Advertising Standards Authority
Debate between Baroness Oppenheim-Barnes and Baroness Neville-Rolfe
Baroness Neville-Rolfe
My Lords, I cannot agree with the noble Baroness. The system works well for all the reasons that the noble Lord, Lord Smith, articulated. We should stick with it and make sure that it continues to improve—which, I understand, is exactly what the Council is trying to do.
Baroness Oppenheim-Barnes (Con)
I wonder whether my noble friend would agree—and certainly the noble Lord who is in charge—that gambling is still a big problem. As someone who could easily be on the verge of becoming a compulsive gambler in the middle of the tennis season, I point out that there is an advertisement that says, “If you know whether the person who won the first set is going to win the match, press the button. It’s a free vote and we will pay you if you win”. I can only confess that my finger is starting to itch when they do that. Other people must be in the same position; they must go the whole hog and stay there, losing more money than they possibly can afford. Please would they pay special attention to the gambling advertisements?
Baroness Neville-Rolfe
My Lords, the noble Baroness is right. Of course, this is not a matter for the ASA alone. Regulations governing gambling, marketing and advertising are shared with Ofcom and the Gambling Commission. The Government are committed to ensuring that people, particularly the young and vulnerable, continue to be protected from being harmed or exploited by gambling—and also, of course, people in the later stages of life.
Consumer Rights Bill
Debate between Baroness Oppenheim-Barnes and Baroness Neville-Rolfe
Baroness Neville-Rolfe
I agree that broadband is a substantial investment. The Government and the utilities are putting a large amount of investment into a broadband structure, not least—I used to campaign on this when I was on the Back Benches—to ensure that there is proper broadband right across the UK. There are obviously costs to consumers in change but it is extraordinary how the cost of software, smartphones and so on has come down as a result of our innovative industries in the UK demonstrating great progress.
Transparency is also important. If utility providers choose to make a charge for providing a paper bill or for settling bills by a more expensive payment method, the law requires that these additional charges be made clear to customers before they are bound by a contract. We are working on this. We are not standing still. The regulators keep a close eye on charges to customers and on the issue of choice and there is a good deal of work going on in this area. For example, Ofcom has announced that it will be collecting further information on energy suppliers’ approaches to settling price differences between payment methods. When Ofwat approves water companies’ charges each year it makes sure that the companies offer a reasonable range of payment options. Ofcom published research in July which looked at the affordability of essential telecom services. It found that the cost of the itemised bills was not a material concern to its customers.
Turning to the amendment in detail, I shall explain why I cannot accept it. There are legal constraints, particularly from European directives, which would prohibit legislation in the manner proposed. My noble friend Lady Oppenheim-Barnes mentioned the French and Spanish legislation in this area and the excellent staff in the House Library have provided a note on that. It records that the French Minister made an order regulating billing for electronic communications services—that is, calls, text messages and the internet. However, some of the parallels stem not from the consumer rights directive but from French national policy under French law. We have already fully implemented the consumer rights directive in the UK—that is the directive to which my noble friend referred—and that process was completed in June. I should add that the consumer rights directive requires the provision of pre-contractual information on a wide range of matters before the consumer is bound by a contract. However, it does not require bills to be provided to the consumer in paper form. I just wanted to clarify the legal position.
Although I agree that we need to think about the interests of the 7 million people who are not online, what really matters is getting people the best advice and putting them on the right tariff. Citizens Advice is seeking to help people to do that, as are the comparison sites to which the noble Baroness, Lady Hayter, referred, and to save significant sums of money. The key message we should take away from today’s debate is how much you can save by being on the right tariff.
As I have said, the Government cannot support the amendment but I want to take action in this area. I thank the noble Baroness, Lady Oppenheim-Barnes, for promoting the importance of choice for a paper bill and the need to keep a close watch on this important issue. We also need to ensure that the pace of change is not so fast that it is detrimental to consumers, a point well made by several noble Lords.
I announce today two things. My honourable friend the Minister for Consumer Affairs will ask Citizens Advice and Citizens Advice Scotland to develop new guidance on this issue. This means that when a consumer phones Citizens Advice or CAS with a concern, the staff have useful relevant information to help the consumer. The Competition and Markets Authority has agreed to follow up its recent work on problem debt by considering further practices or markets that may generate particular problems for consumers with low incomes. If lack of access to paper bills is highlighted as an issue, the Government would look to act further.
