Retail Sector

Vicky Ford Excerpts

Wednesday 6th June 2018 Commons Chamber

[Rebecca Long Bailey]

With the hon. Gentleman’s knowledge of the sector, I am surprised that he says that, given that business rates are one of the critical issues affecting the high street. Retailers often tell me about the unfairness of businesses such as Amazon receiving skewed business rates valuations due to the size of their operations, so I have dealt with that point.

[Vicky Ford (Chelmsford) (Con)]

I have listened carefully to the hon. Lady, who has accused British retailers of lacking innovation. However, the UK is the third largest e-commerce market in the world. Digital taxation needs to be done on a cross-border basis, so will she join me in congratulating our Chancellor on getting 100 countries across the world to look at implementing a digital tax to allow us to address the level playing field between online and offline?

Industrial Strategy

Vicky Ford Excerpts

Wednesday 18th April 2018 Commons Chamber

[Greg Clark]

As the hon. Gentleman knows—the industrial strategy is clear about it—we benefit from the contribution of workers, scientists and engineers from all over the world. There is no successful future for an economy that does not engage with the world. That means that we should be open to talent from around the world. We need to make sure, as every responsible nation does, that we have an orderly system for managing immigration from around the world. That is what we are achieving and what we will continue to achieve. It is very clear, on every page of the strategy, that this is a vision for an international Britain, rather than one that is moving towards a kind of national self-sufficiency.

[Vicky Ford (Chelmsford) (Con)]

I thank my right hon. Friend for giving way and for the commitment he is making to ensuring that world-class talent from across the world can continue to come to support science in Britain. When the president of the Royal Society came to speak to the Science and Technology Committee, he pointed out that world-class scientists need to be mobile, anthropologists need to work abroad and those working for the British Antarctic Survey need to go to Antarctica. Will he make sure that the visa system is able to provide that mobility?

[Greg Clark]

That is very important. One of the commitments in the industrial strategy is to increase the number of visas and studentships for international researchers coming to work in the UK. Nobel prizes were mentioned earlier. I had the privilege, when I was Science Minister, to go the Nobel prize ceremony. What is notable is not just that a lot of Brits receive these awards, but that most Nobel prizes in the sciences are given to teams of researchers and that those teams are usually international. That embodies the fact that the best ideas come from the connections that are made between researchers from different cultures and different countries.

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[Rebecca Long Bailey]

The hon. Gentleman makes his point very passionately, but I do not think he has really listened to what I have been saying. We are certainly—[Interruption.] Please! If Government Members would listen rather than chunter, they might actually learn something.

We are far from average, as these comments from the Commission on Economic Justice illustrate quite articulately:

“We have vast ingenuity and creativity among our people, where enterprise and industry have deep roots going back to the Industrial Revolution. Many of the most important scientific discoveries in human history have taken place in Britain, advancing not only this country but also the entirety of humanity.”

We are far from average—I agree with the comments that the hon. Gentleman made in a, shall we say, quite haphazard and incoherent way—so why should we have to trail behind the world and settle for mediocrity from this Government in terms of investment in research and development?

[Vicky Ford]

Will the hon. Lady give way?

[Rebecca Long Bailey]

I will make some progress, if I may, then the hon. Lady can make further interventions.

In relation to skills, we were promised about £500 million of investment. That is frankly pitiful and does not even begin to repair the damage done to the adult skills budget between 2010 and 2015, when over £1.15 billion was cut. With research by PWC finding that 77% of CEOs worry that skills shortages could impair their company’s growth, and with the CBI stating that 69% of businesses are not confident about filling their high-skilled jobs, the Government’s actions have done little to show that they are creating a workforce truly ready for our industrial renaissance.

On infrastructure investment, we were promised £31 billion of investment through the national productivity investment fund. Again, that is below the levels seen in other leading industrial nations. As TUC analysis shows, the sums promised will simply increase investment to just 2.9% of GDP, whereas the average spend on investment by the leading industrial nations in the OECD is 3.5%. It is also clear that the Government have made no attempt to halt the skewing of infrastructure spending towards London, which is due to get more transport spending over the next five years than the rest of England put together.

That brings me to local industrial policy. Labour has been clear on the need for a national industrial strategy, but we are also clear about the need to be regionally powerful and distinctive, with the resources to match, and to build on the already world-class universities and businesses in our regions and nations. Since last November, the Labour party has been convening roundtables in every region and nation of the UK to discuss what businesses in those regions need from an industrial strategy. Alarmingly, in one region I heard that the responsibility for formulating a local industrial strategy had simply landed on the desk of the local enterprise partnership’s chief executive, with no additional resources. Could the Minster confirm whether there is a team in his Department working on local industrial strategy or whether that is simply now the responsibility of LEPs? Last month, the Local Government Chronicle argued that the Government should put more resources into agreeing a local industrial strategy if they did not want to risk concentrating their efforts on improving the economy in just a handful of areas.

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[Vicky Ford (Chelmsford) (Con)]

We are in the middle of the fourth industrial revolution—a time of huge technological, demographic and environmental change—and the decisions we make now are crucial to our future. I welcome the focus brought by this industrial strategy, and particularly its focus on innovation. I am proud to serve on the Science and Technology Committee. It is science and research that delivers the innovation that drives a modern economy, and we are a world leader in science and research. Four of our universities are in the world’s top 10, one in six of the world’s top research papers are written here, and we have more Nobel prize winners than any country other than the US.

But we cannot rest on our laurels. Countries such as India and China are accelerating their investment and they want to woo our best scientists. That is why it is absolutely right that this Government are investing more in science and technology than any other Government in the past 40 years. Scientific innovation is not just about money—it is about people, too. World-class science needs world-class people. I am pleased that this industrial strategy establishes the Rutherford fund to help recruit researchers, doubles the number of tier 1 visas and gives a commitment to make it easier for world-class researchers to settle here. However, the devil is in the detail. We need a visa system that makes mobility easy for scientists. I thank the Secretary of State for the answer he gave on that earlier.

Research is changing. It is not just done by one scientist in one lab working alone; it is delivered through networks of collaboration. This industrial strategy points out that our closest relationships and collaborations are with EU member states. Britain has led the EU framework programmes, and I worked with Ministers to lead the latest one. More British scientists participate in them, and more hold European Research Council grants, than those from any other country. It is in our national interest to continue to participate. Ministers have confirmed that if the next framework is materially the same as the last one, Britain would like to continue. I ask them to make that point more positive by saying that we will continue to participate unless it is materially different.

We need to ensure that the best ideas are not just generated here but also developed and manufactured here. That is why I welcome the sector by sector focus in the strategy, and I would like to concentrate on some of those sectors.

Our space sector has trebled in size, and the jobs in it are highly skilled and highly productive. The Space Industry Act 2018 means that next-generation smaller, smarter satellites will not only be developed here but launched here. Space assets are key to our communications and our security. We are the only G7 country that does not have its own earth imagery assets. We have paid for the Galileo satellites, and Britain needs to benefit from that.

We are a world leader in life sciences. We are home to the Wellcome Genome Campus. It was a British Prime Minister who led the visionary 100,000 Genomes Project, and it is absolutely right that life sciences are at the heart of the industrial sector. We need to ensure that drugs are not just delivered and developed here but used here, and our Select Committee has done some very good work on how we can ensure that those revolutionary genomic drugs get delivered into the NHS.

Data is the lifeblood of the digital revolution, and we cannot separate digital from other sectors of the economy. The scandal of Facebook and Cambridge Analytica reminds us of the need for clear rules. It is great that the general data protection regulation is becoming the global standard and that this Government are delivering it into British law through the Data Protection Bill. The strategy also points to the need for legislation to be flexible, which I welcome.

Domestic Gas and Electricity (Tariff Cap) Bill (Third sitting)

Vicky Ford Excerpts

Committee Debate: 3rd sitting: House of Commons
Thursday 15th March 2018 Public Bill Committees

[The Chair]

We will now recommence line-by-line consideration of the Bill. There are the usual words about turning off your mobile phones. I can see at least one cup containing what is a banned substance as far as the House of Commons is concerned—

[Vicky Ford (Chelmsford) (Con)]

It is water.

[The Chair]

It is water! I do apologise. It was the Clerk who drew it to my attention. We have to obey the rules, but water is very acceptable. Thank you.

Clause 8

Extension and termination of tariff cap conditions

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[Claire Perry]

I could not agree more. I thank the right hon. Lady for her kind congratulations. I feel it is an undeserved honour, but it is amazing. She is absolutely right. One of the reasons we were minded to bring forward the Bill was that we have a competitive energy market, with more than 60 companies that would like to sell us energy—either combined heat and power or, in some cases, just power—but we gifted incumbency to a large number of companies when we took what I thought were sensible steps to privatise the energy system. That brought in more than £60 billion of new capital and caused prices to fall and power cuts to halve, but the companies that were gifted incumbency have not had to work for customers. It was interesting to hear from new entrants about how they are determined to shake up that complacency.

