Low-income and Vulnerable Consumers
Debate between Lord Hunt of Chesterton and Baroness Hayter of Kentish Town
Baroness Hayter of Kentish Town (Lab)
My Lords, I thank my noble friend Lord Whitty for introducing what has been a valuable debate and thank the right reverend Prelate the Bishop of Norwich for his warning of the normalisation of food aid in a rich society. We should also pay tribute to the noble Baroness, Lady Noakes, who, sadly, was the only non-Minister to speak from the government side. Needless to say, I very much disagree, along with my noble friend Lord Hunt, with her analysis and particularly with her hopes for the outcome of the next general election.
The essence of consumer policy is not just about putting things right after someone has been ripped off; it is about preventing such action in the first place. Yet, as my noble friend Lady Crawley has demonstrated, without robust trading standards to act on our behalf, consumers are left weak in the face of poor service or shoddy or dangerous goods. There is a proud tradition in the co-operative and Labour movements of fighting for consumer rights. We embedded the consumer voice in regulators, set up ombudsman schemes, established the National Consumer Council—sadly, now demolished by the Government—and we have championed the user voice across both public and private services. As our leader, Ed Miliband, has said:
“In every area, you have to call time on the surcharge culture. Making a fair profit is important, but it can’t be done in an underhand … way … This is about power in relation to … services and how government can be on the consumer’s side … It’s … how you build a competitive economy … It’s about the rules that government sets”.
However, it is not just our leader. I appreciated the quote from my noble friend Lord Haskel, who reminded us that the then leader of the Opposition, David Cameron, said that there is a,
“disconnection between capitalism and people’s lives”.
We see it in housing, where the private market has failed, as rents and house prices drive working people out of the centre of London, putting pressure on transport as well as reducing take-home pay, as more money goes on travel, as well as taking the stuffing out of our communities. It is about water, where one in eight finds bills to be unaffordable. About a quarter of all households, and the majority of the poorest ones, spend more than 3% of their disposable income on water. During the passage of the Water Bill, my noble friend Lord Whitty sought to ensure a national affordability scheme to set targets and minimum standards for company social tariffs, but that was not accepted by the Government. It is not as though the water companies have struggled. Of their £2 billion profit last year, nearly all of it—£1.8 billion—was paid out as dividends.
Baroness Hayter of Kentish Town
It certainly did not go to domestic users.
It is about energy, where prices have soared, which has allowed profits from households to double in a year. Those profits comprise 8% of bills. Labour will break up big energy companies, introduce a simple new tariff and replace Ofgem with a tough new energy watchdog.
Travelling by rail to work is essential for many. In Birmingham, Bristol and York the average commuter travels 35 miles every morning; yet half of rail users do not think that they get value for money and commuters’ fares have jumped by an inflation-busting 20% since 2010.
Housing is another area. No one should have to live somewhere substandard, nor with such insecurity of tenure that they fear being chucked out before they can put down roots. Often they are chucked out simply for asking their landlord to do necessary repairs. However, many face such insecurity. There are more than 9 million people renting in the private sector now, including 1.3 million families with children. Yet this is a barely regulated market. These families want the same stability as any of our families would want: to get to know the community, so that their children can get to make and keep friends. However, many families are denied such stability. The bedroom tax, described by my noble friend Lady Lister, often makes them move, sometimes away from the areas close to mum, where they had a ready-made babysitter and a support network. We need longer tenancies and restrictions on rent increases to improve this volatile, unstable market.
It is a market in which letting agents are disadvantaging tenants. The average fee charged to tenants by letting agents is £355, with some having to pay more than £500. For those in a position to buy, estate agents’ fees can be equally unfair. Despite that, yesterday the Government resisted our amendment to the Consumer Rights Bill to prevent letting and estate agents charging both tenants and landlords, or buyers and sellers, for the same service. We will bring this back to the House on Report to stop this exploitation of our overheated housing market, which sucks money out of housing, as it goes neither to the homeowner nor to the landlord, but to people profiting from the desperation of people to find somewhere to live.
