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Column 1208Mr. Forth indicated assent.
Mr. Summerson : Well, never mind. I support the principle behind the Bill and if it is given its Second Reading I have no doubt that it will be made even better in Committee. I commend the Bill. 12.12 pm
Mr. John Maples (Lewisham, West) : I believe that I am in a minority of one. I do not oppose the Bill, but I am somewhat agnostic about its provisions. I need to be persuaded that it is likely to achieve the effects expected by its sponsors.
The hon. Member for Clwyd, South-West (Mr. Jones) is to be congratulated on picking a subject of undoubted importance to our constituents and ourselves. Everyone who has spoken this morning has identified the problem- -that consumers are ripped off and, sold shoddy goods and that retailers and manufacturers do not honour their commitments, either under guarantees or under existing legislation. However, those hon. Members who naively expect the Bill to correct those people who do not honour their obligations have failed to address the central problem--the ability of consumers to enforce their legal rights. My hon. Friend the Member for Walthamstow (Mr. Summerson) is, with the greatest respect, somewhat naive to believe that the Bill will change the behaviour of retailers. They will not take back shoddy goods simply because a consumer guarantee exists. That arrangement will be voluntary and I cannot see how retailers' behaviour will improve as a result.
Mr. Martyn Jones : The point about the Bill is that it will act against the manufacturer. The retailer will not be all that concerned and will be happy to pass the responsibility on to the manufacturer.
Mr. Maples : I accept that, but all the examples cited concern people who have been unable to enforce manufacturers' guarantees. Problems arise with the retailer and the manufacturer and I doubt whether people will be any more likely to achieve their rights under such guarantees as a result of the Bill. I question the assumption that legislation is the right way to deal with the problem. General legal rights are available to everyone. I am not sure that the right solution is to put a rigid framework of guarantees and legislation round contracts for the sale of particular types of goods. Unscrupulous traders and shoddy goods pose a problem, but competition between manufacturers and traders provide a solution. Part of competition is to be prepared to take back shoddy goods, and we know of good retailers who will do that.
I welcome the Bill's reforms of the Sale of Goods Act 1979, about which I shall speak later, but I do not welcome the guarantee provisions. I am somewhat agnostic about the Bill. I do not believe that it is either wonderful or terrible. I simply need to be persuaded that it will have the effects that are touted for it. I have a general prejudice against legislating when it is not certain that the law will have the desired effect. There is already a great deal of unnecessary legislation on the statute book.
I was and still am a lawyer but I am not about to join in the plethora of special pleading that we have heard from lawyers in this and other debates. When I was studying law the Sale of Goods Act 1893 had to be learned by heart. To follow an established tradition of contributing useless
Column 1209pieces of information to debates, that Act is usually misnamed. It did not receive Royal Assent until 1894. That is an easy way of winning £1 in a bet with a lawyer, because not many know that. The Sale of Goods Act 1893, as amended in 1979, provides some good fundamental rules that are legally enforceable. One rule is that goods must be of merchantable quality. That means that the goods should be reasonably fit for the normal purpose, taking into account their price, nature, any description applied to them and any other relevant circumstances. In practical terms that means, for example, that a garden hose should not have a hole in it and the handle of a suitcase should not break the first time it is used. If goods are cheap one should not expect top quality but whatever the price, they should not be faulty. That is a good fundamental legal rule. It is available to everyone who buys something. Admittedly, it is available only against the retailer but it is a legal remedy.
Other rules say that goods must be fit for any particular purpose made known expressly or by implication by the buyer to the seller and that goods must be as described. A leather wallet should not turn out to be made of plastic and furniture that claims to be made of wood should not turn out to be veneered. Those three basic rules are good fundamental consumer protection. They provide remedies that are available to everyone. The difficulty is in using them. The proposal in the Bill to allow the small claims court to be used to enforce guarantees could be extended to allow claims under the Sales of Goods Act 1979 to be enforced there.
The Unfair Contract Terms Act 1977 makes it clear that guarantees can no longer exclude customers' fundamental rights. There was a time when guarantees were used to reduce consumers' rights under the sale of goods legislation and substitute less advantageous rights. Now that cannot be done.
There is a basis in law for consumer protection. It provides remedies, depending on whether one is deemed to have accepted the goods, which allow the consumer either to seek a replacement, his money back, or damages. That is a well-established framework which has been around for some time.
