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Column 1220the Law Commission, and many people have considerable doubts about it. For those reasons, I shall not support the Bill.
Let me deal briefly with the respects in which I believe the hon. Gentleman is entirely right--as witness the organisations and people who have attacked the Bill. I do not have a substantial motor manufacturer in my constituency but like anyone who has bought a lemon car at any time in his life, I can say that in principle any Bill attacked by the Society of Motor Manufacturers and Traders must have something good about it.
The reasons that the society has given for opposing the Bill suggest that the Bill may be necessary. The society refers to the problem of minor defects and suggests that it does not believe that a minor defect such as an intermittent fault in an interior light should allow the consumer to claim a refund or replacement. Taken out of context, one cannot argue with that statement, but we have all either purchased, or know people who have purchased, motor vehicles in which there has been not one minor defect but a different minor defect every day.
There are brands of car, regrettably manufactured in this country, which one knew one was buying for style and performance but certainly not for reliability. One knew that, every time one took the car in for a service, one would have to list not just the requirements of the service but 27 other faults that had to be put right. I accept the implication in the Bill that even minor defects can build up to the extent where there should be a right of rejection.
The purchaser of a particularly complex item should have the right to say to the retailer, and ultimately to the manufacturer ; "This product is so bad that you should take it back and study it to find out why it went wrong." On a smaller scale, the personal stereo that I usually carry with me when I travel went wrong and the manufacturer had more use out of it than I did in the first year of my ownership, although admittedly, the manufacturer has the reputation of never repairing a product in under six weeks.
The right of rejection and it importation into law is necessary. My worry is that we have not yet reached the stage of research into consumer law at which we can lay down the circumstances in which that right should and should not apply.
As the Society of Motor Manufacturers and Traders rightly pointed out, the option of replacement or refund in the Bill gives rise to particular problems, especially with new cars. Many newly introduced cars are available only to those on a waiting list. When such a car is purchased and found to be defective, it would be wholly unreasonable to give the consumer the right to demand its replacement with an identical car. The only practicable remedy available to the motor trader to give in those circumstances is the right of full refund because he cannot get a replacement anyway and, even if he could, several other people would be waiting for it.
We have already referred to the fact that the society has offered help to draw up another Bill. I hope that, if the Bill goes into Committee, an amendment will be made to take into account not just the views of the manufacturers of expensive consumer goods such as motor cars but the views of a broad spectrum of experience of individual consumers such as Mr. Evans, who wrote to the promoter of the Bill. Those views would help us to arrive at a decision on what rights should be legally enforceable under the guarantees.
Column 1221The British Radio and Electronic Equipment Manufacturers Association has also attacked the Bill, for somewhat specious reasons. It has said that it is generally the dealer who provides the repair service to the public. I suspect that any dealer in electronic goods who saw such a statement would immediately sue the manufacturers for libel. As we all know, the people who repair electronic goods that have to be sent away to be repaired cloak themselves in anonymity because they know of their reputation with the public. The poor dealer is usually the idiot who bears the opprobrium of the public for delays in servicing and for unsatisfactory servicing, when he is merely acting as a post office and sending goods away to the usually inadequate servicing facilities which are laid on by the manufacturer.
The hon. Member for Clwyd, South-West has received a detailed communication on the Bill from Mr. Evans, a constituent of mine. I should explain that Mr. Evans is indefatigable in his pursuit of the rights of the consumer, for reasons that are based at least in part on his own experiences. He has gained a reputation locally as a person who never gives up. Frankly, his experiences with a couple of motor cars that he purchased have convinced me that it is in every way right and proper for him to act in that way. I praise his pertinacity and wish that more consumers would show the same quality.
Mr. Evans has suggested--I believe that the suggestion has considerable merit--that, rather than proposing an enforceable guarantee which would be available to every consumer, we should examine the current powers and duties of trading standards officers, and should perhaps extend their statutory powers so that they would have the opportunity, the obligation and the resources to enable them to take up, on behalf of the consumer, the problems that the Bill is designed to redress.
If the hon. Member for Clywd, South-West were to pursue that line, it would be necessary to make the trading standards service a national rather than a county-based organisation, or perhaps a national organisation with county branches. It is possible that my constituent's proposal, which I commend for consideration at least, would enable us to avoid some of the undoubted legal problems which have been described this morning and which are implicit in the Bill. Mr. Evans's suggestion would also give rather more power to the consumer in arguments with large manufacturers.
