My Lords, like other noble Lords, I too support and welcome this Bill on consumer rights. It introduces a much needed single framework that clearly sets out in one place the rights and obligations of consumers and traders. The Bill succeeds in ensuring that consumers will be better informed about their rights and what they are buying. Simplifying and clarifying consumer law, as the Bill does, will mean that consumers spend less time trying to understand their rights and working out how to apply them. It also provides a firm foundation for empowering consumers. Where businesses treat their customers fairly, those enterprises will benefit and they have nothing to fear from this legislation. As the ombudsman services policy adviser, Simon Darby, has remarked:
“The Consumer Rights Bill represents an excellent opportunity to deliver an improved, enhanced and simplified rights and redress landscape that would tangibly improve the support and outcomes available to consumers”.
There is also, however, a widely held view that the efficacy of the Bill will rest entirely on the extent to which the legislation is enforced, both privately and publicly. Mechanisms such as the alternative dispute resolution referred to earlier by the noble Baroness, Lady Hayter, and the noble Lord, Lord Stoneham of Droxford, could significantly add to the Bill’s effectiveness. I was stuck that a briefing from Which? stated:
“The powers on redress and enforcement could be improved in the Bill”.
I hope that the Government will, as the Bill goes through its further stages, give that further thought.
When considering Bills such as this, which, as the noble Baroness, Lady Hayter of Kentish Town, and the noble Lord, Lord Wills, correctly remarked, have a consolidating function, it is important that we do not limit our ambitions simply to consolidating but introduce new provisions where they are desirable or necessary. I have three issues that I should like to see addressed in the Bill. The first is one that the noble Baroness, Lady Bakewell, referred to in her remarks and which I raised during Question Time today. It was also flagged up earlier this year by the Business, Innovation and Skills Committee, which recommended banning payday loan adverts from programming aimed at children. The committee said:
“We do not believe that these are appropriate channels for payday loans. We recommend that payday loan adverts are banned from programming aimed at children … We are concerned that paydayloans increase the pressure on families already struggling with unmanageable debt and believe that paydayloan advertsshould not be shown on children’s television”.
This Bill provides a timely and welcome legislative opportunity to implement that recommendation and to protect vulnerable children and families from advertising for high-cost loans.
The need to do so was underlined by the Children’s Society in a joint report with the StepChange debt charity, entitled, The Debt Trap: Exposing the Impact of Problem Debt on Children. Certainly, this was an issue that I encountered during my time as a Member of the House of Commons representing a constituency in the heart of Liverpool. I saw it regularly even before this massive increase in advertising and the use of payday loans. Debt can have an incredibly corrosive effect on families and communities.
The report found that problem debt can have a severe impact on every aspect of children’s lives, from missing out on the essentials, to problems with family relationships, and even bullying in schools. It states that more than half of children in families with problem debt say that they worry about their family’s financial situation. It argues that the Government should use the Consumer Rights Bill to,
“review the case for tighter restrictions on loan advertising seen by children”.
Legislation in this area would undoubtedly help in preventing children being bombarded with advertising from moneylenders, usurers and loan sharks, but children should also learn from their parents and schools about money management and the dangers of debt, not least in a country where outstanding personal debt stood at £1.443 trillion at the end of April 2014. Put another way, £161 million was the daily amount of interest paid on personal debt in April this year, while 6,519 debt problems were dealt with by the CAB each working day last year.
Ministers should also reflect that a petition calling on Ofcom to ban short-term, high-interest lenders from advertising on programming aimed at children gathered almost 10,000 signatures. But in their official response to the report of the Business, Innovation and Skills Committee, the Government rejected the demand and played down the scale of the problem, saying:
“The increase reported by Ofcom in the number of payday lending ads seen by children is concerning, but it is also important to note that they comprise a relatively small 0.6% of TV ads seen by children aged 4-15”.
This is complacent and disturbing. A recent survey by the Children’s Society, already alluded to, suggests that 56% of children aged 10 to 17 are seeing advertising for loans “often” or “all the time”. Conversely, only 21% said that their school taught them about debt and money management. Research published by Ofcom last December showed that there were 17,000 payday loan advertisement spots on TV in 2008. That increased to 243,000 in 2011 and reached a staggering 397,000 in 2012. Put slightly differently from the way in which the noble Baroness, Lady Bakewell, who gave the percentage increase, expressed it, that is a year-on-year increase of 64%. According to Ofcom, the average child aged four to 15 saw 70 payday loan adverts just last year.
At a hearing of the committee last year, Martin Lewis, founder of the MoneySavingExpert.com website, called for a blanket ban on advertising designed to “normalise” the idea of short-term loans among children. He accused the firms of,
“grooming a new generation towards this type of borrowing. If you think we have got problems now, you wait until 10 years’ time. Grooming is the right term. We are talking about a market that did not exist five years ago”.
He condemned the adverts as “deliberately contrived and controlled”, singling out Wonga’s adverts featuring puppets to appeal to children. These concerns appear to be well founded. A survey on MoneySavingExpert.com found that a third of parents reported their under-10s repeating payday lenders’ slogans, while 14% said that, when they had refused to buy a toy, their child had nagged them to take out a payday loan.
