Clause 3

Consumers, Estate Agents and Redress Bill – in a Public Bill Committee at 11:15 am on 17th April 2007.

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“Consumer” and “consumer matters”

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

With this it will be convenient to discuss the following amendments: No. 70, in clause 3, page 3, line 3, at end insert—

‘(ab) goods and services include those provided by means of the internet;’.

No. 4, in clause 3, page 3, line 4, leave out paragraph (b).

No. 3, in clause 3, page 3, line 6, at end insert—

‘(d) a person who purchases, uses or receives goods or services for the purpose of their own business.’.

No. 71, in clause 19, page 11, line 10, at end insert—

‘, including the right of online consumers to online complaints mechanisms.’.

No. 72, in clause 37, page 21, line 33, after ‘description’, insert ‘, including online consumers’.

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform)

I will consider amendments Nos. 2, 3 and 4 together, but I confirm that they are all probing amendments, with which I hope to clarify the purpose of the legislation.

I draw the Committee’s attention to amendmentNo. 2, to clause 3 on page 2. I will go quickly through the specifics and then the related arguments. The amendment would strike out subsection (3). My purpose is to clarify exactly how the Government define “a future consumer”. An existing consumer is entirely understandable, obviously, and one understands why future consumers must be a consideration, but the worry is that the resources of the council might be used to try to anticipate people who might be consumers when there are more pressing and emergent issues. I will be interested in the Minister’s views.

Amendment No. 4 also relates to clause 3, but on page 3, and would leave out subsection (4)(b). Again, we seek clarity. Hon. Members can see that subsection (4)(b) says:

“‘goods’ include land or an interest in land”.

My understanding is that, in law, “goods” has a distinct meaning. I refer to the Sale of Goods Act 1979. But, goods as defined here—namely, including

“land or an interest in land”— appears to be different. Could the Minister explain the difference and indeed the rationale? I ask that for perhaps one reason, although there are more, which I suspect others will be able to identify.

Given that the reference to an interest in land must, presumably, mean a financial interest, is there not a prospect of conflict in the Bill? Someone losingout from a property transaction could, as the Bill is currently drafted, seek redress both under part 2, as a consumer, and under part 3 through the estate agents scheme. That is a potentially conflicting message. I am also interested to know whether the Government believe that a good includes an interest in land, which I think would be a change in many people’s perceptions.

Lastly, amendment No. 3 would insert a new paragraph into subsection (4):

“(d) a person who purchases, uses or receives goods or services for the purpose of their own business.”

The reasoning is very simple: expressly to include and identify in the Bill small businesses—whether sole traders or limited companies—as consumers. Conservative Members, and I am sure many other hon. Members, are keen to see small businesses recognised as consumers; sole traders will be, because they act as individuals, but there is a grey area.

Photo of Tom Watson Tom Watson Member, Labour Party National Executive Committee

I read the amendment with some interest. As I read the Bill, the National Consumer Council will not be prohibited from representing business consumers, but amendment No. 3 would oblige it to represent them. That strikes me as perhaps taking away from the work already done by the excellent Federation of Small Businesses and the CBI. Has the hon. Gentleman received representations from the Federation of Small Businesses? It would be a shame if his amendment undermined its work.

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform)

The hon. Gentleman is right that our deliberations need to be appropriate. That is why I began by saying that these are probing amendments. I am concerned with ensuring that the legislation is clearly expressed and that the Minister’s intentions are clarified, so that we are clear that the Government regard small businesses, whether incorporated or not, as having rights similar to those of individuals. A classic example would be a small company that faces the loss of its electricity supply. Does the Bill expressly ensure that that small business has the same rights of redress as an individual might? That is what I seek to ensure.

Photo of Tom Watson Tom Watson Member, Labour Party National Executive Committee

This is an important probing amendment. I understand the point that the hon. Gentleman is trying to make, but I am concerned that we would inadvertently duplicate the work of other organisations. I am interested to know whether he consulted the Federation of Small Businesses before the amendment was tabled.

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform)

I talked to the Federation of Small Businesses at its national conference in Belfast. Several members represented to me their concern about the issue, which is that, sadly, small businesses do not often have the opportunity to be regarded as in the same way as a consumer. Similarly, I was at the British Chambers of Commerce’s annual conference yesterday, where various chambers expressed their concern to ensure that their members are properly represented. The Institute of Directors has raised such concerns with me as well.

The hon. Gentleman’s concerns are understandable, but I want to ensure that the Minister makes it clear in his reply that he regards, as I do, the rights of the small business in this respect to be just as important as those of the individual.

