Consumer Rights Bill

House of Lords written question – answered on 20th March 2014.

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Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Cabinet Office)

To ask Her Majesty’s Government what plans they have to extend the Consumer Rights Bill to cover smaller businesses, as recommended by the Federation of Small Businesses in its report published on 12 March.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie The Parliamentary Under-Secretary of State for Business, Innovation and Skills

The Government welcomes the Federation of Small Businesses’ (FSB) report on “Small Businesses as Consumers”. The Department for Business Innovation and Skills has accepted the report’s recommendation that, when developing consumer law, consideration should be given to extending consumer protections to Small and Medium Enterprises (SMEs.)

In the case of the Consumer Rights Bill, the Government considered the case for small businesses to be treated as consumers, consulting on this question in 2008 and 2012. In the 2008 Consumer Law Review, the Government asked whether the definition of consumer should be extended to include small or micro-businesses and, in response, business groups were opposed to that suggestion. In 2012 the Government proposed the definition of “consumer” used in the Consumer Rights

Bill and received broad support for it. In evidence to the Consumer Rights Bill Committee in the House of Commons in February 2014, the British Retail Consortium raised concerns about including SMEs within the definition of consumer.

The Federation of Small Businesses (FSB’s) report does not recommend defining small businesses as consumers for the purpose of the Consumer Rights Bill and, given the results of our consultations, the Government agrees with that stance. We are however implementing a wide range of initiatives to address the barriers to, and provide opportunities for, small business growth as set out in our 2013 publication “Small Business GREAT Ambition”.

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