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Clause 1

Volume 21: debated on Friday 2 April 1982

The text on this page has been created from Hansard archive content, it may contain typographical errors.

The Contracts Concerned

9.40 am

I beg to move amendment No. 1, in page 1, line 8, leave out 'other than Part II'.

With this it will be convenient to take the following Government amendments: No. 3, Nos. 5 to 7 and Nos. 11 to 21.

As hon. Members know, the Bill seeks to introduce into the law of England and Wales and, as presently drafted, to Scotland, provisions relating to the supply of goods and services.

As I explained in Committee, the provisions of the Bill have rightly been warmly welcomed on this side of the border. Indeed, throughout its passage in the House, the provisions, in so far as they relate to England and Wales, have been strongly supported by the Government.

Part I, which relates to the supply of goods, stems from report No. 95 by the English Law Commission. It is interesting to find that on page 5, at paragraph 16, it says:
"Our two early reports in 1969 and 1975 were made jointly with the Scottish Law Commission, and the legislation which followed from those reports applies throughout the United Kingdom."
There is at that stage and in that context a clear indication that where the law of contract is being altered, it is acknowledged and accepted that it is desirable that as far as possible it should apply on a United Kingdom basis.

The English Law Commission goes on to say:
"The present report and our draft Bill apply only to England and Wales. It is not a joint report with the Scottish Law Commission, because the development of the law relating to contracts for the supply of goods other than sale and hire-purchase has been different in England from the development in Scotland, so that a joint law reform exercise in this field would not have been appropriate. Moreover the minor statutory amendments we propose will only apply to England and Wales. Furthermore the consolidation of the sale of goods legislation which we have set in hand does not apply to Scotland either."

I accept that point, which is a good one. As the Minister knows, I should not like to concertina the law systems, but as the Scottish Consumer Council evidently feels that benefits are being received by customers south of the border, can he give us any indication that the Government will look with sympathy on a similar Bill to bring the law in Scotland into line with it?

I am grateful to the right hon. Member. There are two points on which I shall elaborate, but I shall first attempt to put his mind at rest. The Government, in principle, are not opposed to the enactment of legislation regulating the supply of goods in Scotland. The difficulty, as I shall elaborate, stems from the view that when we are setting about law reform we should do so in a proper and orderly fashion. For reasons that the right hon. Member will particularly appreciate, we do not want to see the law of Scotland changed in any way simply on the basis of the views of the English Law Commission, which itself recognises all too well that it would be inappropriate to do so.

Can the right hon. Member imagine what would happen if the Scottish Law Commission had looked at a particular issue and said "We consider that the development of the law in England, as we are able to observe it, has taken a different course, but we propose this for Scotland"? Suppose that at that stage the United Kingdom Government were to say "It seems to be a pretty good piece of law reform for Scotland, so we shall extend it to the whole of the United Kingdom". The absurdity of the proposition becomes that much clearer when it is turned round the other way.

The Minister will no doubt be aware that the group calling itself the United Kingdom Inter-Professional Group has written a letter to me and to his Department in which it points out that the Law Commission in England and Wales did not consider one aspect of the matter that we are discussing today. It is stretching matters a bit too far for the Minister to indicate the feelings of the Law Commission in Scotland in relation to what the people in Scotland themselves feel about the matter. It is the people in Scotland who would benefit from the legislation. I do not think that the Minister can properly say that it would be wrong for the Law Commission in Scotland not to report on the matter before any enactment is made. Arguments could go on interminably about people who have not been consulted.

In view of the hon. Member's concern, I shall outline the position in some detail. We have well-laid-down procedures for setting about law reform. They are procedures which have been applied for a long time—ever since the Law Commissions were set up in 1965. As I shall hope to persuade the hon. Gentleman, in regard to the law of Scotland it would be better to continue to follow those procedures rather than simply act on the basis of a report from the English Law Commission.

Will the Minister acknowledge that the amendments passed in Committee were not Sassenach amendments, but were drafted by the Scottish Consumer Council? It would be wrong to suggest that the English are trying to foist something on to the Scots. The Scots want to foist something on to themselves. Any obstruction that they have met has come from the Solicitor-General for Scotland and the Scottish legal establishment.

9.45 am

I shall go through the amendments made in Committee in some detail and I hope that I shall be able to satisfy at least some hon. Members that what has been done is inappropriate in terms of either a codification or the development of the law in Scotland.

Part II, relating to Scotland, has not had the benefit of consideration by the Scottish Law Commission, and there has not even been a report based on the usual widespread consultation. As I have already said, the Government consider that it is desirable that law reform in Scotland should follow the same pattern as in England and Wales. In other words, it should follow on a careful consideration of the area of law under review. There should be separate consultation on the basis of a consultative memorandum suggesting various options, culminating the publication of a separate report, often with a draft Bill appended to it. That is precisely the form in which this piece of legislation has been introduced, following the English Law Commission's consideration of it.

That approach has worked well on each side of the border. In relation to the supply of goods, it has been scrupulously followed in England and Wales. Scottish opinion has not been given the same opportunity to express itself on the possible options. The Scottish Consumer Council—no doubt from the best of motives and, I accept, with some support from other consumer organisations—has sought to short-circuit the process and secure the application to Scotland of what is essentially part I, which applies to England.

The Sensible approach that I have outlined has served the cause of law reform very well on both sides of the border for more than 15 years. I hope that the passage of time has not dimmed the memory of the welcome that was given when both Law Commissions were set up in 1965. I hope that there will be no swing away from a thorough, analytic approach because of impatience or a desire for instant law reform. Before 1965, as I am sure hon. Members will recollect, the complaint often was that, the approach to law reform, was far too haphazard. The Government of the day set up the machinery to remedy the position, but it now appears that the supporters of part II, in its application to Scotland, want to disregard that careful and methodical review of law in favour of a more off-the-cuff approach to legislation. I find this particularly surprising in view of the fact that the Scottish Consumer Council has this week put out a press release in which it makes a number of assertions, with which I shall have to deal.

The council claims that the existing law is scrappy and uncertain and that it needs to be brought together and clarified, to which I respond "Precisely". For that reason, I should have thought that anyone concerned about the proper development of the private law of Scotland would want to see consultation within Scotland, proper examination by an expert team in the Scottish Law Commission, proposals put forward and legislation eventually brought forward. If the idea is that we should abandon that approach, it is a trend that I should personally regret. I hope that the lessons of the past have been learnt and that steady progress is much to be preferred to well-intentioned lurches forward.

I wish to deal with the role and duties of the Scottish Law Commission, which remains today much as it was in 1965 under its first chairman Lord Kilbrandon. The commission was to take up and keep under review all the law with which it was concerned, with a view to its systematic development and reform. I know of no pressure to modify that duty. Indeed, the justification for caution was appreciated as clearly in the commission's first annual report as it is by the Government today.

Paragraph 12 of the first annual report observes with what seems to me a striking prescience:
"With regard to `elimination of anomalies', "—
which is precisely the type of point to which the Scottish Consumer Council has addressed itsef—
"our intention is to try to make recommendations about these as they come to our notice, always bearing in mind that our reform of the law must be systematic; there may be cases in which particular anomalies are better left untouched until the whole branch of the law in which they arise can be examined. There is always a danger that the removal of one anomaly may create another."
That is precisely why the Government do not wish to be rushed into hasty legislation on the supply of good; in the law of Scotland. It is worth recording that, generally, support for the commission's unspectacular approach to law reform exists across the entire spectrum of legal opinion in Scotland. Indeed, in the January edition of the Scottish Legal Action Group's bulletin—I am sure that the hon. Member for East Kilbride (Dr. Miller) recognises that this is scarcely a bulletin of the legal establishment in Scotland—there appeared an editorial comment, prompted in part by the publication recently of the sixteenth annual report of the Scottish Law Commission.

The editorial comment was:
"The shooting-from-the-hip style of law-making in the courts contrasts with the Scottish Law Commission's methods; ascertaining the existing law; identifying its defects or limitations; sometimes arranging social research into its operation; discussing possible solutions and testing them on public opinion; and finally making a report to government recommending changes and suggesting how they should be brought about. It is not the elegant, porticoed Parliament House, but that grim grey building in the Causewayside, so often mistaken for a social security office, that is now the real epicentre of change in Scots Law."
I do not seek to enter into a discussion about whether their Lordships in the Scottish courts indulge in a style of approach that might be described as shooting from the hip, but the more general principle articulated in the editorial stating that the Scottish Law Commission has properly become the epicentre of law reform is, I suggest, regarded as being the view held across the whole spectrum of legal opinion in Scotland.

The hon. Gentleman is indicating, or even advocating, something that is anathema to the House. We in this House make the laws. Any law reform society, Scottish or otherwise, or any body of experts, such as the British Medical Association, can surely bring forward only recommendations and ideas. We make the laws. We have ideas of our own. There is no reason why we should wait until every "t" is stroked and every "i" is dotted by an organisation that would love to make laws. We should not allow it to do so.

I am well aware of the constitutional position of the House with regard to legislation. I recognise that the final and vital stage before anything can happen, not just in Scotland but in any part of the United Kingdom, is that legislation is required to pass through the House. Prior to 1965 there was considerable criticism that we were not approaching law reform in a proper, well-calculated and properly researched manner. When, in 1965, the Law Commissions were set up, they were entrusted with the duties that I have outlined. Their responsibility ends with the completion of a report. Often attached to the report is a draft Bill. The House is, of course, under no obligation to accept all or, indeed, any part of the report or the draft Bill.

If we are trying to get back into a rational mould changes, modifications and reform of the private laws of our different systems, it seems to me that we should have considerable regard to what is done by the Law Commissions on both sides of the border. I do not think that it can be disputed that there has not been the necessary consideration and consultation in depth in the case of this Scottish provision. While there might rightly be considerable sympathy with the principle of the proposed changes, the effect of the provisions in the Bill is unclear in parts and the detail of the drafting, to which I shall come, is in part deficient.

This is a complex area of law. It is not good enough to legislate on the basis that the change might be of some good, when there is a real risk that we might make bad law by acting precipitately. Apparently the primary aim of part II is to codify the existing common law for Scotland on an interim basis. It is not clear that this represents any real advance in terms of the legal rights of the consumer. I return once again to the press release put out this week by the Scottish Consumer Council. It condemns strongly the action of the Government in bringing forward these amendments to disapply parts II and III to Scotland. It goes on to say that Scottish consumers
"will not be afforded the same protection as their counterparts in England, Wales and Northern Ireland."
I am somewhat astonished by that assertion. As I understand part I and the report of the English Law Commission—I stand to be corrected by English lawyers present if I have understood it wrongly—what is not sought is to bring about any substantial or radical change in the existing law. It is essentially a codifying measure of the existing common law in England.

Will the hon. Gentleman recognise that clause 22 of part II is a necessary innovation in the law? In future, if passed in Scotland, as in England, it would not be possible to exclude the implied covenants to the consumer in consumer sales. That considerable advance in the law would be lost if part II disappeared.

10 am

Yes, but the main reason for applying part II on the same basis as part I is applied to England is the claim that what appears in part H is in a convenient and precise form but that somewhat bland assertion cannot properly be made. If part II were applied to Scotland, it might increase uncertainty in practice if the detail of the codification were deficient in any way. The close consideration needed to establish whether this is the case has not been possible. However, the Scottish Law Commission is embarking on a review of this area of the law, and in all the circumstances the Government have concluded that it would not be appropriate to legislate for Scotland in this Bill.

I take this opportunity to put the record straight on a number of points that were raised in Committee. It was claimed that there had been fairly thorough consultations with both the Scottish Law Commission and the Scottish Office. It was alleged that the commission was dragging its feet and that no Scottish bodies were opposed to the Bill. Although the Scottish Consumer Council is to be commended for the care that it has taken to keep the Scottish Office informed of its thinking and intentions about the Bill, only one meeting has taken place between them, and that was last month—some weeks after the Committee proceedings. Officials of the Scottish Home and Health Department met representatives of the Scottish Consumer Council primarily to hear why it considered that the Bill should apply to Scotland.

A meeting took place between the staff of the Scottish Law Commission and Scottish Consumer Council representatives at an earlier stage before any Scottish provisions had been produced. The council asked for consultations with the Scottish Law Commission, with the aim of enlisting the commission's support for what is now in part II. I understand that before the meeting took place, and at all times during the meeting, the commission made it very clear that it could not offer the support that was sought. As I mentioned, at that time no Scottish clauses were available for discussion. The staff members who were present at the meeting said that they were prepared, solely as individuals, to discuss this area of law, without purporting to represent the commission's views.

