Commons Chamber

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House Of Commons

Friday 22 January 1982

The House met at half-past Nine o'clock

Prayers

[MR. SPEAKER in the Chair]

Vanuatu (Gift)

9.35 am

Order. I have received from the Parliament of the Republic of Vanuatu the text of a resolution that was passed unanimously on 17 December last expressing the appreciation and gratitude of that Parliament for the gift of a Speaker's desk set and gavel that was presented by a delegation from this House. The resolution was moved by the Prime Minister and seconded by the Leader of the Opposition of that Parliament. I shall direct that the terms of the resolution be entered upon the Journals of the House.

Petition

Canada (Indian Peoples)

9.36 am

With your permission, Mr. Speaker, I beg to present a humble petition signed by a substantial number of duly appointed Indian chiefs throughout the length and breadth of Canada. These most loyal subjects of the Crown are petitioning this House, in accordance with its ancient traditions, for the redress of grievances which the House is competent to remedy.

Their material allegation are these. Rights granted to their peoples by solemn treaties into which they entered with the Crown have been encroached upon or extinguished casually and without their consent. So also has their aboriginal title to land.

Since our Parliament handed responsibility for Indians and Indian reserves to the Federal Government of Canada by the British North America Act 1867, the Canadian Parliament and Government have time and again been in severe breach of a higher trust which arose from the pledges given by the Crown. There has been blatant discrimination against Indian peoples: in their education and in the preservation of their unique culture; in their poverty and widespread unemployment; in the derisory share of Government funds which they receive. The breach of faith extends also the extinguishment of Indian title to land without compensation. The Canadian courts have been rendered powerless by statutes of the Canadian Parliament to protect these people.

All these material allegations are supported by statements of the Canadian Government or by judgments given by distinguished Canadian judges.

The petition is being presented today in the light of a Bill which is before this House at the request and with the consent of Canada which, if enacted, will once and for all end the United Kingdom Parliament's residual jurisdiction over the affairs of that country. The Canadian resolution which gives rise to this Bill is the result of negotiations between the Federal authorities and provinces within Canada which have taken place over the past 15 months and which without adequate protection for Indian peoples would provide the mechanism for the reduction or extinguishment of Indian and aboriginal rights and interests. At no time during these protracted negotiations have the petitioners been consulted in any real sense, nor has their consent been obtained to the resolution upon which this Bill is founded and which holds the key to the future constitutional position of the Indian peoples of Canada.

Your petitioners therefore appeal to the well established practice of this House to defend the rights of the Indian and other aboriginal peoples and to provide for the protection of their basic human rights—while there is still time.

In view of the importance of the petition and in particular the prayer, I respectfully ask that these be read by the Clerk.

Before I call the Clerk, I must say that my predecessor ruled that when hon. Members are asking that the Clerk should read a long petition to the House it is not customary for them to explain it as well.

read the petition, which was as follows:

To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland assembled:

The humble petition of the Indian Chiefs and Councils of the Indian Tribes and Bands of Canada sheweth as follows:
1. Both before and since 1867 many of the Indian people in Canada had been persuaded into one-sided treaties with the Crown in Canada in consideration of unfulfilled promises and guarantees of protection and derisory compensation. Rights and freedoms, aboriginal, treaty and other conferred rights have been qualified, encroached upon or extinguished without their consent and land claims remain unsettled.
2. Federal responsibility in Canada for Indian affairs is derived from section 91(24) of the British North America Act 1867. It was clearly granted to the Federal authorities by the United Kingdom Parliament to be exercised in a manner consistent with the relationship of trust evidenced by the specific guarantees of protections and promises made and contained in the treaties. In the words of the Canadian Minister of Indian Affairs, now the Minister of Justice, in 1970 "we want to end the blatantly discriminatory provisions of the Indian Act as soon as possible".
3. The British North America Act 1867 itself, later British North America Acts (including the Act of 1930 which statutorily confirmed certain agreements between the Provinces and the Federal Government) and the Statute of Westminster 1931, many provisions of which vitally affected Indian interests and treaties made with Indians, were enacted without the consent of, nor even consultation with, Indian representatives or leaders. Under the said Act of 1867 a series of Indian and related Acts has been enacted in the Canadian Parliament, despite the treaties and without Indian consent or adequate consultation with them. By the admission of Canadian Government Ministers there has been serious discrimination against Indians in Canada. Even in relation to the patriation Bill, now proposed, Indians have been accorded mere observer status although the proposals would vitally affect their interests, after patriation, with or without the subsequent enactment of a new Indian Bill. It is the proposed patriation Bill which holds the key to the future constitutional position of the Indian people of Canada. There has been ample opportunity since the beginning of 1981 for effective safeguards for them to be proposed by the Canadian Government but so far the opportunity has been lost. The position of the Indian people would, of course, be made immeasurably worse if, without their consent and adequate consultation, the patriation proposals of April 1981 affecting them were made worse following agreement between the Canadian Government and Provinces of Canada.
4. The Federal authorities have failed, in the submission of your petitioners, in the discharge of their responsibility of trust towards the Indian people of Canada. For example, Mr. Justice Mahoney in the case of Hamlet of Baker Lake v Minister of Indian Affairs in 1979 impartially commented upon the manner in which the Parliament of Canada enacted the Territorial Lands Act in 1950. He stated with reference to the question of aboriginal rights: "it is, I think, fair to remark the irony implicit in the idea that such a basic right, particularly vested in certain people, then helpless to look after their own interests, over whom Parliament had exclusive legislative competence, was, in 1950 so casually extinguished", and he went on to say "in enacting the Territorial Lands Act, Parliament did not expressly direct its attention to the extinguishment of Aboriginal Title".
Other examples include:
(a) The lack of progress towards the enlargement of, and the actual erosion of, basic Indian Rights under the Indian and related Acts passed by the Parliament of Canada since 1867. For example, the Federal vote having been given to many Indians in 1867 (only to be taken away from them by the Canadian Parliament in 1885), it was then only accorded to them as recently as 1960.
(b) The length and breadth of Federal and ministerial control and discrimination exercised against Indians under the Indian and related Acts, most recently criticized in the case of Sandra Lovelace in the Committee on Human Rights of the United Nations.
(c) The discrimination against Indian education, language, culture and custom.
(d) The poverty of Indians evidenced by the Canadian Government's own Ministry of Indian Affairs publication "Indian conditions"—a survey published in 1980 which shows (inter alia) the 68 per cent. unemployment rate of Indians, that they have a life expectancy 20 years lower than that of the average Canadian, and that over the past 10 to 20 years Federal expenditure for Indians increased by a mere 14 per cent. in real terms compared to 129 per cent. in other Federal social programs.
(e) The transparent failure to pay any real compensation for the acquisition of Indian interests in or in relation to land or resources, or to settle outstanding land claims in relation thereto as admitted in the Canadian Government's same publication of 1980 that "the existence of unsettled Land Claims, unsatisfied Treaty obligations and grievances concerning improper past Administration have been recognized by Government".
5. If the proposals in a patriation Bill, which will govern the future constitutional position and rights of all the people of Canada, were to contain effective safeguards for the Indian people (which at present they do not) then if a request for such safeguards came from or was agreed to by Canada, it would not only be an act of faith in the future of Canada but would also diminish the sense of grievance by the Indian people for past acts of discrimination against them.
6. The proposed legislation would be final and differ from most other enactments granting or confirming independence in that it will be contained within the compass of a Bill itself. In many other instances where the United Kingdom has granted or confirmed independence, specific requirements safeguarding basic human, customary and/or proprietary rights have been included in prerogative orders in Council arising out of a constitutional conference. All interests, including minority interests, have been represented at such a conference preceding the presentation of a Bill to, and the laying of the Order in Council before, Parliament. There has been no such conference and the provisions at present put forward and claimed by the Canadian Government to provide safeguards for the Indian people fall far short of what has been regarded as proper in other cases where minority rights are affected. Particularly if there were a request from Canada itself for amendment of any proposed Bill before or during its passage, the protection for the Indian people could be effectively provided by the United Kingdom Parliament. The dichotomy in the distribution of legislative powers between the Federal and Provincial authorities in the Canadian constitution and the economic and legal consequences of this upon Indian people in Canada enhances the need for impartial and balanced protection for them by the United Kingdom Parliament, no less than the Provinces. This protection would be in line with the moral, legal and political imperatives arising from the treaties and pledges made by or on behalf of the Crown over the past 150 years or more.
7. Having regard to:
(a) The parliamentary conventions which exist for the purpose of securing fair play and the rights of minorities, particularly since Indian people have no direct Indian representation either in the Canadian Parliament or in the United Kingdom Parliament, and they have not been consulted in any real sense over these proposals.
(b) The practice now well established (for good reason) in the United Kingdom, when granting or confirming independence to other countries, of making provision at that time for the protection of basic rights and of minority interests in the appropriate legislation as, for example, when the white minority in Zimbabwe was accorded protection upon independence in 1979 and when the Banabans in 1979 were given specific protection in respect of proprietary and other basic rights.
(c) The inadequate protection proposed to be accorded to the Indian people of Canada under the current patriation proposals including the Charter of Rights such as the provisions under the heading "Equality Rights" and entitled "Affirmative Action Programs" which would empower the passing law discriminating in respect of Indian people.
(d) The intention of the Canadian government, after patriation, to enact a wide-ranging Indian Bill now under consideration by them and which is opposed by Indian people.
(e) The spirit and intent of, and legal requirements of, the treaties and pledges entered into between The Crown and Indian people of Canada and the effect which a Bill to Patriate the Canadian constitution would have upon their future and their basic rights.
(f) The fact that the proposed Bill would, it is apprehended contain provisions and terminology vitally affecting Indian interests upon which the courts in Canada cannot be expected to adjudicate without clear guidance in legislation.
(g) The fact that the Supreme Court of Canada has already ruled that in certain circumstances a request for enactment of patriation proposals would be unconstitutional.
(h) Your petitioner's submission that the proposals as they affect Indian people are also unconstitutional in that they infringe the treaties made between those people and the Crown and are in breach of faith.

Your petitioners therefore humbly pray that:
1. A motion or resolution be passed in your Honourable House, if thought fit, requesting the Canadian Government and Parliament to propose and request amendments to any patriation proposals effectively to cater for the matters referred to in paragraph 2 (a) to (k) below.
2. In order fairly and fully to be in line with parliamentary conventions and the ancient practice of the House which protects the rights of minorities, provision may be made either for rejection of the proposed Bill in the absence of full consideration of that case or, particularly if requested by the Canadian Government and Parliament, for the Bill itself to be amended so that by the provision of entrenched constitutional and administrative machinery under such Bill:
(a) The Indian people of Canada may give their approval to provisions therein which vitally affect their interests, treaties, rights and freedoms.
(b) The Indian people of Canada shall be enabled fully and effectively to participate in, and to be fully and fairly represented in any postpatriation procedures and machinery for constitutional amendment or change in Canada during and after the interim period proposed.
(c) It be made explicit that no changes in the Canadian constitution after patriation, during or after the interim period and whether or not under or by virtue of the amending formula, shall abrogate or derogate from aboriginal rights, freedoms or treaties.
(d) All treaties and pledges by the Crown with and to Indian people are fully observed.
(e) New legal and equitable procedures be provided for the assessment and settlement of terms for payment of fair compensation for the acquisition of Indian interests in and in relation to land, reserves and resources.
(f) Indian rights to and control over resources are fully protected and guaranteed whether they are resources in or on land or offshore.
(g) Indian language, education, culture and customs are protected.
(h) There is proper recognition of local autonomy for Indians.
(i) Such protective provisions for Indians as are contained in existing primary and subordinate legislation and Orders in Council are protected in accordance with the spirit and intent of the enactments in question and Treaties by express reaffirmation or by provisions of equal standing.
(j) Such entrenchment be made applicable to any subsequent revision of the constitution after patriation made by the parliament of Canada.
(k) Clear guidance and criteria to the Canadian courts be given in any such Bill as to the meaning to be given to clauses dealing with aboriginal and Indian rights, treaties and freedoms and their relationship to other clauses, and that clear definitions be provided for the words "Indian", "Inuit" and "Metis" and as to the manner in which such provisions should be interpreted, bearing in mind that thereafter the treaties, it would seem, would be construed as overlaid by the statutory provisions of the patriation Bill.
(l) Full effect be given to decisions of the Judicial or other committee of the Privy Council on questions which may be referred to them in respect of the Indian people of Canada.
3. In default of the Canadian Government and Parliament proposing and requesting amendments to cater for the matters referred to in paragraph 2 (a) to (k) above, a motion or resolution be passed in your Honourable House at the appropriate time, before enactment of any patriation Bill, particularly if requested by the Canadian Government and Parliament:
(a) For an order referring questions as to interpretation of Indian treaties, rights and titles to land and resources and other matters referred to in paragraph 2 above to the Judicial Committee of the Privy Council for an advisory opinion under section 4 of the Judicial Committee Act 1833 and/or
(b) For an order referring questions arising under or by virtue of the treaties and enactments affecting the Indian people of Canada to a committee of the Privy Council (other than the Judicial Committee) for consideration and recommendations to Her Majesty in Council and
(c) That provision be made in any patriation Bill to give effect to the proposals of the said Judicial Committee and/or other committee which provision shall be entrenched in the Canadian constitution before the enactment of such Bill; and, if no such motion or resolution is passed
(d) Provision be made in the Bill for the creation of an independent commission on Indian rights with full power of deliberation and recommendation whose proposals, subject to Indian consent, shall be entrenched in the Canadian constitution.

And as in duty bound your petitioners will ever pray.

To lie upon the Table.

Bill Presented

Coal Industry

supported by Mr. Secretary Younger, Mr. Secretary Edwards, Mr. Leon Brittan, Mr. Hamish Gray, Mr. John Moore and Mr. David Mellor, presented a Bill to increase the limit on the borrowing powers of the National Coal Board; and to make further provision with respect to grants and payments by the Secretary of State in connection with the coal industry: And the same was read the First time; and ordered to be read a Second time upon Monday 25 January and to be printed. [Bill 52]

Orders Of The Day

Supply Of Goods And Services Bill

Order for Second Reading read.

9.53 am

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

This is an important Bill, but I hope at the same time that the House will allow progress to be made on other Bills. I know that my hon. Friend the Member for Cannock (Mr. Roberts) is waiting to move the Second Reading of the Bill that follows.

The Bill is to implement the Law Commission report on the sale of goods. As I was first in the ballot, I realise that I have priority in parliamentary time. I wish also to extend the statutory provision and protection of services as well as goods. The Bill is popular. It has the support of the National Consumer Council, the Consumers Association, the Scottish and Welsh Consumers Councils, the National Federation of Consumer Groups, the citizens advice bureaux, the Institute of Trading Standards Association, and, as far as I can see from my researches, it has the 100 per cent. support of articulate consumers.

I am sure that many people at Westminster are grieved by the death of Rosemary Delbridge. But for that she would happily have been assisting me during the progress of the Bill. I am greatly indebted to the Minister for Consumer Affairs and her staff. She had some doubts about parts of the Bill, but she overcame those doubts. She and her officials have been of great assistance to me in the presentation and preparation of the Bill. I am also obliged to my hon. Friend the Member for Norwood (Mr. Fraser), who has been a persistent aid to the consumer. I am obliged to the Director General of Fair Trading and to the officers of the National Consumer Council, especially to its legal adviser, Mr. Richard Thomas. Although I retain their anonymity, I am obliged to a few distinguished lawyers who have also given me assistance and advice.

I intended the Bill to cover the United Kingdom, but at the moment part I does not apply to Scotland. I have been anxious throughout the consideration of the Bill to retain the greatest consensus that I hope will follow the 1977 precedent and extend part I to Scotland.

The Bill has two objectives. The first is to implement the 1979 report of the Law Commission on the sale of goods. That is an excellent report which has proved acceptable to the Government. It contains a draft Bill. That has been a public economy because it has not been necessary for me to have drafting assistance. It means also that the House is as well informed as I am about that part of the Bill.

The Sale of Goods Act 1893 protects the sale of goods for a money price. The Bill aims to extend that protection to transactions analogous to sale, where goods are supplied but not bought only for money. A host of transactions will gain that protection under the Bill. One example is the trading in of one's car in part exchange for a new car. If we trade in coupons or vouchers or buy goods with a "10p off" voucher—or buy two articles for the price of one—that will have the sale of goods model protection.

Most important, the Bill will cover goods that are provided under work and materials contracts. For instance, if a plumber provides and fits taps, the protection will be the same as though the taps were bought in a shop. That covers many goods. One can think, for example, of a garage servicing and repairing a car and also of domestic appliances such as central heating.

I emphasise that we are not trying to write any new law. We are consolidating and simplifying the law. We wish to make it as simple, accurate and accessible as possible. In doing that—as anyone who has read the report should realise—we are removing doubts and uncertainties. As the Law Commission said, uncertainty is undesirable. It is especially undesirable in relation to consumer goods. Those matters are dealt with in clauses 1 to 5.

The Bill also provides similar statutory protection for hire transactions. I emphasise that we are dealing with hire and not hire purchase. Hire purchase has been dealt with in previous legislation. Hire transactions are outside the provisions of the Sale of Goods Act 1893 because there is no transfer of ownership. It is possession that is transferred.

There are many goods which can be hired, such as cars, television sets and office equipment. In general, these services are satisfactory, but there is some dissatisfaction. The hire of television sets for instance exposes complaints in about 11 per cent. of cases each year, so that, although the services are in general satisfactorily provided, a considerable minority of people have cause for concern.

The Bill provides that the owner shall have the right to hire and that the hirer shall enjoy "quiet possession" throughout the period of hire. The sale of goods model applies to description, merchantable quality, and fitness for the purpose.

This is not new law; it is only a simplification and clarification. It is especially necessary to make statutory provision because there is very little case law and the Law Commission states, some of the cases are inconsistent one with another.

I have dealt with the provisions made in clauses 6 to 10. Clause 11 is the last clause of this part of the Bill. Its intention is to prevent people from wriggling out of the provisions.

The second objective of the Bill is to provide some statutory protection in the case of contracts for service. So far, the Bill has dealt with goods and materials in the case of materials and work contracts. The materials will have the benefit of the sale of goods model, and the service element should not be left without some statutory protection. Some statutory equivalent must be provided. For example, if a plumber fits taps to a bath, the Bill provides that he will do it under the same liability as if the taps were purchased in a shop. Suppose the plumber fits the taps wrongly or, having fitted the taps, he charges the earth for his services. If we are consolidating and making statutory provision, we have to make a comprehensive provision and provide not only for the goods and the materials but for the services.

I have been greatly impressed by the National Consumer Council's report "Service Please" which was published in October. It shows that there has been a vast increase in the provision of services. There has similarly been a large increase in the number of contractors providing such services. Firms have mushroomed and there are many cowboys about. The Office of Fair Trading recorded in 1979–80 that there were about 124, 000 complaints concerning services. Moreover, the inquiry by the National Consumer Council shows that this is only the tip of the iceberg.

Would my right hon. Friend's Bill protect people from cowboy salesmen operating on a door-to-door basis? Would there be some method by which the housewife could distinguish between someone genuinely selling goods and services and someone simply trying to con her?

Steps have been taken by some firms to deal with that aspect, but I think it is a matter which requires to be looked at outside the Bill.

With regard to car repairs and servicing by garages, the Consumers Association, through Motoring Which? says that there is an appalling picture of incompetence, wastefulness and even dishonesty.

With regard to plumbers, the Price Commission, in investigating charges for emergency calls, found that

"the total bill may be as high as an irresponsible plumber thinks he can get away with".

I am suggesting not that all services are unsatisfactory but that there is considerable dissatisfaction. About one in 10 of those using garage services, buying household appliances and taking holidays complain.

The law is uncertain. There is a labyrinth of case law. With regard to charges, we have to go back to the seventeenth century, when there was a case concerning a man who agreed to obtain a pardon for a convicted murderer. Case law of that sort makes life very difficult for the consumer. Consolidation can help to make the law clear, simple and certain.

Clause 13 states that work should be carried out

"with reasonable care and skill".

Clause 14 states that where no time is fixed the work must be carried out "within a reasonable time".

Clause 15 provides for charges being reasonable.

I repeat that, in the main, the Bill is not making new law; it is simply providing a partial clarification of existing law. The only new law is in clause 16 which, dealing with consumer transactions, provides that there will be no exclusion or restriction of liability concerning skill and care—in other words, the exclusion would be invalid in all circumstances. My argument in favour of it is based largely on a consumer brief but I concede at once that, unlike the other provisions, this one is innovatory.

In general, providing statutory protection for service, the Bill makes only a modest and cautious contribution. It makes allowance for the statutory provisions which already exist for some contracts of service. It makes allowance for the continuance of the common law. Except for its specific provision, it does not prejudice or affect the common law. It does not trespass upon the present inquiry being made by the Law Commission, but, however modest the provisions may be, I realise that in regard to particular services it may be claimed that there has been insufficient or inadequate consultation.

