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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.