The Law Commission was asked to examine the framework of consumer protection. In 1987 it produced a report in which it recommended some changes, most of which have been included in the Bill. Its main recommendation dealt with the phrase "merchantable quality", which is rather archaic. It recommended substituting the phrase "acceptable quality", while the phrase in the Bill is "satisfactory". The Law Commission also recommended that the concept of acceptance by a consumer should be varied so that the consumer was not deemed to have accepted goods which he had not accepted or not had the opportunity to decide whether he wanted to accept.
The Law Commission recommended against some changes in the Bill. The most important recommendation was against a cure scheme whereby a retailer could be deemed to have cured a defect by putting matters right. The Bill seems to give better protection for consumers than would those provisions. However, the Law Commission suggested that we should not go too far the other way and provide no time limit to the right of consumers to get all
Column 1210their money back. It stated that a cure scheme would be extremely complicated and that it wanted to keep the procedure simple. Its report came down against those provisions on the grounds that it was not sufficiently confident that that would be more beneficial to buyers and sellers generally than the present law. It feared that such a provision would become a fertile source of dispute and legislation.
On the more pertinent point of no time limit on the right to get one's money back, the Law Commission stated that it did not think there should be a change to the present requirement that a buyer should be deemed to have accepted the goods when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them. The Commission discussed and came down against a new general long-term right to reject a sales transaction. It concluded against the long-term right to reject goods because of latent defects or lack of durability on the grounds that such a right would effectively amount to the same thing as a general long-term right to reject. It then considered replacing the expression "reasonable time' with "a fixed period of time" within which the buyer would retain his right of rejection, but concluded that it could not suggest a better answer than the wording of the present law, given that it applies to every sort of good. However, the report mentions an alternative way forward and suggests that consideration might be given to laws applicable only to specific types of goods, for which fixed time limits would apply. That is an important point and it is one into which the consumer guarantee proposed by the Bill would run. We should bear in mind that the Law Commission considered that point and rejected it.
Mr. Maples : My hon. Friend makes that point well. I do not know whether I would have come to it, but I am glad that he reminded the House that the rights under the Sale of Goods Act, to which every consumer has redress, are limited by the statute of limitations and not by an artificial period of, say, six or 12 months.
I understand that the Government are committed to introducing the Law Commission's recommendations. In answer to a parliamentary question, my hon. Friend the Minister said that the Government intend to implement the changes recommended by the Law Commission which will clarify consumers' rights, in particular by replacing the present requirement of "merchantable quality" with a more up-to-date definition. He also said that a new Act would spell out the relevant aspects of determining "satisfactory quality", including fitness for the purpose intended, appearance and finish of the goods, freedom from minor as well as major defects, safety and durability. The Government have announced their intention to introduce legislation to implement those changes to clarify and strengthen consumer rights. My hon. Friend also pointed out that the Law Commission has rejected other proposals. He said that the Law Commission gave careful consideration to all the arguments when it considered the issue, but recommended against the creation of a long-term right of rejection.
Column 1211The Law Commission argued that such a right would be a major commercial uncertainty that would be extremely unfair to sellers. Consumers who bought a defective product would, in effect, get free use of it until the defect appeared, but the seller would then be obliged to take back the used product and refund the purchase price in full. Suppliers would be obliged to hedge against the commercial uncertainties of such a regime, with unwelcome implications for consumer prices. My hon. Friend said that he wants to avoid that. The important thing is that my hon. Friend has reiterated what the Law Commission has already said.
The National Consumer Council stated in its report that we should create a long-term right of rejection, which is what led to its conclusion that there should be a consumer guarantee, and to the Bill's proposals for such a guarantee but the council did not recommend a change in the Sale of Goods Act 1979 to produce that. However, the Bill amends the Sale of Goods Act in several ways that were recommended by the Law Commission. Clause 16 is the most pertinent and seeks to replace the phrase "merchantable quality" with "satisfactory quality", which seems more likely to mean something to the average consumer. The clause states :
"Goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price and all the other relevant circumstances."
The clause then lists certain characteristics that should be taken into account in deciding whether the goods meet that definition. Clauses 17 and 18 implement the Law Commission's recommendations on acceptance and introduce the concept of partial acceptance. The Law Commission was worried about the circumstances in which a buyer could be deemed to have accepted goods when it was unfair to think that he had. Clause 17(6) states :
"(6) The buyer is not by virtue of this section deemed to have accepted the goods merely because (for example)--
(a) he asks for, or agrees to, their repair by or under an arrangement with the seller, or
(b) the goods are delivered to another under a sub-sale or other disposition."