Let me repeat the commission's view. It is that, without the necessary detailed consideration, it is in no position either to support or oppose the inclusion of part II as a matter of policy. However, the commission indicated that legislation for Scotland at the present time might not be opportune.

Will the Minister say where and when such an indication was given by the Scottish Law Commission?

I have had discussions with the Scottish Law Commission on this matter. It has given no indication to the Scottish Consumer Council that it supports it. In part of the programme that it is undertaking at present, it has agreed to include consideration of the matter in part II as part of its researches.

That is not what the Solicitor-General for Scotland said. He said that the Scottish Law Commission considered that it would be inopportune to bring forward the measure. Can he substantiate that statement?

I have already said that last Friday I saw the chairman of the Scottish Law Commission and discussed the matter with him. He made the matter clear on that occasion.

I support my hon. Friend's stand, because I believe that it is wrong to tinker with the law without considering carefully all the implications. However, will he tell us the time scale during which the Scottish Law Commission will report so as to bring Scottish law into line with that of the rest of the United Kingdom?

I thank my hon. Friend. There are two matters that I want to explain to the House. One is the timetable and the type of research and report that would be prepared by the Scottish Law Commission. I also want to demonstrate, by reference to other reports of the Scottish Law Commission, that some of the anxieties that have been expressed that there would be no legislation in this area this side of 1990 are misplaced. I do not want to be nationalistic or parochial, but the performance of the Scottish Law Commission and its record in introducing its reports and having them embodied in legislation is better than that of the English Law Commission. I hope that the English Law Commission will not take what I say amiss. To put the matter in context, may I say that there are not vast numbers of reports from the Scottish Law Commission gathering dust on shelves and awaiting Government action?

I accept what the Solicitor-General for Scotland says. Will he give an undertaking that when he receives the report from the Scottish Law Commission, assuming that it is favourable, as I am sure it will be, the Government will initiate legislation that will apply to Scotland?

The hon. Gentleman is being somewhat churlish. It is clear that the Government have given their support to part I. As the hon. Gentleman will acknowledge, there has been no attempt by the Government to obstruct part I as a matter of principle, in so far as it relates to England, Wales and Northern Ireland. The point of objection is not that the Government feel that consumers in Scotland should be denied the benefits of legislation or that they should be second-class citizens; rather, it stems from the anxiety that since 1965 we have successfully established a proper method of approaching law reform in the United Kingdom.

I agree that we have had every assistance from the Department, but there is one thing that I do not understand. We get a report from the English Law Commission, and no action whatever is taken in Scotland. I should have thought that there would be immediate action once the English Law Commission had made its report.

I thank the right hon. Gentleman for making clear the Government's attitude to the Bill that he has introduced. Let me go back to report No. 95 of the English Law Commission and refer him to paragraph 16. Up to that point there had been two reports, in 1969 and 1975. They were made jointly with the Scottish Law Commission, and the legislation that followed those reports applied throughout the United Kingdom. It was seen that Scottish law in this connection had developed differently from English law. In those circumstances, both Law Commissions agreed that it was inappropriate to attempt to continue with that joint exercise.

The English Law Commission went ahead. The Scottish Law Commission has not yet done so, but is already working on the matter. It will be appreciated that we have two separate legal systems. The Scottish Law Commission would find it a quite unacceptable restraint on its activities if it were slavishly bound to follow the priorities that were asserted by the English Law Commission. Scottish Members will know that the Scottish Law Commission is engaged in a truly magnum opus relating to the reform of the law of diligence. That reform involves a considerable amount of research and investigation. The hon. Member for East Kilbride will know that real social problems are involved in reforming that difficult area of law. I am not prepared to see the issue that we are considering today being given greater priority than is being attached by the Scottish Law Commission to the law of diligence.

I accept that, and I think the Minister for his indulgence to me, but surely he agrees that this is a ridiculous way to do things. I cannot imagine that the Scottish Law Commission would object in principle to what the English Law Commission decides in this respect. As the Solicitor-General for Scotland said that there are differences in Scotland and that the problems in Scotland are perhaps different from those in England, would it not be intelligent and reasonable—it is not a matter of prestige; surely they are brothers under the skin—-for the Scottish Law Commission to look at what is proposed by the English Law Commission?

Surely the Scottish Law Commission could say that it had no objections to the proposal, with the necessary changes for Scotland. What is wrong with that procedure?

If I make some progress I shall be able to point out the exact areas of concern to the Scottish Law Commission and the issues on which it will take the views of those interested in this area of Scottish law reform.

It is unfair to accuse the commission of dragging its feet because it cannot produce an instant report or give instant advice. The range of work being undertaken by the commission is formidable, as can be seen from appendix II to the sixteenth annual report, which was published on 9 December 1981. It records that 66 full reports—including 15 annual reports and 52 consultative memoranda—have been published.

As I explained in Committee, the Scottish Law Commission takes the general position that the law on implied terms and contracts for the supply of goods should correspond as far as possible with the law of implied terms and contracts for the sale of goods. It is currently engaged, again in co-operation with the English Law Commission, on a review of buyer's remedies and related implied terms in contracts for the sale of goods. Work on examining the remedies and implied terms in contracts for the supply of goods has now begun and a consultative memorandum is expected to be completed during the year. Indeed. I understand that its drafting is already well in hand.

The Scottish Law Commission would like to examine certain aspects of the position in Scotland in detail. It is unlikely to be possible to apply the contents of part I to part II simply by means of a few drafting amendments. I expect that the commission will examine in particular the position on title and quiet possession, description and sample, on which there appears to be little difficulty at present. Nevertheless, the Scottish Law Commission would like to consider that. It will also wish to consider what ambiguities exist in common law and the extent to which the trade-in of old cars or domestic equipment should be governed by the Sale of Goods Act, together with the possible need to construe a second collateral contract in such circumstances.

If the hon. Member for East Kilbride has been in touch with the Scottish Consumer Council, he will be aware of a recent case at Hamilton sheriff court. It concerned the position of cars being traded in. Initially there appeared to be some obscurity, but the learned sheriff's decision was that the Sale of Goods Act applied. One of the Scottish Consumer Council's anxieties was that the Sale of Goods Act did not apply in those circumstances for that common type of transaction. Such transactions take place throughout the United Kingdom when a car is traded in for a secondhand car, or possibly for a new car.

There might be a significant point of difference between the respective legal systems on the two sides of the border. The Scottish Law Commission would like to look at the lack of any distinct type of contract in Scots law for work and materials.

The next issue of concern to the commission would be the difficult matter of latent defects. It would wish to consider the obligations that are appropriate to a private supplier of goods rather than to a person who supplies goods in the course of business. The Scottish Consumer Council probably understands that the Scottish Law Commission will want to consider to what extent durability should be an aspect of the condition relating to quality and fitness.

I am not suggesting that formidable or intractable difficulties will necessarily arise from that consideration, but I suspect that that issue of durability could present problems, particularly in relation to hire. However, those aspects would need to be considered by the commission in its review of that area of the law before it could express an opinion on the statutory changes that might be made.

It is highly desirable that that consideration should take place and that it should be the subject of wide consultation within Scotland. It is not possible or proper for me to attempt to predict whether the Scottish Law Commission's report, which will follow the consultaion, will be wider than part II, or to predict when it will be completed. As I said in Committee, if the consultative memorandum comes out later this year, I do not expect that the report will be published before next year.

Contrary to the impression that some hon. Members seem to have gained, the records of successive Governments on implementing Scottish Law Commission reports is good. The proof is once again to be found in the latest annual report of the Scottish Law Commission, in appendix III, which sets out the statutory provisions that have been prompted by the various Scottish Law Commission reports. Indeed, the position is even better than would appear from the appendix, reflecting developments after it went to print in the autumn.

10.15 am

Report No. 60 of the Scottish Law Commission, "Occupancy Rights in the Matrimonial Home and Domestic Violence" was first made available on 17 July 1980. A Bill was introduced in the other place on that matter on 3 February 1981. Little more than six months elapsed before a vital piece of social legislation was introduced. That legislation on matrimonial homes and domestic violence received the Royal Assent in November 1981, together with the consolidation of the Trustee Savings Banks Acts.

Reports Nos. 51 and 64 on the law of damages—which first saw the light of day in July 1981—will largely be implemented in the Administration of Justice Bill, which is currently before the other place. Report No. 57, on lost and abandoned property, finds expression in the code for civic government in Scotland, which will shortly come before the House.

That means that legislation is outstanding on only two of the Scottish Law Commission's reports, out of a total of 66, and on one of those reports—liability for defective products—legislation would be premature, because an EEC directive is currently the subject of negotiations in Brussels. I suspect that several hon. Members are anxious to get into that area of law, with its European implications.

Therefore, there is no need for gloomy mutterings and no need to worry that if the Scottish Law Commission carries on with the consultative memorandum and takes advice and evidence from all the bodies concerned, including the Scottish Consumer Council, a dull but worthy report will be produced to gather dust on a shelf in a dry office somewhere in Edinburgh. The record of those 66 reports is rather more impressive than I realised before I tried to put the subject matter together.

The Government greatly value the work of the Scottish Law Commission, but recognise that the fruits of its labours should find expression in the legislative programme on a regular and more frequent basis. I believe that it was the hon. Member for East Kilbride who said, in Committee, that no body of opinion in Scotland took the view that the Bill should not apply to Scotland. There has been little time for such bodies to consider the matter in depth. However, the position has become clearer. Certainly the Citizens Advice Bureau movement and the Scottish Consumer Council strongly support the extension of the Bill to Scotland. They have made their views clear to hon. Members on both sides of the House. I understand that, generally, the Law Society of Scotland has said that it is unhappy that legislation should proceed in an ad hoc and premature manner without due consideration.

I have a letter from the president of the Law Society of Scotland. That body has not yet had an opportunity to express an official view of the position, but Professor Love stated:
"On reading the Hansard report of the Second Reading, one is struck by the fact that the proposers and supporters of the Bill repeatedly emphasised that the Bill was intended to be declaratory of the existing law. My comment on that is that if they were intending to declare the existing law, it is a pity that they did not see fit to declare it with at least reasonable accuracy. As you know, there is a well established and quite short formula laying down the standard of care for members of trades"——
he is now going on to part III——
"and professions designed in effect to clarify the point which the words 'reasonable care' themselves leave vague and uncertain. I do not see how a court can know whether our common law rules in this area and, for example, in the area of medical services are or are not to remain in force. This Bill is in my opinion no way to legislate for a common law system which endeavours, not always successfully, to keep its law principled, coherent and relatively simple."
I accept that the Scottish Consumer Council has been vocal in its support for the Bill and that the principle that it wishes to have established in Scotland is not only proper, but one that I warmly support. However, the Government take exception to the manner in which it is sought to introduce the legislation in Scotland. I said in Committee that the point of principle about introducing a codification of the law on the supply of goods into Scotland is not baulked at by the Government, but we do not accept the proposed method of introduction without proper consultation and consideration in Committee.

The drafting of part II bears the mark of hasty preparation and an undue reliance on the terms of part I. I should emphasise that the Government do not object to the aims of part II in so far as they are designed to help the consumer. However, we are not satisfied that it would do that in practice. Its drafting is unsatisfactory and its effect uncertain and it cannot be either readily or timeously remedied. Its enactment would undermine the systematic procedures of law reform in Scotland in a way that would set a very unfortunate precedent. Therefore, I urge the House to accept that part II should be taken out of the Bill, especially as the necessary full and separate consultation in Scotland to produce appropriate recommendations for change in Scottish law are now in hand.

As hon. Members will be aware, part III is also extended to Scotland. In the way that the amendments have been grouped, it would be appropriate for me now to make clear to the House the Government's views about the application of part III to Scotland. The arguments against applying part II to Scotland apply with even greater force to part III. The Scottish Law Commission drew attention to certain deficiencies and inadequacies, such as the proposal to derogate by subordinate legislation from a statutory enactment of common law provisions and the danger of undesirable divergences between the laws of contract and delict, which would be described as "tort" on this side of the border. Another deficiency is the uncertainty of the proposal to codify or give priority to existing common law, which does not contribute or clarify.