I congratulate the hon. Member for Clywd, South-West on bringing this measure forward. I cannot support him, but I hope that there is a fair chance of the Bill going into Committee.
Mr. Edward Leigh (Gainsborough and Horncastle) : I know that my hon. Friend the Minister is anxious to speak soon, so I shall restrict my comments to six or seven minutes, which will enable the House to come to a decision on the Bill.
We have heard much today about the Sale of Goods Act 1979. It is true that the Act looks rather frayed at the edges, although it has served the country well. I was pleased by the recommendation of the Law Commission that the phrase "merchantable quality" should be changed. When I was a law student, I always had grave
Column 1222difficulty in understanding what the phrase meant, but I was too shy to ask my teachers. If I was too shy, I fear that the public may be even more so, and may be confused. The phrase rings of the grand Victorian days when British goods sailed the world. Phrases such as "satisfactory quality" or "acceptable quality" would be much better. Notwithstanding the fact that the Sale of Goods Act 1979 is looking a little frayed at the edges, I am sure that we can still address these problems of consumer protection. We are all consumers and we all want to protect consumers. I am not yet convinced that the complex problems cannot be addressed simply by amending the Sale of Goods Act. Although I shall not oppose the Bill's Second Reading, I am not sure whether it will solve all the problems.
From a legal point of view, the beauty of the Sale of Goods Act is that it is easily understood. The consumer understands that he has a right of rejection, but he must exercise that right within a reasonable time. That concept, albeit enshrined in statute law, goes back to common law times and is based on sound common sense. My hon. Friend the Member for Bristol, North-West (Mr. Stern) made a fair point. He said that goods are much more complex in this modern era, so it may take some time for a defect to become apparent. Indeed, several defects might build up. In that case, is it fair to require a consumer to exercise his right of rejection within the reasonable time aspect of the Sale of Goods Act? That is one of the soundest legal points that I have heard today. I am not sure how that problem can be addressed in amending the 1979 Act, but I do not see why we should throw over the 1979 Act and adopt the proposals in this Bill. As I said earlier, although the provisions in the Sale of Goods Act are easily understood by the public, nothing in the Act affects the right of the public to damages, and that is important. Similarly, nothing affects the rights of the consumer under various guarantees. The public must be aware that, if guarantees are given, they in no way remove rights under the Sale of Goods Act.
Self-regulation by manufacturers has achieved a great deal and many of the proposals in the Bill are already enshrined in codes or practices. I am not saying that it would not be useful to enshrine codes of practice in law, but we should not assume that much has not already been achieved.
I understand that my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs is worried about the long-term right of rejection, which is the fatal logical flaw in the Bill. I do not believe that my hon. Friend the Minister was right to say that the Bill would be unnecessarily bureaucratic and restrictive. I hope that he will refer to that later, because I believe that he is not on sure ground there. I have tried to explain as simply as I can that the Sale of Goods Act is so clear that the Consumer Guarantees Bill, if enacted, might confuse the public.
My hon. Friend the Member for Bristol, North-West referred to minor defects --a point that was also made by the motor manufacturers. Perhaps we should not place too much credence on what the motor manufacturers say. However, perhaps my hon. Friend the Minister can tell us what happens if a car's interior light does not work. Under the Bill, would someone have the right to reject the whole car? That may be a philosophical point, but it is of interest.
When my hon. Friend the Minister describes the Bill as unduly bureaucratic, perhaps he is thinking of guarantors needing to monitor repair histories of individual products
Column 1223to protect their interests. Any trends towards liberalisation of servicing might be set back by that. That is a fair point, and I hope that the Minister will refer to it.
I promised that I would sit down before 1.15 pm, so I shall conclude by saying that I am extremely worried about the reversal of burden of proof. We lawyers take that extremely seriously in the criminal and civil courts. I am not entirely convinced that we should proceed as far as the Bill suggests. Although the guarantor is not obliged to repair defects that are not his fault, proving so is an onerous burden on him. This is particularly serious as such radical remedies create an incentive for potential consumers abuse. I am not suggesting that the Bill is not courageous ; nor am I suggesting that it was wrong to introduce it. I believe, however, that we must consider it carefully in Committee.
