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12.17 pm

The Minister for Competition and Consumer Affairs (Dr. Kim Howells): I am pleased to be here to congratulate my hon. Friend the Member for Birmingham, Northfield (Mr. Burden) on introducing the Bill. It has been an interesting and welcome debate on an important and, often, distressing issue. I am pleased to confirm that the Government support the Bill.

Hon. Members will know that we have been considering the need for action on bogus home working schemes for some time. We raised the matter in the White Paper entitled "Modern Markets: Confident Consumers", from which a number of right hon. and hon. Members have quoted. In the DTI, we have discussed the matter with the agencies involved, including the National Group on Homeworking, which does an excellent job, providing advice on home working and guiding people against such scams--I am sure that it would be only too pleased to have the support of the right hon. Member for Bromley and Chislehurst (Mr. Forth)--the National Association of Citizens Advice Bureaux, representatives of consumers,

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business interests, including small employers, and associations with members in the franchising and direct-selling sectors.

We know that there is widespread disgust about the scams. We have heard that from all quarters this morning. It is a positive step that we have this opportunity to legislate against the scams and to make life a lot tougher for the rogues behind them.

I am pleased that the Bill will extend to the whole of the United Kingdom. I know that Ministers in the devolved Administrations have expressed support for taking action. It is a good thing that those measures will be able to be enforced throughout the UK from the same day. It is good to see the devolution arrangements working. I am pleased to say that the Scottish Parliament has voted that the measure be extended to Scotland.

In supporting the Bill, the Government are mindful of the human rights implications. I am sure that the House will want to note that I have taken advice and consider the Bill to be compatible with the European convention on human rights.

The Bill provides an opportunity to close down some of the most scurrilous scams that prey on vulnerable people, whether they are consumers or prospective employees. The stories that we have heard, both today and in our own constituencies, about outworking proposals are often quite despicable and chilling. I am sure that it would chill even the hard heart of the right hon. Member for Bromley and Chislehurst, who espouses the virtues of the free market and the anarchic society, to hear of the cynical way in which the organisers of those scams exploit people. They set out deliberately to woo the low-paid and the vulnerable and raise their expectations by promising work that they can do easily and in their own time and for which they can expect a decent income.

There is not the faintest chance that the home worker will benefit from the scams that we have heard about today. Initially, the home worker stands to lose perhaps £20 or £50. If the scam is convincing and workers believe that it is their own fault that their work has been rejected, they may part with further payments in an attempt to make good the defective goods or to secure different work. The exploitation by those rogues not only of people's pockets, but of their vulnerability and, in some cases, low self-esteem, calls for action by those of us with responsibility to protect the vulnerable in our society.

I am cheered to hear the House's commitment on the issue and support for the Bill. I was also glad to hear the constructive remarks of the hon. Member for Rutland and Melton (Mr. Duncan), who said that he is determined to do something to stamp out the scams. I am sure that he will be interested to know that we have received many letters from other Opposition Members about the scams.

Mr. Forth: Where are they?

Dr. Howells: I just happen to have a few examples.

Mr. Forth: Where are my colleagues?

Dr. Howells: I cannot say why the right hon. Gentleman's colleagues are not in the Chamber. I am here; he is here; that should be enough, I suppose. We have, however, received letters from the hon. Members for Bury St. Edmunds (Mr. Ruffley), for South-West

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Hertfordshire (Mr. Page), for East Surrey (Mr. Ainsworth), for Mid-Dorset and North Poole (Mr. Fraser), for Worthing, West (Mr. Bottomley) and from other hon. Members. Hon. Members on both sides of the House are concerned about the issue.

Let me address some of the issues raised in the debate. The hon. Member for North Cornwall (Mr. Tyler) made a very thoughtful and very good speech. He highlighted the way in which the scams affect some of the poorest and most vulnerable of our citizens. He specifically dealt with carers and those who retire early. That is an important aspect of the issue.

My hon. Friend the Member for Basildon (Angela Smith) highlighted the valuable part that home working can play in the lives of those who want to work for a living but may not have the confidence to step outside their front doors to find it. Many people are in that position and it is an important aspect of the issue. She also dealt with the way in which gangsters--which is what they are--target those who may have those problems. She gave us some vivid examples of scams for which the law currently provides inadequate remedies, making it difficult to prosecute the perpetrators as easily and effectively as they should be prosecuted.

My hon. Friend the Member for Leeds, North-East (Mr. Hamilton) described internet sites that use premium telephone lines without permission. He also gave examples of the variety of possible scams and described how the Bill might help to close them down more quickly by improving detection and enforcement.

My hon. Friend the Member for Plymouth, Sutton (Mrs. Gilroy), who is a member of the Trading Standards Institute, gave us the benefit of her expertise. She highlighted the cynical way in which crooks target people with perhaps low levels of literacy and with low self-esteem. She made the point that the scams increase people's exclusion from society.