My initial impression is that there might be difficulties if parallel claims under both delict and contract are competent in relation to the same act of providing a service. If part III is enacted, a supplier of services could be liable either contractually or delictually. A simple example might be where a garage undertakes to check the brakes of a private individual's car but does so inadequately, fails to realise that they need correction or remedy, and as a consequence the car is involved in an accident. If any personal injury is sustained, the garage would be liable delictually for damages and the obligation would have been to take "reasonable care". However, if the car is damaged, the garage would be caught by part III and would be required to exercise something described as "reasonable skill" in checking the brakes.

It would be wholly presumptuous of me to make remarks about the law of England and Wales in this respect, but the words "reasonable skill" are not a term of art in Scots law and, far from bringing greater certainty to the consumer, could cause greater uncertainty. It would mean that the courts of Scotland, potentially up to the House of Lords, would have to determine whether the expression used in the Bill—"reasonable skill"—as opposed to "reasonable care" was either otiose and meant the same thing or introduced a new concept of greater responsibility than is incumbent on such suppliers of services under Scottish common law.

A further complication that would need closer consideration is the position that could arise if a third party were injured in the accident. A different test could be applied to the driver, who has a contractual relationship with the garage, and the luckless third party, who would have grounds for an action in delict, even though the cause of the accident—faulty brakes—was the same in both cases.

The Statutory duty set out in part III could have important implications for the law of delict in Scotland, not just contractual law. Those must be fully explored before legislation is contemplated for Scotland.

Although I am not in a position to opine whether part III provides an adequate statement of the common law in England and Wales, I have no confidence that it does so for Scotland, and I fear that at least in some instances it could make the consumer worse rather than better off. I appreciate the arguments for greater protection of the consumer, but, as informed legal opinion in Scotland is against the inclusion of the provisions in this form, it would be quite irresponsible of me to suggest to the House that we should apply the Bill to Scotland, because some parts might turn out to be not too bad. I can see no advantage to Scotland or Scottish consumers in proceeding in that way, especially as it is far from certain that the practical effect would be to increase protection for the consumer.

In an eloquent speech to the House, the late Sir Ronald Bell examined the proposition that part III in some way parallelled that great piece of law reform in the last century, the Sale of Goods Act 1893. The assertion seemed to be that if one considered what was being done in this Bill one saw exactly the same effect as that brought about by the previous Act. Sir Ronald Bell's point was that if we examine the 1893 Act we see that we have broken the connection with the common law. Although that is not absolutely true in every respect, generally speaking one need not look back beyond 1893 in to case law to see what the common law has to say. It was neatly, precisely and clearly codified in a relatively short and simple Act.

Clause 28(3) states:
"Nothing in this Part of this Act prejudices … any rule of law which imposes on a supplier a duty stricter than that imposed by section 25 or 26 above".
This problem relates to Scotland. The draftsman did not say that one must never look back to consider what the common law stated on the imposition of a duty of care or responsibility.

10.30 am

The Scottish Consumer Council, as I understood the situation, wanted consumers who had problems over the supply of services—who might visit a citizen's advice bureau, lawyer or anyone else—to ask it what responsibility or duty was incumbent on the person supplying the services—whether that be a plumber, hairdresser or brain surgeon. The council mistakenly believed that if part III were to be applied in Scotland it would be possible, in little more that a page, to identify the precise position for the consumer.

The hon. Member of East Kilbride is a medical man. If the supply of services were medical, the complaints were medical and a person felt that he had suffered damage as a result of the supply of those medical services, he would visit the Scottish Consumer Council, a citizen's advice bureau or his lawyer. The person purporting to advise him could not simply tell him to consider part III. he would be bound to consider the matter more carefully before telling the person his exact position. He would have to check back through common law to ensure that there was no greater or higher duty encumbent on the supplier of services.

I particularly chose the medical services, because I am sure that the hon. Member for East Kilbride, being a practising medical man, will be aware that there have been difficulties and, perhaps, obscurity in dealing with this matter. There appeared to be a higher duty of care incumbent on a medical man than was generally the case.

In those circumstances, I could not say, and the Scottish Consumer Council would positively be misleading people in Scotland if it were to assert, that part III clarifies and codifies the law into such a form that it will be that much easier for consumers to understand their rights and secure justice in the courts. The Scottish Consumer Council sought to have part III included in the Bill. Reading between the lines, I felt that it was less concerned about seeing part HI extended to Scotland than part II. I received a letter from it at the same time as a copy of its press release. That one and a half page letter made no reference to part III.

The application of part III to Scotland makes no more, and perhaps less, sense than the application of part II. I have made no attempt to speak about the law of England. I invite hon. Members to accept that what is being done in applying part II and III to Scotland is not the proper way to approach orderly law reform in Scotland. There are also many additional amendments relating to transitional provisions which would apply if the whole Bill applied to the United Kingdom. No particular points arise out of them. If parts II and III are not applied to Scotland, they are consequential and necessary amendments.

I shall offer the hon. Gentleman what might not be an entirely exact and complete analogy on codification. As he referred to the medical profession, I shall use that example. There is no body of general practitioners or family doctors, as we know them, in the United States. That also applies to a great extent on the Continent. Someone who feels ill must decide for himself what is wrong. He may visit the wrong person. He may see an ear, nose and throat specialist when he should visit someone who deals with heart problems.

We have codified this aspect to some extent. A person who feels ill in Britain can go to a general practitioner. That does not tell him what is wrong, because the next stage, carried out by the general practitioner, is to decide which system is wrong. I hope that the Minister accepts the way my mind is working. Of course, that is not meant to be an exact diagnosis or clarification. However, it is a necessary step on the road towards that.

I understand the way in which the hon. Gentleman's mind is moving. Part III seeks to provide the general principles and established duties incumbent on suppliers of services, without definition, to the areas in which they supply them. That could be cutting the hon. Gentleman's hair or operating in the most delicate circumstances on his brain. That would be intensely difficult and delicate surgery. Part III purports to say that there is a general principle and that there are a number of conditions to be implied in the supply of those services, regardless of type.

The draftsman clearly recognised that there would be difficulty, and therefore did not have the complete confidence to say that this was necessarily the final or best way to approach the matter. If there are circumstances in which a higher duty is incumbent on a supplier of services, nothing in the Bill will derogate from that. As I understand it—the Scottish Consumer Council made this point—particular services might be excluded from the ambit of this part of the Bill. Again, that demonstrates less than complete confidence that what is sought to be achieved in part III—not part I—has reached a final stage. It is approximating, in a codification fashion, that great Act of 1893.

I cannot elaborate more on these provisions. I invite the House to accept not only the amendment that I have moved, but the others, which disapply the Bill to Scotland.

Earlier this week the Scottish courts decided that, no matter what the views of the Solicitor-General for Scotland, there is a right to bring private prosecutions in Scotland. In the same way it was decided in Committee that Parliament, the legislature, no matter what the views of the Solicitor-General, had a right to legislate notwithstanding the advice given to the Committee. Parliament has to be careful when it gives up its right to perform its main function, which is to pass laws. It is an extraordinary development that Parliament, the legislature, which came into being to control the Executive, has for many years now been controlled by the Executive rather than controlling it. We have now arrived at the next stage. It seems that the way in which Parliament goes about its business is to be controlled in some senses by the Law Commissions, by bodies that go beyond the Executive. There is to be extra-parliamentary and unelected control upon the pace and the manner in which we legislate.

That is the principle that has been put forward by the Solicitor-General. I do not disagree entirely with him. If legislation is introduced higgledy-piggledy, there is a risk that the law will be made worse and not better. I do not disagree with the hon. Gentleman's judgment that we must be careful in these matters. I accept that, if it is possible to legislate by reference to a Law Commission's report, it may be better to do so and to get the law right. I do not pretend to be any expert on the law of Scotland. However, in respect of part III, the House of Commons has asserted its right to legislate on implied terms for the supply of services notwithstanding the absence of a report from the Scottish Law Commission. We asserted our right as legislators to legislate.

I do not complain about the argument advanced by the Solicitor-General for Scotland that we must be careful in these matters. I do not object to the proposition that it might be better to have a report from the Scottish Law Commission on the matters dealt with in parts II and III if there is likely to be a difference between what is put in the Bill and what would amount to a proper codification of the law of Scotland. However, I am disappointed by the hon. Gentleman's lack of commitment and initiative. The hon. Gentleman must be more than a postboy. He is not a messenger boy between Edinburgh and Westminster. It is not good enough to come to this place with a message from the Scottish Law Society or to convey to us the views of the Scottish Law Commission. We were looking for a greater degree of commitment to change from the hon. Gentleman and a personal view of the change that is to take place.

The hon. Gentleman has said that he has no objection in principle to changes taking place. We were surely entitled to look for a greater degree of political commitment to the codification of the law on the supply of goods and, secondly, for the hon. Gentleman to express a Government commitment on the principles set out in clause 22 as it applies to Scotland, that in the supply of goods to consumers it will not be possible to contract out of the implied covenance of title, for example. Thirdly, because the hon. Gentleman is urging the House to remove from the Bill a provision inserted in Committee, we are entitled to ask whether the Government will commit themselves to bringing forward legislation once the Scottish Law Commission has reported.

This is not an especially controversial area of the law and I understand that it would be possible to give a commitment that once the Scottish Law Commission reports a Bill could be prepared by the Government. I understand that such a Bill could be given a Second Reading by the Scottish Grand Committee. It could have a fairly expeditious passage from the report of the Scottish Law Commission to the statute book. In return for the House of Commons giving up part II, I would expect that degree of commitment from the Solicitor-General. In those circumstances, I would expect him to do everything in his power, once there is a report from the commission, to put the recommendation into law. There is a long and justified complaint by Scottish consumers that the law that protects consumers in Scotland lags behind consumer law in England and Wales.

10.45 am

The hon. Gentleman is expanding his argument and seems to be asserting that there are specified areas of consumer law in Scotland about which there are identifiable complaints that require to be remedied as a matter of urgency. If that is what he is saying, I shall be grateful if he spells them out. The one particular example that was given to me by the Scottish Consumer Council related to the part exchange of one used vehicle for another one or a new car. The recent decision to which it makes reference itself explains in part of the judgment that that situation is in any event caught in Scotland by the Sale of Goods Act 1979. If the hon. Gentleman is saying that there is a crying need to remedy certain defects in Scottish consumer law, I ask him to specify them.

I had in mind, first, bringing the law into line on unfair contract terms, which was eventually done in the 1977 Act. Indeed, I was responsible for helping the Bill on its way through the House of Commons. It was necessary to apply some pressure in Scotland to ensure that the Scottish drafting took place. There was a degree of difficulty with the Scottish legal establishment in getting that into law. It was necessary to use some muscle. The hon. Member for Caithness and Sutherland (Mr. Maclennan) was helpful in that instance. It was necessary to have political commitment to ensure that the 1977 measure was enacted. I am not talking especially about implied terms in the sale of cars. However, there has been a long-standing complaint by the Scottish Consumer Council about the legal procedures in Scotland that are available to consumers.

I understand the hon. Gentleman's argument that if we are to reform the law it is necessary to get it right. I accept his judgment that part II may not be right. However, I ask for a degree of commitment on the part of the Government that when the draft is in a correct form the Government will take the initiative to pass it into law. If the hon. Gentleman says "Yes" to that commitment, we shall be all the happier in the way in which we allow him to take his amendment through the House.

The Scottish Law Commission is already preparing a memorandum as part of the consultative procedure on which it has embarked. It follows the standard form that is observed by both Law Commissions. It will be a wider consultative memorandum than that which applied to the report which gave rise to the Bill.

There is no hostility to what is contained in part I. At this stage I cannot anticipate what the Scottish Law Commission will do, but the English Law Commission has said, in effect, in its report "We shall codify the existing law" with the one addition to which the hon. Gentleman has referred. I think that he will recognise that there is a real possibility that the Scottish Law Commission will say "Yes, we shall go along that route, but while we are at it we shall consider other matters". The hon. Gentleman will recognise as a lawyer that extremely difficult issues arise in dealing with latent defects, for example. If the Scottish Law Commission brings forward law reform proposals in that area of the law, I have no doubt that the hon. Gentleman will be extremely interested in how the commission deals with them with a view to introducing similar provisions in England and Wales. Another difficult area of the law is durability.