He is not deemed to have accepted the goods if he signs the receipt on a delivery note.
Those changes seem to strengthen the basic protection that the law gives to consumers in the Sale of Goods Act 1979. They are good remedies, and I wholly welcome them. They are the result of a commitment that the Government would legislate along the lines recommended by the Law Commission. I do not think that hon. Members will have any difficulty supporting that part of the Bill. The Law Commission specifically rejected the concept of long-term right of rejection, and at this point I start to have difficulties with the Bill. As I said, it does not lead me to believe that the Bill is wholly wrong, but I need to be persuaded that it is right, or that it is likely to have any effect with the guarantees scheme. Do we want to go further than the Sale of Goods Act provides? That is a fundamental question. The Sale of Goods Act provides some remedies, but I shall deal with how difficult it is to enforce those remedies. Do we want to introduce more law along the lines of compulsory guarantees?
The Bill allows only one form of guarantee for goods in the schedule. One either has a schedule or one does not. If
Column 1212one has a guarantee, it is in the form stated in the Bill. In many respects, the Sale of Goods Act gives better rights than do guarantees. We know that most traders and retailers behave reasonably. If one buys something in Marks and Spencer, John Lewis, Sainsburys, or Tesco and it is no good, one can take it back. I have never had any difficulty getting something substituted. Obviously, there are problems, but most respectable retailers realise that it is in their interests to provide a good service. If, by accident, they happen to sell something shoddy, they will replace it. No doubt they go back to the manufacturer who supplied the item and say, "This does not work. We want another one." That works reasonably well. The problem lies with a minority of traders, but it affects many consumers. It was identified by the Office of Fair Trading as long ago as 1986, and it is the nub of the problem. The Director General of Fair Trading, Sir Gordon Borrie, said :
"Guarantees offered by manufacturers and suppliers can be of great benefit to the consumer, but all too often they are used merely as a marketing ploy or as an additional source of income for the trader. Trading insolvency may leave the consumers with a worthless piece of paper and a guarantee may be used to divert consumers' attention away from their basic legal rights."
He seems to be saying that a guarantee is useful if a manufacturer or retailer honours it. The problem is that companies can go bust or refuse to honour guarantees, or make it difficult for consumers to enforce them. The Bill is unlikely to make any difference to the difficulty of enforcement by the consumer.
The recommendations of the Office of Fair Trading seem to call for a voluntary code of practice on guarantees rather than legislation. The Director General stated :
"I will not hesitate to use my powers under the Fair Trading Act and the Consumer Credit Act to take action against individuals or firms who refuse to honour guarantees or who offer guarantees which seriously mislead consumers. If manufacturers and traders do not bring about improvements voluntarily, I shall consider recommending legislation."
Sir Gordon obviously felt that the best way to deal with the problem would be by voluntary industrywide codes of practice. Some industries have particular problems, and cars are an obvious example. If motor traders were to form an organisation in which they promoted a guarantee which was particularly suitable to cars and, as an industry, police it and make sure that it was enforced, it would be a better system. It would be tailored to meet the needs of the car industry and consumers and would not be imposed by a legislative straitjacket.
In 1988, the National Consumer Council report reiterated some of those considerations and made clear the extent of the problem of many consumers. I was interested in page five of the report, which states :
"The Office of Fair Trading estimated that each year 38 per cent. of the adult population is dissatisfied with a purchase they make. This amounts to some 14 million people. A comparable survey by the OFT three years earlier put the figure at 28 per cent.
The OFT estimated that nearly half of these people will not get the problem resolved.
This means that each year about six million consumers do not obtain redress for unsatisfactory goods. One part of the OFT data that is not questioned is that the dissatisfaction level for cars and household appliances far exceed the level from items purchased regularly, such as food, drink, fuels and toiletries."
Column 1213From those data it is clear that the Bill, which many of my hon. Friends support, addresses a serious problem. There is no doubt that the information shows that consumers are getting a rough ride in some respects.
The problem, however, is not that the goods do not come with guarantees or that the fine print enables the manufacturer to slip out of its responsibilities, but that the retailer and the manufacturer do not honour their commitments or, as I often find with my constituents, that the shop from which they bought the goods has disappeared, or that the builder who gave them a roof guarantee for 20 years became insolvent and is now trading under another name next door.
