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Lord Kingsland: I am of course grateful to the Minister for his response. In our view, the mediation of the court in those circumstances would provide adequate protection and a desirable degree of flexibility. I shall reflect on the Minister's reply. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 214 and 215 not moved.]
Lord McIntosh of Haringey moved Amendment No. 215A:
- Page 144, line 24, at end insert—
On Question, amendment agreed to.
Clause 199, as amended, agreed to.
Clause 204 [Reform of Community competition law]:
Lord McIntosh of Haringey moved Amendment No. 216:
The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 217 to 219.
A European Commission draft regulation, currently under negotiation by member states, is proposed to replace the current Regulation 17, which implements Articles 81 and 82: the competition articles of the European Community treaty. The UK's Competition Act is closely modelled on Articles 81 and 82, which prohibit restrictive agreements and the abuse of a dominant position. I am sorry to have to tell the Committee that "modernisation" is the accepted shorthand for the reform of Regulation 17, which will have the effect—to use a less offensive term—of decentralising the enforcement of Articles 81 and 82 to national courts and national competition authorities. The UK supports that initiative.
Clause 204 of the Enterprise Bill gives the Secretary of State a power to make regulations so that, post-modernisation, amendments may be made to our domestic competition regime in order to eliminate or reduce differences between the Competition Act 1998 and the EC's competition rules. But there are also
The power provided for in Amendment No. 217 is tightly drawn. Amendments Nos. 216, 218 and 219 are consequential on Amendment No. 217. The affirmative resolution procedure applies to any use of the powers given by this clause—although the powers are tightly drawn, it is only right that Parliament should have the opportunity to debate any specific use of those powers.
Of course, that involves further use of delegated powers. I should tell the Committee that this week we are intending to send the Delegated Powers and Regulatory Reform Committee a supplementary memorandum. That will detail the two government amendments which impact on delegated powers in the Bill. As always, we shall take extremely seriously any observations that the committee has. But we have no reason to suppose that it will object to this particular use of delegated powers. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey moved Amendments Nos. 217 to 219:
Page 148, line 30, at end insert—
On Question, amendments agreed to.
Clause 204, as amended, agreed to.
Clause 206 [Domestic infringements]:
Lord Razzall moved Amendment No. 220:
The noble Lord said: In moving Amendment No. 220, I shall speak also to Amendments Nos. 221 and 253. We now come to a different section of the Bill. I know that we have just spent a very happy hour talking about a number of detailed amendments. However, I fear that with these amendments we come to an area where we on these Benches disagree fundamentally with the position that the Government took at Second Reading on the form of the Bill. These amendments attempt to put into our legislation a general obligation for traders to trade fairly.
That obligation applies as a safety net in many industrialised countries—that is, most EU member states and certainly New Zealand, Australia and the United States. At Second Reading the Minister, the noble Lord, Lord Sainsbury, indicated that the Government were not persuaded that English law—I hesitate on that point; I am not entirely clear whether it is English law or whether this is a devolved matter, but no matter—should have such a generalised duty. However, as the Minister is well aware, soon developments in the European Union are likely to lead us to a directive that will require considerable amendment to the law.
As we are approaching 10.30 p.m., I do not wish to over-press the point or speak for too long. However, for the purposes of the record, I believe that it would be useful to read into it examples of why existing consumer protection is inadequate. Our consumer protection legislation depends entirely on being able to catch rogue traders either with specific legislation or with regulations. I am very grateful to both the Consumers' Association and the National Consumer Council for providing me with examples of rogue traders whose behaviour is not currently caught by the existing law. Perhaps I may give two such examples in order that the Minister may explain to the Committee why he believes that a general duty not to trade unfairly would not catch such people.
The first example concerns the elderly disabled woman who responds to an advertisement for a therapeutic chair. The advertisement invites her to telephone for an information brochure. When she telephones, she is persuaded to invite a salesman to her home for a product demonstration. In doing so, she unknowingly loses her right to a seven-day cooling-off period and the trader has exploited the loophole in the legislation. There is no protection for that individual under existing law.
