Queen’s Speech

Baroness Hayter of Kentish Town Excerpts

Monday 13th May 2013 Lords Chamber

[Baroness Hayter of Kentish Town]

My Lords, I shall speak about consumer rights, on which a number of things are to be welcomed. First, I welcomed the opportunity of hearing the maiden speech of the noble Baroness, Lady Lane-Fox of Soho. We look forward to her continued activity on behalf of consumers, particularly in disadvantaged communities. Secondly, I welcome the proposed consumer rights Bill and everything in it. Anything which can be done to make markets work better for consumers is good for the economy, as well for consumers. I also pay tribute to the role played by the Minister, the noble Baroness, Lady Hanham, in accepting our amendment on requiring letting and managing agents to belong to an ombudsman scheme. That is going to make a real difference to tenants and landlords, and help clean up the sector, which can only be good for the provision of much-needed homes. She should be proud of the results of her arm-twisting. Thirdly, I welcome the opportunity that will be provided through pre-legislative scrutiny of a draft Bill. This will ensure that we end up with a Bill that will make a real difference to consumers. That is probably enough of the good side.

I now turn to what is not in the Bill and where the Government have failed to help consumers. We on this side have tried to amend various Bills to help consumers. We sought to have the Prudential Regulatory Authority and Competition and Markets Authority set up consumer panels. The Government resisted. We sought to amend the Financial Services Bill and the Enterprise and Regulatory Reform Bill whereby service providers should have to exercise a fiduciary duty towards their retail savers or beneficiaries. The Government resisted. We asked for the Competition and Markets Authority to include members drawn from a consumer background. We failed. We sought to prevent the closure of Consumer Focus. Sadly, we failed.

Furthermore, funding of trading standards has been slashed, thereby making the identification and prosecution of scams and rip-offs even less likely. The Government also failed to introduce a register of lobbyists. Yet who has the money to pay for fancy public affairs companies? It is not consumers. Whether it is the tobacco industry, drinks manufacturers, the insurance industry, food producers or newspaper proprietors, their bought access is never in the interests of their customers but of those industries’ bottom line. We need to know who is paying for such access. Sadly, the Government omitted from the gracious Speech proposals in this area. When tested, the Government have shown themselves to be lacking in resolve to help consumers negotiate complicated or unfair markets. The Government have failed to put consumers’ interests centre stage. Other measures in the Queen’s Speech, such as requiring landlords to check the immigration status of tenants, are likely to lead to more unofficial letting or to fewer available lets, both of which disadvantage potential tenants.

I turn to the proposals, which, although welcome, do not go far enough and miss the opportunity to ensure that consumers always get a fair deal or, failing that, easy access to redress or restitution. We welcome the enabling of “opt-out” collective redress in competition cases, whereby firms found guilty of competition law breaches will be more likely to pay damages to all affected consumers. However, the proposals are limited to competition and do not cover breaches of consumer law. Why is there no provision for claims to be brought by representative bodies, which could cover product liability, mis-selling or unfair terms such as over bank charges? We welcome the proposal to clarify the law on unfair terms in consumer contracts, which will enable, for example, bank charges to be assessable for fairness by the OFT or its equivalent body. We welcome the introduction of redress for a breach of consumer protection regulations, which will clarify the law and extend consumers’ ability to claim for losses from misleading advertisements or aggressive sales practice. We welcome the remedy for consumers when they have not received what they expected from a service, although we would like this to be extended to where the service was substandard, even though the provider used skill and care.

We welcome the provisions to clarify consumer rights for purchases with digital content. However, it is not clear whether a consumer can get a refund for faulty digital content. We will return to this matter in due course. As with our letting agents amendment, we support consumers having access to redress but would like to go further, with better enforcement and the possibility of a single portal to assist such access. We will seek to ensure that the Bill provides for a strong, accessible, collective redress mechanism, similar to those in Portugal and Australia.

Finally, where are the measures to respond to constant consumer problems? These include cold calling; energy bills increasing by £300 a year since the Government came to office; ever-increasing rail fares, up 9% a year after the Government allowed train operators to increase some fares by 5% above the cap; and extortionate charges on some pension savings such that on retirement some pensioners find that nearly half their pension fund has been wiped out by charges. We need a tough energy watchdog to force suppliers to pass price cuts on to the consumer and to ensure that the over-75s automatically get the cheapest tariff. We need intervention on rail fares and rights for passengers to get the cheapest ticket available, without having to be a whizz-kid on the computer—be they my noble friend Lord Mitchell or our latest noble Baroness.

We need transparent charges on pensions and savings, and to tackle the worst offenders by capping charges at 1%. In addition, we should have had a communications Bill to help consumers, involving greater protection for children and action to tackle the industry’s concentration and monopolistic nature. We need to strengthen people’s rights in a digital consumer’s charter that should cover privacy and online theft, price transparency, greater ease in switching providers, help for parents to protect their children online, improved access to decent broadband, consumer protection for digital payments, and effective action to tackle nuisance calls, texts and spam e-mail.

In short, we need action to create a culture that respects consumers and helps them to obtain a fair deal across all markets. We need to tackle rip-offs and sharp practice, and we need a Government to be on the side of users and consumers, not a voice for the producer or service provider over the less powerful consumer. We will welcome the consumer Bill but work to improve it to make it the best that it can be.