Bill progresses, will he be prepared to consider a list of products to which it will apply, with a view perhaps to restricting the Bill if it can be shown that the manufacturers of those products have satisfactory guarantee arrangements?
Mr. Jones : I should be delighted to consider in Committee a list of specified products and I am sure that a list could be drawn up to answer the hon. Gentleman's criticisms but with the aims and principles of the Bill in mind.
The Minister is also reported as having criticised the measure on the grounds that it is bureaucratic. At first, I wondered whether the report was accurate, but the same word was used in The Times and the Sunday Telegraph.
I have looked hard for bureaucracy in the Bill and I am forced to conclude that the Minister has either been criticising a different measure or believes that the disclosure of information on which the consumer choice must be exercised is in itself bureaucratic. If the latter is the case, I reassure him that, with his blessing and support, I
Column 1171know that the House will drop that so- called bureaucracy and make the guarantee mandatory, as Sir Gordon Borrie recommends. I understand that the Minister has also said that the Bill is over-prescriptive. It is hard to imagine a milder medicine for this widespread malady. Anything that is simple and equitable, such as the consumer guarantee, must be prescribed. If the public are to have any confidence in the scheme, it should be set out in legislation. Business men themselves see merit in such detail being prescribed in legislation.
The Minister and his colleagues keep saying that it is not for Government to tell business how to run itself. But that must cut both ways. We are talking about the well-being of our industry and the quality of life of our citizens. Surely on such issues, unbridled ideology is inappropriate. We should listen to people who know and work together for the public good.
The public deserve the Bill now and business must have it if its quality control is to be sharpened up in time for 1992. I commend the Bill to the House.
Mr. Conal Gregory (York) : I praise the initiative of the hon. Member for Clwyd, South-West (Mr. Jones) in choosing an extension of consumer rights as the subject of his private Member's Bill. As the House knows, I have a long standing interest in consumer matters and I chose consumer safety as the subject of my private Member's Bill in 1986. I believe that the hon. Member for Clwyd, South-West came first in the ballot whereas I came 20th on that occasion. Despite all the frustrations and difficulties that I understand the hon. Gentleman has already experienced, and the frustrations and difficulties that I predict he will have in future, I urge him to stick to his guns. If I can come in 20th in the ballot and find my Bill on the statute book, there is every reason for him to hope that his Bill, too, will become law.
The case for legislation is overwhelming. An enormous amount of confusion exists over a multitude of guarantees and warranties. It is essential that when a prospective purchaser looks at goods, he is aware whether there is a guarantee and, if there is, of his rights under it. We in Britain throw away £3,500 million on unsatisfactory cars and a further £346 million on faulty household goods. Many hon. Members will remember the case of Mr. Bernstein a couple of years ago. Only a minority of cars is purchased by private consumers, but the brand-new car that Mr. Bernstein purchased was not a fleet car. He took the car away and the engine seized up after only 140 miles. He took the car back to the garage where more than 100 faults were identified. Much to my surprise, and no doubt to the surprise of many of our constituents, the High Court ruled against him on the ground that he should have taken adequate care and made adequate inquiry on the forecourt before taking the car away. That makes nonsense of consumer rights and guarantees. I feel for the Mr. Bernsteins of this world. The Bill would outlaw such practices. Shoddy goods will disappear from our stores only when retailers and manufacturers realise that they have a duty to act responsibly. It is all too easy to lose the guarantee card for a new cooker, mowing machine or car and hope that
Column 1172all will be well but then find that the small print and the lack of responsiveness are in stark contrast to the early charms of the sales person in closing the sale.
The Bill aims to cut through the red tape. There are two choices--a solid guarantee to compensate or replace the goods or a clear label stating that the product carries "no consumer guarantee". It is right to require free repairs, including labour costs and the loan of an article to perform the same functions, or compensation, in the meantime. The compensation that the hon. Member for Clwyd South-West suggests is extremely modest. I should have liked him to suggest not the value of the goods but one and a half times or double their value. That could have been whittled down in Committee, no doubt under pressure from the Minister. The hon. Gentleman has instead chosen a modest clause, which I hope he will not allow to be rescinded.