I have not received any objections from those concerned with services, but that does not prove that there are no such objections. In regard to some services the Bill may cause unforeseen consequences. I recognise that. That is why the Bill provides, in clause 12, that

"The Secretary of State may by order provide that one or more sections of this part of this Act shall not apply"

to particular services. I have sufficient confidence in the Minister for Consumer Affairs to know that she can use that provision to ensure that the Bill operates equitably.

The Bill is no panacea. I think that it is a useful measure and that it will be of great help to consumers. One has only to think of the small claims proceedings in county courts and of the people—not legally qualified—in citizens advice bureaux who give day-to-day assistance to consumers, or of the activities of the consumer organisations and advisory bodies, to realise that in many areas the Bill should prove effective and helpful. I hope that it will have the confidence of the House.

10.10 am

It may be for the convenience of the House if I intervene at this stage in the debate. I begin by congratulating the right hon. Member for Sunderland, North (Mr. Willey) on obtaining first place in the ballot for Private Members' Bills and on his choice of subject—a choice, as he pointed out, that was originally made by many other right hon. and hon. Members who were not so fortunate as to win such a high place in the ballot. That signifies what a popular choice the subject is. I am particularly glad that my hon. Friend the Member for Tynemouth (Mr. Trotter), who is present today, is a sponsor of the Bill, because he has also provided us with one of our most valuable pieces of consumer protection legislation.

I am sure that hon. Members on both sides of the House will welcome the legislation, which will help all classes of consumers in what is an area of widespread and justifiable dissatisfaction and frustration. I am glad, therefore, on behalf of the Government, to welcome the right hon. Gentleman's initiative, and I am extremely grateful to him for his kind remarks.

As the right hon. Gentleman explained, parts I and III closely follow the draft prepared by the Law Commission and attached to its report No. 95 on implied terms in contracts for the supply of goods.

I should like at this stage to pay tribute to the detailed and painstaking work of the Law Commission, particularly in relation to the supply of goods and services. One of its early reports led to the Supply of Goods (Implied Terms) Act 1973, which put an end to the growing practice under which unscrupulous traders deprived consumers of some of their basic rights when buying goods. A later report—like the first, prepared jointly with the Scottish Law Commission—led to the Unfair Contract Terms Act 1977, with the passage of which I was proud to be associated when in Opposition, and which I hope I can say without immodesty that I was instrumental in strengthening considerably. A third report will be implemented by the Bill now before the House.

The Law Commission has since commenced work on a crucial, detailed study of merchantability, as a result of which I hope that further legislation will follow in due course to make clear the circumstances in which a consumer is entitled to reject goods and the nature of the remedy to which he is entitled in those circumstances.

I cannot put strongly enough my feeling that the outcome and implementation of the report is perhaps the most crucial and fundamental outstanding issue in consumer protection today. The Law Commission has continued and will, I am confident, continue to make a valuable contribution to the development of consumer law. I am sure that the House and, indeed, consumers everywhere will join me in paying tribute to its work on those matters.

The Law Commission Bill sets out and strengthens the existing terms implied by common law in contract for the transfer and hire of goods as opposed to the sale of goods. The effect will be that a consumer who buys a new car and offers his own in part exchange will benefit from broadly the same implied terms as those under the Sale of Goods Act 1979 if he had bought the car for cash. Similarly, a consumer who enters into a contract for work and materials under which contractors supply and build in new kitchen units and equipment will, following the passage of the Bill, benefit from the implied terms that the supplier owns the goods and can therefore transfer them to him, that the goods correspond with their description, are merchantable and are fit for the purpose for which ther are sold. Equally, a person hiring goods will benefit from similar implied terms and also from a term stating that he is entitled to enjoy quiet possession of the goods during the period of the agreement.

Since the report was published, my officials have consulted many organisations whose members would be affected by the draft Bill prepared by the Law Commission. Although there are one or two problems on matters of detail, which can no doubt be discussed in Committee, it is clear that there is widespread support for the Law Commission Bill.

As the right hon. Gentleman eloquently explained, part II has been inspired by the excellent and widely welcomed National Consumer Council report "Service Please" published last October. Indeed, it seemed to be the answer to a cri de coeur from many thousands of consumers throughout the country.

I have for some time been deeply concerned about the problems which my constituents and other consumers face when they receive unsatisfactory services. Their dissatisfaction and frustration are widespread and cover all classes, including both the less articulate poorer consumer and the more articulate middle class consumer. I know that they find it difficult, as we all do, and often impossible to obtain redress for unsatisfactory services—even more so than for unsatisfactory goods. I was therefore delighted that the National Consumer Council decided to study the problem of services. I congratulate it on preparing such a clear and readable report and on quoting so many examples to bring home to the public the difficulties which consumers—indeed, all of us—face in this sector.

The problems are exacerbated by the fact that, understandably, more and more Consumers are turning to the little man round the corner to do cheap building, plumbing and other service jobs, often for cash, many of which turn out to be disastrous, and recourse is often very difficult.

As I said in my education pack for schools—I reiterate it now—consumers should be warned that cheap can often turn out to be very dear in the end. I do not need to say that too often. Those services and others—even those carried out by reputable contractors—are often rendered under emotive circumstances in people's homes at short notice—for example, repairs to burst pipes, blocked toilets and similar household problems affecting people's living conditions. There are many examples and all too much evidence of people being taken for a ride by unscrupulous individuals and firms which insist on a cash deposit and either leave the job half done or unsatisfactorily carried out.

Car maintenance carried out by freelance mechanics is another area of growing concern. Apparently mechanics call on people at home and offer to service their cars cheaply, and then further disaster follows.

It is important to point out that consumers are particularly vulnerable, because they do not have the technical knowledge to know whether the services have been carried out correctly before they have to pay for them.

There are multiple problems concerning dissatisfaction over the provision of a wide variety of services rendered to consumers. Work is often carried out unsatisfactorily, and sometimes the so-called repairs leave the appliance or car concerned in a worse condition than when the repair was embarked upon in the first place. Delays are all too common, both in starting and finishing work. Costs often appear to be unjustifiably high. Complaints range across a wide range of services including, as the right hon. Gentleman and the Law Commission said, professional services.

I am sure that right hon. and hon. Members consider themselves as articulate and as knowledgeable as most people, but I doubt whether any hon. Member has not had experience of the difficulties that I have described. Only yesterday, an eminent medical doctor complained bitterly to me that he had just bought an expensive German ceramic hob which had broken twice. He had been told by the company concerned that he had no recourse, because there was an exclusion clause in the contract and because it had been supplied by an installer of kitchen equipment. These are not matters that affect only the inarticulate consumer.

Part II of the Bill, if it gains the approval of the House, will codify for consumers the quality of service they have a right to expect but—I emphasise this—it will still be of overriding importance, as I have already advised in my education pack, for consumers to obtain detailed specifications in advance, where possible, of services to be carried out. I accept fully that the vast majority of consumers do not have professional advisers to draft satisfactory specifications for them.

I agree that the consumer's position would be strengthened if the existing common law were codified so that those complaining about unsatisfactory goods and services could point to a specific statute instead of needing to argue that they had common law rights stemming from various court cases of which neither the consumer nor the trader often understood the merits.

I therefore warmly welcome the attempts in the Bill to codify the existing common law. Indeed, I should like to see wider codification of the common law in this field—a point to which I shall return later.

I must reiterate, because I do not wish to mislead the House or the public, that even the codification of the common law in the Bill will not make it less important for consumers clearly to agree in advance the precise terms and conditions on which a service can be provided, whenever and wherever that is possible.

All too often people place an order for services without first agreeing the details of the work to be carried out.

Part II of the Bill will cover a very wide range of services, ranging in the consumer field from the provision of complicated legal or financial advice, through household removals, to repairing cars and domestic equipment. Certain services, particularly in the professional field, are already regulated in part by statute. In other cases—such as carriage by air—the liability of those providing the services is affected by international agreements. Clause 12 avoids any conflict between existing statutes and international agreements and the provisions of the Bill. It also ensures that the common law will continue to prevail if in particular circumstances it is more favourable to the consumer than the provisions of the Bill. It may in some cases prove to be so.

It is barely three months since the NCC report was published and only 10 days since the Bill was published. The very considerable number of professions and trades that will be affected have not yet had adequate time to consider its effect in detail. Nor have the Government. It may well therefore be that we shall need to move amendments at a later stage. I hope, however, that the power conferred on my right hon. Friend the Secretary of State to exempt particular types of contract by order will enable us to avoid any unforeseen or unwarrantable burdens being imposed upon particular sectors. My right hon. Friend will use the power very sparingly.

My right hon. Friend might not have needed such a power if there had been more time to discuss the NCC report before a Bill was introduced. We have, however, thanks to the initiative of the right hon. Member for Sunderland, North an opportunity for quick legislation. I am sure that the House will agree that, in this case, an exempting power is a small price to pay for quick legislation.

I should make it clear, however—as the right hon. Gentleman has referred to this—that the Government see considerable difficulty in clause 16, which proposes that traders should not be able to contract out of the implied term that they should exercise reasonable care and skill when providing services. It may seem surprising that anyone should ever be allowed to perform any service unless he was required to exercise reasonable care and skill. I am advised, however, that this clause may have serious commercial implications for a wide range of traders. I shall attempt to explain why that is so.

Clause 16 may well prejudice what is known as the "two-tier service" system operated by many traders—for example, carriers which offer a basic service at a low rate in exchange for a limited liability to compensate their customers for loss or damage of goods, and a premium service at a higher rate with more generous compensation arrangements. The consumer already enjoys a measure of protection in this field as a result of the Unfair Contract Terms Act, which provides that a trader cannot limit his liability to a consumer for damage arising from negligence unless he can show that the exclusion clause is reasonable.

A recent and interesting court case showed that the provision had teeth. A film processing company lost a film containing wedding photographs. It offered to replace the film and relied on the exclusion clause limiting its liability to the cost of a new film only. The customer, however, claimed that the photographs had been intended as a wedding present for a friend and that loss of the film meant that he had to buy another wedding present at considerable cost. He claimed damages equal to the cost of this wedding present.

I think that that was a modest claim. He might have claimed that the whole wedding needed to be restaged. The court found, I am pleased to say, that the exclusion clause was not reasonable, partly, at least, because the processing company did not offer a second-tier service at a higher price offering higher compensation, and it awarded damages to the customer.

I understand that as a result of that court case a number of film processors are now offering two-tier services. The consumer therefore has a choice between cheap processing, with compensation for loss or damage limited to the cost of a replacement film, on the one hand, or more expensive processing under which he can obtain higher compensation for loss or damaged film, on the other hand. He can then decide which service he wishes to buy, although I agree that it is important that it is made extremely clear to the consumer which service he is buying and what compensation is available.

The Post Office provides two-tier services. Does the Minister intend to amend the Bill so that it applies to the Post Office?

The hon. Gentleman and I had a number of exchanges about the inclusion and exclusion of the Post Office over various legislation of this type. We shall have further interesting conversations on the subject. He knows perfectly well where my heart lies on that matter.

During the Committee stage of what is now the Unfair Contract Terms Act, in which that matter came up under fairly emotive circumstances I drew attention, as an example, to some of the unreasonable exclusion clauses that were then included in the contracts for carriage. A steamship company, for example, claimed to be exempt from all liability, for any loss, expenses or damages arising from any death, injury or sickness of any passenger howsoever caused. It also excluded liability for loss or damage to baggage or goods belonging to or travelling with any passenger howsoever caused. As if this were not enough, it sought—unless the laws of the country otherwise required—an absolute limit on its liability of £100 for damage to or loss of property and £5, 000 for death or injury.

I am glad, and proud, to say that such exclusion clauses are seldom seen today. As a result of the amendment proposed by my hon. Friends and I during the Committee stage, both carriers and other purveyors of services can no longer exclude or limit their liability for death or injury to passengers arising from their negligence.

Are not Her Majesty's Government party to limitation contracts, in the case of international carriage by air, which sharply limit the liability of the carrier for death, injury or damage to baggage?

My hon. and learned Friend is right. I said earlier that clause 12 of the Bill, as does the Unfair Contract Terms Act, recognises international agreements. This is another matter.

As a result of that amendment made in Committee, not only carriers by air and sea but other purveyors of services can limit their liability for loss and damage to goods and property through negligence only if they can satisfy the courts that the exclusion clause is reasonable. The burden of proof rests not with the consumer but with the purveyor of the service. That was achieved as a result of our amendment.

Any such exclusion clauses must be subject to a reasonableness test which, as a result of our amendment, must be proved to be reasonable by the carrier or other person or persons providing services, and not by the consumer. I pointed out in Committee that in the case of the outrageous steamship exclusion clauses, consumers would have little difficulty proving them to be unreasonable.

There are many other cases where technical information is not available to consumers, so the responsibility for proving the reasonableness of exclusion clauses must lie with the business concerned.

Would that point apply when a customer has signed a contract? Often, exclusion clauses are overwhelming and ridiculous in their exclusions. If an unsuspecting customer signs something that is palpably ridiculous, will the supplier be held responsible rather than the consumer?

Perhaps the hon. Gentleman will bear with me and allow me to give him a full and accurate answer if I am permitted to intervene later in the debate. Because our amendment was carried in Committee and puts the onus of the burden of proof on the reasonableness test for the purveyor of the service, it has greatly strengthened the position of consumers in relation to exclusion clauses. I am convinced that, at this stage, clause 16 is unnecessary. I have made that clear to the right hon. Member for Sunderland, North.

The existing law provides protection for the consumer, and that does not need strengthening at this stage. No doubt we shall debate that matter in Committee, but it is the firm view of both the Government and myself, and arising from the proceedings on the Unfair Contract Terms Act 1977. However, as I have already said, I accept that wider codification of the existing common law on contracts of services should be undertaken.

I am pleased to announce that my right hon. and learned Friend the Lord Chancellor has agreed to refer the question of services to the Law Commission, which will consider not only whether and how the existing common law should be codified, but how it should be strengthened. It will naturally also consider—

Will there be a Royal Commission report on contracts of services? If so, are we wise to proceed with part II of the Bill?

The Law Commission review will refer to matters presently covered by clause 16 of the Bill, but not necessarily to those matters covered in other parts of part II of the Bill.

I do not wish to delay my right hon. Friend longer than necessary. However, is she aware of the terms of reference to be given to the Royal Commission? With deference to her, I suspect that the Royal Commission will wish to investigate the whole area of contracts of service. Its previous report, published in 1979, clearly showed that it wished to investigate contracts for service. I do not believe that it will be restricted to the exclusion of liability aspect.

I made it clear at the outset of the debate that the Bill has been brought forward at short notice. Had there been a free choice in the matter, we would have preferred to refer to the whole matter to the Law Commission. Thanks to the initiative of the right hon. Member for Sunderland, North, we have an opportunity for quick legislation that will not preclude a review by the Law Commission. In the short term, this legislation will codify the law for consumers. My hon. Friend the Member for Grantham (Mr. Hogg) is right to think that it will not help consumers to obtain redress. Until the Law Commission report is obtained, it will not be easy for consumers to obtain redress, but at least the law will be codified. We feel that that would be of quick benefit to consumers during the inevitably lengthy period needed by the Law Commission to consider the wider issues, especially those covered by clause 16. The terms of reference have not yet been clearly stated.

I appreciate the Minister's remarks about clause 16. I am willing to withdraw clause 16 when we reach Committee stage to allow the Law Commission inquiry to proceed. I am sure that that is the most helpful way to deal with the problem.

I am grateful to the right hon. Gentleman. The Law Commission will naturally consider problems with any types of contract—it will not be prevented from doing that—but my right hon. Friend the Secretary of State may, later, exclude those matters from the provisions of part II of the Bill. The Law Commission can consider them after the Bill has become law. I expect that it will, in due course, issue a working paper seeking the views of interested parties before making final proposals. That is infinitely desirable. That would be the appropriate way to consider proposals to strengthen the present law. I am grateful to the right hon. Member for Sunderland, North for his co-operation, which will be in the long-term interests of consumers.

I hope that the debate will be instructive for consumers in an area where there is a great deal of confusion. I wish to give a simple example of how the Sale of Goods Act 1978, the Unfair Contract Terms Act 1977 and the two parts of the Bill will act together to protect consumers. Let us take the example of a consumer who wishes to get his dining room painted. The first, and cheapest, method is to buy the paint and do it himself. If he asks for matt magnolia paint to paint his dining room the retailer must supply him with merchantable paint with a matt finish and of magnolia colour. He must also supply paint that is suitable for use on a dining room wall. If the retailer fails in any of those respects the consumer is entitled to redress under the Sale of Goods Act 1979.

The second method is to employ a decorator. If the consumer adopts that course he will have the same rights about the merchantability of the paint as in the first case after the Bill is enacted. If the decorator fails to use matt magnolia paint that is fit for dining room walls the consumer will be entitled to look for redress because of part I of the Bill. If the decorator uses good quality paint but makes a bad job of the painting, the consumer will be entitled to seek redress under part II of the Bill on the ground that the decorator has not used reasonable care and skill.

If, however, the decorator spills paint on the dining room table and spoils it, the consumer can choose between making a claim for damages arising from negligence or arguing that the accident showed a lack of care and skill. If in either case the decorator argued that he was not liable because he had said that he would do the job at the owner's risk, the consumer could challenge such an alleged exclusion clause under the Unfair Contract Terms Act 1977, and the decorator would have to show that the exclusion clause was reasonable. Unless he could do so, the consumer could claim damages.

My right hon. Friend has given a clear exposition on the rather confusing background about exclusion clauses. If clause 16 is withdrawn, will it be possible for a painter to get out of the liability for his work?

That would apply only if the decorator could show that his exclusion clauses were reasonable. If they were not reasonable, the court would find against him as happened in the film processing case that I described. That aspect is of great importance to the reasonableness test and the burden of proof.

The right hon. Lady spoke in high praise about the Sale of Goods Act and said that it prevents unscrupulous traders taking valuable consumer rights away in the sale of goods. What is the intellectual justification for maintaining those inalienable rights on the sale of goods, but not on the provision of services?

The hon. Member argued the point when he advanced the validity of using the reasonableness test in exclusion clauses when he took the Unfair Contract Terms Act 1977 through its various stages. If the hon. Gentleman wishes me to do so, I shall quote later reams of his speeches in support of the exclusion clauses subject to the reasonableness test. The only difference is that he wanted the burden of proof to rest with the consumer. We have reversed the burden of proof in order to strengthen the consumer's case so that he would not have to prove the reasonableness. It therefore ill befits the hon. Gentleman to press that point.

My view was that the hon. Gentleman was not being fair to consumers. We have succeeded in strengthening the consumer's case on contracts. I direct the hon. Gentleman to his arguments on exclusion clauses with the reasonableness test in the Unfair Contract Terms Bill. He rather asked for that answer.

Although I do not wish to take up too much time, I shall take the opportunity to express my gratitude to the NCC, the Consumers Association and the Office of Fair Trading, which all met at short notice to discuss the Bill and, particularly, to the NCC for the constructive and co-operative way that it listened to the anxieties expressed by my officials about the original draft clauses attached to its report which have subsequently been redrafted.

I express thanks to my officials who worked extremely hard on the Bill within a short period. We all accept that some amendments may be necessary. In conclusion, I congratulate the right hon. Gentleman on his choice of subject and commend the Bill. As a whole, it represents a further useful step in codifying and strengthening the common law on goods and services. I hope that it will be of particular benefit to the many thousands of sorely deprived consumers.

10.45 am

I congratulate my right hon. Friend the Member for Sunderland, North (Mr. Willey) on introducing the Bill which is long overdue and much needed. I am sure that all hon. Members listened carefully to the Minister's comments and her general welcome to the Bill.

I was interested to hear the right hon. Lady's comments on the protection to be provided to people having houses or rooms painted, because I intend to comment briefly on the sort of abuse I have tried to deal with. I am sure that all hon. Members warmly welcome the right hon. Lady's speech and the clear indication that the Government will give as much help as possible to ensure that the Bill becomes law.

We live in an age of much advertising on television, radio and in the press offering many services to the public. However, time and again, we hear that the protection offered to the consumer for services is not worth the paper that any guarantee is written on. It is often a case of "So what? Something has gone wrong, and you will just have to put up with it."

People pay large sums for work and services, but have no redress against a large or small company or an individual providing the services. People's complaints can be heard by listening to the radio. Credit should be given to radio programmes that highlight the problems.

I often listen to the BBC's "Checkpoint" and much credit should be given to that programme for drawing the public's attention to the problems. In addition, the BBC's television show "That's Life" hosted by Esther Rantzen also highlighted the problems often faced by consumers. The BBC and independent radio stations try to provide services for the consumer in alerting them to the problems they may experience if they do not closely scrutinise contracts.

All constituencies contain citizens advice bureaux. One soon knows, from listening to the problems expressed by people at CAB offices, that the Bill is needed. The clauses relating to services put a clear requirement on those providing services for work to be fully detailed and costed and for a reasonable time to be given for it. There must also be a compulsion for receipts to be given for any work undertaken. The lack of such commitments often leads to many problems when consumers attempt to gain redress when they feel that the work that they have asked to be done—the money often already having been paid—leaves much to be desired. I hope that in Committee that aspect will be considered in detail.