Photo of Steve Pound Steve Pound Labour, Ealing North

My right hon. Friend the Minister compared himself and my hon. Friend the Member for Birmingham, Hall Green to Butch Cassidy and the Sundance Kid. I recall that that film ended in a hail of bullets with both of them dying, but not before one of them had had the great pleasure of entertaining Katherine Ross on a slow-moving bicycle, so there are always compensations. The hon. Member for Hertford and Stortford has lowered himself from the high moral pedestal that he occupies by daring to compare my right hon. Friend to a diminutive, cross-dressing Glaswegian chanteuse called Janette, one of the Krankies. I tend to think of the two of them as The Proclaimers, wearing Arran sweaters.

I rise not to make some obscure reference to Scottish folk duos such as The Humblebums, but to oppose amendment No. 3, to which the hon. Member for Hertford and Stortford just referred. I do so in the spirit in which the probing amendment was moved; anyone who has had anything more than a cursory glance at the Bill will quickly recognise that it is a consensual Bill. Quite simply, we are seeking to do what all parliamentary representatives should do, which is to represent those who need the support ofan agency. With reference to the duopolies, it is unfortunate that I should be praying in aid David and Goliath later on.

In opposing the amendment, one has to ask why consumer organisations exist. They exist because there is an imbalance of knowledge and power between business and consumers and because consumers are unable to mobilise their interests in the same way as businesses. It can be something of a David-and-Goliath battle, as the Bill recognises. Consumers need a powerful advocate.

Photo of Steve Pound Steve Pound Labour, Ealing North

I am just getting into my stride, but of course I will.

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform)

I am grateful to the hon. Gentleman. As he will have noticed, the amendment refers particularly to “their own business”, so it is intended to apply to owner-managed businesses. Does he recognise that such businesses sometimes face a David-and-Goliath battle when dealing with some large utility companies?

Photo of Steve Pound Steve Pound Labour, Ealing North

The hon. Gentleman makes a good point, which segues with the point made earlier by my hon. Friend the Member for West Bromwich, East. We have an existing imbalance. My hon. Friend mentioned the CBI and the Federation of Small Businesses; there is also the Small Business Service. There are agenciesto assist that sector. It would inevitably confuse the purpose of the Bill, which is about consumer protection, if we were to widen the scope and definition of the wording in such a way. If agencies exist to support and advise, so be it. If we wish to bring them within the ambit of the Bill, we can do so. However, that is not what is being proposed today; this is about consumer protection.

Photo of Lorely Burt Lorely Burt Shadow Minister (Business, Innovation and Skills), Shadow Spokesperson (Business, Enterprise and Regulatory Reform)

Is the hon. Gentleman saying that, as he understands it, small businesses will not fall within the remit of the Bill? Although, as he and other Labour Members say, small businesses are represented bythe Federation of Small Businesses and its ilk—organisations that are funded by their members—are we going to deny small businesses the representation of national bodies that are paid for out of taxpayers’ money?

Photo of Steve Pound Steve Pound Labour, Ealing North

Earlier, the hon. Lady structured an exegesis around the word “may”. The new National Consumer Council will, indeed, be able to represent such businesses, but that is not its principle duty under the Bill. We certainly do not seek to exclude anybody—the Bill is a model of inclusion—but it also   recognises specialisms and existing structures. We do not wish in any way to cut across the bow of people such as the excellent Stephen Alambritis of the FSB.

My point is that by establishing the new NCC on a statutory footing we hope to level the playing field. Businesses are consumers too. They purchase goods and services; they heat and light their offices; theysend post to each other—occasionally, it arrives—[Interruption.] I am sorry, Mr. Weir. A basilisk stare from my hon. Friend the Under-Secretary has almost turned me to stone. What I should say is that, under this Government, the post always arrives and it is always welcome.

It is important for businesses of all sizes, like individuals, to have a voice and a means to put matters right and to obtain redress when things go wrong. It is recognised that a sole trader might well suffer many of the disadvantages of the ordinary consumer. However, most businesses are in a different position from that of members of the public.

Photo of James Duddridge James Duddridge Conservative, Rochford and Southend East

This is indeed a probing amendment, and it refers to someone’s own business. Initially, I thought that businesses included large companies such as ICI. However, as my hon. Friend the Member for Hertford and Stortford pointed out, the wording is “their own” businesses. Would the hon. Gentleman be reassured if the Government tabled an amendment that referred only to sole traders, rather than one encapsulating all small companies?

Photo of Steve Pound Steve Pound Labour, Ealing North

It is possibly a measure either ofmy naivety or of my complete trust in this excellent Government that I will always be reassured by any amendment that they table at any stage. However, I can already imagine the confusion that would exist if we were to seek to define the role of sole trader. We are not talking about Del Boy with a barrow and a three-wheeler in Peckham. It will be extremely difficult to define that role in the Bill. If I can make a little progress, the hon. Gentleman will understand where I am trying to get to.

