Consumer Rights Bill

Debate between Baroness Jolly and Baroness Oppenheim-Barnes

Wednesday 19th November 2014 Lords Chamber

[Baroness Oppenheim-Barnes (Con)]

My Lords, the noble Baroness missed one sort of case. The plumbers, electricians or whoever they are make a charge for coming in the first place, and when they get there, say, “This will need a part that we’ve got to order”. You have already paid for the visit, they demand the money for the parts before they go any further, and they sometimes never turn up again. The noble Baroness can add that to the list.

[Baroness Jolly]

My Lords, this Bill sets out for the first time in statute what remedies consumers are entitled to request and traders must offer if traders provide a substandard service. That is a real increase in consumer protection. Consumers of services, from hairdressing to plastering, will have access to statutory remedies if those services do not meet the consumers’ statutory rights. I am very proud of this part of the Bill and believe it will lead to real improvements for consumers on the ground.

To help consumers use these new remedies, we have set out clearly in the Bill how they will work in practice. This will also be set out in guidance, which will be available for traders and consumers well in advance of the Bill coming into force. To give an example, if a service is not provided with “reasonable care and skill”, the consumer can ask the trader to re-perform the service so that it does meet that standard. In practice, it may not be possible to re-perform a service, or the trader may cause significant inconvenience for the consumer in doing so. In those cases, the consumer can ask for a price reduction. If the consumer has already paid more than the reduced price, the difference must then be given to the consumer within 14 days. That is a practical process designed to work for both consumers and traders. We have discussed this extensively with stakeholders and businesses overwhelmingly support this way forward.

Importantly, these new statutory provisions are in addition to, not a replacement for, common-law remedies that consumers can currently pursue. We are not taking away a consumer’s current access to redress through the court system. Quite the opposite: we make clear in Clause 54 that these remedies are still available. Clause 54(7) is a non-exhaustive list of those remedies. Guidance on the Bill will also explain that these remedies are still available. Moreover, we are not restricting consumers and traders to the remedies in this Bill. The consumer has a right to ask for what is in these provisions. However, if the consumer so chooses, they can negotiate a different remedy with the trader. For example, they could negotiate to reduce the price of a service without exercising their right to a re-performance. There is support available to enable consumers to do this, notably through the Citizens Advice service. The service provides advice over the telephone, face to face and online, including practical tools such as template letters.

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[Baroness Oppenheim-Barnes]

That is not what I said. I said that they charge to come in the first place—not to carry out the work but just to come and see what has to be done. They charge for that and then they say, “It needs an expensive part, so I can’t do anything for what you’ve already paid me in coming here”. They then come back, possibly months later, with a very expensive part.

[Baroness Jolly]

I thank my noble friend for that explanation but I think that I will have to drop her a note to clarify that situation. I ask the noble Baroness, Lady Hayter, to withdraw the amendment.

Consumer Rights Bill

Debate between Baroness Jolly and Baroness Oppenheim-Barnes

Monday 27th October 2014 Grand Committee

[Baroness Jolly]

My Lords, we have taken great care in developing these remedies, for obvious reasons, and we have had a very good example today. Services are a vital part of our economy. In addition, SMEs and micro-businesses make up the vast majority of services businesses. It is therefore essential that we get these remedies right.

When we consulted on these remedies in 2012, respondees supported the approach that we are taking. They considered it a sensible, balanced approach. Based on the support that we received for this approach to remedies, I am not convinced we need to amend them as this amendment proposes. The remedies that we have are clear for traders and consumers, and it is set out clearly in the Bill when the consumer can ask for each remedy. This is important: The British Retail Consortium told us that it agreed that,

“this approach would be helpful to the extent it is practical and realistic”.

However, we have also catered for the more extreme cases where personal safety is at risk. Here I should say that these notes were written before we had heard the story just told by the noble Lord, Lord Harris. Let me reassure him that the Bill does not force the consumer to have a trader whom they do not trust back in to repeat a service. The remedies set out in detail in this chapter of the Bill are not the only remedies available. To make this clear, we have written into Clause 54 that the consumer retains their access to common-law remedies.

[Baroness Oppenheim-Barnes (Con)]

Before my noble friend goes too far, what are the other remedies and how soon are they available?

[Baroness Jolly]

I will come back to the noble Baroness with chapter and verse on the remedies, but they will not be available until the Bill has been passed.

The remedies consumers retain under common law are the right to damages or, in some cases, the right to treat the contract as at an end, rather than being limited to the statutory remedies in the Bill, as long as they do not claim for the same loss twice. I am sure that no noble Lord would do that.

I recognise that consumers and traders will not want to go to court in most cases. That can, in some cases, be expensive and time-consuming. However, knowing that they retain the right to go to court is intended to empower the consumer to ask for their money back. It should also encourage the trader to agree with the consumer to do this. The consumer’s rights under this chapter of the Bill are not the only legislation ensuring that services are performed safely. For example, building regulations require that building work does not compromise the safety of people in and around the building.

