‘(1) Within three months of Royal Assent of this Act the Secretary of State must publish a report detailing how—
(a) better outcomes for consumers of public services; and
(b) more efficient decision-making processes,
will be ensured.
(2) A report under subsection (1) will consider—
(a) how each public service provider will ensure a formalised approach to ensuring independent advocacy is available for consumers at an early stage in the decision-making process for the provision of public services;
(b) the nature of an independent advocate to participate in this process, and the definition of independence, including how this could be supported by the conduct of any service provider;
(c) the effect of a breach in a consumer’s statutory rights as set out by this Act when a direct commissioning contract is in place;
(d) what formal status any independent advice provided will have in relation to decision-making, in particular, in instances where a public service continues to act contrary to such information and formal legal redress is sought;
(e) the role of the public sector ombudsman services in overseeing any such approach under paragraph (a);
(f) how a public service provider will report on their formalised approach under paragraph (a); and
(g) how the approach under paragraph (a) would ensure all consumers of services covered by this Act have access to a licensed alternative redress mechanism.
(3) For the purposes of this section a public service is any provided to the consumer directly by—
(a) a Government department;
(b) a local or public authority; or
(c) a trader acting on behalf of these organisations.
(4) For the purposes of this section a person shall be a consumer of public services under a “direct commissioning contract” when they enter any—
(c) consumer notice; or
(d) proposed contract,
for receiving a service which the person has a direct role in commissioning.’.—(Stella Creasy.)
Brought up, and read the First time.
With this it will be convenient to discuss the following:
New clause 2—Guidance for statutory regulators
(2) Guidance published under section (1) shall—
(a) detail how consumers should be informed of their rights and at what point this should happen;
(b) ensure that traders have the information they need regarding their responsibilities under this Act and other consumer rights legislation;
(c) define what may be a “reasonable time” for consumers to secure refunds, repairs or replacement, or repeat performance; and
(d) specify the sanctions available to enforcement agencies in cases where the guidance has not been followed.
(3) Within six months of the publication of guidance under subsection (1), the Secretary of State shall issue a code of practice in relation to the exercise of any and all the functions set out in the guidance, subject to the provisions of subsections (5) to (7).
(4) Any person exercising such a function must have regard to the code in determining any general policy or principles by reference to which the person exercises the function.
(5) Where the Secretary of State proposes to issue a code of practice under subsection (3), he shall prepare a draft of the code, and shall lay the draft before Parliament.
(6) Where the draft laid before Parliament under subsection (5) is approved by resolution of each House of Parliament, the Secretary of State shall issue the code.
(7) A code issued under subsection (6) shall come into force on such date as the Secretary of State may by order made by statutory instrument appoint.’.
New clause 3—Access to data
‘Schedule [Access to data] has effect.’.
New clause 4—Guidance based on the work of the implementation group
‘(1) Within three months of Royal Assent of this Act, the Secretary of State shall publish guidance based on the work of the Implementation Group.
(2) Guidance published under subsection (1) shall—
(a) advise on the period that a trader may retain sums paid by the consumer for services not yet supplied by the trader, where it is the consumer who dissolves the contract;
(b) further to paragraph (a), advise on the terms under which traders should manage the interest on such sums and make provision for the return of this interest to the consumer; and
(c) advise on whether it should be permissible to charge for a guarantee where that guarantee does not offer any undertaking to the consumer additional to their rights as set out in this Act.’.
New clause 5—Independent consumer advice
‘Within three months of this Act receiving Royal Assent, the Secretary of State shall produce guidance setting out requirements for all statutory regulators to report annually on the provision of independent advice which is free at the point of delivery, and to make recommendations on ensuring consumers’ rights are protected.’.
New clause 10—Powers of the Information Commissioner: nuisance calls
‘(1) The Data Protection Act 1998 is amended as follows.
(2) In section 40 (Enforcement Notices), leave out subsection (2).
(3) In section 55A (Power of Commissioner to impose monetary penalty), leave out subsection (1)(b).’.
New schedule 1—‘Access to data
Information for consumers
1 The Secretary of State shall report to Parliament within six months of Royal Assent of this Act setting out how consumers will have access to the information they require in order to make informed assessments of prices, charges and fees.
Supply of customer data
2 A report under paragraph 1 shall include details of how the Government intends to—
(a) make regulations to require all regulated persons to provide customer data relating to transactions between the regulated person and the customer, as set out in section 89 (Supply of customer data) of the Enterprise and Regulatory Reform Act 2013;
(b) enable third parties to make requests for customer data under section 89(1)(b) of that Act; and
(c) ensure customer data is provided in a form which enables the customer or third party to assess whether the price they are paying for a service is reasonable, which should have regard to section 89(7) of the Enterprise and Regulatory Reform Act 2013.
Designation of regulated persons and regulatory bodies
3 A report under paragraph 1 shall—
(a) review which traders, including the activities of any government, or local or public authority, as defined by section 2 of this Act, shall be considered a regulated person under section 89(2) of the Enterprise and Regulatory Reform Act 2013; and
(b) identify a relevant regulatory body to undertake the duties set out in paragraph 4 of this Schedule.
Guidance for regulated persons
4 A report under paragraph 1 shall include details of how the Government intends to require regulators of services which are provided by regulated persons, as defined in section 89(2) of the Enterprise and Regulatory Reform Act 2013, to produce guidance on the implementation of section 89 of that Act.5 Guidance produced for regulated persons under paragraph 4 shall include—
(a) how regulated persons should provide customer data;
(b) details on the ownership of customer data which shall include, but is not limited to—
(i) that customer data generated directly, at any point in the course of a contract, is owned by the customer;
(ii) that prior to any decision requiring the transmission of data in a format where the customer can be identified to a third party, direct consent of the customer as owner of the data must be secured; and
(iii) how regulated persons should recognise and publicise that such data is owned by the customer;
(c) how customers may consent to their data being shared with third parties under section 89(1)(b) of the Enterprise and Regulatory Reform Act 2013;
(d) specify sanctions for traders who are not able to confirm the consent of the customer to sharing their data;
(e) measures to limit the amount that may be charged for any such single request for data on behalf of multiple customers;
(f) how regulated persons, who hold data on customers on behalf of any government, local or public authority, can use this information to secure social and consumer benefits; and
(g) how regulated persons, who hold data on customers on behalf of any government, local or public authority, can contribute to a report under paragraph 7.
Access to information: public services
6 (1) The Secretary of State shall report to Parliament within six months of Royal Assent of this Act on how the Government intends to ensure that all consumers of public services, who have a direct role in commissioning them, are able to access information regarding any consumer contract or consumer notices which may reasonably be understood to apply to them.
(2) A report under sub-paragraph (1) shall have particular regard to—
(a) the access to information that consumers of public services require; and
(b) how access to information can ensure greater transparency on the work of traders.
(3) For the purposes of this paragraph, “public services” means the work of any government, local or public authority or traders offering services on their behalf.
Access to information: annual report
7 (1) The Secretary of State shall produce and submit to Parliament an annual report setting out an analysis of the cumulative costs and benefits of Government decisions relating to the rights of consumers and protection of their interests.