I think the right hon. Lady also alluded to practices further up the energy system—or further down; I am not sure whether it starts at the top or the bottom—and particularly profits in the distribution sector and overall network costs, which have come down but arguably could come down further. Work has been done in that area, but I am determined that the whole sector, from generation right to the customer’s meter, should be highly efficient, that efficiency and customer service should be rewarded, and that we ensure we have not created a shield of incumbency that allows companies to persist with bad customer practices. This is the start. We may not need legislation to get there, so we may not have the pleasure of—

[Vicky Ford]

Will my right hon. Friend give way?

[Claire Perry]

Of course—it is a pleasure.

[Vicky Ford]

I thank my right hon. Friend for giving way and wish her many congratulations from the Government side of the Committee, too. On incumbency and the investment that she mentioned, is it not extremely important that the price cap is set at a level that continues to encourage investment the whole way through the energy chain and into the new infrastructure we need? That is one of the reasons it is so important to signal that this is not a permanent cap; it is an incentive to increase competition and to ensure that the market continues to be dynamic and that infrastructure continues to be invested in.

[Claire Perry]

My hon. Friend brings her great knowledge of these markets on a broader European scale to make a telling and vital point. The need to maintain investment in the industry, which we must have as we go through what is possibly the most exciting revolution in our energy markets for decades, is included in the Bill for exactly that reason. Clause 1(6)(d) speaks to exactly that point: we must ensure that we still have the financial investment in the industry that we so desperately need.

Having talked about the need to keep on improving efficiency, and having accepted the view of the Select Committee that the price cap should be only a temporary measure—reflecting a cross-party view that the Government should not be unduly involved in setting energy prices— I hope that I have persuaded the hon. Member for Kilmarnock and Loudoun that his amendment is unnecessary and provides an obligation on a future Secretary of State to impose another price cap. A future Government may decide to do that—who am I to suggest what legislation a future Government might introduce? However, I do not feel that the amendment is appropriate; it creates disincentives and uncertainty in a market where we have to have certainty to generate investment. On that basis, I hope he might be persuaded to withdraw his amendment.

Domestic Gas and Electricity (Tariff Cap) Bill (Second sitting)

Vicky Ford Excerpts

Committee Debate: 2nd sitting: House of Commons
Tuesday 13th March 2018 Public Bill Committees

[Dr Whitehead]

The hon. Gentleman is absolutely right. If there do turn out to be legal challenges, despite our best efforts in this Committee to ensure that the Bill is as watertight as it can be, it is conceivable that the whole timetable of a price cap could be seriously derailed—I think we have all understood that, as far as the process is concerned. Indeed, one reason there is legislation, rather than Ofgem going down the road of a price cap under its own steam, which it has been claimed at various times could have been the case, is to ensure that, as far as possible, the proposals and what Ofgem puts in place around them, are legally watertight. That comes in two parts. First, there is the question of ensuring that the legislation is as watertight as possible, but there is also a duty on Ofgem to ensure that, in translating the instruments in the legislation into a workable price cap, it takes measures that are also legally watertight, so that it does not slip up after we have done the good work in Committee of making the legislation as watertight as possible.

[Vicky Ford (Chelmsford) (Con)]

In the evidence session this morning, I clearly asked whether Ofgem would be ready for next winter, and Ofgem was not only clear that it would be ready for next winter, but outlined the very robust, transparent and deep process being undertaken to ensure that.

[Dr Whitehead]

Yes, indeed. The hon. Lady will recall that, in answer to my question, Ofgem went through the processes it is statutorily required to undertake, together with an estimate of the time that that would take. Between us, we were able to get on record a pretty clear note of intention from Ofgem that, subject to the possibility that the whole thing could come off the rails because of an unexpected legal intervention, it would bend its efforts to ensure that the process of five months was adhered to.

The amendment seeks to go a small step further and to place on the face of the Bill an indicative time by which Ofgem should have done its business, to ensure that the working price cap becomes reality under the Act. The amendment does not seek to interfere with, foreshorten or undermine what Ofgem is trying to do, quite properly, to make the Bill a reality.

[Vicky Ford]

I am sorry, but I read the amendment completely differently. If we have all agreed that Ofgem has made it clear that it will go through the process to come up with the right level of cap—taking the right level of evidence—by next winter, and that the only thing that could delay it would be a legal judgment, why would we even suggest, through the amendment, that it may not be ready? That throws unnecessary doubt on the process, which would still be subject to a legal challenge were the amendment there. I think it would just add confusion and doubt.

[Dr Whitehead]

I fully accept the hon. Lady’s reading of the amendment, but I assure her that that is not its purpose.

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[Dr Whitehead]

I appreciate the hon. Gentleman’s point. Paragraph (e) would, conceivably, make life more difficult for Ofgem with respect to what it has to consider. As he correctly points out, it is required first to take a very general view

“to protecting existing and future domestic customers who pay standard variable and default rates”,

and then

“in so doing it must have regard to the following matters”—

those listed in the following paragraphs. In other words, if my reading is correct, after Ofgem has undertaken its initial consideration, it has a number of specific further considerations to take into account. All our amendment says is, “Here are two more to add to the list.”

[Vicky Ford]

The way I read amendment 4, it suggests that all customers on standard variable and default rates will get a £100 reduction, whereas the Prime Minister’s statement was that the millions of consumers who are on unacceptably high default rates would get a reduction. In the statement this morning, there was a suggestion that at least two of the big six do not have unacceptably high rates. I am rather concerned about the one-size-fits-all nature of the amendment.

[Dr Whitehead]

The hon. Lady has a point, but if hon. Members read amendment 4 and clause 1(6) reasonably carefully, they will see that

“the need to ensure that customers on standard variable and default rates have their annual expenditure on gas and electricity reduced by no less than £100 as a result of the tariff cap conditions”

would be a consideration—I emphasise the word “consideration”—that Ofgem needed to take into account.

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[Dr Whitehead]

That is a reasonable and honestly held opinion about the extent to which it is possible easily to distinguish when greenwash is not greenwash and the point at which an energy company, even with a partially green tariff, puts in something that is honestly green and not something that they have just cooked up because they happen to have purchased something that has an element of traceable green energy in it.

Even under the circumstances that the hon. Gentleman mentions, it would be fairly difficult for Ofgem to make easy distinctions when it came to what it was doing about tariffs that could be jumbled up with a lot of brown energy but nevertheless be claimed to be at least partially green.

I have tried to think this through and consider how we might be able to make honest citizens of those companies under such circumstances. It is possible to argue that even if a company accidentally buys green energy, if it is genuine green energy, then yes, it has sourced green energy. However, the bar needs to be set rather higher.

[Vicky Ford]

The hon. Gentleman’s amendment uses the word “wholly”. In my view, “wholly” means that 100% of the energy would be renewable. To me, that is wholly unworkable. I want more consumers to get more choice. If they really wish to buy more renewable energy packages, they can do that. I would also like to see green tariffs that encourage smart consumption—smart appliances that switch on and off at peak times, for example. Those could also be bundled into a green tariff.

Furthermore, as more and more people want to buy renewable packages, what happens at a peak time on a very, very cold day when our renewables cannot cover the amount of consumption those consumers need? Would they have to be switched off and have no energy at all? Would they not be allowed any back-up supply? “Wholly” is not the right word.

Domestic Gas and Electricity (Tariff Cap) Bill (First sitting)

Vicky Ford Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 13th March 2018 Public Bill Committees

[The Chair]

Good morning. We will now hear evidence from Greg Jackson, CEO of Octopus Energy; Hayden Wood, co-founder of Bulb energy; and Juliet Davenport, the CEO of Good Energy. Thank you all for being here this morning. Members of the Committee will now ask a series of questions. Unfortunately, this session has to finish by 10.15, so brief questions and brief answers will be gratefully heard.

[Vicky Ford (Chelmsford) (Con)]

Q I am going to ask questions of Octopus Energy and then Bulb, because you are new entrants.

Octopus, do you think there is a risk that once the cap comes in, prices will all bunch around that cap level? Some people have said that switching activity might then reduce. Do you think that is a risk? Bulb, do you think that the cap will disincentivise investment in infrastructure at this stage, or do you think we can manage the infrastructure need separately?

Greg Jackson: To answer those three questions, on the bunching question we do not agree. There are 70-odd energy suppliers in the retail market currently. The majority of them price below any realistic level at which an absolute cap would be introduced. If there is any bunching, it will be the welcome bunching of the suppliers that currently charge their loyal customers more than an absolute cap by bringing their prices down to that level. Underneath any realistic cap, there is still plenty of room for competition, and competition among the challengers that have to fight for and win every single customer from scratch will be unabated.

In terms of switching rates, the first thing is that the idea that very high levels of switching is a good thing is outdated. For 20 years, consumers have been told that they have to switch; in any given year, no more than 15% to 20% will do so. All the rest are getting ripped off. What we need is a market in which you get good value without switching, and an absolute cap is a step in the right direction. It is an excellent measure that will help reduce the rip-off for those who switch and those who do not.

