Baroness King of Bow
Main Page: Baroness King of Bow (Labour - Life peer)Consumer Rights Bill
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Lord Harris of Haringey (Lab)
My Lords, the noble Lord, Lord Taverne, raised some interesting issues. However, I am slightly disappointed that he did not attempt to sort out some other problems at the same time, as a number of issues such as product descriptions and advertisements of the size or quantity of goods, particularly food products, could usefully be addressed in this amendment. If he gets the traditional rebuff that Members of the Committee expect from the Minister, he might want to consider including those issues as additional items when he brings the amendment back on Report.
I have noticed a tendency for supermarkets to surreptitiously change the size of products, usually food products but also others, as a means of covertly increasing the price, so things which were previously sold at 140 grams weight are now sold at 120 grams weight. Conveniently, the label moves from the front of the packaging to somewhere at the back, often to a place where it is difficult to read. These are all issues that could usefully be addressed if we are trying to simplify and improve the quality of product descriptions and amendments. It is pertinent that we should look at it.
The noble Lord also highlights in his proposed new schedule the anomaly that exists in the markings on beer glasses. However, for those of us who drink rather more wine than beer, there is even more of an anomaly as places that sell wine by the glass may claim that the glass contains 150 millilitres, or whatever it is, but when you look at it, to the untutored eye, it does not look as though it is anything like that amount. I have on occasion challenged this in restaurants and been told, “Sorry, it’s a big mistake. We have given you the small measure rather than the large”, and a smidgen more appears. However, if one is trying to rationalise this—and the motivation of the noble Lord, Lord Taverne, is entirely helpful in addressing this issue—you might as well try to get a number of other things right. Between now and Report perhaps he and the ministerial team will see what else can be got right and included in the Bill.
Baroness King of Bow (Lab)
My Lords, the noble Lord, Lord Taverne, makes a persuasive argument, to which I listened with great interest. It is interesting to note that we use metres and kilometres for our athletics, miles per gallon for our cars, pints for our milk and beer, miles for our speed limits, feet for our height measurements, and our distances are often measured in yards. As the noble Lord pointed out, we have been hemming and hawing on this issue for 800 years, so I doubt that we will sort it out in the next eight minutes. Suffice it to say that Amendment 81 would safeguard a critical element of British heritage, not to mention a key aspect of British identity—the right to buy beer and milk in pints. For some reason, the self-esteem of the British people depends on it. I thank the noble Lord for bringing this issue before us. As my noble friend Lord Harris said, the motivation behind these amendments is entirely helpful. I hope that we will get a thoughtful response from the Minister and I look forward to returning to this on Report.
Baroness Jolly (LD)
My Lords, I start by reassuring noble Lords that a statutory framework for the use of units of measurement is already in place. The Weights and Measures Act 1985 requires the use of metric units for any regulated transaction, with the following exceptions—draught beer and cider, bottled milk and precious metals, where we still use the troy ounce. These are required to be sold in imperial units. In addition, the Units of Measurement Regulations 1986 list all the legal units available for any other purpose. The Weights and Measures Act applies to any unit or measurement in use for trade. This is intended to apply not just in the transaction itself but to any use in connection with, or with a view to, trade. That would already cover most advertisements or product descriptions for goods. I hope that noble Lords will be reassured by this. I am certainly very keen to avoid any possible confusion for consumers, businesses or enforcers. I am concerned that businesses might be confused by duplication of existing requirements, particularly if that were to result in reduced levels of compliance as businesses were uncertain about which set of rules they must comply with. Having a single set of requirements on units of measurement, as we currently do, all under the weights and measures framework, makes it easier for businesses to know where to look for the rules and how to comply with them.
Baroness King of Bow
Baroness King of Bow
My Lords, Amendments 56FC and 56G are in my name and those of my noble friends Lady Hayter and Lord Stevenson.
Amendment 56FC aligns the definition of “average consumer” with case law from the European Court of Justice. This basically means using a phrase already well established in EU law to identify an average consumer. The phrase in question is,
“taking into account social, cultural and linguistic factors”,
when identifying what is average. The essential point of Amendment 56FC is to give courts flexibility when determining what constitutes average. The amendment supports the view of the Financial Services Consumer Panel, which has judged the Bill to be inadequately flexible.
