I assure the hon. and learned Member that I was aware already of everything he has said—that the matter was fully debated in Committee and that he regards it as important—but I have made my selection and I do not propose to vary it.

I beg to move, That the Clause be read a Second time.

The new Clause replaces the existing Clause in the Bill, which deals with what has rightly become known as the bogus directory racket. During its deliberations on the Bill, the Standing Committee generally agreed that the existing Clause was inadequate to deal with the problem and was far too weak. I undertook that on Report I would table a new Clause, which, I hope the House will agree, will deal adequately with this serious abuse.

The new Clause is similar to that which appeared in the name of the hon. Member for Blackpool, South (Mr. Blaker) and which he courteously withdrew on my undertaking that I would produce a Clause which was as strong as his but, perhaps, in slightly better language. The hon. Member admitted that there were certain drafting defects in his Clause. I think that my new Clause adequately meets that undertaking.

The House will know exactly the form that the abuse in directory selling takes and I need not burden the House with a lengthy explanation of it. Briefly, what happens is that some of the unscrupulous, seedy and shoddy publishers send out to shopkeepers and businessmen forms inviting them to place their name and details of their business in their directory. The form is so confusing that it deliberately implies that it is some sort of official publication similar, for instance, to the reputable Thomson's Yellow Pages or Kelly's. Frequently, one of the sneaky little things that these publishers do is to include a deliberate mistake in the form so that the businessman or the shopkeeper will alter the mistake to the correct name and send it back. He then receives a bill, the publisher treating the amended form as an order.

There is never any detail on the form about when the directory is likely to be published, what the circulation figure is likely to be or the cost or charge of the entry. The invoice is then sent out, and many firms send back payment in the belief that it is a genuine and important directory. In the overwhelming number of cases only a derisory number of directories are published, simply to get round the law.

The method which I have used in the Clause to try to stop the abuse is as follows. The Clause makes it obligatory for a publisher who seeks to bill someone for the inclusion of his or his firm's name in a trade or any other form of directory first to obtain a signature and also to supply a copy of the form, upon which certain details must be included. The details are as follows:

" (i) the proposed date of publication of the directory or of the issue in which the entry is to be included;

(ii) the minimum number of copies to be published,

(iii) if the directory or that issue is to be put on sale, the price at which it is to be offered for sale;

(iv) if the directory or that issue is to he distributed free of charge (whether or not it is also to be put on sale), the minimum number of copies which are to be so distributed ".

It must also set out or give reasonable particulars of the entry in respect of which the charge would be payable.

If, after that, the publisher sends out an invoice—in other words, if he sends out an invoice without having obtained a signature and without supplying a copy of the form with the signature to the advertiser or firm—he will be liable to a heavy fine, £ 400, on summary conviction.

I think that this will certainly get rid of the worst of this abuse, which is the willy-nilly sending out, throughout the whole country, of invoices in the hope that firms will pay them in the belief that they are genuine and that they have entered into some sort of contract. It has become a con man's paradise with the whole of British businessmen to milk, and I hope that this new Clause will satisfactorily stop this malpractice.

I accept the fact that certain firms canvass orders and get signatures already. Some of the abuses which have come to my attention have been of unscrupulous, fast-talking, wily salesmen, dishonest salesmen, obtaining signatures by generally deceptive methods by implying, for instance, that there is already an existing order, or that the boss of the firm has agreed to pay for it.

Of course no amount of legislation in the world will stop crooks, and I have no doubt that some crooks will be prepared to take a chance, but I must warn them, I must warn firms, that if after including the particulars in the form they do not live up to them in a material way—for instance, if they say that they will publish the directory by a certain date, and do not do so—they will become subject, I am advised, to the Trade Descriptions Act, which already has heavy penalties in it.

I think I have adequately described the purpose of the new Clause. I think it will satisfactorily put out of business—this is certainly the view of members of the Fraud Squad who are investigating complaints in this field; they feel the same way as I do—some of the more unscrupulous firms. I hope the Clause will be accepted by the House.

Does the hon. Member wish to say a word about the Amendments to the new Clause now or later?

Later, Mr. Speaker.

The hon. Member for Accrington (Mr. Arthur Davidson) kindly referred to the new Clause which I proposed in Committee on the Bill on this very important subject. We are all agreed that it is a very nefarious practice with which this new Clause seeks to deal. The hon. Member has described it and I think it is clear to the House what the nature of the practice is.

I find it striking that the practice is still continuing in spite of the presentation of this Bill by the hon. Member now some months ago. A case has come to my notice as recently as a week ago of exactly the kind which the hon. Member has described where an alleged proof is sent to a firm of an entry to go into a directory without any previous request whatever from that firm. Clearly, the hope is that some subordinate member of the staff will sign this alleged proof and that this will be taken to be an order and that when subsequently an invoice is received payment will be made, probably by the subordinate member of the firm, on the assumption that a real order has been placed.

I have another example, too, of the activities of the companies which have been going in for this practice in relation to a firm which the hon. Member mentioned in his speech on Second Reading of the Bill. When a complaint was made recently by a constituent of his to one of my hon. Friends about this sort of practice he inquired for the report and accounts of the company concerned, which called itself Classified Directories Limited, and in response to his attempts to get in touch with the firm there was no answer by telephone. He put down a Question to the President of the Board of Trade and it was answered by the hon. Lady on 4th March this year. It showed that the last annual return made by the company related to the period up to 26th January, 1968, which is a pretty long time ago. By dint of pressure from my hon. Friend, and no doubt from the Board of Trade, the company has been persuaded at last to file an annual return up to 1969 and has undertaken to file within three months the accounts which should be annexed to it. That is an illustration of the methods of some of the companies which have been going in for this sort of practice.

I have also an alleged directory of the kind to which the hon. Member has referred. It is, as hon. Members will see, a fairly substantial document which is called the "Town and County Business Guide". It is a very interesting example of the way in which companies go in for this sort of practice. This important looking document of several hundred pages is in fact useless. I will give hon. Members an example of what it contains. It is allegedly a classified directory covering all sorts of trades, but if we look at the heading "Gravel Merchants" we find referred to there two firms, one in Nottinghamshire and one in Staffordshire, and nothing else. What on earth is the use of that? If we look at other categories of businesses we shall find a few firms mentioned in this or that part of the country. If one has a directory which mentions three firms, in Honiton, Devon, Staffordshire and Lancashire, and one is—shall we say?—in London and wanting to order gowns, then the directory seems to me to be patently and absolutely useless. But I have no doubt that many of the companies whose names are listed in this guide have paid money to be included. I cannot imagine that the business which has resulted to them from this guide has done very much good.

To confirm the seriousness of this practice, the Advertising Association, which is keen that the practice should be dealt with in the very firm and effective manner proposed by the hon. Member for Accrington, claims that hundreds of thousands of pounds are lost to genuine advertising business per year, and that it has identified in the last 12 months 80 publishers, apparently unconnected with one another, who have been going in for this practice.

The hon. Member referred to my new Clause which I put forward in Committee. I think it fair to remind him that both he and the Parliamentary Secretary said that they thought that a stronger Clause than mine should be brought forward and that it should be brought forward on Report. I welcome the hon. Member's new Clause, but it is certainly not stronger than mine. It is weaker. The Amendments which I have put down to it are designed to strengthen it. Of all the Clauses this is the most important. I am not saying that the others are unimportant; they are important; but this is the most important of the lot.

Perhaps I could take the House through my Amendments which, Mr. Speaker, you have called, and listed (b), (c), (d), (e) and (g). Before I do so I would say that there are other criticisms of the hon. Member's new Clause. For instance, it is not satisfactory to say at the end of subsection (1) that the signatory of the order shall have

" been supplied with a copy for retention by him of the note "

of agreement to the charge, as the hon. Member describes it, without saying at what point in time the signatory should have been so supplied. As the new Clause stands, the copy of the note could have been supplied to the signatory right up to the point where court proceedings might be taken —

That Amendment has not been selected.

I observe that, but I am speaking to the new Clause and deliberately not to my Amendment, although it is the same point. As the new Clause stands, there is no need, for example, for a copy of the note of agree- ment to be supplied to the signatory even before a demand for payment has been made. It is desirable to say something about the point in time when the copy should be supplied, and one could perfectly practically say that it should be supplied at the time it is signed. One is familiar with cases where this practice is adopted.

Amendment (b) proposes to insert in line 9 of the new Clause, after "he", "or his agent on his behalf". The new Clause as it stands does not necessarily catch the principal, that is to say the nefarious company, if a demand for payment is made on behalf of that company by a debt collector. I may have misunderstood the position, but I think every hon. Member will agree that, if there is one person who should be caught by the penalties, it is the principal who has begun the whole process. I hope the hon. Member will say something about that.

Amendment (c) proposes in line 14 after the word "and" to insert the words

"in such manner as to be clearly legible".

This Amendment is perhaps of less importance, although it is important that the particulars which are called for by subsection (3) of the new Clause should be clearly legible. The subsection requires that the charge to be made shall appear immediately above the place at which the note is to be signed, and that is a proper requirement, but the subsection says nothing about the clarity, the prominence or the legibility of the other particulars.

Amendment (d) proposes in line 15, after "give" to insert—

"the name and address of the person, firm or company publishing it and".

The effect is to add to the requirements called for the requirement that the note of agreement should contain the name and address of the person, firm or company publishing the proposed directory. The hon. Member may agree that that is a desirable requirement.

