Consumer Rights Bill

Baroness Crawley Excerpts

Wednesday 29th October 2014 Grand Committee

[Baroness Crawley (Lab)]

My Lords, I thank the noble Baroness for her interesting description of going out with local authority officers. I would recommend that experience, as I am sure she would, to all Members of the Committee. Environmental health officers do an extraordinary job, given the scale of the work they are involved in and the scarcity of the resources they have to work with.

The amendments in the names of the noble Lords, Lord Clement-Jones and Lord Stoneham, and the noble Baroness, Lady Bakewell of Hardington Mandeville, are to be welcomed—I think. I am sure they are a sincere attempt to bridge the gap between the Government’s stance on enforcement and the rather more clear-cut and preferable amendment of the noble Lord, Lord Best, which we will discuss in a few moments. However, I am not yet persuaded that these amendments best the amendment of the noble Lord, Lord Best, on the same subject of trading standards officers conducting inspections on business premises. I am sure it was not at all the intention but these amendments might unfortunately bring about increased barriers to enforcement for officers conducting inspections. For me, the jury is still out on these amendments.

[Baroness Hayter of Kentish Town]

I am slightly confused by this. If I am completely honest, among friends and just within these four walls, I think our Lib Dem colleagues would very much like to support the amendment of the noble Lord, Lord Best, but are not allowed to. They do not want to confront the Government, so they are trying to find a weasel way of not quite confronting them while almost writing down exactly the same words but making it very complicated. They are not going the whole way but saying, “Well, in certain circumstances other than those already allowed for in the Bill, the 48 hours would not have to be given; that is, when a trading standards officer shows his or her credentials and they are going to see whether an offence has taken place”.

I am sure that the noble Baroness, Lady Bakewell, knows that trading standards do not go around in policemen’s big boots unless they think some offence is being committed. They do not have the time or inclination—why on earth would they? They always show their bona fides anyway. This basically seems to be saying, “We don’t like what the Government are suggesting but can we find a way of saying that round the back?”. I could be quite wrong—and look forward to being corrected—but I have my suspicions.

Of course, the problem with these amendments is that they have all the disadvantages of the Government’s own clause; that is, the uncertainty. The same people do food as do electricity safety, counterfeit booze or whatever else one is looking for. The amendments would still introduce two systems for when somebody could go in to do an inspection. It leaves all that complication and uncertainty of having to checklist things first but with no added advantage. That seems a convoluted way of saying that they do not like the present clause.

There seem to be two things going on here. First, in moving the amendment, the noble Baroness, Lady Bakewell, said very strongly that she supports unannounced inspections—which is exactly what is said in the amendment of the noble Lord, Lord Best. Secondly, she raised the interesting point about costs in civil courts, which we will come on to. I look forward to her support for that amendment when we get there. My concern about these amendments is not that they would not move a little way towards making life easier but that they are actually a rather weak way of telling the Government, “We don’t like your clause”.

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We are all supportive of efforts by BIS to reduce bureaucracy, but this measure would undermine an important service and it would add a layer of extra form-filling and administration created by the need to issue—according to the Government’s impact assessment—nearly 7,000 notices of intention to inspect each year, at considerable extra cost to a service with serious budgetary constraints. Amendment 62A seeks to remove from the Bill a measure which could undermine a vital service already seriously overstretched. I beg to move.

[Baroness Crawley]

My Lords, I rise to support the amendment in the names of my noble friend Lady Hayter and the noble Lord, Lord Best. This amendment proposes that the requirement in the Bill for trading standards to give 48 hours’ notice to businesses before entering their premises be removed. In supporting this amendment, I remind noble Lords that it is my privilege to be the current president of the Trading Standards Institute. I refer noble Lords to my entry in the register of interests.

Let us be clear: the power to enter business premises remains but the Bill introduces a new safeguard requiring written notice to be served before entering. Because of the strong response to this highly controversial proposal from the enforcement profession, there is now a list of exemptions to this new proposal from the Government. However, I believe, as do several other noble Lords, that these exemptions will only lead to confusion and the possible introduction of overcautious behaviour on the part of the trading standards profession, which is already seriously stretched. It will also lead to increased financial and judicial burdens, as outlined by the noble Lord, Lord Best.

I remind noble Lords that the budgets of trading standards departments at local government level have in some cases seen cuts of up to 86% since 2009. While the Government have listened and made some changes to the Bill, the Trading Standards Institute does not believe that those changes yet strike the right balance, which the noble Lord, Lord Best, talked about. It is essential that we achieve that balance between the right to carry on a business unimpeded by officials and the right to protect consumers.

