Baroness Jolly
Main Page: Baroness Jolly (Liberal Democrat - Life peer)Consumer Rights Bill
Baroness Jolly Excerpts
Baroness Hayter of Kentish Town (Lab)
My Lords, Amendment 50A is about transparency of charges. This is something we know that the Government support. They are very much in favour of transparency, particularly given their very welcome provision elsewhere in the Bill to make letting agents disclose their charges. However, other groups of home owners and tenants have a similar need to know what they are being asked to pay, whether it is insurance in respect of a holiday or an add-on to a main product. I hope that the example I am about to give will help the Minister to respond to the amendment. It concerns leasehold management where there is leasehold ownership of a block of flats and either the managing agent or the ground landlord takes out an insurance policy or has building work done, but then, because of the contract, the leaseholders have to pay up although they are not shown the details of the cover, if it is insurance, or, indeed, of the price and bids for the work if it is, for example, building or gardening. These details are available to the freeholder, and probably to the managing agent, but not to the leaseholder. When they ask for this, the insurance company or, indeed, the contractor in the case of buildings often says that their agreement is with the freeholder and therefore they will not give the leaseholder the information, even though the leaseholder is paying.
We have had an example of this from my colleague in the other place. It will be obvious who it is when I say that this was about some leaseholders in Walthamstow. They managed to get their hands on their insurance policy and discovered that there was an extra premium covering terrorism. We were slightly surprised that Walthamstow should be high on that agenda. When they inquired, they discovered that it was because a newspaper article had once reported that somebody involved in a plot to blow up a plane lived in the area. That may be an extreme example but I think that we all know of cases where the person who actually pays is not the contractor or is not the person who is party to the contract; they have to pay via a different contract. Therefore, Amendment 50A says basically that when somebody has to pay via a third party, they should have the right to obtain the information relating to the charge to which they are contributing. I beg to move.
Baroness Jolly (LD)
My Lords, like other noble Lords, I, too, have looked carefully at the discussions on this issue which took place in the other place and I am aware of the circumstances and purpose which has given rise to the amendment. As I understand it, the purpose of the amendment is to assist leaseholders in establishing whether the insurance cover and the contributions paid towards the insurance premium are reasonable. I entirely agree that transparency is important and that leaseholders should have access to information about insurance and, indeed, other service charges.
Having carefully considered the amendment, its purpose and effect, I am happy to reassure noble Lords that the law already provides leaseholders with the right to obtain the information that this amendment seeks to provide. Leaseholders contributing towards the cost of building insurance and service charges more generally have for some years had the right to access and obtain copies of this information. This includes being able to request in writing a copy of the insurance policy or the landlord/managing agent providing reasonable facilities to inspect the policy and all other supporting documents, for example. This is in addition to the ability to request a summary of service charges in general, which would include the costs of insurance, and to inspect the invoices, receipts and other supporting documents that make up the costs.
If a landlord or, indeed, a managing agent on their behalf, fails to comply with a request for information without reasonable excuse, they commit a summary offence, which is subject on conviction to a level 4 fine on the standard scale of up to £2,500. Ultimately, as noble Lords will be aware, leaseholders can apply to the First-tier Tribunal Property Chamber for a determination about the reasonableness of the costs of insurance that they contribute towards and other service charge payments. Grounds could include, for example, that the level or type of insurance is not appropriate, in addition to the reasonableness of the premium.
It is, of course, in the interests of parties to try to resolve concerns or disputes amicably, by discussion or alternative dispute resolution where possible, before resorting to the tribunal system. Noble Lords will also be aware of the requirement for letting and managing agents now to belong to one of three redress schemes approved by the Government. This requirement came into force on 1 October 2014, and is something that the noble Baroness, Lady Hayter, inspired through the Enterprise and Regulatory Reform Act. It is also important that we avoid creating a situation in which changes to legislation result in confusion or doubt about how existing legislation operates, or in weakening that legislation. This could potentially act to the detriment of the very leaseholders whose interests noble Lords are looking out for.
Guidance about leaseholders’ rights, including acquiring information about insurance, can be found on the GOV.UK website. Free, independent, initial legal advice about leasehold law and the rights available, including accessing information is also available from the government-sponsored body, the Leasehold Advisory Service. I hope, therefore, that I have been able to reassure the Committee that the law already provides leaseholders with the protections and rights the amendment seeks to introduce, and on why the Government are not convinced that noble Lords’ amendments will achieve their goals. For those reasons and the reassurance I have provided, I ask the noble Baroness to withdraw the amendment.
