Consumer Rights Bill
Debate between Baroness Crawley and Lord Harris of Haringey
Baroness Crawley
My Lords, I, too, support the amendments in this group. This is a vital issue for us all. The language of children’s protection has to be modernised. We rightly rail against pornography and violence and the abusive exposure of young children to those things, but the insidious manipulation of children when it comes to the payday lending industry can no longer be overlooked or seen as a lesser evil. Those puppets are built like children’s grandmothers and grandfathers. They are authority figures that kids look up to—certainly the ones I have seen. We all know that the misuse of money, as the noble Baroness has said, can lead to terrible family misery, and we harm children—often for the rest of their lives, as noble Lords have said—if we make popular for them the notion that money can be procured cheaply, and dress it up to sound like fun or a solution to their family’s pain.
The Advertising Standards Authority, speaking about advertising rules on this subject, states that:
“The protection of young people is at the heart of the rules”.
It goes on to say that advertising “must be socially responsible”. I fail to see what could be socially responsible when it comes to payday loan advertising at usurious rates, as the most reverend Primate the Archbishop of Canterbury put it. Member states of the European Community—which I believe we still are at present—are urged by Article 27 of the audiovisual media services directive to,
“take appropriate measures to ensure that television broadcasts by broadcasters under their jurisdiction do not include any programmes which might seriously impair the physical, mental or moral development of minors”.
I suggest to the Minister that the Bill’s inclusion of this group of amendments would be an appropriate measure.
In conclusion, I read recently that the world’s top 10 PR companies, including UK companies, have said that they will not represent clients that deny climate change. What a powerful signal it would be if those PR firms and their advertisers took a similar course of action when it came to their industry being approached to procure payday loan advertisements. I urge the noble Baroness to use the opportunity of the Bill to stop this practice.
Lord Harris of Haringey
My Lords, I rise briefly to support Amendment 105B, and perhaps I may tender some advice to the Minister. I suspect that this is one of those issues that, were it to be put to a vote in the House at Report stage, it would not be a happy moment for the Government, who would oppose it. However, I am sure that the Minister supports the objectives here.
We are all clear about how wrong it is for companies to be targeting advertising material at children and to rely on pester power to deliver what they want. My reason for speaking is because I agree with everything that has been said in this debate bar about two sentences. Those two sentences were spoken by my noble friend Lord Mitchell. Although he did not mean it, he gave the impression that somehow the cuddly illegal money lender, the loan shark operating in the pub who threatens to kneecap you if you do not pay up, is somehow preferable. I do not regard the payday loans companies as necessarily preferable, but we have to be conscious that one of the consequences of tightening up on the payday loan market will be that more people will seek recourse to illegal money lenders.
I chair the National Trading Standards Board, and one of the things we fund is the Illegal Money Lending Team for England and the Illegal Money Lending Team for Wales. Those teams are only scratching the surface of the problems that exist around illegal money lenders. They are very nasty individuals who are quite happy to squeeze money out of individuals in perhaps the same way as these corporate entities do—except that they do so using violence and all sorts of intimidation. Some of the cases that have been pursued by the illegal money lending teams are horrifying. Illegal money lenders use their power and strength to intimidate vulnerable people and families, including rape of the women concerned, beatings and other attacks. These are organised criminals who sometimes operate in small groups and sometimes as part of bigger networks. We have to be extremely cautious. When the Government accept these amendments or something similar to them either now or at the Report stage, I hope that they will look at what else needs to be done to protect the public from illegal operators as opposed to the legal ones we are talking about in this group of amendments.
Consumer Rights Bill
Debate between Baroness Crawley and Lord Harris of Haringey
Baroness Crawley
My Lords, I rise to support the amendment in the names of my noble friend Lady Hayter and the noble Lord, Lord Best. This amendment proposes that the requirement in the Bill for trading standards to give 48 hours’ notice to businesses before entering their premises be removed. In supporting this amendment, I remind noble Lords that it is my privilege to be the current president of the Trading Standards Institute. I refer noble Lords to my entry in the register of interests.
Let us be clear: the power to enter business premises remains but the Bill introduces a new safeguard requiring written notice to be served before entering. Because of the strong response to this highly controversial proposal from the enforcement profession, there is now a list of exemptions to this new proposal from the Government. However, I believe, as do several other noble Lords, that these exemptions will only lead to confusion and the possible introduction of overcautious behaviour on the part of the trading standards profession, which is already seriously stretched. It will also lead to increased financial and judicial burdens, as outlined by the noble Lord, Lord Best.