Finally, in terms of investment in infrastructure, Octopus Energy is backed by the Octopus Group, which is one of the largest investors in renewable generation in the UK. Frankly, something that makes the retail market behave more like a proper market—one in which consumers get good value by staying loyal to good suppliers—will generate more investment in the sector, rather than the current strangulation that occurs because of things such as predatory pricing, whereby back-book customers of large companies cross-subsidise loss-making deals.

[Vicky Ford]

Q Do the other witnesses agree?

Juliet Davenport: It is going to be interesting—that is the answer. If you look at the current data in the marketplace, with no intervention whatever four out of the big six have a 25% gap between their most expensive tariff and their cheapest tariff. There are two that do not—two have closer to a 6% to 8% differential between the two. Interestingly, the one with the smallest differential also has the lowest standard variable tariff.

If you have an absolute price cap, you will obviously see that the affordability of the lower tariffs for the big six will be less: you will see some shrinkage between the highest price and the lowest price. That is what we are trying to do—to get rid of cross-subsidisation between the most expensive and the cheapest.

Will we see some bunching? We will see a narrowing of that. The question is: how do you want to achieve that? I am assuming that is what you are trying to achieve: the stopping of cross-subsidisation, keeping those people who are very faithful to their suppliers and making the suppliers pay for the discounts that they are using to get other people. I think there will be some slendering through that and the data is kind of showing that already, if you look at it.

Hayden Wood: I would say two things. The first, on the bunching question, is that a price cap would have absolutely no effect on how Bulb sets its prices. We have one tariff, so whether the cap is there or not we would continue to charge the rates that we charge now, and they are among the cheapest rates in the market. There will probably be some bunching, but it is going to occur because suppliers currently adopting these “tease and squeeze” tactics, where they have a great rate in the first year and then they charge more in later years, will be less able to do that: they will not be able to subsidise those teaser rates with expensive rates later. However, we do not expect the long-term cost of energy to change.

On your question about whether this will disincentivise investment in infrastructure, there are two parts of infrastructure that spring to mind: the first is network infrastructure and the second is generation infrastructure. On the network infrastructure question, those investment decisions are made by the regional power networks. Those are regulated local monopolies. They make a metronomic profit margin of between 7% and 9%. The price cap should not affect the profit margin that they will make here, so I do not see any reason why they should be disincentivised from investing.

On the question of generation, from where I am sitting the introduction of a price cap would be a big stimulus to investment in renewable generation, because it would mean that more and more homes could choose to buy their energy from a low-cost, efficient renewable supplier. We see no reason why renewable suppliers should be exempt from this cap, because my view is that Bulb can provide 100% renewable electricity, at a rate that is at least £200 lower than the cap.

[Bim Afolami (Hitchin and Harpenden) (Con)]

Q I have a question about what you were saying about the fact you have one tariff. Why do lots of your competitors—your older, more established competitors—have this completely mind-boggling myriad of tariffs? Can you explain why, if you can manage to price up one tariff, they cannot do so?

Hayden Wood: I struggle to explain it. We do not understand why two people in the same street using the same amount of energy from the same supplier should pay different rates. That just does not seem fair to us. There are some suppliers who will provide a fixed tariff and then they claim that there are substantial costs to providing that fixed tariff, and that those costs then need to be reflected in a—

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[Bambos Charalambous]

Q Do you think that the definition of green tariffs should be tightened?

Greg Jackson: That is exactly right. For example, if you are going to have an exemption, maybe a company would have to do 100% green products for all of its customers on all of its products. Something simple like that means you cannot get away with greenwashing a company that is really a cap evader.

[Vicky Ford]

Q I hear you saying that we need to encourage green innovation, while also insuring that there is no gaming. The approach in the Bill is that Ofgem will consult and then develop an exemption in a robust manner that reduces the risk of gaming but still allows innovation. Do you agree with that approach by Ofgem—that it should consult and, within those parameters, make sure that the green sector is protected?

Juliet Davenport: What is the alternative? Is there an alternative? To make a definition in the Bill?

[Vicky Ford]

Q The approach of making sure that Ofgem, the regulator, has to consult before making the decision.

Juliet Davenport: I would agree on that.

Hayden Wood: This Committee has an opportunity to help 12 million homes that are currently languishing on standard variable tariffs and massively overpaying for their energy, and help them to reduce their bills. If we allow a loophole such as this into the legislation—let us say that it is Ofgem’s responsibility to manage that loophole and to keep it closed—we open it up to being manipulated or lobbied on or people working around it. We saw how the retail market review regulation years ago led to some unintended consequences in how the energy market is structured, and we now suffer from this “tease and squeeze” problem, which others on the panel have described. We would propose completely removing clause 3(2) of the Bill to eliminate any issues with unscrupulous suppliers introducing non-green tariffs and removing the effect of the cap.

[James Heappey (Wells) (Con)]

Q I wonder whether the panel shares my concern that this also allows green tariffs to be seen as a premium product. To achieve our decarbonisation goals, what we actually want is for green tariffs to be seen as the norm. Therefore, to allow them to be sold as a sort of premium rather defeats that long-term aim.

Hayden Wood: I completely agree with that. It perpetuates the myth.

Juliet Davenport: My view is that you can have cheap greenwash tariffs alongside genuine innovative tariffs and you can have a differentiation. You have to focus on the big six and make sure that there are not any loopholes, but most of these companies have had people come to them as a choice. What is great about this market is that we do have choice. We have the cheap greens, and we also have the more innovative products such as us. Why would you close that down? You can see that we have been leading this market and making changes in it. We support about 140,000 homes who generate power in their own house. Those are the kind of innovations that we want to continue to do. To be honest, if you price-cap us, we are going to have no investment left for that kind of innovation.

I completely agree that we should have a differentiation and we should have products that are cheaper green. I met one of Bulb’s customers at the rugby the other day who was very enthusiastic. She was so excited by the fact that she is going on a green journey. I think that is brilliant, and that is what we should embrace in this. We should not try to close it down to be one thing or another. We should allow innovation within the marketplace.

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[Bim Afolami]

Q If you did not think that you could get it right, would you have communicated that already to the Department for Business, Energy and Industrial Strategy?

Dermot Nolan: Yes, I certainly would have. I will be responsible if I do not get it right, so I would have communicated that.

[Vicky Ford]

Q The previous panel spoke about the need for transparency in this process. How do you intend to ensure that, during the consultation, transparency is achieved? Will you be consulting all suppliers equally, for example? Recently, it was pretty cold, so can you assure us that the price cap will be ready by the time next winter comes?

Dermot Nolan: We will consult as openly as possible. We will issue consultation documents, because that is the nature of what we are required to do, but we will also hold workshops which are open to all and we will try to get views from every possible supplier. Not only that, however—I want to be very clear on this—we will want views from stakeholders far beyond suppliers. I think your next session is consumer groups, and we will try to consult as extensively as possible with them. In fact, being blunt, we are both required to and want to listen to as many as we can hear over the next few months, to inform any decision.

Regarding next winter, as you say, it was cold recently, but I have said before and I repeat again very clearly here that we will have the cap in within five months of Royal Assent. We will have it in place and affecting consumers by that point.

[Vicky Ford]

Q With the people who come to those stakeholder meetings and attend those consultations, is that public information?

Dermot Nolan: Yes, it would be on our website and we would make a specific—[Interruption.] Sorry, Chair.

[The Chair]

No, no, I am sorry. I am just keen to get as many people in as possible. Alan Whitehead.

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[Michelle Donelan (Chippenham) (Con)]

Q On that point, do you think six months is right? I know you have just described the trade-off between a three-month and a six-month period. Do you believe six months is the correct period? There are people that are concerned about flexibility and fluctuations. In the last panel, we heard that if everybody started buying their energy in advance, it could inadvertently cause a spike. What do you believe?

Dermot Nolan: I think six months is the maximum. If the Bill goes through as is, we will consult on it. I honestly cannot say what we would ultimately pick, because it would be an open consultation. Certainly, I cannot imagine, at this point in the way the energy market is, having prices change every week or month. I think it would be a consultation along the lines that I have already mentioned. There is no perfect number though. We would want to try to hear from consumers what they thought was best and what reflected their preferences.

[Vicky Ford]

Q One of the issues that has been raised is making sure that the price cap does not disincentivise investment in infrastructure. During the consultation, will you also be listening to infrastructure investors to take into consideration their views when setting the cap?

Dermot Nolan: We will listen to everybody when taking views on setting the cap. However, the infrastructure should not formally be part of the price cap. It should not affect the way in which the price cap will broadly be set in terms of interactions with suppliers and the prices of the inputs they purchase. So although we will listen to everyone, I do not think infrastructure investors per se will be crucially involved.

I came in at the end of the last session and heard about smart metering. We will have to consider the smart metering costs, but only in the efficient cost. One of the difficult tasks in setting any level of cap is deciding a precise, efficient cost for the firms and ensuring that those efficient costs are passed on in the cap.