Amendment (e) inserts a new paragraph in line 18 requiring that the note of agreement should mention the minimum number of copies to be published. The new Clause in subsection (3)(iii) requires that if the directory is to be distributed free of charge the minimum number of copies which are to be so distributed shall be stated in the agreement, but it does not require that the minimum number of copies to be published should be stated, and that is a requirement which should appear.

Amendment (g) is an important one. The new Clause fails in the intention which the hon. Member expressed in Committee that it would be stronger than the one which I there proposed. The hon. Member has adopted the general approach which I adopted. He imposes a penalty for demanding payment unless a document has been signed. But my new Clause went on to impose another penalty where in this document a person made a false statement knowingly or recklessly, and that is the purpose of Amendment (g). The effect would be, if a person knowingly or recklessly makes in the note of agreement a statement which is false to a material degree, he shall on summary conviction be liable to a fine not exceeding £ 400 and on conviction on indictment to a fine or imprisonment for a term not exceeding two years or both. That is a stiffer penalty than is proposed in the new Clause, which does not cover the possibility of imprisonment. Amendment (g) also imposes those penalties if the purported publisher fails without reasonable cause to publish the directory or publishes it in a nugatory form, that is to say, with so limited a content or in such a form that it is not capable of being reasonably regarded as a genuine directory. It deals not only with the making of false statements but with the actual failure to publish a genuine directory.

It is argued that the practice which I am attempting to catch by the Amendment is already caught by other Statutes. I hope that the hon. Member will spell this out. I have looked at the Statutes which appear to me to deal with this, but I am not satisfied that they do so satisfactorily. Section 14 of the Trades Descriptions Act, 1968, reads:

"It shall be an offence for any person in the course of any trade or business—

(a) to make a statement which he knows to be false; or

(b) recklessly to make a statement which is false;

as to any of the following matters …".

All those matters relate to the provision of services. The Act deals not with the supply of goods but with the provision of services, and the Section was not drafted with the practice which we are discussing in mind but having in mind services such as hairdressers, laundries, hotels and so on.

The Misrepresentation Act, 1967, deals only with the right to damages of people who have suffered from misrepresentation and does not deal with the criminal law. It is not, therefore, useful in this case.

Subject to correction, the relevant section of the Theft Act, 1968, would appear to be Section 15 which says

" A person who by any deception dishonestly obtains property belonging to another … shall on conviction on indictment be liable to imprisonment for a term not exceeding ten years."

It may be that Section would be useful in the case of somebody who puts into his note of agreement words which he can subsequently be proved never to have intended to carry out. But it is necessary to prove intention, which is a difficult matter. One would have to prove dishonesty.

My Amendment, in contrast, penalises the making of a dishonest statement, but goes further and penalises also the person who without reasonable cause fails to publish the directory or publishes it in a nugatory form. This seems to be a provision which is much more likely to be valuable in dealing with the cases we have in mind than a provision which relies on the proof of intention.

Moving on to the penalties imposed by Amendment (g), it is right that we should provide for imprisonment. The offence with which we are dealing is every bit as henious as many of the offences under the Trade Descriptions Act which was intended to protect innocent citizens from false descriptions by traders. Here we are trying to protect people from nefarious practices which are every bit as bad as those covered by the Trade Descriptions Act. That Act provides for penalties of imprisonment of up to a period of two years, as is set out in my Amendment (g).

The Amendment is also desirable because even if the Theft Act or the Trade Descriptions Act may have some value in this context, it would be useful, since we are dealing with a new offence, to have in the Bill a comprehensive statement on the penalties to which malpractice should be exposed.

Both hon. Members who have spoken this morning have made it clear to the House that we were extremely concerned in Committee to produce an effective Clause to deal with the whole problem of directory entries. When we left this aspect in Committee I gave the assurance that I would assist the hon. Member for Accrington (Mr. Arthur Davidson) in preparing a strenthened provision on directory entries to retain the basic formula put forward in Committee by the hon. Member for Blackpool, South (Mr. Blaker) and at the same time deal with a number of snags that in my view arose from his detailed wording. The new Clause now before the House achieves all this. Although naturally the hon. Gentleman has loyalty to his own wording, I hope he will accept that we are convinced the new Clause will prove to be a highly effective deterrent to the practices which have been causing so much difficulty.

Members will note that the basic formula put forward by the hon. Member for Blackpool, South has been retained. Unless the person concerned has signed a note agreeing to the charge demanded and containing various specified information, he will not be liable to pay for the entry, and a demand for payment will in the specified circumstances be an offence. This information is related to matters which will help the potential customer to evaluate the possible benefits which he may derive from the insertion of the entry in question, in other words what he is going to get for his money, and should prevent the proposed directory turning out to be something quite different from what it was alleged to be. The key piece of information relating to the charge for the entry, to which the customer agrees when he signs the note, is to appear directly above the space for signature. This is particularly important, because in the past many people have committed themselves to entries under the false impression that they were free of charge, as of course they are in the case of standard entries in the telephone directory.

Although this basic formula is similar to that put forward in Committee by the hon. Member for Blackpool, South. Hon. Members will have noticed that there are considerable differences of detail, some of them important ones. The most important difference is the omission from this new Clause of any reference to an offence of making false statements. I hasten to assure the House that this omission does not reflect any lack of appreciation by the hon. Member for Accrington or myself of the importance of this aspect, but I am advised that there already exists an adequate safeguard in the provisions of the Trade Descriptions Act 1968. Section 14 of that Act makes it an offence for any person in the course of a trade or business either to make a statement which he knows to be false, or recklessly to make a statement which is false about the provision of services, their nature and other specified matters relating to the services.

I am advised that the publication of entries in a directory amounts to a service under the 1968 Act and that the specified matters covered by Section 14 are sufficiently widely drawn to cover those points on which the potential customer of the directory publisher is likely to base his decision as to whether to agree to the charge for an entry. I hope the House will agree that it would be inadvisable to duplicate this provision of the 1968 Act in this Bill; indeed to do so could have the great disadvantage of appearing to imply that the scope of section 14 of that Act is narrower than the courts could otherwise hold it to be.

Another important difference between this new Clause and that put forward by the hon. Member for Blackpool, South lies in the penalties. Here the penalties are somewhat stiffer. The maximum fine for making an unlawful demand is raised from £ 200 to £ 400; and of course for false statements covered by the Trade Descriptions Act the penalties are up to £ 400 on summary conviction and on conviction on indictment a fine or imprisonment for a term not exceeding two years, or both.

Another minor point of additional strength lies in the civil provision in the first subsection entitling the recovery of any money paid in response to an unlawful demand. One other point worth mentioning lies in subsection (2) where, as in the case of Clause 2, the phrase "demands payment" has been strengthened by the addition of

"asserts a present or prospective right to payment".

This has to be read in conjunction with the proposal to make invoices, which do not contain a disclaimer, count as assertions of a right to payment. It is a fact of course that the technique which has been used by the shady operators in the directory field is to send out invoices relating to unordered entries in the hope, which is only too often justified, that the recipients will regard them as demands for payment and will assume that they relate to a commitment which has already been entered into and will pay up.

I will just refer to one further point of difference. This is insertion in subsection (2) of the words

" without knowing or having reasonable cause to believe that a proper note of agreement has been duly signed ".

This is a justifiable attempt to safeguard the genuine directory publisher from a situation in which he makes a demand in the belief that a proper note of agreement—in other words, a note of agreement which is in conformity with the provisions of subsection (3)—has been signed when in fact, unbeknown to him and contrary to what he had been led to believe, signature never took place. In these circumstances the publisher will have been misled and it would not be right to treat his demand for payment as criminal.

I am satisfied therefore that this is an effective provision which will soon rid us of the practices about which there has been so much complaint throughout the country. I hope the House will accept it as such.

I now turn to the Amendments moved by the hon. Member for Blackpool, South (Mr. Blaker). As far as I can see, Amendment (b) is unnecessary. If the publisher demands payment through the agency of a debt collector or the like, it is still his demand or assertion that is being made, at his direct instigation, and on my reading he is nonetheless liable.

It would be dangerous to insert unnecessary words here, for by doing so we would infer that, at other places in the Bill where we simply referred to a "person" doing such and such a thing, it had a narrower meaning. I hope, therefore, that this Amendment will be withdrawn.

The addition of the words proposed in Amendment (c) is unnecessary. If any of the various particulars required to be given by this subsection are given illegibly, then the subsection will not have been complied with. There will be no "proper" note, and any ensuing demand for payment made without reasonable cause will be an offence. Anything which is not illegible is of course legible: there are no half-way houses, and I am afraid the meaning of "clearly legible" is obscure.

There is also the point that the Amendment makes no stipulation as to the legibility of the amount of the charge for the entry—line 13 of the new Clause 1—and perhaps casts some doubt upon whether the illegibility of that essential particular really matters. But my main point is that the words are unnecessary, and I must therefore ask the House to exclude them.

The hon. Gentleman makes a useful point in Amendment (d). It could well be of some help if these details had to be given in the note of agreement which new Clause 1 would require.

I hope that he will not think that I am being ungracious if I say that I think that the way in which he has framed the Amendment is wrong in two important respects.

In the first place, it must not include the words "firm or company". If one says nothing to the contrary, "person" in a statute includes "firm or company", so the words are not necessary here. But they are not only unnecessary; they are very dangerous, because, if at this one point, we spell out the normal statutory meaning of "person", we automatically imply that wherever else "person" occurs in the Bill it is used in some other and more restricted sense. None of us would want that.