Baroness Hayter of Kentish Town
I particularly thank the Government for giving serious consideration to this. It is interesting that the Minister said, quite rightly, that we do not want conflicting laws. Part of the problem is that what she quoted about the right of leaseholders to take the freeholder to the leasehold tribunal to get this information does not enable them to get it from the insurance company. It seems to be the insurance companies that do not seem to know that they should be providing residents with information on their cover. Residents can obviously get a copy of the insurance but it will not cover all these small points. What we were trying to write into the Act was to make sure that everyone knows their responsibility, including insurance companies, who should not wriggle out of giving this information. I think that the noble Baroness is going to give me some more helpful comments.
Baroness Jolly
Certainly. The landlord or freeholder has to get the information from the insurer in the first place in order to show it to the resident.
Baroness Hayter of Kentish Town
I thank the noble Baroness for that clarification. The point was that leaseholders were hoping to get the information directly from the insurer because that is where their money went. I will withdraw the amendment because there is another issue that we shall come to about the amount of risk that is covered. That is for the next amendment. I beg leave to withdraw the amendment.
Lord Harris of Haringey
My Lords, I will speak in support of this amendment. I declare a personal interest in this matter. I appreciate that this Committee has turned into an opportunity for all of us to explain our recent experiences of various sorts, but I suspect that this is one of the most recent experiences. Having had a series of problems with a boiler installed in my home, we called out—for the second time in this instance—a contractor to come to try to put it right. Last Tuesday evening I got home and, despite a slight cold, detected what I took to be a smell of gas. We summoned the appropriate people, who came with their little sniffer things, and so on, and declared that whoever had allegedly repaired this boiler and the flues had left it in a state whereby not only was there a serious gas leak but there was a serious leak of carbon monoxide. Fortunately, the boiler is in a basement area, although presumably it could have become an excitingly combustible place. However, the reality was that it had been left in a seriously dangerous situation.
After I had spent some time swearing at the contractors—and I am tempted to use parliamentary privilege and name them, so that residents of north London are warned of these people—the offer was made that they should come to put it right. They were shocked, as I was, that they might have left this in a dangerous situation. My immediate reaction, which remains my reaction, despite the fact that we have no gas at all in the house, because the gas board has been in and disconnected everything for the sake of safety, was that these were the last people whom I would like to come in and rectify the problem. Indeed, I notice that the contractor has e-mailed and phoned me today, clearly because he wants to be paid for the work that was originally done.
This is precisely one of those areas where the consumer needs a very clear legal position. I had not actually looked at my noble friend’s amendment until today, but this is exactly what is required under these circumstances. I wish that this could be made retrospective and that I would simply be able to point to Section 54 of the Consumer Rights Act, as it would then be, and say, “Hang on, there’s no question that we’re having a full refund of the cost and any additional fees associated with bringing somebody else in”. That is what most sensible people would expect. If the Government are serious about giving the consumer sensible rights, they should provide that in the Bill.
Baroness Jolly
My Lords, we have taken great care in developing these remedies, for obvious reasons, and we have had a very good example today. Services are a vital part of our economy. In addition, SMEs and micro-businesses make up the vast majority of services businesses. It is therefore essential that we get these remedies right.
When we consulted on these remedies in 2012, respondees supported the approach that we are taking. They considered it a sensible, balanced approach. Based on the support that we received for this approach to remedies, I am not convinced we need to amend them as this amendment proposes. The remedies that we have are clear for traders and consumers, and it is set out clearly in the Bill when the consumer can ask for each remedy. This is important: The British Retail Consortium told us that it agreed that,
“this approach would be helpful to the extent it is practical and realistic”.
However, we have also catered for the more extreme cases where personal safety is at risk. Here I should say that these notes were written before we had heard the story just told by the noble Lord, Lord Harris. Let me reassure him that the Bill does not force the consumer to have a trader whom they do not trust back in to repeat a service. The remedies set out in detail in this chapter of the Bill are not the only remedies available. To make this clear, we have written into Clause 54 that the consumer retains their access to common-law remedies.
Baroness Oppenheim-Barnes (Con)
Before my noble friend goes too far, what are the other remedies and how soon are they available?
Baroness Jolly
I will come back to the noble Baroness with chapter and verse on the remedies, but they will not be available until the Bill has been passed.
The remedies consumers retain under common law are the right to damages or, in some cases, the right to treat the contract as at an end, rather than being limited to the statutory remedies in the Bill, as long as they do not claim for the same loss twice. I am sure that no noble Lord would do that.