The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth) : I begin by joining in the congratulations that have been offered by hon. Members, including many of my hon. Friends, to the hon. Member for Clwyd, South-West (Mr. Jones) on achieving the number one position in the private Members' ballot. That is a much coveted position each year and it occupies an important place in the parliamentary calendar. I thank the hon. Gentleman for taking the trouble to see me early on in his considerations of this matter and for the discussions that we had. I hope that he agrees that they were friendly and constructive and I hope that we made each other's position clear. I made it clear to the hon. Gentleman that were he to proceed to amend the Sale of Goods Act 1979 he would have Government support and help. I made it equally clear, however, that I had serious reservations about the guarantee proposals in the National Consumer Council report, and I told him that if he proceeded with those proposals, the Government would have to express their reservations.
Mr. John Marshall : My hon. Friend is giving us an interesting insight into his thought process. I congratulate him on the statesmanlike approach that he has adopted towards the hon. Member for Clwyd, South-West (Mr. Jones). My hon. Friend made it clear that he would not object automatically to the proposed Bill.
I have given the background to the Bill because I wanted to make two things clear. The first is that from the start I have been prepared to be as helpful and open as I can. I hope that my hon. Friends will agree that that was the right position to adopt. The second is that it would be equally fair to the hon. Gentleman, however, to make it clear to him that were he to proceed down a certain route the Government would, inevitably, have some reservations about his Bill.
Another factor that has permeated our proceedings today gives a clue to the strength of my reservations. Speaker after speaker, including the promoter of the Bill, the hon. Member for Truro (Mr. Taylor), and my hon. Friends the Members for Dulwich (Mr. Bowden), for Portsmouth, South (Mr. Martin) and for Newark (Mr. Alexander), said that they liked the Bill, but that it was seriously flawed. They said, "It does not do quite the right thing, but never mind, it can be amended in Committee."
Column 1224That is a worrying attitude to adopt when setting out to introduce legislation. It is especially worrying when a Bill has received such little detailed consideration at this stage of its proceedings that even its supporters admit that it will require considerable amendment in Committee.
The truth is that we have no means of knowing, even remotely, at this stage, in what form the Bill will emerge from Committee. Some people want to strengthen it and others want to include other bits and pieces. That is all understandable, but it makes the process unpredictable and that is not the ideal way in which to legislate.
Mr. Robert Maclennan (Caithness and Sutherland) : I am grateful to the Minister for giving way, particularly as I have not participated directly in the debate, but I heard the speeches to which he referred. He did not characterise those speeches fairly when he said that those hon. Members said that the Bill was fundamentally flawed. Hon. Members, including the hon. Member for Dulwich (Mr. Bowden), were calling for matters of detail to be considered in Committee, but they did not call into question the principle of the Bill.
Mr. Forth : Our examination of Hansard will demonstrate where the emphasis lies. The House may want to bear in mind the fact that many hon. Members who were ostensibly in support of the measure felt obliged to express reservations about it. That seems an odd way to embark upon legislation.
To set in context the Government's view of the Bill I shall quote, as I often like to do on these occasions, the Department of Trade and Industry White Paper published in January 1988 which remains our bible and guiding philosophy. We said of the Government's approach : "In consumer protection the policy emphasis will reflect the Government's view that the best form of protection comes from consumers making well informed choices and acting in their own interests. To achieve this, information can be more effective than regulations. However where the case is made out for regulation on safety or other grounds, the Government will not hesitate to act." Recent history has demonstrated that that is true. It is the correct, responsible and balanced approach to the matter and it will guide us in our response to the Bill. A balance must be struck between what regulations can offer and what the market place can offer through the power of the consumer.
Several hon. Members referred to the Law Commissions' review of consumer protection. I shall do so in more detail because it will be of help to the House. Hon. Members who are lawyers, solicitors or barristers and are familiar with the legislation will realise that what the Law Commissions say is vital to our understanding of the Bill. That has been said, before, but I wish to make sure that the House is aware of it.
