Consumer Rights Bill

Ian Murray Excerpts

Tuesday 28th January 2014 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

I am slightly disappointed that my hon. Friend the Member for Barrow and Furness (John Woodcock) is not still in the Chamber. He said that the debate would be dull, but it has been far from dull. We have heard about the Foreign Secretary’s gym membership habits, about Obi-Wan Kenobi, about the Sith, and about the gestation period for elephants. One Member mentioned Alderaan. We have heard about Monty Python, the Arctic Monkeys, and, at the tail end of the debate, about Arnold Schwarzenegger. It has indeed been an exciting debate.

The experience of consumers is a litmus test for future economic success. When consumers are confident, they can reward good business practice and respond to innovation. When their treatment is shoddy—as it was in recent notable cases such as those involving unsafe breast implants and payment system failures in the long-drawn-out saga of payment protection insurance—goods and services can become stuck in a cycle of weak demand and low trust. The essential element of a successful economy is the ability to ensure that consumers have that confidence, and to support their role as a primary driver in making markets work effectively—as we heard from the hon. Member for Dudley South (Chris Kelly)—not just for consumers, but for producers. That in turn helps to lay the foundations for UK businesses to succeed in other markets, throughout the European Union and, indeed, throughout the world.

As a number of Members have observed, the Bill represents a welcome step towards the simplification of a complicated matrix of consumer law and the adoption of an up-to-date approach to the changing world of the consumer in these digital times. It is not difficult to demonstrate the ways in which consumers can suffer detriment. For instance, how would the Minister feel if she went into a hardware store to buy a number of handles for her garden forks and left with four candles? Such incidents should be resolved quickly and efficiently for the benefit of the consumer. [Laughter.] I thank my hon. Friends for their laughter. I cued them up for it earlier.

There must be a number of building blocks for effective consumer confidence. First, there must be a fair framework: a framework of behaviour, expectations and rules that seem to work fairly for both consumers and producers, and which encourage innovation. Secondly, there must be effective enforcement. The rules governing any exchange between consumer and producer must be enforced so that persistent malpractice does not take place in the industry or any sectors of it. Thirdly, there must be trusted advice. When people want advice or support that they can trust, it must be easy for them to find it. Fourthly, there must be simple means of redress: when things go wrong, they must be put right without difficulty.

The United Kingdom has a record of good practice in all those respects, and the Bill will improve the position further. However, although it does a good job in relation to, for example, the fair framework, Ministers appear to be ignoring other critical pieces of the jigsaw such as enforcement, advice and funding. Let me give two examples relating to enforcement. First, the changes in consumer protection provision that the Government have introduced since 2010 have been muddled, and have created uncertainty and confusion on the consumer landscape. They abolished Consumer Focus and transferred some of its resources and responsibilities to Citizens Advice, but then they did not really know what to do with Consumer Focus, so they came up with the wonderful idea of rebranding it as Consumer Futures, so that it could do pretty much the same job as it had been doing before.

Secondly—this was mentioned by my hon. Friend the Member for Blackpool South (Mr Marsden)—the Government slashed local authority funds. That has had a significant impact on trading standards, making it harder for consumers to uphold their rights and seek redress. Aggregate trading standards funding has dropped from £245 million to approximately £142 million since 2010. Hundreds of jobs have been lost in a brain drain that is estimated to amount to 15% of the total work force.

Trading standards are at the forefront of the upholding and enforcement of consumer rights, but, as the Public Accounts Committee commented last year,

“there is a creation of trading standards deserts”

owing to funding gaps. The Government now want to remove the ability of trading standards officers to make unannounced inspections. In response to that part of the Bill, the Trading Standards Institute, which has done so much wonderful work in this area, said that it

“would urge the Government to refrain from removing the power of trading standards officers to enter premises unannounced. It is an essential tool for them to use and it is vital that when complaints are made, councils can investigate and tackle the problem immediately.”

Those are just two examples of areas in which the Bill is deficient in relation to the four pillars by which we will measure its effectiveness.

