Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Sainsbury of Turville: My Lords, I am grateful for noble Lords' views. I will respond to a few points. I am pleased that as a whole we had general support
21 Dec 2004 : Column 1712
from noble Lords on these issues. The noble Baroness, Lady Miller, raised the question of competitiveness with China. We need to deal with that issue first. The wages in China are 5 per cent of what they are here. In many cases, the environmental and working conditions are still deplorable, though steps are being taken forward. We will not be able to compete with China, and we should not try to do so by reducing our costs and the way we treat workers to the level at which they are treated there. We will be able to do that only on the basis of innovation and moving into high value-added areas. That is where we must set our sights. The whole issue of information and consultation is relevant to that.

The noble Baroness also raised the question of costs incurred by business through familiarisation with the legislation and implementation. Initially, there will be some costs arising from the new provisions on information and consultation, as made clear by the regulatory impact assessment, but we have chosen the least costly implementation option for implementing the directive. If you look at this against the ongoing costs of business, they are very small. If you take together the gross costs of all employment legislation introduced since 1997, it is around £4 per worker per week, and that includes all the benefits that go to workers. If you take just the administrative costs, we are talking about just 3 pence for each worker each week. That is not going to make a great deal of difference to the competitiveness of British industry.

The noble Lord, Lord Lea, raised the question of people covered. The regulations, while they apply only to 3 per cent of all firms, cover 75 per cent of all the people employed in firms. The noble Baroness, Lady Miller, raised the question of the length of the regulatory impact assessment. I am sure that if it had been shorter, the noble Baroness would have asked why it did not cover all the information that it needed to cover. Businesses do not need to read the regulatory impact assessment to understand how to comply with the legislation. The noble Baroness also raised the question of firms being required to consult on trivial issues. That is simply not the case; the directive is about strategic decisions affecting employment, although it will ultimately be a matter for employers and employees to agree on the issues they will inform and consult on.

I also thank the noble Lords, Lord Lea and Lord Razzall, for their support for these regulations. They are important, and they can make a great difference to industrial relations. They are another important step in furthering the partnership agenda. The Government have listened to the views of consultees and produced regulations, in agreement with both the CBI and the TUC, which are flexible and which balance the rights and responsibilities of employees and employers. That is how it should be, and I commend the regulations to the House.

On Question, Motion agreed to.
21 Dec 2004 : Column 1713

Regulatory Reform (Unsolicited Goods and Services Act 1971) (Directory Entries and Demands for Payment) Order 2004

Lord Sainsbury of Turville rose to move, That the draft regulatory reform order laid before the House on 25 October be approved [32nd Report, Session 2003–04 from the Regulatory Reform Committee].

The noble Lord said: My Lords, this regulatory reform order is brought forward under the Regulatory Reform Act 2001 by the Department of Trade and Industry. The Regulatory Reform (Unsolicited Goods and Services Act 1971) (Directory Entries and Demands for Payment) Order 2004 liberalises a code that applies to the authorisation of directory entries in the United Kingdom. That code is set out in the Unsolicited Goods and Services Act 1971, which I will refer to as the 1971 Act. The regulatory reform order reduces the burdens on legitimate directory publishers and advertisers in their directories, while maintaining protection for advertisers from rogue publishers.

The order contains two elements. The first and most important element adds a new method of authorising an entry in a directory to the three methods specified in Section 3 of the 1971 Act. That is a simplified repeat procedure for repeat entries or for renewals of existing directory entries. The other change that we are making is to revoke the Unsolicited Goods and Services (Invoices etc) Regulations 1975. We are replacing them with subordinate provisions that simplify and update the regulations.

By way of background, I should explain that the 1971 Act was introduced to stop scams operated by rogue or bogus directory publishers in the UK. Those scams were based around the practice of invoicing and demanding payments from businesses for entries in bogus directory publications to which they had not agreed. The 1971 Act combated the scams by setting out procedures for authorising directory entries that must be followed if the publisher is to be entitled to payment, as well as making it an offence to demand payment without having a reasonable belief of being entitled to the payment.

The Act also placed significant burdens on both legitimate directory publishers and advertisers. In most circumstances, the Act requires written formalities to be entered into and an exchange of paperwork or e-mails. That is regardless of whether there is a long-term business relationship or whether an entry is simply being renewed from one issue of a directory to the next. Such formalities are unnecessary where an advertiser is already doing business with the publisher, so is therefore well informed of the service offered, and the entry is in many ways simply a roll-over of the existing entry.

The impetus for this regulatory reform order has come from the legitimate directory publishing industry, and in particular the Directory and Database Publishers Association. It has for a long while been concerned about the burdens that the Act placed on the legitimate UK directory publishing industry. The
21 Dec 2004 : Column 1714
Government also undertook to simplify the 1971 Act in the 1999 White Paper, Modern Markets: Confident Consumers. The order is the result. Subject to approval by Parliament, it will introduce a new simplified procedure for approving repeat entries or renewal of existing entries.

That will save advertisers and publishers alike a lot of time and unnecessary paperwork and red tape when there is an existing business relationship and no substantive change in the new entry, or when the new entry is an improvement on the old. It will remove most of the unnecessary costs to business and administrative burdens in the 1971 Act, while maintaining the necessary protections. The authorisation requirements set out in Section 3 of the 1971 Act will be retained for initial or first-time entries in a directory publication.

We are also simplifying and updating the requirements formerly in the Unsolicited Goods and Services (Invoices etc) Regulations 1975, to ensure that those requirements can be satisfied by electronic as well as paper documents. That is also necessary to meet the United Kingdom's obligations under the European e-commerce directive. We are not removing the protections set out in the regulations, but updating them for the electronic age.

The order will apply to England, Wales and Scotland. Northern Ireland has parallel legislation and will be making changes to its order.

The draft order was subject to a full consultation process from March to June 2003. That consultation was on both elements of the regulatory reform order that I have described, as well as a third proposal that was to introduce a new method for authorising initial directory entries over the telephone. There was general support for all three proposals, although the Office of Fair Trading did not support the proposed telephone authorisation.

The proposals have been closely scrutinised by respective parliamentary scrutiny committees, with their responses noted. The House of Lords Select Committee on Delegated Powers and Regulatory Reform did not consider that the proposal to allow telephone authorisation met the necessary protection test. It recommended that it should be amended to strengthen the protection of business against "rogue publishers". It concluded that, apart from that, the proposed regulatory reform order was an appropriate use of the 2001 Act and met its requirements. I thank members of that Select Committee for the time they spent scrutinising the proposals and for recommending them to the House.

The committee in the other place also concluded that the proposal for telephone authorisation did not meet the necessary protection test. It recommended that the proposal be omitted from the order. The committee also recommended that the second proposal be amended to require that documents which were not intended as demands for payment should continue to bear the precise wording of the statements in the 1975 regulations. The wording of these statements is,

Subject to these amendments, the committee recommended that the draft order be laid before the House.
21 Dec 2004 : Column 1715

The Department of Trade and Industry has made the amendments requested by both committees. It has omitted the proposal for telephone authorisation from the order and included the requirement for the three statements to be included in any invoice or other document not to be regarded as asserting a right to payment. Both committees have now unanimously recommended that the order be approved. I beg to move.

Moved, That the draft regulatory order laid before the House on 25 October be approved [32nd Report, Session 2003–04 from the Regulatory Reform Committee].—(Lord Sainsbury of Turville.)

Next Section Back to Table of Contents Lords Hansard Home Page