My Lords, I thank the Minister for the clarity of his introduction and, indeed, for his willingness to discuss the Bill with us. We look forward to working with him in Committee. I think he knows that our disappointment is about not what is in the Bill, but what is lacking. With only small exceptions, we like what is there, but that is because it is largely a consolidation Bill.
Our regret is that the Bill, with its wonderful title, is rather a wasted opportunity, which could have strengthened, rather than just clarified, consumer rights. We of course welcome the simplification and the improvements in the Bill, such as the right of returns and refunds, clarity on repairs, the reperformance of service and protection against small print. We very much welcome the possible redress for breaches of competition law, and, at least in theory, some possible collective redress for breaches of consumer law. However, as that depends on Trading Standards, and as it is being reduced to Lilliputian proportions, we worry this will be a measure in need of enforcement.
We will want to discuss why, despite the very good advice of the BIS Select Committee that the services definition,
“should apply an additional outcome-based liability standard”,
for services, the Government require only the exercise of “reasonable care and skill”, regardless of the actual quality of the outcome of the service provided. We will also want to debate how the Bill will cover public services where there is some payment or copayment by the recipient. Indeed, as that was acknowledged by the Minister only during the Bill’s passage through the Commons, the issue of the effect on the public sector is missing from the original impact assessment. It is slightly regrettable that we saw the extra 240 pages of the revised impact assessment only this morning. Noble Lords will not be surprised that I have not had time to digest that since then. Could I therefore shortcut that and ask the Minister to outline the scope, cost and benefits of the major, and welcome, advance of the consumer rights that apply to public goods and services where there is an element of payment or copayment?
Our approach to consumer rights is to put empowered consumers at the heart of the economy and society; to drive markets that work; to ensure that consumers get the benefit of any advances; and to have an economy that works for all. The generally accepted consumer principles promoted by representatives of consumers, across both goods and services, are access, choice, quality or safety, information, fairness, representation or advocacy, and redress.
On redress, we regret that the implementation of the EU directive on alternative dispute resolution is not part and parcel of the Bill, despite the Minister having just referred to the importance of redress, and despite that directive having sat on the Government’s desk for a couple of years. Rather oddly, it is running in parallel with the Bill, rather than as a part of it. We have been promised a response to the consultation by some unknown date. We have also been promised a response to the Public Administration Committee’s report on ombudsmen “by the summer”. It is
Despite the welcome that I have given to most of the Bill, we have one major difficulty with it—the, I have to say, preposterous idea that trading standards officers will have to give 48 hours’ written notice of inspections. That would seem to be a perfect time in which to dispose of counterfeit or mislabelled goods, and it will also add extra red tape for those hard-pressed local government trading standards officers. It is also in stark contrast to the new unannounced visits from Ofsted or indeed food standards inspections. Moreover, as the Minister has just said, the Bill will require letting agents to display their fees, but of course if trading standards officers have to give 48 hours’ notice rather than being able to pop into a letting agent as they walk past the high street, there will surely be 47 hours in which the fees will go up.
My noble friend Lord Stevenson will raise our concerns over digital content later in the debate. For the moment, I want to draw the House’s attention to our regret at what is not in the Bill. There is nothing on secondary ticketing, on the rights of tenants or on double-charging by letting or estate agents. We have plenty of examples of charging both the tenant and the landlord or the seller and the buyer. There is nothing to strengthen point-of-sale information, nothing on the rip-off logbook loans, nothing to stop unreasonable charges on booking fees, nothing to help consumers to get a fair deal on car insurance, nothing to ensure that every regulator has the consumer interest at heart, nothing to help prevent micro-businesses being ripped off, and no guaranteed advocacy to assist consumers to challenge poor service or shoddy goods. There is nothing to ensure—something that I know to be of interest to this House—that people can continue to receive their invoices or pay bills by post, despite 7 million adults, some of them very vulnerable, still never having used the internet. Surely they should not have to accept online-only communication. There is nothing to tackle that scourge of consumer complaints, which we in this House have also had—nuisance calls.