[Stephen Kerr]

Q In the past, Ofgem has said that it accepts the outcome of the CMA’s energy market investigation, including the majority view that said a price cap would have a negative impact on competition. How are you going to manage that? You have accepted that a price cap can lead to a loss of competition in the marketplace. How will you know? How are you going to measure competitiveness in the marketplace, and what will you do in terms of pulling levers in order to rectify that?

Dermot Nolan: The CMA view was split. We said we would go with the majority view, but one of the points about the process is that Parliament has now taken a decision. It is absolutely something that we will implement, because we are servants of Parliament, and we will implement it as quickly and as effectively as possible.

On the theme of competition, in my reading of the draft legislation, it seems to me that there is a desire to bring in a cap but also a desire to develop a more competitive market. There are a number of things that we are putting in place that we believe will help develop a competitive market further.

On smart metering, I know there were different views among the earlier panel, but smart metering is helpful. It is in some sense a necessary condition for, if you like, a digitised retail energy sector. There will be faster and more reliable switching processes. There are a number of remedies we have tested for prompts—ways in which people who have not yet been prompted to engage in the market will be prompted further. We have tested a lot of those already, trialled many of them and are going to roll them out in the next couple of years. There is the work on what we call midata, where we are going to push forward with a secure piece of your data that you can use in any price comparison website or any particular thing that will facilitate competition.

There are two more points—I know I am listing them off, but I want to be clear. One is that we think vulnerable protections will still be necessary if a full price cap is removed. We will look at whether any vulnerability price caps should be kept and, in particular, whether other forms and ways of protecting vulnerable customers, including things such as collective switches, could be used.

--- Later in debate ---

[The Chair]

Can I bring in Vicky Ford?

[Vicky Ford]

Q In my view, 2023 is the sunset clause: a window to get the competition in the market working. If you bring in measures such as faster switching, prompts and Midata, I am sure we will see more innovation with smart appliances that feed off smart meters and therefore there is smart consumption. Are those the measures that you would write into your report in 2020 for us to be able to decide come 2021 that the competition had maybe already been achieved? You said it could be done in a couple of years. Why do we need five years?

Dermot Nolan: I hope we do not, frankly. We will do our very best to bring competition as quickly as possible.

[Dr Whitehead]

Q I just wanted to reflect the fact that there is a sequence in the Bill, which is that Ofgem carries out a review as to whether conditions are in place for effective competition, and then you have just one requirement to put into your review, which is the vision of smart meters. The Minister then has to make a statement following the report, but it is all sequentially based on your report in the first instance.

Are you happy with what appears to be an almost complete lack of pillars on which your report might be based? Is that something that you can live with easily, or would you prefer or welcome further pillars in the report to ensure that your understanding of the report was in line with what was required to bring competition back into the market?

Dermot Nolan: It is a fair question. I am personally content with the drafting, but I respect the fact that it is a matter for Parliament. I think we have a reasonably clear idea, and I hope we have given some of it today, but I assure you that we will spend a lot of time preparing an analysis of whether we think competition is working effectively in the market.

If further areas are to be put in, that is a matter for Parliament. I am slightly worried that putting specific targets and measures directly into legislative language now, in a market that will change radically over the next five years, might be somewhat distortionary. All I can say is that on the current language we will do as comprehensive a job as we can and look at all possible indicators to give an overall assessment to the Secretary of State of whether we think the market is working for consumers.

--- Later in debate ---

[Michelle Donelan]

I just want to follow up and build on the topic of consumers. How do you each feel this Bill will impact on the interest groups you represent? This is particularly pertinent to Which?

Pete Moorey: We represent all consumers, and the Bill may have a number of different impacts for all consumers. Clearly, for the large number of people on standard variable tariffs, it is going to mean a cut in their energy bills, which will be very welcome for them.

However, as you are probably aware, we have some concerns about the risks presented by a price cap and the impact that could have for consumers as a whole, which may well be mitigated by the measures in the Bill regarding Ofgem, ensuring that it maintains attempts to promote competition.

Nevertheless, the things that we are concerned about with the introduction of a price cap are that we do not see any softening of competition and that we do not see prices for consumers overall going up. It is likely that for some consumers we will see some price rises, as some tariffs get removed. We do not want to see a reduction in the standard of customer service, which is often deemed as being poor among the larger suppliers; the annual satisfaction survey that we do at Which? every year shows that the larger suppliers do very poorly on a whole range of metrics.

Also, we do not want to see less innovation in the market. So we do not want to see the introduction of a cap having an impact on the smart meter roll-out, or indeed on the transformation that Dermot Nolan spoke about, which we really support, around the introduction of new suppliers in the market, who may well be able to bring a transformation to energy, which is what we want to see.

I absolutely understand why the price cap is being introduced. I think the energy industry had opportunities, time and again, to stop this from happening, and they failed to react to that and to the problems that their customers were facing in the market. However, as we now introduce the cap, we have to be very mindful of those risks: the last thing we want is a price cap to come in, be removed at the end, and for us then to be left with exactly the same kind of broken market that we have now.

[Vicky Ford]

Q I want to push a bit harder on understanding the concerns of Which?, because I see smart meters being only a part of the whole move towards smart consumption and connected appliances that talk to each other—in order, for example, to use less energy at peak times of day. Such innovations are important. Do you want to ensure that the cap does not stop that sort of innovation and instead continues to encourage consumers to have a competitive offer?

Pete Moorey: Absolutely. Smart meters themselves are only the facilitator of a new kind of market. Gas and electricity is a homogenous product. Of course it is dull for consumers to engage with, and our expectations around them switching have been—by and large—fairly ridiculous really, given that there is generally little value in switching beyond the price that you can be saving, which can be significant. But beyond that, why people should really engage with this market has been bewildering to consumers, really.

However, we are now just starting to see potentially a very different energy market, because of smart metering and then smart appliances, as well as the introduction of electric vehicles, storage and a whole range of other changes. They should make energy an attractive industry for new kinds of players to enter, which may well mean that consumers start to be offered very different kinds of things. It may well be, as Dermot said, that there will be much more bundled products, whereby suppliers effectively offer to look after your whole house—your whole life—and that may well be attractive.

Of course, with that comes the risk that that will potentially only benefit people like me, who perhaps have the ability and the money to engage with that market. We obviously want to see all consumers benefiting and we will need to be very mindful, as that change comes, about vulnerable consumers and their ability to benefit from the price cap, too. They should do, because the positive benefit could well be that you can target much more specific products at the most vulnerable, and ensure that they really are getting value out of their relationship with their energy supplier, or indeed with a whole range of other suppliers that could start to form a hub around smart meters and other smart appliances.

[Vicky Ford]

Q So, is 2023 the right date?

Pete Moorey: Yes. I think it is the right date, but the critical thing is that Ofgem has the ability on a very regular basis to review how the price cap is working, to set out transparently the changes being made in the market, and to be able to recommend to the Government whether the cap should be removed earlier. I think that having that balance is right.

[Bill Grant]

Q We mentioned smart meters. Do you believe that the roll-out of the smart meters will engender or promote effective competition in the energy market, and, if so, will that contribute to the ending of the cap by 2023? Indeed, I think there is an opportunity in the previous three years to end the cap. What part do you think that process will play?

Finally, picking up on Pete’s reference the less well-off groups, or those who are less price-savvy—I think that was the term—do you think the meters will assist those people in understanding their expenditure? Do you really think it will have an impact?

Pete Moorey: I hope so, but I think there are significant challenges for the roll-out. The fact is that the roll-out does not appear to be going as well as it should. Our own research in the last few months revealed that energy suppliers would be having to install 24 meters per minute for us to hit the target by 2020. So we have to keep a close eye on the smart meter roll-out. I do hope that it leads to changes, and changes that benefit all consumers, but that will require not only groups like us but also yourselves to keep an incredibly close eye on the roll-out.

Peter Smith: National Energy Action runs something called the communities programme, alongside Smart Energy GB, which is the organisation that exists to engage smart meter roll-out. We are doing some valuable work on that, but we are concerned that the roll-out is significantly back-loaded now. That challenges the cost-benefit analysis that the Government originally estimated, which assumes cumulative benefits running all the way through successive years, up to 2020. Now we are in 2018—and 2020 is there; so there is a concern.

--- Later in debate ---

[James Heappey]

Q Some of the big six, in particular, have tried to head off this legislation by, apparently, removing people from their SVTs already. I wonder whether you have made any analysis of the sort of tariffs they have been transferring people on to and of whether that represents genuinely better behaviour, or are they just getting ripped off in a different way?

Rich Hall: We do not have any analysis on that to hand, but it is a crucial issue, in that the problem with SVTs is not their name, but their characteristics; it is the fact that they are extremely poor value products that exploit consumer inertia. If the replacement products simply have the same characteristics, and they are benchmarked to a similar level of pricing, that is simply an attempt to get around the intent of the Bill rather than to reduce the detriment that those customers see. That is an area where we, Ofgem and others will need to improve our monitoring in the coming months, as we see more of those tariffs in the market. At the moment, it is still fairly soon after the launch of these approaches by three suppliers, so it is a bit too early to say, but it is a genuine issue.

