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Mr. Tyler: As the Minister is referring to cost-effectiveness, will he underline the statement in the explanatory notes produced by his Department that some 103,000 people seem to have been conned in this way out of a sum that could be as much as £6.5 million? Is that not the figure that we should be holding on to, rather than the misleading figures given by right hon. and hon. Members?

Dr. Howells: Absolutely. The Bill will provide for the scams to be closed down. It is true that we can expect more investigations and that that will be an added cost. Once the scams are under control--in the first year, I hope--the cost to the public sector will start to reduce. Indeed, we expect there to be savings in the long run, compared with the time and effort involved in carrying through prosecutions under the current legislation. That is an important matter; trading standards departments always complain about the expense under the existing law.

In a recent trading standards case in Wolverhampton, a scam had to be monitored for nine months so that a case could be brought under the Trade Descriptions Act 1968. The £35,000 referred to earlier was simply an illustration of how much money was lost by the 800 people who complained to the National Group on Homeworking. There are many more complaints.

Investigations by trading standards officers into scams reveal that any one scam can profit by anything from £500,000 to £1 million. In a recent case under

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investigation, what we could call a medium-sized scam has netted £600,000 in six months. That is a lot of money, and with 300 or more scams operating at any one time, consumer detriment could be substantial.

We have had a long and useful debate, and we have started to examine the material in some detail. The Bill is important and worthwhile; I recommend it to hon. Members and invite them to support it.

12.35 pm

Mr. David Maclean (Penrith and The Border): This has been an interesting Bill and we have had a wide-ranging discussion on it. No Member on either side of the House approves of criminality. I take the Minister's point that even if a car aerial is snapped off--especially if it is our own car aerial--we would want the police to investigate and call out the full fingerprinting squad, take DNA samples and so on. I would feel so outraged that I would want the whole works.

In reality, however, the police response to such an incident will not be quite so dramatic as it would be to murder and other serious crimes, for which they rightly pull out all the stops, at enormous cost.

We need to put into perspective both the losses that have been mentioned in the context of the Bill and the costs of enforcing it. However, costs should not be the be all and end all. The mere fact that it may cost £350,000 to enforce the Bill in the first year does not in itself justify not passing it. It may have merits, although to me the enforcement costs seem prohibitive by comparison with any gain.

We must also consider whether the Bill is tackling the right target, and whether, as my hon. Friend the Member for Rutland and Melton (Mr. Duncan) said from the Front Bench, the good may be swept up with the bad. Labour Members and the Department of Trade and Industry received complaints about scams and other crooked activity, and decided that something had to be done. Rather than trying to tighten existing law, they decided to create a whole new separate offence that would be easier to use, with more draconian penalties, to catch everyone advertising such businesses.

Then people realised that that would tend to sweep up the good with the bad, and had to build into the Bill, in clause 1(2), some exemptions. Exemptions may fall within subsection (3), or they may be

I am content with those, but one of my main concerns, and one of the reasons why I think that the Bill is drafted from the wrong end of the spectrum, is that exemptions may also be activities

The Minister has just said that there are sectors that the Government would wish to exempt. As I understand it, that would cover operations such as the Kay's catalogue business. A person--possibly a woman--will respond to an advertisement in a women's magazine and send £25 in advance for a thick, glossy catalogue full of clothes, shoes and household goods. Then she will get commission for the goods that she sells on to her friends.

That seems a perfectly legitimate type of business. One may think that 25 quid for the catalogue is expensive, but it may not be, if that is a route into doing legitimate

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business with the catalogue company. I presume that there will be an order to exempt such businesses, because the Government have spotted them, and are ready to exempt them as the legislation comes into force.

The difficulty for the Government and the House is that, fortunately, we live in a society in which--aided by the internet these days--highly innovative people come up with radical business proposals every day of the week. Luckily, as the background notes and the Library paper point out, most of those business proposals--the new methods of shopping or selling--are perfectly legitimate and honest. However, of course, on the back of them will come the fly boys and the crooks who see an opportunity to do something bent.

Mr. Forth: I am sure that my right hon. Friend will come to my point, but in case he does not, would he admit of the following fact? If someone with a bright idea set up a new business, having asked for proper financial participation, but the business then failed quite quickly and that legitimate entrepreneur was unable to make the payments that he had hoped to make, he too would be trapped by the measure.

Mr. Maclean: My right hon. Friend is absolutely right. I was about to make that point.

It is all very well in the case of activities that the Government have already spotted; for the sake of simplicity, let us call them the Kay's-catalogue-type businesses. The DTI knows that they already exist, so the Government can exempt that sector. However, I bet that, at this very moment, legitimate business men and women are coming up with new ideas and inventions to get money from the public for a legitimate business activity. They may want that money as a deposit or as some form of payment in advance--partly to show the good intent of the person who wants to participate and partly to pay the costs of the new catalogue or business venture.