The surprise is that this important Bill falls in private Member's time and is not part of the Government's programme. The Conservative party may not be at the height of its popularity, and a caring piece of legislation designed to protect Mr. and Mrs. Typical Shopper would do wonders for its image and for the Minister's prospects. The promoter rightly referred to the initiative of the National Consumer Council whose report "The Consumer Guarantee" mirrors in many ways the "lemon" laws in the North American states. The report was welcomed by my trading standards body, North Yorkshire county council, whose diligent trading standards officer Gordon Gresty, is a first-class local government officer. Countless examples will be given in this debate and in Committee of the problems that consumers have had, especially with cars and white goods. The Bill has my overwhelming support and I commend it to the House.
Mr. Robin Squire (Hornchurch) : I apologise to the House--if it is not self-evident--that although I have a different ailment from the promoter of the Bill, my voice may not last out. No doubt my hon. Friends will be reassured by that.
I declare a long-standing interest. I first joined what was then Lombard Banking in 1968 and I was with that institution when I was elected in 1979. I have continued with an interest. Although the institution has not asked me to speak today, I am speaking with the knowledge of, and with the advantage of information from the Finance Houses Association of which Lombard North Central is a major part. I add my congratulations to the hon. Member for Clwyd, South-West (Mr. Jones). He will get used to us trotting out our own experiences. A few years ago I was fortunate enough to be able to introduce the Local Government (Access to Information) Act 1985. I can assure the hon. Gentleman that he will find it a rewarding experience and-- whatever my inevitable reservations may be--I am sure that he will end up with legislation on the statute book, and I wish him well. I am grateful to the Finance Houses Association for its assistance. It submitted a detailed response to the National Consumer Council paper, "Competing in Quality", published in June last year. While endorsing the aims of the consumer guarantee, it suggested that the position of the finance houses had not been properly considered.
To be fair, in its final report the NCC acknonwledged that the position of finance houses had been the most
Column 1173difficult matter that it had had to address and it attempted to answer some of the difficulties that had been outlined in the Finance Houses Association response. There remained some problems on which a further response was submitted to the NCC. Subject to their resolution, the Finance Houses Association has asked me to make it clear that it remains happy to support the proposals for a consumer guarantee.
Unfortunately, the Bill as drafted appears to be based on a number of misconceptions and fails adequately to accommodate arrangements involving a finance house. I shall be brief, but I hope that the House will understand if I explain the different types of agreement in a little detail so that the thrust of the Finance Houses Association's reservations can be understood.
First, let me refer to to the application of the Bill. Clause 15 attempts to set out definitions of the parties to which the Bill will apply. It will apply to loans. Credit agreeements have been given the Consumer Credit Act 1974, section 137 definition. As a result, the Bill will apply to loans regulated by the Consumer Credit Act and loans not regulated by it. Regulated loans fall into various categories, such as debtor-creditor, debtor-creditor--supplier, fixed sum and running account credit--I shall not bore the House with full details. The Bill also covers asset-based credit agreements which, again, can be regulated or unregulated. Hire purchase, conditional sale and credit sale are included under that heading.
Hiring agreements can be regulated or unregulated. Although the FHA was led to understand that the Bill was intended to apply only to individual consumers, the definition of "consumer" in clause 15 seems to go beyond that. Clause 3 says :
"a specified product means one which is
((ii) ordinarily supplied for private use or consumption", which clouds the issue even more. What criteria will be used to judge whether a product is "ordinarily" for private use? It seems illogical to extend the guarantee to certain business users when it has already been agreed by Ministers that that will be taken out of the scope of the Consumer Credit Act 1974. We are told that legislation initiated in November 1987 by my noble Friend Lord Young, the former Secretary of State for Trade and Industry, is merely awaiting parliamentary time.
Clause 2 attempts to cover special provisions in relation to finance agreements. Clause 2(1) specifies that it will be applicable only to goods
"supplied to a consumer under a credit agreement or a consumer hire agreement."
The clause appears to be intended to cover all the agreements that I have mentioned, athough in many cases that would be wholly inappropriate. Alternatively, as a result of the way in which the Bill is drafted, clause 2 might not apply at all to loans. "Supply" has been given the same meaning as in section 46 of the Consumer Protection Act 1987 and means, therefore,
"selling, hiring out or lending the goods",
"entering into a hire-purchase agreement to furnish the goods". It may be arguable that under the definition of "supply", finance houses do not fall within the scope of clause 2. That definition of supply would apply unless
"the context otherwise requires".
