Enterprise Bill

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Mr. Waterson: I would not like the Under-Secretary to have the impression that the reason why those people did not have a remedy was that they thought that they were buying a can of embrocation but were sent an armchair. The point of my story was that those people originally asked a salesman into their home because they wanted embrocation, but by the time they got rid of him he had sold them an armchair. That is a slightly different problem.

Miss Johnson: The question of people outstaying their welcome is obviously tricky. It is not clear whether it is a matter for consumer protection.

Mr. Hendry: It is wrong.

Miss Johnson: I agree with the hon. Gentleman that it is clearly unsatisfactory, and that it is not the right way for anyone to do business. However, this is not simply a matter of consumer protection. If someone who entered my home outstayed their welcome, I would regard that as something beyond the fact that they were trying to sell me something that I did not want. It would be a considerable infringement of all sorts of aspects of my home life.

Prize draws may be dealt with under the misleading advertising regulations. As for junk mail, people can register with the direct mailing preference service to reduce the amount of junk mail that they receive. However, I accept that it is a significant problem, and we are still looking at it.

Mr. McWalter: I am listening to my hon. Friend's recital of the reasons why it is difficult to decide when a practice is unfair, but the Bill does not have much to do with the OFT. It seems odd, now that we have reached clause 202, that there should be all sorts of reasons why we cannot identify an unfair commercial practice. I hope that the Minister might be a little more positive. Particularly, I feel that we ought to do something about the selling of deeply unsuitable goods to disabled and handicapped people.

Miss Johnson: I have expressed considerable sympathy with hon. Members' intentions regarding the amendments. I hope that my hon. Friend does not think that I have been trying to argue about the difficulties. The various issues that people have raised are covered by elements of the Bill or other relevant legislation.

Dr. Cable: May I first express my appreciation for the fact that the Under-Secretary is trying to engage with us and answer the points individually? That is very helpful to our discussion. In the context of her basic argument that there is substantial existing legislation that could be used by sophisticated

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consumers, will she explain why the examples that we are citing were not, for the most part, brought to us by individual hapless consumers but by sophisticated consumer organisations such as NACAB and the Consumers Association? Those organisations have teams of lawyers who have looked at the legal remedies and found them wholly unsatisfactory. That is why they have prompted us to table amendments to introduce new powers. Has she discussed the matter with those bodies, and has she persuaded them that the legal remedies really do exist?

Miss Johnson: We are, obviously, in regular discussion with those bodies. I am sure that we will continue to talk about this issue for some time, not least because there will soon be a European dimension to the discussion as well.

In terms of the detailed examples, it is very difficult, without using an even more detailed example, to get both sides to discuss the issues connected with enforcing legislation. We need to be clear which legislation would apply and why it would or would not work. I am grateful to the hon. Member for Twickenham, because he gave some examples and specifically said how he thought the general duty not to trade unfairly would address the problems in them. However, in quite a number of the cases that we have been discussing, there is already provision.

A general duty not to trade unfairly would not in itself, any more than any existing legal provision, enable consumers to get redress. People would still have to be aware of it and find ways of making it bite on the person subjecting them to mis-selling or sharp practices. We have to find ways as a society of supporting them in doing that, through information or enforcement mechanisms. However, the issue would remain the same.

The hon. Member for Eastbourne was concerned about holiday clubs. Some of them do fall within the definition of ''timeshare'', even if those running them say that they do not. However, because of the overseas nature of timeshare, it is important that any necessary changes are effected by an amendment to the timeshare directive, which covers places such as the Canaries. It is particularly important to cover such areas.

Mr. Waterson: I may have missed this, in which case I apologise, but has the Under-Secretary dealt with the question of extended warranties?

Miss Johnson: I have.

Mr. Waterson: I beg the hon. Lady's pardon.

Miss Johnson: I thought that I had covered that point. If a company has gone bust, there is nobody to take the goods back to. A general duty not to trade unfairly would not help that fact.