Secondly, if the hon. Member will look at the sub-divisions of subsection (3)(a) of new Clause 1, he will see that they all recognise that the note of agreement is referred to future events—"to be included", "to be offered for sale", and so on. By the same token, we ought to refer here to

"…the person by whom it is to be published ".

I think, moreover, that it would probably be better drafting if this particular element of the requirements were set out in a separately lettered part of the subsection. Everything in (a) is about the directory itself—this new piece of information is about the person publishing it, and, like the reference to the entry in (c), ought therefore logically to be separated.

I do not think we ought to put these words into the Bill in what is so obviously defective a form, but I feel sure that it will be possible to find the right form and to persuade the sponsor of the Bill in the other place to move the appropriate Amendment there. I hope therefore that the hon. Gentleman will agree to withdraw his Amendment, on the understanding that appropriate steps are taken elsewhere to deal with this point.

As for Amendment (e), I agree with the hon. Gentleman that it would be useful if the firm soliciting directory entries had to place on record the minimum number of copies which it was intended to produce. If we adopt this Amendment as it stands, it may well be thought necessary in the other place to add some words so as to make it read:

"… the minimum number of copies of the directory or that issue which are to be -published ".

But, if the House wishes to adopt the Amendment as it stands, recognising that this minor surgery may be required elsewhere, I would not wish to resist it.

I turn finally to Amendment (g). I can understand the hon. Gentleman's desire to make this provision look as daunting as possible, but what he has done is to formulate three abuses which are already covered by offences under the existing criminal law. Duplication of this kind is of course dangerous, because it makes the existing law look narrower than it really is.

The existing laws in question are, as the hon. Gentleman has said, the Trade Descriptions Act and the Theft Act. The Trade Descriptions Act, 1968, covers false or reckless statements about the provision of services, their nature and certain other specified matters relating to the service; and I am advised that the term "service" in the Act covers the publication of entries in a directory. This is an adequate safeguard against false statements made in the note, and I should be very loathe indeed to duplicate it.

It is in fact Section 16 of the Theft Act which, I am advised, should be of application in the case suggested by the hon. Gentleman. It deals with dishonest attempts to obtain a pecuniary advantage by deception and would clearly cover a case where, at the time a publisher approached customers for entries, he had no intention to publish a directory. In cases where failure to publish is not dishonest, there is, I feel, no justification for applying a criminal offence; and the proposed defence here of "reasonable cause" anyway seems in the circumstances unwarrantably vague.

The concept here of something which is

"…capable of being reasonably regarded as a genuine directory "

is again excessively vague. But both the Theft Act and the Trade Descriptions Act would apply to, for example, cases where customers were attracted through the provision of false information about a directory, which, when it was published, turned out to be nothing like a directory at all.

I hope, therefore, that the House will accept that it would be unwise in the extreme to include offences of the kind put forward here, and that it will accordingly reject this Amendment.

The hon. Lady has referred to Section 16 of the Theft Act, which I have before me. As she rightly says, it deals with the person who

"…by any deception dishonestly obtains for himself or another any pecuniary advantage …".

As they stand, those words cover the point with which she has dealt. However, in subsection (2) the cases to which the section applies are limited to three. Can the hon. Lady say under which of those three cases this will fall? I am advised that it would not fall under any of them.

I am advised that it would be caught by Section 16. We have examined this matter carefully, because obviously one does not want any unnecessary duplication. In view of that, I hope that the House will reject this proposal, and perhaps I might study the exact provisions and draw them to the hon. Gentleman's attention later.

I accept some of the criticism which the hon. Member for Blackpool, South (Mr. Blaker) has levelled at the Clause. However, I assure him that it was my intention that it should be stronger than his Clause and, having listened to my hon. Friend, I feel that it is. Certainly I would not have put forward a Clause which did not contain sufficient penalties, either written into it or unwritten, which would not adequately stamp out this practice.

Before the hon. Gentleman sits down —

The hon. Gentleman has exhausted his right to speak. We are on Report. However, he may speak a second time if Mr. Speaker requests the House to give him leave. In the special circumstances of this debate, I request the House to give leave.

I am obliged, Mr. Speaker. I was trying to intervene in the hon. Gentleman's speech. I am grateful for what you have just said.

I am grateful for what the hon. Member for Accrington (Mr. Arthur Davidson) said about the early Amendments which I put down. But I believe that we should look a little further at Amendment (g).

The Parliamentary Secretary referred to Section 16 of the Theft Act. I have it here, and I explained, in an intervention in the hon. Lady's speech, what subsection (1) says. The House may like to be reminded that it says:

" A person who by any deception dishonestly obtains … a pecuniary advantage ".

On the face of it, that is all right. But subsection (2) says:

" The cases in which a pecuniary advantage within the meaning of this section is to be regarded as obtained for a person are cases where "—

and it lists three cases. In other words, nothing which falls outside the three cases which I am about to mention is caught by this section. The cases do not, in my view—I shall be glad to be corrected if I am wrong—include the kind of thing with which we are dealing.

Those cases are:

" (a) any debt or charge for which he makes himself liable … is reduced ".

That clearly does not apply here. That is where a person gets a debt which he owes reduced by some dishonest deception.

The second case is where

" he is allowed to borrow by way of overdraft, or to take out any policy of insurance or annuity contract, or obtains an improvement of the terms on which he is allowed to do so ".

That has nothing to do with what we are now talking about.

The third case is where

" he is given the opportunity to earn remuneration or greater remuneration in an office or employment, or to win money by betting."

I cannot see where this case falls in relation to those three categories.

We are drifting into a Committee debate.

I am loth to trespass upon your kindness, Mr. Speaker. I intervene simply to ask the hon. Gentleman's pardon most sincerely. It is mea culpa, mea culpa. The hon. Gentleman is quite right. I beg his forgiveness. These things happen in the best regulated households. The hon. Gentleman was right in the first place. It is Section 15, not Section 16.

I beg to move, That the Clause be read a Second time.

The purpose of the Clause is to make provision for offences by corporations where responsibility falls on the

" director, manager, secretary or other similar officer of the body corporate ".

The Clause attempts to make sure that when an offence is committed the person running the firm cannot shield behind the inefficiency or dishonesty of his salesmen. One abuse which has happened, as I said earlier, in respect to both Part I, which deals with the provision of unsolicited goods, and the Clause dealing with directory entries, has been that, when a complaint has been made by a consumer, the person running the firm or a responsible person holding office in the firm has said "It is nothing to do with me. We had a dishonest, sharp salesman. He has now gone. We cannot do anything about it."

The new Clause will make sure that a director, secretary, manager or anybody else who has a principal interest in running the firm will be similarly caught by the provisions of the Bill. I am sure that the new Clause will be accepted.

I intervene briefly to explain that, being a simple soul, I always think that words mean what they say. But to members of the legal profession they sometimes something quite different.

The new Clause—I agree with its principles—refers to

" any director, manager, secretary, or other similar officer of the body corporate ".

In my simplicity I did not realise that a manager was, in law, an officer of the company. It may be that he is, but I did not know. Similarly, in my ignorance, I did not know, until the Parliamentary Secretary spoke, that a person was a firm or company. So I am learning by being here during the proceedings on the Bill. I shall be grateful if the hon. Gentleman would clear this us, and also tell me how far up or down this will go.

The Clause says,

" or similar officer of the body corporate ".

Will the liability go down as far as the senior clerk? How far up or down is the restriction to go? In most of the Bill we talk about the sender. It is only now that we have got down to talking about bodies corporate, and I am not clear about who is involved. I am anxious to catch all those concerned, but I am not clear whether a manager is properly so described.

I endorse what was said by the hon. Member for Southend, East (Sir S. McAdden). The Clause is clearly admirable in intent, but I fear that it is not as simple to devise a valid and appropriate Clause as my hon. Friend seems to imagine. As I understand it, there are only two officers whose existence is recognised statutorily under the terms of the Companies Act. One is a director, and the other is a secretary. These persons are criminally liable under various provisions of the Companies Act, subject always to the defence of the absence of mens rea.

There is no such thing as a manager in law in relation to a company. Administratively there may be a manager, just as there may be a person who is the controlling shareholder. Someone might loosely be described as a manager or a controller of a company, but he would have to be stipulated other than in this way. and I do not think that the situation is regularised by the inclusion of the words

" or other similar officer of the body corporate ",

because there is no other officer similar to statutory officers designated in terms of the Companies Act.

The hon. Member for Southend, East is right in saying that we must, in fairness, stipulate how far down this goes. What my hon. Friend is trying to do is to catch anybody who operates fraudulently through the medium of a company. This is wholly acceptable, but my hon. Friend will have to think again about the wording of the Clause with a view to deleting the words "manager" and "or other similar officer", otherwise he will run into considerable difficulty.

It may be that what is needed is something which places responsibility fairly and squarely upon the statutory officers, the company director and secretary, and perhaps another Clause which stipulates that any person with authority to act in regard to these matters might be made liable for culpable acts such as the Clause is intended to catch. I am loth to differ from a fellow member of my profession but, with great respect to my hon. Friend, I must tell him that as it stands the Clause will not do.