In 1987 the Law Commission and the Scottish Law Commission completed a review of certain aspects of the law governing the sale and supply of goods. They examined the present statutory provisions for implied terms in contracts for sale, the remedies for breach of those terms and the present rules governing the loss of right to reject non-comforming goods. My hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) referred to that a moment ago. One can imagine the depth and thoroughness with which they examined the subject if I tell hon. Members that the deliberations were under way for some eight years, before publication of a comprehensive report which runs to over 100 pages. The list of people
Column 1225and organisations who submitted comments on the Commissions' working paper runs to over 100 entries and covers, among others, representatives of industry and commerce, manufacturers, retailers, finance houses, consumer bodies and lawyers. That gave rise to the Law Commissions' recommendations which were published in May 1987. The main change that was recommended, to which several Members referred, was to replace the present implied term "merchantable quality"--the phrase which gave my hon. Friend the Member for Gainsborough and Horncastle such trouble when he was studying law--with an up-to-date term that recognises the aspects of quality that are important for consumers as end users of the goods in question. The hon. Member for Clwyd, South-West emphasised that. The amended Act would state explicitly that the relevant aspects in determining acceptable or--this would probably be
preferable--satisfactory quality include fitness for purpose, the appearance and finish of the goods, their freedom from minor as well as major defects and their safety and durability.
The Law Commissions also considered the present rules governing acceptance and rejection. However, they proposed that no change be made to the customer's right to reject non-conforming goods. I have no doubt that they gave very careful consideration to all the arguments surrounding this issue. Their report comments that this issue attracted considerable comment during consultation and that their conclusion was generally--although not universally--supported. They recommended--this is crucial to the debate-- against creating a long-term right of rejection. They considered that such a right would create major commercial uncertainties and would be extremely unfair to sellers.
The Law Commissions also recommended several other minor changes to the Sale of Goods Act 1979. I shall not mention them all today, but I draw particular attention to their recommendation for extension of some of the provisions of the Supply of Goods and Services Act 1982 to Scotland. The situation has never been completely clear regarding the rights of consumers in Scotland when goods are hired, acquired as part of a trade-in, or received as a commercial gift. This extension would make it absolutely clear that consumers in Scotland who receive faulty goods in such circumstances would have exactly the same rights as though it had been a cash sale. As such, the proposed reform has the full backing of the Scottish Consumer Council.
The Government have announced their support for the Law Commissions' recommendations and their intention to introduce legislation to implement the recommendations, subject to some minor clarifying amendments. The amended Act will set a high standard for the quality which the consumer is entitled to expect, and will clarify and strengthen consumers' rights. These provisions are reflected in part V of the Bill and I thank the hon. Member for Clwyd, South-West for that because it is a major step forward.
The subject of guarantees forms the bulk of the hon. Gentleman's Bill, which is probably one of the most substantial private Member's Bills to have been laid before the House for some time. That fact must also give us cause
Column 1226to wonder how it would fare in Committee because difficulties always arise when the House sets out to consider a Bill of substance and complexity in a private Member's Bill Committee. That is another source of my reservations. Nevertheless, the subject of guarantees has been scrutinised considerably over the years by the Office of Fair Trading and recently by the National Consumer Council, whose report gave rise to the Bill.
I turn now to a detailed consideration of the proposed legislation, especially in relation to guarantees, on which the bulk of the debate has concentrated. There is much common ground among all hon. Members who have contributed to the debate about the sale of goods part of the Bill, so I need not dwell on it at any length. However, it is right to consider the guarantee provisions in detail.
The Bill seeks to create the provison in law for a consumer guarantee. The essence of the proposed approach, as we see it, is to provide additional remedies against the guarantor, which would be enforceable in law. The measure would provide for rights to free repair of all defects and in some circumstances to refunds or replacements. The remedies would be against the manufacturer rather than the retailer, as under the Sale of Goods Act 1979. The Bill sets out a list of minimum terms--a prescription in fact--for a consumer guarantee. Although the offer of the guarantee would not be mandatory, consumer durables within certain categories would be required to carry a prominent indication of whether they are covered by a consumer guarantee. That might create some burdens and difficulties that have not been fully anticipated.