We shall not today slang each other on political issues but in Wandsworth and other areas, because of Government policy on public expenditure cutbacks, consumer protection offices and law centres, where people involved in disputes sought qualified advice have been closed—not because there was no demand, but because the local authority said that it did not have the money and the Government restrictions imposed on expenditure forced them into that position.

Many hon. Members agree that the Minister has a full commitment to benefit consumers and I hope that she will ensure, as soon as possible, that facilities and moneys are made available so that those advice services can be reopened. From the comments made to me, I have no doubt that they provide a worthwhile and appreciated service in many localities. I hope that that aspect will be considered.

The hon. Member for Hornchurch (Mr. Squire) received much publicity last week for the problems that many of his constituents faced as a result of burst pipes caused by the severe weather conditions. They suffered enormous abuse from individuals or companies that offered a 24-hour service, but only at enormous cost. I am sure that many hon. Members know of similar cases.

Where can people get reliable and reasonably priced services in an emergency? Many of us are left at the mercy of the individuals or companies that we can find as quickly as possible. I should like local authorities to keep a list of approved contractors in the locality so that local people would know which decorators, roofers and so on had guaranteed the service that they give.

Local authorities would not have to spend enormous sums in advertising the services. I am sure that many companies would willingly pay the small cost involved and it would give local people the assurance that companies on the approved list had guaranteed to the local authority that they would provide first-class services at a reasonable cost. That would be welcomed by many of our constituents who have suffered great abuse from some of the people they have turned to.

The Minister mentioned the protection that the Bill will give to a person having a room painted in his house. We could all quote cases of abuse, but I shall quote only two as examples of why the Bill is necessary and why I welcome the contributions of the Minister and my right hon. Friend the Member for Sunderland, North.

The first case concerns an elderly gentleman in my constituency who was approached by someone working on a roof across the road and asked "Do you know that your roof is in a bad state?" The old fellow said "No, I had no idea." The roofer went up on to the roof and the poor old gentleman paid £400 for what turned out to be one hour's work. He could not check what work was done and he had no redress.

The other abuse involved an elderly lady who had the outside of her house painted. When she asked the workmen whether they would put on an undercoat she was told "No. We do not put on undercoats now. We mix the undercoat with the gloss and put them on together. That is the new system." We would have questioned that, but, because of the modern developments that we hear about every day, many people would think that that was a new development.

The sad aspect of both these cases is that there was no redress to those elderly people who paid what to them were large sums. Therefore, I welcome the provisions for the protection of our constituents.

Obviously, legal points will have to be considered in Committee and I am sure that hon. Members with legal experience will be able to formulate what should be in the Bill, but I hope that it will go through Committee quickly and will become law as soon as possible.

The Bill will benefit all those whom we seek to represent. We discuss important issues in the House, but many of them are far removed from the day-to-day problems that confront our constituents. The Bill is of interest to many of them and the publicity that it will receive will quickly make them aware of the safeguards that it contains. I warmly congratulate my right hon. Friend on introducing the Bill and the Minister on confirming that the Government will support it.

10.56 am

I also congratulate the right hon. Member for Sunderland, North (Mr. Willey), both on his luck in coming first in the ballot and on his wisdom in the choice of subject. The right hon. Gentleman and I tend to agree on many matters, especially those affecting shipbuilding, and it is good to be able to support him. I was happy to lend my name to the Bill, which is a worthy cause.

The Sale of Goods Act 1893 was the bible on the subject when I was an accounting student. We did not have to study it as closely as did lawyers, but we had to read it. The Act is an old measure, and the law relating to the sale of goods goes back into history. It is important that there should be clarity and certainty in this area of the law, especially where consumers are concerned. Businesses are better able to look after their own interests.

Reading "Chalmers", the standard textbook on the subject, last night, I was struck by the fact that there are more than 70 pages of cases referred to—more than 2, 000 cases on the subject. Any contract not covered by the specifics of statute law would have case law applied to it, but the law is a jungle and many decisions are difficult to follow and sometimes illogical and contradictory. That makes it difficult for someone to go to law on the basis of general contract law rather than a specific Act. I am sure that the right hon. Member for Sunderland, North is wise to try to codify the law.

I was interested to see that there have been 18 editions of "Chalmers" going back to 1893. The first 10 editions, which were published in the 30 years after 1893, were all penned by the draftsman of the 1893 Act. I know that we shall be sad to say goodbye to the right hon. Gentleman at the next election and I do not know what he has in mind for the next 30 years, but perhaps he will have a career in drafting works on the Bill. I wish him every success!

There are two main deficiencies in the present statute law. The first is that the Sale of Goods Act does not apply unless a contract is one for a money consideration. Anything with an element of barter or hire in it is excluded. We should point out that when we are talking about hire we are not talking of hire purchase but of what the consumer thinks of as rental.

There are two ways in which consumers can acquire objects by hire. One is by a hire purchase agreement whereby at the end of the agreement the consumer has the right to buy the object, usually for a small sum. The other is by rental or lease agreement, and I understand that the Bill seeks to bring in rental agreements, which are not at present covered by the Sale of Goods Act. Moreover, the Act does not apply to services.

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

Before I call the Minister to make his statement, I remind the House that we have already lost 20 minutes of private Members' time due to the long petition that was presented this morning, so I do not propose to allow much time on the statement.

St George's Hospital

With permission, Mr. Speaker, I should like to make a statement to the House about the Government's decision to honour the pre-emption clause on part of the old St. George's hospital site in London.

In summary, the nature of the land holding is that half the St. George's site is vested freehold in the Secretary of State for Social Services. Another third, together with the medical school portion—representing a sixth—are held freehold subject to certain provisions in the conveyance restricting the use that can be made of the site to hospital and medical school and requiring that, if the use ceases, an offer back—that is, a pre-emption right—must first be made to the Grosvenor Estates from which the site was originally acquired in 1767 and held since at a virtual peppercorn before it can otherwise be disposed of.

My right hon. Friend the Secretary of State is convinced that there is no further Health Service requirement for the site.

As I said in my written answer to my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) yesterday, we have studied carefully the legal advice available to us and are certain that there is no other course of action open to us.

s has been made clear on more than one occasion, the proceeds of the Government's share of the development will be an addition to the capital resources of the National Health Service. My right hon. Friend has therefore concluded that the best course of action is to dispose of the site for the best commercial price which can be obtained—within the restrictions imposed by the covenant.

That was a most extraordinary statement. I had hoped that the Minister intended to clarify exactly what is happening to the St. George's hospital site. Instead, he has given the House less information than was contained in his written answer yesterday.

I have a number of questions to put to the Minister. First, he said that the Government had no intention to contest the right of Grosvenor Estates to buy back the freehold of part of the former site at the price originally paid. Is he suggesting that the price will be that at which the site was acquired in 1767?

Secondly, what estimate has the Under-Secretary received of how much the site will be worth now that it has been given planning permission? Is it not true that the site, of which the Department holds more than half, will be worth millions, being in the centre of one of the largest and most lucrative commercial development areas in any capital city? If that is so, why is the Minister not prepared to go to court? Why did he say

"even if the application were to succeed, it could only be on the basis that compensation would have to be paid commensurate with the rights so extinguished."?—[Official Report, 21 January 1981; Vol. 16, c. 167.]

Is not this Government of business men prepared to accept that it is holding a most valuable asset that could be used for the nation either in the National Health Service—I notice that the Minister has not consulted the new district health authorities which are soon to come into operation—or in other Departments, but is prepared to hand back one of the richest estates in Britain an absolutely priceless asset, apparently without so much as a murmur in defence of the national interest?

The hon. Lady's first question showed clearly her total failure to understand the situation. My hon. Friend the Minister for Health made the situation crystal clear in the House. Grosvenor Estates has conveyed for a virtual peppercorn the section of the site which we are discussing. We have taken the highest possible legal advice. The Government are prepared, first, to accept that and, secondly, being a Government of honour we do not propose to try to find a back door to avoid doing the correct and honourable thing.

I do not propose to make an estimate of profits. If the hon. Lady understood anything about commerce, she would know that one does not reveal one's hand before the negotiations have even started. The hon. Lady fails to comprehend what she was told by my hon. Friend. He said that when planning permission had been obtained—and at the moment the Westminster city council has given outline planning permission in principle—when the whole planning issue is settled and we know the maximum development value we shall start negotiating, bearing in mind our substantial interest in the balance of the site. To do anything else would be sheer stupidity, and the Government are not prepared to behave like that.

Leaving aside the fact that Grosvenor Estates is involved—which tends to make the matter emotive, particularly among the Opposition—does the Minister agree that it is proposed that a substantial amount of capital should be released and redeployed within the Health Service. Does he agree that, while the present impasse continues, that money will continue to be locked up?

My hon. Friend is right. There will be additional resources for the National Health Service. So long as we are doing nothing, we are spending £100, 000 a year on security to look after an empty, unwanted building.

Will the Minister renew the campaign that was launched to save the hospital from closure? Is he convinced that all the people who advised the Health Service that the hospital should be closed were aware of the covenants involved in the possible sale of the hospital?

The answer to the first question is "No". The answer to the second is that I cannot tell what was in other people's minds.

Does the Minister accept that, apart from the financing of the site, a great deal of money for St. George's hospital was provided by private individuals and charitable causes? When he achieves the best commercial price, will he consider giving back to those charities and private individuals some of the money which he will realise from the sale?

The hon. Gentleman has made that suggestion before. The Government wish to examine it without commitment. Without seeing the exact details it would be wrong to make a commitment. Since Grosvenor Estates let the nation and the Health Service the site at a virtual peppercorn for 200 years, the slurs cast on the organisation can be seen in their true light as being based on envy, jealousy and malice.

I am glad that my hon. Friend has expressed the Government's gratitude to Grosvenor Estates for allowing free use of the land for so long. When negotiations arising out of the planning permission take place, will my hon. Friend try to ensure that any historic building value or historic building content of the site is taken into account? Is he aware that often such projects are held up for many years as a result of an historic building content and therefore the best intentions can be frustrated for a long time? Sometimes the value that could be attributed to the site is less than was originally expected.

I am grateful to my hon. Friend. The issue concerns Governments of both parties. The proposals which have received outline planning approval in principle include in particular something that will restore the original superb Wilkins building—a listed building—to its original proportions. That hurdle, which often arises rather late, has been overcome at an early stage.

rose—

Order. I propose to call the three hon. Members who have been rising to put questions.

Will the Minister confirm that what he says means that we are talking not simply about part of the site, as he insisted a few moments ago, but the whole of it? Does the outline planning permission, which I believe has been obtained, refer to reconstruction developments or modification of the existing building? Can he give the square footage that is now available? Have the Government, in their financial interest, been in touch with prospective developers, buyers or tenants of the site of which they are part owners?

The site has three components. The first is in the freehold ownership of the Secretary of State. The second is the subject of the pre-emption. The third is occupied by the medical school and is subject to the indentical pre-emption clause. What has been done is to examine the site as a whole. It would be almost impossible to carry out a proper scheme which demolished part of the Wilkins faç ade—

The facade?

—the whole Wilkins site. That runs across both sections.

My answer to the hon. Gentleman's other point is that the proposals, if they receive final approval in detail and then go ahead, would involve both reconstruction and new building. Reverting to what was said by my hon. Friend the Member for Ilford, South (Mr. Thorne), the important point is that the building is in the centre of London and has the historic implication of the Wilkins and grade 2 listing. That has been taken care of. I cannot give offhand the exact square footage, but I will write to the hon. Gentleman with that detailed information.

And the other point?

indicated assent.

The principal beneficiary of the Grosvenor Estates trust is, I think, a young man who is probably the richest of the hon. Gentleman's parliamentary colleagues in another place. Will this sudden accrual of further wealth to him be subject to tax—tax that could well be put to profitable use in the Health Service?

I am sure that the hon. Gentleman, who has been an hon. Member longer than I, knows that he must address that question to my right hon. and learned Friend the Chancellor of the Exchequer.

May I assure the hon. Gentleman that some of us are not envious or jealous of or malicious towards the Grosvenor Estates but simply wish that public assets which have been used for a long time for that purpose shall be devoted to public purposes rather than restricted to private purposes? Will he undertake that, when this transaction is completed, he will make a statement to the House making clear what financial advantages have accrued to the Grosvenor Estates as a result of this transaction?

I assure the hon. Gentleman that my allegations of malice were addressed to the hon. Member for Crewe (Mrs. Dunwoody), who attacked the Grosvenor Estates. When the transaction is completed, the Government will wish to make known all the facts available to show the benefit to the taxpayer and the National Health Service. It would not be our business to disclose any advantage to a private individual. The manner of disclosure must be a matter for my right hon. Friend the Leader of the House, but the facts will be made available.

I believe—I speak from memory—that "Erskine May" states that it is wrong to impute malice to any hon. Member. The English language is rich. Other words can be found to convey feelings.

If I was wrong, I withdraw the word unreservedly, particularly as I had a Welsh father.

I am very much obliged—and I congratulate the hon. Gentleman.

Supply Of Goods And Services

Question again proposed, That the Bill be now read a Second time.

11.15 am

I turn now to part II of the Bill, which brings within the cover of the standard conditions and requirements of contracts the service side of consumer affairs. I have been fascinated to discover the number of complaints made to the Office of Fair Trading. It appears to be about 500 for every working day. That is a substantial figure. There were 12, 715 complaints in a year related to entertainment and accommodation, 8, 060 complaints about holidays and 8, 093 complaints about cleaning. The type of cleaning is not specified. One does not know whether those complaints related to the lady who cleans the floor or the firm which cleans a lady's dress. An enormous number of people are dissatisfied with services that they receive covering a wide range of subjects.

The right hon. Member for Sunderland, North described how one in 10 motorists are dissatisfied with the quality of work, nineteen per cent. of people are apparently dissatisfied with gas cooker repairs, 12 per cent. of people dissatisfied about launderettes and 8 per cent. about laundries. I felt that I should be included. I notice that my shirts seem to be shrinking around my neck. At first, I attributed that to personal problems. However, when my shirts also started to shrink in the sleeves, I began to think that I was perhaps a dissatisfied customer. Whatever may be happening to my neck I do not believe that I am getting longer in the arm.

Most people at times have reason to complain about the services that they receive. Twenty one per cent. believed that garages charged too much for servicing and repairs. That has been my personal opinion ever since I owned my first car many years ago. Hon. Members cannot expect a sudden and dramatic fall in the number of complaints nor indeed a sudden and dramatic rise in the number of court cases as a result of the Bill. One can imagine lawyers doing well out of the Bill until one reads that there is a large number of people who are also dissatisfied with lawyers. Serious dissatisfaction exists among consumers. It is almost a subject that warrants a separate debate.

The problems will still exist. Someone has to establish what reasonableness is. The Bill introduces a requirement that there should be reasonableness of quality, of price, and of speed of performance. I should like to add my tribute to the work done by the Consumers Association on behalf of consumers and for its efforts as the driving force behind the origin of the Bill. One of the categories listed by the association in an excellent supporting paper as being covered by the Bill is, however, that of barber. My mind turns to the speed of a barber. How speedy should a barber be? I have suffered, like other people, from barbers who have talked all morning when I wished that they would complete the cutting of my hair. I do not know whether I could quote the contents of the right hon. Gentleman's Bill when I visit the barber. I might carry a copy in my pocket next time. There will be disputes over what is reasonable, in terms of quality perhaps more than anything else.

The Bill will draw public attention to the fact that people have rights, that they should not take matters lying down and that they should get on their high horse, argue back and threaten that they will not simply accept bad service and excessive charging. I hope that we may see some raising of standards as a result of public attention being drawn to the Bill. Where people adopt a "couldn't care less" attitude now, it may be that they will not be able to get away so easily in future with the bad service that they provide.

There will still be uncertainty about what is "reasonable". I cannot say that I read all 2, 000 cases last night, but I read a couple of them. There was one where a second-hand Jaguar car was sold for £950 on the basis that it might need a repair to its clutch costing £25. In fact, a more serious repair was required necessitating the spending of £45. The court held that the car was reasonably fit, and the dissatisfied buyer did not succeed. But in another case, again, as it happens, involving a Jaguar car, the vehicle was sold as being in excellent condition. Incidentally, the case went to the Court of Appeal, so considerable legal costs must have been incurred. The car was held not to be in a reasonable condition because, after 2, 300 miles, the engine broke up completely.

It is a fact of life that we shall never achieve the certainty that we would like in the argument about what is "reasonable". But if the law is codified and simplicity is brought into it, with attention being drawn to it, the result will be advantageous to the consumer.

It is particularly important that it will be possible to deal with those who set out deliberately to fleece elderly people. I am sure that all hon. Members have been distressed by the stories of knaves who go to an old person's home and suggest cutting the grass in their gardens. The elderly householder agrees, 30 minutes is spent cutting the grass, and the old person is told that it will cost £100. At present, as I understand it, a householder would find it very difficult to get redress. No price is fixed at the start, and advantage is taken of the age of the person concerned who is told it will cost £100 in cash. Under this legislation, it will be possible—

I am sure that my hon. Friend does not want to attach to the Bill a significance that it does not have. The part of the Bill to which he is referring is designed simply and solely to clarify the common law as it exists. All that the Bill provides is that, if the contract is silent about the price, the price should be reasonable. That is precisely the present position. There is no change at all save that, if the Bill is passed, the law will become statutory rather than common law.

I accept that entirely. However, I believe that there should now be wide media coverage about this matter in the light of the Bill. It is much simpler to tell an old person that the Willey Act is now on the statute book saying that an elderly householder does not have to pay and that he can tell the individual demanding the money to go away and leave him in peace. The law will be made concrete and definite, and it is likely to be much more effective than merely saying that Lord Justice so-and-so in the case of so-and-so ruled such-and-such. The law will be made specific, and it is important for the media to give wide coverage to this aspect of it. I hope that news of it goes out on the wireless and that the right hon. Member for Sunderland, North is invited to go on to the "Today" programme to get himself the necessary coverage so that old people listening in their homes may learn of their rights under the Bill. Those rights may have existed before, but now they will be more certain and more definite. Elderly people will have more confidence in their dealings with rascals of the type that I have described.

I comment on the need for consultation. The Consumer Safety Act, which I steered through the House in 1978, was an eye-opener to me. The hon. Member for Norwood (Mr. Fraser) was the Minister responsible at the time, and his Department was good enough to circulate 300 bodies that could be interested in consumer safety. I remember the wise gentleman in the Department with whom I worked telling me not to be too optimistic about the answers. He was right, because the majority had no views while, as he predicted, some of the views that came in arrived after the Act received the Royal Assent. Getting the views of a large number of bodies is a slow business. Many amendments had to be made to my Bill. But in that year I was lucky enough to be a number of places down in the list. What is more, the first two Bills in the list were highly contentious mad contained a great deal of political content. As a result, I had about three months to consider the sensible recommendations and suggestions made to me. that enabled a considerable number of amendments to be made, and the Bill was greatly improved as a result.

The right hon. Member for Sunderland, North is fortunate to have been first out of the hat. However, his good fortune means that his Bill will be the first one into Committee, with the result that there will not be very much time for consultation. I should like to know the views of the Law Society and the CBI. I mention those two bodies because they were most helpful to me when I was promoting my own Bill.

There are two specific matters to which I wish to refer before concluding my remarks. The first concerns finance leasing. The right hon. Member for Sunderland, North tells me that he has been contacted by the body representing financial lessors. As I understand it, the finance houses provide the money but are not expert in the goods involved. The lessee—the user—selects goods from the seller but has not the capital with which to buy them. He goes to the finance house, which provides the capital, buys the goods and leases them to the user.

As the Bill is drafted, that finance house will acquire a liability for the reasonableness of the goods.

No. The position is quite clear under the Bill. The finance house will be liable if the goods are not of merchantable quality. But, save in the rarest of cases, it will not be liable if the goods are not reasonably fit for a given purpose. This is a criticism of the Bill and one that I propose to amplify if I catch your eye, Mr. Deputy Speaker.

I am grateful to my hon. Friend. I respect his wisdom and knowledge of the law. I am a humble accountant struggling to understand these confusing provisions. I have found them confusing ever since my student days, but I believe that the right hon. Member for Sunderland, North has done a great deal better than some of the draftsmen. I can understand nearly all of his Bill, but I have no doubt that we shall discuss this provision at length in Committee.

There is a worry in the minds of the financial lessors that they could have an unfair liability imposed on them. If what they say is right, in my view they cannot be expected to have a great deal of knowledge about all the different types of goods supplied in this way. At a time of recession especially, these people fulfil a useful purpose because they provide capital goods that hard-pressed firms cannot find the funds to finance by outright purchase.

The second specific aspect on which I comment is that of maritime commerce. Different forms of contract have been developed in this very complex and skilled business of maritime commerce. Britain is pre-eminent in it, and it goes back a long way in our history. These specialist forms of contract have been developed at arm's length, bearing in mind the financial impact on both sides when contracts are drawn up. I am told that an important aspect of them is the consequence for insurance arrangements on both sides in this very specialist type of commerce. It is a well-established system, and those involved in it say that there is no pressure for change. I should like to see the Bill amended to exclude contracts of maritime commerce.