I recognise that consumers and traders will not want to go to court in most cases. That can, in some cases, be expensive and time-consuming. However, knowing that they retain the right to go to court is intended to empower the consumer to ask for their money back. It should also encourage the trader to agree with the consumer to do this. The consumer’s rights under this chapter of the Bill are not the only legislation ensuring that services are performed safely. For example, building regulations require that building work does not compromise the safety of people in and around the building.
Many service providers rely on their reputation and word-of-mouth recommendations. If they have made a mistake, they will want the opportunity to return to fix it. It would not be fair on those traders to take away that opportunity. Many consumers would also want the trader to rectify a problem with a service rather than have the inconvenience of finding another provider. There is also nothing to stop the trader volunteering to give the consumer a price reduction without a re-performance. The trader and the consumer are free to come to an arrangement separate to the statutory remedies in the Bill. Reputable traders will negotiate a remedy with the consumer, taking into account what the consumer has asked for. Given that consumers will be able to access compensation where re-performance is not desired and that our consultation showed broad support for our approach, I ask the noble Baroness to withdraw the amendment.
Baroness Hayter of Kentish Town
The noble Baroness, Lady Oppenheim-Barnes, asked a wonderful question. It was short and acute and went to the heart of the issue because the other remedies, the common-law remedies, are expensive and take a long time and any trader will know that no one is going to take them to court for £200 or £300—even my good and noble friend Lord Harris of Haringey. I am tempted to offer to come and help.
Baroness Jolly
My Lords, this has been a fascinating debate. Some really interesting questions have been posed, not least by the noble Lords, Lord Knight and Lord Whitty. I reassure noble Lords that I will write to all noble Lords who I have not answered by the end of my response and place a copy in the Library.
We all care passionately about the provision of public services. I am sure I do not need to remind noble Lords that our reason for not including improvements to our public services explicitly in the Bill is not that we do not consider them important. They are vital, and I am proud to say that this Government have done much to change and improve public services.
This Bill will benefit all consumers by setting out in one place consumer rights. This Bill will empower consumers. To maintain that clarity and consolidation, we have not included specific provisions for public services in the Bill. When asked in the other place, the Office of Fair Trading said:
“If you want to deal with consumer rights and the public sector, there is probably a different way to go. This is a simplification and consolidation Bill that is trying to ensure that consumer rights are clear and in one place”.—[Official Report, Commons, Consumer Rights Bill Committee, 11/2/14; col. 49.]
While there are no explicit provisions in the Bill on public services, some public services will attract the rights and remedies under the Bill. Services will attract these rights and remedies if they are supplied under a contract between the consumer and a public body. That is the test. This is because the definition of “trader” is wide enough to capture the activities of any government department or local or public authority. Consumers of public services provided under a contract with the provider will therefore benefit from the Bill with clearer rights, clearer remedies and ultimately better outcomes. That is a good thing. We will make it clear in our guidance to consumers and traders that this is the case.
Turning to those public services that are not covered by the provisions in the Bill, let me be very clear that these consumers are nevertheless protected—and in a way that often provides more tailored, specific and appropriate safeguards, designed to fit the particular service. Many of these tailored regimes already incorporate just the sorts of protections that these amendments discuss: independent advocacy, regular reporting and established ombudsman schemes.
Several sectors have well established alternative dispute resolution services. For example, the role of the Parliamentary and Health Service Ombudsman is to investigate complaints that individuals have been treated unfairly or received poor service from government departments, other public organisations or the NHS in England. The ombudsman’s powers are set out in law and the service is free for everyone. In 2012-13, the Parliamentary and Health Service Ombudsman resolved 26,358 inquiries for consumers. In 2012-13, the Local Government Ombudsman responded to more than 90,000 contacts from the public.
We all share the vision of public services provided to a high standard, where consumer feedback and consumer choice work to push up standards. The noble Baroness, Lady Hayter, mentioned the issues of signposting to ombudsmen. As my honourable friend Jenny Willott explained in the other place, the Minister for Government Policy, my right honourable friend Oliver Letwin MP, commissioned Robert Gordon to review the ombudsman landscape, thus considering the case for a single public sector ombudsman. He will report to the Minister before Christmas and we are committed to considering his recommendations. It would be premature to take action in this Bill before the review is completed.
