Clause 59

Consumers, Estate Agents and Redress Bill – in a Public Bill Committee at 12:00 pm on 24th April 2007.

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Contracts concluded away from business premises

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

I beg to move amendment No. 69, in clause 59, page 37, line 31, at end insert—

‘( ) Regulations in this section may make provision for the exemption of certain service providers.’.

I hope that I have not distressed the Minister too much by not moving amendment No. 68, and I trust that he will be able to use his arguments on a later date—although, I hope, not on this clause.

The purpose of probing amendment No. 69, which relates confusingly to clause 59, is to establish from the Minister the likely provisions of subsequent statutory instruments and therefore the Government’s intentions. My understanding is that their intention is to prepare a single set of regulations for unsolicited and solicited visits. Will the Minister confirm whether that is the case and say whether current conditions for unsolicited visits will be changed in the new regulations? Will he also explain which home trades are likely to be included? He will understand the sensitivity of that point.

I think that it is fair to say that much of the problem centres on the installation of things such as home improvements or property services—double glazing, stair lifts and so on. Clearly, a typical visit by a plumber or electrician is not what we are trying to deal with. Indeed, the clause could create quite significant problems for more regular visits. Will the Minister explain how the regulations are intended to work and how the balance between the rights of consumers and those of tradesmen will be struck? I am sure that, if we reach the stand part debate, more detailed points will be made, but I should be grateful if he could respond to my amendment, which, as I said, is a probing one.

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 shall try and be as detailed as I can, because, as hon. Members have said, this is a sensitive issue. It is important that we strike the right balance. Let us be clear: the clause is a very important step forward for consumer rights, and it deals with something that has been a cause for concern over many years for trading standards officers, in particular, and for consumer councils and other bodies that represent consumer interests.

The clause relates to contracts concluded with consumers in their home or workplaces—namely, doorstep selling. It gives the Secretary of State the power to provide for exemptions when he makes regulations giving consumers the right to cancel a contract entered into during a solicited visit to a their home or workplace. There is no need for the clause to be amended to enable exemptions to be made in doorstep selling regulations, because clause 60(3) will do that already by providing that regulations under the Bill may apply generally, or be subject to exceptions, and may make different provisions for different cases.

We will consult on the draft doorstep selling regulations, including on potential exemptions, later this year, and I shall write to hon. Members with more detail at the appropriate time. It would not be appropriate, therefore, for the Bill to include specific exemptions, such as for certain service providers, as that would pre-empt the consultation.

The existing doorstep selling regulations already either exempt or make provision for effective cancellations in some cases, such as for food and drink supplied by regular arrangement—for example, milk delivered to a consumer’s door, perishable goods, goods to meet an emergency or those incorporated into land before cancellation, such as double-glazed windows, where the consumer is obliged to pay for the goods and services in connection with their supply. Although I cannot say specifically what exemptions or cancellation provisions might apply, we are aware that some exemptions from the new regulations will be needed.

We are considering the need for an exemption for some specific service providers, such as providers of funeral services. In response to a public consultation on doorstep selling in 2004, we received representations from the funeral services industry, seeking exemption from the new doorstep selling regulations. Many consumers agree in their homes a contract for a funeral or the details of an advertisement announcing a family member’s demise. The provision of funeral services where the contract is made in the home would be caught by the new regulations unless specifically exempted. We are currently considering the industry’s request for an exemption, in the interests of not raising unnecessary obstacles for newly bereaved consumers who are arranging contracts for funeral services in their home at a very difficult time. Undertakers often carry out the funeral within seven days. It is too late for the consumer to change their mind when their loved one is buried, so we are not considering a cooling-off period in those circumstances.

We are aware of the need to make provision for consumers to receive goods and services during the cooling-off period if they wish to do so. We will also aim to ensure that those who require goods or services in an emergency can get them. Limiting the number of specific exemptions from the regulations is a sensible   approach, which will give consumers maximum protection and ensure that they receive necessary services during the cooling-off period.