It is not the case that all businesses are clamouring for the removal of unannounced visits. In a recent edition of The Grocer, the chairman of a large cash-and-carry business in the north-west stated:

“It is independent retailers saying that local authority test purchasing is less effective if there has to be 48 hours notice of a visit.”

Many retailers welcome spot checks because they want to see a level playing field in the high street and with larger retailers.

Last week I spoke to a trading standards officer about food fraud in the light of the very important Elliot report into the horsemeat scandal, which the Minister has referred to. She told me that while checking one of those large storage units that are so prevalent nowadays—we seem to have a lot of things to store in our lives, do we not?—she came across a unit that was being used to cut up some kind of raw meat. This was a unit that was usually used to store furniture; it had no running water or utilities necessary for processing meat. The trading standards officer had the unit closed down immediately. She was able to close it down under the Food Safety Act—which the Minister has also referred to—because, unlike this proposed legislation being brought forward under BIS, food fault is an area where spot checks are still allowed: 48 hours’ notice is not required. Had that unit been processing highly dangerous electrical goods—such as in the tragic case of the phone chargers to which the noble Lord, Lord Best, referred, or the hair straighteners that I have seen in trading standards offices and which can be very detrimental to health when they are criminally produced—she would most likely have had to give 48 hours’ notice. No doubt she would never have seen the rogue trader again.

Life is hard enough for the seriously overstretched trading standards service—which still does a magnificent job on behalf of the public—without putting another bureaucratic obstacle in its way. Such an obstacle could only allow rogue traders to prosper, damaging legitimate businesses—which are, of course, the vast majority of businesses in this country—and diminishing consumer protection.

Before I sit down I would like to ask the Minister where the evidence is that these inspections interfere with or hamper the operation of a business. The recent Elliott report on food fraud highlights the value of unannounced inspections, so why are the Government moving away from them in this Bill? The amendment of the noble Lord, Lord Best—which is also signed by my noble friend—denotes the line between the honest business and the hard-pressed consumer on the one side, and the rogue trader on the other. I call on noble Lords to support this amendment.

[Lord Harris of Haringey]

My Lords, I repeat my declaration of interest as chair of National Trading Standards. Will the Minister tell us what exactly is the problem that the clauses we are debating now are there to solve? What is the evidence that this has been a power that has been abused or misused by trading standards departments? If she can give us chapter and verse today, I would like her to do so but, if not, I ask her to lay in the Library all the complaints that the Department for Business has received on this specific point. It is not clear to me that this has ever been a significant problem or burden on anybody.

We have to recognise that, certainly as initially put forward, this proposal was a complete nonsense. It was essentially saying that: if you were a rogue trader who had something to hide, you would have 48 hours to make sure that it really was hidden before the trading standards department came around to do an inspection. Since then, we have made some changes which are the exclusions in paragraph 23(5) of Schedule 5. However, as the noble Lord, Lord Best, suggested, they pose a whole series of new potential problems. For example, the power of entry is to be exercised by an officer when,

“the officer reasonably suspects a breach of the enforcer’s legislation”.

What does “reasonably” amount to in this case? I have seen how litigious some of the people against whom enforcement action has been taken can be. They will string things out and argue abuse of process. The more serious the case, the more they argue. The litigious will say that there were no “reasonable” grounds. What is going to be the basis of the reasonable suspicion? All of this will have to be defined and the danger is that that will lead to litigation which takes up more time and generates more problems as a result.

If the officer reasonably—that word comes in again—suspects that there is an imminent risk to public health or safety, that is fine, but that is about public health and public safety. Other issues may arise where the evidence will disappear. What is it that is being gained by these changes? The whole point of having the power of random inspection is not just to find something on the occasions when a random inspection is made; it is also the deterrent implication for all those whom the inspector may or may not visit. There is a chance that they will be inspected, something will be found and the consequences will flow. If that is taken away, frankly, one of the most effective deterrent mechanisms as far as these issues are concerned will be lost.

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[Baroness Crawley]

The noble Baroness mentioned that when it comes to a new business, there would be a power for trading standards officers to observe. What is meant by “observe”? Does it mean going behind the counter, as my noble friend Lady Hayter asked, or does it mean “observe” as if the officer was a member of the public? In that case, it would hardly be worth walking in.

[Baroness Neville-Rolfe]

It means observing as though the officer was a member of the public, but obviously a test purchase can be undertaken. The officer can speak to the trader and agree that there should be an exemption, in which case the exemption would apply. Moreover, if the officer suspects a breach, that also implies.

