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Consumer Protection (Enforcement) (Amendment etc.) (EU Exit) Regulations 2018 - Motion to Approve

Part of the debate – in the House of Lords at 8:00 pm on 15th January 2019.

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Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Exiting the European Union), Shadow Deputy Leader of the House of Lords, Shadow Spokesperson (Cabinet Office) 8:00 pm, 15th January 2019

My Lords, I think everyone else on our Benches has gone away to celebrate, and we will join them soon. While thanking the Minister for setting out the reasoning behind these regulations and their purpose, I find it deeply regrettable that we have come to this: having to legislate to take away the protection of consumer rights simply because the Government have so miserably failed to negotiate a withdrawal agreement acceptable either to this House or—as we have now learned—to the other place.

Ministers are therefore threatening to crash out of our near half-century relationship, with all the rights and benefits that have accrued to consumers over that period—threatening no deal in an attempt to persuade MPs to vote for their inadequate deal. As we have seen, it did not work.

Meanwhile, the Government pursue these no-deal regulations, each and every one of which does two things. First, they show how much we have gained from and depend on our close working relationship across the EU, not only in trade but in all those associated areas, be it the recognition of legal judgments or—as in this case—the cross-border protection of consumer rights. It is an issue which, sadly, has been lacking throughout the Government’s approach to Brexit. We will have a longer debate on that tomorrow, when the Minister will also be replying, so perhaps I will just give him notice of one of the things I shall say then, which is to note the shocking failure of Ministers over two years to engage with consumer bodies and their representatives during their process of considering Brexit.

Secondly, the SIs do not only show how closely we have been intertwined with the EU; they are also testament to the disaster any no-deal exit would bring, because, literally overnight, long-standing protections would disappear. Consumers would feel this more than anyone else because it will happen immediately. The suggestion has been made, not by the Government but by some of their supporters, that somehow it would be a good idea to just wave through imports at our borders, particularly at our ports, to save congestion in Kent. That may be fine for the roads of Kent, but waving throughout unchecked lorries will mean we very quickly see shoddy, fake or unsafe goods in our shops, because we will lose all the protections that prevent that happening, and it will be consumers who pay the price.

So the regulations before us are a pitiful example of what will face us should we crash out on 30 March. As we have heard, what they show is that, with no deal, key consumer protection enforcement bodies—particularly trading standards and the CMA—will no longer be part of that absolutely essential cross-border network whereby rogue traders, rip-off companies, cartels and the makers of shoddy goods and services can be brought to book, as they can at the moment, by sharing intelligence and by pan-EU enforcement.

No matter what the Government say, consumer protection will be weaker. All these mechanisms have allowed trading standards bodies to alert their professional equivalents across the other 27 countries in the EU about unsafe products or traders, and to ensure that evidence found in one place can be used in another jurisdiction. That means that courts in one country can tackle a business located elsewhere, which is often the case when a consumer is buying something made in a different country. But under no deal—the outcome this House found unacceptable last night—our domestic enforcement authorities will no longer benefit, on behalf of consumers, from all those reciprocal arrangements and rights now granted under EU law. That is a big loss for our consumers.

But strangely and inexplicably, because of this self-injury to our consumers, the Government have decided, via these regulations, to similarly harm EU consumers by ending the requirement on our enforcement bodies to help other EU states in the interest of their consumers. They have made it voluntary rather than a requirement. That was never necessary. No rationale was given for this. Just because we have chosen to harm our consumers by leaving, I do not see why we are also willing to harm consumers in the other countries.

Furthermore, that was a policy decision. It was not automatic because of our exit. It was a policy decision to end our assistance to consumer bodies elsewhere, and therefore it was absolutely correct that our scrutiny committee insisted on this being an affirmative measure, because it is a policy and not an automatic decision. I hope there will be no further attempts to disguise policy decisions being taken by seeking to slip them through as negative orders.

Perhaps the Minister could explain the rationale for this mean-spirited decision. It is our Government—or even our people—who voted to come out, so why on earth should we make EU consumers pay the penalty? Could the Minister also explain why there has been no impact assessment for this measure? It is a vital measure for consumers and they will feel the impact, as will SMEs. They will have to do more of the checking which thus far they have not had to do because they have relied on any product coming from across the EU being safe to be sold here. Also, the cost will be paid even more by trading standards, not only because they will be hampered in their enforcement, but because they will have to do those checks on products arriving which currently they do not have to do. That should have been in the impact assessment.

Inexplicably, the Explanatory Memorandum says that the regulations will have an impact of less than £5 million. First, I do not believe it. Secondly, how on earth do the Government know without doing an impact assessment? Did they even contact trading standards to find out the impact on them of extra checks? Did they look at the costs where consumers are harmed and therefore compensation has to be paid? Did they look at the impact of enforcement taking longer when the intelligence is missing? Or is it simply that the Minister’s department does not really care too much about consumers?

In the same context, what assessment was made of the cost of the extra checks at borders once we can no longer rely on intelligence from trading standards abroad? We heard it said in the debate yesterday, “Don’t worry about the extra checks, because the checks at our border are done on a risk basis”. That means that they are done on the basis of intelligence. The moment that we take out intelligence, we lose our basis for a risk assessment, so the idea that there will no extra checks at the border is absurd. A little clarity from the Minister would be appreciated. The loss of access to these consumer protection networks is bound to be bad for consumers. It would have been more honest had the Government acknowledged this.

I have one further question for the Minister. This statutory instrument is supposedly “contingency planning” for no deal, but can he detail the Government’s intentions for the whole of the UK’s consumer regime should we leave in a slightly more ordered way with a deal? We would like to know something about the timing of the SIs that will be needed also for those circumstances.