[Vicky Ford]

Q Just to come in on this issue of reviewing every six months, that is of course in the Bill.

Pete Moorey: That is good news.

[Stephen Kerr]

Q Would it help to remove the stickiness of customers if the SVTs were renamed emergency tariffs, because that is quite alarming?

Pete Moorey: I don’t know. It might do. That probably returns to the point I made to Alan Whitehead around testing and trialling different ways of engaging people in the market. It is really important that Ofgem tests how it communicates the safeguard and whether it should be called the safeguard. There is a real danger that most consumers, once they hear they are on a safeguard tariff, think that there is absolutely no reason for them to switch. Once the cap is in place, one of our key messages at Which? would be to go out there and say to people, “The safeguard tariff is not the cheapest tariff on the market. You could well still be saving hundreds of pounds by switching, particularly to some of the smaller suppliers in the market.”

Oral Answers to Questions

Vicky Ford Excerpts

Tuesday 30th January 2018 Commons Chamber

[Greg Clark]

I will indeed. I pay tribute to the hon. Gentleman for the stalwart way in which he and his colleagues stood up for their constituents and, indeed, the supply chain that covers the whole United Kingdom. Right from the beginning, this has been a joint endeavour between us, the Canadian Government, the company and everyone with an interest in the success of Bombardier.

[Vicky Ford (Chelmsford) (Con)]

Does my right hon. Friend agree that the future of our space and aerospace industries is key to our economic future and that practical measures like the new Space Industry Bill will open up new opportunities?

[Greg Clark]

I do indeed. Space is one of the fastest-growing sectors of the economy, and we are world leaders in it. Through the Bill, we will ensure that we have the right regulatory regime to underpin that.

Budget Resolutions

Vicky Ford Excerpts

1st reading: House of Commons
Tuesday 28th November 2017 Commons Chamber

[Rebecca Long Bailey]

I could not agree more. That is very articulately put.

It is not as if the Government were not warned of the problems of austerity by my right hon. Friend the shadow Chancellor. Indeed, the International Monetary Fund warned the Government that

“episodes of fiscal consolidation have been followed, on average, by drops rather than by expansions in output… The increase in inequality engendered by financial openness and austerity might itself undercut growth, the very thing that the neoliberal agenda is intent on boosting.

Refusing to heed that advice was a deeply reckless act.

The current Chancellor may well turn around and lament post-crisis productivity, but let us remember that he was in the Cabinet while this economic mess was being created. He is not absolved of responsibility, but he has the opportunity to admit that that approach was wrong and to change course.

Unfortunately, although the Chancellor admitted in his Budget speech last week that there is a big productivity problem—a big gold star for Phil there—there was very little to give our economy the upgrade it desperately needs, nor was there any attempt meaningfully to level up regional investment spend.

Indeed, despite the Chancellor’s jovial attempts at talking up our ability to harness the fourth industrial revolution, the Office for Budget Responsibility looked at his future investment plans and cut its forecast for growth in productivity, but he still had one last chance—the industrial strategy. I waited with bated breath yesterday, desperately hoping that the action would match the rhetoric. It started well enough with the strategy’s stated goal to create an economy that boosts productivity and earning power throughout the UK. “That’s spot on,” I thought. But sadly, having looked into the strategy in a little more detail, it seems little more than a repackaging of existing policies.

Unfortunately, the Conservatives have form on this. There has been a long line of PR gimmicks that simply do not deliver. Members may recall that, back in 2011, the previous Chancellor announced a march of the makers, but UK manufacturing has since grown at less than half the European average. Similarly, much was made of the northern powerhouse, which sounds great, but only two of the top 20 infrastructure and construction projects in the Government’s pipeline are in the north-east, north-west or Yorkshire and the Humber, leading my hon. Friend the Member for Bolsover (Mr Skinner) to call it the “northern poorhouse.”

No one can argue with the core principles outlined in the 255-page document we saw yesterday but, as the Financial Times summarised today,

“the judgment being passed…is that it amounts to a good start—but much still remains to be done to ensure success.”

Although the strategy certainly acknowledges many of the fundamental problems our economy faces, I fear that the level of detail and proposed investment simply do not match the surrounding rhetoric, falling far short of what is needed.

The White Paper gives us a handy one-page summary of the strategy’s key policies to strengthen the “foundations of productivity.” It is perhaps poignant to point out that even the previous Chancellor was trying to fix our foundations and outlined a productivity plan called “Fixing the foundations” two years ago. What happened to that? I digress slightly.

Let us look at the first foundation: ideas. The key policies are raising total R and D investment to 2.4% of GDP by 2027, increasing the R and D tax credit and allocating some of the increased spend to a second wave of the industrial strategy challenge fund. Although increasing R and D spend is, of course, a step in the right direction, it is an unambitious target.

[Vicky Ford (Chelmsford) (Con)]

Given that this is the largest increase in research and development and innovation funding in more than 40 years, what part of it is unambitious?

[Rebecca Long Bailey]

The hon. Lady misses the point. The UK has been below the OECD average of 2.4% of GDP for years, and we are way behind global leaders such as South Korea, Japan, Finland and Sweden, which all spend at least 3% of GDP on R and D. If we are to be in any way capable of competing on a world stage, we have to up our game. If the Government really want us to be at the forefront of the fourth industrial revolution, they should be aiming above the average, rather than just trying to catch up.

Furthermore, not reforming where and how it is spent risks widening regional divides, as almost half of all research funding currently goes to the south-east. To quote a Conservative Member:

“If we just put more money into the same funding streams we will have the same outcomes and continue to spend half the science budget in just three cities.”

--- Later in debate ---

[Vicky Ford (Chelmsford) (Con)]

This is my first time taking part in a Budget debate, and I would like to say some thank yous.

Thank you to my Conservative colleagues for the work they have already done on controlling the deficit, restoring the public finances and rebuilding a strong economy, so that we can afford the many measures we take today.

Thank you on behalf of young people. I remember that, under Labour, nearly 1 million young people were not in employment, not in education and not in training. Today, youth unemployment is at all-time lows.

Thank you for investing in skills and especially in maths. When I went to university, I was a very rare breed: a girl who did maths. Today, that breed is still too small. So, girls, listen: if you do maths and a science at A-level, you will earn 30% more than your peers. The £600 per pupil taking A-level maths that will go to each school can be transformational for this country.

Thank you for removing stamp duty for first-time buyers. It is hard to get on the property ladder in my constituency, and that will make a difference.

Thank you for listening on universal credit. We must help those most in need. Thank you especially for making it easier for the housing element of the benefit to go straight to the landlord. That is an idea I pitched to the Chancellor, and he had no tin ear.

Thank you for funding the NHS, and especially for underwriting the pay increases for our nurses and for investing in the capital budgets. I am glad that south and mid-Essex will be among the first to benefit.

But most of all, thank you for the support for innovation. I am proud to live in a country where there are 40 start- up businesses every hour—that is three a day in my constituency. I am proud that there are 28 great British start-ups that are now billion-dollar businesses. I am proud that this Government are investing more money in science and research than any other Government for the past 40 years, because scientists are the people who find real solutions to real problems, and they will build us a better future.

[Ms Nusrat Ghani (Wealden) (Con)]

Will my hon. Friend give way? [Hon. Members: “ Oh.”] I will be very quick. Is my hon. Friend also thankful for the £21 million—

[Ms Ghani]

Is my hon. Friend also thankful for the extra £21 million that will be invested in science and tech, helping us to create the jobs of the future?

[Vicky Ford]

Absolutely, because we need to make sure that we invest in not only the ideas and the innovators but the skills, the people and the places.

Brexit is coming, and it does bring huge risks. Now, more than ever, is the time to back ideas, back the innovators, invest in our infrastructure and inspire our industry. I am very proud to be supporting this Budget.

Industrial Strategy

Vicky Ford Excerpts

Monday 27th November 2017 Commons Chamber

[Greg Clark]

Of course we recognise that, and I have made the point throughout our discussions this afternoon that every place requires a consideration of its particular challenges. The geography of Scotland means that different decisions will be appropriate there compared with more urban parts of England, for example. We completely recognise that, which is why we are setting out a localist approach to ensure that we make the right investments for the right places.

[Vicky Ford (Chelmsford) (Con)]

I congratulate the Secretary of State on the industrial strategy, and on announcing more investment in science and research than any Government have done in the past 40 years, particularly in advanced technologies such as quantum technologies. Anyone who wants to see gravity sensing need go no further than Chelmsford. Does he agree that investing not only in blue skies research but in near-to-market innovation is key to ensuring that bright ideas happen and stay in Britain?

[Greg Clark]

I completely agree with my hon. Friend. Making new discoveries is something that we have a deserved reputation for, and we must not take that for granted. We must reinforce that success. Where we have been less successful, however, is in translating those discoveries into practice and, in particular, in creating manufacturing jobs here. That is why medical manufacturing has an important role to play in the life sciences sector deal, and I am thrilled that on the basis of that industrial strategy, major investments have been announced today from the American company MSD and the German company Qiagen, to reinforce the success of that important sector.