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[Baroness King of Bow]

My Lords, I finally rise to speak to Amendment 63ZAA, in the names of my noble friends Lady Hayter and Lord Stevenson. This returns us to the issue of the enforcement landscape. The amendment would review whether the powers of enforcement given in the Bill are adequate. Surely this is absolutely critical.

I know we go in for a lot of hot air in politics—or that is what we are accused of—but this Bill is a quite good example of the detailed work politicians do to improve things for people going around their daily business. Yes, on this side we think the Bill could go much further but still it is a good Bill. What an irony it would be if we lose hours and weeks of our lives putting this consumer law into place—although for part of the debate on that last group I was worried less about losing hours of my life as the will to live—but the end result after all these words is that nothing changes because trading standards officers do not have the powers to enforce this law. Enhanced consumer powers and more flexibility are all well and good but unless we back them up with serious intervention traders might simply feel that they do not have to comply.

Will all enforcers always be able to back up with legal action any threat of intervention and the use of enhanced consumer measures, which are after all designed to avoid legal action? Which? expressed the following concern:

“The threat of court action is not always sufficient to encourage traders to engage meaningfully in negotiations with enforcers over remedies ... This risk is likely to be especially acute as enforcement budgets are streamlined”.

That is a quite nice way of putting it. Which? is therefore keen to see,

“enforcement mechanisms ... extended. This could include either the ability for enforcers to impose monetary penalties or a simplified and streamlined court process”.

This amendment takes the first step in remedying the imbalance between consumer protections on the one hand and enforcement powers on the other. As we know, trading standards departments have undergone significant cuts yet they are supposed to enforce a vast array of legislation, apparently amounting to 200 pieces of law. For example, earlier on we discussed letting agents. Trading standards have to enforce whether estate agents are members of a redress scheme. Then again, we also heard today about their responsibilities in other critical areas such as care homes. It will be very hard for them to balance those competing demands but we know that they will have to go for those that grab the headlines and also that carry more serious risk.

Given their reduced resources, is it realistic for us to increase their responsibilities on the one hand while having no overall idea of whether their powers are commensurate with their duties? Apart from anything else, it leaves the Government a bit exposed on the critical issue of ensuring enforcement. How can we guarantee that trading standards have the financial capacity, never mind the legal capacity and expertise, to use this legislation? The amendment is a sensible measure which would help ensure consumer protection is actually enforced. I beg to move.

[Baroness Crawley]

My Lords, I support my noble friend’s amendment and her very important call for a government review of the powers of trading standards officers, given the responsibilities inherent in the Bill.

In the trading standards workforce survey of March 2014—despite the health warning on it from my noble friend Lord Harris—a picture emerges of a service that is still excellent but is teetering on the edge of sustainability. Trading standards staff numbers have fallen by almost half in the past five years. Numbers of trading standards officers per service range from half an officer in one local authority to 48 officers in another, with apparently little reference to the population size of the areas they serve or the number of businesses in those areas.

The Minister has just spoken, in relation to the previous amendment in the name of the noble Lord, Lord Best, about needing to be an intelligence-led service, particularly in the future. I applaud that but what if there is no one left to gather the intelligence? We are seeing that in some places now. We all want a service that is effective and capable of meeting current and future expectations in the Bill, in order to fulfil its public safety remit and its consumer protection remit.

Trading standards officers take great pride in their work and they welcome the support that they receive from government. They want to make a full contribution to economic growth, public health, environmental protection and safer communities but their depleted numbers make that more and more difficult. In the workforce survey, more than 30% of trading standards authorities that responded mentioned stopping or limiting several second-tier advice services to consumers. Nearly all respondents stated that service provision would be reduced, with most proactive work ceasing and some services providing only the statutory minimum.

The functions under threat in local authorities include underage sales work, intellectual property, food sampling and animal feed. Non-statutory community projects such as the no cold-calling zones, which have been very successful, and trusted trader schemes, as well as the provision of free business advice, are also at risk. Several authorities will be introducing a system of responding only to complaints from vulnerable consumers or those with very immediate risk to their safety.

The trading standards service is centuries old. We have recently been commemorating the trading standards officers who gave their lives in the First World War. Many trading standards officers have in the past travelled to countries around the world to share our best practice. Ours is considered to be one of the finest services globally. We should be proud of that. Therefore, I ask the Minister, who I know is a good supporter of trading standards, to look favourably on my noble friend’s amendment and not simply say that this is the domain of local government and that therefore she is unable to intervene.