It could be argued that the Bill does not prevent exclusion clauses if a contract is not dealing with consumers. It is this aspect of the Bill that I find difficult to follow. I do not believe that it is the fault of the right hon. Member for Sunderland, North. It is because he has had to refer to other legislation, which always brings in unavoidable complexities. One could also argue that under clause 12(4) the Secretary of State is given the power to exclude by satutory instrument some types of contract of service.

The maritime world is an important part of our commerce. It is interesting to see that there is a precedent for exclusion. In the Unfair Contract Terms Act in schedule 1(2), an exception is made for certain maritime contracts. Therefore, that point was considered originally when the House was looking at the sale of goods and bringing in similar provisions. Under that paragraph of the schedule the following are excluded:

"(a) any contract of marine salvage or towage:
(b) any charterparty of a ship or hovercraft; and
(c) any contract for the carriage of goods by ship or hovercraft"

There is however also a proviso that there shall not be such an exclusion if the user is a consumer. Therefore, if one were taking passage on a steamer to the Outer Isles, one could not have exclusion imposed on one. However, business people chartering a ship or making a business contract would have the exclusion. It would set many minds at rest if a similar specific exclusion could be brought into the Bill for maritime contracts. I am not wholly certain what the consequences would be if clause 16 were omitted. I humbly give way to those who understand the complexities of legal drafting better than I do. If section 16 is excluded, the exclusion clause will surely not apply to the services part of the Bill. I do not see any reason why we should not bring in the exclusion clause to the services part of the Bill. I should be happy to leave it in.

That is something that we must consider. We have provided for exclusion in the first part of the Bill, but we must look at the second part.

If clause 16 is omitted, it does not mean that there is no exclusion provision. There would be the ordinary provision already in the Unfair Contract Terms Act. What the right hon. Member for Sunderland, North (Mr. Willey) is proposing is an absolute exclusion clause, which is another matter.

That is one of the doubts in my mind. I do not know why clause 16 was included if it was not needed. It must have a consequence, or it would not have been put there in the first place. I am not sufficiently au fait with the Unfair Contract Terms Act to know whether we shall accept the deletion of clause 16. We shall have to consider that.

I believe that the Bill is a worthy endeavour by the right hon. Member for Sunderland, North. I am delighted that there is no cost to the public purse. I was assured that my Consumer Safety Act was at a minimum cost and I think that that is true. This Private Member's Bill with no cost to the public purse is an act of fairness, which should have the general support of all hon. Members.

11.33 am

I join in the warm congratulations to my right hon. Friend the Member for Sunderland, North (Mr. Willey) on introducing the Bill. I hope that it can be applied to Scotland as well as the rest of the United Kingdom. The Scots have as much right to the protection given in the Bill as their English and Welsh friends.

The House will agree that there has been, and is, considerable dissatisfaction among members of the public about goods and services that are provided, although in fairness it must be said that the vast majority of traders and suppliers of services do an honest, competent job. I have no complaint against them. It is the relatively small minority that receives headlines and causes the problems among consumers. We have seen from the Consumers Association and from BBC programmes, notably "Checkpoint", the situation that not infrequently develops when people are involved in sometimes serious and costly actions as a result of either goods or services that have been badly supplied or of people who have misrepresented themselves when they have supplied services.

As a nation, we have tended in the past—and still tend—to accept poor services without many complaints, although perhaps that attitude has changed a little in recent years. However, it is still an indisputable fact that British people as a whole tend to put up with bad services to a greater extent than others such as Americans and most of those from the Continent. It is often infuriating and frustrating to have an obvious example of poor service about which, apparently, nothing can be done.

The hon. Member for Tynemouth (Mr. Trotter) mentioned car repairs. It is almost axiomatic that if one's car is running well, one should not put it in for service, although the service is supposed to be due, because when the car comes out of service, it will not run as well as before. Unfortunately, that is too common an experience to be laughable.

I congratulate the Minister on her warm acceptance of the general provisions. I should like to ask her about the exclusion sections in contracts, which sometimes nullify the whole contract. I recently received a credit card from one of the large car hire firms, which in certain circumstances allows me to charge the hire of the car to my account. All that goes through a computer. However, the agreement has a clause stating that the company can nullify it without excuse. No reason has to be given for the whole contract falling apart. Too often the small print in contracts contains exclusions that are too far-reaching in their effects. That matter should be considered in Committee. Such things should be prevented.

The vast majority of traders and suppliers of services do a good job, but there are those who do not. I should like to put in a plea for the protection of people who want to provide a service, who are self-employed, who do not have business premises and do not produce written contracts. In these days of high unemployment, more people go from door to door offering their services. The man or woman who is unable to obtain employment must be commended if he or she has a certain amount of skill and asks people to use his or her services. My experience of that has been pleasant. People have come to my door and have offered their services working in the garden. I have been completely satisfied with their work. On the other hand, as my right hon. Friend mentioned—my hon. Friend the Member for Tooting (Mr. Cox) gave examples—there are cowboys who take advantage of people's lack of knowledge.

I should not like the message to go out from the House that Members of Parliament are completely opposed to any private initiative that people may take. Clearly, consumers must be wary of individuals who come round, but I think that at least in some respects guidance can be given as to those who are genuine and those who are not. My hon Friend the Member for Tooting referred to a supposed mixture of undercoat and gloss paint that could be applied in one go. I am reminded of my first trip to camp as a boy scout, in a troop that wore the Douglas tartan. I was asked to go into the village and buy a small pot of Douglas tartan paint to paint a shed that we had erected. Clearly, we have not advanced very far since then if people can still be taken in by that type of injunction. [HON. MEMBERS: "Did you get it?"] I did not get the Douglas tartan but another—I think that it was a MacKay tartan.

As my right hon. Friend said, and the Minister agreed, with the exception of clause 16, the Bill is a drawing together or a codifying of existing law. That is excellent, as it will enable those who advise consumers far more easily to produce their advice in readily available form instead of having to say "You may be protected under such and such an Act, but I am not a lawyer, so I am not sure whether it is that Act or another one". If the provisions are brought together and codified, it is far easier for good advice to be given to consumers.

I am sure that the Bill will be warmly welcomed by the community at large as it deals with an area that requires at least some clearing up and some ability on the part of the general public to see that the services supplied or the goods purchased are in a fit and proper condition, but it should not be seen as a terrible warning to people that they should not go about their everyday affairs assuming that traders and suppliers of services are generally honest when they are not, because in general they are indeed honest.

I hope that the Bill will be enacted, not for the benefit of lawyers—I am glad that the hon. Member for Tynemouth is not a lawyer but an accountant and evinces a lack of legal knowledge similar to my own—but for the benefit of consumers, as I am sure my right hon. Friend intended. It is not a far-reaching measure in terms of new provisions being introduced but an enabling measure that will allow consumers to derive benefits from the supply of goods and services about which many people may at present be somewhat chary. Through the Bill the consumer will be given greater protection from the small number of people who take advantage of others.

11.44 am

It would be unfashionable and quite unacceptable for a Member of Parliament to be thought of as opposing, or materially standing in the way of, a measure that is designed to improve the lot of the consumer. At the outset, therefore, I must say that that is not my intention. Nevertheless, Members of Parliament will be failing in their duty if they do not cast a critical eye on some of the provisions in the Bill.

Having listened to my right hon. Friend the Minister for Consumer Affairs, I am full of trepidation in turning my critical attention to some of the Bill's contents as she gave it more than a fair wind. Indeed, she was lavish in her praise of most of its provisions. I wish, however, to focus my attention on part II. I am fortified in so doing by the fact that she showed some marginal doubts about it.

I hope that the right hon. Member for Sunderland, North (Mr. Willey) will not take it amiss if I say that one of the reasons that has caused me to turn my attention in considerable detail to the Bill is the very speed with which it has been necessary to consider its contents and the relatively short time that has passed since the National Consumer Council report, the recommendations of which are largely embodied in part II. I support the measures contained in part I but I am anxious to question some of the proposals in part II.

Although goods and services appear to go hand in hand, the more I read the Bill the more I conclude that there is a strong case for two Bills. I wonder whether consumer bodies, in their understandable anxiety to deal with the problems that consumers have been bringing to them over the years, are not running the risk of creating within one Bill two incompatible bedfellows.

Part I is satisfactory because it is based on a Law Commission report that emerged only after a thorough study of the problems involved. It takes account of the incontrovertible fact that in 1982 there are many more ways of coming into possession of goods than purchasing outright. There has been a massive change in social habits and the pattern of consumer spending behaviour. I am reliably informed that more people now rent than buy a television set, and video machines, which seem to be the latest "must" in every affluent household, are going in broadly the same direction. Some people prefer to hire a motor car. Others prefer to buy, but under a hire purchase contract. Part exchange of a vehicle is a modern form of barter. All these practices dilute the principle of the purchase of goods upon which much of the present consumer protection legislation rests.

The car and its servicing or the house and its repair involve not only the purchase of goods but the provision of a service—or sometimes, the lack of it. There is a clear category where straight purchase of goods exists, another clear category where there is provision of a service and nothing more, and a rather grey area in the middle that involves the purchase of goods that are attached to the provision of a service. I concede that it is time to update and codify the law protecting consumers in relation to obtaining goods and to take into account the changes that have overtaken our society.

The right hon. Member for Sunderland, North was right to refer to some of the new marketing processes that are upon us. We cannot ignore the fact that coupons and vouchers are part of the marketing phenomenon of the 1980s. If my household is anything to judge by, dozens of cut-price offers fall through letterboxes suggesting that we should buy this at 5p off or that at 20p off. I am told, for example, that if I collect wrappers or enter some imbecilic competition in which I state five reasons in the right order why I love Jumbo cornflakes, my reward may well be a prize—at the very least, a transistor radio and perhaps even a motor car.

Have I bought those items when I buy the cornflakes? On the face of it, I have not, yet I am not entirely clear whether one could be said to have done so indirectly. I should not wish to sacrifice any of the rights that I may have against the provider of the motor car because I obtained it somewhat indirectly. It is right to clarify the law to make it clear what my rights are against the background of changes in commercial and marketing practices. I support the effort to bring the law on the supply of goods other than by sale into line with that applying to normal sales.

My hon. Friend the Member for Tynemouth (Mr. Trotter) referred to the CBI's helpful comments on a consumer protection measure that has passed through the House. I noticed earlier this week that it had not volunteered any comments on the proposed provisions in the Bill. I took the trouble to consult the CBI, the Law Society and a variety of other bodies which I assumed would have contacted hon. Members had they had time to do so. I am happy to tell the House that the CBI told me that it approved of part I and found it quite acceptable. The Law Society had no adverse comments to make. It had no objections in principle because it said that the provisions had been the subject of proper consideration and consultation.

I turn to part II, clauses 12 to 16. It seems that the aim of this part is to extend to all contracts for services a new set of statutory implied terms that will not be restricted or excluded. Service is to be carried out with reasonable care and skill within a reasonable time and at a reasonable charge. That sounds extremely reasonable, but there are those who consider this part of the Bill to be quite controversial. I am sure that the right hon. Member for Sunderland, North will concede that that is undesirable in proposed legislation of this sort.

The new set of statutory implied terms does not seem to have been the subject of widespread consideration or consultation with the legal profession or with industry. I accept that the right hon. Gentleman had to present his Bill within a short time, but I find—I suspect that the House will agree—that the absence of widespread consideration and consultation is unfortunate in a Bill of the importance that we rightly attach to the one that is before us.

Why does the Unfair Contract Terms Act 1977 need to be revised? That question was put to me by those in the legal profession to whom I spoke this week. Would not it be better to extend the 1977 Act to cover all services and in the process give the 1977 Act time to bed down? There were general comments about the Bill. The observation was made that the Bill is a rather hurried piece of legislation, which I suspect the sponsor will not deny. It was claimed to be poorly drafted and in many ways unsatisfactory. Those views were expressed to me by those engaged in industry. I was asked to explain—in turn I must ask the sponsor to tell me—how the new Bill interacts with existing law. It needs to be more clear whether the implied terms in clauses 13-15 are meant to be broadly declaratory of the existing position or to alter it, and if so in what respects.

In summarising part II, I think that it is fair to say that no exclusion clauses will be allowed. There is a proposed ban on exclusion clauses and some people in industry have suggested that that is far too wide. They have focused my attention on the likelihood that smaller firms will be seriously affected by quality of service provisions. Reference has been made to film processing by chemists, for example. It has been drawn to my attention that some service industries could be exposed to large claims that would force them to increase the cost of their insurance considerably, which at the end of the day would not be a service to the consumer. The person who would have to pay the increased costs of insurance would be the manufacturer, directly, but the consumer indirectly.

May I extend the argument advanced by my hon. Friend? Does he agree that the Bill will increase the costs of reputable traders while the costs of disreputable traders—the cowboys—will remain the same? Therefore, we are creating a greater gulf between reputable traders and cowboys and doing nothing about the cowboys.

I agree that that is so. It is more in sorrow than in anger that I feel that I have to ask the House to stop and think before it proceeds, without question, to put the Bill on the statute book. I must ask the House to consider whether it is really helping the consumer who arguably needs assistance the most. I have in mind the consumer who does not employ, for whatever reason—for alleges economy or on any other ground—the reputable provider of services, but who uses the sort of person who, even when this measure is fully in operation, will disappear quickly into the night and will be difficult to pursue. Are we aiming at the correct target if our ambition is, as it should be, to protect the consumer?

There are parts of clause 12 that have caused concern to some of those with whom I have exchanged views this week, but I shall merely draw attention to two subsections of the clause. Subsections (4) and (7) are thought respectively to require clarification and deletion. Clause 16 has been the subject of some comment, including that by my right hon. Friend the Minister.

In her mind it seemed to be the area around which the greatest doubt revolved. The clause prevents contracting out against a consumer, but we are not told how the clause fits in with section 2 of the 1977 Act. That issue was raised by the Law Society. It is easy to say that this is not a measure for the benefit of lawyers, but if it is to be effective lawyers will at some time have to operate it. If the Law Society is unclear, surely a rather clearer explanation is required than that which has been forthcoming so far. The CBI told me that clause 16 is unnecessary.

The fact that the Law Society and the CBI have told me that part II is full of difficulties for them is a reason to stop to consider the insistence of some on including the part in the Bill in the interests of speed. We should ask whether we are not running a risk of losing the entire measure.

As I started by saying that I wished to support the consumer protection approaches of the Bill, perhaps I could suggest to the sponsor that as part I flows directly from a long and detailed consideration by the Law Commission—and as we are now told that the subject covered by part II is similarly to be referred to the Law Commission—there may be an argument for part II to be dropped altogether for the time being so as to speed the Bill on its way with the maximum of good will from both sides of the House and without in any way altering the fact that common law restitution continues in regard to the provision of services. We must hold out the opportunity that after similar and detailed consideration by the Law Commission has been completed, a separate Bill may go on its way through the House with a rather more fair wind.

I have tried to focus my comments on the positive aspects of the Bill. However, I hope that I shall be forgiven for the few questions that I have raised in the minds of hon. Members who otherwise have said nothing critical about the Bill. I hope that the right hon. Member for Sunderland, North will understand that in making my remarks I have nothing but support for the consumer. However, I wonder whether his Bill, as it now stands, is likely most ably to carry its aims to fruition.

12.1 pm

I wish to begin with some tributes and congratulations, none of which are formalities. The first is to my right hon. Friend the Member for Sunderland, North (Mr. Willey), not merely on his good fortune in coming first in the ballot, but on his excellent judgment in choosing a subject where codification and clarification of the law on the supply of goods and services is about 90 years overdue.

In reply to the hon. Member for Brentwood and Ongar (Mr. McCrindle), who expressed some reservations because the Law Commission has not considered part II of the Bill I say that we have known the state of the law on services for a century or more. With the exception of section 16, to which I shall come in a moment, we are doing no more than stating in statutory form the common law at the moment. That is an excellent proposition and a reflection of the way in which Parliament operates. Our predecessors managed to codify the law on the sale of goods in 1893. Somehow, because Parliaments are always overburdened with legislation—which is often ephemeral—and because hon. Members have such limited opportunity for private legislation, it has taken almost 90 years to start to codify, in only three or four clauses, the law relating to the supply of services. Parliament has the right to legislate even if the Law Commission has not considered a subject.

Does the hon. Gentleman believe that there is a danger in that the second part of the Bill may appear to give more rights to the consumer than it does?

I do not believe that there is any such danger. We are stating the present rights in statute farm. There is a great advantage in that, because one can point to a right. I find that members of the public are not reassured when they are told that they must pay only a quantum meruit for a service and are referred to a case in the eighteenth century. It is much better to point to 1982 legislation, which states the proposition in clear terms—that if no price is agreed for the provision of the service, a reasonable price is the one that must be paid. The great advantage is clarity and simplicity of language stated by Parliament.

I congratulate the National Consumer Council on its work in relation to "Service, Please", which led to part II, and the Law Commission on its work, which provides us with parts I and III, where the wording differs very little from that which was recommended by the Law Commission.

I pay tribute not only to the National Consumer Council but to Miss Rosemary Delbridge, who lobbied very hard for the Bill to come before Parliament, and who, unfortunately, died very young at Christmas and was not able to see her efforts come to fruition.

The Bill has been explained to the House and I do not want to repeat my right hon. Friend's explanations or to add to the excellent example that came at the end of the Minister's speech. I was impressed by the way in which, in a few words, the right hon. Lady explained how the law would operate if the Bill were passed.

Apart from Clause 16, there is hardly a provision in the Bill that is not incontestably correct and logical. Indeed, it is of the nature of the Bill that it codifies the law rather than creating new law. The only new development is in clause 16, which extends the Unfair Contract Terms Act 1977, in which I played a part, so as to protect a consumer from having his rights taken away from him in contracts for the supply of services. He has already what I call the "Fred Astaire" right in relation to sale of goods. I call it the "Fred Astaire" right because, in the words of the song

"You can't take that away from me".

I agree that there are problems with clause 16 and I shall come to them later.

Part II, which is rather more difficult, codifies and clarifies the law in an area where consumers are much less aware of their rights, because they are contained in case law and not in statute law. The vagueness can be a beano for the shark. Many examples have been given in the NCC report. One is where an emergency service clears a drain and delivers a bill for over £400, and where the consumer, because he is unaware of his rights—it is not that the rights do not exist but that he is unaware of them—pays an exorbitant charge. It must be right to have that provision.

Surely it is only restating case law to say that a person providing a service must do so with reasonable care and skill. It surely must be beyond contest that if there is no provision in a contract for a time during which the service has to be provided, that time should be a reasonable time.

I have come across cases in which people have been induced to sign contracts for double glazing or for some house improvement and where there has been a long delay in providing the service. People have been duped into believing that the supplier can choose exactly his own time for providing the service, even if there is no time stated in the contract. As there is an absence of any particular statute to which the consumers can point, they are often, in those circumstances, taken in by the rogue trader.

The Bill, like all consumer legislation, benefits not only the consumer but the reputable trader. It is those who are honest in their professions or in their crafts who often tend to suffer from the depredations of the dishonest person. When a consumer is cheated of his money or in the provision of a service, there is also some small and unjustifiable injury to the reputation of the honest and reliable trader.

Apart from clause 16, I think that most of the propositions are logical. They merely restate the common law and the force behind them is self-evident.

With regard to clause 16 and the problems that surround it, I think that the right hon. Lady has come to the right conclusion—that the Law Commission should examine the problem of having inalienable rights for consumers in relation to the provision of services, and that it would be wrong, perhaps, at short notice for the House to endorse, without further consideration, the proposition in clause 16.

I confess at once that my instincts are in favour of clause 16, and I will give one reason for that. If we were to remove clause 16 from the Bill, that would not remove the obligation to use care and skill. That would remain. It would not help the bodger, it would simply help the dodger. The removal of clause 16 would only help the man who is incompetent at carrying out his job, but competent at drafting exclusion clauses. It would not help the man who is incompetent but does not draft exclusion clauses, because he will be caught under common law. He still has to provide care and skill and he is still liable for the results of his failure. The removal of clause 16 would only help the man who is skilful enough to evade liability, but not skilful enough to do his job. Therefore, my instincts are in favour of retaining the clause. I realise that it creates problems. I am worried not about those that it creates for the dishonest trader, but about those that it creates for the honest man, which, perhaps, I can best illustrate by an example.

A man's car breaks down and he takes it to a garage and tells the mechanic that he wants to get back to London from Birmingham. The mechanic may say that he does not have the necessary skill or capacity to be certain that he can make a repair that will enable the man to get back to London. He may say that he will do his best but only on the basis that if he does so he cannot accept responsibility for the consequences. The mechanic is being honest and open about the limitations on his care and skill. There is no deceit. Under those circumstances it is right that he should be protected from liability. If we remove clause 16 the test to be applied will be that of the Unfair Contract Terms Act as to whether he had behaved reasonably. In that example, one could say that the mechanic had behaved reasonably and that there was an equality of bargain between the two parties.