I should like to comment on some of the contributions that have been made to the debate this afternoon, starting with that of the Secretary of State for Business, Innovation and Skills. We all read his comments last night about the wrong type of growth; today, he was slightly more contrite and demonstrated a more positive attitude towards the Bill. He mentioned the importance of the European Union in relation to competition policy, and talked about the clauses in the Bill that would allow collective actions on competition issues. It would be good, however, if the Government could examine an extension to the policy on collective redress. May I point the Secretary of State to the consumer investigation that the shadow Business team completed last year, which has been published on the team’s website? That could give him some ideas on the kind of collective redress arrangements that we would all like to see, and that many Members have mentioned today.

The Secretary of State was absolutely right to pay tribute to the work of the Business, Innovation and Skills Select Committee, which has strengthened the Bill and will continue to do so. The contribution from my hon. Friend the Member for West Bromwich West (Mr Bailey) highlighted some of the issues that the Government should be looking at, and I also pay tribute to the other members of the Committee for the work that they have done so far to make the Bill better.

The Secretary of State said that the digital landscape was hugely complicated; that is certainly an area of the Bill that needs clarity. Concern has been expressed that it is not flexible enough to deal with much of today’s modern technology. He also talked about measures on cross-border enforcement, which we all welcome. When local authorities take the lead on trading standards, there often seems to be a David and Goliath relationship between them and the big corporations that they have to take on. I said earlier that trading standards enforcement across the country has been decimated; we need to do something to replenish those resources.

The hon. Member for Mid Norfolk (George Freeman) rightly pointed out that this was a consolidation Bill, but it is none the less the responsibility of the House to make it as good as it can possibly be. The Bill Committee will have a huge responsibility in that regard. The hon. Gentleman mentioned some of the areas of concern, including banking, utilities and the public sector.

My hon. Friend the Member for West Bromwich West, the Chair of the powerful and effective Select Committee, highlighted the significant range of issues in the Bill, and the need to respond to changing markets. He mentioned three essential elements—clarity of pricing, clarity of contracts and clarity of redress mechanisms—and said that the Bill needs to be improved in those areas if it is to be the best that we can make it.

I agree with my hon. Friend that further debate is required on the sale of goods provisions, on the right to reject the refund tapering that can apply depending on how long someone has had a product for. I hope that the Bill Committee will examine those issues. My hon. Friend also said that he was looking forward to the debate in Committee on the digital provisions, to ascertain whether the Government had got them right and whether they were flexible enough for our modern economy. He also gave good examples of how complicated the service provision in the Bill would be. I am sure that the Committee will look closely at that.

The hon. Member for Windsor (Adam Afriyie), who is no longer in his place, was right to say that highly competitive markets were good for the economy. He also mentioned small businesses, yet they are not included in the Bill as consumers. The Federation of Small Businesses has asked for that to be remedied, and I hope that that point will be looked at in Committee. Perhaps the Minister can tell us today whether small businesses will be seen as consumers for the purposes of the Bill.

My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) is a passionate advocate of tackling the abuses in the secondary ticketing market. She mentioned the Monty Python reunion show in her speech. My father-in-law is a massive Monty Python fan, and I decided to try to get some cheap seats for him for Christmas. The tickets went on sale at 9 o’clock on the Monday morning, yet I was able to purchase them on a secondary ticket site before the official site had opened. That shows that there must be something wrong. Those were not really secondary ticket sales, but there must have been some kind of collusion between the promoter of the event and the secondary ticket market. The Bill could be an opportunity to look at some of those things. Although that is a specific issue around secondary ticketing, the overall concept of consumer detriment from secondary sales is something that we should be looking at quite closely.

The hon. Member for South Thanet (Laura Sandys), who is sitting in a slightly different place, wants to broaden the debate, and I welcome that. Indeed, that is what my hon. Friend the Member for Walthamstow (Stella Creasy) tried to do. Although this Bill is, as my hon. Friend the Member for Barrow and Furness said, quite dry, technical and difficult in terms of the consumer landscape, it does have to be broadened out. Given that this is an opportunity to look at consumer law and the consumer landscape, it is important that we get it right. If the debate can be broadened out to some of those other markets, that is what we should be doing. I was also struck by the idea of a consumer champion to be put in across Departments in Government to ensure that consumers are at the heart of everything that is being done.