The supporters of the Bill have argued that it will strengthen consumers' protection against shoddy goods, that when disputes arise it will clarify the position to the benefit of both consumers and suppliers, that it will lead to improved quality control--a point stressed by the promoter of the Bill--and that it will stimulate competition between manufacturers on quality grounds. Of course, I support the objectives of such a proposal and share anyone's commitment to transparency of information for consumers, to improved product quality, and to free and full competition between producers. Few--and certainly not I--would argue with those objectives. Nor would I dispute that guarantees are a subject that might merit further examination. It has been argued that the law is at present unclear about the exact status of a guarantee and whether it confers rights that are enforceable in law. The report published by the Office of Fair Trading in 1986 draws attention to a number of other practical aspects of the operation and enforcement of guarantees offered to consumers, which merit further consideration in the light of developments even since the publication of that report. That much is common ground. I have indicated throughout to the hon. Member for Clwyd, South-West that I believe that the whole area of guarantees merits further examination. We differ on whether either the National Consumer Council report or the Bill is the correct way to proceed and that is a legitimate area of difference between us. For that reason, I am sceptical about the proposed approach for consumer guarantees. I doubt whether the Bill will provide the benefits that its advocates and supporters have put before us. It is easy to be attracted to it because it sounds good. Reference has already been made to the MORI poll in which people were,
Column 1227in essence, asked, "Do you approve of motherhood and apple pie, if not of guarantees?" Surprise, surprise--a lot of people said, "Yes, we do."
The thought occurred to me that if we are to determine policy based on opinion poll surveys, and Opposition Members are saying, that there is such enormous support for consumer guarantees, they would presumably agree that we should reintroduce capital punishment on exactly the same basis. If I can produce a MORI opinion poll that demonstrates overwhelming support for the reintroduction of capital punishment, to be logical and consistent, Opposition Members should say that we should legislate accordingly. I do not see any takers.
Mr. John Marshall : My hon. Friend the Minister referred to opinion polls. Obviously, in opinion polls, someone must answer yes or no. They often say yes, but they do not feel particularly strongly about the issue. How many people have written to my hon. Friend the Minister asking him to support the Bill? That would give an indication of positive support for it.
Mr. Forth : The hon. Gentleman should not get too excited. Let him contain himself. If I have time, I will give my hon. Friend the Member for Hendon, South, (Mr. Marshall) some details of those who have said that they have reservations about the measure. Many claims have been made about it. My hon. Friend put his finger on an important point. It is easy to ask, "Do you think that better guarantees are a good idea?" Most people will say yes. The best way to ask the question is, "Do you believe that measures of this kind will be desirable, given the effects that they may have on increased prices, for example? The next question should be, "Would you be prepared to balance possible benefits of the extension of guarantees against a probable increase in prices?"
Mr. Allan Rogers (Rhondda) : The Minister's discourse is extremely interesting, but it is quite time-wasting. Will he refer to the intrinsic matters of the Bill rather than the merits or otherwise of public opinion polls?
Mr. Forth : The hon. Member for Rhondda (Mr. Rogers) must not tempt me. He drifted into the Chamber a few minutes ago, is obviously anxious to get away, and has tried to suggest that I should skip quickly over the arguments on this important measure.
Mr. Leigh : My hon. Friend the Minister mentioned questions that may not be covered in a simple opinion poll. One matter which is germane to our discussion is that, under the United Kingdom approach, only parties to a contract may enforce it. If, under the Bill, a consumer is
Column 1228allowed to enforce a contract against a manufacturer with whom he may not have a direct contractual relationship, it could lead to complex disputes involving, perhaps, finance houses, retailers, manufacturers and consumers. That problem is not addressed in simple opinion polls.
Mr. Alan Williams : The Minister is mounting a substantial part of his case upon a fictitious opinion poll that asked whether people are in favour of guarantees. He is now enjoying himself deriding that opinion poll, but that is not what was asked. What he has been saying until now is irrelevant. The NCC report referred to questions about the need for information on reliability and durability of certain products. The term "life expectancy" was used. There were questions about assessment of the way in which that information is currently provided. That is very different from the simplistic opinion poll that the Minister has just demolished. Perhaps he will now address the Bill.
Mr. Brian Sedgemore (Hackney, South and Shoreditch) : When I used to be a civil servant and a private secretary to a Minister, it was usual for Ministers, when they commented on documents, opinion poll surveys and information provided by the National Consumer Council or the Consumers Association, to read the information and then to give informed comment to the House instead of filibustering at the Dispatch Box.
