§ Order for Second Reading read.9.33 am
§ Mr. Richard Burden (Birmingham, Northfield)
I beg to move, That the Bill be now read a Second time.
I am grateful for the opportunity to present the Bill to the House and for the backing given by many hon. Members on both sides of the Chamber. The Bill has the support of the Minister for Competition and Consumer Affairs, my hon. Friend the Member for Pontypridd (Dr. Howells), my hon. Friends the Members for Leeds, North-East (Mr. Hamilton) and for Basildon (Angela Smith), the hon. Member for Worthing, West (Mr. Bottomley), my hon. Friend the Member for Bethnal Green and Bow (Ms King), the hon. Member for North Cornwall (Mr. Tyler), my hon. Friends the Members for Edinburgh, South (Mr. Griffiths) and for Amber Valley (Judy Mallaber), the hon. Member for Southend, West (Mr. Amess), my hon. Friend the Member for Plymouth, Sutton (Mrs. Gilroy), the right hon. Member for Caernarfon (Mr. Wigley) and my hon. Friend the Member for Stafford (Mr. Kidney). Many other hon. Members have written and spoken to me to express their backing, and I am pleased that the Bill has cross-party support.
§ Mr. Burden
Let me inform the right hon. Gentleman that the hon. Member for Southend, West, who is one of his parliamentary colleagues, asked me to pass his apologies to the House. He wanted to be present, but he is attending the funeral of a friend.
The Bill seeks to outlaw bogus outworking schemes—or home-working schemes, as they are more commonly known. It is estimated that some 300 bogus schemes are operating in the United Kingdom at any one time. They are scams that prey on some of the most vulnerable people in society. They pretend to offer such people the chance to make money, usually by working at home, and often involve tasks such as addressing envelopes or making up kits. They require people to pay up front to get that opportunity. However, there is no real opportunity and the people who can least afford to do so end up paying for work that simply does not exist.
The scams are presented in a variety of guises. In some cases, people who have paid their money in good faith find that the promised work fails to materialise and that 566 its proposer then disappears. Other respondents are asked to pay up front to obtain all the necessary materials for kits, but those materials turn out to be rubbish or simply do not turn up. Sometimes, the completed work is rejected for no good reason, so the hopeful worker who has paid up front never gets paid back for his or her labour.
Some proposers have the audacity to encourage participants to move on to different projects that are claimed to be more suited to their skills. Of course, an additional advance payment is then required. Some schemes turn out to be recruitment scams aimed only at getting the first victim to recruit other people to make the same mistake. In one of the more sophisticated scams, a premium rate telephone helpline was set up for participants who were experiencing difficulties with their work.
The amount that each respondent has to pay might seem relatively small to many hon. Members. All too often, however, it is taken from poor or vulnerable people to whom few other work opportunities are open. Such people often have family commitments and do not have surplus cash to lose. Those who prey on them can make a lot of money, even through small up-front charges. If large numbers of vulnerable people respond, the profits made by the scams can add up to large sums for the organiser. For example, a gain of £600,000 is considered to be appropriate for a medium-sized operation.
The Bill would make it unlawful for somebody to require advanced payment for information relating to outworking proposals. That provision will address, for example, the problem of schemes that promise information about home working in return for a fee, but whose promised directories of home-working opportunities turn out merely to be lists of other cheating schemes. Such schemes can mean that people are cheated twice—once for the cost of the directory, and then again when they respond to one of the so-called opportunities that it contains.
The Bill would also ban the promotion and advertising of bogus schemes, which currently happens in a variety of ways, including through circulars, cards in shop windows and notices on lamp posts. The schemes are even advertised on the backs of till receipts and, as I said, tend to target the unemployed and others who are restricted to working from home. For example, they target people who have caring responsibilities or are housebound. Those targeted are often on low or fixed incomes and are searching for a way of bringing in a bit more money to benefit themselves and their families in a manner that fits their domestic circumstances. They are the ones who are snared by the swindlers. They have little money in the first place, but end up even worse off.
I should like to give an example. An advertisement offered a payment of £5 for addressing 100 envelope labels. A one-off payment of £30 was required. It was claimed that the money would be refunded after 500 labels were addressed correctly. As the home workers found, the reality was different. People who replied to the advertisement first had to send £20 to receive details of the work that the firm was offering. As it turned out, the information was nothing more than a shortlist of companies providing jobs in return for another small fee. The original company was offering work at a rate of £5 per 100 labels, but only after workers had paid an additional £40. For that extra fee, they received only 100 labels, a list of companies and instructions that the 567 letters on the labels must measure precisely 3 mm. Even when the workers took great care and time to ensure that the requirement was fulfilled, the completed labels were returned on the grounds that the letters were not precisely 3 mm. The workers were never paid and they never saw their advance payments again.
The case clearly shows how people can get caught out, first by paying money for details of work schemes and, secondly, when they pay extra money to join one of the schemes and take up the work on offer. The Bill would make both elements—issuing information about bogus outworking schemes for payment and taking money from people for supposed work—illegal.
Many hon. Members know of cases that have affected their constituents. Many of my hon. Friends and Conservative Members will want to talk about such cases. However, I want to give an example that applies to me. One of the schemes has the wrong list of fax and telephone numbers. After I had worked late in the House last night, preparing for today, I returned to my London flat to find a fax hanging out of the machine. It was interesting. It states:Eat—drink—shop! and get paid for it! Yes! It really is true, you can get paid for doing the things you enjoy!
§ Mr. Burden
Absolutely. The fax obviously caught my eye. It continues:Get paid to have a drink in a pub. Get paid to have a nice meal in a restaurant! Get paid to go shopping! Earn money for doing the things you enjoy! Full details of all the companies that will pay you to do this part time![Interruption.] I am happy to offer the fax to other hon. Members. However, to get more details, one has to dial a number from the fax machine: 090 6019 1839. The fax instructs people:Press the start button when you hear the fax tone, and full details will appear!In spite of my better judgment, I dialled the number and another fax appeared.
It lists all the opportunities that are available. However, further on, it states:How often will I get a job? All companies agree that it is difficult to predict how often you will get work. They say that the work you may receive depends on a number of factors. These are where you live, your availability for work and most importantly, the requirements for each project.It gives little information about payment. Surprise, surprise, it then provides a list of telephone numbers.
I have not telephoned those numbers, but I examined the small print on the first fax. It stated that simply faxing the form back meant a charge on a premium-rate telephone line. It took more than six minutes for the fax to appear. That cost me £7 simply to get the fax back. That is how such scams work. Perhaps the company responsible will realise its mistake; it probably did not 568 expect its scam to be mentioned in the House of Commons the following day. However, people respond to such companies all too often.
§ Mr. Alan Duncan (Rutland and Melton)
Surely the problem that the hon. Gentleman identifies is not outworking but spam faxes that trap respondents. That is a separate problem.
§ Mr. Burden
The hon. Gentleman is right up to a point. The problem of junk faxes and premium rate phone lines goes beyond outworking. A commission has been set up to try to tackle them. However, the problems are related. The fax that I described offers work, as defined by the Bill. It also offers a trip to Amsterdam for £1 return and a "souper" seven-day diet. Those do not constitute outworking and they need to be caught by other mechanisms. However, the middle offer,Eat—drink—shop! And get paid for it!",clearly offers work. The fax directly refers to "work".
As well as the financial loss suffered by victims of home-working scams, there is another, equally important loss: self-esteem. I had not fully taken account of it when I first decided to promote the Bill, but home workers have made it clear that it is as important as financial loss. People have told me that, when they are mugged by the schemes, they feel that they have been mugs for being taken for a ride. For somebody who may be taking the first steps to get back into the labour market—I am sure that we all support that—or trying to get out of debt, that loss of confidence is crucial.
I have referred to the support, which I value, that has been expressed by colleagues. However, perhaps the most important backing that the Bill has received is from home workers and their letters and calls. I am grateful to citizens advice bureaux, the National Association of Citizens Advice Bureaux and the National Consumer Council for their assistance. The Department of Trade and Industry has been exceptionally helpful with the Bill, and trading standards officers throughout the country are already trying to crack down on the scams through the mechanisms that are available to them. The Bill will help them to do that.
We often complain about the press. However, on outworking, I want to thank the media, especially GMTV, The Mirror, BBC radio, "You and Yours", several regional radio stations—Radio WM in my area—and The Birmingham Post and the Birmingham Evening Mail. They have all done a great deal to highlight the scandal of home-working scams before the Bill was introduced and subsequently. Lastly, I should like to express my appreciation to the National Group on Homeworking, which is based in Leeds, for its work. My hon. Friend the Member for Leeds, North-East is here today. I recommend any home worker who is listening to the debate and needs advice and assistance to contact the National Group on Homeworking's helpline: 0800 174095. I hasten to add that that is not a premium-rate number.
The Bill that I am presenting today will create several new criminal offences to curb the unfair and unscrupulous practices that I have described. They are described in the Bill as outworking proposals. There has been some confusion about why I have spoken about home working when the Bill refers to outworking. We do not want the 569 bogus schemes to escape simply by claiming that the proposed work need not necessarily be based in the victim's home.
The Bill covers all parts of the United Kingdom. I am pleased that that has been possible because we do not want one part of the UK to become a haven for such scams when everybody else is protected from them. The extension of the Bill to Scotland received the approval of the Scottish Parliament two days ago.
The Bill creates criminal offences, and is therefore a reserved matter under the Northern Ireland Act 1998 and it extends to Northern Ireland in accordance with the provisions of that measure. The subject matter is not devolved under the Government of Wales Act 1998 and therefore the Bill's provisions apply to Wales.
The enforcement provisions are set out in a schedule. They will be enforced by local authority trading standards officers in Great Britain and by the Department of Enterprise, Trade and Investment in Northern Ireland. The Crown Prosecution Service will also be able to prosecute those offences in England and Wales. Anyone who commits one or more of the Bill's newly created offences would be liable to a fine up to the statutory maximum, which is currently £5,000, for each offence.
I shall now describe briefly some of the key clauses of the Bill. Clause 1 defines the type of work that will be treated as an outworking proposal for the purposes of the Bill, and which will relate to the criminal offences set out in clauses 2 and 3.
For an arrangement to qualify as an outworking proposal, a person must hold out that work will be provided in return for advance payment and that the person undertaking the work will be paid for it, although not necessarily by the provider of the work. The worker is therefore required to send an advance payment, meaning that a payment must be made by the worker before he or she is paid for the work done. Examples of descriptions of advance payment given in the Bill—returnable deposits, registration fees and so on—are not intended to be exhaustive.
Certain types of arrangements that are not outworking proposals are excluded from the scope of the Bill. Employment agencies and employment businesses are already governed by legislative controls under the Employment Agencies Act 1973. A proposal made in the course of such business does not fall within the ambit of the Bill. That provision is set out in clause 1(2)(c).
Clause 1(3) ensures that legitimate business opportunities and arrangements such as franchises and direct selling are not inhibited. Clause 1(2)(b) gives the Secretary of State the power to make regulations to exempt from the provisions categories of proposals that would otherwise count as outworking proposals. That is a deregulatory provision, which I am sure will have the approval of the House. Clause 6 provides that that provision will be subject to the negative resolution procedure.
Possible categories of proposals for exemption would need to be considered on a case-by-case basis, and their exclusion would need to be justified. It is not envisaged that such cases will emerge very often. However, if a category of outworking proposal was regarded as legitimate, and would genuinely benefit workers, the exemption provisions could be used, provided that that category was distinguishable from the unscrupulous 570 practices that the Bill makes unlawful. The power will, therefore, act as a useful safety net to ensure that legitimate business arrangements and opportunities are not inhibited.
Clauses 2 and 3 make provision for criminal offences. Clause 2(1) makes it a criminal offence to seek or receive payment in response to an outworking proposal. "Payment" bears its ordinary meaning in these clauses. The term therefore catches simple methods of payment such as cheques, as well as the more unusual forms such as moneys received in relation to premium rate telephone lines, as in the example that I gave earlier. That is an important point, given that many of these scams profit from the use of premium rate telephone services, by inviting people to call them for advice about completing work or for information about work.
The organiser of an outworking proposal commits an offence if he or she places an advertisement for outworking that contains information about an outworking proposal that makes it more likely that a person will respond by making a payment in advance. The organiser also commits an offence if he or she asks anyone else to place or distribute such an advertisement. Those measures are covered by clause 2(2) and (3).
The Bill also creates criminal offences in circumstances in which a person who is not the organiser issues, circulates or distributes an advertisement if he or she knows, or ought to know, that it is likely to cause a person to respond to an outworking proposal by making a payment, or if he or she causes someone else to do so. If there is no knowledge, and no reason why the person ought to have known, they will have committed no offence. Even if the elements of one or other of those offences are satisfied, it should be noted that, in relation to such offences, the person may be able to rely on the defence provisions contained in clause 4.
In relation to the advertising offences committed by a person other than the organiser, it should be noted that outworking proposals are advertised in a number of ways. They can appear in newspapers, on television and on the internet. They might appear on notice boards in shops, on the back of till receipts, pinned to lamp posts or on fliers that are posted through people's letter boxes, often inside reputable free newspapers or magazines.
In some cases it will be obvious to the advertiser that the advertisement is for outworking. The advertisement may expressly state that the worker is required to make a payment when responding to the advert. In cases in which it is not obvious from the advertisement, the commission of an offence will depend on whether the advertiser ought to know that the advertisement is for an outworking proposal. It is not possible to state in advance all the circumstances in which a person should know that. The degree to which someone ought to know will depend on factors such as the size of his or her enterprise and the resources available.
Clause 3 makes it a criminal offence to seek or receive money for the provision of information about home working or outworking when the information given relates to outworking proposals of the type outlined in clause 1.
Clause 4 sets out the defence of due diligence, and clause 5 gives effect to the schedule that sets out how the offences in the Bill are to be enforced. Paragraphs 2 and 3 of the schedule cover the powers that enforcement officers will have to enforce those duties. They are very 571 similar to powers in other consumer protection legislation such as the Trade Descriptions Act 1968, the Consumer Protection Act 1987 and the Property Misdescriptions Act 1991. If hon. Members want to discuss other paragraphs in the schedule during the debate, we can do so.
Clause 7 provides for any public expenditure incurred in the enforcement of the Act, and clause 8 sets out the Bill's application to Northern Ireland.
The Bill's main provisions will come into force by commencement order. That is covered in clause 9. I envisage that that will take place about 12 weeks after the Bill receives Royal Assent. I think that that will allow a long enough period for the Government to promote awareness of the Bill, with a view to reducing the number of outworking proposals in the system and alerting advertisers to the new provisions.