Leaving the EU: Consumer Protection

Vicky Ford Excerpts

Tuesday 10th October 2017 Westminster Hall

[Vicky Ford (Chelmsford) (Con)]

I beg to move,

That this House has considered the effect of the UK leaving the EU on consumers and consumer protection.

It is an honour to speak under your chairmanship, Mr Streeter. I thank the Minister for coming this afternoon, and the many consumer organisations, businesses and others with an interest in consumer affairs that have written to me in preparation for today’s debate.

Consumers are key to the country’s prosperity. Consumer spending is more than £100 billion every month. Consumer confidence is vital for our stability and growth, so consumers must be a central part of the Government’s plans as we negotiate our future relationship with Europe. Leaving the EU without an agreement on many consumer issues would risk causing real problems for many people in the UK and elsewhere in Europe.

I am glad that the Prime Minister and the Secretary of State for Exiting the European Union have spoken about putting businesses and consumers at the heart of the Brexit negotiations. We have not yet seen detailed policy papers from either side, so this is a welcome opportunity to look at some of the details. It is essential that the Government work with consumer organisations as well as businesses. I understand that the Minister has invited consumer organisations to join her in stakeholder meetings to consider the issues, and I am grateful for that.

Recent research by the consumer organisation Which? showed that consumers’ top priorities for Brexit negotiations relate to maintaining lower prices, especially in key sectors such as energy, food, fuel and consumer goods. Our consumers are used to shopping across borders, and nearly half of British trade is with Europe, so it is absolutely right that the Government seek a deal with Europe that maintains as much stability as possible, avoids unnecessary financial shocks and keeps trade as friction-free as possible, otherwise costs will increase.

Consumer protection is also vital for maintaining consumer confidence. The UK has more than 40 years’ experience of working with the EU on consumer protection. European directives and regulations give consumers protection on issues such as unfair terms, aggressive selling, and poor quality and unsafe products. Those bits of European legislation not only protect British consumers when we shop in our domestic market and in other EU markets but, importantly, give EU citizens rights when they come here to buy from British organisations. It is important that there is no regulatory cliff edge and that the relevant EU legislation is brought on to the British statute books using the European Union (Withdrawal) Bill, so I was pleased to support that Bill in the recent vote. The Bill will mean that there is no change to the body of EU consumer protection law when Britain leaves the EU.

However, consumer protection is not provided by legislation alone; it is underpinned by product standards and market surveillance networks. In Europe, CE marking means that a product meets the safety standards required by law. It covers technical products, products used by children, electricals, building machinery, medical equipment and many other products. It has been suggested that the CE mark could be replaced by a more global standard, but global standard setting in many areas is still limited and lacking in detail. Given that nearly half of British trade is with the EU, any large-scale divergence on standards could lead to technical barriers for British businesses trading in Europe, which is why the vast majority of British manufactures want to keep a common marking scheme for standards, to avoid unnecessary costs.

However, we know that standards can be a tool for protectionism, to lock others out of a market, and it is important that British manufacturers retain a seat at the table where decisions are made. I hope that the Minister can update the House on the state of discussions regarding the future relationship between the British standards bodies and the European standard-setting bodies. Will we be able to retain our seat at those tables?

Changing the standard-setting regime would also raise questions about consumer safety. When I was a child, I lost my father in an accident that was caused by an electrical good. That would not happen today. The fire at Grenfell tower was started by an electrical good. This is not a time to drop safety standards. Consumers must be protected by strong safety standards, on our exit from the EU and afterwards. I am delighted that Ministers have said that we will not be responsible for lowering standards as a result of Brexit and have committed Britain to continuing to be a global leader on safety standards.

As well as those standards, we have the networks and authorities that are necessary for ensuring that the standards work and are enforced. The UK is part of the Rapex network—the rapid alert system for dangerous non-food products—which means that other countries are notified when dangerous toys and goods are found on the market. That makes it easy for trading standards across the country, in Essex and elsewhere, to take dangerous goods off the market quickly and keeps consumers safe. There is a similar system in the medical world; the pharmacovigilance network ensures that medical authorities and drugs companies across Britain are notified if a patient has an unexpected response to a drug, which helps to keep patients safe.

As part of Europe, we take part in the consumer protection co-operation network, which allows a British authority to ask an authority in another country to begin an investigation if it thinks that standards have been abused or consumer protection law has been broken. That is being used to help hundreds of British consumers involved in the French leaseback scandal, many of whom may have lost their life savings, and it helps to keep our financial products safe.

It is in the interests of consumers on both sides of the channel that we not only retain the European legislation but continue to be part of the co-operation networks that support it. It would be helpful if the Minister confirmed that the deep, special and bespoke partnership that the Prime Minister has mentioned will lead to exactly that type of co-operation.

I am not saying that EU consumer protection laws are perfect; in many areas, they are not, and Brexit will provide us with an opportunity to look again at burdensome areas. Anyone who listens to commercial radio stations will be used to the incredibly long terms and conditions that are read very quickly at the end of every radio advertisement for a mortgage or a financial services package. Apparently, less than 4% of consumers actually remember any of those details. That is all laid down in the consumer rights directive, and we may choose to diverge on such details. That is precisely why it is important that we have an ongoing mechanism for talking about future legislation and for enabling divergences.

[Jo Swinson (East Dunbartonshire) (LD)]

The hon. Lady is making an incredibly powerful speech that I think everyone in the Chamber is glad to be able to hear. She made the point that high product safety standards and consumer protection are good for customers, and obviously they are. Does she agree that they are also good for British businesses? When our businesses go to those high standards, that makes them competitive globally because of their reputation for providing goods of high quality.

[Vicky Ford]

I agree, and I thank the hon. Lady for her intervention. Interestingly, when the consumer organisation Which? surveyed British businesses, it found that those businesses, too, want to ensure that consumer interests are properly considered and maintained as part of the Brexit negotiation. That is precisely why British manufacturers say, “We want to continue to be part of the product-setting networks. We must have a seat at the table when they are agreed.” There are non-EU countries where manufacturers and standard-setting bodies are involved in the negotiations on the standards. It should be perfectly possible to maintain that in a deep and special relationship. It is in the interests of both parties.

It is also important to remember that consumer legislation continues to evolve. We need to ensure that legislation keeps up with the digital age. The digital world is increasingly borderless: our consumers are buying products not just from local retailers but, increasingly, from large global retailers, so it is important that we have international agreement on consumer issues. As I have said, the global forums for setting standards, particularly on digital consumer issues, often lack detail. Therefore, co-operation with Europe is necessary.

A key part of digital trade relates to the use of data. The ability of consumers to use comparison sites and to get consumer feedback means that they are increasingly empowered and informed. Our consumers need data.

[Julian Sturdy (York Outer) (Con)]

As has already been said, my hon. Friend is making a powerful speech. She talks about consumers making informed decisions. Does she see an opportunity with Brexit to take things further? One of my campaigns is for the opportunity to expand country of origin food labelling to allow consumers to make a more informed choice. We could expand the products that country of origin food labelling could be applied to.

[Vicky Ford]

Consumer choice is key, and I will discuss food standards, especially when I talk about trade relationships with other parts of the world. Being able to make a consumer decision increasingly relies on being able to access data, to go on to a database and to work out where to make a purchase in a digital world. The free flow of data also underpins digital streaming services, retail loyalty cards and use of cloud computing services. Without the free flow of data, businesses—but also consumers—would find themselves at a disadvantage.

Later this week, we will debate the future of data post-Brexit in the main Chamber. I contend that it is extraordinarily important for British and European consumers that we continue to have a free flow of data post-Brexit. Without that, British consumers will find that they cannot access information or comparison sites in anything like the detail they can at the moment, and many European companies will find significant barriers to their own business. There is no world trade agreement on digital data flows, so it is important that a decision is made on that area.

Another area I want to speak about in detail is the travel sector, because unless agreements are made in favour of consumers on travel, they will face significant impacts. For many consumers, the main impact of Brexit will be what happens on their holidays. The rest of Europe remains the most popular destination for British travellers. In 2015, British citizens made 32 million trips to the rest of the EU on holiday; EU citizens made 9 million trips to Britain. Two hundred million passengers fly through British airports every year.

As we all know, unless negotiated, the UK will lose access to the EU common aviation area, which risks affecting both flights from Europe into Britain and flights in the UK. There are also the many aviation agreements—more than 50—that the EU has with the rest of the world on airspace issues. It is imperative that access to airspace and landing rights is negotiated. Last week, we saw 100,000 people having problems with flights when Monarch collapsed. If there is no agreement or action on flights, tens of millions of consumers will be affected. That is why it is so good that the Government have started work on the areas that will be most affected if there is not a deal.