I understand that the commission is intensely interested in engaging in a proper examination of these issues. In these circumstances, what emerges from the commission could be a far more significant and radical reform of consumer law than is included in the Bill. Potentially there is an opportunity for better consumer legislation for Scotland than is contained in part II of the Bill.

May I conclude my speech with a question? If the Scottish Law Commission comes out with a more significant, radical and welcome proposal for the reform of the law, will it have the endorsement and support of the Government?

The Solicitor-General for Scotland devoted almost an hour of the time of the House not to an examination of the merits of part II, which one would have been interested to hear, not to an examination of any defects which he or the Government consider are in the Bill, but to stating a case against legislating on consumer matters in Scotland in the absence of a report from the Scottish Law Commission. He ennuciated a novel and unacceptable constitutional principle. It will not command support in Scotland. I doubt whether it will command support in legal circles there.

As an English lawyer, will the hon. Gentleman tell the House which Scottish lawyers and Scottish legal groups he has consulted?

That is an extremely stupid argumentum ad hominem. I have consulted a number of Scottish lawyers. If the Solicitor-General were riot so personally discourteous, he might realise that a former Minister with responsibility for consumer affairs in Scotland would have done that. The hon. Gentleman cannot hope to escape from the consequences of the Government's continuing unwillingness to move to reform consumer law in Scotland by making a personal attack on me.

The proposition that one can move to reform consumer law only if there is a report from the Scottish Law Commission does not bear examination. The law is complex. Undoubtedly there are many changes that could be made to improve it. If the Bill were described purely as a codification measure, it would be desirable to have a report from the Scottish Law Commission. However, it is not. The Bill is specifically described as a Bill to amend the law.

When the Scottish Law Commission was established in 1965 it was intended to assist in the reform of the law, not to impede its development. I do not think that the Scottish Law Commission would consider that it was appropriate for it to arrogate to itself the powers—which the Solicitor-General has suggested it has—to stand in the way of what the House regards as a desirable improvement in the law.

In an intervention I asked the Solicitor-General to say what evidence there was that the Scottish Law Commission regarded it as inopportune to legislate in this area. He prayed in aid some private consultation that he had had. I cannot regard that——

Not in the middle of a sentence. The hon. Gentleman must contain himself. He has had an hour in which to develop his arguments and he has already intervened during the first two minutes of my speech. That is enough.

I have the highest regard for the work of the Scottish Law Commission. I know that it is burdened with a great deal of important work. I know of the work that it is doing on the law of diligence. However, I do not think the Scottish Law Commission would imagine that the House would not seek to introduce legislative reforms in important areas until it had concluded that work. I cannot think that that would be right constitutionally or that in any sense the work of Parliament with regard to the law of Scotland can be dictated in time or in order of priority by the proceedings of the Scottish Law Commission. The Solicitor-General insults the House by even implying that such is the case.

It was notable that in his remarks on the substance of the Bill the Solicitor-General attacked only part III. I have no reason to doubt that what he said was well founded. I am prepared to accept his legal advice as a Scottish Law Officer. What was notably absent was any attempt to attack in substance the provisions of part II.

I was not suggesting that the Scottish Law Commission could in any way arrogate to itself the responsibilites of the House for legislation. I was attempting to set out the procedures that had been followed by successive Governments in dealing with reports of the English Law Commission and those of the Scottish Law Commission. I accept that if the House seeks to legislate on anything it can do so. I was attempting to convey—unsuccessfully, it seems—that I could not see circumstances that justified a departure from those procedures with regard to part II. I was seeking to do nothing more and nothing less than that.

An important constitutional issue is at stake. If the Government are able to pray in aid the absence of a report from the Scottish Law Commission in respect of a matter and refuse to legislate or to permit Private Members' legislation, they are seeking to arrogate either to themselves or to the Law Commission the power to delay or order the priorities of legislation.

There are plenty of other matters outside consumer law reform on which it would be open to invoke the same argument. During this year there was a highly contentious piece of legislation on labour law. The Government did not think it appropriate to seek an opinion from the Law Commission on that. None the less, that is an important piece of law reform. I make no complaint about the fact that the Government did not invite an opinion from the Law Commission on that matter.

The Government are entitled to introduce legislation at any time they choose. The House can consider the merits or the demerits of a Bill. What is not acceptable is that consumer protection law should be treated differently from other law reform, and that it should be treated as a matter not of political judgment for consideration by the House. The Solicitor-General, in raising the matter in the way that he did, paid scant attention to the legitimate concerns that have been expressed by a body appointed by the Government—the Scottish Consumer Council.

It is unacceptable that the Minister has given little indication of the Government's views. It is obvious that the Government give a low priority to seeking to bring about the reform of the law in this area. I have no doubt that that will give rise in Scotland to a recognition that in this, as in so many other matters, the Government are trailing behind Scottish opinion on the need for law reform. That is no reflection on the excellent work that is being done by the Scottish Law Commission. It is a reflection on the priority that the Government have given to consumer matters in Scotland.

That is reflected not only in their failure to bring in substantive law changes, but in their failure to use a Private Member's Bill, which they could have sought to amend. They have chosen not to do that, but prefer to scrap the whole proceedings and they will not even give an undertaking that if the Law Commission brings forward proposals they will be facilitated in Parliament.

That is disgraceful, and typical of the reactionary approach to consumer protection that the Government manifest in Scotland.

It being Eleven o'clock, Mr. Deputy Speaker interrupted the proceedings, pursuant to Standing Order No. 5 (Friday sittings)

Falkland Islands

With permission, Mr. Deputy Speaker, I shall make a statement on the situation in the Falkland Islands.

Over the past 24 hours the situation has become increasingly grave. There is now a real expectation that an Argentine attack against the Falkland Islands will take place very soon. It was for this reason that we sought an emergency meeting of the Security Council yesterday and associated ourselves immediately with a request from the President of the Security Council that both Britain and Argentina should exercise restraint and refrain from the use or threat of force, and continue the search for a diplomatic solution. There was no Argentine response to this; nor has the Argentine President responded to the many appeals that have been made to him to draw back from the use of force.

We are taking appropriate military and diplomatic measures to sustain our rights under international law and in accordance with the provisions of the United Nations charter. The House will not expect me to give details at this stage of the military steps we have taken to respond to the worsening situation. In the meantime, we continue to hope that the Argentine Government even at this late stage will reconsider their rejection of the diplomatic channel as a means for settling the differences between our two countries.

The Labour Party pledges full support for the right of the people of the Falkland Islands to stay British, as they wish, and we believe that it is our duty to defend that right. We pledge our full support to the men of the Royal Navy and the Royal Marines. We believe that the Government were right to inform the Security Council that there was a threat to peace. Nevertheless, there are some questions that we must ask.

First, did the Government misjudge the situation? Is it not a fact that whenever the tinpot Fascist junta that rules Argentina is in deep trouble at home it threatens the Falkland Islands, and were not the signs there to be seen some time ago? Secondly, did not the Secretary of State for Defence contribute, to some extent, to the possibility of an invasion by his talk of scrapping HMS "Endurance" and a large proportion of our surface fleet, thus perhaps giving the false impression that Britain might be willing, though she will not, to abdicate her responsibilities in the area? Are we confident that we can protect the islanders?

Thirdly, did the British Government consult other members of the Security Council before advising the Secretary-General of the threat to peace and have we any support inside the Security Council? Finally—and perhaps this is more a matter for the Leader of the House—the situation is incredibly fluid. Will the Lord Privy Seal be able to make further statements to the House during the day should that be necessary?

I thank the right hon. Gentleman for his expression of support, not only for the Government but for the people of the Falkland Islands, who, as he rightly said, are determined to remain British.

The right hon. Gentleman asked whether the Government misjudged the situation. The answer is "No". It has become increasingly evident over the past few days that the Argentine had assembled a fleet which was operating in the vicinity of the Falkland Islands. We have responded in the appropriate way, and I believe that taking the matter to the United Nations was the proper course. I am grateful for the right hon. Gentleman's support in that.

The right hon. Gentleman's suggestion in regard to HMS "Endurance" cannot be correct. If the Argentines had wanted to wait until "Endurance" was not there—which she is—they would not be acting now as they are.

We consulted our friends before taking the matter to the Security Council, and we have support there.

Is the right hon. Gentleman aware that we fully support the Government in every measure that they see fit to take to defend the Falkland Islands and the interests of the islanders? I think that every hon. Member recognises the Lord Privy Seal's difficulties in questions of military and naval deployment. We all hope that contingency measures were taken some weeks ago to ensure that naval forces are in the area and are capable of intervening if necessary.

Is the Security Council to be called to another session later today? What action do we intend to take in the Security Council if an invasion takes place? Are we right in believing from the right hon. Gentleman's statement that, as he speaks, he is not aware of any invasion and that the report on the tapes that Argentinians have landed in Port Stanley is incorrect?

I fully associate myself with the remarks of the right hon. Member for Deptford (Mr. Silkin) about the need for the House to be kept informed. The Leader of the House is listening to the exchanges, so may we have an assurance that, if necessary, the House will not rise at the normal time and that we shall have an opportunity to debate the issue later today? I think that it is the wish of the House that there should be no question of our adjourning if there is any possibility of an invasion taking place.

I am grateful for the right hon. Gentleman's expression of support for the course that we are taking. The report on the tapes comes from an Argentine newspaper. We were in touch with the governor half an hour ago and he said that no landing had taken place at that time.

There are no immediate plans for another session of the Security Council, but it will be called together if the situation becomes worse. I undertake to the right hon. Gentleman and to the right hon. Member for Deptford (Mr. Silkin) to keep the House fully informed.

While thanking my right hon. Friend for his readiness to keep the House informed, may I press the point raised by the right hon. Member for Plymouth, Devonport (Dr. Owen) and stress that, if an invasion materialises, today's sitting should be prolonged to enable a short debate to take place?

That is more a matter for my right hon. Friend the Leader of the House, who is listening to the exchanges.

At the risk of appearing inconsistent, may I ask whether the Government will give an undertaking that they will not lecture the Falkland Islanders on the Argentinian dimension or suggest that they need an inter-parliamentary council to find a solution?

It is not our business to lecture the Falkland Islanders; it is our business to sustain them.

Is my right hon. Friend aware of any change in the situation in South Georgia or in any of the other dependencies of the Falkland Islands?

No. The 12 or so Argentinian contractors who landed illegally in South Georgia are still there.

Can the Lord Privy Seal assure us that, in the event of an Argentinian invasion, we shall have the full support of all members of the Security Council in condemning such an invasion?

I should certainly hope so. I remind the hon. Gentleman that the President of the Security Council has already called on Britain and Argentina to refrain from the use of force. If force is used, I am sure that the Security Council will maintain its position.

Does my right hon. Friend accept that he has the unanimous support of the House in defending British interests, but that it is not opportune to discuss today the details of how those interests are to be defended?

Can the right hon. Gentleman give a specific undertaking that the rights of the Falkland Islanders will be defended by force if necessary?

As my hon. Friend the Minister of State, Foreign and Commonwealth Office told the House when he made a statement a few days ago, we shall sustain and defend the Falkland Islands to the best of our ability.

Would it be possible to invade the Falkland Islands simply by walking ashore, since the coastline is exposed, if perhaps rugged? Is it not right that the 1,800 or so people who live on the Falkland Islands should expect this country to defend them and their coastline?

I repeat our undertaking that we shall sustain and defend the Falkland Islands to the best of our ability.

As for the ease of any invasion, I do not think that it would be found to be at all easy.

I thank my right hon. Friend for his statement, and I, too, assure him that he has our united support. However, does he accept that possession is likely to be about nine-tenths of the law, and will he assure the House that he has taken the factor of ground possession by ground forces fully into account in his plans?

No invasion has taken place. The Government of Argentina have been called on by the Security Council to desist from the use or threat of force. It is our hope that they will heed the appeals made to them from all over the world.

In expressing support for the action that my right hon. Friend has taken and acknowledging that he wishes to take into consideration the views of the Falkland Islanders before any other action is taken, may I ask my right hon. Friend to assure the House that anyone who might have settled on these islands in the meantime will not be allowed to participate in any referendum which might be called subsequently, in view of the small numbers involved?

That proposition does not arise at the moment. The British Government have no intention of having a referendum.