On compliance cost, the Bill controls outworking proposals. Legitimate businesses employing outworkers such as flexible workers should not be affected because they do not require an advance payment. There is very little compliance cost. Business groups have supported action against scams. It is not in their interests to compete against schemes that operate unfairly in the ways that I have described.
Genuine business opportunities, such as franchise arrangements, in which a payment is made in return for the right to operate the franchise, or direct selling arrangements in which the seller will often pay for catalogues and sample products, will be excluded from this legislation. If there are other legitimate business practices that are not excluded at the outset, and which have a compelling reason for requiring an advance payment, a case can be made for their exclusion under the Secretary of State's power in clause 1.
The Bill will make unlawful schemes that deceive the most vulnerable members of our society. Such schemes seem to promise those people everything that they need: good pay, instant job opportunities and the ability to work from home at hours that suit them. The schemes are offered by companies that pretend to understand the difficulties faced by those people and to offer them a way out. In reality, they deceive them, obtaining money from them in exchange for a false promise.
As well as hitting vulnerable people, such scams undermine businesses operating legal and decent home-working schemes. The Bill will ensure that such businesses can operate legally and fairly without being tarred by the brush of the swindlers. The Bill is in the interests of everybody except those operating bogus schemes, and I hope that hon. Members on both sides of the House will express their support for it today.
§ Mr. Paul Tyler (North Cornwall)
I am delighted to support the Bill and I wish to put it on record that the hon. Member for Birmingham, Northfield (Mr. Burden) has put huge amount of work into its preparation. Indeed, I suspect that a lot of home working has been necessary.
I think that the Minister will acknowledge that, had it been possible for the Government to introduce their consumer protection legislation in the current Session, the provisions of the Bill would have formed an integral part 572 of it. I would also like to put it on record that I remember the shadow Leader of the House, and indeed the leader of the Conservative party, expressing great disappointment at the fact that consumer protection legislation was not going to come before the House in this Session. I look forward to hearing that the hon. Member for Rutland and Melton (Mr. Duncan) is prepared to give the Bill a fair wind.
§ Mr. Tyler
I notice that the right hon. Member for Bromley and Chislehurst (Mr. Forth) is with us this morning. In the context of private Members' legislation, I heard one of his colleagues describe him as the serial strangler. I hope that somebody will keep the right hon. Gentleman quiet so that we can make progress on this important Bill.
A significant feature of the Bill, to which the hon. Member for Northfield referred, is that it would provide greater protection for those who offer genuine schemes. An important part of our function, therefore, is to distinguish between the scam and the genuine, although those who have to deal with this murky world, particularly local authority trading standards officers, often find that impossible.
I am pleased to support the Bill because I, like you, Mr. Deputy Speaker, represent a rural constituency and I believe that the measure has particular advantages in protecting our constituents. The Conservative spokesman also represents a rural constituency, so he, too, will recognise that those who live in small, sparsely populated communities with problems such as expensive public transport, if public transport even exists, have particular difficulties getting to work. Such people are attracted to schemes of this sort.
My area of the south-west and other parts of Great Britain contain some extremely low-paid households. Indeed, Cornwall and west Wales have European Union objective 1 status precisely because the average household income is so low. There is a great deal of seasonal work in my area and in similar ones, and such work may be all that is available to certain people during the holiday season. Again, the attraction of some form of outworking is considerable.
I am also worried about the dilemma facing carers. Carers of all ages who live in isolated communities such as my constituency of North Cornwall, and particularly those who care for the elderly, the disabled and young children, find the ability to earn limited but steady income in the home attractive. Like other hon. Members, I am concerned about those who have retired early. They, too, find that ability attractive. Redundancy may have caused early retirement for some people and their retirement pension may not be sufficient to maintain their life style. [Interruption.] I notice that the hon. Member for North—West Leicestershire (Mr. Taylor) anticipates Conservative Members who may lose their seats at the election having a personal interest in the matter, but I suspect that their pension arrangements are a great deal better than those of my constituents.
573 The detail is important and I draw the House's attention to clause 1(3), which deals with exclusions. We must be careful to ensure that we deal with them properly in Committee. Similarly, we must precisely define advance payment, which so often would have to be the trigger for action, and how it should be dealt with.
I am indebted to one of the newspapers in my constituency, the Cornish Guardian, for running an effective campaign a few months ago. It discovered that a company in the town of Bodmin in our own area, KMP Homeworkers, had used an accommodation address in the main street, but could not be directly contacted by anybody who took up opportunities that it appeared to offer. The company offered people £14 per 100 envelopes produced, but those who registered found that there was a £20 fee. The materials never materialised and people were out of pocket before even starting work.
The company was effectively driven out of town because of the campaign by the Cornish Guardian, but, significantly, Cornwall county council trading standards officers found that they were powerless under existing legislation. That is not an isolated example, and Members who think that the Bill may be unnecessary should talk to trading standards officers, who are strongly in favour of it.
The hon. Member for Northfield referred to the work of the National Association of Citizens Advice Bureaux, whose briefing states that vulnerable people in isolated communities are often the ones who are caught. I shall give examples. In Ross-on-Wye, a mother of three paid £35 for what she later realised was a worthless opportunity. A mother with young children from Bridgnorth, which, again, is a comparatively rural area, paid £65 for work, but was never reimbursed. A woman with two children from the Salisbury area had a similar experience. Each paid an expensive introduction or registration fee for a catalogue or a set of instructions. Such people get sucked in. Two women in the constituency of my hon. Friend the Member for Eastleigh (Mr. Chidgey) paid £70 in fees for equipment needed for home working, but were of course told that the completed work was unsatisfactory.
Precisely because the scam preys on vulnerable people in difficult circumstances, the House has a responsibility to provide protection. Furthermore, we must act because we who have drawn up the existing legislation, including the previous Conservative Government, have left trading standards officers in a vulnerable position. They devote a huge amount of time to trying to deal with these scams, but they do not have the legislative backing effectively to reduce them, let alone remove them altogether.
In any Bill that comes before the House, be it one introduced by the Government or a private Member, the devil is in the detail. We must get the Bill in Committee as soon as possible so that it can be scrutinised rigorously; and I hope that the House will give a fair wind to a measure that would meet a real need.
§ 10.7 am
§ Angela Smith (Basildon)
I am pleased to sponsor and support the Bill introduced by my hon. Friend the Member for Birmingham, Northfield (Mr. Burden). It is a tradition to congratulate a Member on drawing a high place in the ballot even though that is a matter of luck—one in which I have never succeeded. However, I sincerely congratulate him on choosing an important 574 subject. Parliament is here to support and protect the vulnerable, so I am disappointed by some comments—perhaps they were heckles—that implied that people do not need protection. Parliament has a duty to recognise that obligation and if we fail in it, we fail in our duty as parliamentarians.
The Bill represents a shift in the balance of power at work and is part of a wider change in society. We are moving to a much fairer system in which people who want to work are paid a fair wage and are not exploited for their labour simply because they choose, for whatever reason, to work at home. The Bill acknowledges people's rights as consumers and workers, and justice is a strong theme. It could put an end to bogus scams and the activities of those who rip off the most vulnerable in society. Indeed, the nature of the work that the most vulnerable seek in itself makes them vulnerable.
Despite the misgivings expressed by some people about the nature of regulation, we should always discuss the merits of state intervention. What appears to be a nanny state to some—[Interruption.] I hear that the right hon. Member for Bromley and Chislehurst (Mr. Forth) does not support the Bill, even though it would protect people from being ripped off. What for some is a nanny-state measure is for others protection of their livelihood. [Interruption.] The right hon. Gentleman denigrates the Bill. That is unwise, and his comments will be noted by those inside the House and outside.
I do not want to go too far down the philosophical route, but all legislation restricts personal liberty in some way. I believe, however, that there is no natural right to con and cheat people, and to engage in scams that rip others off. Parliament should try to prevent that as far as possible. I am pleased to note that the hon. Member for Rutland and Melton (Mr. Duncan) supports what I am saying. I hope all Members will see the merits of the Bill, and give it a fair wind.
Owing to the way in which the House operates, private Members' Bills are often small measures. This Bill represents only a small step forward, but it could have an immense impact on people who might become victims without it. It would be tremendously important to those who are or seek to be home workers. If it is not passed, I believe that there will be more complaints, and that even more people will be ripped off as my constituents have been.
Complaints about bogus home-working companies form a proportion of the 1 million or more complaints that the Office of Fair Trading estimates are made about unsatisfactory goods and services. Many people choose to work at home because of their circumstances. Often they are already on low incomes; they may be disabled or elderly, and they may be carers. They may be seeking work; they may have to care for children, or for elderly or disabled relatives. They may be tied to the house, and may need to earn extra cash. Those who have skills that are greatly needed in the economic market, and who are on higher rates of pay, are not generally caught by such scams, unlike those who can least afford it—those who do manual work at home for lower rates.
§ Mrs. Linda Gilroy (Plymouth, Sutton)
A project carried out by Plymouth's trading standards department 575 revealed that numerous children respond to advertisements of this kind. They must be especially in need of the protection afforded by the Bill.
§ Angela Smith
I have not encountered that in my constituency, but children who want to earn some extra pocket money will obviously be at risk.
What is so sad is that those who are being ripped off are honest, good people who want to work for a living. It is disgraceful that such people should be denigrated. It is often those who are least able to shell out—children, obviously, come into that category—who are forced to do so. Relatively large sums are frequently required for start-up costs. They may not seem large to Members of Parliament, given their salaries, but they represent a considerable proportion of the disposable income of some of my constituents who reply to these advertisements. They are having to shell out for materials, directories, registration costs, fees, deposits and—always—premium-rate telephone calls, in advance.
The poorest members of society are the least able to afford the consequences of paying for bogus schemes. I feel that we in Parliament have a duty to deal with those who seek to fleece the most vulnerable people.
Those who support the Bill are not against home working. Indeed, it is because he is in favour of home working that my hon. Friend has presented the Bill. Home working is a valuable and important lifeline for many, and genuine home-working scheme operators have nothing to fear from the Bill. In fact, as my hon. Friend said, they have a great deal to gain from it, as it will raise the status of home working and encourage those who know they will not be ripped off to engage in it.
§ Mr. Duncan
If the Bill succeeds in its aim it will be useful, but which part of it would outlaw premium rate calls, given that that money is presumably payment for the telephone call rather than for the outworking scheme?
§ Angela Smith
It is a payment for services. By paying for a premium rate phone call, the person concerned is paying for a service, and the Bill covers that.
Companies that do need to fear the Bill are those such as the company that the trading standards department cited as having raised £600,000 in nine months from advance payments of £25. Although £25 may not seem much to many people, £600,000 is a great deal—and the Department of Trade and Industry described that as no more than a medium-sized operation. We are talking about a trade whose ill-gotten gains run into millions.
The Bill will catch companies such as the one in north Yorkshire that charged people for construction kits, and then rejected all the finished products as being not up to standard. Trading standards officers joined the scheme and asked professionals to assemble the kits; they were still rejected.
The Bill will protect those such as the woman from south Wales who obtained home work sticking labels on envelopes. Her work was rejected because the labels were not stuck on straight. I hope that, in the forthcoming local elections, Members will encourage their local party workers, thousands of whom will be involved in similar activities, to make sure that the labels are stuck on straight.
576 Improving the rights of consumers has been important to me for some years. I was the Labour spokeswoman on Essex county council's trading standards committee. Christine Wade—who is now director of that department—and her valuable team have been at the forefront of action against bogus home-working schemes. They have not been fortunate in every case, but they took a company called Hayden Marketing Services to court under the Trade Descriptions Act 1968 and the Theft Act 1968. They were quite creative in seeking out legislation that would cover that case.
The company was charging people £25 or £35 for a starter pack, which it claimed contained everything people needed to start work, and guaranteed that 43p would be paid for every envelope submitted. The pack outlined what they needed to do before they could submit any work; it did not contain the work. People were informed that they must buy two specific types of envelope, expensive A4 paper, mailing lists, sticky labels and two stamps per unit. They must have the leaflet printed, and ensure that all requirements were met, down to the stamp being in exactly the right place. They had to send the first batch of 500 by recorded delivery.
The trading standards department estimated that submitting the finished pack would cost the consumer 67p; the consumer would be paid 43p. It was not possible to comply with the information on the pack without incurring costs. The company ended up banking £3,500 from people applying for packs—and not one person submitted any completed envelopes.
In an article in Trading Standards Review last August Nicola Webb, principal advice officer at Essex trading standards service, said of the conviction of the person who ran that company:The penalty aside, being able to get money back for consumers who could not afford to lose it made it definitely worthwhile.On behalf of my constituents who contacted the service to complain about the company, I echo her words, but I think that the penalty was inadequate: the lady concerned merely had to do community service and pay the money back.
In that case, because of the wording of the leaflet that the company used, a conviction was possible; but it was an exception. Trading standards departments up and down the country know that many cases cannot be brought to court because no law has been broken. Hayden Marketing Services was smart enough to fleece the vulnerable, but not smart enough to avoid prosecution. I have no doubt that other companies involved in such scams have given careful consideration to why Hayden Marketing Services was convicted, and have worded their advertisements in a way that makes their prosecution under the current law impossible. Such cons are typical of the bogus schemes that are being set up.
The hon. Member for North Cornwall (Mr. Tyler) quoted a trading standards department that supported the Bill. Indeed, trading standards departments throughout the country are seeking legislation to protect people from these schemes. Essex county council's trading standards department has produced a leaflet on home working, advising people on what they should do to avoid scams. It is entitled "Do your homework first." It points out the pitfalls that home workers need to be aware of. People are not being sent any work after they have paid the fee. It is difficult for individuals to get their money back.
577 Businesses often stop trading. There are misleading schemes, with non-refundable registration fees, where the Individual has to find his own customers and, when he has done so, to recruit other customers. It is impossible to meet the quality standards for the work.
Because of the prevalence of this practice in Essex, a charity has been established, Essex Homeworkers, based in Chelmsford. It works mainly with retired and disabled people to organise sales of their craft work. The charity is needed not just to organise the sales, which have become very important, but because current law cannot adequately protect its members and clients from those who are seeking to rip them off. I am sure that the charity will be the first to welcome the Bill, even if takes away part of its work. It is doing that work only because the current legislation is inadequate.