I turning to the specific amendments tabled. The first is Amendment 50K. I am sure that all noble Lords are aware of the Open Public Services agenda. It is based on five principles for reform: decentralisation; choice; diversity of provision; fair access; and accountability. To achieve these objectives, we want to ensure that consumers of public services are empowered to raise concerns and that service providers learn from those complaints. In March, the Public Administration Select Committee published a report following its inquiries into complaint handling across government and the role of the Parliamentary and Health Service Ombudsman. As my right honourable friend the Minister for Government Policy made clear at the time, we agree that the ombudsman can play an important role in improving complaints handling and we are committed to working collaboratively with the Parliamentary and Health Service Ombudsman and other public service ombudsmen to deliver an accessible and effective complaint-handling process from first contact with a service to final resolution by an ombudsman.
There is now a set of choice frameworks covering NHS care, social housing, schools, funded early education and adult social care. These documents clearly set out the choices available to service users, as well as instructions for seeking redress if those choices are not satisfied. To offer clarity to the noble Baroness, Lady Hayter, these frameworks tell the consumer who is responsible and who to complain to. We are now looking at new digital channels for the public to register complaints about public services. This is in response to the Public Administration Select Committee’s report on complaint handling in the public sector. By way of example, we are working with the Department for Work and Pensions and the Land Registry on initial trials during the autumn.
On independent advocacy, as we said before in Grand Committee, we also prioritise making sure that consumers know their rights. Consumers of public services have access to advice, information and advocacy from government-funded channels such as Citizens Advice or GOV.UK. In addition, other bodies such as Age UK act as consumer advocates, especially for more vulnerable consumers.
Citizens Advice provides much of this advocacy. A spokesman was asked in the other place about including reforms to public services within the Bill. He said:
“I am not sure about that, if I am honest. It is not something that we have thought through sufficiently to get to a yes or no answer to that question. There are other ways of dealing with public sector services problems than a consumer rights Bill”.
When asked the same question, Which? said that,
“there are so many things that could fall within the scope of the Bill or could be added to it, and it could become unwieldy. So it is a question of priorities”.—[Official Report, Commons, Consumer Rights Bill Committee, 11/2/14; col. 7.]
I agree with those views. Public services are indeed important. We are committed to their improvement, but that is ongoing—outside this Bill.
Moving to the regulated sectors and Amendment 105A, it is important that consumer rights in regulated sectors are protected and that they are given sufficient information to make informed decisions. Regulators already have a statutory duty to look after consumer interests and must report annually on how they do this. Also, consumers within the sectors regulated are represented by relevant consumer bodies: for example, the Consumer Council for Water, Passenger Focus and Consumer Futures, which is now part of Citizens Advice.
There is also a lot happening to ensure consumers are able to get the best possible information across the board. In 2012-13, Citizens Advice helped 2.1 million clients through its bureaux with free advice. There were nearly 1 million contacts through its consumer helpline and also 14 million hits to its website. Some 91% of consumers reported that they would use the service again. This service reports to Government twice yearly on its performance against agreed standards.
Noble Lords can therefore feel reassured that regulators indeed do a lot for consumers already. With regard to the provision of advice and information, Citizens Advice reports twice annually on its performance. There is also much being done both by regulators and government to help consumers. Therefore, the amendment proposed is an unnecessary duplication of effort. I ask noble Lords not to press their amendments and to withdraw Amendment 50K.
Baroness Hayter of Kentish Town
My Lords, I thank my noble friends Lord Knight and Lord Whitty for the questions they raised and for their support. The public service issue is really interesting. It is no secret that now that universities have realised that it will affect them, one or two are getting a little jumpy. That shows what a very good Bill we have here. There is an interesting thing between those students who would pay a fee—the word in the Bill is “consideration”—and those who would not, where the latter would not be in as good a position as regards their rights. We will come back to this when we move an amendment on higher education. It might be useful at that stage—I give a bit of notice—to tease out some of those things. There was a lot of interest in this from colleagues around the House, many of them chancellors of universities, who I think have already been in touch with the Minister. Certainly, those of us interested in consumer rights are very happy that it will cover this, but I know that some clarity will be needed.
Working backwards, I am very sorry about the comment on regulators. As someone who chaired one of the consumer panels, was vice-chair of another panel and sat on another, it was not the same as being embedded in and a member of the regulator. Partly, you do not get things until they are more or less in the public domain, by which time of course decision-making is a long way down its route. Actually, it is in getting questions asked at the beginning, and the beginning of the formulation of policy and decision, where we want to embed a real consumer voice.