Aviation safety is also really important. The UK is currently covered by the European Aviation Safety Authority and, unless we continue to be a member of that, the Civil Aviation Authority will have to set up an equivalent, which would take time. That is precisely the sort of issue that needs a decent, long, thought-through transition period so that safety is not risked due to a cliff edge of uncertainty. Furthermore, today under EU law when flights are delayed or cancelled, passengers have a right to reimbursement or repatriation. It is important that we know soon whether those rights will continue. Airline tickets go on sale about 10 months before the first flights, so from next summer the airline companies will be trying to offer flights in a post-Brexit world and they need to know what rights go with their tickets.

Furthermore, non-air transport issues need to be considered. Today, British drivers are covered by the motor insurance green card, which means that we can drive from our homes across to the continent using our own motor insurance and that, if we have an accident with someone from elsewhere in the EU, the insurance will cover claims and compensation. If the green card arrangements are no longer in place, drivers may need additional insurance cover, which is especially important not just to individual consumers but to the freight transport sector.

I was glad to hear in the Chamber yesterday that another issue for travellers seems to have been resolved: the European health insurance card. There are about 27 million EHICs in the UK and last year those cards would have been used by more than 200,000 British travellers. Both sides—Europe and the UK—have said that they wish that to remain. It needs to be agreed in detail, but that does show that progress is being made on these key issues.

The final issue for travellers I want to mention is mobile roaming. This summer, my children certainly cheered when they got on the plane and found out that they would be able to use their phones without additional costs. Abolishing roaming charges has been especially popular with younger people. I know how extraordinarily tricky it was to negotiate that, having played a part in the negotiations myself. A deal on roaming and other digital issues needs to be a key part of our future trade agreement with the EU—and indeed of all future trade agreements.

Brexit gives us the opportunity to create new consumer-focused trade policy. That brings many benefits. Trade agreements bring consumer choice, variety, lower prices and the right to be able to buy products from many different countries of origin, including our own, as my hon. Friend the Member for York Outer (Julian Sturdy) correctly pointed out. However, we know that consumer confidence cannot be taken for granted. There have been many recent reactions and protests by consumers against trade agreements, particularly the proposed EU-US trade agreement, the Transatlantic Trade and Investment Partnership. As a member of the European Parliament, I remember receiving more than 10,000 emails over one weekend, nearly all of them different, about TTIP.

Consumers recognised the benefits of cheaper goods and services, but they also said firmly that this should not come at any cost. In particular, the public would be concerned about any drop in standards on food or animal welfare products. That is why the hon. Member for East Dunbartonshire (Jo Swinson) and my hon. Friend the Member for York Outer are both right to point out that it is in the interest of businesses to maintain standards, but also important that people know where their food especially is coming from.

The TTIP experience shows the problem of a disconnect between the public and the negotiators on trade issues and points to the need for transparency. It shows that the public and consumer organisations need to be involved in trade negotiations. It is important that those of us who want to continue to have a free market economy and free trade with the rest of the world prioritise the opportunities from the consumer’s perspective.

That is why it is important that we focus on issues such as mobile roaming and the real barriers that travellers face, so that they can see we are focused on the issues that consumers focus on. Brexit offers an opportunity for both the UK and EU to rethink and reset our approach to how we trade with each other and those across the world, but it will only retain the support of the public if consumers and consumer protection are put at the heart of the policy.

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[Luke Graham]

I did say Conservative-led, but quite right—the coalition did a number of good things.

[Vicky Ford]

I just want to point out that it is this Government who have been leading work on digital consumer rights, so we need to give some credit to the Conservative leadership during the 2015 to 17 Parliament.

[Luke Graham]

I thank my hon. Friend for that intervention; I always support giving praise where it is due.

I would like to end by highlighting the position of the Prime Minister and the Government. Only last week that was highlighted at the Conservative party conference, when the Prime Minister said that

“while we are in favour of free markets, we will always take action to fix them when they’re broken. We will always take on monopolies and vested interests when they are holding people back.”

Furthermore, in the Conservative manifesto a specific commitment was given to make sure that markets will

“work for consumers, as well as producers—with competition keeping prices low and encouraging new product development”,

while tackling issues such as

“poor information, complex pricing and exploitative behaviour”,

which prevent all markets from

“operating efficiently for the benefit of all.”

We realise that that is far from complete. To achieve that, we have set out a range of steps that we intend to take to further strengthen our consumer protection, in addition to the progress that has already been made and which I outlined earlier. I hope to work with Ministers and colleagues across the House to ensure that, as we debate the European Union (Withdrawal) Bill, and then the substantive Bills that will follow on customs and trade, we prioritise strengthening the hands of regulators and online consumers, making terms and conditions clearer—an issue that is recognised by consumers and institutions across the United Kingdom—and strengthening the powers of consumer enforcement bodies to include fines against companies breaking consumer law, and delivering redress for wronged parties. The desire and intent to protect consumer rights is clear and we must ensure that we carry on in that manner as we go through and complete the process of leaving the EU.

[Darren Jones (Bristol North West) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Streeter, and I congratulate the hon. Member for Chelmsford (Vicky Ford) on securing this debate and on her excellent opening remarks. I declare my interests, as in the Register of Members’ Financial Interests: previously I was a legal counsel at BT responsible for, among other things, consumer law compliance.

The UK is a leader in consumer rights, exemplified, as the hon. Member for Ochil and South Perthshire (Luke Graham) said, by the Consumer Rights Act 2015, in which we went above and beyond European requirements, but that direction of travel has been, in my view, driven by the European Union. As we prepare for Brexit, whatever that might mean, it is vital that we protect both our current legal framework and our future policy commitments to maintain strong consumer protections in the UK. If we maintain access to the European single market, as is my preference, ensuring equivalence in consumer law in the future will be vital.

In my previous role, I attended the annual consumer law conference in Brussels, hosted by the European Commission. I was there on behalf of not only business but consumer groups and other stakeholders. It was agreed, among a very large group of stakeholders, that the consumer law framework provided by the European Union and legislated for here in the UK was pretty good. The key issue, however, was enforcement of those consumer rights. It is vital that we keep that in mind in this Parliament too, not only through the European Union (Withdrawal) Bill, but in what we do next, after the date of Brexit.

I have had the pleasure, or misfortune depending on one’s viewpoint, of rewriting and simplifying consumer terms and conditions for TV, broadband, mobile services and such like, hence my declaration at the top. Having to take out liability clauses, disclaimers and warranties and trying to reach, as I did in that example, for Plain English Crystal Marks and simplifications for consumers brings us lawyers out in a bit of a cold sweat. We must call on businesses in a regulatory-friendly manner to innovate in the way they communicate with customers. We know that customers tend not to read even a short number of pages on terms and conditions, so how can we ensure that, where the law already provides, they are made aware of particularly onerous terms? I, for example, commissioned a short video explaining that in two minutes. Whether anybody watched the video, let alone read the terms and conditions, time will tell.

From my own experience, we must have two aims—first, that customers understand what it is they are signing up to, which is the law today, and secondly, that they know how to enforce their rights and that they choose to do so. Although this is an issue across many sectors, I will make some remarks today about the airline industry, which is topical because of the issues with Ryanair in recent weeks. As the hon. Member for Chelmsford said, millions of constituents across the country fly to the European Union every year. Although we must protect important safeguards on cancellations and flight delays through Brexit, we must also remember the enforcement of domestic consumer rights.

Many of our constituents suffer the annual annoyance of additional charges for printing boarding passes, booking seats, or getting a bag on to a flight when they thought those things were included. Many airlines market through comparison websites, which may require further regulation in future. They show the single fare-only price without the additional charges. So when customers think about getting the best deal for their flights, sometimes they are unaware that the airlines may be bulking out their revenues by stinging customers with additional charges at the point of service.

Additional charges in themselves are not unfair or a problem, but when many customers do not know about them until it is too late or have no idea how to enforce their rights when they have been subjected to unfair treatment, such charges become a problem. I myself have experienced that problem. On a recent flight to Iceland with WOW airlines, my wife and I were forced to pay £75 to get our on-board luggage through the departure gate. That was more than the price of the ticket itself. As a consumer rights lawyer, I said, “Don’t worry; let’s pay the fee. I’ll complain and get a refund. I know this consumer law business.” However, I faced a bit of a problem.

It transpired that the acceptable size for on-board baggage on WOW airlines is significantly smaller than for other budget airlines, but the online order journey did not make that clear. I have a penchant for terms and conditions and compliance with online order journeys and am particularly astute at watching out for such things, but I was unaware of that difference. I challenged WOW airlines when I returned from a lovely trip to Iceland, but the customer service was awful. I had copy and paste responses to my question. Clearly, other customers had challenged it because the company gave copy and paste answers. When I challenged the detail of the answer, I was told that the company would no longer speak to me.