As I have said, genuine home working companies have nothing to fear from the Bill. Their reputation will be enhanced by taking cowboy firms out of the picture. For many people, home working is the only viable way of engaging in paid work. They need to have the confidence that, when they do so, they are not being ripped off and cheated and will not be in a worse financial position than before. The message must go out loud and clear from the House: advance payments must be stopped. I am particularly pleased that premium rate telephone lines are being brought within the definition of advance payments.
Far from this being a draconian measure, as has been suggested by some, I strongly believe that we have a duty to legislate. I feel strongly about my constituents being conned—there is no other word for it. I get extremely angry and upset by those who do not feel that this is an appropriate method by which to legislate on the matter.
We must stress some of the horrors associated with home working and the fact that the proposals do not attack genuine home-working jobs, which can be suitable for both reputable companies and for individuals who need, or want, to work from home. We are talking about closing the loopholes available to the unscrupulous, the uncaring and the underhand who make money from the exploitation of others. We are talking about people selling goods or services when there is no intention to pay for the finished product. Often, there is no market for the goods, or the services in a directory do not actually exist.
It is a great shame that legislation is needed, but without the creation of the new criminal offences under the Bill, the scams and unfair practices will continue. It is a sad fact that current legislation, and the threat of civil action by consumers, is not enough to deter determined rogue traders from repeatedly exploiting those working at home. The whole home working, or outworking, market is being discredited by those people.
It says a lot for the Bill that it brings together several organisations that have championed consumer rights, including the National Consumer Council and the National Association of Citizens Advice Bureaux. I pay tribute to citizens advice bureaux in Thurrock and Basildon, which have worked extremely hard and which, in many cases, have to pick up the pieces afterwards.
Often, when someone has been a victim of such a scam, they go to their Member of Parliament or citizens advice bureau and it is too late. Nothing can be done; the law may not have been broken; they cannot get any remedy. If we are lucky, occasionally, as in the case of Hayden Marketing Services, trading standards officers may be 578 able to take action, but in the vast majority of cases no action can be taken and we are left with distraught constituents who have been ripped off. The Bill will be welcomed throughout the country; there is so much malpractice. I hope that today's debate will help those who are considering taking on home working. They can look at the debate and, I hope, the publicity surrounding the introduction of the legislation and then hope to be protected from the worst excesses.
I understand that the Minister has welcomed the Bill wholeheartedly. I welcome that, but there is a wider context in which we should see the Bill. The Department of Trade and Industry White Paper, "Modern Markets: Confident Consumers", made it clear thatRogue traders who prey on the most vulnerable and provide unfair competition to legitimate business must be stopped.Today, we have the chance to put those words into practice. We can take a stand against the rip-off merchants who prey on our constituents. On their behalf, we should all support the Bill.
§ Mr. Fabian Hamilton (Leeds, North-East)
I congratulate my hon. Friend the Member for Birmingham, Northfield (Mr. Burden). I heard him on "The World at One" just before Christmas when he had won the lottery, which is held each year, for private Members' Bills. I was delighted that, subsequently, he chose this subject. Like my hon. Friends who have spoken and the hon. Member for North Cornwall (Mr. Tyler), I feel not only that it is a good choice of Bill, but that, in its small way, it will help a good number of people who have had money taken from them by deception by some of the more unscrupulous companies in the sector.
I support the Bill not only because my hon. Friend the Member for Northfield is one of my oldest friends—
§ Mr. Hamilton
Let me get on to it. I support it also because the National Group on Homeworking is based in the city of Leeds. The group has done much good work. It is a lottery-funded project; it is independent; it campaigns, informs and educates and does a lot of research. It has a free telephone advice and information line, which I am glad to say is funded by the DTI.
We have all seen the posters and advertisements on the lamp posts, street furniture and street signs on major roads—for example, the junction of Canal road and Armley road, the major arterial route into Leeds from Bradford, which I often use when travelling into the city centre in Leeds. While waiting in the traffic, we look at those. That is how people often advertise.
During 2000, the National Group on Homeworking dealt with more than 5,000 calls to its advice and information line. The majority of those inquiries were from people looking for home-work employment. The schemes that claim to offer on-going work, which can be done at home in return for an initial fee or deposit, continue to be the subject of many calls to the advice and information line. Invariably, the callers have lost money already, or found that the claims were not justified. Even in cases where work was provided, no payment was forthcoming.
579 During 2000, the National Group on Homeworking received 647 reports of people losing money to bogus home-working schemes. It calculated that the sum lost was more than £25,270. The reports named 211 different companies, some of which hon. Members have already mentioned. Neath Mailing Services seemed to be top of list—it was reported 122 times. Outworkers Direct was reported 72 times. The sums paid in advance ranged from £20 to £100. IS Trading was reported 56 times to the national group, with a payment of £20 being made in advance. Procraft International was reported 41 times. In that case, the sums paid ranged from £15 to £36. The list goes on.
One of the examples that was given to me involved a constituent of mine, Natasha Harris, of 21 Allerton Grange Vale in Moortown, Leeds. She was about to send money to a local home mailing scam in Bradford costing £10 until the West Yorkshire home-working unit advised her that she should not send the money. The scam is called DPMS. It is based at PO Box 1000 Bradford BD2 1XL. It even advertises in the Yorkshire Evening Post. Natasha works part-time from home at the moment and is one of those who could least afford to lose that money.
I move on to the question of premium telephone lines, in which I know the Opposition spokesperson, the hon. Member for Rutland and Melton (Mr. Duncan), has an interest.
The National Group on Homeworking made a number of complaints to the regulatory body, the Independent Committee for the Supervision of Standards of Telephone Information Services. I am pleased to say that many of the complaints were upheld and that fines were imposed. Baker Telecom, for example, operated an internet site that people could access on a premium-rate telephone line. As the company did not have permission to operate the telephone line, it was disconnected and the company was fined £500.
Eagle Promotions was fined £10,000 for breaching the ICSSTIS code, as was Select Publications. Seekers UK was fined £500, as was Westcliffe Associates. Although I have not read the details of those cases, I imagine that the penalties were imposed for the reasons outlined by my hon. Friend the Member for Northfield.
As we know, the Bill proposes banning up-front deposits from consumers for work at home or fees for directories containing such schemes. I am certain that the Bill will ensure that the money paid by premium telephone lines to the companies concerned is treated as an up-front payment. The Bill also aims to give trading standards officers the power to shut down bogus home-working schemes quickly and to take action against the organisers. It also imposes a fine of up to £5,000 for each offence against a member of the public and a criminal record for those who break the law. Finally, it aims to close the loophole allowing the scams to be advertised.
At any one time, about 300 bogus operations are known to be operating across the country. Without the action that the Bill makes possible, that type of bogus activity will continue and could involve 1 million victims or more.
The National Group on Homeworking sees only the tip of the iceberg. As we have heard, there are many variations on the schemes, including envelope stuffing, 580 typing, kit construction, teleworking, craft work and marketing. One 70 year-old man sent a £40 fee in return for work to do at home. Rather than being asked to do that work, however, he was asked to recruit other jobseekers to the scheme and to send in more money. Later, he sent £20 in reply to another advertisement but received only flyers from other companies wanting up-front money.
One woman wanted to earn some money while she was looking after her young child. She was asked to pay a £98 registration fee in exchange for internet work. She was then encouraged to take out a significant loan to buy a home computer. Nine months after she had paid for the equipment, she had still not been supplied with any work.
One company found a very imaginative scheme. It placed its postcard advertisements in post offices, but distributed a £1 coin to those who replied. The company's modest initial outlay prompted responses from more than 103,000 people who sent the company the minimum registration fee of £25. Consequently, the company netted more than £2,575,000. Those who paid the £25 fee—£24 excluding the £1 that they received—were never employed by the company and did not hear from it again. There are many other similar examples.
I hope that the Bill is enacted. It would save so many people from the rip-off merchants who steal money from those who are often the most vulnerable in society. It would go a tremendous way towards ensuring that those who want and need income from home working are far better protected from unscrupulous companies that feel they can get away with theft, which is what it is.
§ Mrs. Linda Gilroy (Plymouth, Sutton)
I congratulate my hon. Friend the Member for Birmingham, Northfield (Mr. Burden), who has a long track record of supporting consumer issues in the House. I particularly welcome the support that he gave to my Fireworks Bill, which was not enacted because it was much further down in the ballot. I sincerely hope that his Outworking Bill has greater success, which it should have as he has won first place in the ballot.
§ Mr. Deputy Speaker (Sir Alan Haselhurst)
Order. I encourage the hon. Lady to elaborate towards the Chair.
§ Mrs. Gilroy
Hon. Members have already mentioned the support given by the National Group on Homeworking, citizens advice bureaux and trading standards officers across the country, who are in the front line in trying to tackle the important issues we are discussing. As hon. Members may know, I am, I think, the first member of the former Institute of Trading Standards Administration—now known as the Trading Standards Institute—to be elected to Parliament. Before joining that institute, I undertook study leading to a diploma in consumer affairs.
I well remember one hot summer's day, travelling up on the inter-city line from the west country, doing some last-minute revision for that qualification and reading the legislation applying to the issue that we are now seeking to address. The subsequent exam contained a question on whether current legislation was sufficient to stop the type of scams we are discussing.
Legislation is available to be deployed against such scams, but, like so much legislation, it is a bit convoluted. One could attempt to apply, for example, the provisions 581 of the Control of Misleading Advertisements Regulations 1988 or of part III of the Fair Trading Act 1973, which deals with rogue traders. However, use of those provisions would require a great deal of work by trading standards officers to ensure the effectiveness of a crackdown.
Hon. Members often claim that current legislation is sufficient and that more is unnecessary. Sometimes, however, more can mean less. More can be less if a tighter focus on the real challenges facing enforcement agencies makes it possible to lessen the time required to bring a prosecution. That is the intent of this quite narrow, but focused Bill. More can be less also if the new law makes it possible for the precious time of public servants to be used more effectively. More is certainly less if a clarification and tightening of the law increase the chances of successful prosecutions.
Moreover, if we can successfully drive out crooked operators, we shall be able to create a virtuous circle in which less is the basis for more, but more of what is good—such as more certainty for honest businesses so that they can trade in a fair environment. Hon. Members have already addressed that issue in detail.
Honest businesses will abide by paragraph 54(4) of the British codes of advertising and sales promotion code of practice. Last year, a review by the Advertising Standards Authority found that 11 in 14 advertisements failed to comply with the code. The finding would seem to be sufficient evidence that a voluntary approach to the issue has been ineffective. I am all for voluntary approaches when they work, as they often do. However, for such approaches to work, a large proportion of the companies in the sector must subscribe to the code and belong to the relevant trade association. That is a key principle. Clearly, with outworking, the bogus operators fall well short of observing that principle.
As my hon. Friend the Member for Northfield said, these schemes cynically and cold-bloodedly target the most vulnerable members of our society: pensioners, carers, the disabled, lone parents, those with learning difficulties or poor communication skills or anyone who is not able to work outside the home, but wants to do something to raise their family's income.
Hon. Members may not understand how significant the lack of basic communication skills is for some of our constituents. In our sophisticated modern world, we need to tackle these issues. In Plymouth, Sutton, some 30 per cent. of people have greater-than-average difficulties with basic skills. A playwright from my constituency, Sue Ton, has brought her award-winning play "Shout it Out" to Westminster. I challenge any hon. Member who does not understand the issue to borrow my video of the play and to try to put themselves in the shoes of someone who has low or no basic literacy skills.
Such people, if they have employment, will almost always be in low-paid work, typically as cleaners, as Sue Ton herself was before she took to the theatre. I hope that such people are now protected from exploitation by the minimum wage. However, despite that, it is often difficult to make ends meet. Luxuries such as birthday presents, or sudden crises such as washing machines breaking down, are huge problems if debts have been run up because of previous pressures. A bit of wishful thinking in response to advertisements such as those we have heard about today, which hold out the prospect of a quick, apparently legal and easy way to earn money, is understandable.
582 Of 684,000 home workers—as we have said, the bona fide industry, will be protected by the Bill—65 per cent. are women. One was the Paignton woman referred to in the briefing from the CAB. The hon. Member for North Cornwall (Mr. Tyler) has referred to a number of west country people who have suffered from these scams. The woman paid £40 for a kit; it was returned as unsuitable because of the work she had done on it. The second kit was also returned. When she tried to get a refund on unused kits that she had paid for, she was refused.
Plymouth's environment and consumer protection department considered a project to try to head off this attack on our vulnerable and poor constituents as part of a wider social inclusion project. Frequent press releases from the department warning of the pitfalls of such schemes seem to have had a limited effect. After seeking clearance from the legal practice, it was decided to investigate the extent of the problem. That took up the expensive time of the legal practice. Under the Bill, such test projects clearly would be legal.
The first and novel approach was to monitor how many people would respond to an advertisement for home working in the Plymouth area. With the consent of the editor of our local paper, the Evening Herald—a well-known campaigning newspaper, which won the regional newspaper of the year award last year—the trading standards unit placed the following fake advertisement:Christmas money. Earn extra money for Christmas. Local company urgently requires homeworkers. Light work. Good rates of pay. No selling involved. For registration and start-up kit send cheque for £10.The advertisement concluded with a PO box number. If an inquiry was received at the consumer advice desk, the instruction was to give the usual advice of not sending any money. In all, about six inquiries were received at the advice desk, and 21 people sent £10. Their money was subsequently returned with a covering letter, warning them of the potential high risk of losing their money in future if they replied to other such schemes.
The second part of the social inclusion project attempted to assess for legality and value for money 10 examples of similar get-rich-quick schemes advertised in Plymouth. Sums ranging from £3 to £39.50 were sent to 10 companies advertising various schemes. After six months, no reply had been heard from eight of the 10. It must be presumed that the advertisements were bogus and that the people behind them were the only winners. This can be taken only as a serious indictment of any similar schemes asking for money up front.
Trading standards departments in the localities of the companies that advertised were given the addresses; I hope that they were able to find time to follow them up. Of course, that is partly what the Bill is about: making such schemes illegal so that trading standards do not have to go to such lengths to crack down on them.
Of the other two schemes, one company asked for a further £35 for a starter pack of leaflets, address labels and envelopes. The work advertised involved inserting the leaflets into envelopes and attaching address labels. The decision was made not to send the company any more money—quite wisely.
It was discovered that the 10th scheme involved an illegal chain letter whereby, in order to get involved, money had to be sent to people further up the chain. With 583 one's name on the list, the scheme promised £50,000 income within 60 days. That is a matter for the Office of Fair Trading, which, along with the Post Office, was notified. One method of dealing with the problem would be to outlaw demands for money up front and for premium-rate telephone calls. Like other hon. Members, my understanding is that the Bill covers that. If not, we can return to the matter in Committee.