Baroness Hayter of Kentish Town
I think that I have made the point that the difficulty, even with consumer panels, is that they are not included at the beginning of policy development. That is even more the case as regards external bodies such as Citizens Advice, which see something only once it has been published and are therefore always in the negative position of trying to take action afterwards. As my noble friend Lord Whitty said, the whole point is to get the voice of the consumer absolutely embedded into the way in which the regulator defines the problem, what it looks for and how it does its research.
I want to make only one other point in response to the Minister on the issue of signposting to an ombudsman. She mentioned that Robert Gordon is looking at—and I welcome the report he is preparing—the possibility of there being a single ombudsman. The Minister said that it might be premature to require signposting but it seems to me that whatever we come out with, the issue of signposting will still be key.
Baroness Jolly
I think that the noble Baroness may have misheard me. What I actually said was not that it would be premature to signpost but that it would be premature to take action in the Bill before the review was completed.
Baroness Hayter of Kentish Town
While I understand that, the only action that we want is on signposting. If anything were to be commissioned, signposting would have to take place, and whatever Robert Gordon comes out with, that requirement should still be there. Indeed, if there were to be a single ombudsman, there would have to be a new name and, no doubt, a new location and website. It would be even more important to signpost.
As I said, we will come back later to the issue of public services, in which I know there will be a lot of interest. However, I hope that the Government will look at the regulators. Even if it is not in this Bill, they could still take action with each regulator because the issue represents the other side of the Bill. It is not simply about providing consumer rights but about making sure that those rights are looked after by every regulator. I beg leave to withdraw the amendment.
Lord Knight of Weymouth
My Lords, I was using an example that I thought was perfectly realistic. We have seen with the furore around how care data have been handled or mishandled by the Government that the subject of health data is very sensitive, so perhaps I should have used a different example. However, personally, I am of the view that there are times when I want people who are advising me and the professionals assisting me to have rich sources of information about me and my condition, and that is a decision that I can make.
We need all to ensure that we are properly informed as consumers—and this legislation is trying to do that. To me, data are not a scary thing as long as we have proper individual rights over them. What scares me is that I cannot see what data people have about me and I cannot see how other people are using them. I may have some rights through the Data Protection Act but that does not give me any rights to see digital data. It gives me rights to see things on paper. Tesco can come and deliver in a pantechnicon all the data that it has about me, but I cannot then manipulate the data, which is in the end what I would really like—the ability to see them, manipulate them and then decide what I want. There are examples where you might want to use some of your data and license them on a temporary basis to people who then advise you so that they can better personalise their services. But that is a debate that this House should and I am sure will have.
Baroness Jolly
My Lords, Amendment 50L, proposed by the noble Baroness, Lady Hayter, and the noble Lords, Lord Whitty and Lord Stevenson, and the accompanying schedule are about consumers having wider access to the data held on them. I make it clear that the Government support the principle that the public should have access to the data that is held on them; it is in line with our open data policies and activities and with the approach we are taking to the new European data protection regulations. We embrace the principle that, when social benefits can be obtained from anonymised datasets—so-called big data—that should also be supported. That is why, alongside the midata programme, which is concerned with commercially held data, we are also exploring how the data held on individuals by government departments might be made available to those individuals in a useful way. This work is in its early stages, but it is designed to ensure that individuals have access to the information that is held about them by the public sector. It is probably worth mentioning now that the Secretary of State for Health has committed that by 2015 we should all have access to our full health records. In parts of the country where this has been trialled, it has hugely empowered individuals.
I turn now to personal data held by companies and the midata programme. There have been two developments this year that are relevant to the debate. In the personal current account sector, we secured a commitment earlier this year from the big banks to provide consumers’ transaction records—their midata—as downloadable files with a consistent format. This work is progressing well and in June we were able to announce that the technical specification of the data fields to be made available has been agreed. This is no mean achievement. The work is on track to be completed by the end of March next year. This is something that Which? and the comparison sites have been calling for, and so it is very encouraging that the large majority of current account holders in the UK will soon have easy access to their midata files.
The second development is in the energy sector where the facility to download midata files has been available for some time. The Secretary of State for Energy and Climate Change and the Minister for Consumer Affairs held a round-table meeting in June to discuss how the user experience of comparing the market could be made easier using automation. The round table involved energy suppliers, comparison sites, app developers, consumer groups, the Connected Digital Economy Catapult and Ofgem. As a result, a working group comprised of representatives of all these stakeholders has been looking at the feasibility of providing third parties with automated access to consumers’ energy data at those consumers’ request and with their explicit consent. This will avoid the rather tedious process for many of looking for their energy consumption and manually filing it in an online form in order to get an accurate comparison.