As has been said by my hon. Friend the Member for West Bromwich, East, businesses already have effective representative organisations. In addition to those that have been mentioned, there are trade associations. We have mentioned the CBI, the FSB and the Small Business Service. Like many, I was surprised to hear Lord Truscott say—with some enthusiasm—in the other place that the new NCC, which will be funded, let it not be forgotten, by the taxpayer, could play a role in representing the interests of business consumers alongside those of ordinary consumers.

As I said in response to the intervention by the hon. Member for Solihull, nothing in the Bill will prevent the new NCC from representing the business consumer, but there is no obligation on it to do so. I am grateful for the briefing that we have received from people such as the excellent Helen Newton of the existing National Consumer Council, which clarifies that point.

The new organisation will decide which consumers to represent, in which areas and by what means. As an independent body, it is right that it has that freedom of  choice. However, when making decisions about its work plan, the NCC will look to these debates tohelp it to decide which course to steer. That is whyit is important that we put down these points of clarification now, and I am sure that the Minister will clarify this important matter in his summing up.

Surely, the principal focus of the NCC, put simply, must be to represent the interests of ordinary consumers and those of vulnerable consumers in particular. That must be the overriding purpose behind the whole architecture, structure and thrust of the Bill. Frankly, that focus is what is needed most, and I doubt that that is too contentious. To command public confidence and legitimacy, it is essential that the NCC has a clear sense of purpose. There cannot and must not be ambiguity, which is why I am worried that there could be a muddying of the waters if we start to try to widen the ambit of the measures that we are proposing.

Whom would the public think that the NCC was defending if the same businesses could, on the one hand, have redress sought against them, while on the other hand seeking redress? Builders, plumbers, second-hand car salesmen, mechanics and the like often cause consumers some unhappiness. There may well be occasions—not in my own case, obviously—when the interests of consumers and small businesses overlap, but there may also be times when those interests are in direct opposition. That would certainly cause some confusion in the minds of the public.

For example, the NCC has recently called for the abolition of quantity controls on taxis, which cause longer waiting times but protect the incomes of taxi drivers. So, on the one hand, there are the interests of the consumer, as the passenger; on the other hand, there are the interests of the sole operator of the cab. The NCC cannot fight in all directions at once and nor, frankly, should it.

One implication should be placed on the record. To be an effective advocate, the NCC will need to represent the consumer interest at local, national and international levels, in all forums, acting alone and through affiliations with international groups such as BEUC—I know there is a “business”, a “European” and a “consumer” in there, although I cannot remember exactly what it stands for, but I know that my right hon. Friend the Minister is familiar with it—and Consumers International.

Quite rightly, those organisations maintain strict membership rules. Unsurprisingly, since they are consumer organisations, membership is not open to organisations that represent the voice of business. So those pillars are already in place. If the NCC were excluded from those organisations, as it might well be if we were to widen its ambit under the amendment, its effectiveness could be heavily compromised.

Membership of those groups has enabled the existing NCC to campaign magnificently at European level and more widely on issues such as intellectual property; the unfair commercial practices directive, which many of us have spent an evening reading with great enjoyment; the marketing of food and drink products to children, including, I need hardly add, nutrient profiling and simplified food labelling, to name but a few. The NCC has worked on all those campaigns, in partnership with bodies such as BEUC and Consumers International, and frankly, they would  be severely jeopardised if the new body had to represent business consumers, which would prevent it from joining such consumer organisations.

I have no malice against the hon. Member for Hertford and Stortford; he and I have sailed the deep oceans of the world together, and we have bonded. He is a good and decent man, and I know what he is trying to do; but equally, I would urge the Committee and the Minister to recognise that there is the potential for a confusing ambiguity if we were to include the business sector within the ambit of the Bill. For those reasons, I hope that the Minister and the Committee will resist the amendment.

Photo of Lorely Burt Lorely Burt Shadow Minister (Business, Innovation and Skills), Shadow Spokesperson (Business, Enterprise and Regulatory Reform) 11:45 am, 17th April 2007

Follow that, as they say.

If I could just pick up on amendment No. 2 and the idea of excluding future customers from the remit of the Bill, the Liberal Democrats completely disagree with that. We do not see why it should be necessary to restrict the remit in any way, because the Bill already allows a great deal of discretion for those carrying out its provisions. The Minister may wish to explain that in a little more detail. Indeed, I take the point made by the hon. Member for Hertford and Stortford: there may be more of a probing element to the amendment than anything else.