I therefore complained to the ombudsman. The consumer ombudsman, which is a voluntary organisation for certain sectors and businesses, approached the airline, but it refused to take part in the voluntary scheme. I then drafted a letter before claim setting out in detail, on a lovely Sunday afternoon, how the airline had breached consumer law in the UK, and I sent it to the chief executive officer in Reykjavik. Normally at this point I get a response, but on this occasion I got no response. I still hold that the additional charges point on baggage, where WOW airlines does not make it clear that its size restrictions are smaller than for other budget airlines, is a breach of consumer law. I feel that I and my constituents and others are due a refund for an unenforceable charge. Having raised the issue with the airline’s customer services team, the ombudsman, the chief executive and now Parliament, I look forward to a response.

The issue is not just about my story. In advance of this debate I posted a survey online to ask my constituents to tell me their stories, which were broadly similar. Most of the affected customers who completed my survey were annoyed about the additional baggage charges and also about seat reservations. Of those charged for their baggage, 75% had used the bag that they used for on-board storage with other airlines, and they did not know they could not use that bag on the airline that imposed the additional charge. Some 60% did not know about the charges at the point of booking, or they might have measured the suitcase. Again, these are unenforceable additional charges under consumer law.

To make matters worse, nearly 60% of complainants paid the fee, but then did not complain. A clear majority had no idea that they could go to the Civil Aviation Authority or others for support. Of all the customers in my survey who did complain, only one received a refund. Everybody else was either fobbed off or ignored.

Behind the statistics are families going on their holidays. Many of my constituents who use budget airlines and rely on other similar services save up throughout the year for a special time with their families during the summer holidays. It is a major expense in the annual budget of those consumers. The way in which the families are being treated is unacceptable.

[Vicky Ford]

I thank the hon. Gentleman for his passionate story about his holidays, but does he agree that it is in the consumer’s interest to have choice and opportunity? Although there may have been drawbacks in some of the budget airline experiences, to be able to fly at a cost they can afford is a huge benefit to consumers. We need good consumer protection and information, but not if the cost becomes unaffordable and consumers simply cannot afford the flights.

[Darren Jones]

But the issue with unaffordability comes at the departure gate when customers who use comparison websites and book flights they can afford based on the ticket price alone have no choice but to take the flight and go on their summer holiday with their children or go home. That is why additional charges need to be highlighted effectively and why families need the ability to enforce their rights.

One family told me a story about when they turned up at the airport in Bristol. They had not printed their boarding passes and were told they needed to pay £70 for them to be made available. If that was not bad enough, they then realised that they needed to pay an additional £75 for their children to sit next to them because they had not paid for the seat reservations. Why should families have to pay to make sure that their children can sit next to them and pay for the printed boarding pass when it is perhaps available on their phone? Again, those customers knew nothing about the charges and were stung as a consequence of the lack of compliance with consumer law.

Some sectors are better than others in their compliance with consumer law. The best brands, as we have heard this afternoon, understand that building consumer trust is good for businesses and that putting the customer first is therefore a sensible strategy. Under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 and the Consumer Rights Act 2015, with the introduction of the concept of digital goods and services, we are making strides forward, but we must recognise that the law is already becoming out of date in the way in which the new digital economies are working.

To go to my original point, as we prepare for whatever Brexit means for the UK, it is vital that we not only protect our current framework of consumer law but that we work with our European colleagues to enhance the enforcement of consumer rights. We must continue to lead the debate as markets rapidly change and ensure that we protect our constituents not only under current law and in current markets but in future. I look to the Government to help us deliver that.

[Mike Amesbury (Weaver Vale) (Lab)]

I thank you, Mr Streeter, and the hon. Member for Chelmsford (Vicky Ford) for giving me the opportunity to contribute to the debate.

When it comes to Brexit, discussions here and in the media have tended to focus on high-level questions on trade deals, investment or diplomatic treaties. Important as the Brexit questions are, and the consequences will of course ultimately be significant, they are questions that can sometimes seem a little removed from the day-to-day life of many of our constituents. Today’s debate matters because it concerns something that has an immediate and constant relationship with almost everything that individuals, families and businesses do in my constituency of Weaver Vale and elsewhere. There is little more important in day-to-day life than having confidence in the quality of the food we eat, the effectiveness of the medicines we rely on, or the safety of the toys our children play with.

I want to pay particular tribute to the work that one of our north-west MEPs, Theresa Griffin, has been doing on this issue. Theresa and colleagues work every day on the detail that matters—in stark contrast to what we heard only yesterday from the Prime Minister, who made it clear that, 15 months on, the Government are no further forward in dealing with the detail that every hon. Member requires. Indeed, I should acknowledge the work that the hon. Member for Chelmsford did on these matters as a Member of the European Parliament.

Of course this debate is vital not just for consumers, but for businesses. One of the many fantastic features of my constituency is the range of its economy and industry—things that affect everyone. The logistics and distribution companies in Weaver Vale need certainty about what Brexit means for cross-border transport of the parcels and goods that they deliver. Household names in the pharmaceutical industry rely on the research and innovation work at Daresbury, and their success and prosperity is dependent on consumers having confidence in their products. I have every confidence that the famous Roberts Bakery will continue to produce some of the best bread anyone will taste, but to continue to be successful it will, like every food manufacturer, need certainty about the frameworks that it is working with.

As to one of the biggest challenges—the safety and value of data in the digital age—my constituency is affected at almost every level. At one end of the spectrum, many individual householders in Weaver Vale are currently locked in dispute with broadband providers about the quality of their service—or in some cases the complete lack of it. The EU is committed to achieving speeds of 1 gigabit per second by 2025. By contrast, the UK’s ambition is a mere 10 megabits per second—a hundredth of that speed. We are told by some members of the Government that we need to be “ambitious” about Brexit, but my constituents are being given 1% of what they might otherwise have been entitled to.

[Vicky Ford]

On the point about inadequate broadband—and, indeed, the mis-selling of broadband—perhaps I may bring to the hon. Gentleman’s attention the fact that during negotiations on the telecoms directive the Brits pushed for stronger regulation, to make it against the law for anyone to mis-sell broadband and promise higher speeds than they could get. The Europeans refused to introduce that measure. Brexit gives us an opportunity to take new measures on behalf of consumers, especially on issues such as broadband.

[Mr Gary Streeter (in the Chair)]

Order. Interventions should be brief.

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[Vicky Ford]

I thank all colleagues who have taken part in this debate, and especially the Minister for answering it. The UK has a strong history of consumer protection, and I am delighted that she has committed to its continuation with no reduction in consumer protection. I am also delighted to hear that we will continue to share intelligence with our neighbours to ensure that consumers are protected, and that we are committed to very high standards.

In this debate, food and animal welfare standards in particular were raised numerous times. Those are, of course, competencies of the Department for Environment, Food and Rural Affairs. The first time this Parliament when the Secretary of State for Environment, Food and Rural Affairs took questions from the House, I was honoured to be drawn to ask the first question. My question was whether we would maintain high standards for food and animal welfare post-Brexit; he said yes. It is a key part of consumer protection that we do not mislead our consumers. We should not mislead our voters. This Government are committed to maintaining high standards for consumer protection, animal welfare and food. I thank the Minister again for saying that those would remain priorities.

Question put and agreed to.

Resolved,

That this House has considered the effect of the UK leaving the EU on consumers and consumer protection.

[Mr Gary Streeter (in the Chair)]

We now move on to our next debate, as I see that the protagonists are here. Would Members leaving please do so quietly? This is a half-hour debate, which seems to be extremely popular; fortunately, I am not chairing it. If colleagues will take their positions, we will move swiftly on.

Oral Answers to Questions

Vicky Ford Excerpts

Tuesday 12th September 2017 Commons Chamber

[Joseph Johnson]

None the less, I assure the hon. Gentleman that we are engaging very closely with the companies involved and will follow up on his points.

[Vicky Ford (Chelmsford) (Con)]

14. In my constituency of Chelmsford, more than 500 jobs at Teledyne e2v are directly involved in the space sector. We are making the cameras that will go on satellites out in space to see whether there is life on other planets. Will the Minister reassure my constituents that the UK’s ongoing contribution to the European Space Agency is being considered?

[Joseph Johnson]

Absolutely; we are committed to our ongoing membership of the European Space Agency. As I said a second ago, we have just provided €1.4 billion of new funding for its programmes. Teledyne e2v in my hon. Friend’s constituency makes an important contribution to the success of the programmes that ESA is running.

--- Later in debate ---

[Greg Clark]

The hon. Gentleman is an intelligent fellow and knows that the route to building productivity in this country is to look to the long term to establish, in a serious way, a shared analysis and determination about what is to be done. On skills, for example, I hope he will share our view that by investing in technical education through the new T-levels and extending the hours for which people are educated, we are taking a step towards addressing what is a generational challenge for the UK economy.

[Vicky Ford (Chelmsford) (Con)]

More than eight out of 10 British manufacturers export elsewhere in the EU and tariffs or customs delays could have a negative impact. Will the Secretary of State confirm that the Government will seek to negotiate transitional relationships that maintain the economic benefits of the single market and customs union until a new relationship with the EU can be implemented?

[Greg Clark]

It is completely understood that a cliff edge would be bad for business. Companies need to have the confidence to be able to make investment decisions over the next few months and years. That acceptance across Government is welcomed by business.