[Lord Harris of Haringey]

My Lords, this is probably a helpful amendment from my noble friend. The reason I say “probably” is that I am not sure that it is asking all the right questions: it is asking two of the right questions, but I suspect that there is a third one as well. One of the good provisions—which I actually think should be incorporated in all of the legislation that goes through Parliament—is the one introducing some mechanism for reviewing, once the legislation has passed, how much the powers that have been granted to whoever have been exercised, whether they have worked, and so on, and what the cost has been. Paragraphs (a) and (b) here are very much a part of that. I would like to see those incorporated in every piece of legislation that we pass because it would be helpful. I sometimes think that government departments put forward these things and then nobody ever looks at them again until perhaps 20 years later, when there is a Law Commission review as to whether anything has actually happened. This would provide the raw material to see what happened. It is particularly critical in this area because we know the extent to which trading standards departments are overstretched and in real difficulties. Therefore, it would be extremely valuable to understand whether this has been yet another set of powers, duties and obligations placed on them that they simply cannot cope with.

The second important thing done by the amendment is to try to set a standard for individual trading standards officers; to say essentially that there should be a properly recognised qualification and describe how all that would work. That is also extremely helpful. The amount of law that trading standards officers are expected to enforce—I think there are 250 pieces of legislation and the number rises constantly—covers an enormous range of areas of activity and requires a degree of specialist skills. Some of them require investigatory skills and financial skills in addition to all that, so having some minimum standard as to what officers should do is helpful and useful.

What the amendment omits is the minimum standard that our citizens—from whichever local authority—have the legitimate right to expect from local trading standards. What is the minimum level of protection that we can expect from local trading standards? That is the area where this amendment could be strengthened. Obviously, if the Government accept this amendment today, there would be progress and no doubt my noble friends would then introduce an amendment on Report which focused just on this issue. Otherwise, if they bring it back, perhaps they could look at this wider issue as well. This is important because there is enormous variation between local authorities in terms of trading standards provision.

As a former local government leader, I absolutely espouse the importance of local accountability, localism and so on. That is an absolute principle, but there were plenty of areas when I was a council leader where, yes, we had local discretion and espoused the principle of localism, but we were expected to achieve certain minimum standards. That is not the case as far as trading standards and consumer protection are concerned. It would be helpful to try to find some way to enable the Department for Business to look at whether there was an acceptable minimum standard or level of trading standards provision in every local authority. I am conscious that the level of provision made by local authorities necessarily depends on their block grant. That is determined not by the noble Baroness and her colleagues in the Department for Business, but by the Department for Communities and Local Government. Consumer protection is one very miniscule part of that block grant. It would be in everyone’s interest—particularly in the interest of all of us as citizens or consumers—if there were some clear minimum standards laid down. Perhaps some work done on the back of a small amendment to this Bill over the next year or so would be extremely helpful in setting out what that minimum should be.

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[Baroness King of Bow]

My Lords, I thank the Minister for her reply and other noble Lords who have taken part in this short debate. My noble friend Baroness Crawley spoke powerfully about trading standards services as they teeter on the edge of sustainability. Anyone who has worked with them and followed their trajectory over recent spending reviews and spending rounds cannot help but feel that there is a bit of a chasm between what we are talking about in theory here—the laws that we want those trading standards officers to promote—and the powers and resources available to them to do so, not least because, as my noble friend pointed out, their numbers have been halved.

If we are on the brink of ending current services and giving up on proactive work, it does not seem realistic that they may be able to make use of any powers, which is another reason why we feel a review of this sort would be very helpful and important. My noble friend Lord Harris of Haringey gave me qualified support—thank you.

[Baroness Crawley]

You were lucky!

[Baroness King of Bow]

I was very lucky. He said I got two of the questions right; perhaps a 66% ranking is not too bad. He said that the areas that this amendment promotes that are important relate, first, to providing the mechanism for reviewing whether powers have worked and what the costs are, and, secondly, setting a standard for individual training standards officers. That is extremely important; it is why we are asking for support for this amendment. My noble friend Lord Harris pointed out that this whole area of minimum standards has resulted in a postcode lottery nationally. If we are to tackle that postcode lottery and also ensure that the Bill’s objective of enhanced consumer protection is fulfilled, we need the powers set out in the Bill to be used proactively in the pre-emptive way in which they were intended. This amendment would give us the information we need to make sure that happens in future.

My noble friend Lord Harris said that the Government might accept the amendment. Obviously, we need not worry about that, so I will leave it to one side and end on the point that the Minister referred to, that effectively it will be local authorities who have to make sure that this works. That brings us back to the point where we started. We do not see how we can avoid a dissonance between the powers that local authorities have and their inability to use those powers and meet their obligations because of a lack of resources. We do not think that those two issues can be split up, but the review would illuminate where the problems really lie. None the less, I beg leave to withdraw the amendment.