Amendment No. 4 would specifically exclude

“land or an interest in land”.

Again, we are unsure why that should be excluded. We look forward to hearing the Minister’s comments. Amendment No. 3 is about including business in the remit of the Bill in respect of purchasing goods and services. In response to the erudite comments of the hon. Member for Ealing, North, I have already raised one or two concerns about that. We feel strongly that businesses are consumers too. We look forward to the Minister’s confirmation that businesses of all sizes, but particularly small businesses and small traders, are included in the Bill’s remit.

I should also like to say a word about amendments Nos. 70, 71 and 72. Although there has been no discussion on them yet, I assume that they are probing amendments. I am sure that the Minister will say that purchases on the internet are automatically included in the Bill. Nevertheless, the hon. Member for Gateshead, East and Washington, West is right to emphasise the importance of internet purchases, because of the lack of security that many people have experienced when buying goods and services online. There is a huge problem with regulation on the internet. I shall be interested to hear what the Minister has to say about how we can make people who buy goods and services on the internet more secure.

Photo of Sharon Hodgson Sharon Hodgson PPS (Mr Liam Byrne, Minister of State), Home Office

May I, too, say what a pleasure it is to serve under your chairmanship, Mr. Weir? I am pleased to be able to serve on this Committee, to scrutinise such an important Bill, which I am sure will give better consumer rights to every person in this country.

I should like to speak in support of my amendments Nos. 70, 71 and 72. Their purpose is to put a spotlight on what is happening in the world of online trading, giving us the opportunity to address a problem that is  emerging for consumers in this country. What I want to see is very simple: consumers who purchase goods and service online should able to complain online when things go wrong. These amendments would set down explicitly that the Government and the newly established National Consumer Council will make it a priority to resolve the inconsistencies of the rights available to consumers online. That is why I am pleased to have the support of the National Consumer Council, which says:

“It should be as easy for consumers to make a complaint or to redress poor customer service as it is to make a purchase. Consumers do have power and they can do their bit by not settling for second best and sticking to their guns on the standards they expect.”

The internet is clearly a fantastic tool, which is transforming peoples lives. At the same time though, it is beginning to run away from existing legislation. A failure to address that would leave us open to the risk of damaging long-term consumer confidence in online markets, and I am sure that no one wants to do that. More and more people have access to broadband and are buying online. About half the population are involved at present, although that is set to increase, as are the connection speeds, which will in turn encourage more people to use the internet.

It is easy enough to click and buy a flight, a fridge or flowers for a friend. Companies go out of their way to set up websites and encourage people to order online, but many are not making it as easy to seek redress and complain in the same way. Not only will they not allow online complaints, but existing protection for the online consumer is very fuzzy. Who pays if someone needs to send a product back? Which country is the company that someone is purchasing from based in? When people just bought goods in a shop and something went wrong, they could simply pop back to the shop, see the manager and be compensated if the shop was at fault. Now, they often have to navigate through a thicket of premium-rate numbers and overseas call centres. Most decent retailers probably either already have such a complaints system, or understand that it is the smart way to attract and retain customers, but others need to be obliged to do the right thing—and I hope that Michael O’Leary is listening.

I was first alerted to the need for legislation to look at online trading by people’s experience of Ryanair—although it is not the only culprit—which trades online but absolutely refuses to set up an e-mail for customers. Instead, it says that people should phone a number that costs 10p a minute, or write a letter or fax the company in Dublin. Ten pence a minute might not sound a lot, but if people try to call it, they could be online for about 40 minutes before they even get to speak to a human at the other end, if at all. Ryanair refused even to take an e-mail on this issue from me. It is no surprise that Ryanair has been described as the irresponsible face of capitalism.

This led me to table early-day motion 2643 last year on the Ryanair complaints mechanism, and I was pleased to see that it attracted cross-party support and had nearly 60 signatures. The early-day motion

“notes that Ryanair is one of the main providers of cheap flights, which are popular with consumers; regrets that Ryanair has no plans to provide an email address for such purposes and directs its customers to use either a telephone number”—

at a cost of 10p a minute—

“or to post or fax complaints to its head office in Dublin; calls upon online-based companies such as Ryanair to improve the ability of their customers to communicate with the company after sales by at least publishing an email address for this purpose so that redress for poor service is made less complicated and expensive”.

Given the company’s point-blank refusal to play ball, my early-day motion took a drastic step in noting,

“that Caroline Green, Head of Customer Services for Ryanair can be contacted at greenc@ryanair.com and that the geographical telephone number for its head office in Dublin is00 353 18121212, which is cheaper than its high tariff 0871 number”.