I realise that the Minister is likely to respond to Amendment 56FC by saying that it is too subjective. It would seem, for example, to protect consumers who might currently be unprotected—those who are not average. An example might be consumers with learning difficulties, mental health problems or medical conditions. The European Court of Justice has not found this approach too difficult and has used the phrase in a succession of cases. Although the ECJ expects traders to consider an average consumer as reasonably well informed and reasonably observant, at the same time it expects traders to take social, cultural and linguistic factors into account. This does not seem to have caused it undue problems.
Amendment 56G requires the Competition and Markets Authority to,
“publish an annual assessment of the extent of consumer detriment caused by the use of unfair terms”.
Throughout this debate, we have heard that consumer protection is meaningful only if consumers understand what their rights actually are and those rights are enforced. Amendment 56G would provide insight into those two critical factors. Many stakeholders involved with this legislation are concerned about the enforcement landscape, which is looking very patchy, to say the least. One of the obvious reasons for that is that funding for trading standards has in some places been cut off at the knees. The majority of trading standards enforcement comes via local authorities and we all know what has happened to local authority funding. The amendment requires the CMA to publish an annual assessment of the extent of consumer detriment in relation to what we have just been discussing around unfair terms.
It is helpful to have an idea of what we are talking about in terms of scale. The most recent comprehensive research on this that I am aware of was conducted by the National Audit Office in June 2011, although I would welcome any more recent figures that the Minister no doubt has to hand and can bring to the debate. In June 2011 the NAO estimated that the total cost of detriment to the consumer was £6.6 billion. Of that sum, £4.8 billion could not be tackled locally. Therefore, £4.8 billion of consumer detriment requires a national response and a national enforcement strategy. That national response is funded to the tune of £34 million—or at least that was what was forecast for this year.
Those figures set out a national problem that costs the consumer almost £5 billion, depending which of those figures you are using, and yet our response at a national level amounts to £34 million. That is an example of asymmetry that is clearly detrimental to consumer interests. Of course, you are never going to spend as much on trying to tackle the problem as the scale of the problem itself because clearly that would not make sense but I am sure we can all understand that there is a very big gap there when you look at the scale of the problem.
I am sure that, none the less, the Minister will resist the amendment by saying that the NAO is reviewing the landscape. She may well also point to research commissioned by the University of Birmingham which the Government are supporting and which will look at the structure of trading standards and the extent to which funding cuts may have impacted the service, among other issues. However, the key point here is that the CMA has overall responsibility for unfair terms legislation and therefore the CMA should determine detriment in this area. After all, it holds the knowledge about what is happening in the market. Yes, the NAO has looked at the landscape and said that it is a dog’s breakfast because it is just so complicated. The feeling out there is that the Government have replaced one complicated landscape with another one.
We know that the scale of the problem is huge and that the resources allocated to tackle it are few and far between. It is for precisely that reason that we need all the insight and information we can get from the right source. The debate that we recently had on unfair terms sets out why we need to assess and then tackle the vast scale of consumer detriment caused by unfair terms. I beg to move.
Baroness King of Bow
The Minister points out as a concern with Amendment 56FC that it might cause the trader problems in relation to knowing the background of the consumer. I trust that she understands that the point behind the amendment is, as I set out, not to increase any undue burden on the trader; rather, it is to increase flexibility in the courts when determining what constitutes the average. As I hope I have pointed out, this seems to have been done in a way which will not lead to the problems that the Minister raised.
On Amendment 56G, I am delighted that the Government estimate that the Bill will reduce consumer detriment by £2 billion. However, the point remains that the agency that would appear to be best suited to being able to measure this is not the one tasked with that, as far as I am aware. The concerns still remain, but naturally at this point I will withdraw the amendment.
