Clause 10 - Part 2 of the 1973 Act

Enterprise Bill – in a Public Bill Committee am 6:15 pm ar 16 Ebrill 2002.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Question proposed, That the clause stand part of the Bill.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

The clause repeals most of the provisions of part 2 of the Fair Trading Act 1973. Part 2 of the FTA was designed to deal with novel unfair trading practices as they emerged. It allowed the Secretary of State, by way of secondary legislation, to prohibit or modify unfair, but not illegal, trade practices that harmed the economic interests of consumers. The Secretary of State would make those orders on the advice of the Director General of Fair Trading and a then newly created consumer protection advisory committee.

Part 2 has barely been used. Only three orders have been made under it. The consumer protection advisory committee, on whose report the order-making power is dependent, has not existed in practice since 1983. Two of the orders made under part 2 are still in force and in everyday use by trading standards officers. The clause ensures that they are retained, together with the enforcement provisions for them. The rest of part 2 is repealed by the clause.

The order-making power under part 2 was found to be rigid and the process took too long. Specifically, it proved difficult to satisfy the legal tests in part 2, particularly the test of attributing specific consumer economic detriment to practices that were clearly undesirable. The possibility of reforming part 2 to make it easier to use has been considered at length. However, it has proved extremely difficult to identify the circumstances in which a revived part 2 might be used in the future. In any case, the Bill significantly strengthens consumer protection, and we therefore see no need to keep the provisions in part 2–other than those that I have mentioned–on the statute book.

Photo of Nigel Waterson Nigel Waterson Ceidwadwyr, Eastbourne

We agree with the wisdom of repealing part 2 of the 1973 Act. The issue, which we shall consider in more detail later, is what to replace it with. We appreciate that some of the powers have fallen into disuse and that the committee seems to have fallen off its perch, as no one has seen hide nor hair of it since 1983. Clearly, something had to be put in its place, but there is a great debate to be had–perhaps not now–about where clause 202 takes us.

As the Minister will be aware, a campaign has recently been started by the National Consumer Council and various other leading consumer bodies, pushing for the duty not to trade unfairly. I appreciate that there are many arguments to be had about the scope of that, its practicality and its impact on other areas of English law. I do not want to open up such a debate today; we shall say more in due course. However, it is important to put down a marker about the fact that there is significant disappointment among consumer bodies that, although we are getting rid of part 2 of the Fair Trading Act, its proposed replacement is not man enough to do the job–if that is not a politically incorrect way of putting it.

As I said at the start of our proceedings in

Committee–it feels like a long time ago although it was only this morning–the opportunity to reform consumer legislation seems to come round on a 30-year cycle. Let us do our best to grab the opportunity in both hands. We shall not vote against clause 10 for the reasons that I have mentioned. However, I should not like the Minister to take that as approval–there is a great deal of debate to be had.

Photo of Mr Harry Barnes Mr Harry Barnes Llafur, North East Derbyshire 6:30, 16 Ebrill 2002

I am also interested in the question of where powers go. I raise it now because of the points that have been made by the hon. Member for Eastbourne. It would be helpful to discover whether the measures have fallen off their perch altogether, whether they are covered by a complex clause later in the Bill, or whether they have been hived off to the new Office of Fair Trading. That is a further marker for the future.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I acknowledge the interest in the issues raised by the repeal of part 2 of the Fair Trading Act. We shall have a fuller debate later in the Committee's proceedings.

Question put and agreed to.

Clause 10 ordered to stand part of the Bill.