When my office later phoned to double-check the company’s position on establishing an e-mail, it refused to talk and insisted that I write to Dublin. My e-mails still go unanswered; so, Michael O’Leary, if you are listening, please get your act together and take e-mails. Michael is, of course, free to e-mail me anytime at hodgsons@parliament.uk, to say that he will set up an e-mail address. I can assure him that his e-mail will not go unanswered.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

Order. I think that the hon. Lady has made her point, and I am sure that she can send Mr. O’Leary a copy of the report of the debate. I ask her to come back to the terms of the amendments.

Photo of Sharon Hodgson Sharon Hodgson PPS (Mr Liam Byrne, Minister of State), Home Office

Thank you, Mr. Weir, and I thank the Committee for its patience on this matter. If the internet is meant to make life easier, its benefits must be a two-way street. Ryanair could not function without using online sales, and it should not function without utilising online customer services. That is the worst possible practice. Customer service should never be seen as an overhead, but as an integral part of a company’s relations with the consumer. People would not mind paying a few extra pence if they knew that they could receive a quality service if things go wrong.

Last year, the NCC produced an excellent report called “The stupid company: how British businesses throw away money by alienating consumers”. In one part of its analysis, the report comments:

“The stupid company appears distant from consumers and deals with them in a clinical and sometimes uncaring manner. People detest impersonal communications, and almost everyone complains about call centres, automated telephone systems and cold calling. Consumers react particularly badly when companies do not take ownership of a problem, or where an individual inquiry is met with a computerised reply that ignores the particular circumstances.”

Accepting these amendments would mean that we could seek to accept a rule of best practice. Companies cannot maintain an ephemeral online presence—“here when you want, gone when we don’t.” The purpose of the Bill should be praised; it is a good piece of Labour legislation that will give the little people the chance to stand up to the big boys. It is a chance to square the playing field and to ensure that consumers get the information that they need.

Clearly, the fact that the online world without borders and territories makes enacting catch-all rules difficult and complex, and I am not suggesting that we   should do that. There are already some EU provisions in place—hopefully, more are to follow with theunfair commercial practices directive—which would harmonise rights of European online consumers, but Britain should be proud to lead the way. We are proud to be doing so on climate change, with that leadership achieved by taking bold steps and coercing companies to do the right thing. We should be doing the same for online consumer rights. I am not the only one who feels that way: I am sure that if anyone in this room were to ask a colleague or friend, they would be able share tales of frustration when things go wrong after purchasing online.

The NCC is the focus of much of the Bill, and it is clear that it feels that anything that makes it easier for consumers to get what they deserve by complaining should be welcomed. It seems that at present, nowhere is the need for greater consumer rights so clear as in cyberspace. Any good Government should enable their citizens to empower themselves, and setting out a clear specification that the Government intend to do just that for those who purchased goods and services online would be an example of good governance from a good Government. Establishing lasting protection forthe consumer as the internet age reaches maturity is the reason that I commend the amendments to the Committee.

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office 12:00 pm, 17th April 2007

I will give a comprehensive reply to all the amendments, and the reasons why I will resist them. I know from my experience of being an Opposition spokesperson and a Back Bencher for my first 10 years in Parliament how difficult it is to table probing amendments. By their nature, they are rather lax in their wording. As a consequence of that, three out of four of the amendments tabled by the Conservatives are extremely anti-consumer in their individual consequences and in the intellectual input to what is being proposed. The other amendment makes a genuine, reasonable point. I hope to cover all the Opposition amendments, and I will also deal with amendments Nos. 71 and 72, tabled by my hon. Friend the Member for Gateshead, East and Washington, West.

I say to my hon. Friend the Member for Ealing, North that I take his contribution in the spirit in which it was intended. I shall not follow his line of argument, but we both reach the same conclusion that we will resist the Opposition amendment. I am not goingto do anything other than support the concept ofsmall businesses being treated as a consumer in all circumstances. I shall explain the legal basis of that in a moment. I also hope that I shall comprehensively cover the points made by the hon. Member for Solihull.

The Bill delivers real benefits for consumers with a new NCC, with a new remit and statutory powers and duties for the first time. A new statutory redress scheme for gas, electricity and postal services will resolve consumer complaints, not just arrange for them to be handled. A key objective of the Bill is to equip thenew council with the flexibility to act on behalf of consumers today and to anticipate consumers’ needs in the months and years ahead. Of course, that flexibility is coupled with responsibility and accountability. The new council will need to be able to identify and consult  on its priorities and it will need to be transparent, to account for what it has done to advance consumers’ interests.

