Queen’s Speech

Lord Borrie Excerpts

Monday 13th May 2013 Lords Chamber

[Lord Borrie]

My Lords, the great German Chancellor Otto von Bismarck once said:

“Laws are like sausages, it is better not to see them being made”.

Of course, we in this House see laws being made all the time. It is what we do. We use words such as “scrutiny” and “amendments” and so on, but what we do is watch laws being made. Sometimes it is not a very edifying sight. Since naturally I will choose examples of recent times, it is not really a blame that I can attach to a Government of any particular colour.

We are very familiar with Bills that have been through all stages in the other place and yet we find they have been inadequately discussed or whole chunks of them have not been discussed at all. Sometimes we get Bills in this House where Ministers have to produce all sorts of amendments because they have only recently thought of things or because of points made by Back-Benchers in the other place or this House. Sometimes, as in recent Sessions, we get Bills such as the Public Bodies Bill or the Enterprise and Regulatory Reform Bill, which range over an unrelated mix of topics so it is quite difficult for us to understand what the specific aims of the legislation are. Sometimes the aim of the Bill may be clear but the solution that the Government propose to us is not at all clear. Sometimes new institutions are created that are not really necessary.

For example, in the previous Session, the purpose of the Groceries Code Adjudicator Bill was perfectly clear and the Government had a perfectly good answer to the question: what is the purpose of the Bill? The Competition Commission had recommended that because of the overweening powers of supermarkets, suppliers such as farmers and others deserved some sort of protection and dispute machinery. Why on earth did the Government not simply give this role to the Office of Fair Trading, which was about to be amalgamated—under another Bill of the Government’s—to form a powerful competition body called the Competition and Markets Authority? Instead, a new institution was set up, a charming lady has been appointed; nobody knows how many cases it will receive, but a whole new institution has been set up with a back office and all the rest of it. I do not know how much work it is going to do. It must be very difficult to estimate because “groceries” is very narrowly defined. Nobody knows quite how many different anti-competitive practices may emerge that deserve to be looked at by this adjudicator. It may take some time to know what the result is. It does not even cover all supermarkets; only the biggest ones are specified.

Time and again, the Government tell us that there is a great need to protect small and medium-sized enterprises. I apologise to those who think that there is a real difference between small and medium-sized. Of course there is, but they are classed together for many purposes and that seems quite reasonable. One of the troubles that SMEs—as I will continue to call them—suffer from is late payment of debts. Larger companies deprive SMEs of their cash flow because the cash flow does not proceed in accordance with the dates that the contract has set out. Payments are delayed and small companies have to put up with that. This is a very real problem. I have not seen the full report yet but I am glad to note that the special adviser to the Government on matters of enterprise, the noble Lord, Lord Young of Graffham, has pointed specifically to this problem as something the Government ought to deal with. Of course, I entirely agree.

To my mind, instead of creating some new body, one should look at the Financial Conduct Authority, which was set up recently by the Government; it is a perfectly good, existing body that could be given the task of assisting the creditors among the small enterprises which really need assistance. It is unreasonable to leave it to consumers or small businesses to fight their own case. If they start fighting their own case, they may find that that supplier does not wish to deal with them again.

I note the very worthy sentence in the gracious Speech that:

“A draft Bill will be published establishing a simple set of consumer rights to promote competitive markets and growth”.

It will be very important to see how far the ordinary consumers will be assisted—because they will need assistance—in getting advice or pursuing their case, by citizens advice bureaux, trading standards officers and the like. They will need that help. How far will the resources be provided?

“A simple set of consumer rights” sounds like some kind of holy grail, and people have been using that phrase for quite a long time. I have been involved with the reform of consumer law one way or another for about 50 years. In the 1960s and 1970s Governments of different political colours set about making a number of changes; for example, making illegal any contract terms that sought to exempt a seller from his normal liability to supply goods that are fit for their purpose and of satisfactory quality. Incidentally, it used to be “merchantable quality” but it was reasonable for the Houses of Parliament to accept that “merchantable quality” was not a phrase that would appeal particularly to the ordinary consumer and something else was needed, and so one has “satisfactory quality”, bearing in mind the price and description of the goods. That was an excellent change, but I wonder whether the setting out of consumer rights more simply can be achieved, because it may be very difficult. It may be asking the impossible to set out rights in such a way that they are self-explanatory and the consumer needs no help, but I am delighted, as others are, to see the Bill, and to see how it might be achieved.