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Consumer Protection Bill Lords

Volume 116: debated on Wednesday 13 May 1987

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Considered in Committee.


Clause 4, as amended in the Standing Committee, ordered to stand part of the Bill.

Clauses 5 to 8 ordered to stand part of the Bill.

Clause 9

Application Of Part I To Crown

7.13 pm

The Parliamentary Under-Secretary of State for Trade and Industry
(Mr. Michael Howard)

I beg to move amendment No. 13, in page 6, line 37, after 'tort', insert `or in reparation'.

The amendment adapts clause 9(2) for Scotland. The clause refers to the Crown's liability in tort under the Crown Proceedings Act 1947. However, the word "tort" is an English legal term of art. The 1947 Act defines it for Scotland as
"any wrongful or negligent act or omission giving rise to liability in reparation".
The amendment reflects the terms of this definition by adding a reference to the Crown's liability in reparation under the 1947 Act.

Amendment agreed to.

Clause 9, as amended, ordered to stand part of the Bill.

Clause 10

The General Safety Requirement

I beg to move amendment No. 42, in page 7, line 10, leave out 'any person' and insert

`the British Standards Institution or the European Committee for Standadisation'.
This amendment is purely exploratory. The Minister and I have had an exchange of correspondence on this matter. I thought that it would be useful for it to be written into the Official Report.

The amendment attempts to restrict those standards of safety which will be considered in deciding whether consumer goods fail to comply with the general safety requirement to standards approved by either the British Standards Institution or the European Committee for Standardisation. The Opposition fear that some traders might attempt to write their own standards of safety to ensure that their goods comply with the general safety requirement. Those fears are groundless.

The purpose of clause 10(2) is to ensure that all the circumstances are considered when deciding whether consumer goods fail to comply with the general safety requirement. Along with all the qualifications in the preceding subsection (1)(a), which concern the manner in which goods were marketed or used and in any instructions or warnings given with the goods, and in the subsequent subsection (1)(c) concerning the existence of any means by which it would have been reasonable for the goods to have been made safer, we also have to consider any standards of safety published by any person. Consideration of those standards will include the question whether the particular standard of safety which applies to the goods is suitable. If the published standard does not reach the level of safety which in all other circumstances is necessary, compliance with that standard will not necessarily be enough to outweigh consideration of these other circumstances.

There is a specific reference in subsection (3)(b)(ii) to "approved" standards of safety. These standards are more than likely to be British standards or, possibly, European standards, or may be suitable safety standards from any part of the world. But, for the purposes of clause 10(3), compliance with an approved safety standard will ensure that goods comply with the general safety requirement in relation to matters covered by that standard. No other fact then needs to be taken into account. Compliance with that approved standard will be sufficient.

For the purposes of clause 10(2), where all the circumstances are to be taken into account, any standard of safety will be taken into account, although, as I have just said, only if the level of safety provided by those standards is sufficiently high. There is, therefore, a distinct difference between the role of safety standards for the purposes of subsections (2) and (3). The amendment would seek to limit the generality of subsection (2) and, as I have sought to explain, compliance with approved standards of safety relates to subsection (3). I hope, therefore, that the right hon. Member for Swansea, West (Mr. Williams) will see that there is no need for his amendment and will withdraw it.

Amendment, by leave, withdrawn.

I beg to move amendment No. 40, in page 7, line 36, leave out paragraph (a).

Various organisations have expressed concern that, although we are establishing standards of safely of products in our country, we waive any such requirement for goods to be exported. Concern has been expressed by various lobbies that that would mean that many Third-world countries will sell products that would be regarded as substandard and unacceptable in this country. I should like the Minister to place his defence on record.

I remind the Committee of the genesis of this provision, which was in the White Paper, "The Safety of Goods", which was published in July 1984. In that White Paper the Government proposed that the general safety requirement would not apply to goods intended for export. It was explained at that time that a distinction had to be drawn between regulation-making powers and a general requirement such as the general safety requirement. While with a regulation-making power each case could be considered on its merits, that is not possible for a general requirement of this kind. The White Paper therefore concluded that it would be preferable, on balance, for the general safety requirement not to apply to goods for export. In these cases, it would be preferable to allow manufacturers flexibility to meet the safety requirements of the overseas market concerned. For example, an electric hair drier manufactured for use in a country which operated on a 110 volt electricity supply and used a two-pin unearthed plug might very well comply with the safety regulations of that country. It would clearly be unsafe here. If the amendment were passed, a United Kingdom manufacturer would be unable to make such a drier.

Moreover, I think that it is quite right to argue that other countries should have the right to set different safety standards from our own. Safety standards in any country tend to increase with its wealth. It is for the Government of the country concerned to decide what is acceptable, not for us. It has been suggested that our approach is in some way inconsistent with the White Paper "Standards, Quality and International Competitiveness". That could hardly be further from the truth. A crucial part of international competitiveness for our manufacturers is to allow them flexibility to compete with their foreign competitors. That will not be achieved if we impose standards upon them which might be quite irrelevant for foreign markets.

Therefore, it would be inappropriate to apply such a general requirement for goods intended for different export markets. We should allow manufacturers the flexibility to compete in foreign markets where the safety standards are properly set by the foreign Governments. For those reasons, I hope that the right hon. Gentleman will seek to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 10 ordered to stand part of the Bill.

Clauses 11 to 13 ordered to stand part of the Bill.

Clause 14

Suspension Notices

I beg to move amendment No. 48, in page 13, line 12, leave out 'that person' and insert 'any such person'.

With this we may take the following amendments: No. 35 in clause 34, page 30, line 8, leave out `and'.

No. 36, in page 30, line 10, at end insert
`; and
(c) it is shown that the officer did not have reasonable grounds for exercising the power'.

The Minister will appreciate that amendment No. 48 is purely exploratory, to give him a chance to put in the Official Report certain exchanges that we have had, to which other people should have access.

Amendments Nos. 35 and 36 have been tabled because of the concern of the Association of Metropolitan Authorities. The Minister will be well aware that the compensation arrangements in the Bill are so wide that the authorities feel that they will constitute a disincentive to enforcement. They have suggested legitimate amendments to try to establish that the liability for compensation should lie where an enforcement authority has acted improperly. It seems to me that this is a fair and legitimate narrowing of the provisions. I hope that the Minister will look sympathetically at the amendment.