In other areas, my instincts are in favour of retaining clause 16. Perhaps at the end of the day the answer might be to allow the limitation on the amount of damages that have to be paid, rather than allowing a person completely to evade liability. I am not sure, but for the sake of compromise and for the sake of getting this legislation through, I am prepared to support the Minister's propositions, which have been assented to by the promoter of the Bill.

I should like to give advance notice of some matters that I intend to raise in Committee. I accept that clause 12 is necessary because there may be contracts for services that might need to be excepted, and about which we have not yet thought in sufficient detail. We had the same problem in 1977 with the Unfair Contract Terms Act. As the Minister said, the power should be sparingly exercised. If she were standing where I am now standing she would be the first to say that the matter should be dealt with by affirmative resolution because it is not a mere regulatory provision. It is an exception that will make substantial changes in our civil rights. On the whole, I am against affirmative resolutions, but in this case I am in favour of the procedure.

Many of the examples of abuse of the consumer in the provision of services arise from doorstep sales. I hope that if the Minister catches your eye for a second time, Mr. Deputy Speaker, she will be able to tell the House whether she has any proposals to legislate on the matter. That is where the consumer is most at risk. He is not able to make a choice, as he is in the market place. He tends to be talked into making an unwise contract. I know that nothing has been done about it for a long time because of the directive that is being discussed in Europe. However, there must come a point at which we must say that we can no longer wait to reach agreement in Europe. We should legislate on cash sales on doorsteps to protect the consumer. Ironically, he is already protected in respect of credit sales, where there is a cooling-off period.

I also direct the Minister's attention to the use of the small claims court. It is no good conferring rights upon people if they are not able to enforce them easily. The success or failure of arbitration proceedings in county courts depends very much on the character of the registrar and whether he has his heart in the small claims arbitration procedure. I tried it out for myself when I was a Minister. I was given an appointment for my small claim to be heard by way of arbitration at 2.30 pm on a Monday when I was due to answer questions in the House of Commons.

I went to the court and said that I could not be there at 2.30 pm. I asked what would happen. I was told that my claim would be struck out. I asked whether a letter from my employer would make any difference. The clerk said "No". There would be no difference. He said that I would have to take my chance. In the event, I either wrote the letter myself or received one from my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley). I took the letter to the county court and explained how my job prevented me from attending the arbitration at 2.30 on a Monday afternoon. It will come as no surprise to the House to learn that the appointment was postponed until 4.15 pm. I wonder what would have happened if a person in another profession had been involved.

The manner in which arbitration works in the county court varies from court to court and from registrar to registrar. There is a need for further training of registrars. Perhaps a layman should sit with the registrar in arbitration proceedings. I hope that the right hon. Lady and her colleagues will look at this matter. It is no use codifying and clarifying rights unless they are enforceable.

The legislation is long overdue. It does little more than codify and clarify the law. I hope that it will have a speedy passage through Parliament.

12.17 pm

I welcome the introduction of the Bill. I do not have the severe reservations of several of my hon. Friends about part II.

It is ironic, in a sense, that we have in the past given greater protection to goods than to services. It is at least arguable that in the case of goods it is often easier to make an appraisal of them at the time of purchase. If it is a garment, for example, the purchaser can see whether it is sewn correctly and can try it on and see whether it fits.

In the case of services—such as the roofing incident mentioned earlier—it is clearly not possible for an old-age pensioner to climb up and see whether the roof needs repair as he has been told.

The covering of services is very much overdue. I am not impressed by the observation that we ought to wait until the Law Commission has concluded its deliberations. After all, a bird in the hand is worth two in the bush. How long will it be before those deliberations are concluded? How long would it be before a Government felt able to find the legislative time to introduce a Bill? Alternatively, how long will it be before a private Member feels moved to take up this topic? In other words, we could wait for years, and I am not prepared to see that happen.

As the hon. Member for Norwood (Mr. Fraser) observed, we are trying to codify rights already enshrined in common law. It cannot even be said that we are breaking new ground. It does not seem to be beyond the wit of hon. Members to use the Committee stage and the Bill's passage through the other place to put right any deficiencies that there may be in part II of the Bill. That the Bill is necessary is clear from the number of complaints that are taken to citizens advice bureaux—not much short of 1 million consumer complaints, business complaints and so on. My local citizens advice bureau in Plymouth was most anxious that I should support the Bill. In this case, I was a most willing victim. It is absolutely necessary.

We all have anecdotes about the provision of services and their often unsatisfactory nature. I shall use a personal experience as a short illustration.

My mother's drive, at her house, was and remains in need of retarmacking. She was visited by a door-to-door gentleman who said that he could offer to do the job at a very keen price. The sum mentioned was about £200. I thought it a suspiciously low figure for the work involved. He said that he was working in my mother's town on behalf of a local authority 15 miles away, and could fit in my mother's work and do a good, cheap job.

I told the gentleman that I was interested in the fact that he was doing work for the local authority and that I would make inquiries about it. The expression on his face changed. He said that he would return the following day. I telephoned a personal friend, the former borough engineer for the local council, and asked him to make inquiries. He found that not only did the gentleman not carry out work for the local authority but that he did not have a proper business address and worked from an accommodation address. Not surprisingly, he did not turn up the following morning and has never been seen since.

Had my mother been the sort of elderly lady who knows nothing about such matters, she could have easily fallen into the trap. The work on the drive might have been left only half finished so that no one could get in or out. Yet the work would have cost hundreds of pounds. Many services are expensive, which makes it all the more necessary for the Bill to cover that aspect.

I have some queries about part II. They spring from a desire to improve the Bill, rather than a desire to hold back or tread water. I am not clear about the position of subcontractors in the chain of responsibility. I hope that my right hon. Friend the Minister can clarify that when she replies.

I can answer my hon. Friend.

I would prefer to hear my right hon. Friend's reply rather than that of my hon. Friend the Member for Grantham (Mr. Hogg). As a lawyer he might charge for the advice that he is anxious to give me. I am not inclined to give more jobs to the legal boys. Indeed, that is one good reason to enact the Bill. If it clarifies the rights of consumers, they may not need to consult lawyers so often.

Clause 15 deals with the ascertainment of price. I am delighted that the Bill provides that charges should be reasonable. What is the position if someone obtains an estimate that turns out to be far too low and a much greater charge is made? Would it not be wise to have a legal definition of an estimate or a quotation, and an explanation of the precise difference between the two? That area is somewhat vague—it is certainly not clear to me. I should welcome some clarification of the matter, either now or in Committee.

Does my hon. Friend accept that vagueness still persists? As has been said, the words "quantum meruit" are old fashioned and out of date. If they mean anything, it is that a reasonable fee has been earned. If an estimate does not become a fixed contract, what is the reasonable price for the contract? It is possible that that will provide more food for lawyers. Does my hon. Friend agree that those risks are involved?

I know of no positive course of action that is without risk.

I said that the best and, in some cases the only defence for the consumer, and it has nothing to do with the Bill, is to acquire a detailed specification and complete quotation in advance of any work being carried out. No Bill or other measure will override that precaution, which will give consumers the best protection of all.

I merely wanted to ascertain that by the acceptance of an estimate one was not deprived of a right that one might otherwise have under the Bill or any other enactment. However, no doubt that point will be dealt with at a later stage. I merely advance it now so that the position can be aired.

Much has been said about clause 16 and I understand the reservations about accepting it in toto, but I hope that it will not be thrown out, because it has some merit in not allowing people to insert an exclusion clause that would nullify what we seek to do.

Using an everyday example, what would be the position of a person who sent an expensive dress or suit to a dry cleaners, who proceeded to lose or ruin it? What compensation might legally be offered? I noticed in the past that the minute conditions on the back of dry cleaners' tickets often limit the compensation that can be paid to, perhaps, a small fraction of the cost of purchasing a similar garment. I should be interested to know whether that position would be covered by clause 16 or whether it is already covered.

Another query relates to the services offered by estate agents, especially the descriptive "blurb" about properties.

That is the next Bill.

Yes, but is there any reason why it should not be included in this Bill? The descriptions of some properties are almost a laughing stock. For example, "a house of character" frequently turns out to be an ugly Victorian villa with no damp course—a different "character" from a modern house. I should be interested to know whether that aspect will be covered here or dealt with, as my hon. Friend the Member for Grantham mentioned, in another Bill.

I have mentioned some of the queries about part II of the Bill, in which I am particularly interested, but I remain convinced that it is a most valuable adjunct to consumer protection and I hope that it will receive a fair passage.

12.28 pm

I add my congratulations to the right hon. Member for Sunderland, North (Mr. Willey) on the Bill, which undoubtedly offers certain ameliorations in the remedies available to consumers.

I emphasise that most suppliers of goods and services are reputable and competent, as other hon. Members have said. In the right hon. Gentleman's words, we are supposed to be discussing cowboys. Most of the debate has been on cowboys and Indians and, after the long exordium on Indians, it is right that we should have a little discussion about cowboys.

I give my general support to the first part of the Bill, and express perhaps a non-benevolent neutrality on the second. If I spend no further time praising the Bill or the right hon. Gentleman, it is because too much praise is bad for anyone. Although I bear in mind that Adlai Stevenson once said "Flattery does no harm provided you do not inhale", it would be more profitable to use the time at my disposal to find fault with the Bill but without derogating from my general commitment to support the Bill.

The right hon. Member for Sunderland, North said that the Bill enjoyed the complete support of articulate consumers. I agree. My criticism is that in a way consumers are becoming a bit too articulate these days.

No.

My right hon. Friend says "No, " to which I reply "Yes"—a meaningful discussion. There are so many pressure groups. In the House we are always exposed to pressure groups. The current hysteria is about rape, but before rape it was consumers. We must be careful that we do not go over the top about consumers and neglect to consider the general interest of the community.

First, who is a consumer? I heard references in the debate this morning to the exclusion of certain contracts provided that no party to the contract is a consumer. That is nonsense because under any contract, whether for goods or services, the person who is to receive the benefit of the contract, as distinct from paying the price, is the consumer of the benefit of the contract. That applies to maritime and commercial contracts and to anything else. We must avoid falling into the trap of using the word "consumer" in an entirely artificial sense. We are all consumers. I remember having a discussion in the House on the Shops Act in 1950 when Mr. Aneurin Bevan used a phrase which I have since thought useful. He said that we were in danger as producers of giving ourselves a black eye as consumers. We might bear that in mind.

Apart from clause 16, the effect of the Bill is to codify the existing common law. I have some almost instinctive reservations about that because one admires the way in which the common law has developed. The Sale of Goods Act 1893 has always been hailed as a great achievement because of Chalmers' superb drafting. He managed to embody the rules relating to the sale of goods in a language of unrivalled simplicity and therefore clarity. The effect of codifying that branch of the law is, as it has been held, to disconnect the common law process which existed up to then—that is, one can no longer look back to the cases which evolved the rules but has to stop at the words of the statute. Of course, the process can take on again from there, but from the date of the statute, 1893, one no longer looked back to the cases which that statute was codifying.

And a jolly good thing.

It might be a good thing, but when we talk of—and I use a phrase which has been used in the debate—partial codification of such branches of the law we begin to run into complications. That is one of the problems that one encounters in the second part of the Bill.

Let us suppose that we accept the second part of the Bill and pass it into law. That codifies—although it is agreed not completely—the law relating to the supply of services. It brings down a gate and one does not look back behind the words. What happens if the Secretary of State exercises his function under clause 12 and removes some categories of contract from the effects of the Act? One has disconnected the common law process. Is it reconnected, perhaps a year or two later? I do not know. I can see all kinds of complication arising from that type of operation. There would still be a section of the law relating to the supply of services that was not codified but was left for further consideration.

My feeling is that it would be wise not to proceed with part II of the Bill. I do not see that there would be any great disadvantages if that happened. My right hon. Friend the Minister and the hon. Member for Norwood (Mr. Fraser) both made the point that the advantage of part II, although it might not be perfect, is that it would at least provide a quick result. Their case was that clause 12 was available for the Secretary of State to make changes in the law should mistakes be made because of the speed with which the matter had been put on the statute book.

I did not say that.

I am sorry. I thought that the hon. Gentleman did. Certainly my right hon. Friend did, as, I think, did the right hon. Member for Sunderland, North.

I do not like that process. We should not pass something into law quickly and give the Secretary of State a fall-back power to change it if the House had not been sufficiently careful. That is not a good practice. The advantage of quick legislation is easily exaggerated. A great deal has been heard about the complications associated with going back to old cases. It is confusing for people to have to refer to some case decided in the nineteenth, eighteenth or seventeenth centuries. Part II of the Bill, which codifies the existing common law, shows that the issue is terribly simple. If someone performs a service in the course of a business, he has to do it in a proper and workmanlike manner or, as the Bill says,

"with reasonable care and skill."

That is not a very complicated concept. It has been well established by a long series of cases to which one does not need to refer in any court. I have conducted many such cases. I have never had to quote to a judge any authority for the proposition that care and skill should be used in the execution of a contract. It is taken for granted. It has been the law for so long that it is a simple proposition.

Does the hon. and learned Gentleman think that it should apply to barristers?

It does apply. I am not sure whether it should, but it does, by a fairly recent decision.

Save in court.

Save in court, of course. This is an interesting side area which has nothing to do with the main line of my argument.

The proposition is well known. I do not think that it can be further simplified by being codified in the Bill. If people think that the passage of this Bill into law wall reduce the amount of work for lawyers, or reference to lawyers, I can only say it is a triumph of hope over experience. I have never known legislation to have that effect. I do not believe for a moment that it will happen.

The proposition is simple. If it is to be codified, being as simple as that, I should like the Law Commission to go into the matter very fully, bearing in mind, as the Law Commission can, the implications of codification on the organic growth of common law. That would be preferable to taking action quickly over the next few weeks on the basis of nothing better than a report by consumers' organisation and arguing that matters can be put right if they go wrong. I do not think that that is sound.

I agree with my right hon. Friend about clause 16. We cannot have an absolute exclusion clause of that character. The hon. Member for Norwood began to defend it and then rightly drew back. He gave the example which I would have given—the person who says, "I am not especially skilled in that class of work, but…"; there is a consensual agreement that that person, with his limited ability, will carry out the operation. There is no sensible reason why that should not be allowed. It covers the whole range of what I describe as "the while-you-are-here" contracts: a tradesman comes in to do a job, the householder says to him "While you are here, will yell look at this?", and the tradesman says "It's not in my line, but I will look at it and see what I can do." What is wrong with that? We all want that to happen. But clause 16 would expose that person to the full liability of the person who claimed to have the proper skill for the job.

There is also the person who calls at the door and the householder knows full well that he is not skilled. I have used such a person. We all have. If someone says: hat he will work in the garden and he makes a mess of it because he does not know a gardener's job, is he to be bound by the strict terms of the general duty of the skilled man? I do not think so. Therefore, I am sure that clause 16 should be dropped from the Bill.

I am also sure that there should be an explicit exlusion of maritime and commercial contracts, if we have part II at all. But I think that the right remedy is probably that we should proceed on part I and let the Law Commission look at part II with all these thoughts in its mind, including maritime and commercial contracts, the exclusion clause in clause 16, and surely get rid of the discretion of the Secretary of State which is embodied in clause 12 and which would be a bad precedent for us to follow.

All those qualifications sound rather awful, but I am sure that the right hon. Member for Sunderland, North heard my initial remarks about the merit, virtue and desirability of part I of his Bill. I hope that the Bill gets a Second Reading.

12.43 pm

I join all those hon. Members who have given their warm congratulations to my right hon. Friend the Member for Sunderland, North (Mr. Willey) on his good fortune in being first in the ballot. I say nothing of the good fortune of consumers that he has chosen to promote a Bill on the subject of consumer protection.

It is interesting to note that, if time permits, we shall be discussing another consumer protection measure, assuming that my hon. Friend the Member for Cannock (Mr. Roberts) succeeds in catching your eye, Mr. Deputy Speaker, and assuming that we terminate our discussion of this measure fairly soon. There seems to be general agreement about it. The hon. and learned Member for Beaconsfield (Sir R. Bell) criticised clause 16. However, when the Minister referred to its shortcomings, my right hon. Friend the Member for Sunderland, North responded immediately and guaranteed that it would be withdrawn. It is no longer an issue. The promoter of the Bill is willing to withdraw it, so there is no difference between us about it. I hope that the Bill will soon move into Committee. It is pleasing to note that the official Opposition support it and that even the Minister has become almost enthusiastic about it.

This Parliament will not go down as one that has done a great deal for consumer protection. As a result of the first Queen's Speech, we began by doing away with the Department of Prices and Consumer Protection. That was extremely unfortunate. I should like to see the right hon. Lady in the Cabinet Room as Minister of Consumer Protection. The Government's deliberations on consumer protection matters should not merely represent a small part of the activities of the Department of Trade.

There is a need for the measure. It is an important Bill. Amends have been made for the fact that we have not given due attention to consumer protection, thanks to this Bill and the Trade Descriptions (Amendment) Bill that might be discussed later.

The Bill has widespread support, particularly of the National Consumer Council. My right hon. Friend will agree that it is the prime mover in seeing that the problem is dealt with, although tribute has been paid to the Consumers Association, the Institute of Trading Standards Association and the Welsh and Scottish Consumer Councils, which support the National Consumer Council. The National Federation of Consumer Groups and citizens advice bureaux have been given increasing scope by the Government. Therefore, among consumer bodies, there is unanimous support for the Bill.

The Bill is concerned with three main types of transactions—the supply of goods other than by way of sale, the hire goods and the supply of services. With regard to goods the broad effect will be to place those transactions as far as possible on the same footing as goods sold for a money price. The basic idea is that all contracts for the supply of goods should be treated in the same way and should follow the Sale of Goods Act model.

There is no doubt that the Sale of Goods Act is working. We hear about that in our political surgeries. That measure has not been on the statute book for long, but the consumer bodies set up by the local authorities have been approached many times by people who have complaints. Those complaints have been dealt with because it is the law of the land that consumers have certain rights with regard to the goods that they purchase.

The objectives of the Bill are clarity, certainty and the elimination of anomalies. The part of the Bill dealing with goods is based on the work of the Law Commission. The same objectives apply to the part of the Bill that deals with services. Its effect is to establish a statutory regime for the basic obligations that are already imposed by the common law on those who supply services. That part of the Bill is based on the report of the National Consumer Council entitled "Service, Please" that has been referred to on a number of occasions in the debate.

Most goods are purchased for a money consideration. The law describes such a transaction as a sale. That transaction is governed by the Sale of Goods Act 1979. Of vital importance are the terms that are implied by the Act. The main ones are that the seller has the right to sell the goods, that the goods should correspond with any description applied to them, and thirdly, that the goods should be of merchantable quality and they should be fit for their purpose.

However, the Sale of Goods Act does not apply where goods are supplied in ways other than by sale. The main example of where the Act does not apply or where there are doubts are exchange, probably including part-exchange—when a car is traded in—goods obtained with coupons or vouchers, such as cereal packet tops, goods obtained at a reduced price in exchange for wrappers, goods supplied as a bonus with other purchases and goods supplied with a service, known as contracts for work and material, for example, car and roof repairs, installation of kitchen units and so on.

The common law as laid down over the years by the judges applies to all those transactions, but the law is by no means clear. It is not so much whether consumers are treated unjustly or illegally that is important, as that they are not aware of their rights. I believe that the Bill will help this sort of problem.

The law is by no means clear. The leading case on contracts of exchange dates back to 1813, when there was a problem about exchanging Burgundy for champagne. The common law has developed from that case. There is wide agreement that the obligations of a supplier in relation to goods should be as nearly as possible the same, whatever the type of contract employed. The Bill sets out to achieve this, using the Sale of Goods Act as its model in relation to all contracts for the transfer of goods.

There is no general Act of Parliament dealing with the provision of services. We should address ourselves to that omission. The National Consumer Council report reveals widespread dissatisfaction with the entire range of consumer services. It calls, in the first instance, for the basic provisions of the common law to be put on a statutory footing. It also makes the point that it would be inconsistent to have a statute to deal with the materials element of work, and a materials contract, without simultaneously doing something about the work element.

It is as well to take some examples from the excellent document provided by the National Consumer Council. We should pay tribute to the council, and particularly to the authors, Barbara Lantin and Geoffrey Woodroffe for preparing that report. I take the example of motor cars. The council says:

"the standard of garage servicing presents—as the Consumers' Association put it—'an appalling picture of incompetence, wastefulness and even dishonesty'."

That is from Motoring Which? January 1981, not January 1921.

"Certainly this has consistently been the Consumers' Association's experience. Its most recent tests produced the same gloomy results as previous investigations. 'Out of 50 garages only two came anywhere near to carrying out a full service in line with the maker's specification, ' said the test report published in the January 1981 edition of Motoring Which? The remainder omitted some service items or did them badly. One garage charged £40 for a full service 'and did little more than change the oil'. "

We all have experience of this. I took my car to a garage for servicing—I do not take it there any longer—and came away without any oil. There is a need to look at services on behalf of consumers.