Baroness King of Bow
“( ) For the purposes of the enhanced consumer measures set out in Schedule 7, the Secretary of State shall publish a review of the powers of Trading Standards Officers to consider—
(a) the number of enforcement actions by Trading Standards taken under the enhanced consumer protections set out in this Act,(b) any additional operational costs to Trading Standards Services associated with the new powers and procedures under sections 77 and 79 of this Act, and(c) the establishment of a statutory minimum standard for all officers carrying out Trading Standards functions in any local authority and the role of a competent body to set, test against, apply and monitor those standards.”
Baroness King of Bow
My Lords, I finally rise to speak to Amendment 63ZAA, in the names of my noble friends Lady Hayter and Lord Stevenson. This returns us to the issue of the enforcement landscape. The amendment would review whether the powers of enforcement given in the Bill are adequate. Surely this is absolutely critical.
I know we go in for a lot of hot air in politics—or that is what we are accused of—but this Bill is a quite good example of the detailed work politicians do to improve things for people going around their daily business. Yes, on this side we think the Bill could go much further but still it is a good Bill. What an irony it would be if we lose hours and weeks of our lives putting this consumer law into place—although for part of the debate on that last group I was worried less about losing hours of my life as the will to live—but the end result after all these words is that nothing changes because trading standards officers do not have the powers to enforce this law. Enhanced consumer powers and more flexibility are all well and good but unless we back them up with serious intervention traders might simply feel that they do not have to comply.
Will all enforcers always be able to back up with legal action any threat of intervention and the use of enhanced consumer measures, which are after all designed to avoid legal action? Which? expressed the following concern:
“The threat of court action is not always sufficient to encourage traders to engage meaningfully in negotiations with enforcers over remedies ... This risk is likely to be especially acute as enforcement budgets are streamlined”.
That is a quite nice way of putting it. Which? is therefore keen to see,
“enforcement mechanisms ... extended. This could include either the ability for enforcers to impose monetary penalties or a simplified and streamlined court process”.
This amendment takes the first step in remedying the imbalance between consumer protections on the one hand and enforcement powers on the other. As we know, trading standards departments have undergone significant cuts yet they are supposed to enforce a vast array of legislation, apparently amounting to 200 pieces of law. For example, earlier on we discussed letting agents. Trading standards have to enforce whether estate agents are members of a redress scheme. Then again, we also heard today about their responsibilities in other critical areas such as care homes. It will be very hard for them to balance those competing demands but we know that they will have to go for those that grab the headlines and also that carry more serious risk.
Given their reduced resources, is it realistic for us to increase their responsibilities on the one hand while having no overall idea of whether their powers are commensurate with their duties? Apart from anything else, it leaves the Government a bit exposed on the critical issue of ensuring enforcement. How can we guarantee that trading standards have the financial capacity, never mind the legal capacity and expertise, to use this legislation? The amendment is a sensible measure which would help ensure consumer protection is actually enforced. I beg to move.
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.
Baroness Jolly
My Lords, on behalf of the team I thank the noble Baroness, Lady King of Bow, for her kind words at the outset.
The enhanced consumer measures will give enforcers of consumer law greater flexibility to get better outcomes for consumers. When there is a breach or potential breach of consumer law, the measures available to enforcers can be limited. Prosecutions in the criminal courts can lead to a fine or even imprisonment, while actions in the civil courts can stop the infringing conduct. However, neither option tends to lead to consumers getting their money back, nor does the person who has broken the law have to take positive steps to put right the damage they have caused.
The enhanced consumer measures will allow public enforcers to seek a range of innovative and positive measures in the civil courts, aimed at achieving one or more of three outcomes: redress for consumers who have suffered loss, increased business compliance with the law or more choice for consumers. Measures must be just, reasonable and proportionate. Once they have settled in, we expect the measures to lead to consumers getting around £12 million in redress annually. Although a business might be required to spend money in order to pay redress to consumers, to increase compliance or to provide information to consumers, a simple penalty payable to the enforcer or to the Treasury would not be appropriate.