One of the hard lessons for any mere woman to learn when she enters the Board of Trade is that in all attempts to put any form of words on the Statute Book one takes ad- vice from lawyers, one arrives at the House, one quotes confidently the advice that one has been given, and then one is instantly trampled to death by other lawyers in the House. I find myself in considerable sympathy with the hon. Member for Southend, East (Sir S. McAdden) who says that he has learned a little in dealing with the Bill. I think that I have learned quite a lot.

I can only tell the House that it was my advice that offences committed by a body corporate, where the responsibility fell on any director or other senior officer of the corporation, would be caught by the wording of the Clause. In view of the remarks of my hon. Friend the Member for Reading (Mr. John Lee), I shall be only too happy to look at this again, but I am advised that there are various Statutes which would deal with the problem he has raised. In Committee the hon. Member for Blackpool, South (Mr. Blaker) included a similar provision, which he later withdrew.

By separating this from the directories Clause we apply it to the Bill as a whole. We thought that this would be advisable, because there is no reason why there should not be individual responsibility for demands and threats regarding payment for unsolicited goods. This is an important matter, and I should not like it to be lost because of an argument about interpretation. I take my hon. Friend's point that this needs to be clarified, but I am advised that it is covered by existing Statutes.

It is bad enough being criticised by one's fellow lawyers. When one is criticised by an unholy alliance of fellow lawyers and distinguished laymen, it is quite terrifying.

I think the House will agree that the Clause is well-intentioned. I accept that there may be some legalistic difficulty about it, and I assure the House that I shall take further advice on the matter. I agree with my hon. Friend the Parliamentary Secretary when she says that it would be a pity to lose the Clause. I am sure that there is nothing in it which cannot be improved to satisfy all the criticisms that have been made.

I beg to move Amendment No. 3, in page 1, line 5, leave out ' paragraph (a) or paragraph (b) of.

This is a paving Amendment for several others which we shall take with it. They are:

This is a drafting Amendment. In view of the changes proposed by Amendments Nos. 7, 14 and 17, paragraphs (a) and (b) are superfluous, and I think that it would be superfluous for me to expand on that.

As the Bill stands, "unsolicited goods" are defined as goods which, first,

" with a view to their being accepted for or in respect of a purchase or hire-purchase transaction, are sent to a person ";

second, are

" received by him other than in the course of any trade or business carried on by him";

third,

" for which no written or verbal order originating or purporting to originate from or on behalf of the person whose name and address appear on the order form for such goods or are given at the time of a verbal order for such goods being made has been given or made."

That is a rather wordy definition, and the purpose of the Amendments Nos. 7, 14 and 17 is to set out in more concise language the intention of the Bill.

Quite apart from the fact that the third element in the definition Clause— which would remove hoax orders from the scope of the Bill and thereby place recipients of all unsolicited goods in a position that the House might describe as one of uncertainty—is unacceptable, the definition itself suffered from the defect of confusing the definition of "unsolicited goods"—that is, goods sent without any prior request—and a specification of the circumstances covered by the first and second elements.

I accept that criticism. The definitions are very confusing as they stand. The words

" that the goods were sent to the recipient with a view to his acquiring them, that the recipients had no reasonable cause to believe that they were sent with a view to their being acquired for the purposes of a trade or business and has neither agreed to acquire nor agreed to return them"

are much simpler, and more adequately represent the intention of the Committee.

I have two brief questions. The first concerns the effect of the first words of the Amendment, which require that in order to fall within Clause 1 the goods must have been sent to the recipient with a view to his acquiring them. The hon. Member said that this group of Amendments was intended to remove from the scope of the Bill hoax orders, with which we had a good deal of trouble in Committee. I welcome any provision that is intended to remove that difficulty, but I should like to know the effect of these Amendments on the cases that were referred to in Committee—cases where the goods were delivered to the wrong address by mistake by the delivery boy, or where a retailer delivered goods in substitution for the goods ordered, in a genuine attempt to help, for example, a milkman who has been asked to deliver three bottles of gold-top milk and has only one such bottle may leave one gold-top and two silver-tops in a genuine effort to be of service. What is the effect of these Amendments on that situation?

I have a later Amendment on the Notice Paper designed to deal with the possibility that anybody who sought payment for the goods in that situation would be committing an offence. If the hon. Member for Accrington (Mr. Arthur Davidson) can clear up this situation for me it may not be necessary for me to move that later Amendment. It is not only a question whether the property passes in the two cases that I have put; it is also a question whether we might inadvertently expose genuine traders to penalties, which I am sure we would not not want to do.

Secondly, I should like to know why Amendment No. 14 contains the words

" not with a view only to his acquiring them for the purposes of a trade or business."

These are drafting Amendments. I hope that the House will bear with me in explaining them because they are complicated and are best taken in easy stages. My task of explaining them is made all the more difficult because we are all used to the definition of "unsolicited goods" set out in Clause 3(1). In fact, that definition suffers from a basic defect. It tries to combine a basic definition of "unsolicited goods"—in other words, goods that are sent without any prior request for them —with a list of the circumstances in which the provisions of the Bill will affect such goods.

What is now proposed is a new basic definition—as proposed in Amendment No. 21—and the allocation of the various relevant circumstances to the operative parts of the Bill, where various other relevant circumstances—for example, the criteria in Clause 1(2)(a) and (b)—are already set out. Some of these circumstances are now changed, and new ones are added.

The first change occurs with the insertion of the words

"with a view to his acquiring them."

Those words are common to all three Amendments and replace the words,

" with a view to their being accepted for or in respect of a purchase or hire-purchase transaction.'

As a matter of drafting the proposed Amendment is simpler and makes the relevant condition easier to understand. The word "acquire" includes buying and obtaining on hire-purchase, and if Amendment No. 21 is accepted it will also include simple hiring.

The second change occurs with the insertion of the words, in Amendment No. 7,

" that the recipient has no reasonable cause to believe that they were sent with a view to their being acquired for the purposes of a trade or business."

Those words replace the present reference to the goods being

" received … other than in the course of a trade or business."

In the first place it is preferable to eliminate the expression

" received … in the course of a business "

because where the goods are unsolicited it is not appropriate to talk of their having been received by the sender in the course of a business.

On a point of order. I apologise to the Minister, but she has said that it is proposed to alter the Clause by a later Amendment—Amendment No. 21. I do not know whether we are in order in discussing that Amendment. What the hon. Lady is saying may be designed to help clarify the situation, and I am sorry to interrupt her speech, but we may be getting into difficult waters if we attempt to discuss Amendment No. 21 before it is reached.

The hon. Member for Southend, East (Mr. McAdden) is quite right. It is really a question of convenience. I have no objection to including Amendment No. 21 in the group that we are discussing.

I have no objection, Mr. Speaker.

In that case, we can add Amendment No. 21 to the group that we are discussing. The hon. Member for Southend, East can rest happy.

I take the hon. Member's point. I was careful to say that "if we accepted" any such Amendment, that would be the effect.

I was saying that the second change is preferable, namely, to eliminate the expression

" received … in the course of a business."

However, the most important reason for the proposed alteration is that under the Bill as it stands the recipient has to know that the sender sent the goods to him to be received other than in the course of a business. In the case where the recipient lives on his business premises, or when the goods are suitable both for domestic and business use, the recipient may not be sure whether the statutory provisions apply to him. Again, the sender may send them not caring whether he buys them for business or domestic purposes, so long as he buys them. The proposed Amendment is intended to make the recipient's position clear from the moment that he receives the goods. Unless it is reasonably clear in the circumstances that the goods must have been sent for him to buy for use in his business, he knows that he can exercise his rights under Clause 1 by sending notice or waiting for four months.

12.30 p.m.

A similar kind of criteria is also imported into Clause 2 by Amendments 14 and 17. But in the case of the criminal offence of demanding payment for goods known to be unsolicited it is necessary to look at the sender's intentions, rather than at the situation as seen by the recipient. The effect is that the sender's liability to the criminal provisions will now depend on his own intentions at the time he sent the goods and not as at present upon how they were received at the other end.

Lastly there is the addition in Amendment No. 7 of the words

" has neither agreed to acquire nor agreed to return them ".

These remedy a defect in the present drafting, which would permit a recipient to induce the sender not to collect the goods by seeming to agree to buy the goods or to send them back, and then at the end of the relevant period to break his word and claim the goods as a gift. I do not think we want to encourage dishonesty of this kind.

It might seem that this is an obscure and unlikely set of circumstances but one thing we have learned in dealing with this Bill is that it is not beyond the ingenuity of man to think up all sorts of ways of circumnavigating quite sensible definitions and laws. I am sorry that I have bored the House with such a long explanation, but I hope that hon. Members will agree that in the new way in which we have set this out, the Bill should be more easily understood and Heaven knows this is what we are all after. More important, it will operate more effectively.

I would not want to leave any hon. Member in an unfair position. We have added Amendment No. 21 to this discussion. I see that the hon. Member for Blackpool, South (Mr. Blaker) has an Amendment to that Amendment suggesting that the word "directory" comes into this set of definitions. I think that he had better say a word about it.

In reference to my Amendment to the proposed Amendment No. 21, in line 4, at end add,

' directory includes a similar compilation consisting primarily of names and addresses of persons, firms or companies '.

This Amendment proposes to add to the amended definition of the Clause a definition or explanation of the meaning of "directory." My Amendment says that the word "directory" includes a similar compilation consisting primarily of names and addresses of persons, firms or companies. It is desirable that there should be an explanation of the meaning of the word in the Measure because I do not think that as things stand it is satisfactory. There may be problems arising in relation to many reputable publications. For example, the annual diary published by commercial concerns which often lists other firms engaged in the same trade or a relevant trade to the business for which the diary has been published. Without some explanation of the scope of the word "directory" there is likely to be confusion.