The recent extreme weather conditions, with many elderly people trying to find plumbers to mend burst pipes, again highlights the need for consumer protection. The report states:

"Stories about 'cowboy' plumbers are especially common. Under the headline 'Scandal of the "killer" plumbers' the Daily Star of 11 April 1981 reported:
'A woman was killed when a newly installed boiler blew up in her face. And factory workers drank coffee from a machine that had been connected to a lavatory pipe. The botched-up jobs were the work of cowboy plumbers. Like the new "cistern" in a pensioner's loft that turned out to be a plastic carrier hag. And the "minor pipe repair" that cost a London family £56, 000 after their house was flooded.'"

These examples illustrate the need to tackle the question of services.

There are also problems with hairdressing. The Times of 22 February 1978 reported:

"Mrs. Susan Goodwin of Canterbury…went for a light permanent wave at a well appointed salon in the town and came out with an Afro frizz and her hair falling out in bunches."

Those who say that these matters should be referred to the Law Commission are asking for further delays. My right hon. Friend is right—this legislation is 90 years too late. It is true that the previous Government took some action, as have the present Government. My one regret is that this has had to be left to a Private Member's Bill. Bearing in mind some of the legislation that the Government have introduced in the last couple of years and intend to pursue this Session, I should have thought that we could have left some of that alone and done this instead. I am aware that another consumer protection Bill will be introduced as the right hon. Lady wants to cross some of the t's and dot some of the i's. However, I hope that the Bill will be put on the statute book as soon as possible. Some of the issues that have been raised can be dealt with in Committee. Some of the arguments that have been advanced against part II may also be dealt with in Committee.

It would be wrong for the House not to allow this measure to have its Second Reading. The Bill sets out to codify in statutory form the existing law on three main aspects. These are quality of service, the time for carrying out that service and, in the absence of agreement, the price to be charged. In these respects case law is not so much uncertain as, by virtue of its nature, inaccessible and not widely known. I commend the Bill to the House. I hope that it will be given a Second Reading.

12.56 pm

I ask leave of the House to intervene to answer some of the questions that have been raised. If I am allowed to do so now, it may lead to more speedy progress with the Bill.

I find myself in an unusual but not an unprecedented position in answering questions on a measure that is not a Government Bill. I hope that the House will forgive me if I deal only with some of the main issues and do not take up all the interesting questions that have been raised. The matters with which I do not deal can be raised in Committee. If that is done it will make for an interesting Committee stage, if that is reached.

The hon. Member for East Kilbride (Dr. Miller), like many other hon. Members, said that the majority of traders are honest and competent. That is true and should be said. However, I am bound to say that too many traders are not honest and competent. That has emerged from the speeches of most right hon. and hon. Members.

The hon. Member for East Kilbride asked about the status of a consumer who signs away his rights to compensation. A consumer's rights to compensation in the event of death or injury cannot be excluded in any contract because of the provisions that are set out in section 2 of the Unfair Contract Terms Act 1977. The right to compensation for death and injury cannot be excluded in any circumstances by any exclusion clause.

The hon. Member for East Kilbride talked about Scottish matters and no doubt he will make representations to my right hon. and hon. Friends in the Scottish Office. The exclusion clauses to which he referred in respect of car hire contracts are subject to the reasonableness test, as are all other exclusion clauses under the 1977 Act. As for the eminent doctor and the broken ceramic hob, he will have rights of merchantability under the 1977 Act and not under the Sale of Goods Act 1979 because the firm that he used to install the cooker cannot include unreasonable exclusion clauses as a result of the 1977 Act and exclude its responsibility for merchantable quality in an unreasonable manner.

The hon. Member for Tooting (Mr. Cox) mentioned programmes that provide consumers with information. I concur with the hon. Gentleman's views and draw attention to the especially valuable work that is done by Esther Rantzen, whom I recently appointed to the National Consumer Council. Consumer advice is important, as is consumer education. That is why I published an education pack. The hon. Gentleman knows, as I do, that he has an excellent citizens advice bureau in the borough that forms part of his constituency, which gives a great deal of consumer advice. Local authority spending is a matter for local authority priorities. Trade associations can be and often are helpful in such cases. It is advisable always to go to contractors who are members of trade associations.

The hon. Member for Tooting spoke about excessive charges for roofing contracts. Those are already contrary to the common law. Clause 15 does no more than restate the common law. The case that he raised of the old gentleman could be challenged if he knew what the law was.

As to the intervention of my hon. Friend the Member for Grantham (Mr. Hogg) during the speech of my hon, Friend the Member for Tynemouth (Mr. Trotter), the finance house is liable if goods bought under a hire purchase agreement are not merchantable. At present, the finance house is not liable if the goods are bought under other consumer credit agreements. When the Consumer Credit Act 1974 is finally in operation, finance houses will be liable if the goods are unmerchantable in most cases. That is the view of my legal advisers, but I am aware that the hon. Member for Grantham still holds the opposite view. I can advise him that I sat through both Committee stages on the Consumer Credit Act 1974. However, the law is not yet fully enacted and is subject to interpretation. In reply to my hon. Friend the Member for Billericay (Mr. McCrindle), who expressed doubts about clause 16, I made it clear that it is not acceptable and the sponsor has said that he will withdraw that clause.

The Minister is seven years out of date. I was the Member for Billericay but my constituency is now Brentwood and Ongar.

I apologise to my hon. Friend. In making that mistake, I have dated myself.

I agree with my hon. Friend the Member for Brentwood and Ongar, and my hon. and learned Friend the Member for Beaconsfield (Sir R. Bell), that it would have been much more satisfactory to have part II drafted by the Law Commission following a review by it and all the consultations with interested parties that would have been inherent in such a review. I do not believe that anyone would dissent from that point of view.

However, the acceptance in the meantime of part II, which helpfully codifies in statute law form for the information of consumers what they have a right to expect from purveyors of services under common law, in no way precludes that review taking place, and eventually a draft Bill being produced that will possibly replace part II. Therefore, part II is not the last word, but an interim measure.

We should not claim too much or mislead the House or consumers about what part II will do for them. It will do no more than codify and inform them about the present position. It will not make it easier for them to obtain redress. Their present rights to redress will exist, but until the Law Commission has reported—it will no doubt take some years—and has provided another draft Bill, that redress will not be available to them. My hon. Friend and my hon. and learned Friend are right to draw attention to that matter, but it does not constitute a reason for rejecting a measure that will inform consumers more widely and not place any undue burdens upon honest traders while the Law Commission is carrying out its review.

The hon. Member for Norwood (Mr. Fraser) recognised very fairly the problems of clause 16. His ambivalence on the matter underlines the desirability of referring it to the Law Commission, and he was the first to accept that.

We hope that agreement on the final text of the doorstep selling directive will be reached shortly. If it is agreed, legislation, by either a Bill or an order, will have to follow.

I sympathise with the need for the county courts to be sympathetic to consumer problems, and I welcome the increasing awareness by court officials and officers of the need to be as co-operative as possible with consumers when they are bringing cases in the small claims court.

My hon. Friend the Member for Plymouth, Drake (Miss Fookes), in her excellent intervention, mentioned the problem of subcontractors. If a consumer enters into a contract, he or she has rights against the contractor. If a subcontractor bodges a job, the consumer can proceed against the contractor, who can sort matters out with the subcontractor, so the contract is with the original contractor.

I have already answered several points raised by my hon. and learned Friend the Member for Beaconsfield. He said that consumers were too articulate. He then rephrased the remark and said that the consumer bodies were too articulate. There is a distinction between the two. I have been known on occasions to tell consumer groups that if they are unreasonable in their demands, the movement will lose credibility. I have equally been known to advise consumers to be more demanding in order to stimulate competition and raise standards. I am sure that my hon. and learned Friend would not object to that point of view.

From the hon. Member for Aberdare (Mr. Evans) we had the usual Aberdare grand guignol. Nevertheless, I know that his contribution was sincerely meant and that he supports the Bill, just as he supports consumers on every occasion.

I commend the Bill to the House. Almost every hon. Member, on each side of the House, has welcomed it, although not always in an unqualified way. I do not recall anyone from the SDP-Liberal Alliance speaking in favour of consumers, especially as one of them is a former Secretary of State for Prices and Consumer Protection. [HON. MEMBERS: "Where are they".] My hon. Members ask "Where are they?" Perhaps in some smoke-filled room in Queen's Gate they have more pressing business than the interests of consumers.

As I have said, practically every hon. Member taking part in the debate has demonstrated the desirability of the legislation. I therefore commend it to the House.

1.7 pm

As I am about to say that I do not approve of the Bill, I hope that the House will understand that I am not opposed to the well-being of consumers and that I am not in favour of misbehaviour by cowboys. I make that abundantly clear at the outset.

None of the hon. Members whose names appear on the back of the Bill is a plumber, garage hand, shopkeeper or industrialist. They are lawyers, lecturers, accountants and professional people who live in a sort of pink haze of well-being—or perhaps in some cases a pale blue haze of well-being.

I want to take issue in particular with a remark made by my hon. Friend the Member for Tynemouth (Mr. Trotter). He said that the Bill would cost nothing to the public purse. I am a bad mathematician and I do not know the salary of my right hon. Friend the Minister for Consumer Affairs, but her attendance here today alone, even if she never looks at the Bill again, must have cost the public purse about £55.

Worth every penny.

I see a bevy of able and intelligent people in the officials' box, seeking to help my right hon. Friend. We have the full panoply of the House, from you, Mr. Deputy Speaker to the many other officials who are here to help us. The Bill is costing the public purse a great deal of money. It will occupy virtually a full day's debate. It is a great myth that consumer protection legislation is free. Practically nothing in this world is free. It is important that we realise that the great burgeoning consumer protection movement costs a great deal of money to the very people whom it seeks to protect.

Does not the hon. Gentleman accept that if services can be protected it will save many people a great deal of money? People have been exploited. They have been paying through the nose for services that they have not received. If the Bill can help in codifying common law, the consumer will be protected in that way.

I do not for a moment believe that it will, judging from the remarks of my hon. and learned Friend the Member for Beaconsfield (Sir R. Bell) and my right hon. Friend the Minister, who commented that it was an interim stop-gap measure that made no change in the law—

That referred to part II only.

The hon. Member for Aberdare (Mr. Evans) was talking about part II. I wish to speak about the generality of the Bill.

It is unfortunate that by trying to attack a few cowboys—whom I, too, would like to be attacked—day by day we are putting greater burdens on legitimate traders who put on 5 per cent., 10 per cent., I know not what per cent. every time the House churns through another piece of consumer protection legislation. Every reputable garage will say "Oh God, what have those chaps in Westminster done now?", and they will put another 5 per cent. on all services. It is a fact of life that traders must protect themselves, and they do.

Much has been said about the cowboy contractor. Nothing whatever has been said about the barrack-room lawyer consumer, of whom there are a great many—people who try it on. One of my earliest experiences as a Member of Parliament was of a constituent who was in prison in North Germany complaining that every time he finished a sentence in a Scandinavian country or in a lander in Germany he was hauled inside for a similar offence that he had committed elsewhere.

Let me tell the House what his offence was. The man once had the great misfortune to trip over a piece of loose carpet in a hotel. He dislocated his shoulder, which was extremely painful. He then discovered that the hotel paid up extremely handsomely. He also discovered that if a carpet was a little loose he could put his shoulder out a second, third, or even a tenth time, with no discomfort. He travelled round Scandinavia and the rest of North Europe visiting hotels, dislocating his shoulder and getting handsome payments. Unfortunately for him, he was just going through his act in Hamburg when an hotelier from Gothenburg was clocking in. He remembered the man and the episode. The hoteliers' union—or whatever it was called—did the man for fraud, quite rightly. The first time it was genuine enough, but subsequently it was a palpable fraud. Twenty-five years ago—the time about which I am speaking—the Europeans were perhaps tougher than they are today and the man visited many Northern European goals as an inmate.

I give that as a non-British example of the fact that many consumers are dishonest barrack-room lawyers. We kid ourselves if we believe that only the providers of goods and services are possibly disreputable. Virtually every hon. Member who has spoken has paid tribute to the excellent services that can be and frequently are given by casual visitors at one's door. The hon. Member for East Kilbride (Dr. Miller) gave an excellent example of the good services which can be given by casual traders or casual service providers. At this time of high unemployment, we must encourage people who offer a service. It would be lamentable if the House made it harder for reputable people to offer services within their reasonable ability.

Part II of the Bill is peppered—in clauses 13, 14 and 15—with the terms "reasonable time", "reasonable charge", and "reasonable care and skill". All these cases of "reasonable" this and "reasonable" that will have to go to the courts if the Bill becomes law. The courts will not look at the codification we have today, which the supporters of the Bill praise so highly. The courts will look at case history. Therefore, the codification of the common law that is being advocated today is still only a temporary codification. A case of someone versus someone in 1890 will still be a good precedent and will still be quoted in the courts.

This is a costly Bill which does very little. We are in grave danger, as a nation, of becoming over-tender to the consumer, who is also the person who has to pay for the services, the good services and the good goods, that he or she buys. If we over-coddle consumers, we shall only put up the price to those same people.

1.17 pm

I listened with great care to my hon. Friend the Member for Maidstone (Mr. Wells). I regret to say I disagree with almost the entirely of his speech. It was based on a bizarre assumption that the effect of this legislation would be to introduce new law and practices into consumer affairs. I do not believe that is the case, because the Bill, in every respect I think, is declaratory of existing common law provisions.

That being so, although the Bill might bring the law more clearly to the consumer's attention, it in no way adds to the substantive legal burdens already imposed on the producer or person who renders services. Therefore, the premise on which my hon. Friend founded his criticism of the Bill is extremely unsafe and doubtful, and I do not agree with his conclusions.

It is not an interest that I ought strictly to declare, but I am a council member of the Consumers Association. That organisation has lent its weight and support to the Bill. I should like to be associated with other right hon. and hon. Members who have congratulated the right hon. Member for Sunderland, North (Mr. Willey) on bringing the Bill forward. It was a sensible and wise decision, and we are grateful to him.

I am entirely behind the main substance of the Bill. I do not need to rehearse the arguments already advanced. The 1893 legislation did not include a number of important contracts. I am delighted to see that the Bill will now bring into existing law contracts of bargain and contracts of hire. That I do not praise the right hon. Member or commend the virtue of the Bill at greater length is to save time, and for no other reason.

I have two criticisms of the Bill. I hope that they will be borne in mind at a later time. They do not go to the root of the Bill, but they are significant. My first criticism relates to the position of finance houses. On this matter, I have the misfortune to differ from the Minister.

Finance leasing or hiring arrangements with finance companies are becoming an increasingly important part of commercial life. A customer visits a retailer, chooses a certain item—such as a car or agricultural machinery--and it is delivered to him. An arrangement is made between the retailer and the finance company, and ownership of the item passes to the finance company, which hires it to the customer. There is no contract, and thus no privity of contract between the consumer and the retailer. The only contract will be between the finance company and the consumer, and that is becoming increasingly common-place. Such arrangements allow sophisticated equipment to become available to ordinary or specialist consumers.

It should be an implied term of such an arrangement that the goods to be hired should be reasonably fit for the purpose for which the consumer requires them. That would be the position if there were a contract of sale or a hire purchase agreement. Does the Bill or any other legislation mean that there is such an implied term on which the consumer can call? I do not think that there is.

I apologise for speaking in the debate so late in the day and after the Minister has replied. I think that my right hon. Friend relied on section 75 of the Consumer Credit Act 1974. That section does not apply for two reasons—first, it has not been brought into effect; and, secondly, its intended effect is to make the finance house liable only to the extent that the retailer is liable. However, the retailer can be liable to the consumer only for misrepresentation or breach of contract. I have already said that there is no contract between the retailer and the consumer in the majority of cases. Therefore, section 75 cannot apply.

That view was taken by the Law Commission in its report—I commend page 30 to the Minister—and also by the Finance Houses Association. That body said in a letter that the Bill might impose such terms upon finance houses. I submit that it does not. Does the Bill impose any obligation upon the finance house if the goods are not reasonably fit for the purpose? I believe that it does not. The obligation arises only if the criteria in clause 9—and especially clause 9(4)—are satisfied. Under that provision, the implied condition of reasonable fitness arises only if the purpose is made known either to the bailor—the finance house—or to a credit broker The purpose will never be made known to the bailor because it is remote. Will it be made known to the credit broker? The definition section of the Bill makes it clear that, although the bailor may occasionally be the supplier, in the great majority of cases he will not be.

Representations making known particular purposes to the retailer in the first instance should be sufficient ground to give rise to the implied term. Therefore, if I go to a supplier, say that I want something for a particular purpose and enter into a finance arrangement with a finance house, I should be entitled to the implied protection that the article will be reasonably fit for its purpose. That aspect is not covered by previous legislation or the Bill and it ought to be.

Two other considerations might influence the Minister. First, under a hire-purchase contract, the hire purchase company is liable for representation made in antecedent negotiations. I ask for parity in that situation. Secondly, the finance company can always recover from the retailer, if there is an appropriate term in the contract between them. My proposal would not, therefore, be unfair to finance companies. I shall never cry over finance companies. They are often party to increasingly sophisticated commercial transactions, and they should not escape from contractual obligations which should be imposed on them. The Bill needs strengthening in those respects.

We will, of course, consider that aspect, but I hope that the hon. Member for Grantham (Mr. Hogg) will take the opportunity of serving on the Standing Committee to ensure that that aspect is properly discussed.

I am grateful to the right hon. Member. I hope to serve on the Standing Committee. We are all agreed that there is no pre-existing legislation. The finance houses expressed concern that the Bill may impose such a term on them, but I am telling the right hon. Member that it will not. That is the division between us.

I dissent from what was said by many hon. Members about part II. I believe that part II should not be included in the Bill. First, we must understand that it is only declaratory of common law. There are only three terms—reasonable price, reasonable time and reasonable skill. That does not add to consumer protection; it merely states the common law.

The hon. Member for Norwood (Mr. Fraser) said that part II would enable legal rights to receive wider publicity. That is a fair point to be put into the balance. What are the arguments against that? First, contracts for services are much more involved than many hon. Members appreciate. Many other questions must be answered. For example, should we follow the Australian model and say that, when the work is done, it should be reasonably fit for consumers? Secondly, what is the extent of the lien that the service company should be entitled to exercise? Thirdly, what range of damage should be recoverable? Fourthly, to what professions should this extend? I am a barrister and declare an interest. Should the provisions extend to the Bar? Those are all questions which cannot be ignored and which touch materially on any changes in the law. It was because of such considerations that the Law Commission's recent report on implied contractual terms for the supply of goods recommended that it should consider the matter before coming forward with draft legislative changes.

The Minister told the House that my right hon. and learned Friend the Lord Chancellor will request the Law Commission to consider clause 16, or the limitation exclusions of liability covered by that clause.

indicated dissent.

The Minister shakes her head, but that did form part of it and she also said that the Law Commission would be asked to consider contract services generally.

indicated assent.

I see the Minister agreeing with me.

The Law Commission will consider the law on contracts of service. There will not be an enormously long delay—perhaps 18 months or two years—before it issues a report. I urge caution, bearing in mind that the provisions are declaratory only of existing common law provisions.

We should delay any legislative changes in this area until the Law Commission has reported on the law relating to services. I am sure that it will provide a draft Bill as an annex to its report. No doubt a public-spirited hon. Member will follow the example of the right hon. Member for Sunderland, North and adopt it as a Private Member's Bill. Let us not have part II, because it is premature.

1.30 pm

I support the general concepts of implementing the Law Commission's recommendations on the sale of goods and extending sale of goods protection to the supply of goods and services, but I approach the Bill with the greatest caution. Although most contractual law is enshrined in statute, the old concepts still apply and there are still references in court cases to "assumpsit" and "action on the case". Many of the old common law and equity terms are still relevant.

Hon. Members have spoken about the implication for the legal practice of a change in the law, but perhaps they have not turned their minds to the implications for business men and those who advise business people and consumers. Millions of forms include the contractual law as it stands and legal advisers have to advise companies on the law as it stands. If there is a change in the law there will undoubtedly have to be changes in the millions of forms covering contracts. The Law Commission has more representatives of the law and substantial business than of smaller traders.

I approach the concept of a redefinition of the law with the greatest concern and apprehension. Knowing that laymen sometimes rush in where lawyers fear to tread, I took the liberty of checking the qualifications of the right hon. Member for Sunderland, North (Mr. Willey) to introduce such a Bill.

If there is another right hon. or hon. Member with a first class honours degree in law who also won the Blackstone, Harmsworth and McMahon prizes—I did not know that anyone had ever won all those prizes—and is also a soccer blue, I would defer to him as much as I defer to the right hon. Member for Sunderland, North. The Bill has the best possible provenance and I am reassured by that.

However, the right hon. Gentleman will be the first to acknowledge that what appears simple is often nothing of the sort and that consolidating and simplifying the law may lead to further complications. There are many phrases in the Bill that will need judicial interpretation. Matters that appear to be extremely simple will require definition and may result in complication rather than simplicity.

For example, clause 3(4) refers to goods that are "exposed for supply"—a term which appears simple, but which I am sure will require judicial definition. Clause 4(3)(b) refers to defects that "examination ought to reveal". That will also require definition. Clause 4(6) mentions "where the circumstances show" and clause 4(9) refers to "the price if relevant".