Mr. Forth : The hon. Gentleman observes that in my hand I have the MORI opinion poll referred to by the right hon. Member for Swansea, West (Mr. Williams). It has been at my side throughout the debate. I have refreshed my memory of its contents at times during the debate and feel entitled to comment on it. If the hon. Gentleman would like a copy, I should be happy to let him have one after the debate, whenever that may be. I am being hampered in making progress by Opposition Members who seem determined to slow the pace of the debate. I cannot understand why they should do so, but no doubt the reason will emerge at some stage.
I shall now deal with the points of my hon. Friend the Member for Gainsborough and Horncastle, to which I have not yet been able to respond. His comments went to the heart of the matter. One danger of the Bill is that it might interfere with the delicate relationship between consumers, manufacturers, retailers and the providers of finance--a point made ably by my hon. Friend the Member for Hornchurch (Mr. Squire) who, due to indisposition, has offered his apologies for leaving the debate. He made some telling points to which I shall return if I am given the opportunity, about the relationship between the financial institutions--through hire purchase and leasing--and consumers. That point is crucial. My hon. Friend suggested that it may be a fundamental flaw in the Bill, and I am inclined to agree. That may not be resolved adequately in Committee. I am worried at the glib assertions that if only we give the Bill a Second Reading, we can resolve everything in Committee. That is not the correct way to proceed in this case.
Column 1229The core of the matter--in addition to what I have just said--is the long-term right to reject. That has been considered carefully by the Law Commissions and, after much serious consideration, they set it aside. The consumer guarantee within the Bill, including a compulsory provision for the remedy of refund or replacement at the election of the buyer, would create a long-term right of rejection that would apply even if the defect that triggered the remedy was only a minor one. The attempts to meet the inherent problems in this long-term refund or replacement remedy give rise to many of the complexities in the Bill and the burdens to which I referred before this debate, which a number of hon. Members have queried today.
I remind all hon. Members that the Law Commissions gave the matter careful consideration but rejected the long-term right of rejection in the context of sale of goods legislation. They argued that such a right would create major commercial uncertainties and would be unfair to sellers. Consumers who bought a defective product would, in effect, get free use of the goods until the defect appeared.
My hon. Friend the Member for Bristol, North-West (Mr. Stern) mentioned that point, although it was not picked up by anyone else. One of the possible effects of a Bill of this type, paradoxically, would be the possibility of consumers abusing the Act, if it became law, frivolously for mischievously to seek replacement of goods. That raises the important point --
Mr. Alan Williams : I have never heard anything so preposterous in my life. The Minister, whose post is a substitute for the Department of Prices and Consumer Protection which we had under the Labour Administration, is not at all worried about consumers. Consumers are thought to be the evil people in the market place and it is the poor innocent producers who need protection. The hon. Gentleman should go out into the real world.
Mr. Forth : That is pretty rich, coming from a member of the party that argued--and may, for all I know, still argue--for public ownership, nationalised industries and inherent monopolies. Of course, a Labour Government had to set up a Department to counteract the effects of the very monopolies that they had created. This Government do not have that sort of problem. We have the market place and competition, which will do the job extremely well.
The point that seems to have escaped all Labour Members is that we must seek a balance. No one wants to alter unduly the delicate balance in the law between consumers and suppliers and the intermediaries in the market place. One of the great risks is that this measure may do just that.
Mr. Wilshire : My hon. Friend said that there are members of the public who are determined to take advantage if they are given a chance. I would have been able to say that in my speech because I was involved in running a retail business before becoming a Member. As the Opposition are keen to waste so much time, I guess that I will be unable to make my speech. I should reassure my hon. Friend that some members of the public will take
Column 1230advantage of every opportunity. I know that for the simple reason that, over 17 years, I have had to help my wife serve such people-- [Interruption.]
Mr. Forth : My hon. Friend the Member for Spelthorne (Mr. Wilshire) has reinforced, from his knowledge and experience, a point that has been made before. All hon. Members would do well to pay attention to this fact. We have heard from our legal experts and we have just heard from an hon. Member who has direct experience in the market place in the retail sector. His views, should therefore, be heard carefully. I hope that my hon. Friend the Member for Spelthorne has the time to make a brief contribution. I shall try to ensure that that happens if I can press on.
The Law Commissions considered the long-term right of rejection against sellers. I believe that the arguments are even more persuasive in the context of the buyer-manufacturer relationship. Provision for compulsory refund and replacement remedies would be grossly unfair to manufacturers because they would be obliged to refund the purchase price in full--not just the cost price to the manufacturer, but the price that the consumer paid when buying the goods from a retailier, who in this case is a third party over whose pricing policy the manufacturer has no control.