Now that we are discussing Amendment No. 21 which radically alters the existing state of Clause 3, may I intervene to say that this Amendment if accepted will lead to the early demise of one of my few Parliamentary children. As the hon. Lady knows, this Clause, hopelessly drafted as it is at the moment, was sought to be amended by me in Committee. I am glad to see that it is now being rectified and amended in much briefer language. There is one aspect of drafting omitted from the Amendment and that is the suggestion that we ought to incorporate the words, "or purporting to originate from." It may be said that to introduce words like "purporting" may make things difficult for the parliamentary draftsman, but I am fortified in my argument by seeing that new Clause 2 which he just accepted, moved by the hon. Member for Accrington (Mr. Arthur Davidson) included the words "purporting to". If it is good enough for him, it is good enough for me and I hope that perhaps at another stage of the Bill some consideration can be given to including the words I have suggested, as was intended originally.

Order. Again I must be fair. The hon. Member for Beckenham (Mr. Goodhart) has an Amendment, No. 22, which we were to discuss with Amendment No. 21. Would he like to say a word about that now? He speaks now or forever holds his peace.

I would rather speak on this matter when we come to the question of services.

If the hon. Gentleman can find some other place to talk about it all will be well.

I will simply want to express a lawyer's lament over the use of the word "acquired". It is an addition to our concept of property through a useful but minor piece of legislation and not a practice to be encouraged. As I understand it, a person can either purchase goods, hire them, obtain them on a credit sale basis or have them as bailee for use or non-use as the case may be. To insert the word "acquire" into the Bill when it is obviously a matter of some importance to the operation of the legislation, and to have a definition which says that the word includes "hire" is an unsatisfactory piece of drafting. I do not want to vex the House because I think the Bill is improved by this clutch of Amendments but I do wish we had a little more precision.

rose —

Order. I see that the hon. Gentleman has had second thoughts. Mr. Goodhart.

Perhaps it would be as well if I said something about Amendment 22 now rather than in the debate about services. I am uncertain as to whether the credit card is "goods or services" for the purposes of the Bill. As it seems that unsolicited services are to disappear from the Bill we should have a word about credit cards. Whatever happens to unsolicited services I hope that we will keep unsolicited credit cards within the ambit of the Bill. This is not a particular problem here at present, but we know that many retailing practices follow the fashion set in the United States. In the last four years in America over 100 million credit cards have been distributed, many to people who have not asked for them or made an application. In America this practice is fostered largely by the banks, and the great majority of these 100 million credit cards have been distributed by the banks —although not necessarily to their clients, for it has been estimated that more than one-third of these cards have been sent to people who have no connection with the bank at all and on whom no checking has been carried out. Many credit cards have been sent to the wives and even to the children of clients of the banks and some to infants under one year of age. As the father of seven, I view with some alarm the idea that credit cards could be sent unsolicited to young children who could then run up substantial hills for which, presumably, I should be liable.

I do not wish to stamp out the reputable credit card movement in this country. Indeed, I have two credit cards and I use them from time to time and find them most useful. But the practice of sending credit cards to people who have not asked for them could lead to difficulties and to trouble on the domestic front. The possession of a credit card is an inducement to purchase goods or services in respect of which one might think twice if one had to pay cash. I do not seek in any way to inhibit the orderly expansion of the credit card movement in this country, but the practice of sending credit cards to those who have not asked for them, and in many cases to those whose credit-worthiness has not been checked in any way, should be controlled by the Bill.

I was intrigued by the speech of the hon. Member for Beckenham (Mr. Goodhart), for I was not aware of those problems. Indeed, as other hon. Members said during the course of our debates on the Bill, we are constantly learning something new. I hope that when the hon. Member takes me to dinner at the Savoy, which I am sure is uppermost in his mind, he will use his credit card.

But however much concern he may feel, rightly, about the practice to which he referred, it would be wrong to pass his Amendment. Credit cards are sent free, whereas the Bill is concerned with preventing purchasers who receive unsolicited goods from being charged for them. It does not ban the sending of unsolicited goods. If a credit card company sends one of its cards to someone who does not like it, it is in any case a free gift and he need not use it. While, therefore, I appreciate the motives of the hon. Member's Amendment, I do not think that it would be right to include such a provision in the Bill.

Credit cards are sent entirely free—I am talking about the main bank cards in the United States—but if one does not settle one's bills within 25 days, there is a service charge of 1·5 per cent. per month, which means that they are charging at the rate of 18 per cent. for servicing the bill. It could be quite an expensive free gift.

I presume that the charge would operate only if one used the credit card. If someone were daft enough to use the credit card, the Bill could not be framed in such a way as to protect him.

The hon. Member for Blackpool, South (Mr. Blaker) spoke about directories and wished to amend the Clause to include a similar compilation consisting primarily of the names and addresses of persons, firms and companies. I fully appreciate why he wants to widen the definition of "directory". None of us wishes to see a directory publisher get round the regulations by calling a directory by some other name, such as a trade gazette. I am, however, assured that an elaboration of the word "directory" is unnecessary and that the natural meaning of the word includes similar compilations as described by the hon. Member, as well as directories which could be described as year books. In the circumstances, on the advice which I have received, I am satisfied that the word "directory" will include any other similar compilation and that the words which the hon. Gentleman suggests are unnecessary. In fact, they could do more harm than good, because by inserting them we might unwittingly narrow the scope of the Bill. While sympathetic to the hon. Member's motives, therefore, I feel that I should not accept the Amendment.

Will the hon. Member deal with my suggestion to include" or all purporting to"?

I admire the hon. Member's considerable parliamentary skill. First he attacks the wording of my Clause and then he uses my Clause as an excuse for including other words which he wants included. Having great respect for him, I will look at the point which he made.

I beg to move Amendment No. 4, in page 1, line 6, leave out' has received' and insert:

'after the commencement of this Act receives'.

The House will agree that the Amendment is not only self-explanatory but necessary. As the Bill stands, its effect would to some extent be retrospective, and in my short time in Parliament I have learned that retrospective legislation is not looked upon very kindly by the House.

If these words were not included, the right to treat unsolicited goods as gifts would become available in respect of unsolicited goods received in the past which, during the period of four months from their receipt, had not been repossessed by the sender and in respect of which the recipient had not unreasonably refused to permit the sender repossession. The same right given under the Bill as it stands would become available under subsection (2)(b) in respect of goods received within a period of three months of the Bill coming into force. The recipient, for instance, might have written to the sender asking him to take the goods back, and if he had done this within 30 days, the goods would become the recipient's, even though the Bill had not come into force.

In other words, while the whole purpose of the Bill is to stamp out the sending of unsolicited goods and to penalise those firms which indulge in it, this would be penalising firms for acting in possible contravention of a law which did not exist then. While there is an argument for leaving in the existing words, natural justice and a desire for at least certainty to know when one's legal obligations begin lead me to believe that it is right to insert the words suggested, and I hope that the House will feel the same.

I beg to move Amendment No. 5, in page 1, line 7, leave out from the ' to sender ' in line 9.

With this we are to discuss Amendment No. 9.

The effect of the two Amendments is to delete the present definition of "sender" which is embodied in subsection (1) and to substitute a better definition in the form of an additional subsection (4). The existing definition of "sender" is:

"A person by whom or on whose behalf they were sent".

It is the nature of that other party in relation to whom the recipient of unsolicited goods may, in the circumstances set out in subsection (2), treat them as a gift, but it is conceivable that someone intent on inertia selling could sidestep Clause 1 by assigning to another his rights in the goods which he had sent and that other person could claim title to the goods and the whole point of Clause 1 would be nullified.

Is not this point covered by the general law of agents?

It may or may not be. I do not feel disposed to enter into legalistic discussion at this time. I am satisfied that the words would improve the Bill and make the definition of "sender" much clearer.

I beg to move Amendment No. 6, in page 1, line 10, leave out from ' and ' to end of line 11 and insert:

' any right of the sender to the goods shall be extinguished '.

The purpose of the inclusion of these words is self-explanatory. This is what I would regard as a matter of super-caution. It is to make it clear beyond doubt, if the sender manages to recover the goods, that the recipient has the sender's title to them. I need not elaborate. It makes it clear beyond peradventure that the recipient may keep the goods and treat them as a gift.

I beg to move Amendment No. 10, in page 2, line 9, after who ', insert:

'not having reasonable cause to believe there is a right to payment, '.

With this Amendment we are to discuss No. 15.

I need not go into great detail about the purpose of these Amendments. The words

" not having reasonable cause to believe there is a right to payment "

make the position of the sender and the rights of recipients clearer. Unless hon. Members have any doubts, I can leave it as briefly as that.

I return to a matter which I raised earlier and about which I did not get a clear answer. It concerns the two cases of delivery by mistake to the wrong address and in substitution in a genuine effort to satisfy the customer. I welcome the words so far as they go, but I question whether they remove the possibility that a trader who delivered by mistake to the wrong address, or who delivered some other goods in substitution for those ordered because he could not supply those ordered, would commit an offence if he subsequently demanded payment.

There is a possibility that the person who received the goods would consume them, or use them. In that case, it would not be possible for the trader simply to repossess them. At least, it would not be possible for him to repossess them if the goods had been consumed, and if they had been used he would not want to repossess them, and his only course would be to demand payment. In the circumstances, everybody would agree that the trader should have the right to payment. Would he be entirely safe in demanding payment?