I always enjoy speeches by the right hon. Member for Bromley and Chislehurst and I have always admired his stand for liberty. I also share his anarchic views. I believe that we have far too much government and far too many laws that, as the hon. Member for Rutland and Melton said, are incomprehensible to most people. I quite agree with that.

Mr. Forth: But.

Dr. Howells: There is no but. [Laughter.] I refuse to use the word.

Mr. Tyler: Try "however."

Dr. Howells: Certainly not.

The refrain of the right hon. Member for Bromley and Chislehurst about standing up against the gradual decline of society into a nanny state should be measured against the protection that is afforded by the Bill. He would not agree that these gangsters and rogues should be allowed to continue to perpetrate their crimes. We should not rationalise their behaviour as the good work of job creators. That is precisely what they are not; they cast a stain across good employers and good companies. We are concerned about that, as is the hon. Member for Rutland and Melton.

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I thank my hon. Friend the Member for North-West Leicestershire (Mr. Taylor), who gave us the benefit of his experience as an outworker and stressed how important it is to differentiate between the honest companies, which provide a valuable service to those who want to work, and the crooks, who give the whole sector a bad name.

Mr. Maclean: How will the Government differentiate between them in clause 1(2)(b)?

Dr. Howells: I will answer that when I come to the points raised by the hon. Member for Rutland and Melton, whose resolve to co-operate in reducing the opportunities available to crooks to practise their deceit and corruption I welcome.

The hon. Member for Rutland and Melton asked how we could ensure that good companies do not get captured unnecessarily by the Bill. First, genuine home working providers do not ask for advance pay-outs. Franchise agreements or direct-selling arrangements are excluded from the Bill. The Bill provides for exclusion powers by the Secretary of State if any other legitimate arrangements develop. As the hon. Member for Rutland and Melton said, markets and delivery systems are changing, and almost before the ink is dry on the page, someone is operating a different scam. That is why we need flexibility.

Mr. Forth: I am grateful to the Minister for what I think were his kind comments about some of what I said. However, he has just said that genuine home-working businesses cannot, would not or could not ask for an advance payment. Can the Minister envisage no circumstances in which someone with a genuinely good new idea might not legitimately ask those who want to participate to share in the risk and contribute upfront? Can the Minister not even contemplate that?

Dr. Howells: The Minister certainly can contemplate that, which is why I stressed the exclusions in the Bill. The hon. Member for Rutland and Melton asked whether the exclusions would be by company or by sector; they would be by sector.

The Bill provides that certain types of arrangements are not outworking proposals, and such arrangements are excluded from the Bill. Employment agencies and businesses are already governed by legislative controls under the Employment Agencies Act 1973. A proposal made in the course of such business does not come within the ambit of the Bill.

Genuine business opportunities are excluded from the Bill under clause 1(3). I repeat that that exclusion will be by category. These include franchise arrangements, when a deposit or upfront fee is required to protect the business when a new participant joins, and direct selling, when a deposit may be required to secure catalogues or sample kits to demonstrate the goods to be sold.

The need for this express exclusion stems from the definition of an outworking proposal in clause 1. The relevant part of the definition relates to a holding out that work will be provided in return for advance payment and that the person undertaking the work will be paid for it. The person paying for the work does not have to be the

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provider of the work. The provider of the work will not always be the proposer, of course. If the definition of an outworking proposal was any narrower than it is in clause 1, it might not catch some outworking scams. However, it is not the intention of the Bill to catch legitimate business arrangements that provide the participant with the opportunity to earn an income by generating work for himself. In such a case, the worker expects to make money as a result of his efforts from payments for goods or services by his customers and not the suppliers of the goods or the franchises.

In this case, the customer who is paying for the goods or service provided could be another person under clause 1. That would mean that an opportunity provided through direct selling or under a franchise agreement could be caught by the Bill. To ensure that that does not happen, we have excluded such activities under clause 1(3). If there are other genuine business practices that are not excluded from the outset, a case can be made for their exclusion under the Secretary of State's power in clause 1.

My hon. Friend the Member for Amber Valley (Judy Mallaber) dealt clearly with the impact on individuals who have been conned by crooks into parting with their money. She pointed out something that I thought very interesting, which was repeated by the right hon. Member for Bromley and Chislehurst. She said that most people just feel like a mug when they realise that they have been conned. They have lost their money, and that is it. I would like to use that to illustrate my next point.

We had a little flurry in the debate about the cost-effectiveness of this type of legislation. Very often, crimes are small in terms of value. However, I am sure that everyone agrees that even when crimes are just a nuisance--a small window is smashed or the wing mirror is ripped off a car--we nevertheless believe that the police or the enforcement authorities have a role to play in ensuring that the public are protected from such activities.

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