I remind noble Lords that the budgets of trading standards departments at local government level have in some cases seen cuts of up to 86% since 2009. While the Government have listened and made some changes to the Bill, the Trading Standards Institute does not believe that those changes yet strike the right balance, which the noble Lord, Lord Best, talked about. It is essential that we achieve that balance between the right to carry on a business unimpeded by officials and the right to protect consumers.
It is not the case that all businesses are clamouring for the removal of unannounced visits. In a recent edition of The Grocer, the chairman of a large cash-and-carry business in the north-west stated:
“It is independent retailers saying that local authority test purchasing is less effective if there has to be 48 hours notice of a visit.”
Many retailers welcome spot checks because they want to see a level playing field in the high street and with larger retailers.
Last week I spoke to a trading standards officer about food fraud in the light of the very important Elliot report into the horsemeat scandal, which the Minister has referred to. She told me that while checking one of those large storage units that are so prevalent nowadays—we seem to have a lot of things to store in our lives, do we not?—she came across a unit that was being used to cut up some kind of raw meat. This was a unit that was usually used to store furniture; it had no running water or utilities necessary for processing meat. The trading standards officer had the unit closed down immediately. She was able to close it down under the Food Safety Act—which the Minister has also referred to—because, unlike this proposed legislation being brought forward under BIS, food fault is an area where spot checks are still allowed: 48 hours’ notice is not required. Had that unit been processing highly dangerous electrical goods—such as in the tragic case of the phone chargers to which the noble Lord, Lord Best, referred, or the hair straighteners that I have seen in trading standards offices and which can be very detrimental to health when they are criminally produced—she would most likely have had to give 48 hours’ notice. No doubt she would never have seen the rogue trader again.
Life is hard enough for the seriously overstretched trading standards service—which still does a magnificent job on behalf of the public—without putting another bureaucratic obstacle in its way. Such an obstacle could only allow rogue traders to prosper, damaging legitimate businesses—which are, of course, the vast majority of businesses in this country—and diminishing consumer protection.
Before I sit down I would like to ask the Minister where the evidence is that these inspections interfere with or hamper the operation of a business. The recent Elliott report on food fraud highlights the value of unannounced inspections, so why are the Government moving away from them in this Bill? The amendment of the noble Lord, Lord Best—which is also signed by my noble friend—denotes the line between the honest business and the hard-pressed consumer on the one side, and the rogue trader on the other. I call on noble Lords to support this amendment.
Lord Harris of Haringey
My Lords, I repeat my declaration of interest as chair of National Trading Standards. Will the Minister tell us what exactly is the problem that the clauses we are debating now are there to solve? What is the evidence that this has been a power that has been abused or misused by trading standards departments? If she can give us chapter and verse today, I would like her to do so but, if not, I ask her to lay in the Library all the complaints that the Department for Business has received on this specific point. It is not clear to me that this has ever been a significant problem or burden on anybody.
We have to recognise that, certainly as initially put forward, this proposal was a complete nonsense. It was essentially saying that: if you were a rogue trader who had something to hide, you would have 48 hours to make sure that it really was hidden before the trading standards department came around to do an inspection. Since then, we have made some changes which are the exclusions in paragraph 23(5) of Schedule 5. However, as the noble Lord, Lord Best, suggested, they pose a whole series of new potential problems. For example, the power of entry is to be exercised by an officer when,
“the officer reasonably suspects a breach of the enforcer’s legislation”.
What does “reasonably” amount to in this case? I have seen how litigious some of the people against whom enforcement action has been taken can be. They will string things out and argue abuse of process. The more serious the case, the more they argue. The litigious will say that there were no “reasonable” grounds. What is going to be the basis of the reasonable suspicion? All of this will have to be defined and the danger is that that will lead to litigation which takes up more time and generates more problems as a result.
If the officer reasonably—that word comes in again—suspects that there is an imminent risk to public health or safety, that is fine, but that is about public health and public safety. Other issues may arise where the evidence will disappear. What is it that is being gained by these changes? The whole point of having the power of random inspection is not just to find something on the occasions when a random inspection is made; it is also the deterrent implication for all those whom the inspector may or may not visit. There is a chance that they will be inspected, something will be found and the consequences will flow. If that is taken away, frankly, one of the most effective deterrent mechanisms as far as these issues are concerned will be lost.
Baroness Crawley
My Lords, I support my noble friend’s amendment and her very important call for a government review of the powers of trading standards officers, given the responsibilities inherent in the Bill.