By contrast, the Opposition’s probing amendment seeks to exempt traders, such as plumbers, from requirements to provide a cooling-off period or to give written notice of cancellation rights, which would weaken the protection considerably. An exemption for emergency services, for example, would mean an exemption for only those services that a consumer wanted to receive during the cooling-off period, not for all the services that were provided by the trader.

I shall give an example. If, under our proposals, a consumer had a burst pipe, they could call a plumber and agree that the work should be carried out during the next seven days. The trader would not refuse to provide the service within the cooling-off period, as the consumer could not subsequently cancel the contract. If the consumer wanted a new bathroom fitted, however, they could agree with the plumber a contract for the plumbing work in advance, so there would be a cooling-off period. The consumer would also receive written notice of their cancellation rights.

There is another example that applies to gardeners. If a tree in a consumer’s front garden fell, perhaps due to strong winds, and was blocking the driveway, the consumer would probably want to have it removed within seven days. However, for routine, regular gardening work done by a gardener who came monthly, the consumer could agree a contract with more than a week’s notice. From the point of view of consumer protection, it would be preferable to ensure that it would be possible for the emergency work to be undertaken, but not to provide a blanket exemption for all gardeners.

The amendment could lead to the exemption of many traders from the new requirements for solicited doorstep sales, thereby giving consumers less protection from rogue traders. That cannot be in the interests of consumers, although I accept that it is a probing amendment. The purpose behind the new regulation is to give consumers good protection from rogue doorstep traders. We will not weaken the new regulations by making lots of holes in them through blanket exemptions for specific traders. We will limit the exemptions to those that are in the interests of the consumer and that give them the best possible protection from rogue doorstep selling.

I remind right hon. and hon. Members that I have used only examples of possible exemptions from the new regulations by way of illustration. As I said, we will consult on the regulations and their exemptions later this year; I do not want to be seen to pre-empt that consultation by saying that those examples are definitely carved out from the regulations. I hope that I have given some sense of what we want and need to do, and that the hon. Gentleman is able to withdraw his amendment.

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

The Minister has tried to put on the record some indications of the scope and character of the regulations. We will have an opportunity to consider them when they come forward. There are one or two issues that I may wish to raise during the clause stand part debate, but I shall not detain the Committee any further. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

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

The principle behind the clause, as we said on Second Reading, is one that we strongly support, although we will want to see the regulations and how they work in practice. I would not wish to constrain any debate in advance. The regulations for unsolicited business date back to 1987, and provide a seven-day cooling-off period, as the Minister has touched on, for goods or services worth more than £35. Sadly, the rogue element in the doorstep sales industry has increasingly been finding ways around those rules.

We should recognise the size of that business. The hon. Member for Richmond Park referred in an earlier debate a couple of days ago to the fact that there is something over £1 billion in that field. However, if we take doorstep sales of double glazing, for example, sales were £1.6 billion in 2004. Even just conservatories were worth £200 million—I nearly misread that as “Conservatives”, which would be a bargain. Even the market for mobility products, such as stair lifts or scooters, was worth £80 million. That was in 2004, and those markets have grown substantially.

If one thinks about products such as stair lifts or scooters, it is the elderly who get caught out, as I have found out in my constituency. An elderly lady there contacted me because she had seen an advertisement for a raised bed. She is reasonably immobile. She sent for what she thought was a brochure. Five weeks’ later, she got a visit and was persuaded that she had requested the sales visit in seeking the brochure. To be fair, she could not quite remember exactly what she had ticked. She did not have a copy of the coupon that she sent off, because, obviously, she had sent it, so she could not be sure, and she was persuaded that the individual could come in. The result was a potential sale of a £3,000 product. She felt obliged, but her family stepped in, thankfully, and I was also able to ensure that she did not have to proceed. That was not her intention.

My example highlights the differential treatmentof solicited and unsolicited goods, which creates a potential loophole for the unscrupulous. We must correct that danger. Placing doorstep sales on the same contractual footing should close that loophole, as I hope that the Minister will confirm. My only question is whether the Government have made an assessment of the impact of similar measures on doorstep sales elsewhere. Is there any evidence that they significantly reduce the availability of doorstep sales? I would not buy from a doorstep salesperson; but to be fair, I am more mobile and perhaps more awkward as a consumer—not least being a man—so it is something that I would not do. However, for other people, doorstep sales are an important part of how they live and their availability to certain products. I should be interested to know from the Minister what impact the clause might have on those businesses, the vast majority of which are entirely legitimate.