(2) A report under sub-paragraph (1) shall in particular address the effect on—
(a) household consumption;
(b) vulnerable households; and
(c) any other subjects as the Secretary of State decides.’.
We come to the Report stage of the Consumer Rights Bill. I am minded of the words of the great English churchman Thomas Fuller, who said that our lot was to be born crying, live complaining and die disappointed. Of course, as true Brits, we know that that approach can be best encompassed in a “tut”, but we see the Bill as offering much more than a “tut” for people who have been ripped off. We see the potential of the Bill to free us of that particular malaise, and with that in mind we have tabled a number of amendments that we hope will receive the support of the House.
We believe that the Bill should be subject to the tests—that they should be performed with reasonable care and skill—that it sets for goods and services. At the moment, it is found wanting, and that is why today we are looking for a repeat performance and hope of speedy redress. The new clauses speak to that and in particular to the Opposition’s approach to consumer rights, which should not be only about dealing with problems when something has gone wrong, but, when done well, could avert problems. For that to happen, consumers need three things—more information, strong advocacy and speedy forms of redress.
In introducing the Bill, the Minister has opened a veritable Pandora’s box, given how some of its clauses will be perceived on the consumer landscape in the UK. We are mindful that hope lies at the bottom of Pandora’s box, and we hope with the new clauses to bring hope for how consumer rights legislation could work. Let me explain what I mean. I want to turn first to new clause 3 and new schedule 1, which new clause 3 brings into effect. The schedule refers to the first principle to which I referred—information. How do consumers get the information that they need to make the right choices for themselves the first time? We know that having access to more information is vital to empowering consumers.
The Government’s research, “Better Choices, Better Deals”, argues that if consumers were able to use price comparison sites more effectively, they could gain £150 million to £240 million a year. That is why the Opposition welcomed many of the ideas and intentions behind the midata project to give consumers more access to their information in a portable and accessible format. In Committee we expressed concern that, despite the project, four years on, it is not really working. There is a lack of information coming forward to consumers. The Minister defended the slow progress of the midata project, telling us that taking action now would prejudice the results of a review of the project that she has commissioned, and she did not think that that would be beneficial to the programme or, ultimately, to consumers. We have tabled the new clause and schedule because we fundamentally disagree. We want to go much further.
Currently the midata project covers four areas of consumer data, but we think that the power in the new schedule offers the potential for a framework for improving consumer and citizen access to data in a way that can transform outcomes and improve our consumer markets; that would be good for business and good for Britain.
We do not understand why the Government gave themselves the power, under the Enterprise and Regulatory Reform Act 2013, to enact the midata project and yet have not done so. The first thing that new schedule 1 does, therefore, is put that power into effect to ensure that consumers get the information they need, in a portable and accessible format, about a key utility bill.
Every time we click, we create wealth—whether we are giving our contact details or browsing online, companies are harvesting information that drives their marketing and product development. Datasets such as store loyalty cards, medical records or tax affairs are an important and revealing resource for both the public and the private sector. Facebook is making more money than any of us can dream about from the content that we are creating. That stream of data should not be one-way. Citizens and consumers should have access to those data in a meaningful way, which allows them to start calling for the kind of products and services that they want.
My hon. Friend is making a number of key and critical points about the potential power of data in both the consumer and the public sector. Has she been able to detect a strategic or coherent approach to data access from the Government in respect of the Bill?
I pay tribute to my hon. Friend for the work that she is doing in the digital review that she is conducting for Labour, which reflects precisely what she is talking about—a strategic approach. That stands in stark contrast to the shambles that we have seen in relation to the care.data project, the tax return data project and some of the amendments that have been tabled to the Deregulation Bill.
This Government talk about data being like oil—a resource that can be exploited to make new industries and potentially huge profit margins. If we are creating it, however, we should also benefit from it. That is why in the new schedule we have set out a framework to enable that. We want to make sure that the British public are firmly in charge of their own data, so that they benefit from those data and how they can be used.
This should happen not just in the private sector, through the midata project, but in the public sector. It is important that we flag that up, not least because when the Bill was originally proposed, and in Committee, the Minister tried to tell us that it had no relevance to the public sector. She told the Committee:
“The purpose of the Bill is to look at the rights that consumers have in their relationships with business; it is not to look at any rights that consumers have when it comes to public services.”––[Official Report, Consumer Rights Public Bill Committee,
Only when we questioned her in the Committee did she admit that the provisions of the Bill affect the public sector. That gives us the opportunity to ask how we can ensure that consumers and citizens have access to data to make good choices in both the public and the private sector.
So far the Government have admitted that the provisions cover valuable benefits such as personal health budgets, university tuition fees and child care vouchers. Given the framework that the Government have set out, we think that the licence fee, perhaps controlled parking zones, bus fares and possibly even water and sanitation services—directly provided services that consumers pay for and for which they therefore have a contract with the provider—should also be covered.
There are concerns about access to services in the public sector, which the amendments would address. One in five of us has experienced a problem with public services in the past year, but a third of us who have experienced a problem with the public sector do not complain. We are what the Public Administration Committee has called a nation of “silent sufferers”. “More complaints please!” is the title of its report. That is not what is coming forward from the public.
As we all know, good complaints help to generate feedback. They therefore help to make services in the public and the private sector more responsive. I estimate that two thirds of our casework as MPs is about public service decisions gone wrong. Much of that is to do with what we would recognise in the private sector as information asymmetries—people not knowing what services they are entitled to and therefore getting a raw deal.
New schedule 1, which is inserted by new clause 3, is about the lessons that we can apply from the midata project to information across our lives in both the public and the private sector. We know that sharing data directly with citizens can help reform public services and improve outcomes, but we also recognise that the relationship that people have with the public sector is different from their relationship with the private sector, so regulators should look at how to make it work in both fields. We recognise that we are both providers of public services, as taxpayers, and also users and consumers of public services in our daily lives.
The benefits that come from releasing data in the public and the private sector are manifest. We need a clear framework to make sure that it is not only those with the loudest voices or the largest wallets who are able to access the benefits, whether it is giving patients the information they need on their health care to manage conditions for themselves, improving parent and pupil involvement in schools, or communities designing their own cities. The benefits from this process could be legendary, but the Bill does little to move that debate forward. Our concern is that as currently drafted the Bill could create further inequalities, as those who understand their rights in the public sector are able to use them but those who do not cannot.
Let me explain how we think the issue could be addressed. New schedule 1 is about access to information, allowing people to make the right choice the first time. New clause 1 acknowledges that choice is not enough to guarantee a good outcome. People often need an advocate, an expert or an adviser with whom to work through the options and decide what works for them. New clauses 1 and 5 both introduce a clear commitment to advocacy in the public and the private sectors to help improve the relationship betweens service providers and service users.
In the public sector, advocacy can not only improve outcomes but cut costs. A study in Nottingham showed that 60% of cases that a local advice provider was working with involved public sector decisions made badly the first time. Involving advocates reduced the number of complaints by 30%, reducing the burden on the public sector and improving outcomes for the users of services. It is a win-win scenario. The more challenge there is in the public sector, the more information and the more advocacy in the private sector, the more we can make our markets work better and our services serve our people.