The second example, which no doubt will be dear to noble Lords as we approach our summer holidays, concerns the holiday brochure that states that the hotel is 25 metres from the sea. As the Minister proceeds to a Spanish beach on his holiday at the beginning of August, he realises that the brochure fails to mention that a motorway runs between his hotel and the beach—no offence under the Consumer Protection Act. Those are two examples—many more have been brought to our notice—of why we on these Benches feel that there should be a general duty not to trade unfairly.
We have no pride of authorship in the form of the amendment, which we have tabled as a probing amendment. We know from the Minister's remarks at Second Reading that the Government are not persuaded. We hope that they will be persuaded and, if they are, will return at Report stage with a better clause than we have drafted.
Lord Borrie: I have a great deal of sympathy with this amendment. If I did not, it would be surprising. I do so because in 1990, admittedly 12 years ago, when I was the Director-General of Fair Trading, a report was published in which I expressed myself as in favour of introducing into our law a general duty to trade fairly, for the same kinds of reasons as the noble Lord, Lord Razzall, has put forward for his amendment; namely, because of gaps in the law.
The value of a general duty, whether expressed positively, as I did in 1990, or negatively, as in this amendment—a duty not to trade unfairly—is that the law never quite catches up with the malpractices of traders. Some traders always seem to be a step ahead of the law. However, I admit today that, in principle, I prefer the law and the civil obligation to be precise. My general view is that if the law is to be respected and is not to impinge unfairly on traders, it needs to be clear and precise. Consumers, and their advisers, also need to know their precise rights.
I therefore believe that it is preferable that the malpractices of the kinds listed—I think it is a non-exhaustive list—in the noble Lord's amendment should as far as possible be covered by amendments to the existing law. In Amendment No. 253, in relation to misdescriptions of services as distinct from goods, the noble Lord has in fact proposed exactly that.
Another example, similar to that given by the noble Lord a few moments ago, is that if a contract is signed at a dealer's premises, there is in law a cooling-off period for customers and, therefore, there would be little point in the dealer trying to pressurise the customer into signing the contract. If that law were extended to contracts signed at home, even when a visit is solicited—it would not be too difficult—some of the examples of unfair trading used by the noble Lord in tabling his amendment to illustrate problems would disappear. In my view, several other examples of malpractice covered by the amendment could be dealt with by pepping up the law on undue influence and the law on misrepresentation, such as the example given by the noble Lord about the travel brochure.
It may be that the National Consumer Council, for which I have every respect—perhaps its distinguished former chairman, the noble Baroness, Lady Wilcox, could be persuaded to say a few words—will, despite the points that I have just made, still think that a general duty embodied in law is desirable, although it may lack the specificity that I have suggested is desirable. So I am glad that the Minister in another place at a late stage of the Bill offered a seminar on the subject. One may make fun of that—is this government by seminar instead of by legislation? But,
My present view is one of agnosticism, but I am concerned that new fangled malpractices can emerge that no existing law deals with. I should like finally to quote the words of the great Francis Bacon. He said:
"(7) Subsections (4) to (8) of section 9A apply for the purposes of this section as they apply for the purposes of that section but in the application of subsection (5) of that section the reference to the court must be construed as a reference to the OFT or a specified regulator (as the case may be)."
Page 148, line 22, leave out "this section" and insert "subsection (1)"
"(2A) The Secretary of State may by regulations repeal or otherwise modify any provision of an Act (other than the 1998 Act) which excludes any matter from the Chapter I prohibition or the Chapter II prohibition (within the meaning of Part 1 of the 1998 Act).
(2B) The power under subsection (2A) may not be exercised—
(a) before the power under subsection (1) has been exercised; or
(b) so as to extend the scope of any exclusion that is not being removed by the regulations."
Page 148, line 31, leave out "The regulations" and insert "Regulations under this section"
Page 148, line 36, after "power" insert "to make regulations"
Page 150, line 4, after "(2)" insert "or is an unfair commercial practice"
10.30 p.m.
"He that will not apply new remedies must expect new evils; for time is the greatest innovator".
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