This issue is the enforcement of consumer rights and it applies equally to consumer rights in common law. If the consumer found a mechanism that made it easier to enforce his legal rights under the Sale of Goods Act 1979, it would not be necessary for him to worry about enforcing guarantee obligations, too. The problem is that traders do not honour their guarantees. We need a simpler way of enforcing rights under the Sale of Goods Act, just as the Bill proposes that rights under the consumer guarantee should be enforceable in the small claims court. That provision is sensible. If there is to be a guarantee, let it be enforceable in the small claims court. Lawyers could not then run up huge bills and the consumer would be on an equal footing with the supplier and the manufacturer.
That provision could be extended to the remedies under the Sale of Goods Act, although I am aware of difficulties with the level of jurisdiction of the small claims court in the Courts and Legal Services Bill that is currently being considered in another place. I hope that when that Bill comes to Committee we can ensure that the limit is raised to a point that would cover most of the items in schedule 2 of this Bill, although whether it could cover the most expensive cars is debatable.
If enforcement were available in the small claims courts of those new and extended rights that the Bill will give to consumers under the Sale of Goods Act, is it necessary to go further and impose a fairly rigid guarantee? The manufacturer either has to offer this guarantee or no guarantee at all. Consumers will not necessarily gain some rights by being able to enforce the provisions of that guarantee rather than their rights under the Sale of Goods Act. I doubt whether a dishonest or disreputable trader is more likely to honour the consumer guarantee any more than he honours his present obligations under existing guarantees or the Sale of Goods Act.
I want to deal with a point made by the Minister in his reply to an Adjournment debate. After-sales service and guarantees of quality are proper subjects of competition between businesses and proper areas for the exercise of consumer choice. Consumer magazines write up products and say which product is better than another, which provides better after-sales service and which is more reliable. Those are items that consumers should be able to take into account when making their choice between different products. I have no doubt that those characteristics will often, although not always, be reflected in the price of a product. The nature of the guarantee and the reliability of its being honoured are important factors in competition.
Column 1214If one manufacturer is prepared to offer a two-year guarantee while another will offer only a six-month guarantee, but the six-month guarantee costs £50 less than the two year guarantee, the consumer could choose between them. Extended guarantees cost manufacturers money. The consumer guarantee proposed in the Bill could, in some industries, add considerable costs. The consumer should have the right to choose between paying for the extended guarantee, knowing that he has that comfort, or paying a little less and taking the risk of having to pay for the repairs himself. I question whether it is right to introduce the law into that circumstance.
I am not convinced that there is no room for the law in this arrangement. I have a predilection or prejudice--which is mild at this stage--for allowing the consumer to choose. If there is no guarantee, the consumer can draw his own conclusion. It may be that the product has no guarantee but is well written up in consumer magazines. It may have a terrific reputation. Many of the consumer's friends may have bought it, and he would rather buy it without the guarantee.
Mr. Stern : Does my hon. Friend agree that the idea of having a choice of guarantees would be welcome, especially to those consumers who have been taken for a ride by the offer of guarantees by companies which have then gone out of business? Does my hon. Friend agree that if such extended guarantees were made more generally available, it would be useful to have legislation to ensure that they were independently insured?
Mr. Maples : That would be an attraction that a manufacturer could offer in his guarantee. If he were prepared to insure his guarantee, it would be an added guarantee of the product's liability. No doubt it would cost something to insure the guarantee, but again that should be a subject of consumer choice. The consumer should be able to choose whether to pay a little extra and have the insured guarantee. In certain circumstances, I would welcome that offer and choose it.
I have some difficulty about the guarantee scheme outlined in the Bill. It imposes a uniform guarantee--one either has this guarantee or no guarantee at all. It results from the National Consumer Council report. I have quoted the comments of my hon. Friend the Minister that, in the Government's view, it goes too far. In another debate, my hon. Friend said :
"I agree that guarantees should state their terms clearly and in plain English and I could support legislation that would make such guarantees legally enforceable. I fully endorse the view that any guarantee must be additional to existing statutory protection. But I do not accept that it is necessary to lay down detailed terms or procedures which would attach to specific products covered by consumer guarantees.