Many service providers rely on their reputation and word-of-mouth recommendations. If they have made a mistake, they will want the opportunity to return to fix it. It would not be fair on those traders to take away that opportunity. Many consumers would also want the trader to rectify a problem with a service rather than have the inconvenience of finding another provider. There is also nothing to stop the trader volunteering to give the consumer a price reduction without a re-performance. The trader and the consumer are free to come to an arrangement separate to the statutory remedies in the Bill. Reputable traders will negotiate a remedy with the consumer, taking into account what the consumer has asked for. Given that consumers will be able to access compensation where re-performance is not desired and that our consultation showed broad support for our approach, I ask the noble Baroness to withdraw the amendment.

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[Baroness Jolly]

I can rely on the noble Lord, Lord Harris of Haringey, to put me on the spot. The de minimis element of £5 may be worth looking at but that sort of decision is considerably above my pay grade. Noble Lords should consider how irritating it is to listen to commercial adverts. The advert itself may be absolutely fine but then all the rights are read out so quickly that you cannot take them in, or at least I cannot do so.

We have strong backing from business organisations to promote the summary of consumer rights to their members on a voluntary basis. It will be a central tool that we provide to businesses in April. It will help them comply with the new obligations they will have and explain these rights to their customers, so avoiding costly shop-floor mistakes that undermine their reputation. We do not need every single retailer in the country to be obliged to display the summary of consumer rights to achieve our objective of increasing consumer knowledge and confidence but we will be looking for a significant take-up. We consider that this approach, supported by Which?, will be far more effective, and far less burdensome, than the mandatory approach proposed by these amendments. Therefore, I ask the noble Baroness, Lady Oppenheim-Barnes, and the noble Lord, Lord Whitty, to withdraw this amendment.

[Baroness Oppenheim-Barnes]

I am very disappointed because the response we have had sounds like a wonderfully constructed Civil Service briefing. There is a very simple definition of merchantable quality. When I was Minister of State for Consumer Affairs, I was already very concerned about people not being aware of their rights. I therefore introduced an education pack into schools. I introduced it in every type of school. First, the children—young men and women—concerned were very interested. They did not find any difficulty in defining merchantable quality. One, who was only 10 years old, said, “My mother just bought a knife that says it was extremely sharp. It doesn’t cut anything. Is that merchantable quality or not?” That is simple to answer. I am not suggesting the kind of information provided at the point of sale needs to be complicated; it is very important that it would be drafted in a way that was comprehensible to most people, not too long and not too detailed. If this amendment was finally passed I would want to have a great deal to say about a description of merchantable quality, both from experience and, believe it or not, from school children.

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[Baroness Jolly]

This has been a very interesting debate, interwoven with sorry tales about regulators. Of course, the noble Lord, Lord Blencathra, as an MP, regularly heard these tales from constituents coming into his constituency surgery. One of the regulator’s primary objectives is to take account of consumer interests. They must report annually on how they fulfil their functions, and they have done much good work for consumers. Water companies have agreed to return £1 billion to consumers after negotiating with Ofwat and the Consumer Council for Water. All but two water companies agreed in their plans to keep prices at inflation levels. Ofcom has capped second class mail prices, while Ofgem has made npower pay £55 million to consumers due to incorrect billing. However, it is also important to know that Citizens Advice does a lot of advice in this area.

I refer noble Lords back to my comments on Amendment 105A regarding the good work that Citizens Advice is doing. In addition to those comments, I shall expand on the benefits that that body provides to consumers. It promotes consumer rights and clear, intelligible information for consumers. Sixteen million people were helped through the Citizens Advice digital service, while 84% of clients said that their understanding of their rights had increased and 86% of clients reported a positive impact of advice on their lives. All this is a key port of call for consumers in the regulated sectors. I also mention that relevant consumer bodies play a vital role in this regard, especially in helping consumers on matters around redress, complaints and securing the best deals in issues such as utilities. The effect of this amendment would be to place extra requirements on regulators and increase bureaucracy when there is a drive to cut the costs of regulation and increase efficiency. The Government believe that in many cases it would also replicate protections that already exist and take away the discretion of regulators to decide what is appropriate in the circumstances.

On regulators levying fines for breach of any part of this amendment, the enhanced consumer measures set out in Clause 79 and Schedule 7 to the Bill would achieve a similar aim. In summary, there is a limited benefit in adding more duties on the regulators. Noble Lords can be reassured that much is being done for consumers by regulators, but of course we salute the wonderful work being done in the world of consumer rights as championed by my noble friend, and we will be happy to meet her to discuss the amendment. However, I ask her to withdraw it.

[Baroness Oppenheim-Barnes]

I thank my noble friend for that reply. She will not be surprised to hear that I am, shall we say, disappointed, but obviously I am not put off. I do not want to be accused of currying favour with the Opposition because that is not my primary objective, but nevertheless from time to time they do seem to have a closer grasp, although not as close as those of us who have been MPs and have held constituency surgeries where these things come up over and over again. There is a distinct division in your Lordships’ House between those of us who have such experience and those who do not. I think that this is one of the occasions when it shows. For the moment, I reluctantly withdraw the amendment.