Replying to one such local premium-rate advertisement cost £4, with no work opportunity offered. Although ICSSTIS tries to tackle this matter, the current framework is insufficient to clamp down on it. The conclusions drawn from the project showed that people are desperate to obtain extra income and will spend money that they can ill afford to lose to get such work. There is huge profit in operating such unethical and already illegal schemes, but it is difficult to enforce the law. There is an urgent need for legislation. The second part of the project reinforced the fact that these are important issues. Work is continuing in Plymouth to warn citizens of the possible risks of losing their money if they get involved in such schemes. The project was drawn to the attention of the DTI and has, no doubt, informed my hon. Friend the Member for Northfield in drawing up the Bill.
When I was elected, my constituency had the poorest ward in England. We have made huge progress in tackling unemployment and, crucially, in improving literacy and the communication skills that people need to help them make informed assessments. Quite simply, however, we still have a steep hill to climb when it comes to tackling social exclusion issues. Our resources for doing so are precious.
The Bill will make the law clearer and easier to enforce. It will allow trading standards officers to do their job better, faster and more effectively. It will stop poor constituents wasting money on crooks. It will play a small but important part in addressing social exclusion and create a fair trading environment for those businesses that are honest and above board. I support my hon. Friend the Member for Northfield and wish his Bill well.
§ Mr. Eric Forth (Bromley and Chislehurst)
One difficulty with a Bill such as this is that it is easy to make a superficial appeal and tug the heart strings, as many right hon. and hon. Members have attempted to do. I suppose that the hon. Member for Leeds, North-East (Mr. Hamilton) is to be admired for his touching remark that he supports the Bill because the hon. Member for Birmingham, Northfield (Mr. Burden) is his oldest friend. However, my main problem is that the Bill exemplifies what is becoming an alarming tendency in our legislative proposals with regard to risk in our society.
Time and again, well-meaning colleagues, backed by pressure groups or quangos, try to persuade us that we must create a risk-free society and that our population—our electorate—should in no circumstances be exposed to any risk. We might as well ban mountaineering, horse-riding, rugby or any other pursuits that cause much more distress, physical pain and worse.
The Bill represents another step in that direction. Time and again, right hon. and hon. Members tell us that when people in our society take a risk and it all goes wrong, we 584 must protect them. I want to challenge that assumption. Not only is it patronising, but it carries a danger that we will stifle job creation, which we all say that we support.
§ Mr. Forth
I was against compulsory seat belts, as it happens. Unfortunately, I was not in the House at the time, but I almost certainly would have voted against the compulsory wearing of seat belts. However, I will not allow myself to be drawn excessively into that discussion.
We are talking about jobs and paid work. For hundreds of years, the capitalist, property-owning, risk-taking, shareholding society that we have developed—and from which we all benefit, to such an extent that people are desperate to come to this country to enjoy all its benefits—has been based on entrepreneurship, risk taking by shareholders, and people who work in various ways at different times and in varying places. This time yesterday, Labour Members lamented the tragic loss of a large number of traditional jobs in steel making. It is incumbent on us to ensure that we do nothing to endanger employment that is growing rapidly in society as an alternative to static, traditional, factory-based jobs, which are being lost.
§ Mrs. Gilroy
Does the right hon. Gentleman agree that it is also incumbent upon us, as parliamentarians, to ensure that young people have adequate communications skills and basic literacy and numeracy? Will he apologise for the 18 years during which the previous Government did nothing effective to tackle those problems?
§ Mr. Forth
I am very happy to indulge in party badinage this morning. It may—who knows?\enliven, and even prolong, our proceedings. I am always happy to apologise for many of the things that happened during the 18 years of our glorious period in government. If the hon. Lady thinks that she is being politically cute by challenging me to say that not everything that we did was perfect, she will be very disappointed. I am more than happy to confess that many of the things that happened when my party was in government were regrettable. Many mistakes were made.
I am simply trying to prevent the hon. Lady's colleagues from making a similar mistake with this ridiculous Bill. Perhaps we can all join hands in our shared desire to maximise job creation and minimise the dead hand of interventionist legislation that the Bill represents. Surely the House has a duty to guarantee that we do not legislate in haste and leave our voters repenting at leisure when they find that their occupational opportunities have been reduced by our ever-increasing desire to eliminate any risk.
What the Bill calls "outworking" is also termed, in a slightly different context, "teleworking" for those who are more keen on the information technology side. My right hon. Friend the Member for Penrith and The Border (Mr. Maclean), may want to refer to that if he catches your eye, Mr. Deputy Speaker, because he is a great expert and an aficionado of such matters, which I am not. There is a real danger that this well-meaning but 585 ill-directed Bill could endanger the very high-technology jobs that involve outworking or teleworking, and that would be a tragedy.
It is interesting that the excellent House of Commons Library research paper says:Most people working from home are not the victim of scams. Many are relatively prosperous professional teleworkers.That is the first point that we have to meet head on. It is a familiar problem to those of us who have spent some time here. It is all too easy for well-meaning people, interest groups and Government-paid quangos to identify an area of difficulty, then demand legislation without paying proper regard to the serious damage that it might inadvertently do to the much wider sphere of legitimate, profitable and job-creating sectors in the economy. For the Library to tell us that most people working from home are not the victims of scams is stating not simply the obvious but the necessary.
§ Mr. Burden
I am following with care the right hon. Gentleman's argument about the need to protect legitimate businesses, one of which, I am sure that he would agree, is direct selling. I have had a letter from the Direct Selling Association, which says:First of all, may I say how pleased we are that you are promoting this Bill and that it has obtained strong Government support. Although home working schemes do not come within the direct selling channel that we represent, the DSA is frequently asked to intercede on behalf of those who have been taken in by these scams.It gives an example. Admitted, the DSA wants exclusions, and that provision is in the Bill. However, a number of such businesses support the Bill—they do not oppose it.
§ Mr. Forth
I am very familiar with this concept. I came up against it when I was doing the Minister's job, and I shall make another passing reference to that later. The hon. Gentleman makes a familiar argument. Surprise, surprise, the people already established in the business want to make it more difficult for others to come in. There is nothing new about that; it is a perfectly respectable aspiration. However, let us not blind ourselves to it.
The previous Government—here is a confession for the hon. Member for Plymouth, Sutton (Mrs. Gilroy)—were guilty of that as well. Established businesses, trade associations and so on used to say that they were very keen to have more regulation and asked us to raise the hurdle for entry to their business. Of course they were. The last thing that established businesses want is thrusting, enterprising new entrants. Any Bill, such as this, which might deliberately or inadvertently prevent new entrants to the business is, of course, supported by the trade associations.
§ Mrs. Gilroy
I should have thought that the right hon. Gentleman, during his time as Minister in charge of consumer affairs, would have picked up a little more about creating a fair trading ethos, under which good businesses appreciate appropriate and focused legislation that helps to keep crooks out and enables consumers to have confidence in the markets in which they operate.
§ Mr. Forth
The problem is—and as I develop my analysis, I hope that this point will come out—that the Bill is not focused. It takes an undiscriminating, scattergun approach to what may or may not be a relatively small 586 problem. When I was in the post that the Minister now occupies with such distinction, I spent most of my two years fighting off bodies such as the National Consumer Council, which, in any case, the Government fund and whose members the Minister appoints. So I am not very impressed with that as a pedigree. The people at the National Association of Citizens Advice Bureaux are almost as bad—left-leaning, regulatory, interventionist bunch that they are. [Interruption.] I said that when I was in office, in case the hon. Member for North Cornwall (Mr. Tyler) is worried about it. Please let us not have any more of that sort of thing.
The House of Commons Library research paper helpfully tells us on page 18 something that we have not heard much of from the Government. It says:The numbers working 'mainly' at home have risen dramatically over the 1981 to 1998 period—doubling from 345,920 … in 1981 to 680,612 … in 1998.That is a significant figure, because it illustrates what I think we all know instinctively: that this is a rapidly growing area of employment.
We must distinguish, as I did a moment ago, between the outworking sector and the tragic loss of jobs that we have heard about over the past two or three days in our traditional, heavy, factory-based industries. The occupations dealt with in the Bill—outworking, teleworking and other kinds of working from home—have become important as substitutes for the traditional jobs that, regrettably, are disappearing, not least from the constituency of the hon. Member for Northfield. Let us not lose sight of that as a first guiding principle concerning our responsibilities in the context of the Bill.
The research paper continues:Those working from home for at least one day a week (`partially') account for 3.5 per cent. of the employed workforce"—that is nearly 1 million people—while those reporting working 'sometime' at home account for a further 22 per cent.Working at home is something that many people want to do to enhance their household income, their experience and so on. It is that important.
If we do anything that might damage that area of employment, we shall bear a heavy responsibility. We should not take the flip attitude, "So long as we mention scams often enough, the Bill is all right," or patronise people by saying, "We've got to protect gullible people at all costs," and "We won't even assume that you can read anything properly, or that you may be prepared to take the occasional risk."
I reject all that. It is superficial, patronising and wrong-headed. I have a higher opinion of voters than Labour Members do. They seem to assume that people are completely cretinous and cannot look after their own interests or make their own decisions. I would rather err in the other direction, and regard voters as mature 587 responsible people, prepared to have a go, prepared to take a chance or even a risk, and prepared to be let down occasionally.
§ Miss Anne McIntosh (Vale of York)
Does my right hon. Friend think that the Bill will promote the nanny state, or will it lead to the more flexible labour market that we would like?
§ Mr. David Maclean (Penrith and The Border)
I am sorry to disagree with my hon. Friend the Member for Vale of York (Miss McIntosh), but the Library paper suggests that this is a case not so much of nanny statism as of jobs for the boys. Has my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) seen that, according to the paper, in 1999 the total amount of money that people lost in scams was £35,000. Yet when the Bill is passed it will cost £350,000 a year for trading standards officers to enforce it. We will spend £350,000 to deal with a £35,000 problem. Would it not be better to give everyone who lost money a tenner?
§ Mr. Forth
I hope that my right hon. Friend is not trying to pre-empt something that I intended to say later. Now that he has mentioned it, however, I shall take the point up briefly and then, depending on my reading of your mood, Mr. Deputy Speaker, I may or may not seek to return to it later.
My right hon. Friend is correct; the Library does give us those astonishing statistics.
§ Dr. Howells
I always try to help the right hon. Gentleman. He is, of course, making his usual pitch for a return to a more anarchic age when cheats, bullies, fixers and those who delivered short measure were regarded as a natural consequence of a thrusting economy. If the right hon. Gentleman is right, I am not sure why we need laws or police forces at all. Why not just let the bullies loose in society, and avoid threatening them in case that threatens the creation of jobs? Does he agree with the right hon. Member for Penrith and The Border (Mr. Maclean) about the money? How much does a murder cost? Why spend money on police forces if it costs so much to solve the occasional murder? His argument is the most facile load of old garbage that I have ever heard in the House.
§ Mr. Forth
I am glad that we have got the Minister to his feet, and that he has given us a foretaste of the measured remarks that he will make later. If that is the extent of the Department of Trade and Industry's analysis, it has slipped a lot since I was there some years ago. If the Minister is briefed to say that transactions averaging £40 in value are equivalent to murder, we have reached a 588 new and fascinating level of Government analysis. Perhaps we shall hear more from him later when the debate hots up a bit. It has been rather somnolent so far, and perhaps I will be able to encourage him to say more.
My right hon. Friend's intervention was helpful, and referred directly to the Library analysis of the Bill, which points out—I do not know whether my right hon. Friend made this clear—that the figures given come from the National Group on Homeworking, which presumably has some grasp of what is going on. Apparently, in 1999 there were 869 so-called scams—a word that has dominated the debate so far, but has never yet been satisfactorily defined—and that those nearly 900 transactions probably lost the people concerned nearly £35,000. If that had been £35,000 each, I might begin to be impressed, but I assume that that is the total. We are therefore talking about responding with the heavy hand of the law—I shall go into that in more detail when I consider the schedule—at, as the research paper goes on to outline, a very much greater cost to the taxpayer.
The research paper refers to the explanatory notes to the Bill. It is interesting that of the three private Members' Bills before us today, this is the only one with explanatory notes. That makes me wonder whether there is not just a hint of Government input. I believe that the Government said that they wanted to do something similar, but because they were too busy banning foxhunting, they could not find time to put such a Bill in their official programme. Up bobs the hon. Member for Northfield to produce, obligingly, a private Member's Bill. However, I shall let that pass.
The result is that we have useful explanatory notes for the Bill, drafted, no doubt, by the promoter himself—not. Those notes say that the public expenditure costs ofadditional investigations and some prosecutionswill amount to £350,000 in the first year—10 times the estimate of what the alleged hapless victims of the transactions will have lost. What sort of cost-effectiveness is that? I hope that the Minister will answer that question later, and perhaps this time he will leave out any allusions to murder. That might be helpful.
§ Mr. Maclean
Is my right hon. Friend as appalled as I am that the Minister should intervene with such an intemperate outburst and offer us such a pile of pants? He said that throwing £35,000 at £350,000 somehow equated to an investigation of murder. Of course the police service should leave no stone unturned in investigating murder, whatever it costs—but to compare that with a £35,000 scam is outrageous.
§ Mr. Forth
I am grateful to my right hon. Friend. His description of what the Minister said is entirely accurate, and I subscribe to it.
However, I shall not be diverted any more at this stage, because I was giving the House the benefit of the analysis in the Library research paper as a background to my analysis of the Bill, which I shall offer in due course. Now I want to remind the House, to put the matter properly in context, what the Library tells us about the nature of this sector of employment:Higher occupational groups are over-represented among the mainly and sometimes working at home groups, while those lower down the occupational hierarchy are under-represented".589 That is not the impression that we have been given by the speeches that we have heard so far—quite the opposite. In other words, most of the people who are involved in that rapidly growing and vital employment sector are themselves intelligent, educated people who want to take advantage of homeworking, teleworking, outworking or whatever we want to call it.
The Library document continues—this is the information technology aspect that I hope my right hon. Friend the Member for Penrith and The Border will help us with later—Three out of five who work at home at least one day are reliant on keeping in contact with clients and colleagues via computers and telecommunications.That is the first hint that this is an absolutely vital growth area of employment—relating directly to what is called information technology.