I welcome my right hon. Friend's statement and the support that it has had from all quarters of the House, but I hope that Her Majesty's Government will now give more serious consideration to the implementation of the Shackleton report on the future of the people of the Falkland Islands, especially its recommended construction of an airfield—a requirement which hon. Members on both sides of the House have been pressing on the Government and their predecessors for the past five years?

A great part of the Shackleton report has been implemented, but I take note of what my right hon. Friend has said.

Since time is an essential element, will the right hon. Gentleman assure the House that he will not wait until there is condemnation by the Security Council before Britain takes action to protect the people of the Falkland Islands?

As I told the House, we have already been to the Security Council. If the position worsens, we shall go again immediately.

We all accept, of course, the logistical problems—they have become clear to us over the past few weeks—but will my right hon. Friend think again about the phrase that he used just now—"to the best of our ability"? Given the circumstances, I think that the House will agree that that is not the way in which we should approach this problem. Our words should match our deeds, and they should be forthright in the extreme.

I do not think that the Government, or anyone else, can take any action better than to the best of our ability. That is what we shall do.

Does my right hon. Friend accept that in some of the European press our country has been criticised for getting angry about a few scrap merchants? In the circumstances, is it not clear that their presence was merely a pretext and that these moves would have taken place whatever our reaction to them had been?

I do not think that it is possible to say exactly how this situation was planned to develop by the Argentine Government. But the problem that we are discussing today has nothing to do with the presence of 12 scrap merchants. The House is anxious about the possibility of an invasion of Port Stanley.

If the worst comes to the worst and military action is necessary, do the Government intend to see that we are able to tackle the problem alone and not involve any other country in the action?

As I said, we shall go to the Security Council; we shall seek to get the support of the Security Council. But we shall be taking the appropriate action ourselves at the same time.

Do not the Government feel a sense of shame and ridicule about spending billions of pounds on armaments but being unable to defend a small British possession?

The Queen's representative and the people there are in danger of having to suffer the humiliation of surrender to an Argentinian dictatorship. Should not the Government have taken a lesson from the Labour Government in defending these islands?

The threat to the Falkland Islands has existed for at least 15 years from a country which is a great deal closer to them than we are. Successive Governments have taken what they believed to be the appropriate steps to defend the Falkland Islands. We shall do the same.

The right hon. Gentleman said that he had been in touch with the governor of the Falkland Islands about half an hour ago—presumably he meant half an hour before he made his statement. Bearing in mind that the House is conscious that the position is highly sensitive, can he say whether the governor has asked for assistance of any kind?

No, Sir. The governor has been kept fully in touch by the Government with all the developments. It is now about three-quarters of an hour ago that we were in touch with him. No troops had landed at that time.

Will my right hon. Friend take note of column 1194 of Hansard of 16 April 1980, when I questioned the Lord Privy Seal about the Shackleton report? Will he accept the congratulations of the House on his comments about the position of the Falkland Islands in international law and agree that the sovereignty of the islands is not a subject for debate with any foreign power?

There is no doubt under international law who has sovereignty over the Falkland Islands. As the House knows, everyone living on the Falkland Islands, with virtually no exception, wishes that position to be maintained.

I shall of course look at what my predecessor said in April 1980.

Does my right hon. Friend agree that, apart from any necessary military and diplomatic action, it is vital that we also win the propaganda battle and that no one throughout the world should doubt that we are acting in response to the wishes of the people of the Falkland Islands, who naturally would prefer to be linked with our diplomatic institutions than with a military dictatorship in Argentina? Will my right hon. Friend take any necessary action, especially affecting the BBC's external services, to ensure that our voice is heard loud and clear throughout the world?

My hon. Friend is right. It is necessary continually to impress upon the rest of the world the wishes of the people of the Falkland Islands, and we shall do that.

I take note of what my hon. Friend said about the BBC's external services. From what I have heard of them in recent days and before that, they give a very fair and balanced picture of the world scene.

Is my right hon. Friend satisfied that adequate communications links can be maintained with the Falkland Islands in the current situation?

Yes, Sir. The links that we have currently with the Falkland Islands are very good. I repeat that we were in touch with the governor direct only about 50 minutes ago.

Will my right hon. Friend say what exactly are the consequences of our recourse to the Security Council? Will he assure the House that, because we have made that representation, it in no way limits our freedom to act in whatever way we think right?

No, Sir, it does not. The consequence of our recourse to the Security Council last night was that the President of the Security Council called on Argentina as well as us to abandon the threat of use of force. That is a beneficial consequence, and we hope that the Argentine Government will pay attention to it.

Will the right hon. Gentleman be more specific on one matter? I understand that discussions have been going on between the British ambassador and the Argentine Government in Buenos Aires. Are those discussions still going on, or have they ceased? If they have ceased, is that as a result of the intransigence of the Argentine Government, or do 'we regard the discussions and other diplomatic moves that we might be making as having been superseded by the approach to the Security Council?

Do the Government regret reducing the Spanish-language broadcast of the external services of the BBC, and have they any plans for extending them?

Our ambassador has been constantly in touch with the Argentine Government over the past few days and weeks. Unfortunately, they have rejected every suggestion that we have put forward for taking the matter forward by diplomatic means. The fact that our ambassador is not in touch with the Argentine Government at the moment is because they will not see him.

We have no immediate plans to change the BBC's external services.

Does my right hon, Friend accept that the people who live in the Falkland Islands are not just British by law, but that when one meets them one realises that they are British in fact, in nature and in every tradition? Does he also accept that it would not have been reasonable to maintain a large military presence thousands of miles from the islands? Can he assure the House that if, regrettably, force is used by Argentina the initial use of force would not be the end of the matter?

No, Sir, it would not.

I agree with my hon. Friend about the nature of the Falkland Islanders. They have made it extremely clear for many years that they want to remain British. I agree with my hon. Friend that the difficulty of maintaining a substantial force in the vicinity of the Falkland Islands is very great because of the enormous range between here and there.

On a point of order, Mr. Deputy Speaker. Would the Leader of the House care to respond to the request to extend the sitting if necessary?

The Lord President of the Council and Leader of the House of Commons
(Mr. Francis Pym)

I shall respond to the remarks of the right hon. Members for Deptford (Mr. Silkin) and Plymouth, Devonport (Dr. Owen). Almost exactly 12 hours ago I undertook to keep the House informed. We have had a statement this morning. Should the circumstances develop in such a way that a further statement is appropriate, I shall make arrangements for one to be made. The situation is sensitive, but if a further statement seems to be called for and events develop in a way that makes that necessary my right hon. Friend the Lord Privy Seal will come to the House again this afternoon.

Further to that point of order, Mr. Deputy Speaker. The House is due to rise at 3 o'clock. The right hon. Member for Plymouth, Devonport (Dr. Owen) and I wonder whether the sitting can be extended if necessary.

Further to that point of order, Mr. Deputy Speaker. That can be discussed through the usual channels. If before 3 o'clock events develop in such a way that a further statement is called for or is appropriate, I shall make the necessary arrangements.

Supply Of Goods And Services Bill

As amended, again considered.

Question again proposed, That the amendment be made.

11.23 am

Had the hon. Member for Caithness and Sutherland (Mr. Maclennan) concluded his speech?

Having listened to the Solicitor-General for Scotland and the subsequent exchanges, I am happier with the legislation than I was earlier. That does not mean that I am unhappy about the Bill.

I congratulate the right hon. Member for Sunderland, North (Mr. Willey) on introducing an advance in consumer protection. I am not a lawyer, but I am jealous of the separate Scottish legal system. I should be opposed to legislation with Scottish provisions tagged on as a tail. Scottish legislation should be drafted with the Scottish legal system and Scotland's interests in mind. In recent years there has been much instant legislation, thought up on the wing. Before a measure makes the statute book it should have had the benefit of careful and thoughtful review.

Scottish consumers will be disappointed that they are not included in the Bill. If I had to make a choice between giving them that protection now and awaiting the result of a well-thought-out review of the existing position, I should opt for the second proposition. Now that the Scottish Consumer Council and consumers generally are aware of the protection to be given in England and Wales, the Government should feel obliged to ensure that similar protection, apposite to Scottish circumstances, is afforded to Scottish customers as soon as possible. I do not see much wrong in the Government's waiting until they have the report from the Scottish Law Commission. The commission is engaged in an examination of the law of diligence, an importance matter.

There is no evidence that the Government have sought to obstruct the Bill. The right hon. Member for Sunderland, North has said that he has received every assistance. I am sure that there is no Government plot to leave out Scotland, just for the sake of doing so.

The Scottish customer has a right to expect protection as soon as possible. I hope that the Solicitor-General for Scotland will press the Scottish Law Commission to make its recommendations as soon as possible. The hon. Member for Norwood (Mr. Fraser) made a reasonable request when he asked for a Government commitment to implement the commission's recommendations.

I am mildly surprised that the right hon. Member for Western Isles (Mr. Stewart) is so satisfied with a measure that has such an adverse effect on Scotland. During the Committee stage of this little Bill the Scottish question was agreed on non-party lines. It was thought that that was a considerable achievement; that the Government had seen the light and realised the dangers inherent in having a measure of such an important nature applying to England and Wales but not to Scotland. I hope that I can provide an exact analogy of the situation.

Let us suppose that a Scottish family is on holiday in England. The mother goes into a shop and buys an article. She finds that there is a defect in it and returns it to the shop. There is no problem, because she is covered under the Bill. If she does that in Scotland, she is told, much to her consternation, because she does not think that Britain is two separate countries, that the law does not apply in Scotland. That is the situation that we are trying to ensure does not arise, but it will if the hon. Gentleman permits this to go through.

11.30 am

I think that it was a slip when the hon. Gentleman referred to a purchase rather than a hire. With great respect, I think that the hon. Gentleman is mistaken. At the moment, if a consumer in Scotland hires goods, he or she is covered, just as that selfsame consumer is covered by the common law, as I understand it, this side of the border. This Private Member's Bill is an attempt to ensure, following on the English Law Commission's view of it, that it is codified clearly in a short and narrow compass. That is a desirable piece of law reform.

The consumer who hires something in Scotland at the moment is not without remedies and protection. I accept that it may be more difficult at the moment for the consumer in Scotland to discover the position in that range of activities.

I am not sure that if part II were to be introduced in Scotland, it would mean that the consumer would enjoy the same rights as he does at present. It may restrict his existing common law rights. That is why it is vital that the Scottish Law Commission should look at the matter to ensure that we do not introduce something into Scotland which, far from being an amplification or a simplification of Scottish consumers' rights, might amount to a restriction of them.

The hon. Gentleman is making a virtue out of the expediency that he has been talking about for quite some time this morning. I take the point that the law in Scotland protects such a consumer. We know that the common law gives such protection. However, the whole thrust of the proceedings in Committee—in fact, the whole thrust of the Bill—was not to make drastic changes in the law, but merely to have a codification which made it easier to identify where the consumer's interests lay. That is where the difficulty lies.

My example of the woman making a purchase in Scotland could well be true. She might just accept that she is not covered. If she goes to the Scottish Consumer Council, it will say that it does not know what the law is. She would then have to go to a lawyer and find out. By that time, my hypothetical purchaser might have lost interest in the matter or decided that she cannot afford a lawyer and would drop the whole thing. That is what we are trying to avoid.

The Minister said that the Bill might make matters worse. If that is the case, I do not see why it takes the Scottish Law Commission a couple of years to decide that. I suggested in Committee—and I am suggesting it now—that that should be looked into. The Scottish Law Commission should be asked as a matter of urgency. I do not see why that cannot be done. If the Scottish Law Commission says that it is certain that the Bill will make matters worse, the matter will end there. However, to exclude Scotland from this part of the Bill merely because the Scottish Law Commission has not reported is a dereliction of duty on the part of the Government.

I do not think that the principles are any different. I said that over and over again in Committee. The principles of Scottish and English law cannot be all that different. If a different form of words is needed in Scotland compared with England, there is no problem about that. Is this how laws are enacted and how a Bill that comes before Parliament is initiated? Do we have to wait until some learned organisation pontificates on it and sends us a report before we do anything about it?

The Scottish Consumer Council comes to its Members of Parliament, as it ought to do and does, and says, "Here is a Bill which has been introduced for England and Wales. We firmly believe that it will be of value in Scotland. Will you initiate legislation?" We say "Yes". It does not enter the council's mind—or mine—to go to the Scottish LAW Commision and ask it to report on some future legislation. That is the negation of Government authority. The Government ought to have initiated discussions when the idea of a Bill for England and Wales was first mooted.