I am afraid that during the time which we have had in which to mull things over since Committee we have found a number of shortcomings in subsection (3) of Clause 2. Our view is that the exemptions which are provided by this subsection from the penal Clauses are too tightly drawn, and in any case subsection (3)(b) deals with a case not covered by the offence anyway, and could therefore cast some doubt on the meaning of

" obtaining payment for unsolicited goods ".

Clearly, it is necessary to protect the sender who asks for payment of goods which he has sent under a hoax order, and this has been done by providing that he must know that the goods are unsolicited before any offence is committed. Again, it is obviously not wrong to demand payment for unsolicited goods when the recipient has decided, as some do, that he would like to buy the goods, although unsolicited, and has entered into a contract. But there could also be cases where the recipient has not actually entered into a contract but the sender may genuinely believe that he has and demand payment accordingly. Thus, the recipient's wife may purport to order the goods for her husband, without actually having his authority to do so. In such a case the recipient might well have reason to believe that he had done so and demand payment. I suppose there could even be cases of hoax acceptance of unsolicited goods. The purpose of these Amendments is to provide a defence in cases where the sender demands payment or threatens to take action in the genuine but mistaken belief that the recipient is contractually bound to pay for the goods.

Clearly, the proposed Amendment also covers the case where payment is demanded in respect of a contract which does exist, because in such a case there is reasonable cause to believe that payment is due. If these Amendments are accepted, therefore, the first part of subsection (3) becomes unnecessary.

It is felt that the second part of subsection (3) as it stands could cause confusion. The offences relate to demanding payment of the price of goods under an alleged contract, or to making threats in order to secure such a payment. The offences do not apply to demands for the return of the goods—that is, to claims in fact for the goods. There is therefore no need to provide a defence for claims for the return of the goods in cases where the recipient has refused to deliver them in circumstances which make the refusal unreasonable. Such claims will not be claims under an alleged contract. It would be much clearer therefore to delete this provision.

In the interests of clarity and of providing a defence which is justified but not available on the present draft of the Bill, I hope the House will accept these two Amendments and the consequent deletion of subsection (3).

Is the hon. Lady saying that in the cases which I mentioned a demand for payment of money would not risk exposing the trader to a penalty?

It is clear that in both cases that the hon. Gentleman postulated the trader would be protected by the defences.

:I beg to move Amendment No. 11, in page 2, line 9, leave out

`in the course of any trade or business '.

We have been wholly non-partisan in our desire to stamp out undesirable practices. I hope that the House will forgive me if I strike a rather partisan note because my intention in the Amendment is to bring trade unions into the Bill.

Listening to our debates, one would imagine that the main practitioners of inertia selling were to be found among companies selling cook books, Christmas cards, printed paintings by handicapped artists, gramophone records, encylcopaedias or even plastic gnomes. But, in fact, the main beneficiaries of inertia selling are members of the Parliamentary Labour Party through the political levy, which is an unsolicited service for many members. This is perhaps the most important and widespread example of the inertia selling of services.

I am full of admiration for the eloquent and able way in which the hon. Member for Accrington (Mr. Arthur Davidson) has piloted the Bill. But he is a beneficiary of this type of inertia selling. I am full of admiration for the way in which the hon. Lady the Parliamentary Secretary has guided our debates. But, through the political levy, she is a beneficiary of inertia selling.

It was the well known letter of cats out of bags, Lord Shawcross, who let this cat out of the bag in 1946 during the Second Reading of the Trade Disputes and Trade Unions Bill, which changed the basis of the political levy from contracting-in to contracting-out. Lord Shawcross, then the Attorney-General, said:

" The truth is, of course—and l confess it quite frankly—where you have any large body of people you come up against a certain degree of human inertia, which prevents certain numbers taking any particular action. They just cannot be bothered filling in a form, whether it is a form to contract in or contract out. They cannot be troubled doing it, they cannot be bothered and they let the thing go."—[OFFICIAL REPORT, 12th February, 1946; Vol. 419. c. 209.]

The force of Lord Shawcross' point soon became apparent because in 1945, the year before the Trade Disputes and Trade Unions Bill was passed, 45 per cent. of members of trade unions affiliated to the Labour Party signed their contracting-in form. In the following year, although the Labour Party was riding higher than it had been before or has been since in the affections of members of the trade union movement, the number of people who paid the political levy increased from 45 to 91 per cent. It would therefore seem that almost half of those who pay the political levy do so purely because of inertia and because of the difficulty of getting the sums of money back, because they are often quite small and it is extremely difficult to get repayment.

I do not expect the hon. Member for Accrington or the hon. Lady the Parliamentary Secretary, in a fit of consistency, to stop the main source of contributions for their political party. But I hope that when a change is made in the matter of contracting-in or contracting-out they will remember how vehement they were about the evils of inertia selling in other sectors.

I am rather saddened by the hon. Gentleman the Member for Beckenham (Mr. Goodhart). Until now I had always had the highest opinion of his intelligence and believed him to be reasonable and well-informed. Frankly, anyone who accepts the views of the noble Lord whom he quoted just now as being a letter of cats out of bags seems to me to be lacking in judgment. The noble Lord occasionally seems to me not so much a letter of cats out of bags as a cat inside the bag himself, and a bad-tempered and rather overwrought and not very pleasant animal at that.

Far too polite!

I think it is rather ingenuous, but are we who have staggered all this way with this Bill to forbid the hon. Gentleman his little bit of fun? It is an interesting thought that possibly the trade unions may be providing a service! I can only say to the hon. Gentleman that I do not believe they are in the way he suggested. I believe they are protecting the interests of the people of this country and that they do so by banding together to keep those interests very much in the forefront of their minds. All I can say to the hon. Gentleman is that, if it is a service, it is a damned good service, which has served this country very well, and not just the individual members of the unions, but the national economy, and I only wish that the hon. Gentleman opposite occasionally could have such clean, helpful and nice donations given to them.

I think the hon. Lady is misinterpreting my hon. Friend, is she not? My hon. Friend was not attacking the trade unions. His remarks were directed to the inertia effect of the levy.

I think there is some doubt whether there is an inertia levy in the way the hon. Gentleman was suggesting. I do not for one moment believe there is. Trade unionists contribute to their unions' funds, and they do so because they know they get jolly good value in return, and could not get better value anywhere else in the world.

If I may just in passing turn to the Amendment, to which the hon. Gentleman's remarks bore astonishingly little connection, I must say that I am totally mystified why it should be limited to subsection (1) of Clause 2. I must say I am thankful, none the less. The abuses with which we are concerned, both the sending of unsolicited goods and the demands of payment for them, are invariably carried on in the case of a trade or business. So is debt collection. If it is not, if it occurs in relation to an isolated attempt to sell by what one must regard as a private individual, then I think it must be so odd and unusual a case that we ought not to bring these criminal provisions automatically to bear upon it. There really is no need for this extension of the offence, and I shudder at the thought of the peculiar and innocent cases we might find we had unexpectedly caught.

I hope the House will not accept the Amendment, and I hope that in future the hon. Gentleman will take as his sources of information more reliable and responsible ones.

I am sure the hon. Gentleman will not be entirely astonished when I say I am not prepared to accept this Amendment. One of my difficulties in knowing whether or not to accept it is in knowing whether he wishes to protect people from abuses in any field and to protect from inertia the millions of Labour voters who are unaware that when they buy Watney's beer they are indirectly contributing to the funds of the Conservative Party, or are unaware that when they go into any of several large department stores in this country and spend money there, that money goes into the funds of the Conservative Party. If I were to have an assurance from the hon. Gentleman that his Amendment would protect the vast bulk of the population I might be prepared o look again at his suggestion.

I beg to move Amendment No. 12, in page 2, line 10, after ' payment ', insert:

'or asserts a present or prospective right to payment,'.

As the Bill stands the Clause relates purely to making demand for payment. The Amendment would add to that assertion of present or prospective right of payment. A similar provision is made in the case of directory entries.

The purpose of the Amendment must be clear to the House. It is to cover the possibility that a sender of unsolicited goods might be able to achieve the same effect upon the recipient of making him believe that he, the recipient, owes money —the same effect as if the recipient received a demand for money—even though the assertion were not to make an actual demand for payment. The sender might say that the document he sent could not be classified as a demand for payment. In it he might say that payment is due at a future date; or he might simply assert that the recipient is under a contract to pay for goods. In such a case it might be held not to be the same as a demand for payment.

I am sure the House will appreciate the Amendment and its purpose and will accept it as strengthening the Bill in the way the House wants.

I think my hon. Friend the Member for Accrington (Mr. Arthur Davidson) wants to go in for a belt and braces and safety pins policy in legislating in this matter. Really, there is no danger of his being embarrassingly exposed in any way. This matter is probably covered by the new provisions in the Theft Act, in Section 21, under the broad and compendious term of blackmail, and in Section 15, to which reference has already been made. Moreover, I think that the criminal law generally deals adequately with this kind of situation, and that any demand of this sort as specified here would be unlawful and would be covered by the criminal law. I do not suggest that my hon. Friend should withdraw the Amendment, but I think that he will, on reflection, probably find that his Amendment is quite unnecessary in this case, laudable though his intention is.