In conclusion, I do not agree with the terms of the noble Baroness’s amendment, although I value all she has done during the passage of this Bill and in her long career as a consumer champion. The world is changing. We cannot and should not try to prevent that. But paper bills and cheque payments are available and we are taking action shortly through the Small Business, Enterprise and Employment Bill to make accepting cheques more attractive to business. I have set out in detail what is being done to protect choice and I have announced some action today as a result of the contributions that have been made by my noble friends and others during the passage of the Bill.
I warmly thank the noble Baroness, Lady Oppenheim-Barnes, for making this debate possible, but I ask her to withdraw her amendment.
Baroness Oppenheim-Barnes
My Lords, I thank the noble Baroness for the amount of time that she has spent on this issue with me. I also thank her for not making more public some of the arguments that I put forth when we met privately.
We shall have to do this. The fact that the French have taken one road and the Spanish another does not solve anything. The directive says that when a contract is embarked on its details can be provided in a way appropriate to the means of the person and should be given on paper unless other requests are made. Identity proof by passport or driver’s licence immediately knocks out most of the neediest people in the country: the elderly. They do not drive cars. They do not have passports. They do not go away. Those sorts of helps are not really any good to them. But the number of people in this country who still do not have broadband is about 1.7 million, so there is a big area of exclusion.
I am grateful to everyone who has contributed, and especially to my noble friend Lord Tebbit. His seal of approval is very important to me and to the House. Therefore, I think I really must test the opinion of the House.
Consumer Rights Bill
Debate between Baroness Oppenheim-Barnes and Baroness Neville-Rolfe
Baroness Oppenheim-Barnes
Before my noble friend leaves that point, I wish—possibly—to help her. Is she aware that EU authorities have to give only 24 hours’ notice when coming to inspect a British company and, within that period, that the Secretary of State responsible has to provide supporting police for the inspection?
Baroness Neville-Rolfe
I am grateful to my noble friend for that factoid, of which I was not aware. Of course, our proposed regime provides for routine inspections and then, where there is a potential problem, for immediate inspections when they would be more appropriate. That difference is entirely justified, for the reasons that I have explained. Having worked in business, I know that when you have routine inspections you want to make sure that the people who understand all the rules and how the systems work—and have all the necessary paperwork—are available, because otherwise you often end up with a second visit. That is what we are trying to avoid, because that costs both parties.
We have clarified where notice needs to be given by adding to the Bill reference to what a routine inspection is. To offer further reassurance—
Consumer Rights Bill
Debate between Baroness Oppenheim-Barnes and Baroness Neville-Rolfe
Baroness Oppenheim-Barnes
My Lords, I would like to make a point in the limited time remaining, which is that the companies that continue to give paper bills and continue to give the sort of services we have asked for are not losing anything, because of all the extra money they have earned from the vast majority of people who are paying online. So there is no financial loss to any of these companies, and particularly to BT.
Baroness Neville-Rolfe
My Lords, first, I thank my noble friend Lady Oppenheim-Barnes for her amendment, for her previous two amendments and for providing us with a useful and constructive discussion. She was not here for what I was going to describe as a gallop, but my noble friend Lord Hodgson rightly described as a canter, around this issue in our previous session. I shall not, in the interests of time, repeat everything I said on that occasion. For example, we had a good discussion about the point that the noble Lord, Lord Harris, made about ID. While I have the floor, I also pay tribute to everything that my noble friend Lady Oppenheim-Barnes has done for the consumer over many years. Things have improved as a result of things done recently, from domestic and EU sources. This Bill, if we can get it through, will make further improvements.
I was also glad to hear of my noble friend Lady Maddock’s experience, which I shall come back to in a minute. I am well aware of the Keep Me Posted campaign, which the noble Lord, Lord Harris, mentioned, and have indeed talked to some of the campaigners about their plans. It is good for the postal angle to have been articulated by the noble Lord, Lord Clarke of Hampstead, whom I thank. I also understand that this amendment is talking about the regulated areas, not everything in general; that point is well made.
We are returning to an issue that has been debated in the House on a number of occasions. It is very much a House of Lords issue and I therefore thank everyone for their thoughtful contributions. The amendment is addressed to utility suppliers but my noble friend Lord Hodgson mentioned banking, which is not in the amendment but, no doubt, similar considerations apply. All these sectors have regulators to ensure that consumers are treated fairly, in accordance with licensing rules and wider consumer protection law, including those intended to protect the more vulnerable in our society—a point that I am going to come back to.
