Consumer Rights Bill

Baroness Bakewell of Hardington Mandeville Excerpts

Tuesday 1st July 2014 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, this is a good Bill. It covers many issues that have previously been of concern to consumers and offers them reassurance and protection for the future. It is easily understood by the layman, without too much jargon. I welcome the clarity the Bill brings and look forward to the Committee stage.

I would just like to comment on the issue that has arisen in the Bill around unannounced inspections. As a vice-president of the Local Government Association, I am well aware of the concerns that councils have about the initial proposals to restrict their ability to perform such inspections. I understand, as do local councils, the stress that such inspections can put on businesses and their employees. However, sometimes, in order to preserve the safety of the general public, and often the most vulnerable members of the public, the ability of councils to inspect a business without warning needs to be protected. In my own council of South Somerset, the power is used extremely sparingly and generally only in conjunction with other agencies, such as the police and the county council.

In the south-west, the “Smokefree” campaign is focusing on the sale of illegal tobacco and the effects it has on encouraging young people into smoking. Recent research has shown that 89% of adults in Somerset believe that illegal tobacco is a danger to children because it can be bought easily and cheaply at pocket money prices. Cheap, illegal tobacco is easily accessible in communities across Somerset. It sells for less than half the tax-paid price of legally sold tobacco. Illegal tobacco therefore impacts on the business of legitimate traders in Somerset.

The south-west, unfortunately, already has the highest number of young smokers in the UK. Illegal tobacco sellers do not ask for proof of age or care if they are selling to children. Apart from advertising and raising awareness of illegal tobacco sales, a main plank of the campaign is enforcement alongside HMRC, the police and trading standards. Giving notice of enforcement visits and action is counterproductive to reducing the number of sellers in the marketplace.

Outside of illegal tobacco sales, the vast majority of local businesses abide by the rules, but there will always be some which do not. Where inspections are not necessary, the Local Government Association, through its local regulation initiative “Open for Business”, is promoting the advance notification of business inspections wherever possible. It is also key for best practice to be shared from councils where trading standards teams work closely with businesses to ensure that their practices are within the rules, while reducing their burden as much as possible. Therefore, I urge the Government to accept the recommendation of the Business, Innovation and Skills Committee in another place for an exemption from the requirement for 48 hours’ advance notification where an enforcement officer reasonably considers that to give advance notice would defeat the purpose of the visit.

Turning to letting agency fees, like many in the House before me, when I was introduced I began to look at possible accommodation in London. I found the various estate agent adverts confusing in the extreme. I could not tell whether the real rent was being charged or whether utilities and council tax were included or extra, and there was certainly no mention of fees to be paid by the renter. I welcome the greater transparency proposed in the Bill on letting agent fees. This is a great step forward. With rents in London on the increase, it is essential that we can all see what the actual cost of entering into the rented market is and how much it will cost us to change accommodation. At a time when household budgets are stretched to the limit, transparency is vital.

Lastly, I turn to children’s exposure to payday loan advertisements on television. We covered payday loans during Questions. Like others, I am sure, I have received a brief from the Children’s Society. Being a great supporter of that organisation and having received many important briefings from it over the years, I took particular notice of this one. Back in Somerset I chair a task group looking at the impact of the welfare reform programme on residents and families. The huge detrimental effect of the industry which has grown up around payday loan companies, both licensed and unlicensed, forms a key part of our deliberations. The statistics are stark. Ofcom research showed that in 2008 there were 17,000 payday loan television adverts. By 2012 this had risen to 397,000—an increase of 2,300% in just four years. In 2012 children aged four to five saw an average of 70 adverts for payday lenders during the course of the year. Children are exposed to payday loan adverts on a daily basis. These adverts do not flag up the penalties for non-repayment and give the impression that money is readily available, just for the asking. Anyone who has children will have suffered at some stage from the “I want” syndrome, especially in the weeks running up to Christmas. This can cause enormous stress to families struggling to make ends meet. By allowing children to think it is easy for their parents to get access to cash, the adverts are encouraging children to pester their parents to take out high levels of debt. It is exploiting children to reach parents, and this manipulative tactic must be discouraged. Finally, I should like to ask the Minister whether the Government will consider using this Consumer Rights Bill better to protect children from advertisements for payday loans.