The noble Lord, Lord Whitty, raised the issue of collective switching, which is becoming very popular and is reducing energy bills for those who engage. In 2013, DECC awarded 31 successful projects a share of a £5 million competition for collective energy purchasing. I am pleased to report that the work has gone well and that a second ministerial round table at the end of the month will discuss the rollout of this project. The Government hope that the facility for consumers to compare deals quickly and with accurate energy consumption will be available this winter. Again, this is something that has the support of consumer organisations as well as the comparison sites.
The noble Lord also raised the issue of the Consumer Focus Confidence Code. In energy, Ofgem has taken over the former consumer confidence code. Other regulators such as Ofcom and the FCA also oversee comparison sites. In July, the Minister for Consumer Affairs published the results of a review of the voluntary approach to the midata programme that has been followed so far. It addressed the issue of whether the Enterprise and Regulatory Reform Act 2013 powers that became available to us were needed to speed up implementation. The conclusion of the review, in the light of the good progress I have described, was that it is not useful to proceed with legislation at the moment, but that the situation would be kept under regular review. Similarly, where it may be useful to apply the powers to other sectors, the Government are open to this where there is a strong case that doing so would deliver tangible benefits that a voluntary programme could not. The amendment encourages us to go faster and to use the legislation to force the pace. This could disrupt the voluntary programme which has already achieved a great deal. While it is a useful challenge, we do not need new laws to do this, as I hope I have demonstrated; we are doing it already.
The amendment also proposes that the midata powers should be extended to all services provided by the public sector. I have referred to work that is under way to explore how data held on individuals by government departments may be made available to those individuals in a useful way. I have also explained the reasons why services not provided by a trader to a consumer under a contract are not covered by this Bill. The amendment proposes that the Bill should require a report on the information that is provided to consumers about the services they may be commissioning themselves. A good example of where this is already happening is in the provision of care and support under the Care Act 2014. The obligations of local authorities to provide the information people need in an appropriate way are set out in statutory guidance that was published last week. This is just one example of where I believe the Government are already delivering what is being asked for in this amendment.
Finally, the amendment asks for an annual report about the impact of government policies in these areas. I have already talked about the Open Public Services agenda, and the Cabinet Office publishes an annual report on its work on this agenda, which has as an explicit objective to give people the power of choice about what services they receive and the information and insight they need to support that choice.
This year’s report was published in March on the GOV.UK website. One example given is about supporting parental choice on education: the Department for Education’s school and college performance tables provide parents with detailed performance data on primary and secondary schools and providers of 16 to 18 education. The tables received 2.8 million unique visitors in 2013. They provide contextual information, including absence rates, workforce numbers and finance and school census data. The Ofsted School Data Dashboard, which has received 800,000 unique visitors since it was launched in February 2013, provides an analysis of school performance over a three-year period, adding further insight to support parents.
In the light of what I have said, I hope that the Committee is persuaded that the Government take the provision of information to consumers of both public and private services seriously and that good progress is being made. I therefore ask that the amendment be withdrawn.
Baroness King of Bow
My Lords, I support Amendment 51 tabled in the names of the noble Baroness, Lady Oppenheim-Barnes, and my noble friend Lord Whitty. My Amendments 48B and 50G were spoken to last Wednesday, but they were originally grouped with Amendment 51. I know that the Committee is pushed for time, so I will not repeat in detail the arguments that we had around point of sale. Suffice it to say that if consumers do not have clear and transparent information, their consumer rights are effectively undermined. That is the crux of the matter and it is the argument which has been made again now.
This is an amendment essentially to ban smoke and mirrors and to ensure that consumers actually get their rights in practice as well as in theory. The noble Baroness, Lady Oppenheim-Barnes, said how deeply held her feelings are on this matter, and she is quite right. We have to get the basics right. To my mind, this amendment will serve to do just that. Without the basics, consumers will not have their rights safeguarded. For those reasons, we are delighted to support this amendment.
Baroness Jolly
My Lords, as I said when we discussed point of sale information for goods and services in previous sessions, the Government believe that it is really important that consumers should feel confident about exercising their rights. Last Wednesday the noble Baroness, Lady King, reminded us that Martin Lewis from moneysavingexpert.com had stressed the importance of a simple and clear version of our consumer rights when he gave evidence to the BIS Select Committee on the Bill. We agree with him, which is why I am delighted that moneysavingexpert.com is one of the consumer organisations that is working with us on the high-level summary of consumer rights that the Minister and I have mentioned on a number of occasions. This summary covers our rights when we buy goods, services or digital content, and members of the implementation group are working to ensure that it is written in plain English.