The circumstances in which local authorities should he liable to pay compensation have been much debated, both on the present Bill in another place and on its predecessor, the Consumer Safety (Amendment) Act 1986, for which we are indebted to my hon. Friend the Member for York (Mr. Gregory). The present Bill does nothing more than consolidate the provisions of that earlier Act. In the light of their history, it is useful to recall why the provisions are in their present form, since they represent the outcome of considerable earlier debate and a change in the provisions in favour of enforcement authorities.

The new powers of suspension and forfeiture were suggested in the White Paper, "The Safety of Goods", published in 1984. That suggested that, because of the sweeping nature of these powers, compensation should be payable to traders wherever there was no conviction under the safety legislation. Compensation would not be paid when there was a conviction.

During the passage of the Consumer Safety (Amendment) Act 1986, it was suggested that such a compensation provision did not sufficiently reflect the practical difficulties that trading standards officers might face. We listened to those representations, with the result that the circumstances in which compensation would not be paid were substantially widened. Those new circumstances were enacted in the earlier Act and they have been consolidated in the present Bill.

It would be wrong to suggest that compensation will almost always be paid; that is simply not the case. Two conditions must be satisfied. They are that the goods have not contravened any safety provision—that is, that the goods are safe—and that the exercise of the relevant power of seizure is not attributable to any neglect or default by the person seeking compensation. The second condition is very important. It includes not just specific failures to meet obligations under safety legislation, but any act or omission which, in the circumstances, is blameworthy. It could include, for example, an unreasonable unwillingness to provide an enforcement officer with information about or access to the goods. In the light of this, I suggest that the circumstances in which compensation will be paid are relatively narrow.

The amendments put forward by the right hon. Gentleman, although expressed differently from the amendments to clauses 14 and 34, in practice would have a similar effect. The important question is what should happen in those unfortunate circumstances where goods are seized and nobody is to blame—the goods are safe; the trader has acted reasonably; and so has the enforcement officer. Such circumstances could arise where the enforcement officer relied quite reasonably on information supplied by a third party.

The effect of both amendments is that, in those circumstances, the trader should bear the loss. The Bill, as it stands, provides that the enforcement authority should bear the loss, and that is quite right. It is surely wrong that in providing powers for enforcement authorities to halt the supply of unsafe goods, we should do so at the expense of the innocent trader. We are simply not prepared to create a new burden of this kind on business.

Similar provisions concerning suspension of the supply of goods were enacted in the Consumer Safety (Amendment) Act 1986, which has been in force for eight months. It would appear that not one practical example is available to the right hon. Gentleman of a case where a local authority has been inhibited from taking action because of its concern over compensation. Yet, as is well known, the powers of suspension have been used.

We have moved from the position in the White Paper, but we do not believe that it could ever be right not to compensate the innocent trader. There does not seem to be any evidence of a practical problem here. I hope that, in the light of that explanation, the right hon. Gentleman will withdraw his amendment.

I am disappointed by the Minister's reply. While I can see the substance of many of his arguments, it remains that there may be a serious impediment to the import of modern, highly technical products, particularly new products.

I press my hon. and learned Friend a little further on this matter. He was well briefed in connection with my Bill, the Consumer Safety (Amendment) Bill, as it then was. I put great pressure on the fact that local authorities, if they wished, would be empowered to take action against goods that they considered to be within the remit. My hon. and learned Friend challenged the right hon. Member for Swansea, West (Mr. Williams) to produce evidence. The cases are far too numerous to bring to the attention of the Committee this evening. Many people, adults as well as children, will suffer this year and have suffered hitherto, not only because of the restrictions in the Consumer Safety (Amendment) Act 1986, but if this Bill goes on to the statute book in its present form.

The budgets of local authorities are limited and there are limitations in the Consumer Safety (Amendment) Act. Regulation 5(1) states that it shall be the duty of each weights and measures authority to enforce— these are the three key words—"within its area" the provision of the safety regulations.

If a product is considered to fall within the limits of this Bill my hon. and learned Friend has suggested that the goods must be found and tested in the local authority's area. If they are found and tested in another area, that does not comply with the consolidated legislation being proposed to the Committee. That is a serious defect and loophole in the legislation which will be pursued.

I invite the Minister to answer the substantive criticism about the amount of insurance that local authorities will need to take out, because trading standards departments Would have to put forward a sizeable amount of money. I feel that the Minister is unduly favouring manufacturers, particularly those who promote look-alikes. We are not talking about the good and bona fide products which have been tested properly; the Minister is championing the shoddy, poor products, particularly those from the far east and the Third world, which is not honourable.

I endorse the point made by the hon. Member for York (Mr. Gregory). Two thirds of the toys sold in Britain are imported and there is a vast influx at a time such as Christmas. As we have to make progress, for reasons that everyone well understands. As it is not our wish to delay the Bill in the limited circumstances available to us this evening, although the Minister has it wrong, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 14 ordered to stand part of the Bill.

Clauses 15 to 23 ordered to stand part of the Bill.

Clause 24


7.30 pm

I beg to move amendment No. 54, in page 21, line 47, at end insert

'and it shall be a defence, if the misleading indication is given in a printed catalogue, circular or price list, for that person to show that he informed the consumer in writing of the manner in which the indication was misleading before the consumer became legally bound to purchase the goods, service, accommodation or facility in respect of which the misleading indication has been made.'.
The Minister and I have had discussions within the past few days on the Bill's impact on mail order traders. He said that he was willing to give certain guarantees rather than to amend the legislation, and, as we are compacting the Bill's proceedings, it is proper that any such undertakings that he is willing to give should be clearly stated. Therefore, the amendment is intended not to be pressed, but to be a vehicle for him to state to the Committee what he has already stated to me.

I do not consider it appropriate to include a defence of the kind contemplated in the amendment in the Bill. As the right hon. Member for Swansea, West (Mr. Williams) said, the amendment is directed at special difficulties which might be faced by mail order traders. That seems to me a relatively narrow and detailed matter. The provisions of the Bill itself are meant to be of general application. The Bill already makes provision for codes of practice and for regulations, which are the proper means to deal with such matters of detail.