In the trading standards workforce survey of March 2014—despite the health warning on it from my noble friend Lord Harris—a picture emerges of a service that is still excellent but is teetering on the edge of sustainability. Trading standards staff numbers have fallen by almost half in the past five years. Numbers of trading standards officers per service range from half an officer in one local authority to 48 officers in another, with apparently little reference to the population size of the areas they serve or the number of businesses in those areas.
The Minister has just spoken, in relation to the previous amendment in the name of the noble Lord, Lord Best, about needing to be an intelligence-led service, particularly in the future. I applaud that but what if there is no one left to gather the intelligence? We are seeing that in some places now. We all want a service that is effective and capable of meeting current and future expectations in the Bill, in order to fulfil its public safety remit and its consumer protection remit.
Trading standards officers take great pride in their work and they welcome the support that they receive from government. They want to make a full contribution to economic growth, public health, environmental protection and safer communities but their depleted numbers make that more and more difficult. In the workforce survey, more than 30% of trading standards authorities that responded mentioned stopping or limiting several second-tier advice services to consumers. Nearly all respondents stated that service provision would be reduced, with most proactive work ceasing and some services providing only the statutory minimum.
The functions under threat in local authorities include underage sales work, intellectual property, food sampling and animal feed. Non-statutory community projects such as the no cold-calling zones, which have been very successful, and trusted trader schemes, as well as the provision of free business advice, are also at risk. Several authorities will be introducing a system of responding only to complaints from vulnerable consumers or those with very immediate risk to their safety.
The trading standards service is centuries old. We have recently been commemorating the trading standards officers who gave their lives in the First World War. Many trading standards officers have in the past travelled to countries around the world to share our best practice. Ours is considered to be one of the finest services globally. We should be proud of that. Therefore, I ask the Minister, who I know is a good supporter of trading standards, to look favourably on my noble friend’s amendment and not simply say that this is the domain of local government and that therefore she is unable to intervene.
Lord Harris of Haringey
My Lords, this is probably a helpful amendment from my noble friend. The reason I say “probably” is that I am not sure that it is asking all the right questions: it is asking two of the right questions, but I suspect that there is a third one as well. One of the good provisions—which I actually think should be incorporated in all of the legislation that goes through Parliament—is the one introducing some mechanism for reviewing, once the legislation has passed, how much the powers that have been granted to whoever have been exercised, whether they have worked, and so on, and what the cost has been. Paragraphs (a) and (b) here are very much a part of that. I would like to see those incorporated in every piece of legislation that we pass because it would be helpful. I sometimes think that government departments put forward these things and then nobody ever looks at them again until perhaps 20 years later, when there is a Law Commission review as to whether anything has actually happened. This would provide the raw material to see what happened. It is particularly critical in this area because we know the extent to which trading standards departments are overstretched and in real difficulties. Therefore, it would be extremely valuable to understand whether this has been yet another set of powers, duties and obligations placed on them that they simply cannot cope with.
The second important thing done by the amendment is to try to set a standard for individual trading standards officers; to say essentially that there should be a properly recognised qualification and describe how all that would work. That is also extremely helpful. The amount of law that trading standards officers are expected to enforce—I think there are 250 pieces of legislation and the number rises constantly—covers an enormous range of areas of activity and requires a degree of specialist skills. Some of them require investigatory skills and financial skills in addition to all that, so having some minimum standard as to what officers should do is helpful and useful.
What the amendment omits is the minimum standard that our citizens—from whichever local authority—have the legitimate right to expect from local trading standards. What is the minimum level of protection that we can expect from local trading standards? That is the area where this amendment could be strengthened. Obviously, if the Government accept this amendment today, there would be progress and no doubt my noble friends would then introduce an amendment on Report which focused just on this issue. Otherwise, if they bring it back, perhaps they could look at this wider issue as well. This is important because there is enormous variation between local authorities in terms of trading standards provision.
As a former local government leader, I absolutely espouse the importance of local accountability, localism and so on. That is an absolute principle, but there were plenty of areas when I was a council leader where, yes, we had local discretion and espoused the principle of localism, but we were expected to achieve certain minimum standards. That is not the case as far as trading standards and consumer protection are concerned. It would be helpful to try to find some way to enable the Department for Business to look at whether there was an acceptable minimum standard or level of trading standards provision in every local authority. I am conscious that the level of provision made by local authorities necessarily depends on their block grant. That is determined not by the noble Baroness and her colleagues in the Department for Business, but by the Department for Communities and Local Government. Consumer protection is one very miniscule part of that block grant. It would be in everyone’s interest—particularly in the interest of all of us as citizens or consumers—if there were some clear minimum standards laid down. Perhaps some work done on the back of a small amendment to this Bill over the next year or so would be extremely helpful in setting out what that minimum should be.