New Clause 1 — Independent advocacy: report

Part of Prohibition of Unpaid Internships – in the House of Commons at 3:00 pm on 13th May 2014.

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Photo of Jennifer Willott Jennifer Willott The Parliamentary Under-Secretary of State for Women and Equalities, Assistant Whip (HM Treasury), The Parliamentary Under-Secretary of State for Business, Innovation and Skills 3:00 pm, 13th May 2014

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.