The proposed defence also goes much wider than can be justified. It could put consumers who make purchases through mail order catalogues in a rather worse position than those who buy goods in shops. For example, where goods in a shop are marked with one price but the customer is asked to pay a higher price at the checkout till, the trader has committed an offence under both the existing law and the Bill, even though the customer can simply decide to leave the goods at the till. The proposed defence would allow a mail order trader in similar circumstances to avoid committing an offence by sending a revised price indication to the customer with the goods, even though the consumer would be required to go to the effort of posting the goods back if he did not want them at the new price. That does not seem to me to be an acceptable outcome.

If genuine mistakes are made, the mail order trader will, as will any other trader, be able to make use of the due diligence defence in clause 39. However, I accept that mail order traders may face particular difficulties with the requirement in clause 20(2) to take all reasonable steps to ensure that consumers do not rely on a price indication which becomes misleading after it has been given. Therefore, my Department is considering with representatives of mail order traders what would be an appropriate definition of "reasonable steps" in those circumstances and I hope that it will be possible to reach an agreed solution. But I am confident that any solution can, and should, be reflected in the code of practice, or, if necessary, regulations.

I hope that with that explanation and assurance the right hon. Gentleman will be prepared to withdraw his amendment.

Amendment, by leave, withdrawn.

Clause 24 ordered to stand part of the Bill.

Clause 25

Code Of Practice

I beg to move amendment No. 14, in page 22, line 49, at end insert—

'(1A) A contravention of a code of practice approved under this section shall not of itself give rise to any criminal or civil liability, but in any proceedings against any person for an offence under section 20(1) or (2) above—
  • (a) any contravention by that person of such a code may be relied on in relation to any matter for the purpose of establishing that that person committed the offence or of negativing any defence; and
  • (b) compliance by that person with such a code may be relied on in relation to any matter for the purpose of showing that the commission of the offence by that person has not been established or that that person has a defence.'
  • With this it will be convenient to discuss Government amendment No. 15.

    As it stands, clause 25 makes provision for the Secretary of State to approve codes of practice for the purpose of giving traders practical guidance on the requirements of this part of the Bill and promoting desirable practice in the giving of price indications. It also provides for the approval of such codes to be subject to parliamentary procedures. However, as a result of amendments made in another place, it does not at present provide for an approved code to have any legal effect.

    As introduced in another place, the Bill provided that compliance with the code should provide a complete defence to a charge of giving a misleading price indication. There were a number of reasons for proposing such an arrangement.

    Clause 20 creates a wide general offence of giving a misleading price indication. That approach was adopted because the prohibition of specific practices — the approach followed in the existing legislation —allows rogue traders to invent new misleading practices not subject to the prohibition.

    It does, however, have a potential disadvantage— that it may leave some uncertainty for the honest trader who wants to advertise that he is offering a bargain about whether a particular indication complies with the law. One way of overcoming this uncertainty is to provide that compliance with the code should be a complete defence. A trader could thus follow the relevant provisions of the code and be certain that he could not be convicted.

    Against this, it has been suggested that making compliance a defence would allow rogue traders to exploit loopholes in the code. That argument is misplaced for two reasons. First, a trader could rely on the code only so far as it was relevant. He could not, for example, comply with the code in one respect, adopt an additional practice not addressed by the code and claim a defence in respect of that latter practice. He would have to argue that the practice was not misleading on its own merits with no reference to the code.

    Secondly, should it transpire that any practice sanctioned by the code is open to abuse, there is a procedure for amending the code which could, if appropriate, be operated very quickly.

    While the Bill was passing through the other place, we were presented with a package of proposals having the agreement of many of the main interests involved. The package included a proposal that compliance with the code should not be a complete defence. Instead, it was proposed that contravention or compliance should tend to establish guilt or innocence.

    Clearly, proposals having the agreement of those interests must be taken seriously, but there were others not represented by the Condordat, as the group came to be known, whose views had to be heard. Therefore, we consulted widely and undertook to reflect the outcome of the consultation in the Bill. The consultation revealed a consensus in support of the status proposed by the Concordat. I therefore informed the House on Second Reading that I intended to lay the amendments now before the Committee.

    The amendments that I have laid achieve what the Concordat sought; that is, that contravention of or compliance with the code will tend to establish that an offence has or has not been committed but will not be conclusive of either.

    The amendment also has another effect. If a court is satisfied that a misleading price indication has indeed been given, the defences provided by the Bill may arise. The code may, in some circumstances, be relevant to some of those defences, in particular the due diligence defence provided by clause 39. In those circumstances, the amendment will enable compliance with or contravention of the code to be used in evidence as tending to establish or negative the defence.

    Thus, a trader who complied with the code would not have a certain defence, but he would be very unlikely to be convicted of an offence. I believe that it will be in very unusual circumstances only that an enforcement authority will bring a prosecution against a trader who has complied with the code's relevant provisions.

    In the light of these considerations, I believe that the status given by the amendment would give honest traders almost the degree of confidence that would have followed from the Government's original proposals. However, should rogue traders find any loophole in the code, which they can exploit to give a misleading price indication, the courts will now have the opportunity to convict in appropriate circumstances. There will, therefore, be powerful incentives for traders to comply with the code, which I am sure we can all agree is the desirable outcome.

    Given the extent of support for this alternative in both Houses of Parliament and outside, I therefore think that the amendment is the most appropriate way to proceed.

    First, I wish to declare an interest. I am a member of the council of the Food and Drink Federation. As I understand it, the amendment will change the status of the code of practice so that it will be of evidential weight only in legal proceedings. Both the food and drink industry and the confectionery industry supported the original drafting of the clause, and, for reasons that I should like briefly to explain to the House, they are concerned about the clause as it will be if the amendment is carried.

    The Concordat, which is comprised of retail, consumer and enforcement associations, has made representations about the status of the proposed code of practice and it argued that some provisions should be covered by regulations. The Minister has said that he proposes to accept the Concordat's proposal on the status of the code of practice and I assume that that is why he has tabled the amendment. If the amendment is carried, the code of practice will no longer constitute an absolute defence, as he has mentioned, but will merely be of evidential weight in legal proceedings.