Column 1174It may be necessary to consider the ordinary meaning of the word "supplied". Can it be said that goods are "supplied" under a loan contract? The central point is whether a loan contract constitutes supplying goods. The answer is by no means certain in law and clarification is essential. I argue that it would probably not be a supply of goods and, therefore, clause 2--which is an important clause-- would apply only to hire purchase, contract hire and rental agreements.
Clause 2(2) stipulates that where a consumer claims a refund, the guarantor, acting as an agent for the consumer will pay
"such amounts as would be necessary under the Consumer Credit Act 1974 to discharge the consumer's indebtedness"
to the finance house and repay to the consumer what he has already paid. There is a defect in the drafting, in that sections 94 to 96 of the Consumer Credit Act apply only to certain types of agreement. Various types of agreement would not be included, such as unregulated agreements and consumer hire agreements. Ironically, if the definition that I gave a moment ago on loans is correct, and only consumer hire agreements are included, broadly speaking, we are now excluding those agreements under sections 94 to 96. What agreements will be covered by the Bill? Other agreements that would not be included are those where the charges are calculated on a daily basis, running account agreements and regulated hire agreements. Provision will have to be made for the calculation of the amount due to the finance house in those cases, which could form a substantial proportion of all the cases that will arise under the Bill-- because I hope that it will become an Act. It may be agreed that the Consumer Credit Act 1974 rules could be made to apply to unregulated loans but, as there are no Consumer Credit Act rules for most of the categories that I have outlined, there is an obvious central flaw.
There is a particular difficulty with hire agreements. A refund based on the total rentals may not be sufficient to pay off the finance company. The rentals, especially in the case of motor cars, may have taken into consideration tax allowances and the residual value of the car. In that case, the recovery of the residual value may depend on a pre-existing obligation to resell the supplying dealer. In cases where both the manufacturer and the car to the supplier of goods offer a consumer guarantee, it is uncertain who will be liable to pay the consumer's indebtedness to the finance house. The assumption must be that they will be jointly and severally liable, but that has not been made clear in the Bill.
A small adjustment is needed in clause 2(2)(b). The words "consumer credit agreement" are used, but the word "consumer" is wrong in that context. Clause 2(3) states that where a guarantor has satisfied his obligations under clause 2(2), "he shall be entitled to recover the product."
However, it should be remembered that where the agreement is a hire purchase or conditional sale agreement, the customer becomes the owner of the goods upon payment of the indebtedness, so there will have to be further provision to ensure that title to the goods rests in the guarantor. If the goods are provided under a loan agreement, the customer will already have title to them, so it will be necessary to provide for the transfer of the title.
At what point will title and risk in the goods pass to the guarantor? The FHA assumes that that will be when
Column 1175payment in full is made by the guarantor, but it could be when delivery is made to the guarantor. That point requires clarification. Although, separately, most of these are small points ; collectively, they highlight the fact that a substantial amount of clarification is needed if the legislation is to to be fully acceptable.
Various items, which arguably should be covered in the Bill, are missing. There are no provisions, for example, relating to the impact of the supply of replacement goods, although that would have a major effect on finance houses. If goods are provided on hire purchase, conditional sale or consumer hire, title to the replacement goods must be passed to the finance company. It will be necessary, again, to identify at what point that happens. New documentation will have to be completed if the agreement is a regulated agreement. That is an important point as there could be an onerous administrative burden if many guarantees were exercised.
In fairness to many hon. Members who are waiting to speak, I shall gloss over some of the fiscal aspects of the proposals, which are not covered fully and which need greater attention. I shall draw them to the promoter's attention in a separate letter. The Bill does not take account of the fact that a guarantor may be unaware of the existence of a finance agreement. Where the guarantor is the manufacturer, it is unlikely that he will be aware that the goods in question are subject to a finance agreement. The FHA does not believe that it will always be possible to rely on the customer giving that information. Clause 13 gives the Secretary of State excessive powers, it may be argued, to make regulations. My hon. Friend the Minister, who is well known for his sterling upholding of Conservative qualities on law and order and the importance of punitive action, must recognise that clause 13(1)(o) and (p) offer what may be unnecessary and undesirable powers to create new criminal offences. I realise that I may be attracting my hon. Friend to the Bill by highlighting that point, and I know that he will examine it closely.
