Lord Stoneham of Droxford
Main Page: Lord Stoneham of Droxford (Liberal Democrat - Life peer)
Lord Stoneham of Droxford (LD)
My Lords, I am pleased to support this Bill, which has been led by my colleagues Vince Cable, Jenny Willott and Jo Swinson through the Commons. I have been asking myself in the past few days whether this is the first Bill that is the product of a formal ministerial job-share. I am glad Which? in its briefing fairly recognises this Bill as providing,
“a firm foundation for empowering consumers”,
and that it will,
“benefit businesses that treat their consumers fairly”.
Among my colleagues on this side of the House we see this ongoing commitment to strengthening consumer rights in the fine tradition of Liberal Democrat—and indeed Social Democrat—campaigners, on behalf of the rights of consumers. This is not simply a regulatory Bill. It aims also to encourage competition and to simplify, through consolidation, 12 pieces of legislation on consumer rights and 60 pieces of legislation on the investigatory powers of consumer law enforcement. It also aims to simplify the language of legislation by making it easier to understand. I think we will have to wait to appreciate that until the end of the passage of the Bill through this House. Time will tell.
I am sad that my colleague, my noble friend Lord Phillips of Sudbury, is not in his place. He has been a champion of simplifying legislation: he was a renowned consumer campaigner when he broke new ground as Jimmy Young’s champion on consumer rights—the legal eagle—on Radio 2 in the 1970s and 1980s.
This Bill combines a commitment to consumer rights with the Government’s strong commitment to greater competition to ensure fair and competitive pricing, and to ensure that competition encourages innovation and cost reduction, all of which are central to ongoing recovery and to developing the country’s competitive advantage. Vince Cable has highlighted these reforms as lying at the heart of a crusade towards trusted business and trusted capitalism. He sees the Bill as part of the overreaching overhaul of UK competition and consumer legislation which the coalition has been undertaking in the past few years. We fully support that work on this side of the House. This Bill complements the reforms of competition policy and the new Competition and Markets Authority, which came into force in April, with particular attention to dealing with price cartels.
There is also a European dimension to both consumer rights and competition policy: many issues have to be addressed at an EU level to open up markets, and to deregulate and increase competition. Increasingly, consumers make internet purchases on the web, regardless of national boundaries. With the EU so much out of favour it is perhaps appropriate to remember that free trade, regulatory competition and wider consumer rights are interlinked. The recent consumer rights directive, which came into force on 13 June 2014, produced a number of real benefits for UK consumers. Customer helplines must now be charged at only the basic rate. There is a ban on excessive card payment surcharges and on pre-tick boxes for additional purchases such as travel insurance. Consumers now have 14 days in which to return unwanted goods.
Competition has to be worked at. It is not necessarily a natural state of affairs. Given the opportunity, businesses normally prefer to eliminate competition if they can. It is also essential that consumers are able to make purchasing decisions with better information and with the confidence that, if they are misled or product quality lets them down, it will be put right quickly and cheaply. It is also important to business that clarity of what is expected of them and their responsibilities will reduce burdens on them and avoid costly problem resolution procedures. Standards that have to be met are now in one place, a 30-day period is set for inspecting goods, and procedures for repair and compensation are clear. The legislation applies to goods and services, and digital content. There will need to be further debate on how quality of service is defined for services and how in digital content “inherent buys” are dealt with.
We welcome the attempt to tighten up the prominence of small print and the measures to allow enforcers to have greater flexibility to get the best outcome for consumers. In the Bill received from the other place, we also welcome Clauses 81 to 86 to require letting agent fees to be more transparent. We also welcome Part 1, which requires any refund of goods, services or digital content due to be repaid to a consumer to be paid within 14 days, without any deduction by the business to cover fees and charges.
We will be following up on the detail as the legislation goes through the House. I agree with the previous speaker that we need to look again at the satisfactory quality test for service. It has to be reconsidered during the Bill’s passage through the Lords, which I think that the Government accept. Rather than the satisfactory quality test, we have set different standards at the moment calling on reasonable skill and care. However, it is more difficult for the consumer to judge that, which may leave consumers unprotected if things go wrong. Services are different from goods, but we need also to look at the exception where a repeat performance to put the work right cannot be contemplated. I hope that the Government will say more about their intentions as the legislation goes through.
My colleague the noble Lord, Lord Clement-Jones, who is much more of an expert than I am in this area, will comment on digital content, but we need to be aware that bugs are endemic to software and we need to be clear about whether this infringes quality and when, and about what the customer expects. We must not endanger innovative and necessary improvement work in this sector.
It is regrettable that the alternative dispute resolution directive is on a different timetable and cannot be included in this Bill, but we should have a discussion on how it will be implemented. We need to simplify the complex alternative dispute resolution landscape in the UK and create a strong, simple, competent ADR authority. I hope that the Minister will outline how the Government intend to respond to the alternative dispute resolution directive.
During the course of the legislation, I hope that there will also be some discussion of consumer and business education required to implement it successfully. Businesses can benefit if managers educate their staff that it is always cheaper and better for customer good will to put something right quickly rather than to argue over it. Customer service is more important to our economy as services become more exportable. There is huge potential with this and we cannot always rely on the price competitiveness of the pound to pursue British exports. Customers need to know how to put wrongs right speedily, which starts with providing proper guidance at the point of sale.
The Bill will help consumers reduce the time and cost of dealing with their consumer problems. It will provide more safeguards about small print in contracts and increase the means of redress. Through simplification and greater clarity, it will reduce legal complexity and costs for business and protect legitimate businesses from anti-competitive practices. Creating greater confidence among consumers will encourage them to buy new and innovative products and services. It will help encourage a vibrant, creative economy as we go forward from the foundations of economic recovery to one of sustainable economic growth.