    Originally, as the clause was understood widely by those in the food and drink industry, the code's status as a defence meant that it set out what was good practice. Therefore, traders could see clearly what action they could take to remain within the law. Enforcement officers would also have the certainty that practices endorsed by the code were within the law. Disputes about whether particular practices were misleading or not therefore would be confined to those actions by traders who fell outside the provisions of the code, thus considerably narrowing the scope of such disputes to arise in the first place.

    Furthermore, traders would have considerable flexibility in the use of price indications, and scope to develop new pricing practices that were not misleading. Consumers' interests would have been served by the widest possible adoption by traders of pricing practices in the code of practice which would set a standard of behaviour that would prevent consumers being misled. It would facilitate consumers comparing price claims by competing traders, and price comparisons would be more transparent than at present.

    The original absolute defence status of the code of practice was, in the view of many people in the food industry, preferable in that it added a degree of flexibility. The person giving the indication still had the option of being able to show that, despite non-compliance with the code, he had not misled in practice. This would have avoided the arbitrary and rigid rules that are a feature of the present Bargain Offers Order. The fear that rogue traders could get around the provisions of the code and give misleading price indications while still being able to show that they had complied with the code, does not stand up. If there are practices which are endorsed by the code but which are misleading, I understand that so far none have emerged in the Department of Trade and Industry's consultations to date. Furthermore, the Bill contains provision to enable an amended version of the code to be approved at a subsequent date.

    Given that my hon. and learned Friend the Under Secretary of State for Trade and Industry, has taken this Concordat proposal on hoard, it seems clear that the House will not reinstate the original status of the code of practice; that is to say, the absolute defence if the amendment is carried. However, while manufacturers and traders will be able to live with the amended status, there is a feeling that this route will introduce rigidity into the system, whereas the original proposal would have allowed greater flexibility in interpretation to ensure that action is taken only when there is a genuine concern that a price comparison or promotional offer is misleading to the consumer.

    I am not clear whether my hon. and learned Friend the Under-Secretary has accepted the Concordat's proposals for regulations on specific provisions. Will he clarify his intentions a little further on these points: the 28-day rule; recommended retail prices; introductory offers; worth and value claims; and substantiation? In the view of the food industry, it is not necessary to regulate on those provisions. Traders and consumers will benefit from having the requirements covered in a comprehensive code of practice rather than the rigidity and relative technicality of regulations.

    Price indications cover a wide range of circumstances and in the past have not been easy to regulate in specific statutory controls. The code of practice approach offers greater flexibility for traders than an approach which involves specific requirements in regulations. Regulations would lay down requirements that must be followed, giving rise to a number of specific offences rather than a single general offence, and would give rise to potential difficulties for enforcement authorities in identifying the appropriate charge to bring.

    The Bill does not make it a legal requirement to follow the provisions of the code of practice in respect of the 28-day rule. Therefore, provided that the price indication is not misleading, it is open to traders to adopt a different basis for their price comparisons and, if they so wish, to indicate that they have done so. This allows flexibility for traders within the constraints of the general prohibition on misleading price indications. I hope, therefore, having explained to my hon. and learned Friend some of the worries that still exist in the food and drink industry and in the confectionary industry, that he will take those matters into account. Even if the amendment is carried, I hope that he will keep the matter under review.

    The observations of my hon. Friend demonstrate convincingly the impossibility of pleasing everyone. We responded to the views expressed by the Concordat which represented an overwhelming consensus that our original proposals should be revised. My hon. Friend has advanced many cogent reasons in support of the original provisions in the legislation, but in the view of those whom we consulted, those advantages were outweighed by the disadvantages to which I referred when I moved the amendment.

    The answer to the questions raised by my hon. Friend in relation to the regulations is that no final decisions have yet been taken as to which areas will be covered by regulations. However, he can rest assured that we will consult widely on those matters. It may be that the interests that he has represented this evening will be more fortunate in the context of those consultations and representations than they may have been in the context of the ones that led to the amendment.

    Amendment agreed to.

    Amendment made: No. 15, in page 23, line 6, leave out 'this Part' and insert 'subsection (1 A) above'.— [Mr. Howard.]

    Clause 25, as amended, ordered to stand part of the Bill.

    Clauses 26 and 27 ordered to stand part of the Bill.

    Clause 28

    Test Purchases 745 Pm


    I beg to move amendment No. 39, in page 25, line 28, leave out paragraphs (a) and (b), and insert

    'be carried out by or at the expense of the authority in a manner prescribed by or determined under the regulations'.

    With this it will be convenient to take amendment No. 38, in page 28, line 4, leave out paragraphs (a) and (b) and insert

    'be carried out by or at the expense of the authority in a manner prescribed by or determined under the regulations'.

    I simply press the point made by the local authorities that, if the amendment is agreed to, by being allowed to choose the testing place that they prefer and by not being inhibited, as the Bill would otherwise do, they would have greater flexibility and also better cost benefits. Since the Government have been arguing that local authorities should try to be more efficient, local authorities feel that there is a case where they are arguing for efficiency and where the Government are limiting them. The Minister should take the opportunity to state his case.

    The amendment would remove an essential power of the Secretary of State to prescribe by regulation that tests should be carried out only by specified test houses. This is not by any means a new power. It has been available for many years under both the Consumer Protection Act 1961 and the Consumer Safety Act 1978. It is important to appreciate the purpose of the powers in clauses 28(3) and 30(7). They are designed for a specific purpose, to restrict the choice of test house where the test concerned is of such a technical nature that it is necessary to require the appointment of a particular testing laboratory or laboratories to carry out the test under strictly controlled conditions. This may be necessary, for example, to achieve uniformity in the quality of technical evidence.

    Some of those tests—for example, those relating to fire resistance and electrical safety —require expensive, specialised equipment and experienced, qualified people to operate it. The equipment and those people are to be found in only a limited number of test houses. Therefore, it is prudent in those cases to require that the tests be carried out only by establishments specified by the Secretary of State. If this were not stipulated — it would be impossible, if the amendment were adopted, for such a stipulation to be included in safety regulations — the enforcement authorities would be inclined to have the tests carried out by whatever laboratory, consultant, local technical college or similar body offered to carry them out on the most attractive terms. That would mean that the test results would be open to challenge in court, with expert witnesses disputing whether the specified test method had been followed or not.