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 apologise for not answering a question earlier about two sets of regulations covering both aspects. We intend to have a single set of new  regulations. We do not intend to amend the current set of regulations, but we think it better to draft a new set that covers all issues included in the consumer’s home. That is important to the point that the hon. Gentleman has just made about loopholes or potential loopholes, intended or otherwise. I hope that that puts his mind to rest in that respect.

On the sale of double glazing, for example, two issues arise: the sale of double glazing and, increasingly, financial agreements. Those arrangements are important, because people will find others not only selling the product but providing the finance and the wherewithal for the product to be provided. It is currently a criminal offence to canvass cash loans to a consumer on an unsolicited basis. The consumer must have expressly requested that in writing. If a credit agreement is signed in the consumer’s home as a result of face-to-face discussion, the consumer has a period in which he or she can cancel, which is usually five days after giving the required notice of cancellation rights.

If agreed in its present form, the proposed consumer credit directive would extend those rights, and it does not make sense to change the present version until the outcome of the negotiations on the directive is clear. The directive may or may not come before a Committee or the European Scrutiny Committee. If it does, we will have a discussion and a debate; if it does not, I will ensure that I write to hon. Members to inform them about the outcome of discussions under the German presidency. We may seek a political agreement in May of this year, but I cannot confirm that that will definitely happen.

We are currently considering credit agreements that are linked to doorstep sales. Those agreements will be within the scope of the new regulations. We are likely to seek views on that issue during the consultation on draft regulations. It is therefore important that we cover not just aspects of the sale of the product itself, but any credit that is given for the purchasing of product. I hope that also puts the hon. Gentleman’s mind at rest. Cancellation of a visit as requested aims to cover that sort of situation in the new regulations. Again, because the regulations have been consultedon, I will ensure that consultation is held with the organisations concerned and interested parties and that access to the consultation is given to hon. Members, who may wish to make a contribution.

Assessing the impact on those businesses that engage on the doorstep is indeed difficult. There is no reliable data available on how many companies engage in doorstep selling. However, measures have been welcomed by leading trade bodies in the industry that already provide cooling-off periods for solicitous sales visits. Those measures are a welcome part of the Bill and, as the hon. Gentleman said, we must attempt to draft regulations that protect the consumer, but that do not prevent an organisation from legitimately carrying out its business and that may actually help many people. Like the hon. Gentleman, I do not use doorstep salespeople, but I cannot guarantee that someone else in my family does not. In fact, I am sure that they do, whether it is Avon women or whatever. People who are  housebound require and obtain legitimate services in such a way and we must ensure that legitimate services are protected. I give an assurance that in respect of single unit regulations there will be appropriate consultation. I am happy to offer to have a discussion about that with the hon. Gentleman and the Liberal Democrats in advance of the consultation or while preparing for the consultation.

Photo of Ben Wallace Ben Wallace Conservative, Lancaster and Wyre 5:45 pm, 24th April 2007

May I just make a plea on the record that we look at rural areas, the coalman and the milkman in that consultation? Those goods are often distributed by solicited and unsolicited means locally and in small areas. In a purely legitimate manner, that is how those businesses have operated over many years.

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 current regulations do not cover: the selling of food and drink; some of the goods supplied by regular arrangements, such as the daily milk and newspaper deliveries; agreements for £35 and under; agreements relating to land or the construction and extension of property; and insurance and investment agreements. Catalogue goods ordered through an agent are generally not covered provided that the trader allows the customer to return the goods within seven days. Obviously, in the consultation, we will look at all aspects of doorstep selling and I take on board what the hon. Gentleman has said.

Question put and agreed to.

Clause 59 ordered to stand part of the Bill.

Clauses 60 to 66 ordered to stand part of the Bill.