Some of the Opposition amendments would reduce flexibility, cut down the scope of the new council and what it can do for consumers, and would prevent it from looking at the future needs of consumers. I shall resist those amendments, and others that try to undermine the new council and its pursuit of consumers’ interests.

Amendment No. 2 would have the effect of excluding future consumers from the scope of the new council’s remit. We are naturally keen to ensure that, when undertaking any of its functions, the new council should aim to consider the long-term implications for consumers. The amendment would not be beneficial to consumers. A responsible consumer body will need to be able to balance short-term issues against longer-term consumer benefit. A short-term focus on low prices in the market may not serve consumers well if it leads to under-investment or lack of competition and choice in the future. That is why the provision is inthe Bill.

Excluding future consumers would limit the flexibility of the new council to anticipate changing customer pressures. That is why we seek flexibility. The new council must be able to weigh the current position for consumers against a future position and the impact of what we do now as a society to address matterssuch as environmental conditions that will affect consumption in future years. It is critical that the NCC has the capacity to take account of all trends and the impacts—positive or negative—on the rights of consumers, and to participate and help with policy submissions. The NCC must be able not only to focus but to help to fashion policy in future years. We do not want an organisation that is just an advocacy body, which tends to deal with situations when they break down and there is a need for redress. We want a body with the ability to give the present and future Governments and Parliament its best advice on the marketplace and on the impact of changes in the marketplace on consumers. That is very important.

Amendment No. 3 purports to enable the new council to represent the interests of business consumers, which is appropriate and necessary. However, the amendment is not required, because the new council can already represent business. Clause 3 provides for a “consumer” as

“a person who purchases, uses or receives...goods or services”,

which includes business. The standard legal interpretation of “person” includes persons corporate or incorporate. In other words, the definition of a consumer in the Bill already adequately includes business consumers. That goes back to my hon. Friend the Member for Ealing, North’s point about the taxi driver.

For the record, I once represented London taxi drivers in my role at the Transport and General Workers Union—I remember it fondly. Despite all the legitimate complaints made about taxi drivers, who have to respond about their conduct to the licensing authority, it is also true that taxi drivers seek mortgages, purchase and sell property, and have to deal with issues such as electricity costs and water. There is  a legitimate role for a business to conduct itself as a business as well as, at the same time, having rights as a consumer. That is why the provision is important.

I hope now to give the legal explanation. From a personal point of view, I consider all of us here as small business people in our own right: we employ people and use goods and services to represent effectivelyour constituents. From time to time we Members of Parliament come across a problem with our own facilities, goods or services. It is very important for there to be absolute clarity that small businesses—or businesses per se—have the right to utilise the legislation and will be able to do so.

Amendment No. 4 seeks to exclude

“land or an interest in land” from the definition of “goods” in the Bill. That would certainly not be helpful to consumers. [Interruption.] Does the hon. Gentleman want to guess what I am going to say? But I will give way to him.

Photo of Ben Wallace Ben Wallace Conservative, Lancaster and Wyre

The Sale of Goods Act 1979 is very specific about the definition of “goods”. That definition has remained unchanged for nearly 30 years. Why have the Government decided to use the Bill to extend that definition to include land, when defining “consumer” by the consumption of services would probably be adequate?

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

The hon. Gentleman should have waited for the buzzer, but his intervention is well intended. As the law stands, rights in land such as lease or tenancy are called “interests in land”. That is what the law says and that is why the Bill is designed as it is.

Many of the most important and expensive issues facing consumers arise from their interest in property, so it would not be sensible to exclude the sector from the scope of the new council. With the powers provided in the Bill the new council will be able to investigate all the issues concerning consumers, including house purchase, sale or letting. The new council will be able to draw the attention of the Government to any issue that it considers need to be addressed. Therefore, it is important that definitions in the Bill are the same as definitions in law. The measure is not freestanding; the Government have not put it there on a whim. The aim is to ensure that the legal obligation that is placed on the new NCC, and its rights of investigation, inquiry and consultation, give it the widest possible scope to deal with the issues that consumers will raise with it.

Photo of Ben Wallace Ben Wallace Conservative, Lancaster and Wyre

I am not a surveyor, but I am concerned that we might be duplicating an existing provision. We already have the lands tribunal system to resolve disputes and investigate conflicts between the owner or provider of land and the consumer—the tenant. Are we not replicating unnecessarily?

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

No. The hon. Gentleman is mixing up a number of issues. I am not a lawyer, but we are dealing with leasehold and freehold, which are entirely different. Leasehold and freehold legislation relates, for example, to the rights of a leaseholder who has been treated unfairly under his lease, or who wishes to purchase the lease and turn it into a freehold but meets  resistance from the owner of the freehold. There is a legislative process to ensure that the interests of the leaseholder are represented.