Part V puts forward several important amendments to the Sale of Goods Act 1979, many of which deal with commercial rather than consumer sales. Perhaps the short title to the Bill should be "Consumer Guarantees and Sale of Goods (Amendment) Bill." The Bill raises important matters, that, are inevitably legalistic, and I apologise to the House for being rather dryer than most hon. Members will be. However, a substantial proportion of the sales of the goods that the promoter intends the Bill to cover are achieved by means of loan, hire purchase or other forms of agreement. In 1988 alone, the value of store goods supplied on credit was £2.794 billion, which is a staggering figure. It is important that we get this right. The Bill is important and I support it, with reservations. I wish the promoter well and I very much hope that the provisions about which I have reservations will be amended in Committee.
Mr. Alan Williams (Swansea, West) : I congratulate my hon. Friend the Member for Clywd, South-West (Mr. Jones) on his fortune in coming first in the ballot and on his choice of subject for the Bill. The hon. Member for Hornchurch (Mr. Squire) referred to the Bill's implications for finance houses and mentioned the Consumer Credit Act 1974. I was fortunate to be the Minister of State in
Column 11761974 and I guided that Act in the first independent Department of Consumer Affairs. The present Minister, the Under -Secretary of State for Industry and Consumer Affairs, embodies the residue of that Department and I am glad to see him here today. High though my regard is for the Minister and much though I like him, from where I stand, his Department does not look impressive.
The arguments of the hon. Member for Hornchurch about finance houses are legitimate and deserve consideration. When the Consumer Credit Act 1974 was enacted, there was no intention that business users would be the beneficiaries. The aim was to protect the individual in the market place. It was obvious from the opening and closing comments of the hon. Member for Hornchurch that we have his good will and I am sure that it will be possible for my hon. Friend the Member for Clywd, South-West and his sponsors to accommodate the serious points that need to be made on behalf of the finance houses. That can be achieved in Committee.
The Consumer Guarantees Bill is one step in a succession of legislative steps intended to overcome the problems that have arisen from the emergence of the consumer society which is the product of a mass production economy. We now mass-produce goods remotely, in isolation, from consumers who will be using those products. Much Government time is spent trying to ensure consumer protection. They have been trying to give consumers the information that they need when they buy goods which have inevitably become enormously complex. They become complex not just in the technicality of production, but in the technology embodied in the products. That technology is often incomprehensible and unascertainable at the time of purchase. We need only consider the use of electronics in cars today to realise that the days of home car repairs are limited. Kits are sold in the United States to convert older cars back to manual as their electronics begin to give trouble. Those unconverted cars are unsaleable because their second-hand value falls so much.
Mr. Michael Stern (Bristol, North-West) : In addition to the problems that the right hon. Gentleman described, does he agree that the problems are often compounded by the apparent inability of any western nation to write instruction literature in such a form that it can be understood by anyone other than the person who built the appliance concerned?
Mr. Williams : I attempted the apparently simple process of assembling a desk unit with my daughter. One would have thought that little could be simpler. However, we sat scratching our heads for nearly half an hour trying to interpret what at first seemed to be a simple diagram and trying to work out where to install a particular support piece. The problem is that the person writing the instructions knows what he means and presumes a level of knowledge in the readers which in many cases may not exist--it certainly does not in my case.
The complexity of products has made it much more difficult for the consumer at the time of purchase to know whether the goods are up to the required standard or of the standard described. The Bill goes a short way towards ensuring that what we cannot always ascertain from personal inspection can be taken for granted because of the guarantee that accompanies the product.
Column 1177Some vested interests oppose that principle for reasons that we can understand. All too often the faults that aggravate the consumer and take up so much of his time--the faults which cause products to be out of use or mean that the car stays in the garage for long periods--are often minor. Those faults could be engineered out and reliability could be engineered in. At the design and specification stage it is possible to engineer in greater reliability at relatively minor cost. Often, the faults that arise from production can equally be engineered out at low cost in the production process.
