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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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The Parliamentary Under-Secretary of State for Business and Trade (Blair McDougall)
It is a pleasure to serve in my first debate as a Minister under your chairship, Dame Siobhain. I congratulate my hon. Friend the Member for Warwick and Leamington (Matt Western) on securing this debate. I would have felt cheated had the hon. Member for Strangford (Jim Shannon) not been at my first outing as a Minister. He mentioned that perhaps this work was different from the work that we had done together previously on human rights. I think there is a lot of overlap, because on human rights we are asking for people to be treated with dignity and to be treated fairly under the law, and I think it is the same with consumer protection. What there is also in common is that when those rights are not respected, that causes enormous anger, so I think there is considerable overlap.
This has been a fantastic debate, with many different issues raised. I will refer to as many of them as possible. I thank my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier). I had hoped, as a matter of professional pride, to get through the whole debate without the ministerial get-out of “I will write to you about that”, but she asked me to write to her, so I thank her for saving me.
The hon. Member for West Worcestershire (Dame Harriett Baldwin) and my hon. Friend the Member for Hackney South and Shoreditch made similar points about ensuring that innovation is balanced with consumer protection. I am quite encouraged, in my first few days in this job, by the approach of the leadership of the CMA as a watchdog. It is very clear that it will bare its teeth at the most egregious abuses of consumers, but where having a lighter touch and some guidance would be better, it is doing that, so that the innovation that was mentioned is not lost.
I am looking forward to working on the licensing review—particularly because it means I get invited to a night out in Hackney. We will add that to the diary pile in the office. My hon. Friend gave the example of Meta and asked about acting quickly online. I think the CMA now has the online interface orders, which allow it to quickly ask companies to change or to take down content. We are looking forward to seeing how that operates in practice.
My hon. Friend and a couple of other Members mentioned algorithms and AI. I am really interested in how AI functions here. There was a case in Atlantic City in which there was some suggestion that algorithms were being used to fix hotel prices and operate a cartel, but human beings were involved in that decision making. One of the interesting questions is how we regulate things when AI might be making decisions to breach consumer law, without a human being involved in that.
To come to some of the issues mentioned by my hon. Friend the Member for Warwick and Leamington, it will come as a shock, in a debate talking about the size of Mars bars, that I am no stranger to the confectionery aisle. [Laughter.] In case Hansard did not pick that up, everyone cried, “No!” there. My ire, when a Back Bencher, was actually directed towards the changing size and shape of Easter eggs from last year to this year.
My hon. Friend was right to mention the changes to the price marking order that are coming in in April and which will require consistency in unit pricing, so that people, when making consumer decisions, are able to compare different goods. We are also putting in place more clarity for consumers on multi-buys and things like that, but we need to keep an eye on this. I know that my hon. Friend will continue to monitor it, and that he will make that case very strongly in years to come. In relation to his point about a consumer champion, I think that my ministerial colleague who will be primarily responsible for consumer affairs will hope to feel that that is their role, but I will take the suggestion to the Department.
Many Members spoke about concerns around variable pricing models, such as dynamic and algorithmic pricing, and a broader sense of a lack of transparency in pricing. It is a frontier for regulation—things move very quickly—but we do believe that it is our job to ensure that consumers have protection so that they can easily and accurately compare prices.
As the shadow Minister for business, the hon. Member for West Worcestershire, rightly said, pricing flexibility, when used responsibly, can be good for consumers and business. It can manage demand, improve access and support innovation. We all love a bargain; we all love the January sales. We like discounts for different groups, but against that evolving backdrop, the Government are actively engaging with regulators, industry and our watchdogs. The CMA’s dynamic pricing project is a recent example of that work.
We will strengthen the law where necessary to uphold transparency, as evidenced by the recently implemented ban on drip pricing, which my hon. Friend the Member for Warwick and Leamington referred to as a particular bugbear, to ensure that the price presented at the start of the shopping process is the price that consumers pay at the checkout. The principle that underlines that, and that underpins consumer law, is that consumers must know the price that they will pay, and can make an informed decision about whether that price is right for them. Where that is not the case, the Government and our watchdogs will look to take action.
Dynamic and algorithmic pricing have been spoken about, and they are a growing concern for many Members’ constituents. We know that changing prices in response to demand is an essential part of any market economy, but it needs to be done responsibly and within consumer law. It should not be the case that businesses use technology to rapidly change prices in a way that misleads customers or is otherwise unfair, resulting in them overpaying. That would be wrong in any circumstances, but particularly when so many of our constituents are struggling to make ends meet.
Let me be clear: when consumers are misled or pressured into paying a higher price, that is unlawful. The law, including the recently introduced Digital Markets, Competition and Consumers Act, requires that businesses provide clear, up-front pricing so that consumers understand what they are paying for. Additionally, consumers must be able to evaluate that information in the absence of undue pressure. Aggressive tactics and pressure selling are illegal. When price fluidity or instability puts customers in an unfair position—for example, as we mentioned, in ticketing, when consumers feel that they have to immediately accept a high price for fear of it going even higher—that is unacceptable.