Turning to the amendment, and to answer the points made by the noble Lord, Lord Harris, we have already committed to a post-implementation review of both the enhanced consumer measures and the changes we are making to trading standards powers in the Bill. Our impact assessments for both state that the policies will be reviewed three to five years after they come into force. In addition, when we introduce the power to extend the enhanced consumer measures to private enforcers, we want to see how the measures bed in, and the experience of public enforcers using them, before deciding whether the use of them should be extended. Clearly, when deciding whether or not to extend the use of the measures, a key consideration will be how often they have been used and the cost to trading standards of using them.
The enhanced consumer measures represent a real change in how public enforcers such as trading standards will approach enforcement. The measures will be innovative and far-reaching. We have already circulated draft guidance on using them to our implementation group for comment.
On the proposal to establish statutory minimum standards for trading standards officers, if not the service itself, local authority trading standards are required to have regard to the Regulators’ Code, which is a statutory code of good regulatory practice. This code makes it clear that regulators should ensure their officers have the necessary knowledge and skills to support those they regulate, and that regulatory activity should be proportionate and consistent. A post-implementation review of the code was undertaken in 2012, and, following a consultation in 2013, an updated and simplified code came into force in April 2014.
The Government have committed to monitor regulators’ published policies and standards to ensure that they are consistent with the principles in the code. There will be a post-implementation review of the revised code to check that it is operating as intended. In the mean time, the Better Regulation Delivery Office offers assistance to all relevant bodies to implement the provisions of the code. At a local level, we think that local authorities are best placed to determine their officers’ competence. They will have a better understanding of local priorities, taking into account new models of delivery or collaborative approaches with businesses and other neighbouring councils.
As I have already said, the Government greatly value the work of trading standards and that is why we have commissioned research on the impact and effect of trading standards on the economy, to build on the evidence base. The research will conclude in the autumn, and the outputs will inform future policy. I therefore ask the noble Baroness to withdraw the amendment.
Baroness King of Bow
My Lords, I thank the Minister for her reply and other noble Lords who have taken part in this short debate. My noble friend Baroness Crawley spoke powerfully about trading standards services as they teeter on the edge of sustainability. Anyone who has worked with them and followed their trajectory over recent spending reviews and spending rounds cannot help but feel that there is a bit of a chasm between what we are talking about in theory here—the laws that we want those trading standards officers to promote—and the powers and resources available to them to do so, not least because, as my noble friend pointed out, their numbers have been halved.
If we are on the brink of ending current services and giving up on proactive work, it does not seem realistic that they may be able to make use of any powers, which is another reason why we feel a review of this sort would be very helpful and important. My noble friend Lord Harris of Haringey gave me qualified support—thank you.
Baroness King of Bow
I was very lucky. He said I got two of the questions right; perhaps a 66% ranking is not too bad. He said that the areas that this amendment promotes that are important relate, first, to providing the mechanism for reviewing whether powers have worked and what the costs are, and, secondly, setting a standard for individual training standards officers. That is extremely important; it is why we are asking for support for this amendment. My noble friend Lord Harris pointed out that this whole area of minimum standards has resulted in a postcode lottery nationally. If we are to tackle that postcode lottery and also ensure that the Bill’s objective of enhanced consumer protection is fulfilled, we need the powers set out in the Bill to be used proactively in the pre-emptive way in which they were intended. This amendment would give us the information we need to make sure that happens in future.
My noble friend Lord Harris said that the Government might accept the amendment. Obviously, we need not worry about that, so I will leave it to one side and end on the point that the Minister referred to, that effectively it will be local authorities who have to make sure that this works. That brings us back to the point where we started. We do not see how we can avoid a dissonance between the powers that local authorities have and their inability to use those powers and meet their obligations because of a lack of resources. We do not think that those two issues can be split up, but the review would illuminate where the problems really lie. None the less, I beg leave to withdraw the amendment.
Baroness King of Bow
“Report on work of Implementation Group for this Act
On commencement, the Secretary of State shall report to Parliament on the work of the Implementation Group to ensure consumers and businesses are adequately informed of the changes in the law made by this Act, especially with regard to the key rights at the point of sale.”