Those points may merely be matters of definition, but the courts will have to decide whether the Act is a matter of redefinition.

When I see in part II that two matters are referred to as being matters of fact, I become even more apprehensive. What is a matter of law and what is a matter of fact has always been the subject of dispute among lawyers.

"The Beginner's Guide to Contract" states:

"the distinction, it is feared, must still be maintained, the exact demarcation between fact and law has never been determined."

Later it states:

"It must be said, in conclusion, that the whole relationship of law and fact remains incoherent and continues to embarrass many branches of English law."

What is apparently simple may not be as simple as it looks.

I urge caution on the Committee that will examine the Bill. I hope that it receives a Second Reading, but I wish to add one further point of caution. We are told that many complaints are made by consumers, but how terrible are the wrongs that the Bill seeks to right? I heard earlier in the debate that there have been about 124, 000 complaints about services. An hon. Member asked how many complaints that represents per day. I calculate that 124, 000 complaints about services means that only one person in 40 has complained. That does not seem to be many, because people tend to be dissatisfied with the services with which they are provided.

A survey in the United States showed that 78 per cent. of the world's population believes that it is badly governed. Of course, people are dissatisfied with services that are provided, and with their Government. If we tighten up consumer protection—I urge hon. Members to recognise this—we shall increase the responsibility on honest traders and increase the cost disparity between the honest traders and the cowboys.

Examples have been given by hon. Members of ways in which consumers have been badly treated, notably that given by my hon. Friend the Member for Plymouth. Drake (Miss Fookes) of a man who volunteerd to apply tarmacadam to her mother's drive for £200. He subsequently turned out to be a liar who had only an accommodation address. Such people will continue to get away with deluding and deceiving honest purchasers and consumers. We are codifying the practice which will be incumbent upon the honest trader.

My right hon. Friend the Minister warned against cowboys. I agree with her, but we must be careful when applying the law in favour of consumers. The hon. Member for Norwood (Mr. Fraser) made an important point when he said that we need to protect the small man who says that he will do his best.

One of my life's nightmares is when a workman does a small job in my own house. My wife is fond of saying "While you are here"—a phrase used by my hon. and learned Friend the Member for Beaconsfield (Sir R. Bell)—"would you be good enough to look at some defective plaster? While you are here, would you help with this bit of rewiring?" If the chap is helpful he will be prepared to do that and may find the whole panoply of law descending on him like a ton of bricks.

I urge all those concerned with consumer affairs to recognise that not every small trader wants to develop around him a panoply of lawyers and financial advisers. Many want to get on with the job. Every time we tighten the screws on behalf of consumers we are making life more difficult for the man who is trying to do his best.

I believe that the Bill deserves a Second Reading. I hope that it will proceed. However, I urge a firm word of caution. My right hon. Friend used the phrase "a bird in the hand is worth two in the bush", but such an attitude to the reform of law can be very dangerous and extremely complicated because of the millions of people who will be affected by changes in the consumer law. The Bill should go into Standing Committee, but I urge caution on the Members of that Committee.

1.40 pm

I add my congratulations to the right hon. Member for Sunderland, North (Mr. Willey) on his good fortune in being able to bring forward this Bill.

I am surprised that I am one of the few hon. Members to declare an interest. I believe that my hon. Friend the Member for Maidstone (Mr. Wells) said that the majority of hon. Members sponsoring the Bill were from the other side of the fence and that they were mainly lawyers. It is important to realise that the supply of the majority of goods and services and other transactions occur in a satisfactory manner at a fair price and within a reasonable time.

My hon. Friend the Member for Gosport (Mr. Viggers) said that, when asked, the public are inclined to say that politicians do not give a satisfactory service. The same is said of lawyers and many other professions, but on reflection we discover that we are given good value. I have been horrified at some lawyers' bills but on reflection I realise the enormous amount of work involved. The same applies to plumbers and others. It would be wrong to give the impression that we are surrounded by rogues and vagabonds.

I do not agree with the right hon. Member for Sunderland, North when he suggests that there might be more rogues today than there used to be. I believe that there were just as many rogues in days gone by, but that people did not know their rights. They tended to keep quiet and hope that they would learn by their experience.

I welcome the fact that these days people know their rights. They know where to apply if they believe that they are not being dealt with as they should be. Most of my colleagues have experienced that. We often wish that our constituents would go to the Consumers Association with their complaints first and come to us later. We often receive consumer complaints at an early stage. Most people realise that they have rights and are determined to find out how to exercise them.

The hon. Member for Tooting (Mr. Cox) was misguided in suggesting that local authorities should be invited to compile lists of approved contractors. That would be open to all sorts of abuse and would be entirely wrong. Already local authorities are heavily criticised for producing lists of contractors that they are prepared to use. If local authorities had to take on that additional responsibility for consumers or, heaven forbid, had to follow up the hundreds of complaints that would follow, they would be left in a very unsatisfactory state.

The only sensible solution is self-regulation. I hope that the Bill will not encourage the general public to believe that they can leave their responsibilities and duties to look after themselves entirely to the State. When one wishes to employ a person's service one should ensure as best one can that the person is properly qualified.

The trade associations should be encouraged in every way possible by the Government to promote their trade so that people know that there is someone to whom they can go with a complaint. It would be unfortunate if we gave the impression that by passing such a Bill the general public can just relax and not worry because there will be some retribution in relation to their complaint. That is far from the truth.

We have heard of constituents who have suffered from those who offer their services on the doorstep having no regular business address and the service that they offer being beyond their ability. This form of trading requires the separate licensing that my right hon. Friend the Minister mentioned was under review. My personal belief is that it would be right for local authorities to have a large say in deciding those to whom licences for door to door offers of services should be given. This is an area in which old people particularly suffer. Many are approached by the type of person that hon. Members have been discussing—the cowboy with no known address whose main object in life is to prey upon those who are least able to look after their own affairs. Hon. Members should not try to suggest that the Bill would take away the responsibility of every consumer to look after his or her own affairs. We should therefore encourage the setting up and promotion of trade associations for internal regulation.

I do not personally accept the suggestion that there should be a postponement of part II of the Bill until the Law Commission has deliberated. We criticise the length of time taken by traders in providing services. Everyone knows that lawyers are among the worst examples in taking time to consider their recommendations. It would be wrong to postpone a matter of this importance until the Law Commission has reported. There is every reason to have an interim provision. If the Law Commission can come up, in a few years' time, with a better answer, so be it. I do not subscribe to the views of my hon. Friend the Member for Grantham (Mr. Hogg) who suggests that we should leave well alone until the case has been presented.

I have great pleasure in supporting the Bill. I hope that it will receive a Second Reading and make further progress. I hope in the interests of all good traders and consumers that it will not be delayed purely and simply on the technicality of a reference to the Law Commission.

1.47 pm

I should like to be associated with those hon. Members who have congratulated the right hon. Member for Sunderland, North (Mr. Willey) on bringing forward the Bill. In view of the full debate that has taken place, I do not propose to extend my remarks beyond a few minutes, especially as I see the hon. Member for Cannock (Mr. Roberts) in his place. I know that the hon. Gentleman has a Bill that he wishes to lay before the House. I believe I am right in interpreting that the wish of the House is to see the Bill receive a Second Reading and go to its Committee stage.

I wish to read briefly from a letter that I received from the secretary of the consumer advice bureau in my constituency. It is an excellent consumer advice bureau, as I know my right hon. Friend the Minister recognises. She also knows that my constituency is an important shopping centre in the north of London to which many people come from all parts of Hertfordshire and north London. I disagree with my hon. Friend the Member for Maidstone (Mr. Wells). It is important to the vast majority of honest and decent traders providing goods and services in my constituency that a good consumer advice centre should exist, as is the case in my constituency. It is important that I should read out the view "from the field" about the Bill. The secretary and organiser of the centre says:

"The Bill is a very important one which if passed will strengthen the position of consumers considerably in an area where at present there is no statutory provision and reliance is laid essentially on common law rights and voluntary codes of practice. Problems that do arise in considerable quantities in the field of consumer services such as motor repairs, home improvements, servicing of domestic appliances, etc., take up a great deal of time and attention and effort since at present there is no Act of Parliament dealing with the provision of services. If advisers could refer to a specific statute, as is the case, for example, in the matter of goods purchased and the Sale of Goods Act then their work would be made somewhat more straightforward and the users of services…will be much better placed than at present in sorting out such issues as bad workmanship or exorbitant charges."

That sums up very well the merit of the Bill.

I re-emphasise that the Bill does not attempt to make new law. It seeks to codify present rights, implied or existing, in the common law. I take the view not only that it is good for the consumer but that it is also good for the vast majority of honest traders in commerce or in services.

I listened with great interest to what my hon. and learned Friend the Member for Beaconsfield (Sir R. Bell) and my hon. Friend the Member for Grantham (Mr. Hogg) said about part II. I can see some merit in what they say. Perhaps there is a risk in introducing a piece of legislation when we know that the Law Commission will be providing us in one, two, three or four years—there is some dispute about when it is likely to materialize—with a fully considered Bill that we can examine and which no doubt another hon. Member will introduce. Equally, although I have no legal qualifications, it seems to me that if this Bill seeks simply to codify existing rights and, if the Secretary of State already has powers to intervene in cases where, perhaps due to the shortage of time, errors have been made, on balance I support part II as it stands, accepting that the right hon. Member for Sunderland, North has shown considerable flexibility and agreed that clause 16 should not remain part of the Bill.

Without wishing to detain the House any further, I join other hon. Members and my right hon. Friend the Minister for Consumer Affairs in giving the Bill a very warm welcome.

1.53 pm

I wish to take only a minute of the time of the House simply to welcome this measure, to say how important it is to consumers, and to express the hope that it is dealt with in its entirety and that there is no delay in dealing with part II. I know that the hon. Member for Cannock (Mr. Roberts) is anxious to secure support for his Bill, and rightly so. In view of that, I shall simply welcome this measure.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Trade Descriptions (Amendment) Bill

Order for Second Reading read.

1.54 pm

I beg to move, That the Bill be now read a Second Time.

In view of the late hour, my remarks will be extremely brief in the hope that the Minister manages to catch your eye, Mr. Deputy Speaker, and can give us at least her reaction to the measure.

It is a very important Bill. It is very much in line with the consumer protection measure to which we have just given a Second Reading. Essentially, it closes some of the loopholes in the Trade Descriptions Act.

We heard in the previous debate that a great deal of our present consumer protection legislation waited for some 90 years. Legislation on the subject with which my Bill deals waited only about six years. Essentially the Bill implements some of the major recommendations of the committee under the chairmanship of the late Sir John Methven when he was Director General of Fair Trading. Although my proposals may not be fully in line with his, my intention is to implement something along those lines.

The Bill has two main proposals, It brings services in general into line with goods with regard to the Trade Descriptions Act. It is amazing that under the Trade Descriptions Act, whereas goods enjoyed the full force of the Act under section 4, services were dealt with differently under section 14, where the individual, to commit an offence, had to give false information knowingly or recklessly.

In its report Sir John Methven's committee felt that there was no fundamental reason why that differentiation between goods and services should remain. The first major proposal in the Bill is that those two things should be brought into line. It is clear that there is enormous abuse of the laxity of the services provision in the Trade Descriptions Act.

In the three or four weeks since I said that I would introduce the Bill, I have had scores of letters from all over the country. A great many refer to brochures that advertise holidays. Often when a family goes on holiday, it finds that its holiday is not what is described in the brochure.

I have heard a particularly sad story from an elderly couple who booked a holiday abroad. They spent a great deal of their life saving for that holiday. It was supposed to be the holiday of a lifetime. However, when they reached their destination they found that the hotel had poor provisions. The brochure had stated that there was a good view of the harbour from the hotel. Only a giraffe with an extremely long neck could have seen the sea from that hotel.

We all hear such stories time and again. They have been repeated in my correspondence. Brochures describe a luxurious swimming pool. When the holidaymakers arrive, they find a hole in the ground. The idyllic country cottage turns out to be an old barn that is falling down. In the brochures we always see pictures of beaches fringed with palm trees. One year the picture is described as Rimini, the following year it is Nice and the third year it might be Bootle—not that I have anything against Bootle.

Such problems apply not only to holidays but to every type of service provision. Today several hon. Members have mentioned the increase in the number of people who knock on the door and offer their services. All sorts of unsolicited literature are coming through the door, which glowingly offers all types of services. The provisions would also apply to those services.

Some hon. Members may feel that the present legislation is adequate and that we can afford to wait for a Royal Commission to report. However, the facts are not like that at all. Mr. Jim Potts, trading standards officer in the West Midlands, says:

"We had about 60 complaints last year specifically involving false brochure descriptions. But we didn't manage a single successful prosecution under section 14 of the Trade Descriptions Act."

Indeed, it is so hard to make a complaint stick that Mr. Potts says that the Act is "virtually inoperable". If that is the view of that officer, who has considerable experience, as the House will accept, the Act clearly needs to be changed.

Perhaps an obvious example of how absurd the situation can get is that of people who sell hearing aids and the accompanying service. Whether the person benefits from a hearing aid depends greatly upon the service that is provided with it. The absurdity of the existing situation is that whereas the aid itself is goods, and therefore covered by the present provision, only the minimal provisions of section 14 apply to the important service. Rectifying that is one of the major aims of the Bill.

The second aim is to close probably the largest gap in the Trade Descriptions Act 1968—the complete exclusion of real property, whether in the form of houses, shops, factories or whatever. The operation of estate agents in general is, of course, not covered by the Act. As all hon. Members will know from their experience of complaints, this is an area in which action is desperately needed.

The Daily Star has reported a useful example of someone who went to view a house which was advertised as having three bedrooms. The lady concerned thought that one of the bedrooms was rather small. When the family, which desperately needed the third bedroom, tried to push a bed into the third bedroom, having bought the house, they found that it could not get the bed in, whatever contortions they attempted. The sleeping accommodation consisted of two bedrooms and a box room. Clearly the description was unacceptable for that sort of property.

The difficulty does not lie with the unscrupulous estate agent. I am not talking about the man who mentions that the house overlooks the local golf club but "forgets" about the sewerage farm that separates the house from the golf course. One of the real problems lies with the measurement of rooms, which is frequently extremely lax. This results in prospective clients wasting a great deal of time by being led to view property which is obviously unsuitable. Sir John Methven and his committee felt that real property should be embraced by the Act. I understand that the Minister will tell us that he was not prepared to go as far as the Bill, but it appears that there is flexibility. If we go as far as Sir John wants to go, we shall make considerable progress.

The Bill includes the concept of civil penalties, which came from the Consumers Association. The association considered the Bill to be a useful vehicle for exploring that concept. I understand that my hon. Friend the Member for Norwood (Mr. Fraser) has already drawn attention to this sort of provision when debating the Supply of Goods and Services Bill. I accept that on reflection the House may feel that the Bill is not the right vehicle for the introduction of what is virtually a new legal concept. If that is the feeling, I shall withdraw the clause in Committee. Its insertion may not be the best way of making such a major change.

What arguments can be advanced against the Bill? It seems that there are only two. There is the traditional argument advanced by Conservative Members when discussing the Supply of Goods and Services Bill, which is based on cost. It is argued that the good tour operator or estate agent will incur additional costs because he will have to ensure that he is not infringing any of the provisions in the Bill. That is not a valid argument. The good tour operator, the travel agent who is doing his job properly, and the decent estate agent are already ensuring that their brochures and advertising conform with the specifications set out in the Bill. Such operators and agents will incur no additional costs.

Certainly cost is a possible argument against the Bill. It is not an argument that I support because in general I approve of what the hon. Gentleman is trying to do. If we consider holiday brochures, is there not an alternative way for tour operators to react that would be to the consumers' disadvantage? That alternative would be not to increase the cost of the holiday but, because of an awareness of their openness to prosecution under the Bill, to be extremely careful about the information that they include in their brochures, thereby reducing a large part of the enjoyment of the great British public in choosing their holidays from catalogues while at home.

I do not accept what the hon. Gentleman says. At present the dream is greater than the reality. It would be far better for the individual to find the reality greater than the dream when on holiday. I hope that that will be achieved if there is any movement of the type that the hon. Gentleman suggests.

The second argument against the new concept to which I have referred is the possible absence of a defence for the tour operator. Would he feel endangered if the Bill were enacted? There are adequate defences already within the Trade Descriptions Act 1968. One defence lies in the travel agent having relied on what he regarded as a reputable tour operator for his information. If he has acted in a reasonable and diligent manner, he will have that defence. I do not accept that the Bill involves any danger for the decent and honest estate agent or for the decent and honest provider of services.

Many organisations have expressed their support for the Bill. I shall not list them, in view of the hour. Among the organisations that have expressed support is the Institute of Trading Standards, which would be responsible for administering the Bill, if enacted, as it is already responsible for administering the Trade Descriptions Act. The Bill would be of great benefit to consumers generally. It would also be beneficial to businesses that provide a service. I hope that the House will accept the Bill and that we can make speedy progress.

2.10 pm

First, I congratulate the hon. Member for Cannock (Mr. Roberts) on his success in the ballot. I am pleased that we have an opportunity today, however brief and inadequate it may be, to discuss his Bill. Whatever view the House takes of the hon. Gentleman's proposals, there is no doubt that they raise issues of real interest and importance to consumers. The allowance of time for parliamentary debate on the subject is overdue. Therefore, I have listened with interest to the points made by the hon. Gentleman.

The Bill would give effect to two of the recommendations for amendment of the Trade Descriptions Acts 1968 and 1972 proposed in a report of 1976—there is some significance in that date—by the then Director General of Fair Trading, the late Sir John Methven. Many hon. Members will remember that gentleman with great respect. In that report, many matters were brought forward after a comprehensive review of the Act.

The report, which remains the most comprehensive available analysis of the Trade Descriptions Acts and the issues of consumer policy that lie behind it, proposed that the Act should be amended on a significant number of points, many of which, as in the present Bill, touched upon matters of considerable technical complexity. As the report was written in 1976, the complexity of the matters involved in the recommendations has been the main reason why legislation was not brought forward earlier.

As I shall try later to suggest to the hon. Gentleman, there have been developments. There is legislation about estate agents that may, after some time, overtake some of the concepts or principles that the hon. Gentleman had in mind when he brought forward the Bill. It cannot be denied that there are aspects of considerable technical complexity involved in the matter.

As the hon. Gentleman explained, the underlying aims of the Bill are relatively straightforward. They are also—I know that it will not surprise the hon. Gentleman—radical proposals. They would remove altogether what legal experts call mens rea from section 14 of the Act—that is the requirement of the concept of the guilty mind—with the result that persons making false or misleading statements about services of the sort specified in the section could be convicted of a criminal offence without the need, as at present, for proof that their statements had been made knowingly or recklessly.

Additionally—I realise that the hon. Gentleman is fully aware of these aspects—the Bill would create a new criminal offence in respect of certain statements made in the course of a trade or a business about land and buildings. In effect, it would bring real property within the scope of the main Act.

I should perhaps remind the House at this stage that if a false or misleading statement amounting to a deception is made dishonestly about land, buildings or services, and as a result a pecuniary benefit is obtained, it is already an offence under the Theft Act; and if a false statement is made as a result of negligence, and in consequence an innocent party is induced to acquire services, land or buildings, he may well have a civil remedy available to him. Those are two important existing points concerning the legal position which have to be borne in mind in assessing the significance and importance of the hon. Gentleman's proposal.

Thus, the Bill would leave traders who in all innocence make false statements about services in a significantly worse position concerning the defences available to them than exists at present in respect of misrepresentations about goods.

Whatever the good intention of the hon. Gentleman in bringing his proposals to the House, I feel sure that he and a great many hon. Members would feel, on reflection, that that would not be an acceptable position. It would be a position about which we would need a great deal more thought, study and consideration. Undoubtedly, that part of the hon. Gentleman's proposals could not be described as acceptable.

The Methven report, which I mentioned earlier, outlines some of the main arguments that are relevant to the general purport of the hon. Gentleman's Bill and that could be described as being for and against the proposals and the direction in which the hon. Gentleman wishes to move.

In the case of mens rea in misstatements about services, it has to be borne in mind that assessments of the truth or falsity of descriptions of services are often inherently much more subjective than are similar assessments of descriptions applied to goods. That was, no doubt, one of the reasons why the need to prove knowledge or recklessness was originally included in section 14, of the 1968 Act.

On the other hand, my right hon. Friend the Minister for Consumer Affairs and I are well aware that many consumers see no reason why, in principle, misclescrip-tions of services should be treated differently from misdescriptions of goods. One understands that approach. It is often the technical complexity involved that begins to present the difficulties when one comes to deal with the problems by way of legislative proposals.

With regard to land and buildings, it has been argued that extension of the Act in the way proposed by the Bill is unnecessary and would make little practical difference to the majority of ordinary consumers. That is because people buying houses usually, if they are wise, employ professional advisers of their own to check the accuracy of all important particulars about the property supplied by or on behalf of the vendor. At some stage in the proceedings there is the opportunity for a professional expert to be involved in the examination of these details and in the examination of the circumstances in giving advice to the purchaser in this very important transaction.