I cannot claim any great knowledge of those matters, Mr. Deputy Speaker, so you will be relieved to hear that I shall not spend much time on them, except to point out that it is evident, even to me, that people working at home using computers and other technology, who are distance working, teleworking, home working, outworking—all those forms overlap—will be affected by the Bill, should it, mistakenly, ever reach the statute book, although I hope it does not. We run the risk of damaging growth in that sector at the very time that we as a society are utterly reliant on its development to maintain our prosperity. The figures speak for themselves. We are talking about a sector that is not only vital now but will become even more important in the future.
Reference has been made to the support given to the Bill by bodies such as NACAB and the NCC. Interestingly, in one of the many pieces of paper that they have produced on the Bill, I picked up this rather helpful phrase:There is no specific law that controls how home-working schemes operate. So most are not illegal".Thank goodness for that. The document continues:Misleading advertising is, though, covered by the Advertising Standards Authority, the advertising industry's watchdog, which can investigate complaints from the public.Although I do not want to conduct an in-depth analysis at this stage, as it would be more appropriate for subsequent stages of the Bill, I refer to that point because I suspect that there is already a panoply of measures, agencies, bodies and so on—not least our excellent local trading standards officers—which could deal with a large amount of the abuse that worries Labour Members. In cases and Bills such as this, a full analysis is often missing. I can understand why the promoter of the Bill—or any of the Labour Members who profess themselves so keen on the measure—would not want to do that. However, we really need a full analysis of the alternative possibilities or routes—perhaps using a lighter touch, being more minimalist and less interventionist—that could be used to deal with the problems identified by Labour Members.
§ Mr. Tyler
The right hon. Gentleman says that he looks forward to further scrutiny of the Bill in its subsequent passage through the House. May I take it from that that he and his hon. Friend the Member for Rutland and Melton (Mr. Duncan), the Opposition spokesman, will give it a fair wind into Committee?
§ Mr. Forth
No, that is a matter for Members of the House. I am making my opposition to the Bill absolutely 590 clear. I hope that the hon. Gentleman at least concedes that. I rarely seek to conceal my position or to prevaricate on it. I regret that, in my introductory remarks thus far, I have been unable to persuade him about my position. I shall obviously have to make it much more clear cut and much better defined so that he is left in no doubt.
I do not like the Bill. It is ill-conceived. It will damage employment. It takes a scattergun rather than a focused approach. The cost-benefit analysis is adverse. The origins of the Bill are extremely dubious—being as they are NACAB, NCC and, worst of all, Her Majesty's Government in the shape of the Minister for Competition and Consumer Affairs with his obsession about murder. All in all, I am not impressed with the Bill's pedigree—to put it no more strongly.
Let me turn again to the briefing from NACAB and NCC—two quangos supported largely by taxpayers' money, unless things have changed since I was a Minister. It states:The purpose of the NCC is to make all consumers matter.What glib nonsense. The NCC is a Government-funded body, almost the sole purpose of which is to dream up ill-conceived Bills such as this one. That simply will not do. It does not persuade me in the slightest. Unless the Minister can tell me that things have changed a lot since I was dealing with such matters, I shall continue to be unimpressed.
I shall now turn in the direction of the Bill, Mr. Deputy Speaker—I am sure that will give you some reassurance. I thought that I might deal with it slightly back to front in case I run out of time. I am anxious to deal first with the schedule.
Schedules are often ignored or overlooked parts of Bills. The wording of the Bill is sloppy; it has been poorly drafted. I suspect that the parliamentary draftsmen have been so busy on other things that they have had no chance to get their teeth into this measure. If it ever reaches Committee, which I trust it will not, it will need a great deal of remedial work; if it ever gets out of Committee and comes back to this place on Report, which I trust it will not, it will need even more remedial work. However, that is not our job today—I know that well enough, Mr. Deputy Speaker. Awful though the Bill is, I want to alert the House to the horrors of the schedule.
The schedule is headed "Enforcement" and "Enforcement authority". It was interesting to hear the promoter of the Bill and other Labour Members roll those words around their mouths; they positively enjoy the idea of criminal prosecutions. That is what Labour Members really like about the political world. The fact that the Bill would produce more criminal prosecutions seems extremely attractive to them. It is not the sort of world that I particularly want to live in. The measure gives a flavour of what the Government and their supporters are up to.
Reading the schedule gives us enough of a clue. It starts slightly blandly and, one might think, a bit encouragingly by stating:For the purposes of this Act … every local weights and measures authority in Great Britain is the enforcement authority for its area.That may be okay as far as it goes. We all like local weights and measures authorities, except when—as in the ghastly little statutory instrument that the Minister is 591 trying to smuggle through the House at present—they are going to impose metrication on us, but not until 2009—[Interruption.] The Government Whip, the hon. Member for Hyndburn (Mr. Pope)—to do him a favour, I shall get him into Hansard, so that his constituents know that he was in the Chamber today—says from a sedentary position that my colleagues and I voted for that measure. I can tell him—he can ask the Minister—that I voted against it yesterday. However, I shall not digress, Mr. Deputy Speaker; I am talking about the schedule and local weights and measures authorities.
Notwithstanding the bland and reassuring words at the beginning of the schedule, we then come toPowers of officers of enforcement authority".Now we are getting to the nitty gritty. That is the kind of provision that Labour Members and the Government feel obliged to include in almost every Bill in order to up the rate of the criminal prosecutions that they seek so avidly in every aspect of life. The schedule states:If a duly authorised officer of an enforcement authority has reasonable grounds for suspecting that an offence under section 2 or 3 has been committed, he may act".How may he act? He may enter the premises and then he may do all sorts of other things that I shall come to in a moment.
If I read the schedule correctly—although I am open to correction—we are moving, unusually, from powers that are normally given to police officers or Customs and Excise officers and, in this measure, importing a power of entry to premises for trading standards officers. That is the only way in which I can read the Bill. The authority is the local weights and measures authority, and I assume that the duly authorised officer is an officer of that authority—unless I am about to be told that it is a police officer.
This is either sloppy drafting—I hope that it is, in a funny sort of way—or something that will create a whole new group of officers who can enter premises. If we are really saying that the nature of the problem is so severe that we need such a provision in the Bill, I regret that. It is another example of the disproportionate cost as against the risk that has been exposed. I regret that that tendency is coming more and more into Bills.
The schedule goes on to talk about seizing and detaining documents. I mention this only in passing, because it has always intrigued me, but if we want to take seriously the powers of entry, enforcement and seizure, why does the schedule limit those powers in paragraph 2(8)? It says:The powers of an officer under this paragraph may be exercised by him only at a reasonable hour and on production (if required) of his credentials.Well, we must have that, must we not? Why the reasonable hour? I take the view—I am not quite arguing against myself, but getting close to it-that if we are to have serious powers of enforcement, entry, seizure and detaining, we should not limit them to a reasonable hour. If I wanted my authorities to be effective in all this, I would want them to exercise their powers at an unreasonable hour so that they could find real evidence. We shall need to return to that issue as the Bill meanders its way through its further stages.
592 Another aspect of the Bill that disturbs me has echoes of the Tobacco Advertising and Promotion Bill, which we dealt with recently. I rather hoped that my party would oppose that Bill, but so far it has not. The schedule refers to something called "test responses". That bothers me. We have argued before that a policeman can deliberately send an under-aged person into a shop, get them to buy something illegally and then feel the collar of the shopkeeper. Here we have a similar sort of thing and I am instinctively unhappy about it. I do not want to say that I am completely against it, but I am uneasy about the direction in which the schedule seems to take us. Time and again, we say that something is illegal, but we want to use authorities to persuade someone to commit an illegal act so that we can entrap them. I believe that what are blandly called "test responses" could amount to entrapment and I want to draw the attention of my hon. Friend the Member for Rutland and Melton (Mr. Duncan) and many others to it.
I was intrigued to see a nice little reference in the schedule to impersonation of officers. It is terribly Mr. Plod, but I suppose that the drafters had to put it in somewhere, for reasons that I cannot begin to imagine. Paragraph 7 of the schedule says:A person commits an offence if he is not a duly authorised officer of an enforcement authority but he purports to act as such under this Schedule.A person guilty of such an offence is liable"—here we go, more prosecutions—
I cannot quite imagine who will go around impersonating trading standards officers. The promoter of the Bill, or whoever wrote the Bill, obviously can. We shall need to explore that rather more fully.
- "(a) on summary conviction, to a fine not exceeding the statutory maximum;
- (b) on conviction on indictment, to a fine."
I did not want to spend a lot of time on the detail of the Bill, Mr. Deputy Speaker, because you and I know that that is appropriate at subsequent stages, but a glance at the Bill tells me that the wording is extremely unsatisfactory. It is full of loopholes and it will require a considerable amount of attention. I shall leave it to others to look at different aspects of it.
Labour Members, who, I hope, are still anxious to have their word about the Bill—I will not detain them much further—may have a mild criticism of my remarks, and I want to pre-empt it. They may say that what I have said has all been terribly negative. They may ask me, since I do not think that all these things should happen, what should be happening to protect the poor, innocent, ill-informed, ignorant people who walk into traps over and over again and get taken for 40 quid. One of my answers—here, there may be an area of agreement between me and perhaps, who knows, my Front-Bench spokesman and possibly the Government—is that we should inform people of the risks involved.
I am all for giving people information. I do not dissent from warnings on cigarette packets or other things that say, "The Government think that this is bad for you; the Government believe that this could damage your health; the Government this or the Government that". I have no problem with warnings from experts, authorities and well-meaning people. More could be done to warn people that they should be a little bit careful, and perhaps talk to friends or think about it before they send their money off 593 to someone whom they do not know and have never heard of. One might have thought that most people would be careful about sending off their money. One would not imagine that they would do it serially. Labour Members have given us examples of people who have been caught out not just once but several times. I suspect that such people are beyond saving, even by the Bill.
Let me suggest another measure. I do so only reluctantly and I hope that my hon. Friends are not really listening because they will pull my leg about it endlessly. I suggest it in a spirit of helpfulness and reaching out to Labour Members.
§ Mr. Forth
My right hon. Friend queries that. He knows that I am a reaching-out sort of person. Here we are on a private Member's Bill Friday in a friendly and relaxed atmosphere discussing a Bill. Having said that I am against the Bill and will oppose it if I get the opportunity to do so, I want to make helpful suggestions. Why do we not provide a helpline? The Department of Trade and Industry is awfully keen on helplines for all sorts of other things. People are supposed to call the DTI about almost every aspect of their lives these days. Why not say to people, "If you are considering responding to a seductive advertisement that says that you can work at home and get well paid, why don't you call us and we will try to talk you out of it?"—or something of the kind? It would not be worded in quite that way, but it would be along those lines.
§ Mr. Maclean
My right hon. Friend is clearly having some mild aberrations this morning. Has he considered setting up a self-help group to deal with the problem? Perhaps if he continues in this vein, he will become the chairman of a self-help group and other touchy-feely things that may help people who spend £40 on a scam.
§ Mr. Forth
That is possible. I am surprised that there is not a provision in the Bill for counselling victims. I have just had an idea for an amendment or new clause. It strikes me that the lack of counselling is a lacuna that we might seek to remedy. However, I shall not be deterred from my little bit of positivism at the end of my remarks.
I have suggested giving proper information and a helpline. My right hon. Friend has suggested support groups. Labour Members or the Minister may want to take up the idea of counselling. The Minister may want to do it personally. I cannot imagine anything more comforting for someone who has been a victim of a scam than to have a session with the Minister, if he can keep away from murder for a moment. There is then the role of trading standards officers—people whom we all hold in the highest regard, and who are very professional. I should have thought that they could make a much better contribution to all this.
I make no secret of the fact that I think that the Bill is ill-conceived. There might be a real problem out there, but the Bill is not a proportionate response to its incidence and extent or the amounts of money involved. It is time that we did not reach for legislation every time that groups of people got into difficulty. We should expect people in a mature, educated, civilised society to take more responsibility. We can inform them, but we must expect them to make their own decisions. For all those reasons, I shall oppose the Bill on Second Reading.
§ Mr. David Taylor (North-West Leicestershire)
I congratulate my colleague and fellow midlands Member, my hon. Friend the Member for Birmingham, Northfield (Mr. Burden), on introducing this much-needed Bill, which—despite some of the comments by the right hon. Member for Bromley and Chislehurst (Mr. Forth)—would be immensely valuable were it to hit the statute book. In a slight parody of JFK, I declare my interest: ich bin ein outworker—or at least, I was until May 1997. As a freelance accountant, I dealt with the financial affairs of many outworkers in the area where I live.
As hon. Members have said, many people who are outworkers or home workers are not vulnerable or in badly paid occupations. They are at the core of our economy, and increasingly so, as teleworking develops. The Bill makes it clear that such activities and the firms involved with such work are not threatened; the scams are the Bill's prime target. We acknowledge that the great majority of firms are legitimate and many outworkers are reasonably paid. None of them would be caught by the Bill.
What is the extent of the problem? The National Group on Homeworking produced some useful and valuable statistics. Its analysis, which is a little different from the Library report's, states that about 80 per cent. of outworkers are female. We need to understand why they seek home work or outwork to find out which groups would benefit in society. The prime reason given by those surveyed was child care, unsurprisingly. The second of four reasons was low income. The third reason was lack of other work opportunities, and the fourth was long-term illness or disability. Those are the groups of people who would benefit from the elimination or reduction of the scams that are endemic in certain parts of the country.
There are four main categories of scheme, and I am pleased that that is recognised in the Bill. First, there are those in which the client receives nothing in return for the fee, and any further attempt to contact the company fails. That is particularly frustrating, so I hope that it will be much less common if the Bill reaches the statute book. Secondly, clients are asked to recruit more people by placing advertisements similar to the one that they responded to—a relatively unsubtle pyramid home-working scam. Again, I hope that such scams will disappear under the legislation. Thirdly, the client is sent work to complete. The work is often bogus, with artificial standards that can never be met by even the most perfect of workers. Fourthly, the client receives a directory of home-working opportunities—another problem tackled in the Bill.
Hon. Members have referred to the links to premium rate telephone numbers. I shall not develop that further, but I was pleased to hear the promoter's reassurance that the costs associated with the problem are included in the definitions.
Why do we need the Bill? The right hon. Member for Bromley and Chislehurst said that it represents the nanny state at its worst, that people should be more alert to their own interests and that it should be necessary only to provide them with more information. However, I assume that the few Members here who oppose the thrust of the Bill broadly support the work of the Advertising Standards Authority. In its assessment, the most common reasons for such complaints is that, first, the adverts in 595 question did not necessarily stipulate that an initial outlay or investment was required. Secondly, they did not stipulate the level of outlay required. Thirdly, the claims of earning potential in the adverts could not be substantiated by the company. Fourthly, claims of possible earnings were not accurate. That is why we need to develop such legislation.