However, it is clear from the work that we have done since the initial conversations in Committee that that approach, ethos and understanding of what the Bill could do for the public sector, how information could make a difference, and how advocacy could be beneficial, has not been progressed in Government discussions. It is worrying to us on the Opposition Benches to discover that having admitted that the Bill will cover sections of the public sector, the Minister has not had talks with the Department for Culture, Media and Sport about what that might mean for the licence fee.
Many of us might have watched the Eurovision song contest on Saturday night. Many of us might have had comments about the coverage—some supportive, some negative. Under the Bill, it could be argued that we have a right to a service performed with reasonable care and skill, so if we did not think that Graham Norton was the most erudite host, we could make a complaint. In theory, under the Bill, we would have a right to a repeat performance, a price reduction or a refund. That has huge ramifications for the BBC and for the licence fee, yet no conversations have yet taken place between DCMS and the Department for Business, Innovation and Skills on the matter. We are also told that the Minister has not spoken to Ministers in the Department for Education about how the Bill covers child care tax vouchers, yet she admits that it does. Clearly, the Bill opens up the possibility that some parents will be able to use such rights to challenge the provision of nursery services in their areas, whereas others who do not know their entitlement will not.
We know that the Minister has at least spoken to the Department of Health about how the provisions will affect personal care budgets. She has, apparently, had regular informal contact. Given that many of us know that the silent sufferers are often incredibly vulnerable people, frightened of complaining about a carer because they are frightened of what will happen next, regular informal contact, I would wager, does not cut it when the Bill could transform what happens.
The Minister has, however, spoken to some people in her own Department about tuition fees. Unfortunately, the Minister with responsibility for higher education tells us that no meeting has taken place with external stakeholders about how the Bill will affect tuition fees. That might be because in Committee the Minister was not entirely sure whether students were consumers—having spoken to students about their consumption patterns, I think we can agree that they are when it comes to paying tuition fees. That is why, when the Minister responsible for higher education tells us that there have been no meetings with student representatives, higher education providers and universities on the implications of the Bill, we are rightly worried. The new clauses are needed to put in place a framework to understand those implications.
Many of us may remember some of our university lectures, some positively, some negatively. The fact that we would have the right under the legislation to complain that they had not been prepared or delivered with reasonable care and skill opens that Pandora’s box. That is why the National Union of Students has said that it is concerned about how the Bill is drafted and the possibility that legal redress could be easier and more effective for students with greater resources, whether in terms of finance or access to legal services.
My hon. Friend is making some powerful points about the rights of consumers and public service users. Does she not find it strange that parties that are so keen to turn passengers and patients into consumers now do not seem to understand the implications of giving potential public service users consumer rights?
I absolutely agree. We all want to see an empowered citizenry. We believe that would be positive for our public services by encouraging feedback on how services work for the public. But the risk with the Bill as it stands is that those with sharp elbows will do well and those without will simply be left behind. I think that is why both Citizens Advice and Unison, which after all has considerable expertise in some of these relationships, support the amendments and say that they want to see further debate and scrutiny on how we ensure that we do not have a two-tier system, with only those services that have a direct relationship getting better service responsiveness because of such legal rights, and only those people who can access services and complain getting those rights.
Trading standards has told us how it often refers people to what it calls the “sausage machine” of local council complaint services. Under this new legislation, it is not clear whether trading standards would then be able to pick up issues. That could lead to real inequalities in both the public and private sectors without advocacy and clearer information rights, which is why we have tabled the amendments.
I also want to draw colleagues’ attention to paragraph 5 of new schedule 1, which we also believe will tackle nuisance calls. We recognise that the misuse of data is as important as the analysis of data and that there is a need to put in place a proper framework on that. Many of us will have had constituents complain about nuisance calls and texts. Indeed, only this afternoon, while waiting for this debate, I received a text telling me that I could get compensation for an accident that I have not had—perhaps it came from the Government Whips.
However, we know that there is a gap at the moment where it is hard for the Information Commissioner to prove that there has been a lack of consent, where companies themselves will not be clear about whether they have the consent of the person they have bombarded with text messages and phone calls. In one six-month period alone, 71% of landline customers said that they have received a live marketing call and 63% said that they had received a marketing message. We also know that the Information Commissioner receives about 2,500 complaints a month about unsolicited text messages. We want to close that loophole. The all-party group on nuisance calls also recommended tightening the rules on consent, and Ofcom has said that it agrees. Indeed, the Government’s own report on the nuisance calls action plan said that we should do more on consent.
Paragraph 5 of new schedule 1 would enable fines to be imposed for those people who do not show that they have the explicit consent of consumers to send them that kind of marketing measure. We think that is entirely proportionate and hope that Government Members, even if they are scrabbling to understand quite what the Bill would do in the public sector, will recognise the issue of nuisance calls and act accordingly to address it. I would also encourage those among us who speak up for taxpayers—perhaps Gary Barlow should take note—to support new schedule 1.
Indeed. “Take that” is the answer we would give on many of these things.
New schedule 1 looks at the cumulative impact of Government policy on households. Currently, among European nations only Estonia has a worse proportion of people struggling to pay their energy bills than the UK. Yet one of the issues that have been debated across the House is the impact of some of the long-term planning on the infrastructure building projects for our energy system in this country and the consequences for energy bills. Indeed, in November last year the National Audit Office published a damning report stating:
“Government and regulators do not know by how much overall expected new investment by the private sector in infrastructure will increase household utility bills and whether bills will be affordable.”
We know that the concept of affordability is contested by some, and we know from the evidence the Department for Environment, Food and Rural Affairs gave the Public Accounts Committee that it does not even have a target for affordability in relation to water bills. Yet many of us will have seen at first hand in our constituencies how people are struggling with those basic costs of living. We think that the Government should be able to publish an analysis of the impact of their own policies on the cost of living. Paragraph 7 of new schedule 1 asks for such a report to be provided by the Treasury. I am sure that Government Members who support transparency will want to support it.
I will say a little about new clause 2, which concerns implementation. After all, we think that with this framework we are offering the Government a way forward on information and advocacy, but we also recognise that it is no good having rights written on paper if they are not a reality in practice. One of the concerns that came up repeatedly in Committee—many of the Opposition amendments that the Government opposed related to this—is how consumers will actually access rights in practice. When will they know that they have a right to a repeat performance? At what point will the BBC tell us that we have a right to a price reduction because we did not like its commentary?
Those are all questions that the Minister said would be dealt with by the implementation group. It became a mythical beast in our minds, because it will cover so many issues, from point-of-sale information, information on remedies open to consumers, how businesses should be informed of these rights, the length of time before people can get a refund, the time limits people would get on a repair, replacement or repeat performance, or even testing consumers’ understanding of their rights.
Time and again the Minister said that we should leave it to a body of experts, which we believe—we are not entirely sure—includes organisations such as Citizens Advice, Which?, the Trading Standards Institute, the British Retail Consortium and even the Financial Conduct Authority. They are worthy bodies indeed to look at these issues, but we had some concerns in Committee, having seen some of the minutes of their meetings, which are not very frequent. Despite their good works, any the recommendations they make would not be statutory guidance. Therefore, new clause 2 simply states that the recommendations they make about the rules on how the Bill should be implemented should have meaning, that they should have real teeth, that it is no good saying that it would be good for consumers to be informed of their rights if that does not actually happen at the coal face or at the shopping till.