Customers may take queries or complaints to the relevant regulator and receive some form of assurance on their position—for example, should a business seem to be charging excessively for supplying a paper statement or for processing a cheque payment. I believe that we have already established a consensus that some individuals value retaining the option of paper transactions. We are all clear that the terms of the contract must be set out at the outset, at the time of agreeing the contract, and that they must be clear and transparent. In particular, consumers need to be clear and agree if there is to be a change in the way in which they receive and pay their bills. In this way, the customer knows how bills and statements are to be provided and on what terms. As I mentioned in our previous debate, paper bills and cheque payments have never been free. The fee for processing them was always borne by the consumer but was tied up in the administrative costs of the utility, and the charge was spread across the customer base. Thankfully, today these charges are more transparent and linked to costs.
This amendment would be of particular disadvantage to online customers, for whom statements are readily available and can be printed if necessary, especially by the young but increasingly by our digitally aware “silver surfers”, because many people are embracing the internet at every age in a very surprising way. I welcome the opportunity to save money that paperless bills offer, and so do many people. Paying by direct debit, which was condemned by my noble friend Lord Blencathra, can also enable people—some of them vulnerable and elderly—to budget more effectively than being faced with quarterly or lump-sum bills. There can be some value there. For them, the proposed statutory requirement set out in these amendments adds little but the possibility of extra costs.
It is undoubtedly more expensive for a regulated business to print out and post bills to its customers than it is to deliver them electronically online. It is not for the Government to dictate that certain costs cannot be accounted for with the consequent burden instead being potentially passed on to all customers. It is surely reasonable to incentivise customers to use the cheapest processing mechanism by sharing savings with them. This amendment would outlaw that and almost certainly drive up the charges to online customers.
Baroness Neville-Rolfe
It is always good to have that sort of good experience on the public record. I thank the noble Baroness for that intervention.
The noble Lord, Lord Clarke of Hampstead, asked whether there were any talks going on with the regulator to ensure that payments to Royal Mail are fairer. I will need to write a letter to the noble Lord on what is largely a Royal Mail competition issue, if I may. I was also pleased that the noble Lord, Lord Blencathra, shared his experiences, knowing that he comes from the north of England, even though I do not think that I agreed with him on every aspect. The noble Lords, Lord Hodgson and Lord Blencathra, talked about meters. The Government are working with industry on smart meters which will enable readings without a visit to a house and therefore make the cost of energy use more visible. That will be better for consumers.
In conclusion, this is a difficult area, as we do not want society to incur the costs of printing and sending off bills to everyone if that is not needed. The trouble is that if there is no cost to paper bills, people will just opt for paper anyway even if, like me, they can manage online. I think that that is a risk. I know that is not a popular thing to say but I hope that noble Lords will reflect on that aspect of things. There is already a range of billing, payment and statement options available on the market. We agree that it is important that the appropriate protections on access to paper bills are kept in place, and are doing that through our licensing regimes and specific regulatory and sector interventions and by driving quality, choice, fair prices and value for money for consumers through good competition and good consumer law.
We will of course reflect on what has been said in this lengthy and important debate, and see if anything can be done. However, in the light of what I have said, I ask my noble friend to withdraw her amendment.
Baroness Oppenheim-Barnes
I thank my noble friend for that very careful and detailed response, which was extremely interesting. She paid a lot of attention to what has been said. I am afraid that she will not change my mind but on this occasion I beg leave to withdraw the amendment.
Consumer Rights Bill
Debate between Baroness Oppenheim-Barnes and Baroness Neville-Rolfe(10 years, 2 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Oppenheim-Barnes (Con)
Could I just highlight one of the main points? The noble Baroness mentioned the AER. One of the directives that she has mentioned as dealing with the way in which payday loan information is given by the providers is that it is still given in the old form, with the AER only, with no written amount. The noble Baroness might recall that we had an amendment to the Financial Services Act, during which we were told that the Government at that time—this is some time ago—were busily discussing that directive and would be wanting to implement it as soon as possible. It seems to me that the request from the EU about AER was a very small, perfectly justified and overdue one, and it is particularly disappointing if the Bill becomes law before that amendment has been made by the Government.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)
My Lords, I thank the noble Baroness, Lady Howe, for raising this very important issue. Her interest and expertise in consumer problems was demonstrated at Second Reading, which I missed, so it is very good to have her engaged on this important subject. The noble Baroness, Lady Drake, also rightly underlined the value and importance of ADR and of ombudsmen and ombudswomen.