I feel very strongly about Scotland being left out. I do not think that it has been done deliberately—I agree with the right hon. Member for Western Isles on that—but I think that it will be seen in Scotland as another instance of the way in which legislation that can be of benefit to Scotland is enacted only for England and Wales. Probably the BBC will broadcast some information about the measure, showing that it is of some limited value, and the Scots will feel that it is another instance of England legislating for itself and not for Scotland.I am not a betting man, but I would give a slight shade of odds to the proposition that Scotland will not be included in these provisions by the end of this Parliament.

I should have liked to have from the Minister a categorical undertaking, with the necessary privisos, that his Government will initiate legislation to bring Scotland into accord with England and Wales in this little matter.

May I ask the Minister to clarify whether part III, dealing with the supply of services, will apply to Scotland? I am becoming confused about which part will and which will not apply.

What I have been advancing to the House in regard to the group of amendments to which I have been speaking is that not only should part II be disapplied to Scotland, but also part III to Scotland alone. I say nothing about part III in regard to the rest of the United Kingdom.

I had assumed that that was the case, but I was not clear in my mind. I shall not get involved in the differences between Scottish and English law. I accept that this is basically a codifying measure. It emerged from earlier debate that while we were codifying English law we would not be codifying Scottish law if the Bill were made to apply to Scotland, because there are differences between the two common law systems. I am not a lawyer, and I shall not go into that labyrinth, but it seems to me in principle desirable that the law on consumer matters should be the same on both sides of the border.

My constituency is only two constituencies away from the border. Many Scots people have the sense to spend their holidays at Whitley Bay, which is a traditional holiday resort for them. It is undesirable that, when they buy something in a shop in Whitley Bay, a different law should apply from that which would apply had the purchase been made, for example, in Glasgow.

For the reasons that the Minister has given, I accept that it is not practical on this occasion, in this way, to make the law the same, but it should be the aim of the House, by some means or other, to ensure that on matters such as consumer legislation the same law applies in all parts of the United Kingdom.

If one goes just outside the town of Berwick one is in Scotland, and it is ridiculous that there should be different laws applying in shops only a mile or two apart. When I steered the Consumer Safety Bill through the House a few years ago there was no question but that it would apply on each side of the Scottish border, and rightly so.

I cannot help noticing that we spend much time in the House wrestling with what are sometimes extraordinarily complex documents and Bills to try to bring our law into harmony with that of the rest of Europe. I should have thought that it was equally important to bring the law into harmony on both sides of the Scottish border. I was intending to say that I hope that my hon. Friend the Solicitor-General for Scotland will accept that, as a long-term objective—although, I think, on reflection, that it should perhaps be described as a short-term objective—on matters of consumer law the law should be the same in all parts of the United Kingdom.

I wish to take up a point raised by the hon. Member for East Kilbride (Dr. Miller) who said that the Committee, when discussing this issue, did not divide on party lines. I have read the proceedings of the Committee this morning to refresh my memory. My hon. Friend the Solicitor-General for Scotland attended the Committee and advised that it would be unwise for these clauses to apply to Scotland. Following the debate, the Committee divided. The Hansard report shows that five Labour Members voted in favour of the amendment and four Conservative Members voted against it. It seems to me, therefore, that the Committee divided on party lines.

One has also to take account of those who did not attend. How many Conservative Members were not present?

It is not for me to tell the hon. Gentleman how the Conservative majority inadvertently failed to carry the day on that occasion. There has no doubt been discussion of this matter. I do not make this point strongly, because hon. Members have not made a strong party political issue out of the matter. What is important is getting it right. I wish only to record that the minority in the Committee followed the advice of my hon. Friend the Solicitor-General for Scotland.

It would not be correct to apply this legislation to Scotland until there has been full consideration and acceptance of the review of the situation by the Scottish Law Commission. As a lawyer, albeit not a practising one, it is wrong to legislate if in doubt. One should delay, consider and legislate following due consideration. I do not agree with the hon. Member for East Kilbride that hon. Members were showing dereliction of duty or abrogating their responsibility by not legislating in this matter.

I agree with my hon. Friend the Member for Tynemouth (Mr. Trotter) that it is most unfortunate that the work of the English and Scottish Law Commissions has not been co-ordinated in this area. It is unfortunate that it should not be possible for them to work together to produce a unified law for the whole of the United Kingdom. That is regrettable, especially when one considers the flow of legislation into the United Kingdom from the European Community. We are co-ordinating European law within our law, but we are still not able to co-ordinate the work of the English and Scottish Law Commissions and so co-ordinate consumer law as it applies to England, Wales and Scotland.

If I were still in practice and if I was advising a mail order company, I think that I should be applying my devious mind to whether it might be helpful for the company to move to Scotland, or perhaps from Scotland to England, to take advantage of the different law north and south of the border. My devious mind might be able to work out a form of contract that would apply the lex loci contractu and so enable the contract to be struck at the place of the depot of the mail order company. It might then be possible to take advantage of the disparity between the law of Scotland and of England.

Is the hon. Gentleman aware that he might destroy the benefits that could accrue from such a move by failing to take into account that rating for business premises in Princes Street is double the rating cost of the same type of premises in Oxford Street?

11.45 am

I suspect that, if I pursued that matter, I might stray beyond the immediate issue covered by the amendments. I am interested to hear what the right hon. Gentleman said. I always like to hear points expressed by Members from north of the border. That is a wise course for me to take, being married to a Scots lass.

The Law Commission report No. 95 on the law of contract makes clear, as my hon. Friend to the Solicitor-General for Scotland has pointed out, that the report is not a joint report with the Scottish Law Commission. The development of the law relating to contract for the supply of goods other than sales on hire purchase has been different in England from that in Scotland. A joint law reform exercise in this area would not have been appropriate. This point was fully recognised by the National Consumer Council in its book "Service Please" which refers to the same sort of problems. The council, on page 33, states:
"The Law Commission's draft Bill only affects the law of England and Wales. It would be desirable—as was done with the Unfair Contract Terms Act—to expand it to include a separate part to introduce the same results into the law of Scotland."
The last sentence, which is the most important, states:
"This would not seem to raise any points of principle."
The council, in the acknowledgment section of the publication, expresses gratitude to a gentleman from the department of law at Dundee university who, on behalf of the Scottish Consumer Council, dealt with the Scottish aspects of the report. The reference that it gives to the advice of one individual from one university does not carry the weight of authority of the Law Commission for England and Wales. It is important that proper weight should be given to the views of the Law Commission, which says that it does not think that unified legislation is appropriate, and to the views of the Scottish Law Commission.

I should like to remind the hon. Gentleman that the vice-chairman of the National Consumer Council is Mrs. Joan Mackintosh, a Scot and former chairman of the Scottish Consumer Council. She is well aware of the Scottish dimension of the problems that the National Consumer Council is considering.

I was about to refer to the comments made earlier by the hon. Member for Caithness and Sutherland (Mr. Maclennan). The hon. Gentleman commented to the effect—he will correct me if I quote him wrongly—that he did not understand the concern of the Scottish Law Commission about including the present legislation in Scottish Law. The hon. Gentleman was not present in the Chamber when my hon. Friend the Solicitor-General for Scotland read out a list—a long and rather worrying list—of issues that the Scottish Law Commission wishes to consider before agreeing to include this legislation in the law of Scotland. I made brief notes. They include matters such as the Scottish Law Commission's concern about the law of title and quiet possession, application of the law of sale by sample, whether trade-in of cars and goods is to be subject to the Sales of Goods Act, the application of the law of latent defects and the extent to which durability should be an applied term of contract.

I did not take notes with a view to quoting them, nor have I read the Scottish Law Commission's report. However, if these matters are of concern to the Scottish Law Commission and if it feels that it needs to give due consideration to them, it would not be right or opportune for us to include this law in the law of Scotland at this point. I am reassured by the comments of my hon. Friend the Solicitor-General for Scotland that the Government have in mind a timetable for the implementation of this law to Scotland. I shall support any amendments to exclude the law applying to Scotland at this time, but I join others in urging the Government to accept that the law should be unified as soon as possible.

I enjoyed the speech of the Solicitor-General for Scotland. It was perhaps rather long because he is not very enthusiastic about his case. He made all the points that he could make in its favour, but I got the impression that he personally was not too convinced of it.

This is not a revolutionary or an innovatory Bill. I am seeking to make a declaratory codification, and it was for that reason that I paid attention to paragraph 16 of the report. That was why, originally, the Bill did not apply to Scotland. However, the Bill applied to services, about which there was no recommendation from the Law Commission. That was approved by the House. What is more important is that the Government said—and I congratulate them on it—that they would make the change because they thought it desirable to do so, but that they would make a reference to the commission to deal with services, and in that reference it would be empowered, if necessary, to recommend strengthening the law. So there was a change. It remained desirable for the Bill to apply to Scotland if that was acceptable. In Committee we had a majority in favour of that course, but I am willing to concede that possibly the abstentions were not purposeful but accidental.

The Solicitor-General has now told us that it is not opportune to take that step because it is not declaratory, and that we should wait for the Scottish Law Commission to make its recommendation. We have no alternative but to do that. The Scottish Consumer Council says that it does not want confrontation, and certainly that is something that we should avoid.

I hope that the Government will continue consultations to see whether it is possible, when the Bill is considered in another place, to reach an agreement. If not, I think that we have obtained as adequate an assurance as we can get from the Government that the matter will be dealt with in Scotland as promptly as possible, and that if that action is taken it will result in legislation.

I was interested to hear the comments of the hon. Member for East Kilbride (Dr. Miller). His arguments were persuasive. I support what my hon. Friend the Member for Tynemouth (Mr. Trotter) said, that it seems wrong to have two separate systems, one for Scotland and one for England and Wales. This therefore seems an ideal opportunity to ensure that the law is the same in both cases, particularly as my hon. Friend the Member for Gosport (Mr. Viggers) illustrated the sort of action that could be taken to avoid the law. However, I am reassured by the fact that my hon. Friend the Solicitor-General for Scotland confirms that the Bill can be extended to Scotland shortly after the Law Commission reports.

I always suspect that the lawyers tend to use every opportunity to extend the law on every possible front for their own benefit. They have been doing that since the time of Henry VIII, and 1982 is no exception. Having referred the matter to the Law Commission, the House has no alternative but to await its comments. Otherwise, the next time the matter is referred to the Law Commission, the commission will be reluctant to consider the matter at all. It will rightly say that it is wasting its time and that it will be pointless to make a contribution. Thus, having taken the step, I believe that it should be allowed to continue.

I was heartened to hear the right hon. Member for Sunderland, North (Mr. Willey) accept that to make progress on the Bill it was necessary to accept that as a fact. There are so many good aspects of the Bill that it would be a pity to dig in on one issue and thereby lose it. I hope that my interpretation is correct, and that the right hon. Member for Sunderland, North is prepared to accept the situation.

I do not wish to prolong the debate, particularly in view of what the right hon. Member for Sunderland, North (Mr. Willey) said. However, I want to take up a number of points.

I am sorry that the hon. Member for Caithness and Sutherland (Mr. Maclennan) seemed to think that this was developing into a personal vendetta. In my view, we must clearly establish what is proposed for Scotland, who has been consulted, and what views they have expressed.

Since I intervened in the speech of the hon. Member for Caithness and Sutherland, I have been handed a letter written by one of the secretaries of the Scottish Law Commission on the meeting that he, Lord Maxton and others had with the Scottish Consumer Council. It says that
"we explored fairly fully what were thought to be the ambiguities at common law, and we were made aware of the Council's opinion that there should be legislation along the lines of Part II. The Council is therefore, fully aware of the Commission's position—that we are in a position neither to support nor to oppose the inclusion of Part II beyond making the point that legislation for Scotland at the present time may not be opportune—and has been so aware at all material times."
I hope that the hon. Gentleman will accept that that view held by the commission was communicated to the Scottish Consumer Council.

The hon. Member for Caithness and Sutherland also criticised me because I did not attempt to consider the detailed deficiencies of part II as it might apply to Scotland. I was considering whether the whole should be applied to Scotland, and for that reason I did not go into details. He, as an Englishman, will understand, for example, what the words "quiet possession" mean in English law. I am sure that the right hon. Member for Sunderland, North could deliver a learned dissertation on their meaning. This is not a term of art in Scottish law in the same way as it is in English law. Again, the term "transfer by description" is not apt for Scotland. I do not want to go into further detail. I merely ask hon. Members to accept that there are a number of aspects in part II which demonstrate their English origins and which make it difficult to leave part II as it is and apply it to Scotland.