The people at whom the scams are targeted are vulnerable in all sorts of ways. The type of information that they request of the National Group on Homeworking illustrates the picture nicely. Their top need is information on employment rights. They feel especially vulnerable about low pay and about the availability of redundancy and lay-off pay.
The National Group on Homeworking should be commended, not criticised as it was by the right hon. Member for Bromley and Chislehurst. He was also dismissive of NACAB's support for the Bill. It is a mark of the Bill's strength that NACAB is so strongly in its support. It frequently receives complaints about the loss of money to clients who are least able to afford it. We have heard about the categories of people who are often the victims of such scams. NACAB often reports nationally and locally on the failure of legislative provision to deal with the problem. That is precisely why we are debating the Bill today. However, many people fail to complain at all, so we are looking only at the tip of the scam iceberg.
The existing legislation, which one or two right hon. Members have suggested is adequate to protect vulnerable people, is absolutely deficient because individual complaints are unlikely to be investigated by the police, given the small sums involved, although the amounts can be substantial for those concerned. I was pleased to hear the supportive comments about trading standards officers that have been made from both sides of the House. Those in that profession must wait until members of the public have lost money and made a complaint before they investigate. The Bill would improve the process.
§ Mr. Duncan
If what the hon. Gentleman says is true, why has someone in Sunderland been prosecuted for selling bananas by the pound?
§ Mr. Taylor
I am not sure that metrication of sales of vegetables or greengrocery is covered by the Bill. I thank the hon. Gentleman for that helpful comment, but I shall press on.
Trading standards officers' involvement is restricted to the activities covered by the bogus home working addressed in the Bill. There seems to be no suggestion of anyone being targeted who wraps bogus bananas and sells them illegally in imperial quantities. We are not talking about such activities.
Another indicator showing that the legislative framework is inadequate is that the fines imposed by courts do not reflect the sums being made by such businesses. I dispute the figures given by the right hon. Member for Bromley and Chislehurst, who suggested that the Bill deserved to fail because the predicted costs of implementing it were greater than the overall cost to those defrauded recently. In fact, in four years, one firm is estimated to have defrauded the British public of between £2.5 million and £6 million—considerably more than the Bill's likely cost.
596 Existing legislation also fails because the types of business involved in such disreputable activities are usually very difficult to track down. They operate using mobile phone numbers or post office box numbers and are almost impossible to identify with any certainty. Consumers have no practical means of redress.
I shall illustrate the difficulties by citing some examples provided by my own citizens advice bureau in north-west Leicestershire. They show the nature of the scams and of the people behind them. People are asked to provide money up front for an envelope template that is badly cut and useless and could never make a reasonable envelope. Of course, they cannot make the envelopes and the money is lost. That is the kind of activity that the Bill is aimed at tackling.
Sometimes, national insurance payments are stopped from home workers' pay but not passed on to the Inland Revenue. That is not covered in the Bill, but it is a matter that I have taken some interest in and one that the Inland Revenue and the Department of Social Security should consider.
Some companies that had employed home workers legitimately have suddenly ceased sending them work and then avoided paying redundancy. That, too, should be tackled.
My area has traditionally had a substantial economy in the clothing, textiles and footwear sector, which has had a very difficult time. Outworking is common in the sector, and much of it is legitimate and welcome, and not at risk from anything in the Bill. I am pleased to see a fellow Leicestershire Member on the Opposition Front Bench, no doubt waiting to leap to his feet and endorse everything in the Bill.
When scams are reported in our county, the same firms' names crop up time and again. Let us hope that they will not resurface when the Bill is enacted. The names include Capital Publishing, Creative Solutions, Sterling UK, Formula One International and Unicorn Direct. The names have a certain resonance of quality and high technology that completely belies what they are about. If the service that they provided was commensurate with the effort put into concocting their names, the Bill would not be needed.
The Leicester outwork campaign, now the Homeworking Campaign for Change, has long pressed for legislation such as this. Manjeet Tara said:Getting these crooks into a court would be an achievement in itself.That is true. We must look ahead to see how the legislation might be evaded through technology. The IT activities to which other hon. Members have referred could be another means allowing bogus companies to defraud hundreds of thousands of people in this country.
We have come to a time, in relation to the development of the economy and the assessment of social difficulties, when action is needed. My hon. Friend the Minister will have been involved with the White Paper "Modern Markets: Confident Consumers", in which, in July 1999, the Government said:There are many schemes claiming that those who take part can make a quick and effortless income. This is impossible for most participants to achieve.That document made a commitment to Government action. I hope that, 18 months on, the Government will give the Bill a fair wind.
597 Unscrupulous and immoral firms that trade on the desperation of the poor and the gullibility of the naive and exploit the isolated housebound should have no further part to play in the economy of the United Kingdom.
§ Mr. Alan Duncan (Rutland and Melton)
This has been an interesting debate. The House is full of good intentions on this topic, even though the conclusions reached on either side are very different. I do not in any way impugn the good intentions of the hon. Member for Birmingham, Northfield (Mr. Burden). He has identified a problem and attempted to solve it. It is not a massive problem, but it is a nasty one that comes up repeatedly and, as the hon. Member for North-West Leicestershire (Mr. Taylor) said, especially hits the vulnerable, the poor, the disabled and those who are scrabbling to get every penny that they can in order to subsist.
We all want to eliminate the scams, in the cause of social justice, but we need to try to marry good intentions with good law, and there is a danger that the Bill could get us into a bit of a mess. Conservative Members share the desire of the hon. Member for Northfield and his supporters to tackle the problem, but it is always difficult to legislate simply for good intentions. Equally, it is difficult to outlaw gullibility.
The Bill would empower trading standards officers, under the weights and measures structure, to intervene and apply the law to stop scams. We, too, want to tackle the deceit and corruption. It is a poor reflection on some people that they still fall for such scams. Local newspapers have run excellent campaigns to expose those scams, and it is sad that people can still be taken for suckers—but we must treat the world as it is, and if we, as parliamentarians, feel that a law is needed, we must make that law and frame it well.
We are determined to try to find a way of giving people the power to banish these swindles from our society. There are a lot of scams, sometimes dressed up with new ways of advertising and describing what is essentially a system of saying, "I'll give you a penny, and you give me a pound." At the heart of all the scams is a little bit of enticement leading to the participants parting with more money than they get back, to the benefit of someone who knew at the outset that that was exactly what would happen. Scams have included bogus recruitment, envelope addressing and basic manufacturing in somebody's living room, as well as directories, kits and so on.
Many home-working schemes are, however, legitimate. Some people—especially those who are caring for children or who are housebound—participate legitimately and profitably in home-working schemes and are satisfied with their involvement. The danger of the Bill is that faulty drafting might cause the good to be caught up with the bad. I want to address that issue, about which my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) is especially concerned. He pointed out that there are far more good schemes than bad. As my right hon. Friend the Member for Penrith and The Border (Mr. Maclean) said, it appears that the proposed financial gain from the Bill could be up to 10 times greater than the current loss. I have no doubt that the Minister will want to explain that loss.
The key point about getting the Bill right is for us all to be satisfied that the good will not get caught up with the bad or suffer in well-intentioned attempts to tackle the 598 problems that exist. I should like to set out some background in that respect, as Opposition Members have some regrets about the origin of the current situation. The measures contained in the Bill should have been part of the Government's much-promised and long-awaited consumer Bill. They failed to introduce such a Bill in the Queen's Speech, which is why we are considering the add-on, stand-alone Bill that is before us.
The Government have been promising that wider consumer measure for a long time. In their consumer White Paper, which was entitled "Modern Markets: Confident Consumers", they said that they would publish a consultation paper and introduce a Bill. They have published a consultation paper that does not deal with many issues, certainly not in respect of the Bill that is before us; they have merely conducted an informal consultation with a few privately selected consumer groups. That process goes against the grain of what they always promise in the consultation that they pretend to offer in the spirit of so-called open government. All that has happened is that a few quangos have told the Minister or his Department what they want. The Bill is certainly not the product of wider consultation.
I am especially concerned that the many legitimate companies that provide a livelihood for people who are working from their homes have not been adequately consulted and may not yet be aware of the effect on them of the dangers that lurk in the Bill. I doubt whether the internet industry has been consulted. Many of the Bill's provisions could be circumvented by advertisements on the net. One could sit in Calais and advertise through an internet service provider a home-working scheme on what appears to be a UK-based website. People with credit cards could then subscribe to that scheme. I acknowledge that many of the people involved in home working will not have credit cards, but they would somehow find a means of remitting money if they thought that such a scheme was the way to their fortune and reward. The money would then go outside the United Kingdom.
Internet advertising could, therefore, result in the transmission of money through a Visa card or a MasterCard to pay for the sort of scam that the Bill is designed to address, but the Bill would have no power over those involved. The internet can, therefore, allow easy, modern and inexpensive circumvention of the very problem that the Bill is trying, but failing, to address.
I have a greater concern. I cannot quite match with the detail of the Bill the claims that hon. Members—I refer mainly to Labour Members—make about its contents. As the hon. Member for North Cornwall (Mr. Tyler) rightly said, the devil is in the detail. Indeed, I was going to use that phrase anyway, but he said it first. As my right hon. Friend the Member for Bromley and Chislehurst said, the House has become increasingly prone to introducing legislation on the basis of good intent, favourable headlines and campaigns. We have begun to lose detailed scrutiny and a proper understanding of how every dot, comma and word that we are enshrining in a Bill will be enforced in practical terms when that Bill is enacted.
§ Mr. Forth
It is perfectly legitimate for focused single-interest groups to lobby Members of Parliament and to seek to persuade them to introduce laws. However, does my hon. Friend agree that it is our wider responsibility to balance those representations with the more general good and to make our judgment on that 599 basis? It can never be good enough merely for us to say that we must legislate simply because an organisation or body says that a proposal is good. Our duty runs much wider and deeper.
§ Mr. Duncan
I agree with my right hon. Friend. The Government have sought to buy off pressure groups by representing them, and probably them alone, in some of their legislation, even if not in the Bill that is before us, yet hon. Members must represent all their constituents and the country when they pass laws that are universally applicable. We must therefore consider the detail.
§ Mr. Tyler
I apologise to the hon. Gentleman for missing the first minute of his speech. Unlike the right hon. Member for Bromley and Chislehurst (Mr. Forth), does the hon. Gentleman support the Bill? Does he want it to go into Committee so that the detail to which he refers can be properly scrutinised in the right forum? I accept his point about internet circumvention of the measure. Does he wish to amend the Bill in Committee to tackle that problem?
§ Mr. Duncan
We are considering a private Member's Bill, and the structure of a Committee that considered it would be slightly different from that of a normal Standing Committee. We support the Bill's intentions, but it would be better if it was completely redrafted. Amendment in Committee would remove so much of it that it would require such redrafting. As I develop my argument, the hon. Member for North Cornwall will understand my position. We want to get rid of the scams through good law. We accept in principle the Bill's intention and would support a well-drafted measure on home working. However, we are duty bound to consider the detail.
As with every measure that I have examined in detail, the style of drafting terrifies me. Why cannot Bills use simpler English? There is no obstacle to our insisting on updating our legislative language. Many of the "wherefores", dots, commas, cross-references, letters and numbers are unnecessary. I try to read legislation and I find it difficult, so heaven knows how people cope when they pick up a Bill simply to ascertain whether they fall foul of the law.
I found the comments of the hon. Member for Northfield on premium-rate telephone lines difficult to reconcile with the wording of the Bill. I should welcome it if he could identify the clause that applies to those premium lines. Whether a company that sends a fax and asks for replies through a premium-rate fax line—the hon. Gentleman believes that he used such a line this morning—falls foul of the Bill will be a matter for the courts. The Bill lacks the necessary clarity, although the hon. Gentleman believes that it is clear.
The main problem is the breadth of the category that the Bill automatically chooses to criminalise in clauses 2 and 3. Clause 2 makes it a criminal offence to seek or receivepayment from another person in response to an outworking proposal.Clause 3 makes it a criminal offence to receive money for providing information about outworking proposals. That may appear innocuous and so simple and obvious that 600 hon. Members believe that it properly tackles the corruption and theft that are the basis of the problem. That may be true in some cases, but it may also catch the good with the bad.
All the speeches that I have heard this morning imply that the main problem is the anonymity of the scam monger and the difficulty of tracing such a person. We have heard that such people use PO box numbers, and that they provide only mobile phone numbers. They can chuck a mobile phone in the river or disconnect at will. It is therefore difficult to track those people.
The best method of tackling the scams and finding the people who are behind them is to require in law that anyone who trades in outworking registers makes available a proper name, address and contact details, and that PO box numbers and mobile phone numbers are not acceptable. No one has presented an argument to show why such a provision, and perhaps a little extra, would not suffice to tackle the problem.
Instead of that simple provision, which would go a long way towards tackling the problem, the Bill criminalises anyone who asks for a little deposit—I shall give possible examples shortly—or makes a charge or even advertises some sort of home working.
I can envisage an idea—touched on by hon. Members on both sides of the House—that one might call a home secretary scheme. By that, I mean a scheme whereby secretaries work at home using modern technology. Many people have a laptop computer in their house. A wife, perhaps looking after a young child, could do a few hours' work a day transcribing, typing or even proofreading a book.
A company, perhaps a publisher, might say to a secretary, "I am going to employ you to proofread documents." They could be instruction manuals for new products, perhaps, or books. The person could then sit at home, receive the documents through the ether on to her computer, do the work and send them back. It would be only fair for the company to say that, for that to work sensibly, the person should have some kind of compatible software. She might have to buy that. Alternatively, she might be required to provide some evidence of training. She might then have to pay to go on a course, for example. Such practices would be outlawed by the Bill. I see the hon. Member for Plymouth, Sutton (Mrs. Gilroy) shaking her head; perhaps she would like to tell me why. I also seek assurances from the Minister—I am sure that, if they exist, he will be well briefed enough to provide them.
There are possible problems that have not yet been envisaged. Decent schemes that are perfectly legitimate and above board, and that would benefit home workers, might require the transfer of money to get them started—to prime them, in some way. Such schemes might find themselves trapped and outlawed by the Bill. That would be a pity because that would be worse, in some ways, than getting rid of the problem that the Bill is trying to address.