    The absence of any restricted lits of competent test houses would lead to uncertainty, dispute, and wasted effort and resources. It is far better for the legality or illegality of those products to be established beyond doubt and the only way of avoiding such doubt is to require that the hightly technical tests involved be carried out by only those establishments, relatively few in number, that are competent to do so, and are recognised by all experts in the field as being the only such establishments.

    I assure the right hon. Gentleman that it has been and will continue to be our policy to use the power sparingly and to make every effort to mitigate any possible restrictive effect by approving as many test houses or laboratories as are technically competent to carry out tests. I hope that, with that assurance, the right hon. Gentleman will withdraw his amendments.

    Amendment, by leave, withdrawn.

    Clause 28 ordered to stand part of the Bill.

    Clauses 29 and 30 ordered to stand part of the Bill.

    Clause 31

    Power Of Customs Officer To Detain Goods

    I beg to move amendment No. 49, in page 28, line 27, leave out 'forty-eight hours' and insert 'two working days.'.

    With this it will be convenient to consider Government amendment No. 50.

    These provisions have been the subject of considerable debate. The purpose of the amendments is to extend the period during which Customs and Excise can detain imported goods. The question how long it should be able to detain goods was debated extensively during the passage of the Consumer Safety (Amendment) Act 1986. The Bill of my hon. Friend the Member for York (Mr. Gregory) originally provided for 72 hours. The Government considered that 24 hours was sufficient and a compromise of 48 hours was eventually agreed.

    Local authorities consider that, particularly over weekends and bank holidays, 48 hours does not allow sufficient time for them to form a view on whether to exercise their powers. The local authority associations have wanted the detention period to be used as a time when they can make rather more extensive examination of the goods concerned without having to use their formal powers to seize or suspend the goods, powers which would attract liability to pay compensation in the event that the goods turned out to be safe.

    This issue has been a major bone of contention. It was raised on Second Reading, in Committee and on Report in another place and on Second Reading in this place. Having listened carefully to the points that have been raised in the many discussions on the subject, and having given further consideration to the potential difficulties of enforcement, I accept that significant difficulties may arise where the 48-hour period encompasses a weekend or a bank holiday. To overcome those difficulties, I propose that the period during which the Customs and Excise may detain imported goods should he altered to two working days. That will make no difference in the majority of cases, and therefore minimises the risk of challenge from the Community institutions. It will allow the enforcement authorities much greater flexibility in those cases where real difficulties may arise. I hope that the House will agree that this allows an adequate time for the limited purposes of the provision.

    I welcome this change. It gives effect to amendments that we asked the Minister to make. I can only observe that it takes a long time to persuade the Minister to make even the most minor concessions. We have spent over a year trying to do that, and it has taken a general election to squeeze this concession from him. I am glad that he now recognises that the arguments that some of his hon. Friends, as well as Opposition Members, put forward about the Consumer Safety (Amendment) Act 1986 were valid and it leaves me with a grave suspicion that his stubbornness on so many other amendments that have been moved in the other place and here is something that he and the enforcement officers may come to regret. However, it would be churlish to make a sour point on a concession. It improves the Bill, and in those circumstances we welcome it.

    Amendment agreed to.

    Amendment made: No. 50, in page 28, line 30, at end insert—

    '(2A) In subsection (1) above the reference to two working days is a reference to a period of forty-eight hours calculated from the time when the goods in question are seized but disregarding so much of any period as falls on a Saturday or Sunday or on Christmas Day, Good Friday or a day which is a bank holiday under the Banking and Financial Dealings Act 1971 in the part of the United Kingdom where the goods are seized.'—[Mr. Howard.]

    Clause 31, as amended, ordered to stand part of the Bill.

    Clauses 32 to 41 ordered to stand part of the Bill.

    Clause 42

    Reports Etc

    I beg to move amendment No. 34, in page 34, line 21, leave out subsections (3) and (4).

    This amendment also arises from a request from the local authorities, which feel that the requirements built into the Bill are cumbersome and costly. They ask whether such a wide-ranging requirement needs to be part of the Bill. This is to give the Minister than opportunity, hopefully, to have second thoughts on this issue.

    This clause provides that a report on the functions relating to safety in the Bill should be submitted to Parliament at least once every five years. It would seem right that Parliament should he informed of the extent to which the powers in this Bill are being used and of the extent to which non-complying goods are found on the market. Basically we want to know whether the Bill is effective.

    In order for the Secretary of State to prepare such a report, he needs information from the enforcement authorities. This clause therefore requires the enforcement authorities to report to the Secretary of State, as and when he directs, on how they have exercised their functions under this Bill.

    These provisions arc not new and are not an unnecessary additional burden on the enforcement authorities. Similar provisions are already contained in section 8(2) of the Consumer Safety Act 1978, which will be consolidated in this Bill. The House may recall that the Secretary of State submitted a report to Parliament in October 1986 on the working of that Act. The report to Parliament was based on the annual reports submitted by the enforcement authorities. This clause provides that the first report on the Bill before us shall be laid not more than five years after the October report to Parliament. I hope that that information will suffice to persuade the right hon. Member for Swansea, West (Mr. Williams) to withdraw his amendment.

    Amendment, by leave, withdrawn.

    Clause 42 ordered to stand part of the Bill.

    Clauses 43 and 44 ordered to stand part of the Bill.

    Clause 45


    Amendment made: No. 28, in page 37, line 7, at end


    '(5) In Scotland, any reference in this Act to things comprised in land by virtue of being attached to it is a reference to moveables which have become heritable by accession to heritable property.'.—[Mr. Howard.]

    Clause 45, as amended, ordered to stand part of the Bill.

    Clause 46

    Meaning Of "Supply"

    Amendments made: No. 16, in page 37, line 12, leave out

    ',or a contract for work and materials,'

    No. 17, in page 37, line 13, at end insert—

    ',( ) the performance of any contract for work and materials to furnish the goods;'.

    No. 18, in page 37, line 36, at end insert—

    `(2A) Subject to subsection (3) below, the performance of any contract by the erection of any building or structure on any land or by the carrying out of any other building works shall be treated for the purposes of this Act as a supply of goods in so far as, but only in so far as, it involves the provision of any goods to any person by means of their incorporation into the building, structure or works.'.