My hon. Friends the Members for Gosport (Mr. Viggers) and for Tynemouth (Mr. Trotter) made the very proper point, which is supported on both sides of the House, that while I argue aggressively to maintain the distinctive traditions of Scottish law—again, I do not want to be chauvinistic—where it is superior I see no reason why we should seek uniformity or conformity simply to make sure that there is no difference. I quite accept that, if possible, it is desirable to have the law of the United Kingdom uniform, provided that that does not breach the principles of the two separate systems.

Am I not right in saying that if a person from Tynemouth went to Scotland and bought some goods that were unsatisfactory, and thus became involved in a law case, he would consult a solicitor in Tynemouth, who could not act for him effectively because he would not be knowledgeable on Scottish law? The solicitor in Tynemouth would have to consult another solicitor in Aberdeen, Edinburgh or whichever place was involved. Two firms of solicitors would be involved in sorting out the case for my constituent. That would involve two lots of legal costs. Surely that is something that we should not encourage.

12 noon

That is a fine, solid, unionist argument. However, as my only ally so far has been a Scottish Nationalist, the right hon. Member for Western Isles (Mr. Stewart), I am a little anxious about going down that avenue. The point of principle is that there should be uniformity as far as possible and that any legal reforms should, as far as possible, march step in step.

Paragraph 16 of report No. 95 explains why different routes were taken in this area. The development of law in Scotland had followd a different route. On that point, we are now back on track. I hope that my hon. Friends the Members for Tynemouth and for Gosport will be satisfied that both Law Commissions, in a joint exercise, are looking at buyer's remedies. That applies not only to the supply of goods, but to the sale of goods. That is an eminently worthwhile exercise for them to be engaged in, and the supply of goods in Scotland will be included.

Therefore, without in any way breaching the great traditions of the Scottish legal system, there will be an opportunity to ensure that the law reform provisions have more chance to apply throughout the United Kingdom. Of course, different sides of the border assert different priorities fo law reform. I should have thought that the Opposition would accept, in principle, that it is desirable—whichever Law Commission undertakes to make a report—for it to have the opportunity of properly investigating the matter. Once it has done so, the Government should give every consideration—policy reasons may be involved—to introducing legislation along the lines of the report.

From the outset I have sought to demonstrate that the record of successive Governments on Scottish Law Commission reports is startling. There are only two outstanding reports, and one of them cannot be acted upon at present because of our EEC commitments. That scarcely seems indicative of a Government deliberately delaying. The right hon. Member for Western Isles will recall that in the last Parliament one of his hon. Friends sought to introduce legislation on the problem of matrimonial violence in Scotland. He was unable to do so. The arguments that I am deploying are exactly the same as those deployed then. This is a complex and difficult area. As soon as the report was published by the Scottish Law Commission on domestic violence and property rights in the matrimonial home, legislation was introduced extremely swiftly. No party opposed any major part of the Bill. That is the best way of proceeding.

I am grateful to the right hon. Member for Sunderland, North for his acceptance—albeit grudging—of the fact that the provisions should not apply to Scotland. However, he said that he enjoyed what I had to say, but then paid me a backhanded compliment. He said that he thought I was less than convinced. I am utterly convinced that if we wish to retain the present first-class Scottish Law Commission under an outstanding judge and with a very good team of academic and practical lawyers, we must not ignore what it has to say about the private law of Scotland and its reform. In the long term, not only should we do the Scottish Law Commission and Scottish consumers a disservice, but we should lose the worthwhile advice that we always receive from the Commission.

Amendment agreed to.

I beg to move amendment No. 2, in page 2, line 5, at end insert—

'(f) a transfer of drugs or appliances under the National Health Service Act 1946, as amended'.

With this it will be convenient to take amendment No. 8, in clause 12, page 8, line 19, at end insert—

`(f) a transfer of drugs or appliances under the National Health Service Act 1946, as amended.'.

I am not sure whether amendment No. 8 has any meaning any more. I rather suspect that its meaning has disappeared with part II. However, I shall confine my remarks to amendment No. 2, which basically covers the same point.

Amendment No. 2 deals with bottles of medicine and pills sold by about 10,000 retail chemists, who are concerned about the Bill's possible effects on their businesses. They envisage that heavy claims could be made against corner shop chemists for the sale of defective medicines. At the back of their minds they may recall the enormous damages awarded against a well-known manufacturer a few years ago. The House will recall the tragic case of the thalidomide children. In that case, the manufacturer ultimately had to make payments to those who suffered. Chemists all over the country are worried that, as a result of the admirable efforts made by the right hon. Member for Sunderland, North (Mr. Willey), the law may be dramatically changed to their disadvantage and that, as a result, enormous sums of money could be claimed from them. I am sure that that is not the right hon. Gentleman's intention. That is a genuine fear.

The law on the sale of medicine is complex. The amendment covers National Health Service dispensing. If someone goes into a shop with a National Health Service prescription, I am not sure what contract results from the transaction. Is there a contract between the person buying the drug and the chemist, or is there a contract in which the NHS is the principal party? Of course, the NHS pays most of the cost and sometimes the whole cost. Therefore, I am not happy about the exact legal situation. However, it has been suggested that there are different legal opinions on this matter. As an accountant, I am not surprised. With any two lawyers there will be a difference of opinion. I am sure that it is possible to reach different conclusions on such a complex matter.

The official view may be that the chemists have nothing to worry about, because the law would not establish any contract between them and the person with the prescription. However, the chemists are worried about product liability. That serious and important issue hangs over the whole trade. Eventually the House will have to decide on legislation on product liability. The chemists say that high street chemists might suffer enormously as a result of product liability. I think that the English Law Commission and the Scottish Law Commission are united on this issue and have said, if and when product liability is introduced, liability for a defective drug should basically lie with the manufacturer. I understand that there is an exception in the recommendation if the drug is sold anonymously in a bottle dispensed wrongly by the chemist. If it is a proporietary drug being sold in the maker's packet or cover, the Law Commission recommends that the liability should be with the manufacturer, which is a sensible suggestion.

However, there is a fear that, if those recommendations are introduced into law, the Bill could jump the gun and bring in a liability not on the lines recommended by the two Law Commissions, so that liability rested not with the manufacturer of the drug but with the high street chemists. I can well understand that chemists, who are often small retailers, are horrified by any suggestion that a heavy liability should be imposed on them. I suppose that they could insure against it, but to insure for potentially enormous damages would entail a substantial premium.

I am grateful to my hon. Friend for allowing me to intervene now, because I hope that my small point will be taken up both by the right hon. Member for Sunderland, North (Mr. Willey) and by the Minister. If a contractual link and a link in liability is established between a customer and a chemist, the customer can follow that link through the chemist to the wholesaler and thus establish a link with a substantial company from which damages can be claimed. My hon. Friend's point affects insurance not only for the chemist but for the wholesaler who supplies him.

I am much obliged to my hon. Friend for pointing that out. It may be that wholesalers have not yet realised the potential threat.

Insurance against such risk could carry a substantial premium. That premium must be passed on to the customer, which, in the case of the National Health Service, means ultimately the taxpayer. No doubt the major drug companies already carry insurance, but an additional layer of insurance could be necessary if the fears of chemists and wholesalers are not allayed. I hope that my hon. Friend will tell the House whether those fears are justified and whether he is satisfied that the law is such that no liability will arise.

I wish to have clarification of two points. It would be illogical, unreasonable and unfair if the chemist who supplies medicine is made responsible for any damage that it may do. That is not the position in law. From a practical point of view, as in the case of thalidomide, the manufacturer of the drug should accept responsibility for the product. Perhaps the Minister will confirm whether that is the legal position.

If chemists were to be made liable, the more logical course would be for the doctor also to be liable. The chemist supplies only what the doctor has written on the prescription. The chemist is not supposed to know the reason why the doctor has prescribed the drug. That, again, would be a ridiculous position. Drugs must go through a gamut of different tests. We could not expect a medical practitioner to be responsible if something goes wrong unless he knows about the consequences and has not explained the possible dangers to the patient. All doctors tell patients about the side effects that they may experience from drugs, and the patients should let the practitioners know if any side effects occur. I wish to be sure that this legislation does not alter that position.

12.15 pm

There is no reason why chemists selling items that have nothing to do with the medical profession should be exonerated from liability, because other retailers are not so exonerated. That would be entirely fair, and the chemist would not worry unduly about it.

There is also the problem of drugs that are out of date. As the Minister knows, many bottles have tablets left in them. It is incumbent upon the chemist to destroy bottles and ensure that drugs are not used after the expiry date. However, the fears expressed by the pharmaceutical profession are unjustified. The profession is justified in being concerned, but its fears will not bear examination. I wish to have an assurance from the Minister that my two main points are as I interpret them and will not be affected either by what we are or are not legislating today.

I look forward with eager anticipation to speeches from the right hon. Member for Sunderland, North (Mr. Willey) and the Minister, because I do not know the answer to the questions raised by my hon. Friend the Member for Tynemouth (Mr. Trotter).

For some years I was a director and deputy chairman of a leading pharmaceutical wholesaler. I no longer have that interest. When I visited the United States of America I met an American business man who, when I mentioned my business interest, said "I wish to shake your hand, because you must be a very brave man". In America, consumer legislation and the ability to pursue claims against almost anyone concerned in matters that might damage consumers or patients have become so significant that firms find it almost impossible to obtain insurance to cover themselves against risk. It is worth remembering that, if a claim is made and a writ is issued, even though the legal advice given to an individual may be reassuring and the chemist, wholesaler or doctor may be reassured by a lawyer that the claim is bad, it remains an extremely worrying matter. Many business men will pay to get rid of it, even though they know themselves to be totally blameless.

A chain of people might be responsible for the prescription and sale of drugs which prove to be damaging. Initially, of course, drugs are supplied by the retail chemist on prescription by a doctor. The chemist is unlikely to be primarily liable if he prescribed and gave the goods he was instructed to supply in accordance with his medical information. Presumably the doctor is unlikely to be held liable unless it can be shown that his prescription was reckless, thoughtless or inappropriate for the ill it was meant to heal. Similarly, the wholesaler is unlikely to be found responsible if he merely purchased the goods and passed them through to the chemist in the normal way. Therefore, presumably, the responsibility will normally lie with the manufacturer, if it can be shown that it failed to carry out all proper tests.

Although that is the normal chain and the responsibility can normally be shunted up the line to the manufacturer, in my experience, the law remains unclear. I took legal advice on several occasions to ensure that I was covered against the risk of being drawn into a case. I reiterate that a business man, drawn into such a case, has a severe problem, even if the advice is that he is unlikely to be found liable.

For example, a company which is faced by an outstanding writ must mention that in its annual report and, if it be a public company, keep its shareholders informed about the progress of the case. It has been found that companies with substantial claims outstanding against them suffer since their shares stand at a discount because of the risk that they will lose money as a result of the claim. Companies in such a position always have problems when presenting themselves to the public.

I do not understand the difference between National Health Service medicine and private medicine in this case. I assume that with private medicine the position is simpler, in that the prescription is given by the doctor and sold by the chemist, whereas the NHS prescription involves a more complicated contractual position. The NHS provides medicine and the patient makes a contribution towards the cost of the item, the paperwork being handled by the chemist.

I do not understand the present contractual chain. That is a matter of concern and I hope that it will be possible to clarify it later in the debate.

The amendment is unnecessary. When somebody goes to a chemist and gets a National Health Service prescription, there is no contractual relationship between patient and chemist. Therefore, no liability arises. That is the short answer to the amendment. If there were any contractual relationship between patient and chemist, which is unlikely, the amendment would, of course, be taking away the rights that people now possess. That would be highly undesirous.

The amendment provides an opportunity to examine, however briefly, the existing liability towards members of the public on the supply of drugs. There are three possibilities and they have different legal consequences. The first possibility is on the sale of drugs—goods. If one goes into a chemist's without a prescription and buys aspirin or treatment for hay fever, or whatever, and simply pays over the counter, that constitutes a sale of goods. In such circumstances there is an absolute liability on the chemist towards the customer. At any rate, there is absolute liability for the merchantable quality of what is handed over. In a sense, the chemist may not be guaranteeing fitness for purpose.

