Baroness Hayter of Kentish Town
To ask Her Majesty’s Government what assessment they have made of the decision by Volkswagen not to pay compensation to United Kingdom motorists who bought cars that were fitted with emissions-detecting software.
Viscount Younger of Leckie (Con)
My Lords, the Government’s view is that Volkswagen could be liable to compensate consumers for any actual losses they suffer. We are aware of Volkswagen’s statement that consumers are unlikely to suffer losses but it is too soon to say whether this is correct. The Competition and Markets Authority has not opened a formal investigation but is continuing to assess whether there is evidence of consumer harm, while liaising with government and other agencies, nationally and internationally.
Baroness Hayter of Kentish Town (Lab)
I thank the Minister for that Answer, which at least acknowledges that British Volkswagen drivers have been well let down. They bought what they thought, and for good reasons, was a low-emissions car only to find that Volkswagen had cheated them. Nearly 1 million cars will need to be recalled but their resale value will then go down, yet Volkswagen is refusing to compensate UK owners either for the inconvenience of taking their car back or for the loss of value. Can the Minister tell the House whether he considers that this decision is in line with the new Consumer Rights Act, passed in this House last year? Why will the Government not choose to explain to Volkswagen clearly that misleading purchases should lead to compensation?
Viscount Younger of Leckie
My Lords, the Government take the unacceptable actions of Volkswagen extremely seriously. Our priority is to protect the public as we go through the process of investigating what went wrong and establishing what we can do to stop it happening again in the future. Regarding the noble Baroness’s Question, there is no evidence that consumer rights have been breached but if any have, we have legislation in place at the moment in the Consumer Rights Act and the Sale of Goods Act.
Lord Deben (Con)
I first declare an interest as a Volkswagen owner. Does my noble friend accept that the real damage done is to the general public by the additional air pollution, which is already very bad, particularly in London? It seems to many of us that the Government should be taking a proactive stance and insisting that Volkswagen makes proper reparation to society as a whole. Would it not be outrageous if the United States took these steps and we in this country, with our high environmental standards, did not?
Viscount Younger of Leckie
Indeed, and it may be some comfort to my noble friend that the Department for Transport and BIS have been pressing Volkswagen very hard over the past few months. We believe that by February there will be a decision on how UK customers who own Volkswagens are affected. On the question of car emissions, the Government are spending more than £600 million between 2015 and 2020 to support the uptake and manufacturing of ultra-low-emission vehicles.
Lord Stoneham of Droxford (LD)
The Government have announced that individual Volkswagen car owners will not be liable for any shortfalls in their car road tax. Have they worked out the scale of compensation which they should be seeking from Volkswagen and can they assure the House that they will not accept discounted Volkswagen cars into the government car pool instead of real money?
Viscount Younger of Leckie
I do not know about that, but as I said, that the Government have been pressing Volkswagen very hard and we need to establish what the actual losses are. There is no question but that if UK owners have legitimate claims for compensation for losses, they should be compensated.
Lord Forsyth of Drumlean (Con)
Can my noble friend explain why Volkswagen has indicated that it will pay compensation to owners of Volkswagens in the United States but not in Britain?
Viscount Younger of Leckie
I am very aware of that point. We are trying to establish why the US has done this, but it does have a different emissions regime, and there are fewer Volkswagen cars in the US. We are trying to get to the bottom of that.
Lord Anderson of Swansea (Lab)
My Lords, individual motorists cannot be expected to pick up the legal costs for any action against a firm the size of Volkswagen. Who will act as plaintiff and who will support the plaintiffs—the motorists—financially?
Viscount Younger of Leckie
The first thing is to establish exactly what the losses are, which could include a range of things. Hopefully, by February—next month—we will know what the situation is in terms of Volkswagen’s statement.
Lord Vinson (Con)
My Lords, what Volkswagen did was entirely reprehensible, but there is a technical development here that raises a problem. At the present level of technology, the more you screw down car pollution to lower levels, the more fuel you consume, and there is a very fine balance between the two. I hope any legislation will bear in mind that there is a technical consideration here and that the one balances the other. We could easily find that you produce more pollution rather than less by increasing consumption.
Viscount Younger of Leckie
My Lords, as your Lordships might expect me to say, this involves a complicated device. One of the reasons for the delay, according to Volkswagen, is that it is trying to get to the bottom of the device that it fitted and is now looking to fix. It wants to make sure that the solution does not impact on vehicle performance, fuel consumption or driveability.
Lord Tebbit (Con)
My Lords, is it possible that the Americans have been able to take action because they are not subject to European Community law?
Viscount Younger of Leckie
My Lords, as I say, we are looking to get to the bottom of the decision in the US.
Baroness Oppenheim-Barnes (Con)
Would my noble friend not agree that so far, there has been no formal statement from the Government that they are pursuing this matter with a view to protecting consumers who may have been hurt, individually or as purchasers in respect of the value of their cars, and that it is time for such a statement to be made, as has been demonstrated by all the questions asked in your Lordships’ House today?
Viscount Younger of Leckie
I can reassure the House that much work has been going on behind the scenes. For example, two Secretaries of State—for Transport and for BIS—have met Paul Willis, who is in charge of the sales operation in the UK, and have written to the Volkswagen board on several occasions. They are behind the consumers who may be affected and are taking this extremely seriously.