In the debates relating to previous amendments concerning the requirement to provide consumer information at the point of sale or at the point of complaint, I set out the Government’s objections to requiring every single business providing goods, services and digital content to set out a consumer’s rights every time they make a purchase. Perhaps I may briefly reiterate. These were, first, that consumers are already faced with a lot of information at the point of sale, and I suspect that most of us are not going to take in information that is not immediately relevant to our purchase decision. Secondly, it is will be particularly irritating to be faced with an oral statement or handed a piece of paper setting out our rights every time we buy a newspaper in the corner shop or arrange by phone to have the dog walked—not to mention the burden this would place on the trader. Thirdly, it could cause significant confusion where the trader’s own policies were more generous than consumers’ statutory rights or where sectoral regulation of services requires specific remedies that the trader must offer.
My noble friend the Minister mentioned the concerns of a major retailer that a requirement to set out a consumer’s basic rights would completely undermine its core message. This was that a customer who is dissatisfied for any reason could bring the product back because it wanted to do what it and the customer thought was right in the circumstances, even if that went beyond what the law would require.
In answer to a point made by the noble Baroness, Lady Oppenheim-Barnes, the British Retail Consortium has said that it would happily join in providing information at the point of sale but does not support the mandatory provision of consumer information for reasons I have given. The BRC, the Federation of Small Businesses and the British Chambers of Commerce all oppose this too.
Fourthly, it would be perplexing for consumers to have to have their attention drawn to their full rights at every point in the complaints process even in circumstances where they have said what they want and the trader has immediately agreed.
On the point made by the noble Lord, Lord Blencathra, on consumers who are sold things over the telephone and have no written follow-up, the consumer has to be given a range of pre-contractual information under the Consumer Contracts Regulations 2013, so a situation in which a consumer does not know they are entering a contract should no longer arise, with effect from 2013. For all these reasons, we do not believe that requiring this information to be given to all consumers before they purchase goods or services or, indeed, afterwards, would achieve the best outcome for consumers or for businesses.
Lord Harris of Haringey
The noble Baroness gave the horrifying image of someone’s rights having to be read to them before they could buy a newspaper. Would her objection to this provision disappear if there were a de minimis element within it so that the transaction had to be worth more than £5 or £25, for example? It would be helpful to know that. Secondly, is the argument that consumers will be confused if they are told that they have more rights rather than less the best that the Minister can deploy, because that is essentially what she said? Given that the noble Baroness, Lady Oppenheim-Barnes, suggested that she might bring this amendment back on Report, it is important that the Minister who is to reply on that occasion deploys some rather better arguments.
Baroness Jolly
I can rely on the noble Lord, Lord Harris of Haringey, to put me on the spot. The de minimis element of £5 may be worth looking at but that sort of decision is considerably above my pay grade. Noble Lords should consider how irritating it is to listen to commercial adverts. The advert itself may be absolutely fine but then all the rights are read out so quickly that you cannot take them in, or at least I cannot do so.
We have strong backing from business organisations to promote the summary of consumer rights to their members on a voluntary basis. It will be a central tool that we provide to businesses in April. It will help them comply with the new obligations they will have and explain these rights to their customers, so avoiding costly shop-floor mistakes that undermine their reputation. We do not need every single retailer in the country to be obliged to display the summary of consumer rights to achieve our objective of increasing consumer knowledge and confidence but we will be looking for a significant take-up. We consider that this approach, supported by Which?, will be far more effective, and far less burdensome, than the mandatory approach proposed by these amendments. Therefore, I ask the noble Baroness, Lady Oppenheim-Barnes, and the noble Lord, Lord Whitty, to withdraw this amendment.
Baroness Oppenheim-Barnes
I am very disappointed because the response we have had sounds like a wonderfully constructed Civil Service briefing. There is a very simple definition of merchantable quality. When I was Minister of State for Consumer Affairs, I was already very concerned about people not being aware of their rights. I therefore introduced an education pack into schools. I introduced it in every type of school. First, the children—young men and women—concerned were very interested. They did not find any difficulty in defining merchantable quality. One, who was only 10 years old, said, “My mother just bought a knife that says it was extremely sharp. It doesn’t cut anything. Is that merchantable quality or not?” That is simple to answer. I am not suggesting the kind of information provided at the point of sale needs to be complicated; it is very important that it would be drafted in a way that was comprehensible to most people, not too long and not too detailed. If this amendment was finally passed I would want to have a great deal to say about a description of merchantable quality, both from experience and, believe it or not, from school children.