Mr. Edward Leigh (Gainsborough and Horncastle) : With regard to minor defects, will the right hon. Gentleman respond to a point made by the motor manufacturers which was not answered by the hon. Member for Clwyd, South-West (Mr. Jones)? The manufacturers claim that "satisfactory quality may include the freedom from minor defects. While we agree that a manufacturer must ensure that such defects are repaired, we do not believe that a minor defect, such as an intermittent fault with an interior light, should allow the consumer to claim a refund or replacement."
Is that not a serious point? Why should such an onus be placed on the retailer and manufacturer for what might be a very minor defect?
Mr. Williams : That is an arguable point. My hon. Friend the Member for Clywd, South-West is reasonable and I am sure that he will be willing to see how far such points can be accommodated. If there is good will on both sides, I do not see why there should be a confrontation on that issue. All hon. Members and their families are consumers. We all have the same interest in ensuring that we and our constituents have reliable goods. All too often it is possible to engineer in, at low cost, protections for the consumer which would incur high costs if the faults were allowed to enter production. A couple of years after my consumer job, I was involved in the Department of Industry in dealing with the inability of the British television industry to sell components. The hon. Member for Caithness and Sutherland (Mr. Maclennan) was a Minister in the Department with me at the time and may remember what happened. British manufacturers claimed that they could not sell components to Japanese companies operating in the United Kingdom because the Japanese demanded utterly unrealistic standards of performance and reliability from the components. They would accept only minuscule faults in batches delivered to them. We were told that that was an example of the Japanese at it again and that it was a wily endeavour on their part to ensure that British industry could not sell to them.
One of my officials at the Department of Industry took on the task of investigating Japanese standards. He spoke to the Japanese companies to see whether we could discover common ground between them and the British manufacturers. It emerged that the Japanese were asking for component standards in this country no higher than they expected and received from components manufacturers in their own country. More damning--this is why I do not regard too seriously many of the criticisms from
Column 1178industry about the Bill--the same component manufacturers who claimed that the Japanese standards were unattainable were meeting such standards in their Government defence contracts.
We must put pressure on companies to provide goods of the quality that the public has a right to expect. There is no mandatory element in the Bill and that is important. If I refer to a company by name, I do so for example and not because I am pinpointing it for any other reason. For example, if Ford believes that it cannot meet a guarantee because of production difficulties with a particular component, it does not have to give that guarantee and it is also likely that Ford's competitors would face the same problems. It will not lose the competitive advantage. But if one company is failing at a technical level and another is succeeding, the public have a right to know that the product from that company is more reliable than that produced by the other. The onus is on the company at fault to put its house in order. It should not hide behind a lack of information that prevents the public from discovering the inherent problems in its product. I was surprised to note the Minister's facial expressions when my hon. Friend the Member for Clwyd, South-West spoke about bureaucracy. Although there are elements of the Bill that we might want to discuss or, conceivably, to amend, I cannot see how it could be described as bureaucratic. One of its main advantages is that it would be self-policing to a great extent and, therefore, of little or no cost to the Government.
Industry may argue that the Bill is too costly, but if industry does not want to meet the cost of ensuring that its products are of a standard that consumers have a right to expect, that is industry's decision. There will be no compulsion on industry, but it cannot expect the consumer to be misled any longer by the type of guarantee given at the time of purchase. I do not believe that the Bill need cost industry.
I was surprised to see a report at the weekend suggesting that the Department wanted to see the Bill killed. I am sorry that the Minister was pinpointed as the initiator of that plan. I would be delighted if he assured me that that was not so. I should be sorry if an attempt were made to talk the Bill out. It would be difficult for the Department to recover its standing with the consumer organisations if it was seen to abuse the advice proffered by those organisations and by the Office of Fair Trading.
Our constituents are the consumers who would be affected by the Bill. At the very least we should ensure that it is not killed off after a cursory Second Reading examination. We owe it to our constituents to give the Bill a detailed examination, with the possibility of amendment, in Committee. That would give us the opportunity to consider many of the problems that legitimately need to be discussed on behalf of consumers. On Third Reading we would then have the opportunity to decide whether the Bill deserved to be supported.
On Second Reading it would be premature for anyone to attempt to frustrate the progress of the Bill. I sincerely hope that that will not happen and I hope that the Minister would not dream of being party to it.
Column 1179in the front line of consumer affairs can be added to the evidence gathered by the National Consumer Council--all of which demonstrates there are loopholes in existing consumer legislation. Perhaps that is a generous way in which to describe what most would see as whole rungs missing on a long ladder. The Bill will not solve everything, but its precise certainty should help enormously.