If we were to find that the unintended consequences of this Bill were to reduce and, in some cases, forbid the kind of work that suits the way in which people in the modern world want to work—and the kind of work that we want to encourage—we should have done a bad thing. I cannot see sufficient exclusions and exemptions in the Bill to address that concern. We might find that, rather 601 than having a Bill that outlawed home-working scams, we had a Bill that outlawed home working. That would be a disgrace to the procedures of the House.
We cannot envisage every eventuality. I can, however, think of one example. Hon. Members might think it is absurd, but at least it is close to home. Let us imagine an advertisement that states: "There is a life out there in which you can earn up to £50,000 a year. You will be very important in life in the future. All you have to do is send £1,000 deposit to the returning officer." There could be an exclusion in the Bill that will ensure that trading standards officers will not stop the next general election. However, that is an example of someone applying for a job—it could be called outworking—who has to submit money in advance. There are probably much better examples.
§ Mr. Duncan
My right hon. Friend is absolutely right. It could be said that this is where we should be doing most of our work, and that our constituency work could be described as outworking.
Given that the Bill has so much Government support—indeed, it has been drafted by the Government—and that it has, quite reasonably, been taken off the shelf by the hon. Member for Northfield, it has attracted only a handful of Labour Members to the debate. However, numbers count in this House.
I was drawing a parallel between working at home as a secretary and standing for election. My point was that we cannot see so clearly into the future that we can predict who might get caught by the Bill. That is always the danger of legislation.
§ Mr. Maclean
Clause 1(2)(b) describes the exemptions. However, they are merely thoseof a description specified by the Secretary of State by order".That is all that we know at the moment. The explanatory notes to the Bill state that the Secretary of State will exempt cases if he thinks that they are legitimate and might genuinely benefit workers. All we have from the Government is a suggestion that those categories of home workers that might be included or excluded are ones that the Secretary of State or his civil servants might think it beneficial to include or exclude. That is not good enough for legislation.
§ Mr. Duncan
My right hon. Friend hits on an important point. If the exclusions are to come before the House only by order, will the Minister say whether they will be descriptions of particular categories or ad hominem exclusions—that is to say, by named company? Will not that effectively amount to an approval process whereby a company seeking an exclusion will have to wait for the Secretary of State to put before the House an order stating that its proposed method of working is legitimate, even though it may be clear that everything it wants to do is legitimate?
Anyone who believes that he will work within the law can set up a company, employ people, trade and make a profit. However, under new Labour, we may suddenly 602 create a category of commerce for which permission and a statutory instrument are required before concerns can go about their lawful commercial business. That amounts to a pre-approval process unparalleled in any other area of commercial activity. Perhaps the Minister will tell the House what exclusions he envisages and how regularly he will have to amend and adapt such exclusions to keep up with an ever-changing world.
All that gives rise to a fundamental concern about the Bill and returns us to the point about social justice that both sides of the argument have tried to address. Unlike most legislation—unlike all legislation, I would like to think—the Bill contains a presumption of guilt. It assumes that anyone who might seek prepayment is guilty and that anyone who might advertise is guilty of wanting to set up a scam. That is upside down legislation.
If people do not conform to certain criteria and are proved to be administering a scam, we should get 'em and get 'em hard. However, the Bill suggests that there is a certain method of doing business that, in all cases, would be deemed to be criminal even though the Government and many Labour Members accept that much of what is going on is not criminal, deceitful or corrupt. We may criminalise the good—arguably, criminalise the majority—to catch the bad.
The Bill would be better legislation that properly tried to address a problem that we all want solved if it took a different approach. It should define what is bad about the effects of such scams on individuals sufficiently to provide that those who overstep the boundaries would fall foul of the law and that there would be powers to stop them. However, it would criminalise people who could be doing something perfectly proper, decent and beneficial. It is a pity that a lot of the good could be caught up in the bad.
Assumption of guilt is questionable as a principle of legislation. The methodology is questionable, but the purpose laudable. Conservative Members support the purpose, but there are severe questions about the legislative detail. Ideally, a proper consumer Bill containing trading standards measures to address the issue properly, honestly and fairly would be introduced, although I accept that we will not get that from the new Labour Government, who have failed to deliver a lot of what they promised.
§ 12.9 pm
§ Judy Mallaber (Amber Valley)
I, too, am pleased to sponsor the Bill. When I asked my hon. Friend the Member for Birmingham, Northfield (Mr. Burden) what subject he might choose, I was surprised when he suggested home working and outworking, as no constituency cases have been brought to my attention. I know two people who are involved in home working. One is a woman who used to live in the flat below mine and did sewing work at home. I knew that that work had come from a factory owner, who was not really exploiting her. He may not have been paying her very well, but no scam was involved. The other employer was someone I know who produces a great many embroidery kits. Embroidery is a popular activity, and many people work for him at home; he, too, pays his workers well. Those cases would not be caught by the Bill, because in neither case has there been a demand for money in advance, followed by a rejection of the work on spurious grounds.
603 As I had encountered no bad cases myself, I wondered what the Bill was about. However, once I had talked to trading standards officers in my area, Derbyshire, I realised why no cases had been referred to me. The fact is that the scams often require relatively small sums from a large number of individuals. The operators feel that they can rely on complaints not being made, and on the loss being written off to a bad experience. As my hon. Friend the Member for Northfield said, many people just see themselves as mugs and feel that they were stupid to be taken in. John Logan, who was caught by one of the many scams of Simon Stepsys of Win-Star Direct in Cheshire—who, having been caught out by the Office of Fair Trading, had to make a "voluntary" statement that he would not continue his scams—produced a cogent account of his experience. He said:After a protracted delay, I received the material and eagerly opened the envelope. My hopes were high. After all, I wasn't looking to get rich, just earn a few extra quid. It took about all of thirty seconds to realise that I was just another mug!John Logan did not make a complaint. He just felt stupid, tore up the material and chucked it in the bin. It is because many people react in the same way that cases are not referred to us, and stronger legislation is needed.
Derbyshire's trading standards department tells me that, although the complaints it has received represent only the tip of the iceberg because most people feel too stupid to say anything and the sums involved are often small—though they add up to a huge amount—it received 38 complaints in the last financial year alone. I want to mention three of those scams, because I think that the more variety we see, the easier it will be for us to identify the problem with which we must deal.
The first example involves a Derbyshire resident who replied to an advertisement for extras in films and television. I do not think that such advertisements have been mentioned so far. Such work sounds rather glamorous, and people would not necessarily be considered gullible for taking up the offer—not in Derbyshire, anyway. Nearly everyone in my area knows someone who has been an extra in "Peak Practice", my local TV soap. Alastair, my constituency party chair's son, gave a brilliant performance in a recent episode of "Peak Practice". We also have Chatsworth house, which is always seeking extras for the various films made there. The scam was therefore quite plausible, but, having paid a £10 registration fee, the consumer received no offers of work as an extra at Chatsworth or in "Peak Practice". He did not receive the regular newsletter; indeed, he did not receive anything. Eventually, he was told that the trader had moved, and a new telephone number was given. The number, of course, did not exist, and the trader had disappeared.
Sometimes people are found out. My second example involves an advertisement for work printing envelopes, which is quite common. Consumers had to pay a £35 fee, and a £110 fee for every 250 envelopes mailed was promised; but the consumer had to supply her own materials, including stamps. The materials cost about £135. Although the printed result was of good quality, payment was refused on the ground that the quality was not of the standard required. In that case intervention by a consumer adviser worked and the consumer received a full refund, but it is the exception rather than the rule.
604 Another Derbyshire resident saw an advertisement for a home worker scheme involving making pottery cottages, and sent off £36 for the kit. He thought that he would receive four moulds and enough plaster and paint to make 40 cottages. On opening the kit he found that the materials were of very poor quality, and that the quantity was only enough to make about 10 cottages. He felt that he had been misled and asked for a full refund. He is still waiting for that, but he knows that the person involved in the scam could be caught by such legislation.
There are many examples; others have been quoted. Once we start to think about it, we will all remember seeing the amazing headlines, including on the internet. There is a good list of examples on the Office of Fair Trading website. It points out the things that people should look out for when they see a scam on the internet or in an advertisement: capital letters that shout at them; words such as "The secrets of guaranteed success"; vague references and so on. It warns against advertisements that say, "This is not a scam." It probably is. Promises are made of instant wealth and easy money. We have all seen such advertisements.
I have heard no hon. Member say that he or she approves of the scams; obviously, no one does. Indeed, Conservative Members, although querying how the legislation is framed, have made it clear they do not support the scams, so why do they not support the Bill? The hon. Member for Rutland and Melton (Mr. Duncan) said that he wanted to deal with those cases and supported the purpose of the Bill, and other Conservative Members have opposed the scams. They have made a number of detailed points, which should be considered in Committee. I appeal to them to put their votes where their mouth is and to support the principle of the Bill.
That is the whole point of a Second Reading debate: to gain support for the principle of a Bill, and then the details of the legislation can be argued about in Committee. I urge Conservative Members to support the Bill.
The scams prey on the vulnerable. People are not necessarily gullible or taken in. The scams are often plausible. We should give the Bill a Second Reading so that it can then go into Committee, where the detail can be looked at. I hope that hon. Members will support it today.
§ 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, 605 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.
§ 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 606 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.
§ Dr. Howells
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.
607 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.
§ 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 608 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.
§ 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 609 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.
§ 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 bemade in the course of the business of an employment agency or employment business.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 activitiesof a description specified by the Secretary of State by order".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 610 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 611 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 612 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.
§ Mr. Forth
While my right hon. Friend is on the subject of the Home Office, and can give us the benefit of his vast experience of it, will he think—perhaps not now, but as he develops his remarks—about whether simpler, civil remedies might be available to people who feel that they have been sufficiently exploited in the way that Labour Members suggest? Perhaps they could take the person who has committed the offences to court. Perhaps there is a way to assist them using existing legal redress rather than introducing a ghastly Bill such as this.
§ Mr. Maclean
My right hon. Friend could be on to a good point there. I do not want to go too far down that route. I suggest that the Government have looked down the wrong end of the telescope. This Bill and other Bills could improve access to civil remedies. That could be a better solution than new criminal penalties. We could make it easier for the so-called little people of the world to get access to court to get their money back, or to take collective action against the crooks.
Where people are engaged in criminal activity, there has to be a criminal sanction. I have no problem with that. If people are fraudulently advertising goods and services that do not exist, as they seem to be, and are ripping people off, they should be prosecuted somehow or other and suffer penalties, whether it is £5,000 or some other amount. I shall wish to move an amendment on Report to make such scams an indictable offence if we are dealing with a more serious crime.
If one chap's scam took in £600,000, it is a pretty big scam and level 5 on the standard scale could apply. Admittedly, the fine could be imposed for every offence, so if 1,000 people gave money and there are 1,000 charges against the person involved and he is fined £5,000 for each charge, that could be a substantial sum. I presume that the magistrates court would have the authority to pass the case to the Crown court for sentence. We will wish to explore that matter on Report.
613 Provision should be made for an indictable offence in cases involving such a high level of criminality. I shall not go into detail about that today. It would be inappropriate to do so, but I can envisage amendments and possibly a new clause being tabled on Report. Trading standards officers might have confiscation powers. After all, their warehouses might be full of all the hamburger carts that they have confiscated in the metropolitan parks during the past year, but they should have space for some of the documentation, as well as the other goods, that they might confiscate from the stammers.
There is another weakness in the Bill—at least, I assume it is a weakness in the Bill, but it does not say much about the matter. Again, the weakness relates to clause 1(2)(b), which refers toa description specified by the Secretary of State".The weakness is in the explanatory notes that the Government have published. They state:Possible categories of proposals for exemption would need to be considered on a case by case basis and their exclusion would need to be justified.
§ Mr. Maclean
It is not just bureaucracy. I make the point for the last time: if people have set up a little business and issued leaflets, saying "Send me 10 quid"—perhaps for a new idea, a new internet guide to home shopping, or whatever—they have already committed the offence, so it is difficult to say that the Department will consider that on a case-by-case basis. Those involved will already be guilty.
§ Mr. Forth
I hate to disagree with my right hon. Friend, but surely people will be advised not to set up such a business until they have got clearance from the bureaucracy, and the entrepreneurs will take the risk if they do not get it. That is why I want to make it clear to my right hon. Friend that that will stifle business. Following his own logic, surely those who want to set up a new business will have to go through some ghastly DTI bureaucracy and their proposals may even need to receive the signature of the Secretary of State, or the Minister for Competition and Consumer Affairs, before they dare set up their little businesses.
§ Mr. Maclean
My right hon. Friend is right for those who know about such matters—those who ask business links, the latest name of such things, or any of the other county-based industrial start-up schemes how they can get help or funding from the board or the various Government agencies. Those organisations will say, "Hang on, this is an outworking idea and it's not within the parameters that the Secretary of State has described." In that case, the people will have to apply to the Secretary of State, describing and justifying their ideas. The explanatory notes state that, if the Secretary of State thinks the proposallegitimate and would genuinely benefit workers",he may grant permission for it and introduce an order, and, one day, the House may find time to pass the order and the little chap can then set up his business.
My right hon. Friend is right to say that those entrepreneurs who know that such things are prohibited by law will have to go through the bureaucracy to ask a Government advisory quango and to get permission. 614 However, the House should be concerned about the individual with an honest, legitimate business who does not know about that and ends up with a criminal record for no good reason, simply because a catch-all measure has been included to wipe out some crooks.
I am concerned that the Bill puts the onus on the Government and the Secretary of State to decide what is lawful and what is legitimate. I am suggesting, inadequately, that the Bill should be drafted differently so that the courts determine such matters. The Bill should set out an offence of fraud or deception, so that anyone who advertises with the intention of deceiving people into sending money is guilty of that offence. Then the trading standards officers can round up anyone they like and let the court decide whether the activity is crooked or legitimate.
We should not substitute the Government's judgment for that of the courts or magistrates. The Government will make the judgment—in advance, we hope, but often post event—not on an individual who is tried, but on whether a business is legitimate and would "genuinely benefit workers". How is the Department to decide that?
If the election goes badly for me and I find myself seeking other activity—[HON. MEMBERS: "Hear, hear"]—I know that I would have hon. Members' support in finding honest employment. If I answer an advertisement in the Labour party paper asking me to send in £25 for a pack that one day may lead to my being selected as a candidate, I may conclude that that would genuinely benefit me, but the Bill says that the Government should decide what is of genuine benefit to home workers.
Of course, we must protect people from criminality, but there may be a wide range of views on what is of benefit. Some people would not work at home for less than £10 an hour, but others would be willing to work for £5, £4, £2 or even 50p an hour. We might all agree that working for so little is scandalous and wrong, but the individual has the right to decide. Why should the Government decide what is best for people who choose to work in their own homes?
