Consumer Protection (Enforcement) (Amendment etc.) (EU Exit) Regulations 2018

Baroness Burt of Solihull Excerpts

Tuesday 15th January 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, this instrument is part of our EU exit contingency planning. It will not be needed should the UK conclude the withdrawal agreement with the EU.

Several laws allow for collective redress where infringements of consumer protection laws take place. The first of these is the consumer protection co-operation regulation, known as the CPC regulation. The reciprocal arrangements that this EU law sets out require enforcers to act on requests from their counterparts in another EU member state. They are required to investigate and, if necessary, take action to end infringements of EU consumer law where the collective interests of consumers in another member state are being harmed.

The second of these laws is the injunctions directive. The reciprocal arrangements in this EU directive allow enforcers to take action in the courts of other member states to stop the relevant infringement. In the UK, Part 8 of the Enterprise Act 2002 implements the injunctions directive as well as providing the UK’s enforcement mechanism for the CPC regulation. It enables certain UK and EU enforcers to apply for enforcement orders to stop the infringement in question, where listed EU consumer laws are being breached— known as community infringements—and the collective interests of consumers are being harmed. Lastly, UK enforcers are given the necessary investigatory powers through Schedule 5 to the Consumer Rights Act 2015.

After EU exit, and in the absence of a deal, the CPC regulation and injunctions directive will no longer apply to the UK as we will cease to be a member state. In consequence, UK consumer enforcers such as the Competition and Markets Authority will no longer be part of the reciprocal cross-border enforcement arrangements. This instrument therefore revokes the CPC regulation, which will otherwise continue to apply in UK law. This prevents a situation in which UK enforcers are required to assist their EU counterparts while EU enforcers are not under the same obligation.

The instrument also amends the Enterprise Act so that EU enforcers cannot apply for enforcement orders in the UK courts. This prevents a situation whereby EU enforcers remain able to take legal proceedings under the injunctions directive in UK courts while UK enforcers lose their equivalent right to take proceedings in the EU. However, the instrument does not prevent UK enforcers co-operating with their EU counterparts. UK public bodies will remain able to share information that they hold in their capacity as enforcers under Part 8 of the Enterprise Act to assist their counterparts abroad, although we recognise that cross-border enforcement co-operation to protect consumers will become more limited in a no-deal scenario.

The instrument also ensures that UK enforcers retain the powers that they have now to continue, within the UK, to investigate and address infringements of UK consumer law, including retained EU consumer law, after exit day. These laws are set out in the new Schedule 13 to the Enterprise Act inserted by this instrument.

In conclusion, these changes are a necessary use of the powers of the EU withdrawal Act and I commend the instrument to the House.

[Baroness Burt of Solihull (LD)]

My Lords, I thank the Minister for his letter of 7 January to my colleague, my noble friend Lord Fox, explaining much of the reasoning behind this statutory instrument. I sincerely hope that we will never ever need the provisions within the instrument; the effect of the vote that has just been held in the other place on the prospect of no deal remains to be seen. The letter says that the regulations,

“form an essential part of the government’s preparations to ensure a functioning statute book should the United Kingdom leave the European Union without a deal on 29th of March 2019”.

There has been much speculation about what would ensue should that happen, and we know that no one—or very few individuals, anyway—would want us to be in that situation. However, I wonder if the Minister knows how many more statutory instruments there are to come before 29 March in his own department alone? I understand that many have not yet even been drafted, but I would be very grateful, and I am sure the House would be too, for his best estimate of just how much work remains to prepare for that potentially disastrous eventuality.

The UK has a proud record of close and complex co-operation with the EU on consumer protection matters, but we know that if there is a no-deal withdrawal, UK consumer protection enforcement bodies will no longer be a part of the reciprocal cross-border enforcement arrangements in the consumer protection co-operation regulations or the injunctions directive. If the EU and the UK lose their mechanism for cross-border collaboration, we will all be the poorer for it. We will no longer benefit from reciprocal rights under EU law. As the Minister said, the instrument introduces the concept of a “Schedule 13 infringement”. I think I understood what he was saying but I would be grateful if he elaborated on how this might work in practice.

The letter says that the instrument will,

“protect UK consumers in the case of infringement of EU derived UK consumer laws”.

Could the Minister give an example? We know that purchased items that were manufactured in the EU but supplied through UK-based suppliers will be protected under UK rules, which will cover the vast majority of our purchases of EU-manufactured goods. Could the Minister give an example of when this Schedule 13 infringement power might be required and how it might be enacted?

It looks to me as though UK enforcement bodies can retain powers to protect UK consumers but are not obliged to co-operate with their European partners. I am sure the Minister will have some reassuring comments to make about that; it is certainly in nobody’s interest not to co-operate, but it is unfortunate that we potentially find ourselves in this position.

My final question relates to the UK European Consumer Centre, which the Government will be keeping open for at least a year, until March 2020. All well and good, but what happens to EU-purchased goods after that date? If you buy something and it develops a fault after March 2020, to whom will you go for advice?

In conclusion, the UK has been a leader in consumer protection issues and has helped to shape much of existing EU legislation. The letter says that the Government are,

“fitted to agree high levels of cross-border co-operation on consumer issues”.


It would be very helpful to know what this co-operation will look like and when it will happen. Any explanation the Minister can give about proposed timescales and content would also be appreciated.