I understand why some of my hon. Friends have reservations about the principles of the Bill--and certainly some have doubts about the details. The Retail Consortium has written to me--I imagine it has also written to other hon. Members--but I submit that none of its objections should prevent the Bill from going to Committee. What first turned my mind towards, and awakened my interest in, consumer protection was a succession of horror stories that I heard in my surgeries about cars, household goods, toys, builders, replacement windows, holidays and even British Rail. I congratulate the hon. Member for Clwyd, South-West (Mr. Jones), not only on coming top in the ballot--after all, that is the luck of the draw, the hand of fate--but on positively taking up the Bill as his choice. There has been a fair amount of press and media coverage about the Bill, but there is constant press and media coverage about shoddy goods, lemons and rip-offs. There has always been a torrent of post from individuals--taxpayers, voters, customers and clients--who are landed daily with shoddy goods. The hon. Member for Clwyd, South-West, mentioned that the Office of Fair Trading had estimated that 14 million people a year buy products that turn out to be lemons. Let us suppose that that is a wild over-estimation and let us suppose that those affected amount to 7 million people only. Let us assume that one can shop for 365 days a year--ignoring Sundays, bank holidays and half-days. That means that 20,000 people purchase shoddy goods each day--about 40 a minute in trading hours. Therefore, while I have been talking, another 100 or so people have bought unsatisfactory goods. When they complain, about 50 of them will be fobbed off and they will give up because they feel that there is nothing they can do. I should like the modest, reasonable expectation of quality, which will be backed up by a guaranteeing act of faith for replacement or compensation, refund or replacement, extended to services. In May, in a ten-minute Bill I sought to supply a measure of compensation, as of right, where public services such as British Rail, the Post Office and local authorities failed to deliver an agreed enforceable minimum standard of service. It was a great idea, but I could not progress with it.
In an Adjournment debate in December, I called for a consumers interests authority--a CIA for Britain. It would be a sort of high street ombudsman, a beefed-up trading standards service acting on behalf of the consumer. That authority could cut through the red tape and bureaucracy when the market could not or would not help the consumer. It was another great idea, but I could not progress with it. Today, I am delighted to be a co-sponsor of this Bill. It is a great idea that can progress, but whether it will is for the House to decide. I am looking forward to hearing my hon. Friend the Minister's views on it, as they are crucial.
Just as there are some cowboy dealers, I accept that there are some pirate customers who seek to abuse existing legislation and good trade practices. That still leaves many
Column 1180people who fall victim in the grey areas when seeking redress against retailers and who have expectations about manufacturers' products. The Bill will clarify the relationship. The simple beauty of not requiring manufacturers to offer the no-quibble guarantee, but requiring them only to display the warning "no consumer guarantee" will, I hope, appeal to the House. It would certainly appeal to reasonable people on both sides of each consumer trade deal. In an ideal world, of endless time in the school day, we might well require that consumer education, credit management and consumer rights be part of the national curriculum. Such conditions do not exist, but the broad thrust of the Bill will lend a framework of certainty to the consumer. I should have thought that that would be a welcome spur to the manufacturers, the retailers and suppliers, and the buyers.
It has been argued that the protection offered by the Bill is all too much and that we already have the small claims court procedure to enable consumers to seek redress. All too often, that procedure is patently too daunting and too legalistic. In some cases, it is another field day for lawyers. It has been argued that one could raise the small claims court threshold, but it would still not be customer-friendly. Controls, if they work and are trusted, can be voluntary or they can be part of civil or criminal law, but to initiate such legal controls involves the drawbacks I have already mentioned. The Bill, however, treads a middle path--it represents an achievable one step at a time.
I like the twin aims of the Bill, and I hope that it will be supported. When one peruses a line of cars, videos, tumble driers or whatever in a showroom, the eye will see the warning "no consumer guarantee" displayed on some items. Therefore, every potential customer who can recognise that sign will have a potent weapon with which to enter the battlefield of choice.
The Bill represents a charter for anyone who buys anything big as an aid to modern living. It is therefore a charter for a great many people. Those people may find it difficult to understand should the House not give the Bill a Second Reading today. I add my support to it and I urge the House to say Aye.