There is always the trouble in legislating for this sort of thing that the harder one tries to define them the more elusive a satisfactory definition seems to become. Sometimes it is best not to go to the trouble. The skill of legal drafting is, I suspect, in knowing when not to define too precisely what one wants. It is the old problem, that when one sees an elephant coming into the room one recognises it but cannot define it. I suspect that the criminal law recognises this element quite adequately without my hon. Friend's well-intentioned Amendment.

I beg to move Amendment No. 13, in page 2, line 11, leave out "or unsolicited services".

With this Amendment we will discuss also Amendment No. 27, in the Title, leave out lines 2 to 5 and insert:

'receiving unsolicited goods or claims in respect of entries in directories '.

The purpose of leaving out "or unsolicited services" is very simple. In my researches and, I think, those of hon. Members who have been concerned with the Bill—there is no abuse in connection with unsolicited services other than that in respect of bogus directories. In these circumstances, with a general desire that the Bill should be neat and tidy and should not contain superfluous provisions, I think it will be generally agreed by the House that "unsolicited services" should be deleted.

Reverting to my nonpartisan role, may I ask the Parliamentary Secretary whether, in the view of the Department, the credit cards to which I referred on an earlier Amendment are a "good" or a "service"?

The hon. Member has caught me napping. Our feeling in the Department was that the abuse of which he spoke, which obviously would be most undesirable if allowed to grow, was not at present such as to require immediate examination. I take the point, however, that, unfortunately, we occasionally follow the bad fashions as well as the good fashions which come to us from across the Atlantic. The recent United States Federal Trade Commission ban was a clear indication of how this trading practice has, in some cases, grown to be a considerable abuse.

I must confess that I have not gone into the correct legal definition of whether a credit card could be taken to be goods or services. I happily assure the hon. Member, however, since he has raised this important point, that if there is evidence in this country of a growing abuse of this sort, we will obviously examine it closely. We have had only one complaint of this nature.

One accepts that if people continually find it easier to use credit cards instead of paying in cash, it may prove to be a difficulty for us in the future. If, however, the hon. Member will forgive me, I would rather define this case when we reach the stage—if it should be reached in the future—of having to introduce the necessary legislation. We do not at present have these difficulties. We shall certainly keep a close eye on developments to make sure that if there is any possibility of getting into considerable trouble with them, we shall bring the matter to the House so that it may be much more fully ventilated.

I beg to move Amendment No. 16, in page 2, line 15, leave out from ' goods ' to end of line 20 and insert:

(a) utters any threat to bring any legal proceedings; or

(b) places or causes to be placed the name of any person on a list of defaulters or debtors or threatens to do so; or

(c) invokes or causes to be invoked any other collection procedure howsoever described or threatens to do so.

This is a simple Amendment. The Bill imposes penalties for threats to take certain steps all of which have been designed to extract payment where payment should not be extracted. It does not, however, impose the penalty where the action which is threatened is taken. This seems to me to be rather curious. There may be a good reason for it.

Perhaps I may explain a little further what I mean. The Bill imposes a penalty for the uttering of

" any threat … to place the name of any person on a list of defaulters or debtors ".

It imposes a penalty for the uttering of

" any threat … to invoke any other collection procedure howsoever described ".

It does not, however, impose a penalty for the actual placing of a person's name on a list of defaulters or debtors or for the actual invoking of any other collection procedure. This seems to me to be surprising.

I should have thought that the carrying out of the steps which had been threatened would be equally as objectionable as the threats themselves. I wonder whether subsection (2) is a deliberate way of expressing matters or whether the promoter of the Bill might be prepared to strengthen the Clause as I suggest.

The hon. Member for Blackpool, South (Mr. Blaker) has been very patient, and on occasions when he has tried to help we have found ourselves in disagreement. I hope that he will be pleased to know that we consider that his Amendment has some interesting arguments, that on a first hasty study we see nothing wrong with his drafting and that we are, therefore, content to see it adopted.

I beg to move Amendment No. 18, in page 2, leave out lines 23 and 24.

I move this Amendment without overwhelming enthusiasm. Its purpose is to delete from subsection (2) the provision for a penalty on conviction on indictment of an unlimited fine or imprisonment for a term not exceeding two years, or both. The penalty would then be limited to a fine not exceeding £ 400 on summary conviction, a similar penalty being provided in the directories Clause.

My reason for moving the deletion of the threat of imprisonment from the Bill is that I am advised that the penalty is out of all proportion to a similar provision which is specifically provided for harassment in the new Administration of Justice Bill which is currently going through the House. In that Bill, the penalty for unlawful harassment is on summary conviction a fine of not more than £ 100 for a first offence or not more than £ 400 for a second or subsequent offence.

I am satisfied—and I think that the House would agree—that the circumstances in which imprisonment would ever be used by the courts would be very rare. I am satisfied also that the fine of £ 400 on summary conviction which could be inflicted in respect of every abuse, every demand for payment or every threat is a considerable one and would certainly act as a deterrent to firms which want to chance their arm and send out demands for payment in respect of unsolicited goods. In those circumstances I cannot in all conscience elaborate my reasons in greater detail and I ask the House to accept the Amendment.

I see the point which the hon. Member is making about the penalties intended to be proposed for harassment, but there are other aspects. The Trade Descriptions Act imposes penalties which are as severe as those contained in lines 23 and 24 which the Amendment seeks to delete. The offences created by the Trade Descriptions Act and the offences created by this Bill are equally severe, and the penalties provided by the Bill should therefore be as severe as those provided under the Trade Descriptions Act. The activities which the Bill seeks to prevent are equally unscrupulous, equally damaging and equally capable of causing great anxiety as the activities which the Trade Descriptions Act prohibits.

It is arguable that the right comparison is not with the harassment of debtors. We want to stop a practice which somewhat resembles the harassment of debtors, and we have adopted the technique of imposing a penalty for demanding payment; that is where the analogy with the harassment of debtors comes in. The evil which we are trying to prevent is equally as offensive as that prohibited by the Trade Descriptions Act, and I am in favour of retaining the penalties, although the hon. Lady may be able to convert me from that view.

I endorse almost entirely the remarks made by the hon. Member for Blackpool, South (Mr. Blaker). My hon. Friend the Member for Accrington (Mr. Arthur Davidson) has a certain amount of logic on his side, but it would have been a little more appropriate if he had brought the penalties in line completely with those in the Administration of Justice Bill, if he is drawing that analogy. What I think is important is subsection (2)(c) which refer to a person who utters a threat—

" to invoke any other collection procedure…"

I interpret that to include people who use, or threaten to use, strong-arm procedure, which can give rise to abuse, possible violence and threats of breach of the peace and there is a case for keeping at least in reserve the penalty of imprisonment.

One could argue that the fine of £ 400 on summary conviction is possibly too high. I am not sure that courts of summary jurisdiction should be given power to impose such heavy penalties without a person having the option of going for trial. I would not have been sorry if my hon. Friend had decided to limit the penalty on summary conviction to £ 200 or even £ 100. At the same time there is a case for keeping in a provision to cover gross abuse, where there is a threat or an element of blackmail or strong-arm methods. The criminal law in general takes a severe view of this behaviour and provides penalties far in excess of these.

There has been a dramatic change in attitudes, partly because of the Criminal Justice Act, 1967, which initiated the concept of the suspended sentence. Courts do not lightly impose prison sentences, even when they have considerable discretion. It is rare nowadays, except for crimes of violence, to impose a penalty of imprisonment on a first offender. Therefore, this penalty would be imposed only in circumstances of the grossest abuse and would not lightly be imposed by a court.

Although I understand my hon. Friend's desire to err on the side of leniency in the imposition of penalties since one's general views on penology tend that way nowadays. I think that he is marginally in error in making this provision. I do not know whether he is minded to think again about this, but admirably intentioned as no doubt the Amendment is, it would detract from rather than add to the value of the Bill.

I regard the practices dealt with in Clause 2 (2) as abhorrent; such threats are thoroughly evil and should be soundly punished; but we may be in danger of losing our sense of proportion if we impose the severe penalty of imprisonment for such offences. Current penal philosophy discourages the use of short terms of imprisonment, and the prison sentences imposed would, therefore, be likely to be relatively long. Imprisonment might be justifiable if the maximum fine were not a sufficient deterrent, but the maximum fine is £ 400 for each individual threat to each individual person. There is also a possible fine of £ 200 for each individual demand for payment.

The new Clause which we discussed this morning provided that directors of companies should be held individually liable where their consent, connivance or neglect is involved in the commission of an offence by the company. For an isolated offence, the maximum fine is thus vastly greater than the sum which the company stood to gain; it could be 100 times as much. If the company has been pursuing a deliberate policy of making demands or threats, it should be possible to bring against it a large number of charges, one for each demand or threat.

Does my hon. Friend think that the courts are likely to impose enormous penalties, and that there would be literally dozens of summonses treated and penalties improved in aggregate? In my experience, that is not the general practice.

I would hesitate to overrule my hon. Friend on matters of law, but as he has said that a particularly gross case might require imprisonment as a punishment, he presumably thinks that the courts would take an extremely serious view of that abuse. I am convinced that if these practices were persisted in they would take the view I have suggested. We are in a sense arguing in subjective terms and are only guessing what a court would do. I feel that a court would not treat this sort of offence lightly, particularly if there was evidence that it had been continuous. We all detest the kind of practice at which the provisions are aimed. We want to see the punishment available to fit the crime and to act as a real deterrent to those who attempt to commit such an offence.