In proposing this first group of new clauses, we are trying to make this Bill what it could be. We are trying to find the hope at the bottom of Pandora’s box. We are trying to ensure that consumers have access to the information and advice they need to make good choices the first time around. The old model of politics, in which progress depends on centralising these abilities, will no longer work with our communities. The task at hand, we believe, is to give the public more control and more power over their lives to enable them to make the choices that they want to make first time. As it stands, the Bill will leave citizens to navigate services alone, without the resources, either money or skill, to struggle to make them work.
We want to do something different. We want to reform the public sector by devolving power to people, investing in the prevention and co-operation they need to make services work for them, to stand shoulder to shoulder with every consumer and every citizen, not blunting the efforts of those who already fight for services, but enabling more people to give the feedback about the kinds of services we want in the public and private sectors. We believe that new clauses 1, 2, 3 and 5 and new schedule 1 will enable that framework to be put in place, and we hope that the Government will respond positively to the points that we have made as a result.
I rise to speak to new clause 10, which stands in my name. Although I support paragraph 5 of new schedule 1, it is not just the lack of consent that I think is the problem with nuisance calls. My new clause has been promoted by the huge growth in nuisance calls and messages. In fact, on each occasion when I have been out on the streets recently, at least three people have come up to me to talk about the explosion in unsolicited contacts and said, “Can’t something be done?” There is a weak data protection regime and consumers feel that they have lost control of their personal information.
I am convinced that if I was on a desert island the first call I would receive would be someone offering me a loan to get off the island. For people in financial difficulties, in particular, nuisance calls and text messages offering high-cost credit, such as payday loans or fee-charging debt management services, can lead to the temptation to take out products or services that, if mis-sold—they often are—could substantially worsen their situation.
StepChange has done some research that shows that 1.2 million British adults have been tempted to take out high-interest credit as a result of an unsolicited marketing call or text. There is legislation to protect consumers against these practices. Unsolicited promotional electronic messages are banned, but the ban is widely flouted and inadequately enforced. My new clause would lower the threshold for firms breaching the Act. At the moment, the Information Commissioner’s Office can issue enforcement notices against these companies only if “damage or distress” can be demonstrated. It can also issue monetary penalties to firms misusing consumer data or breaking the laws on electronic communication under section 551 of the Data Protection Act, but only if
“substantial damage or substantial distress” to the consumer can be demonstrated.
I believe that those thresholds are far too high. They should be lowered so that firms can be issued with enforcement notices or fined for breaching the Act without the Information Commissioner having to demonstrate “damage or distress” or
“substantial damage or substantial distress”.
The current thresholds have resulted in a situation where it is next to impossible for the Information Commissioner to enforce penalties against these firms. A recent tribunal decision went against the Information Commissioner when a £300,000 fine was overturned despite the defendant sending hundreds of thousands of illegal text messages.
This situation cannot continue. We have to demonstrate that we are serious about stemming the flood of unwanted text messages and nuisance calls. Lowering the thresholds would send that message and allow the Information Commissioner to do his job—the job that consumers expect him to do. We need to take away the thresholds about distress to the consumer and simply tell companies, “It’s illegal to do this—let’s stop it now.”
I want to speak in favour of new clause 1 and new schedule 1, which call for independent advocacy and citizen involvement in decision making in public services. I commend my hon. Friends the Members for Walthamstow (Stella Creasy) and for Cardiff South and Penarth (Stephen Doughty) for proposing them.
I wholly welcome the extension of these rights into the public sector. It is only right that people should be able to seek redress when things go wrong or to expect their complaints about service failure to be treated seriously. It is certainly right that people should have more power to influence decisions made about them by other people. I worry that, as my hon. Friend the Member for Walthamstow said, the Bill in its current form will not allow that to happen as readily as it should.
A number of Labour councils are part of the Co-operative Council Innovation Network, of which I am very proud to be the patron. The councils involved are working together to find new ways to hand power to service users so that they have more control over the services they use and the people and organisations who provide them. That approach is already demonstrating that it can improve outcomes for citizens. One of the lessons those councils have learned is that handing people more power, on its own, is not enough. Many people who rely heavily on public services do so because they are extremely vulnerable or socially excluded. They lack the capacity or experience to exercise the power made available without additional support to allow them to do so.
Let me offer an example. Personalised budgets are a fantastic opportunity to give more control to people who rely heavily on care services such as home helps, day care, or assistance in managing chronic health conditions at home. Yet many of the people offered personalised budgets feel poorly equipped and supported properly to manage them. Research shows that this is one of the reasons why there has not been a higher take-up of personalised budgets, and that is a missed opportunity. The answer is to put in place the support that people need to exercise control. For someone not used to handling relatively large budgets, it can be a frightening experience to be asked to do so, particularly at a time when their health may be failing. Bringing budget-holders together with experienced advocates—people who are on their side and can help them to understand and articulate their real needs—can transform the situation. We need to build people’s capacity to participate in order to make this power meaningful.
Another example is children’s services. Many service users are children who have experienced severe trauma or disruption in their lives. They do not, of course, have any professional experience themselves of running things—they are, after all, children—but that does not mean they cannot take more control, as long as appropriate support is on offer. When I was elected leader of Lambeth council in 2006, the authority’s children’s services were rated by Ofsted as among the worst 3% in the country. By 2012, Ofsted rated exactly the same services as the best in the country by a considerable margin. One of the key reasons for that transformation was the active involvement of children in shaping their own services—but providing those children with support was fundamental in making that process work. That is why the new clause is so important in improving the Bill.
We also need much greater openness and transparency of information and data in public services. People cannot participate in decision making if they do not have full access to information. I was bitterly disappointed to see Croydon council, which covers the constituency I am proud to represent, failing to understand this. It took a decision to sell off the borough’s public libraries to a private developer in secret, behind closed doors. Doing it in that way fuelled public concern that the deal was not in the best interests of residents. That feeling appeared to be justified when the buyers, Laing, quickly sold the libraries on to another developer, Carillion—at a considerable profit, one would assume, but unfortunately we are not allowed to know.
These are public resources and public services, and decisions about them should be transparent and open; the public should be able to participate. At the council I led, I introduced a very simple open data charter which stated that the authority would publish everything that it was not legally prevented from publishing. Once we did that, the public started asking for data in different formats so that they could use them to scrutinise services more thoroughly and propose better ways to run services, and alternative providers to run better services. That approach helped to create community-run parks, a community-run youth services trust, more tenant-led housing estates, and even a new council website designed by the residents who were using it.
However, citizens need support to take advantage of these opportunities, or the potential for change that they offer will never be realised. We need the new clause and the new schedule if we want these powers really to work for everyone and not just for a privileged few.
I should like to speak in favour of new clause 2, which seeks to clarify how the Bill will be implemented and how consumers will be informed of their rights.