My hon. Friend the Member for Inverclyde (Mr McKenzie) was right to concentrate on the sales mechanisms of some industries and companies and on how the Bill should be used to assist consumers, particularly vulnerable ones. We are finding that constituents are increasingly coming to us with problems of nuisance calls and door-to-door selling, especially as they impact on vulnerable consumers and customers.

I was interested in the short contribution by the hon. Member for Stockton South (James Wharton). I agree that the law up to now has been deficient in terms of the digital landscape, and I hope that the Bill will be able to do something about that. Perhaps it is late in coming, but we do, none the less, welcome it. I am also pleased that he managed to speak for six minutes without banging on about Europe, which was fantastic.

The hon. Member for Dudley South talked about the importance of getting the Bill right in the digital sphere, but we have spoken about that already. The hon. Member for Foyle (Mark Durkan) endorsed the Citizens Advice briefing note—I think we all do—especially with regard to some of the simple steps that it suggests we put in the Bill to make things just that little bit easier.

Finally, the hon. Member for Strangford (Jim Shannon) raised a number of issues, particularly around the insurance industry. He mentioned the fact that some insurance premiums are not available in Northern Ireland in the way that they are across the rest of the mainland UK. It is worth emphasising something that he said at the end of his contribution, which is that we need to prevent the exploitation of the vulnerable. That should be the cornerstone of this Bill, and I do not think that anybody in the House would disagree with that.

It is also important to look at the competition in markets to give consumers confidence. Last year, Teresa Perchard from Citizens Advice said:

“Consumers have a long memory. When energy companies say ‘trust me’, to consumers, their experience says that they should expect the opposite. Consumers do not feel powerful in many markets.”

My hon. Friend the Member for Walthamstow looked at some of those markets that the Government must deal with if they do not want the Consumer Rights Bill to be irrelevant. She mentioned energy, pensions, payday loans and banking. Those are just a few of the industries that may be affected by the Bill.

Finally, let me turn to my hon. Friend the Member for Edinburgh East (Sheila Gilmore) who brings experience to this debate through the Scottish Consumer Council. She highlighted the sensible approaches in the Citizens Advice briefing, one of which must be about giving information to consumers when they are purchasing goods through stores or online. I have often been met, when reaching the till in a store, with a nice sign that says that my statutory rights are not affected. I know that that is a statutory requirement, but it is completely beyond me what it means. If we turn over till receipts from many organisations, we would find a whole plethora of legislation that a Philadelphia lawyer would find difficult to pick through never mind someone who just wants to return a pair of shoes that are either too large, too small or not to their liking. There is something in that Citizens Advice briefing that I hope the Committee will look at when it takes through this Bill. For example, there might be some simple proposals to ensure that information for consumers is clear.

There is also a substantial body of evidence that shows that businesses are not aware of the rules. Will the Minister address that in her response? What will the Government do to ensure that there is a wide understanding of the new rules among businesses as well as consumers? Yet again, the Business Innovation and Skills Committee deserves a considerable amount of credit for its detailed analysis in that particular area.

Finally, will the Minister seriously consider the research that has been mentioned, commissioned by the Federation of Small Businesses, on treating small businesses as consumers? I know that that is incredibly difficult and complex, but they are a huge pillar of the economy and much of the detriment goes not only from businesses to consumers but from businesses to businesses—indeed, the detriment tends to go from large businesses and Government Departments to small businesses. We should consider that in Committee.

Healthy, fair and competitive markets and effective methods for information sharing across providers are vital to building an economy that works for both consumers and businesses. Well-informed consumers make better customers for businesses, improved markets make better businesses for customers, and better informed citizens get better outcomes when redress is required. We will support the Bill on Second Reading but encourage the Government to improve it in Committee to ensure that the opportunity is not lost truly to make a step change in consumer rights in this country.