Let me give another example. Some years ago we changed the legislation to deal with the situation in which the freehold of entire blocks of flats in London was held by a single freeholder, but the tenant or owner of each flat was a leaseholder. There is a requirement in law to protect the interests of such individuals in case, for example, the freeholder decides to refurbish the property, so that the refurbishment cannot damage the interests of the leaseholder or increase the capital value of the property to the extent that the freeholder can resist the ability of the leaseholder to purchase the freehold from him appropriately in the marketplace. There is a legal process for appeal and for such matters to be determined; that has been set down in statute for many years, under Governments of both major parties. From time to time the law is upgraded, and every time some freeholders try to find a way around it. However, most of them do not. Many freeholders in this country are good, legitimate, well run companies that do an effective job on behalf of their tenants and leaseholders. The hon. Member for Lancaster and Wyre is mixing up these measures with other parts of property law.

We are talking simply about the ability of the new NCC to carry out the obligations set out for it in the Bill. It should be free to conduct research and to represent consumers, for example. However, let us be clear that there is no duplication in part 3. If an individual consumer has a problem with an estate agent, he can pursue it through the redress scheme approved under part 3—that point was well made. It is not a double whammy. People cannot pick and choose and seek redress from more than one scheme; they must get it through the scheme with which the company is registered. If it is not registered, it cannot conduct business as an estate agent.

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform)

I am grateful to the Minister for that clarification. Unlike my hon. Friend the Member for Lancaster and Wyre, I am a surveyor. The Minister is correct in terms of long leaseholds and the change in the relationship under property law. I think that he is saying that the definition here includes an interest in land and land holdings, but not of a financial character. Clearly, that would start to drift in the direction of the Financial Services Act 2000 and other legislation that is not within the remit of the new council.

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

I think that the hon. Gentleman should have given me a tip-off that he is professionally qualified. I am an enthusiastic amateur for the purposes of answering this debate. I do not use that as an excuse, but it is important to separate out what we are talking about.

We are considering issues that are in the purviewof the new NCC. Beyond that, there is an array of organisations and legislation that is covered differently. The Bill has no impact on that. We are trying to achieve clarity by establishing a process of redress through the Secretary of State, a redress scheme or  schemes and a requirement on the organisation to be registered as a member of such a scheme, without which it cannot operate in the marketplace as an estate agent. There are legitimate discussions that we may have in later debates on whether the scheme should be extended in future years.

A consumer will not pursue redress twice through different redress schemes in different parts of the Bill. Part 2 of the Bill enables the Secretary of State to require energy and postal services suppliers to belong to a redress scheme. Part 3 enables the Secretary of State to require estate agents to belong to a redress scheme, and any complaint against an estate agent relating to residential property will be dealt with via the redress scheme to which the estate agent must belong. I hope that I have explained to the hon. Gentleman what we are trying to achieve.

Amendments Nos. 70, 71 and 72, tabled by myhon. Friend the Member for Gateshead, East and Washington, West, raise important issues. I also congratulate her on tabling an early day motion just before the summer recess last year. I hope to give her a detailed response to the points she raised and to set out the current position in respect of issues relating to Ryanair.

It is important that consumers who purchase goods and services online should be able to make complaints and to seek redress online directly and easily from the service or goods provider. Any lack of confidence in that respect would negatively affect the longer term health and growth of the internet shopping market and the consumer’s willingness to engage in it. It is in everyone’s interest that those who provide goods and services have a clear understanding of their obligations and the standards expected of them, and that information is available for consumers so that if things go wrong they can effect change whether that is redress for the consumer or a change in the company’s policy towards the consumer, individually or collectively.

The electronic commerce directive implemented in the United Kingdom by the Electronic Commerce(EC Directive) Regulations 2002 requires information society service providers to provide certain information on their websites and on other electronic commercial communications. Information society service providers include services normally provided for remuneration at a distance by means of electronic equipment at the individual request of a recipient of a service. Article 5 requires internet providers of goods and services to provide the recipient of the service with the name of the service provider, the geographical address at which the service provider is established, and details of the service provider, including his or her e-mail address, which is very important as it makes it possible to contact them rapidly and to communicate with them in a direct and effective manner.

The primary enforcement authority in respect of EU information society service providers is the member state in which the provider has its headquarters. In the case of Ryanair, to which my hon. Friend the Member for Gateshead, East and Washington, West referred earlier, it is the Republic of Ireland, but we have not left the matter there. The Ryanair case was brought tothe attention of the Office of Fair Trading, which contacted its Irish counterpart, the Office of the Director of Consumer Affairs, which is giving the  matter its full consideration and has already communicated in writing with Ryanair. I have asked the OFT to keep me up to speed with developments.