Having thought carefully about this matter, and bearing in mind the need to keep penalties not only appropriate to the offence but properly proportioned as between the many different types of criminal offences, I must tell the House that in the Government's view it is un- necessary and would be quite inappropriate to treat these as offences suitable for proceedings on indictment or to pro- vide for any greater penalty than the Bill now provides on summary conviction.

The hon. Member for Blackpool, South said that the Trade Descriptions Act contained considerable penalties and asked why we could not use that sort of range for dealing with offences under this Bill. That Act deals with a subject which by means of national advertisement could affect millions of people. But the situation envisaged in this Bill will affect one particular person and we are talking about a different scale of problems. In this instance we feel that we have protection of a different sort which, given the circumstances obtaining at the time, is more fitted to the offence.

I realise that hon. Members who rightly feel strongly about this problem would like to see the heaviest possible fines and other means of punishing those who indulge in these practices. I cannot state too strongly my revulsion at the sort of behaviour we have been discussing in this Clause. But I hope the House will think deeply before rejecting this Amendment. We could be in danger of over- playing the situation and not realising the extent of the penalties imposed.

I have listened carefully to what was said by the hon. Member for Blackpool, South, and also by my hon. Friend the Parliamentary Secretary, and I fully accept the reasons why the hon. Gentleman is concerned about the deletion of these penalties. Without any positive assurance that the penalty Clause will be put back in the Bill, I will give an undertaking to the House to discuss the matter with my hon. Friend.

Would the hon. Member be prepared to leave the penalty Clause in the Bill and if on mature reflection he still believes that it should be deleted something could be done in the other place? Personally, I would be much more satisfied with that solution.

I beg to move Amendment No. 23, in page 3, line 10, at end insert:

(2) For the purposes of this Act any invoice or similar document stating the amount of any payment, and not stating as prominently (or more prominently) that no claim is made to the payment, shall be regarded as asserting a right to the payment.

I beg to move Amendment No. 24, in page 3, line 10 at end insert:

(2) Where a person offers to send goods without obligation to the recipient the acceptance of such offer shall not be deemed a request for the purposes of this section.

With this Amendment, it might be convenient to take Amendment No. 26, in line 23 at end insert:

(4) Where a person offers to send goods without obligation to the recipient the acceptance of such offer shall not be deemed a request or order for the purposes of the definition of unsolicited goods contained in subsection (1) of this section.

This Amendment proposes that where a person offers to send goods without obligation to the recipient the acceptance of that offer shall not be deemed a request for the purposes of this Clause.

This arises out of a case which has been brought to my notice and which might have wider implications. It concerns a company in the wine and spirit trade, and, to explain it, perhaps I might read an extract from a letter which I have received. The writer said:

" A lady rang a member of our staff and asked him if he would like to have, without obligation, a survey of the wine and spirit industry He replied that he would, and the enclosed survey was sent with a rather tatty letter telling one that to become a subscribed one need only keep the survey for 14 days … Today an invoice was received …I rang the company concerned and spoke to a woman who was difficult about the whole matter, and, to say the least, unsatisfactory."

The writer explains that the alleged survey enclosed was worthless, that it contained only information which is all available from Companies House about details relating to various companies engaged in the wine and spirit trade, that the invoice which he received after he received the alleged survey asked for a payment of £ 26, and that all the information in the alleged survey could have been obtained for a fee of something like £ 1 by a search in the Companies Registry.

The point is that the sending of the survey was preceded by a telephone call which asked if the recipient would like to receive without obligation a survey of the wine and spirit trade. As the Bill now stands, I believe that this would not be caught. The reply given by the employee of the recipient company saying that the company would like the survey would take it out of the new version of Clause 3 which deals with interpretation. That new version says that "unsolicited" means, in relation to goods sent to any person, that they are sent without any prior request made by him or on his behalf. It is clear in the case that I have cited that there was a request, even if it was only a request stimulated by a telephone call.

It appears to me that the case which has been drawn to my attention may reveal a loophole in this Measure. We are all aware that the people who perpetrate the practices that we want to stop will be alive to any possible loopholes when this Bill becomes law, and we must anticipate any possible loopholes if we can.

I ask myself whether it is possible that inertia selling companies may see the possibility of resorting to the telephone and making it a practice to contact people who are not well versed in the way of business and a knowledge of their rights, who probably are anxious to meet genuine debts and become worried if they are presented with a demand for payment as they have always been brought up to meet their obligations as they become due.

I do not stick rigidly to my choice of words. I am anxious to get across the point that, unless we adopt an Amendment of this kind, it will become the practice of firms engaged in this sort of business to inquire on the telephone whether a recipient would like to have a certain object without obligation.

How can the hon. Gentleman's words be construed in this way? If a firm offers to send goods without obligation and that offer is accepted, there cannot be any right or duty in the way of something owing to the person who makes the offer. He says "without obligation".

The hon. and learned Gentleman has made a point with which I cannot disagree. However, the practice of inertia selling is concerned with cases where people are sent goods without any obligation to pay for them. There may be other obligations, but, under existing law, they are not obliged to pay for the goods. We have been discussing this Bill with a view to protecting people who may be unaware of the full extent of their rights under existing law. If everyone understood his rights, inertia selling would pose no problem. While I see the hon. and learned Gentleman's point, it does not affect my argument.

As I have said, I am not wedded to the wording of my Amendment. We have a genuine problem in the example that I have cited. There is "a request" within the definition Clause of the Bill, and we should look at this problem seriously.

There will always be a somewhat grey area here, and one will never be able to say with complete satisfaction where an obligation begins to fall on the recipient of certain goods.

I am thinking particularly of photography. A number of photographers ask to photograph children without any obligation on their families to buy the pictures. They take photographs and send them to a family. They are either bought or returned. However, it happens frequently that photographs are taken and sent to the family, and the photographer does not call the following day or week. Often the photographs are left for two or three months, and then, suddenly, the photographer calls demanding that they be paid for or returned. If the family cannot find the photograph of little Susan, they are rather stuck. This can be a serious inconvenience to some people who feel that they have to pay whatever the photographer demands.

I can see that there are certain obligations both ways, but in my view it would be desirable to adopt this Amendment and thereby make it plain that the acceptance of an offer to provide a service such as taking photographs does not create any contractual obligation on the recipient of the photographs to buy them.

In my view, hon. Gentlemen opposite are overloading this matter. The words "without obligation" are clear. If I ask someone to send me goods without obligation, that means that I have no obligation with regard to any liability in respect of those goods. How can anyone after that charge them with being liable for goods in any way? I do not think that anything of this kind is necessary.

I appreciate the case which has been put forward, but the answer is very simple. If the person on the telephone said, "I want these goods sent to me without obligation", and anybody tried to say that he was liable for payment, the answer would be that he was not, because they were sent "without obligation".

I appreciate the hon. Gentleman's motive, but I think that he is being far too cautious in regard to this matter.

I am grateful to my hon. and learned Friend because he has stated the position as I understand it.

I presume that an offer to send goods without obligation means an offer to send goods on approval or for free trial. If the goods are sent without waiting to hear whether the recipient wishes to receive them, they will be unsolicited goods anyway. The Amendments deal only with the case in which he does agree that they should be sent.

Once a person who has been offered to be sent goods without obligation accepts such an offer, he clearly has solicited the goods. If he agrees to receive them on that basis, there is no reason why the person who sends the goods, in response to such an acceptance, should be subjected to the special unfavourable regime set up for unsolicited goods. The recipient knows quite well that if he does not want the goods he must send them back in accordance with the terms on which they were sent, and that, as far as his obligation is concerned, will be the end of the matter.

As far as I can see, the obvious result of these Amendments would be to deter legitimate firms from making offers which the public might find reasonably advantageous, because it would be too complicated or even dangerous for them ever to send goods on approval.

If hon. Gentlemen opposite have in mind the possibility that the recipients of such goods without obligation might later find themselves dunned for payment, then I think that situation is basically the same as that in which the parties agree on one price and the sender then demands a higher one. Both are cases in which the sender makes a claim to which he is not entitled under the terms of his contract. In the Bill we are dealing with cases in which goods are sent where there is no contract.

I hope that hon. Gentlemen will accept that it would not be sensible to amend the Bill in the way that they are proposing.

I fully appreciate the reasons why these Amendments have been tabled. Like the hon. Member for Blackpool, South, I am concerned that those who indulge in what can loosely be called "inertia selling" do not try to get round the provisions of the Bill. I agree that they will make skilful and perhaps expensive attempts to find a way round it. I think, however, that my hon. and learned Friend the Member for Stoke Newington and Hackney, North (Mr. Weitzman) is right in saying that hon. Gentlemen opposite are being a little over-worried in this case.

If somebody requests goods or accepts goods on the clear understanding that they are without obligation, his rights are perfectly clear: he is under no obligation to pay for them. I do not think that the Amendment would make the position any clearer than it already is. I fear that if we accepted this kind of Amendment we would be so widening the Bill that it would be getting dangerously like a doorstep-selling Bill. The same criticism could be made about people who come onto the doorstep and say, "Perhaps you would like to keep these encyclopaedias. There is no obligation on you to pay for them." The housewife, being a bit harrassed, takes them in and she may receive a demand for payment. In those circumstances, not only would we be widening the scope of the Bill unecessarily, but we would be underwriting and perhaps confusing what is already the law of contract.

In those circumstances, whilst I have a great deal of sympathy with the views put forward, I do not think that we can possibly accept the Amendment.