Baroness King of Bow
In moving Amendment 63AA, I shall speak also to Amendment 105J in the names of my noble friends Lady Hayter and Lord Stevenson. Amendment 63AA deals with the implementation group and is interesting, not least because during the Bill’s passage in the other place the shadow consumer rights Minister, Stella Creasy, spoke about the mythical implementation group because often in the other place the answer to every question raised was, “The implementation group will sort it out”.
What will the implementation group look at? It will look at the point of sale information and identify the best way to communicate and teach people about their rights. It will look at a range of ways to ensure that businesses and consumers know what the law is regarding the point of sale questions being asked. It will look at statutory rights, what they mean and how people will be told about them. It will also identify clear, understandable wording, not just how to tell people about their rights but the words used to describe those rights. It will also look at the point of redress. It will answer questions about the information given when someone complains about the goods, service or digital content. We also heard that the implementation group will look at the guidance given to trading standards; it will look at how this will be drafted for a wide range of organisations.
With that said it is clear that the implementation group is not simply an add-on to this legislation. It is integral to the way in which it will work. The Bill is a framework. As we know, most of the law is then implemented via statutory instruments and guidance. Unfortunately, Parliament too often thinks that its job is done at that point, but implementation is really the most important part. The implementation group will be working behind the scenes—for example, preparing businesses. Consumers can be empowered only to know what their rights are, and therefore we need the implementation group to succeed and its recommendations to have bite. The key work of the group relates to Part 1 of the Bill, improving business and consumer education on their new rights and obligations, as well as spending some time informing trading standards officers.
After all that, what do we know about this mythical, important, integral implementation group? It is an all-statutory group. So first, we do not actually know what it is doing. Secondly, without Amendment 105J its recommendations will have no teeth. We hope that the advice of the group would be taken by the Minister to turn into a code of conduct. There definitely should be a statutory code of conduct. We want the implementation group to succeed. I beg to move.
Baroness Jolly
My Lords, I thank the noble Baroness for highlighting both the work that we are doing on the implementation of the Bill and that this implementation is vital if the measures are to make the differences that we intend.
We have published our plans for implementation online, at GOV.UK, and we have written to all noble Lords about them. These plans have been drawn up in close co-operation with the experts on our implementation group. These are the people who know how this really works on the ground for business, consumers and enforcers. We intend the Consumer Rights Bill to come into force in October 2015. Work to inform businesses of the pending changes in the law will begin in earnest in April 2015. This will include the publication of guidance that is easy to understand and will be supported by the sterling work of trade associations and enforcers to educate and assist businesses.
Businesses will have six months to make any changes to processes and information to meet the requirements under the Bill. They will be able to see at a glance the key changes in the law. They will also easily be able to find more detailed guidance as and when they need it. The noble Baroness rightly emphasised the need for consumers to be aware of their rights, while other noble Lords expressed similar thoughts. As we have said many times, the Government believe that we must ensure that consumers understand their new rights and obligations. That is essential and I know that is something on which we can agree.
That is why we are working closely with relevant organisations, particularly consumer groups, to ensure that consumers have a basic awareness of their updated rights and that they know where to get advice on a specific problem with faulty goods, services and digital content. The primary source of this advice will be the excellent Citizens Advice website and helpline, but of course the work of other consumer groups will be vital and we will work with key organisations to get the message across.
Baroness King of Bow
My Lords, if this implementation group is to take on so many of the issues that we have raised in Committee, we need to know in good time when this information will be made available to consumers and businesses. That is why it is very helpful that the Minister has outlined the timeframe for some of the critical tasks that the implementation group is responsible for. I heard what the Minister said about the timing of publicising consumer rights. I was going to ask if she could write to us with an integrated summary of when both business and consumers will be informed, but the Minister has said that she will place something in the Library of the House. If it is possible to write to us in advance of that, that would be welcome.
The key point, though, is not when these organisations, stakeholders or citizens are informed; the key point is how they are informed, and whether it is in a common-sense, plain manner that they can understand. That will be down to the implementation group and, given that group’s importance, it would be helpful for us to know more about how it will operate. In the mean time, I beg leave to withdraw the amendment.