In particular, I want to ask some questions of the Minister about the implications for rail services. It was welcome news in Committee when, in responding to a question from my hon. Friend Stephen Doughty, the Minister confirmed that the National Rail conditions of carriage will be refreshed to provide stronger provision for consumers in order to make them consistent with the rights set out in this Bill. The operators’ trade body, the Rail Delivery Group, has said:
“The Conditions of Carriage are under review. They will be published by the end of the year and will be fully compliant with the Consumer Rights Bill.”
It also said:
“They’ll be more consumer-friendly in terms of the language used”.
That will be a huge improvement from the passenger’s point of view.
I have a number of questions about how this implementation will be carried out. Do the Government intend to conduct a wider review of the passenger protections in the National Rail conditions of carriage? They could use the Bill as an opportunity to strengthen passenger rights where, for example, the train operator fails to provide passenger assistance, which is so important for disabled passengers; where someone finds that the seat reservations on their train are not being honoured; where there are planned engineering works that the operator could have known about in advance but has not informed people about; or where someone finds on arriving at the station that part of the journey they expected to be by train will be on a replacement bus service.
If the intention is to carry out this wider review of the National Rail conditions of carriage, why has Passenger Focus so far been excluded? Can the Minister guarantee that there will be no watering down of passenger protections in the National Rail conditions of carriage that may be additional to the protections provided in the Bill? All the consumer protections in the Bill are subject to parliamentary scrutiny, and the public have had an opportunity to influence them and have a view on them. Changes to the National Rail conditions of carriage are not usually subject to such public consultation, but this is an unusual circumstance. Will the Minister clarify whether the proposed revisions to the National Rail conditions of carriage to make them consistent with the Bill should be subject to public consultation?
I have a few more questions about implementation and the consequent need for further guidance, as set out in the new clause. The National Rail conditions of carriage do not apply to light rail systems such as the Docklands light railway or the London underground, where separate conditions of carriage are set out by Transport for London. Have the Government made an assessment of the various light rail conditions of carriage? Do Ministers plan to exclude them from the rights in the Bill, as with the National Rail conditions of carriage, or, indeed, to do something different about them?
There are also a number of issues concerning equivalent protections and how they will be met. At present, under the national rail conditions of carriage, a passenger is entitled to a full refund only if they decide not to travel after the service is cancelled or delayed or when a reservation is not honoured and the ticket is unused. Passengers are entitled to partial refunds if they decide not to travel for other reasons, but they are subject to a £10 administration charge. Passengers who start their journey are entitled to compensation of only 20% of the price paid, and only if their service is more than an hour late. Although some rail operators offer a more generous delay/repay compensation scheme, that is not set out in the national rail conditions of carriage.
If passengers are entitled to a repeat performance, as set out in clause 54, on the grounds that the journey was not in accordance with the information given about the service, as outlined in clause 50, will they now be entitled to a full refund? Could that therefore be the stronger provision relating to compensation for consumers that the Minister mentioned when she responded in Committee in March?
I also want clarification on another issue. When passengers are affected by planned possession works by Network Rail, rather than the train operator, they will clearly be receiving a substandard service, but will they be entitled to compensation? I do not think they have such an entitlement at present.
Obviously, I am speaking in my capacity as a Back Bencher rather than from my position on the Front Bench. Many of our constituents are frustrated by their experiences on the railways, and they want to know that the rights set out in the Bill in relation to rail fares and services are being addressed by the Minister and that there is an opportunity to strengthen consumer protections in such an important area of policy.
I want to talk briefly about new clause 3 and new schedule 1, particularly because they relate to the private sector and one of the three sectors named under the Enterprise and Regulatory Reform Act 2013.
As Stella Creasy has said, this country, like the rest of the world, is undergoing a revolution in data in terms of their volume, richness and accessibility, and, in some ways, their associated risks. There is also a rapidly changing market in price comparison, and the hon. Lady has referred to some of the benefits that can accrue from that. The development of that market is not entirely benign and is certainly not without cost. There are two opposing forces: consumers’ ability to compare prices and services side by side tends to bring prices down, but the nature of the marketing—the branding land grab, the cost of advertising and particularly the pay-per-click auction model on the internet—tends to drive costs and therefore prices up. It is certainly true, however, that price comparison has great potential to make markets work better. I am very proud of everything the Government are doing with midata to help make that a reality.
One market that does not work at all is one of the three mentioned in the 2013 Act: retail banking current accounts. The actual cost to consumers of having a current account is, on average, £152 a year, but nobody we talk to, including informed consumers and even Members of this House, knows that. Whenever we talk about “free” banking, we should use inverted commas, because, of course, there is no such thing as free banking. If consumers could see how much they are actually paying, both explicitly in behavioural charges and implicitly through forgone interest, the retail banking market would work better because there would be more diversity and competition.
Critically and perhaps even more importantly—this touches on some of the new clauses and amendments we will debate later—the fact that people do not know how much their banking is costing them inhibits the development of new retail banking products. Such products include budgeting bank accounts—so-called jam jar accounts—for which people have to pay a fee, but through which they are much less likely to tip into debt, because they make it easier to budget money and also that tiny bit easier to save a small amount.
New clause 3 is not necessary because progress is already being made. The powers already exist.
The hon. Lady shakes her head, but the powers already exist under the 2013 Act. The Government are looking for voluntary progress, which I think is the right way to proceed on reforming markets. A review of progress is due about now, and I hope the Government will continue to do what they are doing. They have the reserve right to push for more and have said explicitly that if not enough is being done, they will consult on the wording of regulations in order to make those markets work better compulsorily. That is the right approach, as opposed to jumping the gun.
I rise to speak in support of new clause 4, which is in my name. Unlike other Members present, I was not familiar with this Bill until recently. I did not serve on the Bill Committee. The Minister may recall that I asked her an oral question two or three months ago about issues relating to warranties and additional warranties sold by retailers. My question arose not only from a specific constituency case, but from the related concerns of a number of constituents who have contacted me over the past three or four years.
In her response, the Minister drew my attention to this Bill, which was in Committee at the time, and suggested that I should look to it for comfort, so I did.
I also read the Committee’s debates on warranties. My hon. Friend Fiona O'Donnell is in her place and I recall from my reading of the proceedings that she raised some issues relating to electronic goods. She mentioned her experience in the past and I think she said that the situation may have improved since then. However, I tabled new clause 4 because of an experience that demonstrates that that is certainly not true in all cases.
My hon. Friend Stella Creasy has already referred to the implementation group, which seems to be the catch-all for everything that is going to happen at some unspecified point in the future. I understand that the intention behind the group is that it will ensure that legislated rights are translated into something meaningful for consumers. It is entirely right and appropriate for the new clause to seek to ensure that the implementation group should provide, at a specific point after the Bill receives Royal Assent, guidance on some specific issues.
Constituents tell me that what they are actually sold often turns out to be very different from what they were told they were being sold, particularly on additional or supplementary guarantees and warranties. A retailer will often tell them that what they are being sold will enhance their consumer protection and enjoyment of the product and provide them with a safeguard. It then turns out, however, that there is nothing more in the warranty than that to which they are already legally entitled or what is included in the manufacturer’s own warranty.