The CMA is acting when businesses fail to comply with those laws. For example, last year, it took enforcement action against Wowcher, which agreed to change its selling practices after concerns were raised about its use of a countdown timer to pressurise customers, among other marketing claims.
Before moving on to Oasis, I should declare an interest, which is that in the late-1990s fight between Oasis and Blur, I was very much Team Blur, so that may inform my attitude towards these matters. The CMA is seeking to make changes to the way that Ticketmaster labels tickets and provides pricing information to fans, in response to concerns about last year’s Oasis sale. Obviously, that investigation has yet to conclude. We will continue to work with the watchdog to ensure that pricing practices are transparent and proportionate, and that consumers have the right safeguards.
The CMA recently examined the use of dynamic pricing across different sectors of the economy, and its report sets out all sorts of conditions that may make dynamic pricing problematic, and the information that businesses should provide to consumers when it is in operation.
Matt Western
I should have congratulated my hon. Friend at the very beginning on his appointment—a very warm welcome, Minister, to the role. He talks about dynamic pricing and ticketing. He will probably be aware that in the Business and Trade Committee we looked at Ticketmaster and Live Nation. The Opposition spokesperson, the hon. Member for West Worcestershire (Dame Harriett Baldwin) made some comments about smaller venues. What was striking was the scale of dominance that Live Nation and Ticketmaster have—their control over this entire market.
Blair McDougall
My hon. Friend makes a really good point. He referenced the comments made by the hon. Member for West Worcestershire (Dame Harriett Baldwin) on the impact on venues, big or small. It is important to say that there are ways of doing this that are advantageous to everyone. An example that was mentioned to me is Radiohead’s practices in selling their tickets to make sure there was not widespread industrial buying and reselling. There are ways of doing this. The Government really welcome the CMA’s guidance on dynamic pricing, and it has been clear that it will continue to actively review those practices and will tell us if it feels there is a need for changes in the regulatory environment and the law in future.
Another issue that has been raised is personal pricing, where technology is increasingly enabling online businesses to use personal data to set different prices and tailor them to different groups of people. It is not against the law, as with dynamic pricing, to change prices for different groups in a free market; that is part of the functioning of the market. As with dynamic pricing, it can offer consumers benefits, such as tailored deals based on regular purchases, but we know that customers worry about their data being used in more targeted and less transparent ways to set personalised prices that are higher than those they would otherwise see.
The watchword on this is transparency, in accordance with consumer law. It is an evolving issue, and the Government will keep a close eye on developments on this frontier. We will, of course, look to the watchdog to act on any suggestions that consumers are being disadvantaged.
I want to turn to the comments made by my hon. Friend the Member for Warwick and Leamington on the pricing of food and essential goods and services. Other Members made these points too. The difference between the smaller high street supermarkets and the hypermarket is one that I feel very personally. I grew up in a household without a car, so we had to go to the local shop, where there was much less choice and fewer bargains. It is not an easy issue to solve, but it is one that I feel particularly personally.
It is really important in those situations that there is transparency and fairness in pricing. Our role in Government is to protect consumers and ensure minimum standards, including on pricing. Sector regulators build on the framework that we set by introducing targeted regulations to support consumers in their sectors, particularly in essential services such as energy, financial services and telecoms, where affordability challenges are most pronounced for our constituents at the moment.
Matt Western
Several hon. Members around the Chamber raised the differential pricing between in-town and out-of-town stores. The points the Minister made are totally right, but when retailers were asked about this at the Business and Trade Committee, they just said that it was due to a different cost base. A corporate has a big cost base. It cannot make the case that there is a different cost base for in-town versus out-of-town stores. It may as well say that it has different cost bases for Cromer and Shoreditch, or wherever—it does not wash. Consumers in different parts of the country, wherever they may be, should be offered, I believe, a uniform price. Pricing should not be to the detriment of those who do not have access to out-of-town stores.
Blair McDougall
My hon. Friend makes his point powerfully. The argument that the Government sometimes hear from business is that it is about the cost of the property. He is shaking his head, and I will try to transmit the shaking of his head throughout the system on his behalf. He makes an important point.
I reiterate my thanks for all the contributions to the debate, and congratulate my hon. Friend on securing it. I assure him that we will not be complacent on this issue. Using the DMCC Act and the CMA’s recent work on pricing, we are working to take tangible steps to ensure that pricing practices are fair and transparent, and that businesses across the economy are held accountable.
Where specific markets require more targeted interventions, the Government have been willing to do so. We have seen that recently with the regulation of buy now, pay later arrangements and ensuring that customers continue to pay fair prices for energy. Our work will not stop there. We are always testing the case for going further, working in partnership with regulators and enforcers to ensure that consumers are adequately protected as pricing practices evolve. I thank hon. Members for their contributions to the debate.