The Sale of Goods Act provides the consumer with a clear right of action against the supplier, who is normally a retailer. The NCC proposals would involve the manufacturer, who is not normally a party to the contract.-- [Official Report, 14 December 1989 ; Vol. 163, c. 1302.]
I do not want to go into that last point, but those comments sum up the case against such a scheme.
The objectives set out by the hon. Member for Clwyd, South-West and the NCC are not likely to be achieved by the Bill. The hon. Gentleman described his three objectives in a press release and later in an article :
"(a) to give consumers a clear and simple indication of the quality and especially the reliability of products ;
Column 1215(b) to promote high standards of quality control ; and
(c) to seek fuller competition."
I should have thought that the hon. Gentleman was unlikely to achieve any of those objectives through the Bill. It is unlikely to promote high standards of quality control. It certainly will not achieve greater competition--if anything, it is likely to achieve less, because all guarantees will be the same. It will give consumers a clear and simple indication of their rights, but not of the quality or reliability of products. The fact that a product has a consumer guarantee no more guarantees the product's reliability than do existing guarantees.
Mr. Martyn Jones : I thank the hon. Gentleman for giving way again. I wanted to put him straight on one matter. The point is not that this guarantee will replace all other guarantees. That is arrant nonsense. It will give a minimum level of guarantee and replacement or refund provisions will be enshrined in law.
The NCC's report describes one of the objectives slightly differently. It referred to the aim
"to provide consumers with a clear and simple indication of their rights of redress".
That is an objective to be welcomed--consumers should understand exactly what kind of guarantee they have and what their rights are. I would have no problem in supporting that objective.
The NCC goes on to argue that this will help to promote competition, but I have doubts about that. The Bill will not make it easier to enforce guarantees. Consumers cannot enforce their rights under the Sale of Goods Act or their guarantees legally, and the Bill will not make it easier to do so. The exact form of guarantee is where I begin to have difficulties with the hon. Gentleman's Bill. A guarantor would have to repair any defects in a product, free of charge, although the obligation would not arise if the defect had been caused by misuse of the product. That would apply regardless of the time that had elapsed. The guarantor must provide the consumer with the use of a comparable replacement product free of charge, or must reimburse the consumer for any expenses that he incurred as a consequence of losing the use of the product, if the guarantor does not repair it within four relevant days.
If in any 12-month period--however late in the 12 months--the product is unrepaired for more than 21 days, a full refund or replacement must be offered. All those remedies must be provided free of charge within 12 months of purchase.
Those obligations are likely to lead to increased costs and a diminution of consumer choice between different forms of guarantee and are unlikely to be suitable for every type of consumer product to which they are intended to apply. We would be imposing one scheme on all products.
One criticism is that we would create a long-term right of rejection that would apply even if the defect were only minor, which would effectively give consumers free use of goods until unsatisfactory repair work triggered the right to a refund. The Law Commission in its review recommended that there should be no long-term right of rejection, as it would be unfair to sellers and would entitle
Column 1216consumers to full refunds for used goods, thereby creating major commercial uncertainties with adverse effects on prices. I think that is fair and trenchant criticism.
Other criticisms are that the Bill would create practical, administrative and bureaucratic difficulties for businesses, which would have to keep a history of the goods that they have sold. It would be anti-competitive, which is a point that I have made. It reverses the burden of proof because, although the supplier or manufacturer is not obliged to repair defects that are not his fault, effectively the burden of proof is on his shoulders.
There would be practical difficulties with the provision of loan goods. Perhaps that would not occur with an Amstrad computer, a video recorder of a compact disc player but it would be extremely unreasonable to expect a supplier to keep a stock of expensive motor cars on hand as temporary loan replacements to unhappy consumers. A couple of other criticisms have been made of the Bill, and I should be interested to hear what my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs has to say about them. One is the impact of the Bill on credit agreements, which my hon. Friend the Member for Hornchurch (Mr. Squire) mentioned in his speech. The second is the EC implications of the measure, because many consumer protection requirements and regulations will have to apply throughout the EC. I understand that the Commission is considering the issue at the moment. I shall be interested to know whether this will make life difficult for us in the future.
Mr. John Marshall (Hendon, South) : My hon. Friend said that if we pass such a measure it may be regarded as being in restraint of intra- Community trade. Does he believe that we might be taken to the European Court and would that not be bad for Britain's reputation.