Mr. Waterson: I withdraw my apology, because I remember that bit, but I did not think that it dealt with my point about the Tempo case. A simple change in the law is necessary, whereby companies that take money for extended warranties have to keep it separate. Perhaps we could return to that when we deal with the insolvency provisions. Such money

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should either be kept in a separate account or protected by an insurance policy.

Miss Johnson: I am not briefed on the questions underlying the separation of the funding, but I would have thought that there may be issues relating, for example, to financial services regulations and other matters, which might be more relevant than the topic that we are considering, although I appreciate that the problem adversely affects consumers.

In conclusion, I am not saying that there is no future in considering a general duty to trade fairly, but it is difficult to see how that would help, and in some cases there is recourse to existing legislation. I hope that I have reassured hon. Members on a number of fronts in that context. We must be clear about exactly what problems any new legislation would need to address—to know what the evidence is and what the detriment to the consumer is—and to ensure that we do not duplicate existing legislation or make it difficult for legitimate businesses to operate. We want to ensure that consumers are fully protected, which is why we are extending coverage to ensure that a wider range of consumer protection is available, and making greater use of stop now orders.

Mr. Waterson: Let me repeat that we appreciate the extension of stop now orders, as do consumer bodies. If we had the time to debate the technicalities of how they work, we might be able to suggest how they could be made more effective, but it is unlikely that we will have that opportunity.

The more the Under-Secretary has dealt with the specific issues raised by hon. Members, the more she has made a case for a general duty. Piecemeal legislation introduced after the event keeps the House busy but is often ineffective to deal with new scams, which are often produced by the same old tricksters. I am not ungrateful for the Under-Secretary's efforts in dealing with individual points, but the fact that she has had to deal with those points as we have gone along shows why a general duty of some sort would be so much better.

In short, the Government have not tried hard enough on this issue. I would have liked the Under-Secretary to offer to think about the idea, to talk to people such as Deirdre Hutton of the National Consumer Council, to the Consumers Association and to NACAB, and table an amendment that would be more effective than ours. She has not said that she will, and unless she is prepared to make a further concession, I am minded to invite colleagues to press the matter to a vote.

Miss Johnson: I will clarify my position, because I am not sure that the hon. Gentleman characterised it accurately. We are sympathetic to the motives behind the amendments, but exactly what problems they are designed to address is not as obvious as the hon. Gentleman suggests. That is why I have gone through many of the cases individually. I accept that he thinks that it would be possible to draft an all-encompassing clause, but I fear that there would be difficulties doing so. There are no simple answers. If there were, I am

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sure that previous Governments would have found them. Considerable ingenuity would still be applied to getting round a general duty to trade fairly. Some member states have such provisions, interpreting what is fair or unfair in their own way, but there is no evidence that they are having more success than we are in clamping down on scams. We are extending the infringements that will be covered by existing legislation, so that many unfair practices will be covered. I am open to further discussion about the evidence and the need for further measures, but the way forward is insufficiently clear for me to be able to say that I will table an amendment on Report.

Question put, That the amendment be made:—

The Committee divided: Ayes 5, Noes 8.

Division No. 3]

Cable, Dr. Vincent Djanogly, Mr. Jonathan Field, Mr. Mark
Hendry, Mr. Charles Waterson, Mr. Nigel

Atkins, Charlotte Barnes, Mr. Harry Borrow, Mr. David Campbell, Mrs. Anne
Irranca-Davies, Huw Johnson, Miss Melanie McWalter, Mr. Tony Pearson, Mr. Ian

Question accordingly negatived.

9.45 pm

Miss Johnson: I beg to move amendment No. 167, in page 145, line 43, at end insert—

    '(e) an act done or omission made by a person supplying or seeking to supply goods or services as a result of which an agreement or security relating to the supply is void or unenforceable to any extent;

    (f) an act or omission by which a person supplying or seeking to supply goods or services purports or attempts to exercise a right or remedy relating to the supply in circumstances where the exercise of the right or remedy is restricted or excluded under or by virtue of an enactment;

    (g) an act or omission by which a person supplying or seeking to supply goods or services purports or attempts to avoid (to any extent) liability relating to the supply in circumstances where such avoidance is restricted or prevented under an enactment.'.

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