Those are the sorts of problems facing today’s consumers, but the general demand for a better deal for consumers is not new. In 1962, President Kennedy laid out what we might use to test whether this Bill is fit for purpose. He wrote that all of us deserve to be protected against fraudulent or misleading advertisements and against unsafe products, and that we deserve the right to choose from a variety of products at competitive prices. He went on to outline steps to increase inspections of foods and cut back on deceptive trade practices and high utility bills, while recommending,
“a law to require consumers to know how much they are being charged in interest”,
“laws to tighten safeguards against monopolies and mergers which injure the consumer interest”.
He saw such rights as being,
“immensely important to the well-being of every American family”.
I think that much the same applies in our own country today.
In 1975, that great campaigner and parliamentarian, Barbara Castle, sought a “society in which every producer remembers he is a consumer too”. The Labour leader, my right honourable friend Ed Miliband, has said:
“Unaccountable concentrations of power ... don’t serve the public interest and need to be held to account”.
However, all too often, whether with goods or services, it is the consumer who is weak and the provider who can take advantage of this. The Bill should be the tool to balance this unequal relationship where providers have all the knowledge and where the purchaser, for some reason, is unable to shop around, whether through lack of time, money, know-how and expertise, disadvantage or location.
Whether they are after credit, buying tickets online, going to a letting agent or a bank, needing electricity, or trying to catch a bus, surely there are times when consumers’ buying power is not enough for them to get a square deal or redress when something goes wrong. They are the issues on which we will test this Bill. We know that the Conservatives resisted plain packaging in the interests of tobacco companies. They abandoned minimum unit pricing in the interests of the drinks industry, refused to adopt a code of conduct for banking and insurance and abolished the National Consumer Council. We wonder whose side the Government are on.
The Government had to be forced to regulate letting agents—welcome though it is that they have got there—but they then accepted only that they had to belong to an ombudsman rather than empowering the OFT to ban unscrupulous agents. This Government have produced a regulators’ code that requires regulators to work ever more closely with the businesses they are meant to oversee, with no mention whatever of the interests of those the regulators are meant to be protecting—consumers and citizens.
We see an energy market effectively rigged, at great cost to consumers, with energy companies making £100 profit a year from every family, a doubling from last year, despite a fall of up to 38% in wholesale prices and with millions struggling to cope with spiralling bills. The coalition has done nothing to reform our broken energy market, which is one of the most basic disadvantages for consumers. Even with the new inquiry, customers will have to wait until the end of 2015 to discover whether they are being ripped off. Yesterday we heard that there is worse to come, with consumers being expected to fund two-thirds of the cost—some £250 billion—to modernise infrastructure that is built, owned and operated by private companies. The PAC has asked the Government to assess whether households can afford years of higher energy, water and transport bills to pay for updating our ageing infrastructure. Those questions still remain.
On nuisance calls which, as I said, are of great interest to this House, despite lots of promises there has been a lack of action. We are waiting for the Government to implement their promise to lower the hurdle of “substantial damage” or “substantial distress” required under PECR, the relevant legislation. That is a hurdle that First-tier and Upper Chamber Tribunal decisions acknowledge is set too high for the Information Commissioner to be able to protect consumers. Despite his best endeavours, the Information Commissioner is hampered. A £300,000 fine he had imposed was overturned on the grounds of “inadequate distress caused”, yet the relevant consultation and subsequent action from the Government have not yet appeared and consumers may have to endure another year of this on their phones.
That is a catalogue of problems that has not been addressed, so while we welcome what is in this Bill, with the exception of the 48 hours’ notice of inspections, we wish it had gone further to tackle today’s detriment. Every consumer should be able to demand “the quality I pay for, at a price I understand, delivered on the date agreed, and a remedy when things go wrong”. That is what we will seek to get from this Bill, to make it truly a Consumer Rights Bill.