§ Mr. Forth
My right hon. Friend has talked almost exclusively in terms of rates per hour. Does he not agree that piecework is more common? In passing, does he think that the minimum wage will ever bite on that? More importantly, does he agree that some of the information technology applications may move way beyond anything as mundane as a rate per hour, or even piecework, and into a new sphere and era altogether?
§ Mr. Maclean
Indeed. For some of the work that is done on computers, it would be nonsense to pay a rate per hour. There will be a new, sophisticated method of piecework, calculating, for example, the number of letters processed or addresses entered, although with mailmerge systems—with which I am sure my right hon. Friend is entirely familiar—I am not sure what rate may be payable. Neither I nor anyone in the Government knows what the correct payment system is. We can all say that rates are too low or that somebody is a mug for agreeing a certain term of contract, but if the individual is content to work in that way, it is not right that the Government should intervene.
I am concerned about the phrase "genuinely benefits workers" in the explanatory notes, and about the fact that the activities to be excluded are to bespecified by the Secretary of State by order".615 There is a huge grey area.
I want to register my disapproval of the way in which the Bill is drafted. I have no problems whatever with tackling crooks or with hitting and punishing them hard. I have made that point time and again. I took the same view when I was a Minister of State at the Home Office and the then Conservative Government had to force through legislation against the wishes of the Labour Opposition, who objected when we introduced tougher sentences and said "three strikes and you're out", and so on.
I am, therefore, a great believer in tough penalties, but I also believe in not inflicting them on people who are genuinely innocent. That is the danger of the Bill; but it is not merely a matter of considering the detail in Committee. As long as the Bill omits offences on knowingly deceiving and fraud, I do not think that it can be improved in Committee. All that hon. Members can do when it goes upstairs is to try to force the Secretary of State to spell out more of the exempted categories and sectors. Perhaps we could suggest the use of advertising to prevent innocent individuals from being caught unawares, but it is clear that the Bill tackles the problems from the wrong end of the spectrum.
My only other point concerns the schedule, on which my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) commented. He correctly said that it was one of the most important aspects of the Bill, but he skipped over paragraph 1(2), which states:An enforcement authority must enforce this Act within its area.I think that I know what the Government mean by that, as they ensured in paragraph 1(1) thatevery local weights and measures authority in Great Britain is the enforcement authority for its area",and thatthe Department of Enterprise, Trade and Investment, Northern Ireland is the enforcement authority for Northern Ireland.What they are trying to say, therefore, is that the enforcement authority will be responsible for enforcement in its relevant area. Instead, however, the Bill states that an enforcement authority "must enforce this Act".
I do not think that I have ever encountered legislation that imposes a "must" instead of a "may" obligation on an authority in respect of enforcement. Of course, authorities will want to enforce the Bill, but they may decide in some circumstances that it is not legitimate to take action. The Bill seems to remove that discretionary power. If an authority thinks that a case that has been reported to it is not legitimate or not worth the candle, does the requirement that it "must enforce this Act" mean that it must none the less enforce the legislation in respect of that case?
That terminology is slightly odd and should be explored in more detail. For example, what about the Nigerian letters that we all receive from people who claim to be former politicians or to have run Nigerian oil companies? An hon. Member—or, indeed, any member of the public—could report the scam to a trading standards authority in the belief that it is one of the worst matters and should be tackled. The writers of such letters claim to have salted away £30 million and tell us that they would kindly deposit a few million pounds in our bank 616 accounts if only they could have the details. All hon. Members have received such letters, but none of us, to my knowledge, has yet responded; we have not been mugs, nor have we been caught out. However, some people are caught out. Indeed, I hear sometimes from constituents who have responded to the letters, which are a scam. I hope that nobody is stupid enough to give bank account details or to pay out any money.
Somebody, however, might report the scam to a trading standards authority in the belief that it should be caught by the Bill. After all, it involves the sending out of a letter in advance and a request for the payment of money up front in return for a benefit—in this case, a share of £30 million stolen from a Nigerian oil company. The trading standards authority may rightly say, "We do not think that that's included; it's not worth the candle to chase it, as we'll never catch these people." That may apply even if the senders are based in London and are officially registered in this country.
According to the Bill, however, an enforcement authoritymust enforce this Act within its area.Does that mean that an authority that receives such a request will have lost the discretion to refuse it and will have to take action in every case? That point should be further explored.
§ Mr. Forth
Another possibility occurs to me as my right hon. Friend develops his interesting argument. The measure may drive the people to whom he refers off shore. If its jurisdiction is in the United Kingdom, those responsible for the undesirable activities may be tempted to go to the Republic of Ireland or across the channel to France to ensure that they are beyond the reach of our excellent trading standards officers. They would still be able to persuade people to part with their money.
§ Mr. Maclean
Perhaps we could table a new clause to deal with that on Report or explore it in Committee.
My right hon. Friend skipped over some of the enforcement powers. He believed that some were draconian and others were not strong enough. However, we will need to spend some time considering the definition of premises in Committee if the Bill gets there. I propose to vote against it today because I do not believe that it can be improved in Committee. It will inevitably reach a Committee because of the Government's majority, and we must therefore consider premises.
The schedule states:'premises' includes any place (including any vehicle, ship or aircraft) but does not include premises used only as a dwelling.Once a case gets to court, it can be ascertained whether a place is "only a dwelling" or a business. Some places have a mixed purpose. How will enforcement officers know that in advance? Many of the individuals with whom we are dealing will not have an office suite; they will conduct their business from home. All Members of Parliament are, in some ways, running businesses from home. We may have constituency offices, but I bet that most of us have computers. Even if we do not, we have a telephone, an index, some books and paperwork at home to deal with some our business as Members of Parliament.
Most of the people we are considering, except some big scams runners and crooks who have set up an office or a PO box address, use their homes. They may have a few 617 forms, a little paperwork and a computer. Such premises would not be "only a dwelling." Those buildings, which are 99 per cent. domestic, can be invaded by trading standards officers on the basis that people keep some paperwork there and that they must, therefore, be commercial premises.
What will turn domestic premises into non-domestic premises under the Bill? If the building contains an office, it is probably not domestic premises. Does the presence of a telephone for dealing with business move the premises into another category? If a person has a few books, and a couple of receipt books, or keeps a box of advertising notices under a bed, does the building become joint business and domestic premises? We need to know.
We also need to know how trading standards officers will make a judgment in advance before they start knocking on the doors of private individuals, saying, "Aha, you've got a telephone and you're using it for business. You're therefore caught by the Act. Your house is not purely a domestic dwelling." I am surprised that my right hon. Friend, with his learned, meticulous and perspicacious manner of dealing with such Bills, did not spot that point about the schedule.
I have outlined some of my anxieties. I want to make it crystal clear that I have no intention of defending people who are involved in crooked activity. I hate and despise it, and I like such people to be slapped down and put away for a long time, not tagged and released too soon. I do not expect a further response from the Minister; others want to speak about the measure. I simply flag up my concern that the Bill's approach is wrong. We can ensure that we do not catch the innocent only by drafting a different Bill that concentrates on rooting out deception and fraud rather than catching everyone, honest or not, who publishes an advert. I shall vote against the Bill if I have an opportunity of doing that.
§ 1.9 pm
§ Mr. Andrew Miller (Ellesmere Port and Neston)
It is always a great pleasure to follow the right hon. and erudite Member for Penrith and The Border (Mr. Maclean). He is very nervous about losing his seat. When he loses it, perhaps he could send a cheque to the Andrew Miller beer and benevolent fund. I am sure that something useful could be done for him if it is not illegal.
I want to make several points to show that the unofficial Opposition have presented some interesting arguments, but that they have argued against themselves. The right hon. Member for Bromley and Chislehurst (Mr. Forth) referred to the importance of changing technology and the right hon. Member for Penrith and The Border elaborated on that. However, that is the very reason it would be impossible to put a specific Bill before the House. An umbrella-type Bill is needed because of the changing technology with which the right hon. Member for Penrith and The Border and the hon. Member for Rutland and Melton (Mr. Duncan) are familiar.
I have been advising people in this country and abroad about teleworking schemes for many years. If Opposition Members want to read some of the interesting contributions I have made to the international dimension of that subject, I will gladly provide them.
Opposition Members have missed some important points about the Bill. This sector of the work force is potentially massive. The right hon. Member for Bromley 618 and Chislehurst illustrated the vagueness of the statistics, but there is evidence that up to 22 per cent. of the work force is involved in part-time home working, and the numbers are growing. There is clear evidence of people in this sector being scared off for fear of being caught by the scams operating not only in this country but elsewhere in the world, as the right hon. Member for Penrith and The Border pointed out.
From an employer's point of view, productivity gains of between 10 and 60 per cent. have been identified as a result of putting good, well-structured home-working schemes into operation. Those schemes have been supported by a wide range of organisations in the private and public sectors, and have been incredibly successful. For example, if one calls the AA to deal with an emergency breakdown, one is calling an individual worker operating from their own home as part of a call centre network. Important changes in technology allow that to happen. I cannot, even with the best crystal ball available, predict where such technology will take us. We must, therefore, go along the route recommended by my hon. Friend the Member for Birmingham, Northfield (Mr. Burden).
This is a common-sense Bill that will work alongside voluntary arrangements operating in the organised sectors of the economy, such as the teleworking agreements that exist between employers and the Manufacturing, Science and Finance Union. Such partnerships are extremely important. Small employers developing within the teleworking sector should take advice from the Telework, Telecottage and Telecentre Association, which has made a valuable contribution to the wider debate on these issues. We are in a very strong position, and we just need to keep at bay the scams that could deter more people from joining this important sector.
§ Mr. Andrew Dismore (Hendon)
I shall not detain the House for long, but I wish to support my hon. Friend the Member for Birmingham, Northfield (Mr. Burden). I have read the information from the TUC and from my own trade union, the GMB, and listened to the debate today.
I want to draw the House's attention to a case that convinced me of the value of the Bill. It concerns my constituents, Mr. and Mrs. Roffman, who are serial victims of the scams that we have been discussing. They were first conned by Outworkers Direct Ltd. They sent £45 to the company to obtain button-packaging work, and were told that they would get the money back if they applied within 14 days. They applied, but did not get the money back. They came to me and I managed to get them 30 quid back. I thought that that would be the last I would hear of Mr. and Mrs. Roffman.
Unfortunately, they were conned again, this time by a company called Leading Edge Inc., of County Durham. They sent their money off, but did not get the work. The company kept their £35. The couple also had to buy stamps in connection with the job. They then referred me to Select Publications of 377 Edgware road, London W2. They were, however, put on notice by the fact that "Edgware" had been spelt wrongly—with three Es rather than two—and that the telephone number given was nowhere near our local telephone numbers. They brought that to my attention, asking how this could possibly be a legitimate business if it had a South end phone number and an Edgware road address, and if it could not even spell "Edgware" right.
619 Seekers UK promised to pay huge amounts for stuffing envelopes. Again, my constituents sent off £25, thinking that the company was genuine because it had an address. However, when they called the number it turned out to be—guess what?—unobtainable. By then, Mr. and Mrs. Roffman were starting to get wise. They wrote to me about Capital Publishing of Leytonstone E11 and asked me to check it out beforeI send £35 which I would willingly do if this was a genuine offer—if not they should be stopped immediately".I am pleased to say that Mr. and Mrs. Roffman finally accepted my advice to stop sending money to such companies.
Those examples of people being continually conned show how convincing such advertisements can be. My two pensioner constituents sought to eke out their pensions by doing a bit of home work, but, time and again, were conned out of money that they could ill afford to part with. Mr. and Mrs. Roffman wrote to me to say that I should promote a Bill to outlaw such activity, so I am pleased that my hon. Friend the Member for Northfield has the opportunity to do so. I am also pleased to back him wholeheartedly.
§ Mr. Burden
With the leave of the House, I shall make a couple of points.
I thank hon. Members on both sides of the House for participating, especially those who support the Bill. The hon. Member for Rutland and Melton (Mr. Duncan) said that Conservative Front Benchers agree with its purposes, but have reservations about the detail. The detail can be examined; that is the point of considering the Bill in Committee. However, before being debated in Committee, it must be given a Second Reading. Therefore, there is a challenge for Opposition Front Benchers: if they want the issue tackled as they say, the Bill must be given a Second Reading so they are obliged to vote for that.
Other Opposition Members have more principled opposition, and I understand their view. The right hon. Member for Bromley and Chislehurst (Mr. Forth) said that 620 people who felt that they had been sufficiently exploited should be able to seek civil redress. I do not know his definition of being sufficiently exploited, but £25, £30 or £40 is a lot of money for people on fixed or low incomes, and those who have been stung look to us to help them. We have a choice about whether to do so or not. By voting for Second Reading, we would begin to help them and I invite all hon. Members to join me in the Aye Lobby.
§ Question put, That the Bill be now read a Second time:—
§ The House divided: Ayes 34, Noes 0.
|Division No. 101]||[1.17 pm|
|Allen, Graham||Hamilton, Fabian(Leeds NE)|
|Anderson, Rt Hon Donald||Harris, Dr Evan|
|(Swansea E)||Howells, Dr Kim|
|Austin, John||Jamieson, David|
|Beith, Rt Hon A J||Jones, Dr Lynne (Selly Oak)|
|Brinton, Mrs Helen||Kaufman, Rt Hon Gerald|
|Burden, Richard||Lloyd, Tony (Manchester C)|
|Butler, Mrs Christine||Mallaber, Judy|
|Chidgey, David||Palmer, Dr Nick|
|Clwyd, Ann||Pond, Chris|
|Cooper, Yvette||Pope, Greg|
|Cunningham, Rt Hon Dr Jack||Pound, Stephen|
|(Copeland)||Roche, Mrs Barbara|
|Dismore, Andrew||Taylor, David (NW Leics)|
|Dobson, Rt Hon Frank||Thomas, Gareth R (Harrow W)|
|Dowd, Jim||Tyler, Paul|
|Gerrard, Neil||Tellers for the Ayes:|
|Gilroy, Mrs Linda||Mr. Andrew Miller and Angela Smith.|
|Griffiths, Nigel (Edinburgh S)|
|Tellers for the Noes:|
|Mr. Eric Forth and|
|Mr. David Maclean.|
§ It appearing on the report of the Division that 40 Members were not present, MR. DEPUTY SPEAKER declared that the Question was not decided, and the business under consideration stood over until the next Sitting of the House.