Brexit: Consumer Protection (European Union Committee Report) - Motion to Take Note

Part of the debate – in the House of Lords at 9:26 pm on 16th January 2019.

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Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Cabinet Office), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Exiting the European Union), Shadow Deputy Leader of the House of Lords 9:26 pm, 16th January 2019

My Lords, I too thank and pay tribute to my noble friend Lady Kennedy for her committee’s report and for opening today’s debate. It has been a little unnerving, as it has exposed both the scale of the problems likely to be faced by consumers—even with a deal, let alone after a crash-out—and the paucity of the Government’s response; “platitudes” was the word used by the noble Lord, Lord Bilimoria.

I start with my regret about how the Government have disregarded consumers over the past two years, failing to engage properly with consumer bodies and representatives. I am sure that the Minister has been briefed that, as early as 13 February 2017, I had cause to write to his predecessor at the department, the noble Lord, Lord Prior, about the lack of meetings on Brexit with consumer representatives. Given that lack of engagement, on 22 March 2017, the chief executives of Citizens Advice and Which?, together with Martin Lewis of MoneySavingExpert.com, wrote to the Prime Minister stressing the importance of consumers to the economy and calling for a,

“cross-Government high-level working group focused solely on securing the best possible deal for UK consumers”.

Sadly, that never happened—and, despite my umpteen Written Questions, there has been no improvement.

Indeed, the last letter I had from the noble Lord, Lord Callanan, on 13 November, supposedly set out Ministers’ meetings with consumer groups. But when I looked, I saw that the list of 27 included discussions with the FCA, Ofcom, the BSI and some finance companies, as well as meetings with the CAB unrelated to Brexit. That is a poor record. In fact, there has been precious little involvement throughout the process, which is probably partly why the problems outlined today have been allowed to fester.

It is hard to know where to start, so great is the impact of leaving the EU on consumers, where, as we have heard this evening, the raising of standards and their effective enforcement have helped protect British consumers. Just as we can buy goods made in the EU, confident in the knowledge that they meet recognised standards, so too can our enforcement bodies—the CMA, trading standards and the police—share intelligence with equivalent bodies across the EU, while court judgments here can be enforced there and vice versa.

As we heard from the noble Baroness, Lady Burt, we touched on consumer rights enforcement last night. However, we did not mention that the local enforcement bodies—trading standards—have been halved since 2010, as the noble Baroness, Lady Burt, and my noble friend Lady Kennedy noted. CTSI warns us that it will be exactly those front-line trading standards which will have to unpick the uncertainties after exit and of course will have to carry out far more checks once we can no longer rely on safe products arriving from the EU. So will the Government now provide trading standards with the resources they need, as pressed by my noble friend Lord Anderson? Will they take steps to ensure that our enforcement agencies can continue participating in those EU consumer networks?

Half of the dodgy non-food products reported to RAPEX—the EU rapid alert system—concern motor vehicles. This is clearly serious, as enforcing standards is essential for road safety. However, the Government have not been clear on how they will ensure that cars do meet standards, given that eight out of 10 imported cars are from the EU. REACH, RAPEX and ANEC all facilitate data sharing, policy formation and enforcement. Loss of UK membership—and indeed, leadership, as my noble friend Lord Judd said—of these bodies will be drastic. It would be particularly sad in the case of ANEC, which represents consumers to the standard-setting bodies CEN and CENELEC—a point raised by the noble Earl, Lord Kinnoull. The chair of ANEC is a British consumer champion, Arnold Pindar, and it will be sad for ANEC as well as ourselves if the UK no longer participates. I have of course written and asked questions of Ministers about any ongoing role for the UK on ANEC—but they have gone unanswered.

Products will obviously pose a risk but so, too, will food safety. There is an immediate threat to food prices in the case of no deal, because tariffs will be imposed and a third of our food comes from the EU. There is also a threat to food safety, because outside of the European Food Standards Agency there will be reduced intelligence sharing and joint safety assessments. As I warned last night, the inane proposal that we just wave through lorries at entry ports in order to avoid road congestion is simply an open invitation for out-of-time or improperly labelled food products. So perhaps there will be more horsemeat in our lasagne and, if Mr Fox gets his beloved US trade deal, we can look forward to chlorinated chicken.

However, it is not only food that will be more expensive, as Which? has warned. In a no-deal exit, tariffs will be imposed on a range of goods, adding pressure to families already struggling with the cost of living.

While the focus of what we looked at was obviously consumers in the UK, the challenge of a no-deal exit for foreign travel will be enormous, let alone for the 1 million Brits already living in the EU who might suddenly find that they will need to take a driving test to get a Spanish or French driving licence once ours is no longer recognised beyond a holiday stay. Holidaymakers may need to revert to the old green card proof of insurance—which I think all of us in the House are old enough to remember—if driving abroad. We might also lose compensation for cancellations and delays.

I first wrote to the noble Baroness, Lady Sugg, on 5 February last year about whether UK citizens on an EU airline from a third country, or a UK citizen on a UK airline from a third country to an EU state, would still be covered by EU consumer rights legislation. Sadly, I have received no satisfactory reply and, since then, the threat of no deal has made compensation for any delays to or from the EU even less likely. Therefore, will the Minister set out the current position on this in the case of no deal?

As serious for travellers is that with no deal we will lose the EHIC, the European Health Insurance Card. Not only will that mean that our easy access to medical treatment will be at risk; older consumers—again, looking around the House—or those with pre-existing medical conditions will face real challenges in getting health insurance for travel in the EU. Can the Minister set out the Government’s plans to ensure that holidaymakers will still be fully covered across the EU in the case of no deal?

The UKECC, which everyone in this House will know stands for the UK European Consumer Centre, handles 16,000 cases a year and is partly funded by the European Union’s consumer programme. Perhaps the Minister can confirm the arrangements that his department is making to continue its role after March.

The Government’s own no-deal consumer rights paper fails to outline how consumer rights will be affected when buying from EU businesses. Indeed, there is a woeful lack of detail on how rights will be impacted, especially as the redress schemes will disappear. In fact, I maintain that UK consumers will simply have far less protection. It would perhaps have been a little more honest if the Government had made that explicit in the paper they published and had made some suggestions about how to mitigate the risk to consumers. Astonishingly, although the Government’s report warns businesses selling into the EU that they should keep apprised of future changes in EU regulations, it fails to offer any advice or support on how to achieve this. Both businesses and consumers must be updated by the Government, so some help on that would be of assistance. It is clear that the Government are not doing enough with either consumers or businesses, and that is clearly causing anxiety. Having listened to the Government’s radio ads, they are really content-empty, probably causing less rather than more clarity.

The recent Which? survey found that nearly two-thirds of the over-65s are worried about Brexit. Even among the 35 to 64 age group, there has been a dramatic rise of 25 percentage points since September 2016, with its “Brexit worry figure” now at 61%. Is it any wonder that consumer spending in December was down 1%—the biggest decline for over a year?

This House will recall that we passed an amendment to the withdrawal Bill to retain the Charter of Fundamental Rights, referred to by my noble friend Lord Cashman. A part of our thinking when we passed that was prompted by Article 38, ensuring,

“a high level of consumer protection”.

In sweeping away this objective in the way the Government have sought to do, I fear that they are sacrificing consumers on the altar of Brexit. It is a sad day after nearly half a century of improving consumer rights.