    No. 19, in page 38, line 15, at end add—

    `(7A) A ship, aircraft or motor vehicle shall not be treated for the purposes of this Act as supplied to any person by reason only that services consisting in the carriage of goods or passengers in that ship, aircraft or vehicle, or in its use for any other purpose, are provided to that person in pursuance of an agreement relating to the use of the ship, aircraft or vehicle for a particular period or for particular voyages, flights or journeys.'.[Mr. Howards]

    Clause 46, as amended, ordered to stand part of the Bill.

    Clause 47

    Savings For Certain Privileges

    Amendment made: No. 20, in page 38, line 16, leave out from 'requiring' to end of line 20 and insert

    'any person to produce any records if he would be entitled to refuse to produce those records in any proceedings in any court on the grounds that they are the subject of legal professional privilege or, in Scotland, that they contain a confidential communication made by or to an advocate or solicitor in that capacity, or as authorising any person to take possession of any records which are in the possession of a person who would be so entitled.'.—[Mr. Howard.]

    Clause 47, as amended, ordered to stand part of the Bill.

    Clause 48

    Minor And Consequential Amendments And Repeals

    With this it will, be convenient to consider Government amendments Nos. 51, 52 and 53.

    We had a dispute over this issue on Second Reading and would undoubtedly have had quite a lengthy discussion on this had the Bill been proceeding in the normal manner, because hon. Members on both sides object to what the Government are doing. The import of the Bill is that it will no longer be possible legally to require origin marking on goods in this country. Many organisations, particularly those concerned about South Africa and apartheid and so on, are deeply concerned that in the future there will be no possibility of imposing requirements on imported goods.

    On Second Reading the Minister suggested that he was responding to a requirement of the EEC. We well understand the difficulties which he faces, but he went on to say also that further processes had been open to the Government: for example, they could have appealed, but they decided not to. Instead, they have capitulated at the first squeak from the EEC on this matter.

    It is unfortunate that they have taken that course of action, particularly since, as yet, although it is many months since they first stated their intention, the promised form of a replacement for this protection has not been forthcoming. The Minister said on Second Reading that he was still looking for an alternative form of words. It has been a great many months. He said that one of the reasons for putting this provision in the Bill was that if we were good boys and showed the Common Market that we were willing to come to heel every time it scowled at us even slightly, it will no doubt be kinder to us when the Minister goes forward with his eventual proposal for an alternative. That is a dubious argument. It would be better to tell the EEC that, until we have an agreement, we are not willing to make any statutory concessions. We must have agreement on what is to replace the provision.

    I have moved the amendment not to initiate discussion at this stage of parliamentary proceedings, but to give the Minister a last opportunity to reconsider. I notice that, instead of doing that, the Minister has tabled his own amendment to require at least an affirmative resolution. That takes up a point that I made on Second Reading or in Committee. The Minister's amendment is at least helpful. However, I still believe that the Bill would be better and our negotiating position stronger if the Minister accepted the amendment to withdraw the subsection.

    8 pm

    May I begin by outlining briefly the background to the amendments. The Trade Descriptions Act 1972 requires imported goods bearing a United Kingdom name or mark to be accompanied by an indication of the country of origin. It does not impose general origin marking requirements. It is intended to protect consumers against being misled by goods that are presented in certain potentially misleading ways. The Commission has said that it considers the 1972 Act to be incompatible with the treaty of Rome and has taken the first step in infraction proceedings that will lead fairly rapidly to a case in the European Court of Justice if we are not to repeal the 1972 Act.

    In 1985, the European Court of Justice ruled against the United Kingdom's 1981 origin marking order in a case which the United Kingdom had vigorously contested. After careful study of that judgment, the Government reluctantly concluded that there was little prospect of successfully defending a case against the 1972 Act and that an unsuccessful United Kingdom defence could well have been counter-productive, since the terms of an adverse judgment might well have inhibited the scope for successful arrangements.

    I am conscious of the widespread and strong feeling about origin marking. I am aware that many people feel that it would be wrong for the House to settle important changes in the law in this area without fuller debate than the present position allows. With that in mind, I have tabled an amendment which provides that the commencement order giving effect to the repeal of the 1972 Act will be subject to the affirmative resolution procedure.

    Although that is a somewhat unusual procedure, I believe that it meets the present situation. It will relieve the next Parliament from the burden of repeating the primary legislative process while at the same time ensuring that the implications of repeal can be properly debated before it takes effect and by reference to proposals for successor arrangements.

    Our latest exchanges with the Commission lead us to believe that it is likely to be possible to introduce a successor regime acceptable in Community law. That would provide a valuable degree of continuing protection to consumers in the form of an obligation to provide a sign of origin in any case where goods are presented in such a way that they can reasonably be expected to create the impression in the mind of the consumer that they were manufactured or produced in a different place from where they were produced or manufactured. Arrangements on those lines could be introduced by order under section 8 of the Trade Descriptions Act 1968 and the making and entry into force of such an order could be synchronised with the order bringing into force the repeal of the Trade Descriptions Act 1972.

    I am glad to hear that at last some form of words has been arrived at, but I am afraid that it does not sound adequate to me. For example, where goods carry no marking, they will escape the provisions envisaged by the Minister. Therefore, for the reasons that I have put forward, I still believe that the Minister should have accepted the amendment. However, in this evening's circumstances, I beg leave to withdraw my amendment.

    Amendment, by leave, withdrawn

    Clauses 48 and 49 ordered to stand part of the Bill.

    Clause 50

    Short Title, Commencement And Transitional Provision

    Amendments made: No. 51, in page 39, line 14, at end insert—

    '(2A) The Secretary of State shall not make an order under subsection (2) above bringing into force the repeal of the Trade Descriptions Act 1972, a repeal of any provision of that Act or a repeal of that Act or of any provision of it for any purposes, unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.'.

    No. 22, in page 39, line 36, leave out subsection (8). — [Mr. Howard.]

    Clause 50, as amended, ordered to stand part of the Bill.

    Schedule 1

    Limitation Of Actions Under Part I

    Amendments made: No. 29, in page 42, line 40, leave out from 'unless' to 'and' in line 41 and insert—

    'a relevant claim was made within that period and has not been finally disposed of.