Members of the Committee should be aware that an unfair commercial practices directive, which will be implemented in April next year, will also require traders inviting consumers to purchase goods and services to provide information such as geographical addresses and a complaints handling policy. The distance selling directive also requires traders to provide their address, but it does not apply to transport services. I am glad that my hon. Friend raised the issue and I will write to her and to the hon. Members for Solihull and for Hertford and Stortford when I receive information via the OFT about the action, if any, that is proposed by the Irish authorities on Ryanair. I hope to be able to answer hon. Members’ questions on the matter.

Photo of Susan Kramer Susan Kramer Shadow Secretary of State for Trade & Industry, Trade & Industry, Shadow Secretary of State, Liberal Democrat Spokesperson (Trade and Industry)

Will the Minister confirm that the national consumer council as it will be constituted will be able to look beyond the territories of the United Kingdom and the European Union to pursue consumer issues?

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

I will give the hon. Lady an example. Let us say that we were at the start of a process under the unfair commercial practices directive and a draft proposal had been put forward by the Commission. As well as the Government, the NCC would have the opportunity to be consulted, and it would also consult its regional and territorial groups. It will have the wider remit of being able to influence not just policy direction here in the United Kingdom but all consumer policy matters across the single market and the European Union. That is critical because a great deal of the consumer protection covered by amendments Nos. 71 and 72, tabled by my hon. Friend the Member for Gateshead, East and Washington, West, is in fact provided by the European Union.

In short, the NCC will have the capacity—indeed, the obligation—to make representations and to propose ideas and suggestions. It will be able to work directly with the European Commission on any policy direction that it wishes to take and in any consultations on the outcome of policy direction on consumer matters.

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform)

I should have mentioned the hon. Member for Gateshead, East and Washington, West and said that her amendments are well intentioned. I shall not speak to them at length, but if I did not mention them I suspect I might get an e-mail, and who knows what might happen?

I turn to the three amendments that I tabled. As I said at the beginning of the debate, which has been productive and helpful, they are probing amendments and their purpose is to help to clarify the legislation. On amendment No. 2, the Minister rightly described the purpose of the provision in question: to ensure  that the definition of a consumer includes a future consumer. He rightly pointed out the need for a strategic vision, which I entirely endorse. I am glad that we have got that on the record.

As the Minister said, amendment No. 4 would remove from the definition of “goods” an interest in land. I sought the Government’s rationale for that definition, and I understand its purpose. It was important to have that clarified because the functions being given to the council are not of enforcement but of consideration. As we know, and will consider under part 3 of the Bill, matters of home ownership and so on are of great concern to consumers, so I am glad that the Minister has clarified the matter.

We had an interesting debate on amendment No. 3 and I was happy that the hon. Member for Ealing, North, made, as usual, erudite and loquacious remarks. As always, he was able to argue what appeared to be at least three different points of view in the same sentence—I always admire his ability to do that. Although it is true that we have bonded on the high seas, I think that the less said about that, the better. He did not note that the noble Lord Truscott made it clear in the Lords debate that the Government’s view isthat the definition of “consumers” includes business. Although the hon. Gentleman’s aim was understandable, the Minister then confirmed that definition quite clearly.

The hon. Gentleman was absolutely right to say that the purpose of the council should be to work for consumers, as we understand the term in common parlance, and for vulnerable consumers in particular. My intention was to ensure that we had a clear view that the definition should include persons corporate and incorporate. The Minister gave us that view, and it was an important debate.

Photo of Sharon Hodgson Sharon Hodgson PPS (Mr Liam Byrne, Minister of State), Home Office

I, too, thank my right hon. Friend the Minister for his response. I feel somewhat reassured by it, and I know—I hope that he will not take this the wrong way—that he is on the side of the little people. The only proviso that I wish to give is on the EC directive requiring companies to provide an e-mail address, which is fantastic. That is the first step, and the Minister is going to take up the fact that Ryanair is not fulfilling that requirement. I want an online complaints mechanism so that the whole process of a complaint can be dealt with online. Some companies provide an e-mail address, but someone who e-mails gets a reply telling them to write or telephone to take the process further. With my right hon. Friend’s assurances, I am happy not to press my amendments.

Amendment, by leave, withdrawn.

Clause 3 ordered to stand part of the Bill.

Further consideration adjourned.—[Steve McCabe.]

Adjourned accordingly at twenty-six minutes past Twelve o’clock till this day at Four o’clock.