Mr. Maples : My hon. Friend knows more about the activities of the European Commission than I do. I understand that that is the nub of the problem. I have no objection to Europeanwide standards of consumer protection, and health and safety protection, and we do not want to get out of line. That would give rise to the consequences that my hon. Friend suggested, and we should not let ourselves in for that lightly.
I welcome in clause 14 the introduction of the small claims courts procedure for dealing with claims under guarantees. I suggest to my hon. Friend that he should extend the small claims courts' jurisdiction to actions under the Sale of Goods Act 1979 by consumers for the type of goods set out in the schedule, although that may create difficulties in the case of expensive cars.
To sum up my argument, substantial remedies are already available under the Sale of Goods Act 1979. The amendments proposed to strengthen those remedies and the consumer guarantee proposed by the Bill do not add to them and they will certainly incur costs. I am not at all sure that those costs do not outweigh the benefits of the guarantee. I welcome the provisions covering labelling, clarity and the small claims enforcement procedure, but I am concerned about the competition and expense implications of imposing a guarantee straitjacket on all these goods.
The central problem concerning consumer rights is not so much the nature of the rights but the difficulty of enforcing them. If we could encourage voluntary, industrywide schemes that gained credibility with
Column 1217consumers, and if we could extend the small claims procedure to the Sale of Goods Act, we should go a long way towards meeting the promoter's objectives. I am not at all sure that the consumer guarantee provisions meet their stated objectives. It is also possible that the costs and other implications outweigh the benefits.
Mr. Ron Davies (Caerphilly) : On a point of order, Mr. Deputy Speaker. You were not in the Chair for the private notice question ; Mr. Speaker was. Three quarters of an hour of the time that had been allocated to the Bill promoted by my hon. Friend the Member for Clwyd, South-West (Mr. Jones) was taken up by the private notice question. Mr. Speaker made a pointed reference to the fact that time had been lost, and appealed to all hon. Members to speak briefly. The hon. Member for Lewisham, West (Mr. Maples) was entitled to speak, but he has spoken for over half an hour. Previous speakers made brief speeches since a number of my hon. Friends want to make a contribution to the debate--
Mr. Deputy Speaker (Mr. Harold Walker) : Order. I understand the hon. Gentleman's point. I believe that Mr. Speaker appealed for brief speeches, since time was lost due to the private notice question at 11 o'clock. I hope that hon. Members will bear Mr. Speaker's appeal in mind.
Mr. Roger Gale (Thanet, North) : I hope, Mr. Deputy Speaker, that I shall be commendably brief. There has been a considerable consensus, and I know that all hon. Members are waiting to hear the response of my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs.
I congratulate the hon. Member for Clwyd, South-West (Mr. Jones) and I thank him for his courtesy in inviting me to be one of the sponsors of his Bill, which has my fullest support. I hope that it will swiftly find its way on to the statute book.
The Minister has a reputation for being extremely robust when defending and promoting free trade. Normally I agree with him. I am therefore a little disappointed that, on the radio this morning, I heard him say that he does not consider that the Bill would promote competition and trade. I believe that it will. To take the Minister back a few months, he will remember his first appearance at the Dispatch Box. He will recall that he said that his duty--not a labour of love--was to seek to implement a miserable European directive that abolished the country of origin marking on goods. He most certainly did his duty formidably, as he always does, but I do not believe that his support for that measure was any greater than mine. His heart was not in it.
The Minister has an opportunity today to undo a little of the damage that was done on that occasion and to lend his support to a measure that will lead to the return of a little and much needed bit of consumer protection.
I speak unashamedly on behalf of my constituents in general and of two categories in particular--the first-time buyer, the home maker, and those who are about to retire. I have many of both categories of constituents. I am thinking in particular of the young married couple who are setting up home for the first time and buying their first
Column 1218washing machine, cooker, record player, video and car. I am also thinking of the last-time buyer--those who are trading down and moving to the home where they expect to end their days and who, perhaps for the last time in their lives, are buying new and quite expensive goods on very limited incomes : their last car, cooker and all the other items that I have mentioned. They are entitled to the best of everything when they buy new goods.
My hon. Friend the Member for Spelthorne (Mr. Wilshire) said that those people have rights, but they do not want the right to go to a solicitor or a small claims court. They do not want the right to have something repaired or to have a new car with a second-hand or replacement gearbox. They bought a new car. That is what they paid for and that is what they want. It is that simple.