The new offence created by the Bill would apply, as Methven recommended, only to misstatements made in the course of a trade or business by private individuals. Those individuals, who provide such a significant proportion of the sales in the housing market, would not be in the same position.

Against that, the Methven report points out that the lack of any provision to deal with false statements about house property, which constitutes the ordinary person's most expensive purchase, has long been regarded by many as a substantial and unwarranted weakness in the 1968 Act. I understand that. Sir John Methven was himself a solicitor, highly experienced in dealing with transactions, and moved on to gain a wide experience of consumer affairs. Undoubtedly, he was right in saying that the lack of these provisions would appear strange to the general mass of laymen.

As I have tried to emphasise, it is the technical complexity that is involved that has caused the years to pass without legislative proposals to deal with the general point that Sir John Methven and other members of his committee had in mind.

My right hon. Friend the Minister for Consumer Affairs asked me to make it clear that she does not regard the present position on house descriptions as satisfactory, and many hon. Members would have similar reservations about certain aspects of it.

The hon. Gentleman has a peerless reputation for courtesy. Will he allow the Opposition Front Bench spokesman to speak for a few minutes before the end of the debate?

I shall do my very best.

It should be borne in mind that the Estate Agents Act 1979 should help to raise standards in this professional area. My right hon. Friend will certainly consider whether there is need for further Government action and, if so, what the best vehicle might be. Most estate agents already include a disclaimer relating to the accuracy of details published by them of property for sale. It would be helpful if a way could be found for them to advise consumers to have an independent survey carried out on their behalf.

Weighing up the arguments on the Bill as a whole, our conclusion—I am trying to comply with the request of the hon. Member for Norwood (Mr. Fraser)—is that a consumer case can be made in principle for both its proposals, but there are also some important practical points that need prior detailed consideration. The House would have to be prepared to allow a detailed study before further progress could be made.

Surely nothing should be done that would inhibit either an owner or an estate agent from describing a ropey old shack as a house of charm and character? I hope that that is not the intention.

I am not sure whether my hon. and learned Friend puts that point seriously. Like him, I am aware of the fact that many descriptions of property are unduly and unreasonably rosy and, therefore, to that extent, misleading. However, the recipients of those communications tend to judge them in the light of that general thought. Therefore, what I have sought to do in the short time available—

Presumably, the Minister would not wish to sit down before underlining the fact that although it may be desirable to move in the direction the Bill proposes, under codes of conduct operated by tour operators and the Advertising Standards Authority requirements, there are some protections in existence for consumers. Although it may be ideal to push towards what the hon. Member for Cannock wishes, it would not be fair to leave the impression that there is no protection for the consumer at present.

My hon. Friend is entirely right to emphasise the degrees of protection that already exist. I am glad that he has referred to codes of practice that are developing and setting higher standards in these respects. They apply to a number of trades and professions that are relevant to these considerations. The situation is improving.

For all those solid reasons and also because there are extraordinary technical difficulties and complexities and certain very hard and specific reasons why we should have reservations about the nature of the Bill—I mention particularly the reservation about mens rea—it would not be possible to make progress on the Bill, and I would have to ask my right hon. and hon. Friends to vote against the Bill should there be a Division.

2.26 pm

The Minister's remarks are unfortunate. This is a short Bill. It has only two clauses, and it would be perfectly appropriate for such a short and important Bill to have a Second Reading in the House today. I recognise that the Government and many hon. Members have reservations about the Bill. Nevertheless, it would be perfectly appropriate for such a short Bill to have a Second Reading and then to be considered in detail, on its three main propositions, in Committee. There are precedents. I give the example of the Unfair Contract Terms Act, which enjoyed the full connivance of the right hon. Lady the Minister for Consumer Affairs, which I recognise and praise. That Bill passed through the House on Second Reading without any debate. Other important matters of legislation, when not highly controversial, have been dealt with in that way and have been properly and thoroughly considered in Committee. Both the House and the country have been grateful for them.

There are three propositions in the Bill that will not receive the same unanimity as the previous Bill, but which are worthy of detailed consideration in Committee. The first is Sir John Methven's proposition that misdescriptions about services should incur the same treatment under the Trade Descriptions Act as misdescriptions of goods. That is a proposition about which the House could probably unite most easily. After all, is it right that a person should be under absolute liability if he misdescribes the contents of a box of matches but that there should be a lesser liability if a person misdescribes a holiday that may cost a family £1, 000? There is a certain logic that the rigour of the law should apply there, as Sir John Methven said in his report. We could discuss it further.

The second important proposition that is worthy of examination in Committee is whether offences such as those under the Trade Descriptions Act should always attract criminal penalties. There could be a long discussion about that, but I believe, very firmly, that there has been an overuse of the criminal law and that its use in trading legislation, weights and measures legislation and motoring legislation has brought the criminal law and respect for it into disrepute. That needs to be recognised.

Thirdly, there is the problem of estate agents. Although I am the sponsor of the Bill, I believe that it goes a little too far and that there ought to be more defences than are available in the Bill. But that is an extremely important matter and well worth examination in Committee. It is a short Bill. The matter has not been dealt with before, not because of its complications but because of the way that Governments of both parties organise their time and because of the vagaries and difficulties of pursuing private Members' legislation. That is why we have not made any progress. Complication is no reason why the House should not engage in a short debate and allow the passage of the Bill this afternoon. It can then be examined in detail in Committee—

It being half-past Two o'clock, the debate stood adjourned.

Debate to be resumed upon Friday 30 April.

Relief From Forfeiture Bill

Order for Second Reading read.

Object.

Second Reading deferred till Friday 26 February.

Sex Discrimination Act 1975 (Amendment) Bill

Order for Second Reading read.

Object.

Second Reading deferred till Friday 29 January, in the hope that the hon. and learned Member for Beaconsfield (Sir R. Bell) will not object on that day.

Race Relations And Immigration Bill

Order for Second Reading read.

Object.

Second Reading deferred till Friday 26 February.

Replica Firearms Bill

Order for Second Reading read.

The Bill has not yet been printed, so I cannot put the Question. Second Reading what day? No day named.

Procedure (Finance)

Ordered,

That a Select Committee be appointed to examine the House's financial procedures and to make recommendations.

Ordered,

That the Committee do consist of Seventeen Members.

Ordered,

That Mr. Anthony Beaumont-Dark, Sir Peter Emery, Mr. Michael English, Mr. John Garrett, Mr. W. W. Hamilton, Mr. Terence L. Higgins, Mr. Frank Hooley, Mr. Kenneth Lewis, Mr. Robin Maxwell-Hyslop, Mr. J. Enoch Powell, Mr. Giles Radice, Mr. John Roper, Mr. Fred Silvester, Mr. Roger Sims, Mr. Keith Speed and Mr. Peter Thomas be members of the Committee.

Ordered,

That Six be the quorum of the Committee.

Ordered,

That the Committee have power to send for persons, papers and records, to sit not-withstanding any adjournment of the House, and to report from time to time.

Ordered,

That the Committee have power to appoint persons with technical knowledge either to supply information which is not readily available or to elucidate matters of complexity within the Committee's order of reference.—[Mr. Berry]

Rate Support Grant

Motion made, and Question proposed, That this House do now adjourn.— [Mr. Berry]

2.31 pm

In introducing the Adjournment debate on the relationship between the rate support grant settlement and the Inner London Education Authority, I wish to make it clear at the outset that I am not one of those inner London Conservative Members who have cried out for the abolition of ILEA. Indeed, I am not sure that any have done so. Nor have I sought the closure of the GLC.

When the House debated the ILEA rate support grant last year, I urged the Government to allow the authority to reduce its budget by stages. I argued that, however extravagant ILEA may have been in the past, and notwithstanding the sharp drop in school rolls, it was not practicable to expect it in one year to make the substantial cuts demanded by the Department of Education and Science.

As I speak, ILEA is debating whether to reduce its 1982–83 budget, which calls for an expenditure level of £800 million compared with £734 million in the present year, by 7·2 per cent. as desired by the Government. The Government would provide the increased grant of 4 per cent. for salaries and 9 per cent. for inflation. That cut would not bring ILEA into grant but, according to the Government—and I agree—it would be a prudent and reasonable step in the right direction, having regard to falling rolls.

An option being considered by ILEA is to reduce its 1982–83 budget by 8·5 per cent., which would bring it into grant. In cash terms that would mean a budget cut of £130 million, at which point grant would be receivable. If the budget were reduced by a further £50 million, ILEA would receive rate support grant of £45 million. A third option being considered is to reject both possible avenues of thrift by sticking to a level of expenditure that ignores the sharp reduction in the numbers of children.

Although there was a drop of 17 per cent. in British school rolls between 1973 and 1980, non-teaching staff in ILEA rose by 2·4 per cent. Between 1980 and 1982 there has been a further drop of more than 15 per cent. in the school population. In spite of that enormous reduction in the school population nationally and locally, the national education budget for 1982–83 is to fall by only 2 per cent. In the light of those figures, anyone who argues that the Government are making war on education is blind to reality.

Like London Members on both sides of the House, I recognise the special problems of ILEA and the unique education needs of children and adults in inner London. It goes without saying that we all wish education standards to continue to rise, and I believe that that can be achieved without yielding to the ILEA's budget demands, pillorying the ratepayers or damaging the quality of inner London education. I hope that wise statesmanship will prevail and that our citizens will not be made to pay for anybody's political scalp, whether of the Conservative Party or the Labour Party.

A new and unwelcome phenomenon has made an appearance in this year's discussions and it must have a direct effect on public attitudes to the ILEA budget. It is the shameless use of untrue and scaremongering propaganda by those who ought to know better.

On 23 December last year my hon. Friend the Under-Secretary of State for Education and Science described the Government's proposals to strengthen the nation's adult education services. He pointed out that an increase of £52·3 million in the original programme had been agreed.

I shall not repeat the arguments made in that debate, which was admirably introduced by my hon. Friend the Member for Ealing, North (Mr. Greenway), but the Under-Secretary referred to ILEA's "distressing scare campaign" which upset many of the thousands of students at inner London adult education institutes.

If we are to make financial provision for education in a sane and rational atmosphere, the arguments on both sides must be put fairly. Campaigners who boast of their concern for standards, the status of teachers and the welfare or pupils have based their case on obvious lies—a new phenomenon in British political in-fighting.

Some teachers in schools and colleges in my constituency regularly wear political badges in class. What status does that give them? It is certainly not a professional one. What is one to say when teachers give 10-year-old boys and girls dishonest leaflets to take home to their parents? I have handed the Under-Secretary one example distributed in primary schools in my borough. It starts:

"Michael Heseltine's Bill will mean no adult education."

One can argue whether it is the job of primary schools to fight the adult education battle, but, even if it is, the suggestion that the Local Government Finance Bill will mean no adult education—and the same leaflet said that the Bill will mean no nursery education—is outrageous. The leaflet should not have been put into children's hands.

I have already reminded the House of the facts of the matter, which are in direct contrast to the far Left's fairy tales. Not only Conservative Members are sickened by such practices and the hysterical letters that they engender. At least one inner London Labour Member found that sort of mindless pressure among the last straws that drove him out of his party.

Other hon. Members will have had experiences of such propaganda. When I addressed the west London branch of the National Union of Teachers just before Christmas, it distributed an elegant broadsheet which, as I took leave to say, was mostly untrue. "Of course", said one respected person, a former member of ILEA, "we all know the difference between propaganda and reality." Do we? Goebbels did, of course.

These people are teachers seeking to implant a code of decent values in their charges. Many of them are also good people whom I esteem. The deputy chairman of ILEA came to a party for pearly kings and queens in Fulham—scarcely a political occasion. Sharing a microphone with me, he said "The Tories plan to close every school in inner London." Need I say that he got the bird, but the words were uttered, and by one of the individuals who want us to accept that the ILEA budget figures are not exaggerated. Over half the total of ILEA schools—623—had to suspend classes because teachers chose to participate in the absurd campaign, backed by 400, 000 broadsheets and 5, 000 four-colour posters printed by ILEA with ratepayers' money. Is it for this that Ministers are urged to fork out?

If such excesses were being exploited by sleazy professional agitators, it would not perhaps matter so much. However, teachers are lending themselves to such evil tactics. What is the inevitable result? It is that ordinary decent people will be persuaded that it does not matter what one says or does, how many old ladies are terrified, how many parents are deceived or how many children are corrupted in promoting a cherished cause.

That is not what teachers are for. It is a new and sinister trend in the hateful politicisation of our young people. By undermining Parliament's confidence in their spokesmen, educationists are not helped to achieve the rate support grant that they desire.

2.41 pm

My hon. Friend the Member for Fulham (Mr. Stevens) as an inner London Member, has a genuine concern for his constituents. He has previously raised matters in connection with the Inner London Education Authority. I listened with interest to his comments on the ILEA budget, which has not yet been finalised, as he said. I understand that the recommendation of the Labour leadership group for 1982–83 will be for a budget of about £800 million, which will mean an additional rate on inner London boroughs, and therefore on the ratepayer, of about 9p. I understand that ILEA claims that that is about the same in real terms as the current budget for 1981–82. Most people would challenge that. It is an increase in real terms. The difference comes in relation to the inflation rate in the coming year.

It is interesting to note that Labour's own ranks are divided on the budget. I understand from press reports that Labour council leaders have urged moderation on the ILEA leadership.The Standard of 15 January 1982 said that Labour council chiefs were desperate that ILEA should at least hold spending at its current level. A council leader was quoted as saying that with ILEA's size of budget it was unacceptable to say that no savings could be found without affecting services. I am sure that that is right.

Proposing to increase spending in real terms for next year shows an extraordinary insensitivity to what is happening. The country is in the middle of one of the greatest depressions in the Western world since the 1930s. Many sensible cuts are being made, yet ILEA is increasing expenditure. As my hon. Friend says, the number of pupils has declined over the last three years by 13 to 15 per cent. The truth, as The Economist said on 12 December, is that

"The greater part of the excess that ILEA spends beyond other education authorities is due simply to the decision to spend more."

The 1980 HMI report on the Inner London Education Authority referred to

"clear instances of inefficient management of finance"

in individual schools. It added:

"It is common to find under-use or neglect of resources".

It might not be so galling to London ratepayers if ILEA had first class education for London's children. I agree that many ILEA schools are outstandingly good and that they can hold their own, or better, with schools throughout the country. I refer to the same HMI report, which referred to ILEA's "blinkered support" for mixed-ability teaching and added that

"such teaching often left the least able unheeded, and the most able unchallenged".

What an indictment of dogma. The result of this financial imprudence is that the Inner London Education Authority next year will almost certainly receive no Government grant. I say "almost certainly" because its budget has not yet been fixed. If, however, the intended budget goes through, it will certainly not receive any Government grant. This will not be due to the Government ignoring the needs of inner London. It is because the Inner London Education Authority spends at a far higher level than any other education authority in the country.

The amount of block grant that an authority receives depends on how much it spends and the amount that it raises in rates. An authority will be penalised under the legislation and receive a lower rate of grant or, indeed, in the case of ILEA, no grant at all, if it spends more than it needs to give a level of service consistent with Government plans, arrived at by an objective assessment. I have explained the present GRE assessment, which the hon. Member for Newham, South (Mr. Spearing) knows.

In the grant-related expenditure assessment for ILEA, the Government have taken into account the higher salaries in London and the large number of children who have special needs. They have also taken account of the fact that rolls in inner London have been falling. It would be entirely reasonable, under the grant-related expenditure assessment, for ILEA to spend, for instance, one-third more per primary pupil than most shire counties. If it did this, it would be matching its GRE assessment. It is not, however, spending one-third more. It is spending nearly half as much again. In 1981–82, it spent more than 40 per cent. above its GRE assessment. The result, inevitably, and unhappily for London ratepayers, is that it will receive no Government grant if it proceeds with its recommended budget.

No other local education authorities are spending at this level. Many inner cities spend within 5 per cent. of their GRE limit. Rolls have fallen some 13 per cent. or more in the last three years. If ILEA had cut, by just half, the amount that its pupil numbers have fallen by, it would be receiving grant and would thereby remove the intolerable burden that it is now placing upon London ratepayers.

In the year ahead, 1982–83, the Government have set individual expenditure targets. As my hon. Friend says, with ILEA having reached the level of expenditure it has, it would not be realistic to expect it to reach its GRE target in one year. A target of 7·2 per cent. below its current budget—its 1981–82 budget—was set by the Government. This is certainly realistic.

I urge ILEA to reconsider its budget and to accept this target of 7·2 per cent. I recognise that if it did so it would still not be eligible for grant in the first year, but I urge it strongly to make a long-term plan for two or three years to get back to a position where it receives Government grant and removes this burden from London. I am sure that it will be possible. ILEA should look at this and move towards it.

I was also interested to hear what my hon. Friend said about adult education. Recently, the Government announced the national budget for 1982–83 of £52·3million, which is an increase over previously planned expenditure. I take this opportunity of saying how grateful I am to local authorities which, despite budget cuts, have coped so extraordinarily well.

I agree that one of the results of the budget cuts has been an increase in the average hourly fee to about 51p. But this must still be very good value, and I say that loud and clear because attendance at adult educational institutes has held up very well. In 1979 it was 1·7 million, in 1980 it was 1·6 million, and in 1981 there was an estimated fall of only 3 per cent. With the increase in the planned budget, I hope that adult education will continue on a strong and viable basis throughout the country.

Adult education in inner London is excellent. There is no question about that. It is extremely popular and it meets a very wide range of needs. It makes special provision of a high standard for those people who are disadvantaged or handicapped in one way or another. In consequence I, too, was especially distressed by ILEA's recent campaign against proposed Government legislation. My hon. Friend called attention to the campaign waged in ILEA against the original Local Government Finance Bill.

I say clearly that the Bill was widely misunderstood and misrepresented. The main attack of ILEA and others centred on the fact that the Bill proposed the holding of a referendum by a local authority before levying a supplementary rate. It meant merely that voters would be asked to express a view before they had to pay additional money. It has always seemed to me that ILEA took it for granted that it would lose every referendum that it held and that there was some message to it in that.

The present Bill omits the referendum provision. Among other things it will ban supplementary rates, as I understand is the case in Scotland. Every hon. Member knows the great hardship that supplementary rates have caused to individuals and companies.

ILEA's campaign against the first Bill was without doubt political. It was waged in the classroom, at the expense of the ratepayers. Their money was used. In my view, its claims were exaggerated beyond the bounds of acceptability. It was designed to mislead, and that seems to be proven. I refer the House, for instance, to the ILEA press release of 14 January which set out various budget options. The "worst case" budget option in the press release showed a cut of £110 million—far more than the 7½ per cent. target which the Government are recommending.

The press release listed various consequences which would flow from a cut of £110 million. One of them was

"increasing adult education fees by 20 per cent."

If I tell the House that the average adult education fee in the country is £10 per course and that the average for ILEA is £6, I am sure that hon. Members will agree that the consequence of this "worst case" budget option is very far from closing adult education, as was claimed in the leaflet handed to me by my hon. Friend.

I and a great many colleagues have received a vast number of letters, some extremely pathetic, pleading that we should not close adult education. I have received letters from old ladies saying that it was the one thing to which they looked forward in their lives. I have had letters from people who were innumerate and illiterate, written on their behalf, saying that adult education was the way towards earning a living and getting a job. If we took it away from them, they would be in great difficulty.

It is not surprising that so many people believed that misleading campaign by the Inner London Education Authority. I remind the House that ILEA is in charge of children. It is believed to be an honest and responsible organisation, and, indeed, it is an honest and responsible organisation. I suggest that in this case, under the urgings of its political masters, it fell short of its normal standard of conduct by introducing politics into the classroom in such an hysterical fashion. I sincerely hope that never again shall we see such a political campaign waged among the children, students and adults of inner London.

I make the point again that ILEA is a vastly wealthy authority. It has increased its budget regardless, and at the expense of London's ratepayers. I remind the House that the ratepayers are also the commerce and industry of London. Such action has a drastic and damaging effect on jobs and employment in London.

I repeat what I said to the House on 23 December about inner London:

"Any cuts or closures in adult education will be the decision of the ILEA, because it has given lower priority to adult education than to good housekeeping."—[Official Report, 23 December 1981; Vol. 15, c. 1031.]

I hope that many people who have been misled by ILEA's campaign will find time to read this Adjournment debate, for which I thank my hon. Friend.

Question put and agreed to.

Adjourned accordingly at three minutes to Three o'clock.

Volume 16: debated on Friday 22 January 1982

House Of Commons

Prayers

Vanuatu (Gift)

Petition

Canada (Indian Peoples)

Bill Presented

Coal Industry

Orders Of The Day

Supply Of Goods And Services Bill

St George's Hospital

Supply Of Goods And Services

Trade Descriptions (Amendment) Bill

Relief From Forfeiture Bill

Sex Discrimination Act 1975 (Amendment) Bill

Race Relations And Immigration Bill

Replica Firearms Bill

Procedure (Finance)

Rate Support Grant