    No. 30, in page 42, line 42, at end insert—

    '(IA) If, at the expiration of the period of 10 years mentioned in subsection (I) above, a relevant claim has been made but has not been finally disposed of, the obligation to which the claim relates shall be extinguished when the claim is finally disposed of.'.

    No. 31, in page 42, line 43, at end insert—

    `a claim is finally disposed of when—
  • (a) a decision disposing of the claim has been made against which no appeal is competent;
  • (b) an appeal against such a decision is competent with leave, and the time limit for leave has expired and no application has been made or leave has been refused;
  • (c) leave to appeal against such a decision is granted or is not required, and no appeal is made within the time limit for appeal; or
  • (d) the claim is abandoned'.
  • No. 32, in page 43, line 31, after 'him', insert 'in all the circumstances'.

    No. 23, in page 45, line 4, leave out '(g)' and insert '(gg)'— [Mr. Howard.]

    Schedule 1, as amended, agreed to.

    Schedule 2 agreed to.

    Schedule 3

    Amendments Of Part I Of The Health And Safety At Work Etc Act 1974

    Amendments made: No. 52, in page 52, line 20, leave out

    `forty-eight hours' and insert 'two working days'.

    No. 53, in page 52, line 23, at end insert—

    `(3) In subsection (1) above the reference to two working days is in a reference to a period of forty-eight hours calculated from the time when the goods in question are seized but disregarding so much of any period as falls on a Saturday or Sunday or on Christmas Day, Good Friday or a day which is a bank holiday under the Banking and Financial Dealings Act 1971 in the part of Great Britain where the goods are seized.'.—[Mr. Howard.]

    Schedule 3, as amended, agreed to.

    Schedule 4

    Minor And Consequential Amendments

    Amendments made: No. 25, in page 55, line 41, at end insert—

    'The Insolvency Act 1986

    12. In section 281(5)(a) of the Insolvency Act 1986 (discharge from bankruptcy not to release bankrupt from liability in respect of personal injuries), for the word "being" there shall be substituted the words "or to pay damages by virtue of Part I of the Consumer Protection Act 1987, being in either case".'.

    No. 43, in page 55, line 41, at end insert—

    The Motor Cycle Noise Act 1987

    For paragraphs 3 to 5 of the Schedule to the Motor Cycle Noise Act 1987 (enforcement) there shall be substituted the following paragraph—

    "3. Part IV of the Consumer Protection Act 1987 (enforcement), except section 31 (power of customs officer to detain goods), shall have effect as if the provisions of this Act were safety provisions within the meaning of that Act; and in Part V of that Act (miscellaneous and supplemental), except in section 49 (Northern Ireland) references to provisions of the said Part IV shall include references to those provisions as applied by this paragraph.".'.—[Mr. Howard.]

    Schedule 4, as amended, agreed to.

    Schedule 5 agreed to.

    Bill reported, with amendments; as amended, considered.

    Clause 2

    Liability For Defective Products

    I beg to move a manuscript amendment, in page 2, line 50, leave out "industrial" and insert "initial".

    This amendment returns to an issue that we discussed at some length in Committee. I do not intend to delay the House for long now. However, the Minister will recollect that there was some support from the Conservative Benches for our argument that the Bill missed the opportunity to extend protection to the consumer with regard to the supply of foodstuffs. We regret that the Minister has narrowed the protection afforded by the original directive whereby the only exemptions would be for foodstuffs that had not undergone initial processing. The Minister has limited protection and included the term "industrial process".

    We have had extensive discussions on this point and we believe that the Minister has missed an opportunity. We have given an undertaking that we will facilitate the progress of the Bill, and we do not want to delay it for this item. However, had this been a normal Report stage, we would have had a considerable debate and probably a vote on this issue. Although we are not hopeful, we want formally to make the effort to give the Minister the opportunity to recant even at this, the last moment.

    The preamble to the directive explains why we have chosen the words that are in the Bill. Perhaps it would be for the benefit of the House if I quoted the relevant passage in the third recital:

    "Whereas a liability without fault should apply only to movables which have been industrially produced; whereas, as a result, it is appropriate to exclude liability for agricultural products and game, except where they have undergone a processing of an industrial nature which cause a defect in these products".
    That makes it clear that the reason why we have chosen to use the words "industrial process" in clause 2(4) is that they more accurately represent the intentions of the directive.

    Perhaps I could begin by dealing with the use of those words and then say why I recommend the House to reject the amendment to line 50. We have departed from the words of the directive only when it has been important either to clarify the intentions of the directive or to use words which are more readily understood in the United Kingdom. In this case there are two reasons for us to use the words that we have used. The first is the intention of the directive as set out in the preamble which I have just read. I should also remind the House of the overall intention of the directive which is to harmonise the law for defective products that have been industrially produced. If we had used the word in the directive — that is, agricultural produce which had not undergone an "initial" process— we would not have conveyed the intentions of the directive that it is the industrial nature of the process which is important, not its place in the sequence of processes.

    The second reason for using the words "industrial process" is that the words "initial process" could easily be interpreted to mean that, while the initial processing of agricultural produce might put that produce outside the exemption, subsequent processing—that is, the second and third process to which the produce may be subjected —might not be caught by the exemption. Although this was obviously not the intention of the directive, it could be so argued on a strict interpretation of the wording of article 2. We have avoided that potential lack of clarity by using the words that we have. They have the additional advantage of reflecting the intentions of the directive.

    For those reasons, I hope the House will reject the amendment.

    Amendment, by leave, withdrawn.

    Order for Third reading read.

    8.11 pm

    I beg to move, That the Bill be now read the Third time.

    I am glad that we have been able to complete consideration of the Bill in such an expeditious manner, no doubt having something to do with the rather unusual circumstances in which this takes place.

    I pay tribute to the co-operation of the right hon. Member for Swansea, West (Mr. Williams), who has confirmed the welcome that he gave the Bill on Second Reading by the way that he has assisted its passage. This legislation has been welcomed by both sides of the House and has been enthusiastically greeted by consumers and producers alike. I have great pleasure in commending it to the House.

    8.12 pm

    May I repeat our welcome to the Bill? We regret that one or two improvements that we and other hon. Members suggested have not been included, but it would not have been our wish to see the Bill fall because of those differences.