I buy British whenever I can, and I do not believe that any British manufacturer has anything to fear from the Bill--far from it. I believe that the Bill will stimulate competition and increase confidence, especially in British goods. People will know that they are not buying second best from Italy or Taiwan but the best, which is made in Britain and which says so because it is guaranteed. If we put this measure on the statute book, we shall have given the consumer something that many consumers believe they already have and most certainly want. I hope that the Minister will find it in is heart to see the merit of that and to support it.
With my hon. Friend the Member for Lewisham, West (Mr. Maples), I am in a minority because I have considerable doubts about the Bill, although I welcome much of it. I congratulate the hon. Member for Clwyd, South-West (Mr. Jones) on introducing the Bill and on enabling us to highlight a number of areas of obvious public concern which carry a great deal of public support. In fairness to him, I should deal first with those aspects of the Bill with which I am a little unhappy.
When I started training in accountancy at the age of 16 as an articled clerk--what a pity it is that that phrase has now disappeared from the English language--one of the first principles of English law I learned was "caveat emptor"--let the buyer beware. However much we desire to protect the interests of the consumer, and however much we recognise that the consumer is so often fighting an unequal battle against the large corporation--the business that does not care because it is simply looking for market share and is not concerned about repeat orders--we must be very wary about inculcating into the consumer the idea that he need have no care, that, provided that he buys from a recognised manufacturer or retailer and provided that the packaging looks nice, he has no further duty to take care and consider his assets and his rights.
My first worry is that a basic guarantee as proposed by the hon. Member for Clwyd, South-West would mean nannying the consumer just a little too much. I would urge caution in setting up such a guarantee and relieving the consumer of the power and duty of perception.
Column 1219the house. Obviously a house is a large object and can be looked at by an expert. Does my hon. Friend agree that, if a consumer goes out to buy a video, for example, he cannot really get an expert to look over the product and give him an assurance that it is good enough for his purposes?
Mr. Stern : I entirely accept that. I am not trying to state an absolute principle that only the seller needs protection : I am saying that we must avoid legislation that might persuade consumers that they can afford to be careless.
My second worry is that the Bill seeks to interfere in the basic right of a seller and purchaser to enter into a contract. We should be wary of interfering in that right. It is basic to the Bill that, when a consumer buys goods he obtains rights against not only the retailer but the manufacturer, which is not aware who is buying its product, under what conditions and when.
I should like to instance the recent Monopolies and Mergers Commission report into credit card trading. It was news to me that, for many years, the high street banks had been secretly interfering in every contract between myself and the retailer from which I purchased, by saying that under civil law it is illegal for the retailer to make a different charge for goods depending on whether I used a credit card, which cost the retailer more, or cash. I strongly reject the principle that the high street banks had any right to interfere in a private contract, and I am delighted that the Government have decided to remove that right.
Mr. Gerald Bowden : Does my hon. Friend accept that it is an established principle of English law, whether or not there is a contract between the manufacturer and ultimate user, that if, through negligence, a manufacturer produces goods that are so deficient and defective that they cause injury to the ultimate user, the manufacturer is liable? Should not a manufacturer, which knows how the goods are manufactured and has the technical knowledge to certify them, have a similar liability, whatever the chain of contract between it and the ultimate user?
Mr. Stern : I entirely accept my hon. Friend's point. I am not trying to deal in absolutes, but one must consider the principles on both sides. A manufacturer whose goods are designed to be sold in certain circumstances and conditions may find that a retailer is selling them under different circumstances and conditions, yet under the Bill the manufacturer would be at least in some danger of being liable.
My third worry is about the right of rejection, about which my hon. Friend the Member for Lewisham, West expressed some doubt. We are all aware of circumstances in which the right of rejection should apply. A constituent of mine, Mr. Ken Evans, has written to the hon. Member for Clwyd, South- West (Mr. Jones)--I shall refer to Mr. Evans later--about a car that he purchased. It was in such an appalling condition that any reasonable person would have said that it should be taken off the road straight away and should never be driven by anyone, let alone such a pertinacious gentleman as Mr. Evans. Nevertheless, some consumers would use the right of rejection to obtain goods on free permanent loan. They would return to the retailer about every three months with a marginal defect which might have arisen from use or manufacture and in many cases obtain a new product because the retailer would have his reputation to consider. The long-term right of rejection has been questioned by