The trouble with the Bill is that such payments could be illegal if the business does not fall within one of the Government's clearly defined sectors--those sectors that they have anticipated. How on earth can the Government anticipate business opportunities? That would be to go back to the dear old Wedgwood Benn days at the Ministry of Technology--spotting all those wonderful ideas and backing them with millions of pounds. Legislation introduced under this measure would have to anticipate the ideas that business men and women will come up with so as to exempt them in advance.

A simple illustration of that point is that, if I came up with a business idea that I wanted to sell on to people, and then distributed brochures, took out advertising and invited payment, I should have committed an offence. The only solution that the Minister can offer is to say, "Ah, but if you then go to the Secretary of State and he is satisfied, the Government can make that one of the exempted sectors". However, the trouble is that the offence has already been committed.

At present, there is a perfect example of that in Sunderland, where we can see how reasonable trading standards officers are. I am sure that trading standards departments would not prosecute people who explained that their venture was a new, legitimate business activity for which they were sure the Secretary of State would grant them an exemption. We face the real possibility that

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genuine, innocent people, who are not crooked at all, will have committed an offence. Technically, they will be guilty, because they will not have been exempted by the Secretary of State.

Mr. Forth: Is the matter not worse than my right hon. Friend suggests? Are they not the same Labour Government who say that they support new business and small business and encourage new, small enterprises? I suspect that the DTI has hundreds, if not thousands, of civil servants whose whole life is dedicated to those purposes. Does my right hon. Friend agree that it is odd that, at the very least, the Bill is likely to snuff out, suffocate, or prevent legitimate new businesses arising in the very sectors on which we are relying for future employment?

Mr. Maclean: My right hon. Friend is, as usual, right. I suggest that it is even worse than that. It is not that the measure will suffocate and snuff out businesses--although it certainly will do that--but that it will criminalise some people who have a wonderful business idea. I am not talking about the crooks; they have always been entrepreneurs, one step ahead, no matter which Government Department--the Home Office or others--is trying to crack down on criminal activity. With today's resources--computers and the internet--crooks will always be one step ahead.

The business men and women who come up with new ideas are not going to wait a few months to check out the rules and regulations--they have their idea; the brochures are printed and they are out there trying to sell the concept. When they do that, they will find that a trading standards officer comes to them and says, "Look, you are advertising. That is a straightforward offence under the legislation, and it is not in one of the exempted categories. You are not producing the Forth home shopping catalogue"--a rival to Kay's, Mr. Deputy Speaker--"and it is an activity which has not been exempted by the Secretary of State. So, irrespective of the fact that you have just retired from the police service after many years of distinguished service as a superintendent and you are as honest as the day is long, it is an activity that you ignorantly did not know was not exempted. You are therefore guilty of an offence."

I am not sure that the DTI has checked with the Home Office on dealing with this problem. I know that before the Bill will have gone to the "leg." committee, it will have been passed around other Government Departments. I suspect that the Home Office will have concerned itself merely with the level of the fine. It may have said that level 5 on the standard scale is too high, and that it should be level 4, or it may have said that it can live with it because it is within the normal parameters. The Home Office being the guardians of the sacred cow of the criminal law, it will have checked.

The DTI should have told the Home Office that it had a problem with criminality and wished to tackle the crooks who were defrauding the system and advertising deliberately to con people into sending off money for a non-existent service. The Theft Act 1968 makes it an offence to make off without paying for goods, to go into a restaurant and make off without paying, or to obtain

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goods and services by deception. The activities that we are discussing amount to obtaining goods and services by deception.

I suspect that Home Office lawyers would have tackled that by drafting legislation to deal with the fraud. It would have made anyone who fraudulently or knowingly advertised a service that had no legitimate value or benefit guilty of an offence. The legislation would have tackled the crooks committing the fraud or deception. I suspect that that would have been the standard, legal, Home Office way of going about it.

Unfortunately, the DTI has taken the trading standards mentality route. It wanted to catch the 5 per cent. of the people involved in home working or goods and services who were crooks. It believed that the easiest way was to impose a blanket ban on all advertising of home-working services. So no one in the country will be allowed to advertise any home-working service for which people have to put payment up front. The DTI decided that that would catch everyone, and believed that it would get the crooks, and that it would then build in exceptions. The Secretary of State would say that anyone who advertised for money up front for services would be guilty under the law--except the ones that the Government had anticipated, for whom the Secretary of State would build in an exemption.

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