Does my hon. Friend agree that it is not just that the warranties are sometimes mis-sold, but that companies such as BrightHouse in the rent-to-own market make it compulsory for new customers to take out a warranty when they may already have their own household insurance on those goods?
My hon. Friend makes a very important point about that specific market. I am also aware, as a result of talking to my constituents, that there is almost an expectation on people working for other retailers to sell these warranties, even if it is not obligatory for consumers to have them. In some cases, they even receive a commission for doing so.
That leads me to my concern about a specific case, in which what was written in the signed document was clear, but the way in which the warranty was described and explained to the consumer certainly was not clear and was very different. In that case, a constituent of mine bought a television set from a high street electrical store. He was told that the additional warranty he took out—on top of the manufacturer’s one—would entitle him to a new set if anything went wrong within the five-year period. His television set broke down during that period, but he found in the small print that he was only entitled to a repair or a replacement, which was exactly the same as the manufacturer’s guarantee. That meant that, on the basis of what he was told in the store, he had paid what for him was a significant amount of money every month for something that was effectively worthless.
Fundamentally, I believe that retailers have a duty to consumers not to sell them products that they know to be worthless, which appears to be the case if a warranty simply duplicates existing rights. Warranties very often apply to electronic goods that are significantly expensive, so we can see how a consumer could easily be persuaded to pay for an expensive warranty scheme that delivers no extra benefit, as the retailer is often probably very well aware. That is an area on which the implementation group should certainly undertake some work. Some provisions in the Bill—for example, clause 30—relate to warranties, but they do not seem to cover that point.
In that case, I took up the issue with both the company and my local trading standards office. The trading standards office was very sympathetic, but the long and short of it is that such practices are entirely legal, and there is nothing it can do other than to advise people to be more aware next time. That will not be much comfort for someone who has spent a significant amount of money on something that does not meet their expectations or provide the protection to which they think they are entitled. I of course understand that this problem is not new—it was raised several times in Committee as well as previously in the House—but the implementation group should be charged with ensuring that it is dealt with, and the new clause presents an opportunity for that to happen.
My new clause also addresses the management of deposits. I tabled it after a local small business approached me about an account held with a telecommunications firm— TalkTalk. As many hon. Members will be aware from their constituents, telecommunications contracts for small businesses often require quite sizeable deposits. My constituent was asked to provide a bond of some £900.
The size of such deposits has been a subject of interest for the regulator. I draw the House’s attention to the outcome of a dispute between Apple Telecom Europe Ltd and BT on the level of security deposit required for services, in which Ofcom stated that it was unwilling to determine what an appropriate deposit might be. In the light of that, it is clear that the regulator is not currently prepared to step into that space, but the size of some deposits places a clear responsibility on policy makers to ensure that the rights of the consumer or service user are protected.
After terminating the contract, two issues arose for my local business: first, TalkTalk was in no hurry to return the deposit; and, secondly, when it did return the deposit, it did so without any interest. On the first point, TalkTalk made it clear that it would hold on to the bond beyond the end of the agreed three-year contract. Effectively, it intended to hold on to the bond or deposit until my constituent ceased to be a customer, at which point the onus was on my constituent to write to TalkTalk to request the return of the money. My sense is that the responsibility in that scenario is the wrong way round. It places all the obligation on the consumer, and all the potential benefit of not meeting the obligation on the retailer. Because the retailer was not required to return a bond in a timely fashion, it is clear that my constituent missed out on substantial interest payments on the £900. Given that such contracts may well be for significant lengths of time and may then be renewed, the money amounts to a significant figure over time, particularly for small businesses; it is far from trivial.
My new clause addresses both concerns by requiring the implementation group to report on the length of time for which a retailer may retain a bond after the termination of a contract and on the payment of interest on the money. It would not be unduly burdensome for the company to be required to place bonds in a separate account, the interest on which could be returned to the consumer at the end of the contracted term. I am sure that the Minister is aware of the significant precedents for interest to be paid on money that is held. For example, solicitors are required to place moneys they hold on trust for a client in separate interest-bearing accounts, as is made clear in the professional code of ethics given in the Solicitors Regulation Authority handbook. Equivalent provisions cover other professions in which businesses hold money on trust—for example, an accountant who holds funds for a client to settle a forthcoming tax bill. Beyond such examples, it is clear that there is a substantial licence for abuse. There have recently been concerns in the energy market about moneys retained from excessive direct debit payments. One of the Minister’s colleagues in another Department described it as unacceptable, and said that something needed to be done about it, and the same case can be made in relation to my concerns.
I am conscious that the guidance and regulation arising from the work of the implementation group will not apply retrospectively, and so will not be of direct benefit to those involved in the two cases that I have outlined. However, their experience carries important lessons for all of us to bear in mind, and their cases might and probably will be repeated along the same lines. For that reason, I implore the Minister to look sympathetically at new clause 4. I hope that she will see that it is about enhancing the rights of consumers who, in many regards, have been and are being given poor advice and are not getting the service that I am sure she and all other hon. Members would expect.
The work of the implementation group will obviously be significant, given the number of times that the Minister has referred to it in Committee, and I am sure that she will mention it again this afternoon. It is important that the implementation group gets on and delivers something, as the many people who have been following the progress of the Bill will expect. The new clause represents just one way in which there is a very clear path for the implementation group to follow in taking some action to benefit consumers and small businesses across the whole of the UK.
We have had quite a wide-ranging debate, which has been the case during many of the discussions on the Bill, because it covers so many issues. It is telling that the Opposition have tabled very few amendments; today, we are mainly discussing new clauses that attempt to add provisions to the Bill.
I want first to pause for a moment to reflect on the Bill, which has generally been accepted across the House as a good piece of legislation. It will benefit consumers—all consumers—and by setting out key consumer rights in one place, it will empower consumers. As we discussed several times in Committee, well-informed and confident consumers can experiment and shop around, which drives innovation, boosts competition and creates growth. The entire suite of consumer law reforms are estimated to be worth more than £4 billion to the UK economy over 10 years. Including the impact on consumers, business and the public sector, the Bill will generate £1.5 billion and the associated secondary legislation will generate more than £2.7 billion of benefit.
Some public services will attract rights and remedies under the Bill, as we discussed at length in Committee. That will be the case if there is a contract between the consumer and a public body for the provision of products that are within its scope, because the definition of a trader is wide enough to capture the activities of any Department and local or public authority. Consumers of public services provided under a contract will therefore benefit from clearer rights, clearer remedies and, ultimately, better outcomes. I think that we would probably all agree that that is a good thing.
What we are not doing—in a moment, I will explain why it is right and proper not to do it—is to change which public services are covered by consumer law. Public services that are currently subject to the Supply of Goods and Services Act 1982 and the Sale of Goods Act 1979 will be covered by the Bill. I will now turn to public services that are not covered by its provisions because such services are not provided under contract to a consumer. They include most NHS care, state-funded education and law enforcement services.
Let me be very clear: those consumers are nevertheless protected, and in a way that will often provide more tailored, specific and appropriate safeguards, designed to fit the particular service. Many of the tailored regimes already incorporate just the sort of protections that Opposition Members are pressing for—independent advocacy, regular reporting and established ombudsman schemes. In some cases, the protections already in place are similar to those provided by the Bill. For example, the rights that are consolidated in the NHS constitution are very similar to those in general consumer law, but are tailored for the provision of health care.