If on the advice of a doctor one goes in to a chemist's to get a drug, the purpose of the drug has been made known to the doctor and not to the chemist. Therefore, fitness of purpose may not be provided for by the chemist. Apart from that, there is absolute liability under the Sale of Goods Act 1979 for the sale of a drug across the counter without prescription.

The hon. Gentleman referred to the purchase of aspirin and treatment for hay fever. Any hon. Member could leave the Chamber and ask for aspirin in a chemist's shop. The hon. Gentleman would be right if he were saying that the same thing would apply to a private doctor's prescription, for which payment was made by the patient to the chemist.

That is the first proposition. On private prescriptions, I am not certain, although I suspect, that the doctor is liable for professional care. Therefore, the fitness for purpose aspect of the sale of that drug is the responsibility resting with the doctor. However, responsibility for the merchantable quality of the drug—for example, if the drug turned out to be entirely different from that prescribed by the doctor—rests with the chemist. That is not altogether unfair and is analagous to the sale of goods such as aspirin.

The second possibility is that the transfer of drugs by a chemist, as part of a service, would be caught by this new legislation, which codifies the law. Even in those circumstances, if that law applies, the chemist will be liable under existing law. Under the Unfair Contract Terms Act 1977 it is impossible to contract out of liability for death or personal injury. In that sort of context, it would be impossible to escape liability under the existing law.

What is most likely is that the supply of goods under an NHS prescription will not create a contractual relationship between patient and chemist. Therefore, the patient will have no redress. The Bill and its amendments make no difference to that situation. Perhaps it ought to, and no doubt the Minister will comment on that.

I illustrate my concern by quoting a constituency case. One of my constituents was prescribed a drug called Nivaquine for a skin condition. He received that on prescription for some years. In consequence, he lost his sight. There was no liability—I am investigating the matter—on the chemist who supplied the drug, because there was no contractual relationship. My constituent could receive no redress in that direction. The doctor had no liability, because, although it was eventually known to specialists that this drug would cause blindness, it was not known to general practitioners. That was the state of knowledge at the time. Therefore, the general practitioner could not be liable. He was acting on the knowledge available to him.

In addition, there was no claim against the specialist at the hospital, because he did not know that the patient was still getting the prescription from his general practitioner.

He faced no liability. Finally, there was no liability on the manufacturer of the drug as there was no product liability relationship and clearly no negligence when the drug was first prescribed. My constituent lost his sight as a result of taking that drug, yet he has no redress against anybody. Under such circumstances there ought to be liability, whether contract or product liability, on somebody.

When there is a loss of that magnitude by an ordinary member of the public, who ought to bear the loss? Will it be the person who produced the drug and put it into circulation, or should it be the injured patient? That puts in question the whole area of product liability. I share the concern of the hon. Member for Tynemouth (Mr. Trotter), who moved the amendment, about where liability ought to fall. I have no doubt that in those circumstances—if one must choose between the liability falling on the patient, chemist, doctor or manufacturer of the drug—the prime target should be the manufacturer.

I accept the hon. Gentleman's remarks. Does he agree, in the circumstances that he outlined, that the chemist should not be responsible? One could not expect a corner-shop chemist to have the capability of analysing and researching a new drug. The chemist must surely rely on the manufacturer, who has those facilities.

12.30 pm

That is right. Instead of the patient, even if it is possible, having to tread on a set of legal stepping stones by which he proceeds against the chemist, the chemist goes against the wholesaler and the wholesaler goes against the manufacturer, there should be a direct responsibility on the manufacturer towards the ultimate consumer, which is product liability.

I hope that the Minister will say something about the current state of play on product liability, including drugs. Some advance in that direction is the best answer to the concern expressed by the hon. Member for Tynemouth, even if no liability is created under the Bill, or under any other legislation, on the chemist towards a National Health Service patient on an NHS prescription.

I thank my hon. Friend the Member for Norwood (Mr. Fraser) for putting the case so clearly to the Minister. It seems that the concern is about product liability, not about the Bill. The Pharmaceutical Society has made representations on consultation, but in this instance we are dealing with the Law Commission's report. There was thorough and full consultation on the Bill. If these transactions were covered, they would merely come within the provisions attaching to the sale of goods of merchantable quality. I shall take the Minister's advice as being authoritative. After all, the hon. Gentleman was until recently a DHSS Minister. My advice is that these transactions do not involve a contract of sale and, therefore, they do not come within the provisions that we are discussing.

My hon. Friend the Member for Tynemouth (Mr. Trotter) was correct when he said that amendment No. 8 would no longer be relevant in view of the earlier decision on part II. My hon. Friend has raised an interesting and important issue. It is right that the Pharmaceutical Society should be worried about the effect that the Bill may have on its members. Some pharmacists, including one in the constituency of the hon. Member for Berwick and East Lothian (Mr. Home Robertson), are afraid that the Bill may make them subject to a strict product liability regime in respect of any drugs that they may supply under the National Health Service scheme.

I have great respect for the opinions of the Pharmaceutical Society. It is right to be alert to any possible difficulties that might arise for its members and the public generally. However, I assure the House that there is no basis for its fears. The Bill will not alter the present position. Product liability does not arise under the Bill. That issue has been brought up by the hon. Members for East Kilbride (Dr. Miller) and Norwood (Mr. Fraser) and by my hon. Friend the Member for Gosport (Mr. Viggers). They are all concerned about issues which come entirely within product liability and do not arise under the Bill. The Bill is concerned solely with contractual rights. Product liability legislation will be needed if a directive is agreed in subsequent legislation, but it does not arise in our discussion of these matters.

I was interested in the case referred to by the hon. Member for Norwood, but again it was one of product liability. It seems that responsibility lies with the manufacturer to make it clear that in certain circumstances his products must not be used for more than a certain time.

The issues that we are discussing will not alter the present legal position for pharmacists. Perhaps I can explain the problem best by describing the types of cases that are probably worrying the Pharmaceutical Society.

First, there was the situation which led to the well known case of Appelby v. Sleep. A Mrs. McGee went to her local chemist with a prescription for medicine. She took it home and had several doses in the way prescribed. When she poured the next dose a small piece of glass came out of the bottle. Mrs. McGee complained to her local trading standards department, which prosecuted the chemist under the Food and Drugs Act. It alleged that the pharmacist had sold a drug to the National Health Service executive committee, as it then was, which was not of the quality demanded by the purchaser. The magistrates examined the case and dismissed it on the grounds that the NHS had not purchased the medicine and that there was therefore no case to answer. The trading standards officer appealed to the Divisional Court, which confirmed that there was no case to answer because the medicine had been purchased neither by the executive committee nor by Mrs. McGee, although it said that property had been transferred to Mrs. McGee.

It is astonishing that in those circumstances no one purchased the medicine, yet money changed hands for it. Is there not something that needs to be done—perhaps not under this Bill but under future legislation—so that, if further pieces of glass come out of chemists' bottles, it will be possible for some action to be taken?

I am grateful to my hon. Friend. I am illustrating the anxieties which exist, and which the Bill will not alter, which have led to the concern of the Pharmaceutical Society. Another situation that causes the society concern is when a deaf man obtains a hearing aid under the NHS. I understand that the aid would be regarded as having been loaned to him and it would remain the property of the NHS. Clearly, there is no transfer of property, but equally there is no agreement to hire. Again, the transaction would not be covered by part I.

The third situation involves a visit to the dentist. If a person has toothache and goes to the dentist for an extraction, the position is very similar to that of Mrs. McGee. The dentist has an agreement with the NHS under which he provides services to patients. The patient benefits, if that is the right word, from the agreement when the dentist extracts his tooth. I have chosen this example deliberately, because if a patient has a tooth stopped, for example, the dentist will provide him with a stopping which becomes the patient's property and the service is therefore one of work and materials. It is a complicated area given the present state of the law.

In each of these cases the patient receives medicines, a hearing aid or a service under the terms of the agreement between what is now the family practitioner committee and the professional concerned. However, as the patient is not a party to this agreement, he cannot exercise contractual rights under it. The Bill confers no new rights. The patient and the professionals associated with the NHS have nothing to fear.

I return to the case of Mrs. McGee. Her only redress would be in tort if she could show that there had been professional negligence. I hope that I have gone some way towards explaining the position under the present state of the law.

I was asked why we were discussing National Health Service and not private prescriptions. The reason is that when a private prescription is dispensed, the patient pays the pharmacist. There is a straightforward contract between the patient and the pharmacist.

I shall return to the general issues for a moment. The drug or medicine is provided to a patient by the pharmacist as a result of a contract between the National Health Service family practitioner committee and the pharmacist. The courts have held that that is not a contract of sale as it is the NHS, not the patient, that pays for the medicine. The property is transferred to the patient.

The courts have held that the contract between the family practitioner committee and the chemist is a contract for services. It is equally clearly a contract for the transfer of property in goods and is therefore subject to part I. Hon. Members will see in clause 24(3) that it is clear that a contract can be a contract both for a transfer of property in goods and for the supply of the service.

I presume that that holds good although the patient is making a substantial contribution. Am I right? The patient pays for the prescription. I presume that the Minister's reading covers that situation. It is still not a contract. What happens if the medicines that are brought are cheaper than the amount that the patient is paying? Are there two different categories of people—for example, pensioners who do not pay anything, and the person who pays?

Those are matters concerning the current law. The hon. Gentleman has raised an interesting series of points. I should be glad to look into them. I understand why he is concerned about that matter.

I come back to part I of the Bill. Unless the contrary is stated, it will imply the terms on the lines described in clauses 2 to 5 in contracts between the family practitioner committee and the individual chemist. Such implied terms already exist in the common law.

The patient is not a party to the contract between the committee and the chemist from whom he has obtained his drugs. He has no contractual rights under that contract that he can enforce in the courts. The Bill will not affect his position in any way. If the patient wishes to bring proceedings against the chemist for some defect in the medicine, he will need to rely on the law of tort. Therefore, he will need to show that the chemist has been negligent.

The hon. Member for East Kilbride asked what would happen if a pharmacist broke up a packet or bottle of medicine and dispensed it in his own way. I should be glad to look into that matter. I understand that that is covered by the present practice of the law.

I have also been asked what would happen if a pharmacist dispensed a drug in a sealed packet or bottle supplied to him by the manufacturer without breaking the seal. In such circumstances, normally there would be no way in which the pharmacist could know that there was something wrong with the medicine inside the sealed packet, yet under the Bill it would seem that he might be in breach of the implied terms—that the medicine should correspond with its description and should be of merchantable quality, fit for the purpose for which it is supplied. That is true. However, that is no more than the present position of any retailer under the Sale of Goods Act. If sued, he would have to claim against the manufacturer.

If the pharmacist wished to contract out of such a liability, it is to the family practioner committee, not to the patient, that the pharmacist would have to turn to negotiate his terms of contract.

I apologise for that complicated explanation, but it is a complicated issue. I know that the pharmacists have been concerned about how the Bill will effect them.

I congratulate the hon. Gentleman, who is a medical practitioner, on the way that he is interpreting the law.

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It is ironic that, following my recent change of ministerial duties, my first speech to the House in my new post should concern an NHS medical matter.

I assure the pharmacists that part I, which is based on a careful consideration of the problem by the Law Commission, does no more than restate the existing common law. It will not create greater obligations or risks for pharmacists and will not provide additional rights to patients. I am advised that there is no need to amend the Bill to meet those anxieties.

The amendment has provided the opportunity for a useful debate. There was anxiety about the matter and a number of interesting points have been raised, but I hope that my hon. Friend the Member for Tynemouth will seek to withdraw the amendment.

I congratulate my hon. Friend on steering a clear passage through the complex provisions applying to pharmaceutical retailers. I still have some doubts about whether part III, which introduces a contract for the supply of services—in words that will be statutory when the Bill is passed—affects the pharmaceutical industry. I think that it probably does not, but I should like my hon. Friend to give an undertaking to meet representatives of the pharmaceutical industry if, despite his reassurance, they are still concerned about the matter. If necessary, the issue could be discussed further in another place.

Amendment, by leave, withdrawn.

Amendment made: No. 3, in page 2, line 6 leave out `other than part II' —[Dr. Vaughan.]