If the goods are bought under a finance agreement, the situation becomes even more unclear and potentially more unfair. The guarantor may be obliged at the customer's election to refund not just the full purchase price but any further sums outstanding on the credit agreement. The House should bear in mind that the guarantor is not necessarily party to that agreement and can exercise no control over the terms agreed. The guarantor who issued a consumer guarantee would, in effect, come close to writing a blank cheque in favour of the consumer. That is in itself reason enough for us to have serious reservations about the Bill.
Mr. Maclennan : The Minister makes it sound as though the manufacturer is obliged by the Bill to do something. The Bill makes no such provision. It allows manufacturers to decide whether to subscribe to a scheme. It is similar to the John Lewis Partnership saying that if a customer finds a cheaper product, it will reduce the price of its product accordingly. No one forces John Lewis to do that ; it does it to boost its position in the market place. This reinforces the free market, of which the Minister pretends to be in favour.
Mr. Forth : I am surprised at the hon. Gentleman's last comment. My support for the free market is certainly not pretence--it is wholehearted and real. I am simply trying to remain somewhat consistent.
The hon. Member for Caithness and Sutherland (Mr. Maclennan) has put his finger on an interesting point ; it is entirely up to those operating in the market place--whether retailers or
manufacturers--voluntarily to introduce what measures they believe will make their products more attractive to the consumer. What worries me is that if we overburden the guarantee with complexities and costs, as I believe we are doing in the Bill, we could end up dissuading manufacturers and
Column 1231retailers from providing the guaranteed cover that everyone must believe is a good idea. That is one of the great drawbacks of the Bill.
Another problem is the dilemma created by a full refund for used goods. It is proposed that, under some circumstances, the right to full refunds or replacement could expire and may instead be subject to an allowance for use. The formula proposed for determining when that right expires is not particularly straightforward and differs for different products. I mentioned earlier the Law Commissions' reports, which highlighted some of the pitfalls of this approach. It is also likely to lead to uncertainty for consumers and may leave the consumer vulnerable in some circumstances.
I shall be as quick as I can because I realise that the passage of time may create some problems later.
A number of contributors have asked me what comments I have received about the legislation. I have received many. I will quote some of them so that the House can get a flavour, and know what the experts on the subject have said.
The Confederation of British Industry has described the proposals as "unnecessary and unworkable". The Finance Houses Association asked some serious questions about refund and replacement in the context of financed purchases--my hon. Friend the Member for Hornchurch (Mr. Squire) spoke expertly on that subject during the early part of the debate. The Law Society said that it does not agree with the proposals set out in the consultation paper, and the Society of Motor Manufacturers and Traders, quoted by one of my hon. Friends as being in favour of the measure, on reflection said that the Bill revealed a misunderstanding about how the motor industry operates.
During a visit to the United States last year I had extensive discussions with those involved in the American legislation and I found the extent to which the law has sought to intervene in the relationship between consumers and suppliers rather alarming. I have always thought it odd that so many hon. Members, in particular Opposition Members, should seek to import extensive elements of United States law. I yield to few in my admiration of the United States, but I have always thought that an attempt to introduce their rather litigious approach would hardly benefit British
consumers--although it might benefit our lawyers. That is another major source of my reservations about the Bill.
Mr. Leigh : Has my hon. Friend received any representation from the European Commission? To what extent do the proposals in the Bill, given that they are burdensome on importers and manufacturers, run contrary to article 30 of the treaty of Rome? This is a serious problem that could snaffle the Bill before it becomes law.
Mr. Forth : My hon. Friend makes an important point. I was going to come to that later, but I shall try to deal with it now. There is at least a danger that the type of measure contained in the Bill could get us into some difficulties with the European Commission and the European Community. We must bear that factor in mind. My hon. Friend and I may not be enthusiastic about that aspect of our legislation, but it is nevertheless a fact. We have to bear the requirements of the European Community in mind.
Mr. Sedgemore rose --
Mr. Forth : Perhaps if I say a few words, that will allow the hon. Gentleman to intervene. Does he wish to intervene now? He shakes his head. I am glad because we want to make progress. I have found that more difficult than I anticipated, but the House is always capable of surprising us. May I give just a few more examples?