Where the protections are not similar, consumers benefit from even greater protection. Several sectors have well-established alternative dispute resolution services. For example, the Parliamentary and Health Service Ombudsman, the local government ombudsman and the housing ombudsman play an important role as key, respected arbiters for complaints about care, treatment or choice in public services.
The Government share the desire of Stella Creasy to improve consumer input into the delivery of public services. We are committed to further improving how the public sector uses complaints and feedback to improve service provision. In October last year, my right hon. Friend the Minister for Government Policy announced two further pieces of work to do just that. The first follows his recognition that UK Governments have not made nearly enough use of complaints as a tool for identifying systemic problems. He has set up a review of how Government Departments, agencies and public services can use patterns of complaints to improve the services that they offer.
The recent Public Administration Committee report on citizens and public services raises some very interesting issues, as well as revisiting some that have been looked at before, about how complaints could be used as tools to drive change for the good. We will consider carefully whether the approach that the Committee recommends is right for consumers and the public, and will focus on what might be the practical and delivery considerations of its ideas.
Secondly, my right hon. Friend the Minister for Government Policy will take a wider look at the role and powers of the public sector ombudsmen, and consider the case for a single public sector ombudsman. The Government are grateful to the Public Administration Committee for its inquiry on that issue. That report, alongside the Committee’s recent report on complaints, will be a valuable contribution to the Government’s ongoing consideration of the ombudsman landscape and complaint handling. On both those matters, my right hon. Friend will report to the Prime Minister in the summer. The Government will respond to the Committee’s reports in due course.
We prioritise making sure that consumers know their rights. That means all consumers, whether of public or private services and whether public services are provided under contract or under a tailored regime. Consumers of public services have access to advice, information and advocacy from Government-funded channels such as Citizens Advice and gov.uk. There are other bodies, such as Age UK, that act as consumer advocates, especially for more vulnerable consumers.
The Citizens Advice remit covers benefits, housing, employment, debt and money, consumer, tax, discrimination, health care and wider individual legal problems, as well as other issues. It has a very broad remit. It is right that consumers have a central source of advice and, if necessary, can be signposted to other help, where it is needed.
Does the Minister believe that public library users in Croydon should have a right to know why the council chose to sell the libraries off to one bidder rather than another, and that it should have taken that decision publicly, rather than in private?
Obviously, I cannot comment on the situation in Croydon because I do not know the details. However, the Government are committed to freedom of information and, in a moment, I will talk about the access to data and information that we are supporting in the private and public sectors.
We fully recognise that sometimes more intensive support is needed, above and beyond the advice that is given by Citizens Advice. That is why the patient advice and liaison service offers confidential advice, support and information on health-related matters. There are already independent third-party adjudicators in the public sector, for example at HMRC. Those systems exist to support consumers, often the most vulnerable, in making a complaint and having their voice heard.
There is a serious danger that mandating others to provide a service that overlaps what is in place will confuse, rather than strengthen, the landscape. We need to continue to make public services more responsive to end users, not dilute the central role of Citizens Advice and hinder its ability to act as a key advice agency by creating bureaucracy. We all share the vision of public services provided to a high standard, where consumer feedback and consumer choice work to push up standards. However, we do not need to bring them all within the ambit of the Bill to achieve that.
The transparency of data in the public sector, which has been raised by hon. Members, is a priority for the Government. In many areas, transparency is much more advanced in the public sector than in the private sector. Consumers of public services have access to a wealth of data, such as crime statistics and educational standards. Those all work to empower consumers, promote choice and accountability, and, ultimately, raise standards.
Let me make it clear that the Government support the principle that the public should have access to the data that are held on them. That is in line with our open data policies and activities, and with the approach that we are taking to the negotiations on the European data protection regulations. We embrace the principle that where social benefits can be obtained from anonymised data sets—so-called “big data”—that should be supported. That is why, alongside the midata programme, which is concerned with commercially held data, we are exploring how the data that are held on individuals by Departments might be made available to those individuals in a useful way. That work is in its early stages, but it is designed to address just the sort of issues that we have been discussing today.
As the hon. Member for Walthamstow said, we have been reviewing the progress with the voluntary approach that has been taken to the midata programme so far. I plan to announce the results of the review shortly, but in the meantime I can report that there was an encouraging development in March. In the personal current accounts sector, which was raised by Damian Hinds, we have secured a commitment from the big banks to provide customers’ transaction records—their midata—as downloadable files with a consistent format. That has been called for by Which? and the comparison sites. It is encouraging that by the end of the year the vast majority of current account holders in the UK will have access to their midata files. I hope that that reassures the hon. Gentleman on the points that he has raised.
We are working with all the parties involved to ensure that tools are available to use those files. We are confident that this approach will help consumers to compare more easily what is on offer in terms of price and service. As was highlighted by the hon. Member for East Hampshire, there is clearly a lot more to be done to encourage consumers to switch. We hope that by providing the information and working with comparison sites, we can ensure that that happens more often.
Our central objective is that the Bill should deliver rights that are much easier for consumers to understand and use. It is a vast improvement in terms of the simplicity of the language and the consistency of approach. However, we recognise that traders need to know their forthcoming responsibilities in good time before the Bill comes into force, and consumers need practical guidance with real-life examples of how the legislation works. Achieving that quality of communication is a significant challenge and requires planning, which we have been doing.
As hon. Members have highlighted and as we discussed many times in Committee, we have been working with an implementation group to develop appropriate guidance and effective channels of communication. The group is making progress and we will publish a timetable later this year setting out when the parts of the work will be done. We intend to have guidance for businesses available soon after Royal Assent, and it will be available for consumers when the legislation comes into force to ensure that people are able to access and understand their rights.
Will the Minister confirm whether the implementation group is looking at the specific issues that I raised: the retention of bonds and interest payments for small businesses, and additional warranties that are sold by retailers that do not provide any additional benefit to the consumer?
If the hon. Gentleman will bear with me, I will come to those matters later in my speech and address the points that he raised.
I am sorry; could the hon. Lady repeat the question?
I apologise to the hon. Lady. That was a very sensible question. That is being looked at. As she says, more and more people are buying online, so this is an important outlook for retailers. We need to ensure that consumers are aware of their rights, whether they are buying things on the high street or online. As we discussed in Committee, some requirements are being introduced in June that will provide more information and safeguards for consumers who purchase items online. The implementation group is looking at all the ways in which consumers buy goods and services to ensure that they are protected and know what their rights are.
Lilian Greenwood asked a number of questions about rail conditions of carriage, but such questions would be much more properly put to the Department for Transport. If I may, I will direct her points to Ministers in that Department and ask them to write to her with details of how the conditions of carriage are being reviewed. That is not a matter for the Bill but it is being considered by the Department for Transport, and I will ensure that her points are raised.
In Committee the Minister said that although rail services are excluded from the Bill, it was intended that any rights introduced by the Bill be incorporated in the rail conditions of carriage to ensure that consumers were no worse off as a result of that exclusion. How will she ensure that that is implemented?