It is completely unacceptable that payday loan companies should be allowed to target parents through their children. We should consider whether it is acceptable to allow payday loan advertising to continue to mushroom generally, but there is no doubt that immediate action should be taken with respect to the targeting of children.
I appreciate that the Government have suggested that the Advertising Standards Authority and Financial Conduct Authority could ban irresponsible and misleading adverts which breach their rules. However I firmly believe that, rather than regulatory bodies banning particular adverts, the Government should use this Bill to make it explicit that all adverts targeted at children should cease. If the Government are not prepared to act, we as a House should do so. When the noble Viscount replies, I would be grateful if he would tell us what discussions the Government have had with Ofcom about banning payday lenders from advertising on children’s TV; whether the Government will consider using the Bill better to protect children from the advertising of payday loans; and how the Government will ensure that young people get financial education from schools, not from advertising of high-cost credit.
I now want to refer briefly to two points. In particular, I support the point made about local authority trading standards officers providing 48 hours’ notice of routine business inspections. As originally drafted, that requirement would have restricted the ability of trading standards officers to undertake unannounced inspections where they have reasonable grounds to do so—for example, because of a known risk relating to a business or type of activity. Maintaining the freedom of trading standards officers to turn up unannounced in those contexts, where they have reasonable grounds to do so, is vital. During pre-legislative scrutiny, the Trading Standards Institute, along with the Local Government Association, of which I am also a vice-president, made it plain that although it welcomes the overall direction of the Bill, it felt that that provision required urgent revision. I am happy to say that the Government have, to some extent, responded positively, but additional clarity is required. Specifically, there remains doubt about whether the exemption can be applied in respect of unannounced inspections relating to a known risk in an area, rather than to specific premises. I will listen with interest when the noble Viscount comes to reply on that.
I turn to my third and final point. Right at the heart of any credible concern for consumer rights must be concern for the safety of consumers. With the Eldorado tendency within the biotech industry, which sees vast profits to be made from genetic engineering and streets paved with biotech gold, we need much clearer safeguards, tempering the desire to make breakthroughs with proper concern for the safety of the public.
One example is the growing public concern about the Government’s proposal to introduce regulations permitting pro-nuclear and maternal spindle transfer in the hope of creating children who do not inherit mitochondrial disease. That issue was raised during debate on the Bill in the other place. Regrettably, a bipartisan amendment tabled by the admirable Mrs Fiona Bruce, the Conservative Member for Congleton, and the equally admirable Mr Jim Dobbin, the Labour Member for Heywood and Middleton, was not reached or properly debated in another place.
In Committee here, there will be a further opportunity to discuss this important subject. For today, I shall not go into great detail, but, in short, the Government have asked the Human Fertilisation and Embryology Authority on three separate occasions to produce a report on the safety of the proposed procedures. In its report, the HFEA has concluded that there is no evidence to demonstrate that the procedures are unsafe, but it has recommended a series of pre-clinical research experiments, some of which it describes as critical.
In March this year, the head of the United States Food and Drug Administration warned that there are not enough data on animals or in humans to move to those new techniques, and it is unclear whether the procedures would be effective. The noble Lord, Lord Winston, who is of course a leading expert in fertility treatments, has expressed his deep concern, stating that,
“the problem is that I do not believe there has been enough work done to make sure mitochondrial replacement is truly safe”.
Like the head of the Food and Drug Administration, the noble Lord warns that not enough research has been done on animal models and that more tests should be done to assess the risks to the child.
In addition, only earlier this week, two leading bioethicists said that the United Kingdom is rushing to introduce mitochondrial transfer despite the profound safety risks. Donna Dickenson, emeritus professor of medical ethics at the University of London, and Marcy Darnovsky, executive director of the US Center for Genetics and Society, pointed to America, where there are “no plans” to allow those techniques. In an article for
New Scientist magazine, the bioethicists highlighted concerns raised by an advisory panel to the US Food and Drug Administration that there is no evidence to support the use of GM techniques in humans. Despite the desire of the biotech industry to stampede us into giving a green light, the risks and safety concerns of those techniques are therefore considerable. Given the importance of public safety, it would be quite wrong to rush into those procedures.
In the context of a Bill that puts the safety and protection of people at the heart of its consideration, it is right to ask Ministers how they intend to provide the necessary scaffold of public protection when such developments occur. Clearly, unamendable regulations will not provide for safety thresholds but, as Members of the House of Commons argued, the Bill could do so.
The public need to know that Parliament has properly considered these matters and not been rushed pell-mell into signing them off while pre-clinical research remains unfinished. This is an issue I raised directly with the Secretary of State for Health only yesterday, and in correspondence and in questions to the noble Lord’s department and to the noble Earl, Lord Howe. At the very minimum, I hope that the Minister will reassure the House that no regulations will be laid before Parliament until all the pre-clinical research recommended by the HFEA has been conducted and written up in peer-reviewed journals that are in the public domain, where they can be scrutinised by Members of Parliament and concerned members of the public.
There is much more that could be said, but that can wait until another day and until later stages. For now, I welcome the Bill and hope that it makes good progress on to the statute book. I look forward to the reply of the noble Viscount at the conclusion of our debate.