I want to make it clear that the Government are very supportive of alternative dispute resolution, which provides a more accessible route than the courts for consumers to obtain redress. Accessibility was a point well made and emphasised by the noble Baroness, Lady Crawley, and, as the noble Baroness, Lady Howe, said, it is also good for business. The noble Baroness, Lady Hayter, described the advantage of wider ADR and talked—rightly, I think—of the benefits of both this Bill and the ADR directive, so I thank her for that.
Before I address the specific amendment, I shall take a moment to reflect on what the Bill seeks to achieve. The Consumer Rights Bill sets out a simple and modern framework of consumer rights and, where appropriate, enhances measures to protect consumers. Clearer rights and remedies mean that both consumers and businesses will be better equipped to resolve any issues at an early stage. Having said that, we recognise that there will be occasions when problems arise that cannot be so easily resolved between the parties. In these instances, access to alternative dispute resolution can prove invaluable.
I am glad to say that the Government will be strengthening the framework for alternative dispute resolution when it implements the European directive on ADR in July 2015, to which I think all the noble Baronesses referred. Currently there are well established mandatory ADR schemes in sectors with a high risk of consumer detriment. It is worth remembering that. One example is financial services, and I was interested to read that the largest ADR provider in Europe is the UK’s financial ombudsman, and that last year it resolved 500,000 cases. Another example is energy, but in other sectors access to ADR is limited. The directive requires us to address these gaps and ensure that ADR is widely available.
We recently undertook a consultation exercise, which has been referred to, on the best way to implement the ADR directive. Stakeholders were asked for their views on the issues covered in this amendment, and we addressed several other issues in our consultation. We proposed that the compulsory use of ADR should continue to be targeted at sectors where consumers most need it. We said that our preferred option was not to gold-plate the directive by introducing a blanket compulsory requirement for all businesses to use ADR; that would come at significant cost to businesses, which pay for the provision of ADR through a mixture of annual fees and case fees. However, we expect the directive’s requirement for businesses to inform consumers with complaints about ADR and to encourage much greater participation in ADR schemes. We will very shortly be publishing our consultation response document, which will outline the Government’s proposals for implementing the ADR directive and improving and simplifying access to redress for consumers, a point raised by the noble Baroness, Lady Crawley.
Baroness Neville-Rolfe
All I can say is that the consultation will be published shortly. I confirmed that the implementation date for the directive is 2015. The noble Baroness anticipates what I was going to say at the end, which I will say now. I assure your Lordships that our implementation plans for the Bill, which we discussed on Monday, will also advise businesses of their forthcoming responsibilities under the ADR regulations. Similarly, information to consumers will be available in one place—to meet the point that we will be joined up.
If I may elaborate, our response will explain how we intend to make ADR widely available and accessible for consumer disputes and our plans for competent authorities to monitor the provision of ADR. I hope that noble Lords will understand that I cannot set out the full detail of the Government’s response before publication. We consulted on whether a consumer complaint helpdesk would be useful to help consumers and business to access ADR, which was a point made by the noble Baroness, Lady Drake.
We will publish our intentions in our consultation response document. Once we have published our response, we will work with partner bodies to prepare for implementation. We will then publish draft regulations to transpose the ADR directive by spring 2015.
I would not want to affect the ongoing work to implement the ADR directive in regulations by amending the Bill. The noble Baroness, Lady Howe, said that her amendments would achieve consistency and simplification. However, the ADR directive contains many provisions, several of which are linked. That is why we feel that it is far better and more straightforward for businesses to implement the ADR directive in one package. Our consultation response document will set out our plans for doing so. We certainly want to avoid any unhelpful confusion that could be caused by implementing the directive partly through the Bill and partly through regulation.
The noble Baroness, Lady Drake, raised an important point about the need for the implementation of the ADR directive to complement consumer rights. I am glad to say that the changes that we will make to implement the ADR directive will complement the reforms in the Bill and improve access to and awareness of the ADR. We want to take the same comprehensive approach to ensure that we deliver the best possible ADR framework. Our plans for implementation allow us to do so. I therefore ask the noble Baroness to withdraw her amendment.
Baroness Oppenheim-Barnes
Before my noble friend sits down, can she tell the Committee what AER stands for?
Baroness Neville-Rolfe
ADR stands for alternative dispute resolution. I thank the noble Baroness for her intervention, which I did not think called for comment but I am happy to discuss it with her on another occasion.