I understand that rail conditions of carriage are more detailed and already go further than the fundamental backstop rights in the Bill. However, the Department for Transport is reviewing them, and I will ensure that her questions are passed to Ministers so that she receives a more detailed answer. We will ensure that the Bill is not confused with the rail conditions of carriage, and that they take primacy.
Tom Greatrex raised an important constituency case, and I understand why he wished to do that. It concerned a business that had to pay a deposit for a telecoms contract, but the Bill does not affect business-to-business rights; it is about consumer rights and affects consumer-to-business rather than business-to-business contracts. I cannot comment specifically on the case, but it would probably not be covered by the Bill since it is a business case. Generally, however, we are doing more to protect deposits that are paid under contract.
Under the Bill, if a consumer enters into a contract for services and pays a deposit but then cancels, the trader does not have a free hand to retain that deposit. Any term in a contract that allows a trader to retain a deposit must be transparent and prominent to avoid challenge in the courts on grounds of fairness. Where such terms do not also provide equivalent compensation for the consumer when the trader dissolves the contract, they are liable to be challenged as unfair, even if they are transparent and prominent.
Our reforms also include clearer cancellation rights in consumer contracts regulations for consumers who buy at a distance or at home. Consumers must be informed that they have 14 days to change their mind and cancel such contracts, and a trader must reimburse them within 14 days of being informed by the consumer about a cancellation of the services. Those regulations will come into force in June, which will give consumers additional protection.
The Minister is generous in giving way again. Is she not missing the point that my hon. Friend Tom Greatrex made, which was that the Government missed an opportunity to protect small businesses in the Bill, to treat them as consumers and give them those rights? That £900 can be the difference between a business sinking or swimming.
As the hon. Lady will remember, we discussed this issue at length in Committee. The Government consulted on whether small businesses should be covered by consumer legislation in 2008 and 2012, and on both occasions the result of that consultation was that they should not be. Recent work by the Federation of Small Businesses considered whether micro-businesses should be covered by consumer law, and it too came to the conclusion that they should not be. There is work to be done on the protection of micro-businesses, and some regulators are considering treating them in a similar way. However, the Government consultation on consumer law resolved that it was far more complicated to include micro-businesses as consumers, and that was not the response to the consultation.
The hon. Member for Rutherglen and Hamilton West raised the issue of guarantees being sold with products. Consumer protection regulations already prohibit traders from presenting statutory rights as a distinctive feature of their offer, so a guarantee that offered no more than a consumer’s statutory rights would already be prohibited.
We have now made it easier for consumers to get their money back when they have been mis-sold something to which they already have a legal right.
Extended warrantees can offer consumers valuable additional benefits if done properly, such as accidental damage cover, regular servicing and so on. Before consumers buy extended warrantees in the shop at the same time as buying electrical goods, they must be informed of their statutory rights and their right to cancel the extended warrantee. In 2012 the Office of Fair Trading found recent significant improvements in the market, and although we recognise that there have been issues in the past, more and more consumers are now shopping around when looking at warranties. That is driving competition between warrantee providers, which seems to be increasing quality and lowering price.
Will the Minister elaborate on how that would affect customers of organisations such as BrightHouse and PerfectHome, where the cost of an extended warrantee is included in the price of the goods and is compulsory? What rights do those customers have to cancel and get some money back, apart from giving back the goods?
The issue is whether extended warrantees provide anything over and above the statutory rights provided under the law. If companies charge more just to provide statutory protection, that would be prohibited under consumer protection regulations. A purchase that somebody would make, such as a hire purchase or whatever, would depend on the terms of their contract. If the contract contains terms that are unfair, they may well be on the grey list—we will come to that in future discussions on the Bill—and such terms may be challengeable in the courts on grounds of fairness. If the hon. Lady is concerned about specific terms in the Bill, she might raise them at that specific point in our debate to see whether they would be covered.
I am grateful to the Minister for giving way again but I raised another point, to which she did not respond. It concerns what happens if a consumer buys a product with a manufacturer’s warranty and is then sold a supplementary warranty by a retailer, which does nothing more than the manufacturer’s warranty. Is that an issue on which the implementation group will be able to provide information for consumers?
That is the point I just made. If a warranty provides no more than the statutory rights and there is a charge associated with it, whoever is selling the warrantee may well be in breach of consumer protection regulations. When shops sell goods and the warranty is purchased at the same time, the full cost must be disclosed and consumers must be informed of their statutory rights. Consumers also have the right to cancel the extended warranty within a set period, and those rights must be made known to the consumers when they purchase the warranty. That is covered under consumer protection regulations, and there are also rights in this Bill. The circumstances that the hon. Gentleman highlights would be covered.
The other issue raised today is nuisance calls, which is a priority for the Government. I am sure that all hon. Members have had constituency casework on that, but there is no silver bullet to eradicate the problem. That is why in our action plan of
The Minister expressed surprise that some of these issues should have been the subject of new clauses. I am sad about that. In her responses, she is missing some of the debates that we had in Committee on just these issues—not just on implementation but on the impact of the Bill on the public sector. I am saddened that she has not answered what I call the Graham Norton question about the licence fee. We will take that as a yes, meaning that licence fee payers will be entitled to these rights.
The Minister said that a review of complaints is ongoing and talked about the role of the public sector ombudsman. This is what is causing so much concern and has prompted the new clauses. That is happening at the same time as this legislation is making progress, so a whole series of new legal methods of redress will be open to licence fee payers, personal care budget holders and students paying tuition fees. At the same time, a secondary process is being undertaken in government. The situation is confusing.
I am pleased that the Minister’s understanding of consumer rights in the public sector—and what they can offer—is evolving. In that sense, I am happy to give her the benefit of the doubt in what she says about new clause 2 and the implementation group. I am sure that the Lords will want to hear about its further progress. I am also happy to give her the benefit of the doubt about advocacy. Her conversion to the importance of advocacy is welcome: it was not clear in Committee, but it is wonderful to hear her talking about it now. She has been dragged kicking and screaming to the debate, and I refer to the comments made by my hon. Friends the Members for Croydon North (Mr Reed), for Makerfield (Yvonne Fovargue) and for Rutherglen and Hamilton West (Tom Greatrex), and even Damian Hinds about the importance of advocacy and what more should be done in the Bill.
On that basis, I am happy not to press new clause 5 to a vote, but I will press new clause 3 and new schedule 1, given what the Minister said about information. I have to point out to the hon. Member for East Hampshire that the Government have admitted that the midata project has stalled. The look on his face spoke volumes about the problems of getting access to those data.
The Minister said that the Government thought that people should have access to the data they create within the public sector: the Opposition think that people should own their own data. It is a clear dividing line.
New clause 3 and new schedule 1 set out some clear rights for people. On nuisance calls, the Minister said the Government are already doing something. Why does she oppose paragraph 5 of new schedule 1, which would place sanctions on those people who do not have consent, to send a clear message to the companies that are abusing the information that they have? It is beyond me. The issue of ownership of data is key, so we will press new clause 3, which would bring in new schedule 1, to a vote. The British public should not just have access to their data; they should own it. It is a clear division between the two parties on consumer and citizen rights, and an increasingly important debate for this country. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.