Baroness Hayter of Kentish Town
I was about to thank the noble Baroness, Lady Oppenheim-Barnes, for this amendment but, having seen all the troops she has on her side, it might be better for Labour to say, “We think this is dreadful”. It might make it easier for the Minister to accept it. However, I shall resist that temptation because I think that it is a brilliant amendment, and we are happy to support it. Earlier today we clearly failed to persuade the Government to embed the consumer voice right in the top echelons of regulators—that has been the tone of the debate—but this is another way to achieve the same end. The examples given by the noble Baroness, Lady Maddock, as well as those from the noble Lords, Lord Blencathra and Lord Whitty, about different regulators show how often, without that consumer voice, they fail to protect the consumer. The question from the noble Baroness, Lady Wilcox, about who regulates the regulators is very interesting because the answer ought to be, “the consumers”. The more that it is open to them, the better it will be.
The amendment is excellent. It would put in place the possibility of redress without consumers necessarily having to take their individual case to an ombudsman. It would ensure a proper complaints procedure for mistakes and poor service, falling short of a breach of rights, that nevertheless lead to substantial losses to the consumers. As has been said, it is extraordinary that regulators, which are supposedly in existence because a particular market has failed consumers, still often fail to put consumers first. They have allowed users to be muddled by confusing prices, ripped off by poor deals and ignored when making complaints. Consumers are often made to feel like the least important part of the food chain. As my noble friend Lord Berkeley says, it is often without their long-term interests being placed at the centre of regulators’ thoughts.
I look forward with interest to how the Minister is going to accept this amendment—because I am sure that she will.
Baroness Jolly
This has been a very interesting debate, interwoven with sorry tales about regulators. Of course, the noble Lord, Lord Blencathra, as an MP, regularly heard these tales from constituents coming into his constituency surgery. One of the regulator’s primary objectives is to take account of consumer interests. They must report annually on how they fulfil their functions, and they have done much good work for consumers. Water companies have agreed to return £1 billion to consumers after negotiating with Ofwat and the Consumer Council for Water. All but two water companies agreed in their plans to keep prices at inflation levels. Ofcom has capped second class mail prices, while Ofgem has made npower pay £55 million to consumers due to incorrect billing. However, it is also important to know that Citizens Advice does a lot of advice in this area.
I refer noble Lords back to my comments on Amendment 105A regarding the good work that Citizens Advice is doing. In addition to those comments, I shall expand on the benefits that that body provides to consumers. It promotes consumer rights and clear, intelligible information for consumers. Sixteen million people were helped through the Citizens Advice digital service, while 84% of clients said that their understanding of their rights had increased and 86% of clients reported a positive impact of advice on their lives. All this is a key port of call for consumers in the regulated sectors. I also mention that relevant consumer bodies play a vital role in this regard, especially in helping consumers on matters around redress, complaints and securing the best deals in issues such as utilities. The effect of this amendment would be to place extra requirements on regulators and increase bureaucracy when there is a drive to cut the costs of regulation and increase efficiency. The Government believe that in many cases it would also replicate protections that already exist and take away the discretion of regulators to decide what is appropriate in the circumstances.
On regulators levying fines for breach of any part of this amendment, the enhanced consumer measures set out in Clause 79 and Schedule 7 to the Bill would achieve a similar aim. In summary, there is a limited benefit in adding more duties on the regulators. Noble Lords can be reassured that much is being done for consumers by regulators, but of course we salute the wonderful work being done in the world of consumer rights as championed by my noble friend, and we will be happy to meet her to discuss the amendment. However, I ask her to withdraw it.
Baroness Oppenheim-Barnes
I thank my noble friend for that reply. She will not be surprised to hear that I am, shall we say, disappointed, but obviously I am not put off. I do not want to be accused of currying favour with the Opposition because that is not my primary objective, but nevertheless from time to time they do seem to have a closer grasp, although not as close as those of us who have been MPs and have held constituency surgeries where these things come up over and over again. There is a distinct division in your Lordships’ House between those of us who have such experience and those who do not. I think that this is one of the occasions when it shows. For the moment, I reluctantly withdraw the amendment.