    As I observed earlier, it is good that we have managed to continue a consensus approach on consumer issues, as we have done over a great many years. It has meant that the public have benefited from consumer legislation which is not continually threatened with repeal and alteration for political reasons. Therefore, we welcome the Bill. It could have been better but we are glad that it is completing its proceedings.

    8.13 pm

    I should like to record my welcome for the Bill on behalf of my constituents. I believe it to be a very important and valuable piece of legislation and I am glad that it has been possible to carry it in this Parliament.

    I am glad also that my hon. and learned Friend has taken account of some concerns expressed by those engaged in research in the pharmaceutical industry. They are particularly happy with the provisions of clause 4(1) (e)dealing with the state of scientific and technical knowledge. If this so-called state-of-the-art defence had been deleted, many companies in the pharmaceutical industry, three of which are in my constituency, would have been deterred from marketing potentially valuable novel products, whether intended to treat currently lethal conditions such as AIDS or lung cancer, or painful or disabling states such as arthritis, schizophrenia or senile dementia. I am glad that my hon. and learned Friend has responded to those legitimate concerns. Because of the consumer protection which the Bill provides in so many ways, there will still be every encouragement to develop new medicines for the benefit of the health of the people.

    8.15 pm

    I would also like to welcome the Bill. On behalf of my constituents, I have one broad question which I would like to ask the Minister. I have in my constituency, in Wisbech, a prestigious printer by the name of Balding and Mansell which is concerned that it may be blamed for textual errors in its printing. The British Printing Industries Federation wrote to the Minister and received a reply which said:

    "It seems to us reasonably clear that the Directive does not apply to mis-statement."
    I would simply like the Minister to make it clear that it is not the intention of the Bill to do so.

    The hon. and learned Gentleman may remember that, in 1979, Longman published a chemical textbook in which it got wrong a proportion between two totally unpronouncable chemical elements; it printed that the proportion should be 2:30 instead of 2:3. A school had a major explosion as a result. Of course Longman, who printed the book, would be responsible. I would simply like the Minister to say that it is not an intention of the legislation to hold a printer responsible for textual errors.

    8.16 pm

    I simply wish to raise a point to which I referred on Second Reading. I had tabled amendment No. 26 for consideration in Committee, but in view of the circumstances with which we are faced and the knowledge that we would not divide on it, it seemed inappropriate to press it.

    The foundry industry made it clear that it was not satisfied with the wording of clause 4(1) (f). I have had a letter from my hon. and learned Friend, in which he has explained that he thinks that the concern of the industry can be dealt with under the terms of his letter. We hope that the interpretation which is placed on those words by the Minister will prove to be correct. This is an important and serious matter. If the Minister's interpretation were to turn out not to be correct, and if the matter proceeded to court, no doubt we would have an opportunity to correct the position in subsequent legislation.

    8.18 pm

    I heartily welcome the Bill and praise the work of my hon. and learned Friend at this late hour in this Parliament in seeking a dialogue with the Opposition and other parties in bringing the legislation to fruition. The Bill will be in the interests of consumers, including my constituents. We should not lose sight of the cardinal point, that each year some 7,000 people die in Great Britain in home accidents, a greater number than are killed on the roads. In addition, more than 3 million people sustain injuries which require medical attention. Clearly, with those devastating figures before the House, we must address ourselves to consumer safety.

    In many ways, this is a blockbuster Bill because we are dealing with the entire concept of safety at the stage of purchase. Furthermore, we have given greater resources to local authorities in England, Wales and Scotland. I note the response from my hon. and learned Friend that that greater provision has increased from £60.9 million in the financial year 1983–84, to about £72·6 million in 1985–86. However, notwithstanding those extra financial provisions, there are still some remaining doubts and queries. I hope that my right hon. and hon. Friends will consider them in the time that remains to us.

    The new power of suspension of the threat of compensation is still a worry, especially where the tests can be carried out only by designated test houses. I understand that it can take three weeks for the official test reports to be received. The House has not had a full chance to examine the ramifications of that. So that the enforcement authorities are not discouraged, the strict rules on compensation need to be relaxed, either by an exemption from the compensation provisions, if an authority can demonstrate that it had acted reasonably, or for a limited period. I recommend a time limit of seven days during which an authority can arrange its confirmatory tests. In other words, compensation would not be available during the initial period if the goods were later found to comply.

    I am not clear from the Bill who should receive the suspension notice. Perhaps my hon. and learned Friend can advise us. Is it the importer, the haulier or the warehouse owner? Can suspended goods be moved to another warehouse without any breach? In such a situation, there is no requirement for the local authority to be informed in advance of such a move, but vital goods can be properly supervised. These and other matters would, had the normal legislative process taken its course, have been examined week upon week and no doubt into the midnight hours. However, it has all been concertina-ed into a few days. The period of 48 hours is inadequate to determine whether goods might be suspect and whether that amounts to time for seizure and detention.

    For a long time, I have felt that improvements in consumer safety are overdue. However, in this Parliament and with this major Bill, we have taken a step forward, not only for the consumer but also for the bona fide producer and retailer. I believe that that will be widely welcomed, and I commend it to the House.

    8.22 pm

    I am grateful for the remarks that have been made and for the welcome that the Bill has received from hon. Members of all parties. Two specific points have been made which call for a reply from me.

    The hon. Member for Cambridge, North-East (Mr. Freud) asked for an assurance that it was not intended that the type of printing error to which he referred would give rise to liability under the Bill. I am happy to give him that assurance, although that may be rather less useful than the observation that I made in the letter to which he referred— that it is reasonably clear from the language of the legislation that that should not be its effect. Having regard to the attitude of the courts to the deliberations of this House, the clarity of the language, rather than any statement of intention, is likely to be of greater assurance to those who might be affected by such provisions.

    In answer to the specific question posed by my hon. Friend the hon. Member for York (Mr. Gregory) as to whether suspension notices should be served on hauliers, shopkeepers or importers— I believe that those were the three categories that he identified — it depends on the circumstances, and especially on who had possession of the goods at the relevant time. It would be possible to serve a suspension notice on any or all of those categories, i f they were the people in possession of the goods.

    Naturally, I am delighted that we have been able to make progress and to complete the Bill's consideration in this House and I am grateful to all those hon. Members who have contributed to its speedy passage.

    Question put and agreed to.

    Bill accordingly read the Third time, and passed, with amendments.