Without better regulation and without having someone on their side to champion their rights, consumers will never get a fair deal. Back in 1962, President Kennedy said:
“If consumers are offered inferior products, if prices are exorbitant … if the consumer is unable to choose on an informed basis, then his dollar is wasted, his health and safety may be threatened, and the national interest suffers”.
Today we have new challenges. We sought yesterday to get the Government to take action on nuisance calls, but we failed. Yet we know that it is the vulnerable on whom the scammers prey, selling high-cost credit, false PPI claims and post-accident help, by nuisance calls or junk mail. Indeed, one campaign group estimates that victims send more than £10 billion to scammers every year. Increasingly, rip-offs are via copycat websites, ads for loans on gambling sites, or payday loans advertised before the watershed, all of which the Government have refused to act on; or there is illegal activity, such as scamming people’s bank accounts, which banks fail to publicise for commercial reasons, and the regulator seems hesitant to act on.
Meanwhile, there are those who operate within the law but take advantage of the vulnerable, such as the new rent-to-own shops, whereby people supposedly rent a household good, which they will finally own, having paid perhaps three times the price through their weekly payments. This ruse gets around regulation. They are not offering loans or hire purchase that would be covered by the FCA, as people are theoretically renting rather than buying the product. What then happens is a new business model; they add compulsory but useless insurance to the product, charging 60% to 90% APR and encouraging repayment by direct debit, which of course comes out of the bank the day after benefit goes in, giving preference over other payments. Those companies can repossess for a missed payment as the consumer has no protection.
We have seen banks fail to act ethically or in the interests of users. Yet the Government rejected our attempts to introduce a code of conduct for financial services, despite the record of misselling PPI, interest rate swaps and inappropriate mortgages, all the time managing to suck out huge bonuses. Today we welcome, as I think the noble Baroness, Lady Noakes, would, the announcement of a CMA investigation into personal current accounts and SME banking. We urge all haste to this.
Our political system faces a fundamental challenge. In our globalised world, many feel that they have no influence over their surroundings and that no one is standing up to the strong on their behalf. This feeds the rush towards parties offering apparent simple solutions—everything will be better if we leave the EU or the UK is broken up. That is something that we have to challenge but, as my noble friend Lord Whitty said, the Government have made all of this worse by placing the burden of austerity on the poor. Our vision is different. It is to protect the vulnerable and to remove the fear and shame, as my noble friend Lady Lister called it, of some groups in society. It is to spread the benefits of any growth to all workers and not just to the rich, including to the 30,000 in Norwich who live on the edge of poverty. It is to tackle the cost of living crisis and put families and consumers at the heart of policy.
The Government have resisted all our attempts to get the Consumer Rights Bill to deal with the issues raised today. We will try again; we will bring back those issues on Report; and, if we fail then, we will act from May of next year.
Defamation Bill
Debate between Lord Hunt of Chesterton and Baroness Hayter of Kentish Town(11 years, 9 months ago)
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Baroness Hayter of Kentish Town
I thank all noble Lords who have spoken and, obviously, particularly the noble Lord, Lord Phillips, for his support and the interesting suggestion about it being in regulations. I congratulate the Government on their consistency. If that is all they have to offer, they may wish to look further.
The amendment relates only to subsection (3). In a situation where it was not possible for the claimant to identify the person who posted the statement, the claimant has given the operator a notice of complaint and the operator failed to respond to that in accordance with regulations, we ask that a notice is posted—it could be just a little red spot—that says “challenged by”.
I am concerned that the Government have met with the internet operators and, with no one else coming forward—we did not know that the meetings were taking place and were not asked to produce extra information—that they have taken the internet operators’ view on this as the one which will guide their hands.
Lord Hunt of Chesterton
In today’s International Herald Tribune there was a long editorial about the great superiority of the European approach to dealing with privacy on the internet compared with how the American Government were dealing with their internet operators. I support the noble Baroness, Lady Hayter. Just talking to internet operators suggests that you are not agreeing with even the opinions of the New York Times.
Baroness Hayter of Kentish Town
I am always happy to have the New York Times on my side. Clearly, however, the Government value internet operators and particularly value being consistent. On that basis, I fear that I must withdraw the amendment this evening.