Consumer Rights Bill

Baroness Oppenheim-Barnes Excerpts

Monday 24th November 2014 Lords Chamber

Moved by

[Baroness Oppenheim-Barnes]

30: After Clause 77, insert the following new Clause—
“Consumer regulators
(1) This section applies to the regulators which are involved in protecting consumers (“consumer regulators”).
(2) It shall be the duty of the consumer regulators to uphold the rights of consumers under this Act.
(3) In exercising their functions, consumer regulators shall have regard to the desirability of—
(a) upholding accurate, plain and intelligible information for consumers about goods and services;(b) promoting—(i) fair and reasonable practices in the selling of goods and services;(ii) fair and reasonable pricing of goods and services;(iii) the inclusion of comprehensive information on goods and services in contract;(iv) quick and fair means for consumers to make complaints and have disputes resolved.(4) Consumer regulators shall have a duty to consider whether a proportion of any fines levied for breaches of rights under this Act shall be used to compensate consumers.”

[Baroness Oppenheim-Barnes (Con)]

My Lords, I beg to move Amendment 30. I think it would be helpful if I read it out at this early stage. The proposed new clause states that the section involved applies specifically,

“to the regulators which are involved in protecting consumers”—

that is, “consumer regulators”. The proposed new clause continues:

“(2) It shall be the duty of the consumer regulators to uphold the rights of consumers under this Act.

(3) In exercising their functions, consumer regulators shall have regard to the desirability of—

(a) upholding accurate, plain and intelligible information for consumers about goods and services;

(b) promoting—

(i) fair and reasonable practices in the selling of goods and services;

(ii) fair and reasonable pricing of goods and services;

(iii) the inclusion of comprehensive information on goods and services in contract;

(iv) quick and fair means for consumers to make complaints and have disputes resolved.

(4) Consumer regulators shall have a duty to consider whether a proportion of any fines levied for breaches of rights under this Act shall be used to compensate consumers”,

who may have suffered loss or inconvenience as a result of that.

The amendment proposed previously by the noble Lord, Lord Clement-Jones, shows that it is time that this matter was reviewed. This is an important Consumer Rights Bill which in many other ways will be of great benefit to consumers. It would be a great pity for it to go ahead without recognising and dealing with the anomaly which exists.

Under the Bill, the regulators are not required to exercise certain functions that one would expect them to exercise. I make it clear at the outset that I am not complaining about, or accusing, the current regulators. I am saying that their attention has never been drawn to this particular role. It is a new role as far as they are concerned. I am very grateful to the National Consumer Federation which has helped me to draft this amendment and, by the way, gets no money from anyone. The federation covers all the other consumer organisations and has gathered all the necessary information in giving this amendment its warm support.

I shall deal as quickly as possible with my reminiscences but I remember that, when we first privatised a public industry—the electricity industry—we received a report from the Monopolies and Mergers Commission saying that the electricity boards did not satisfy consumer needs, their prices were too high and their labour forces were not treated correctly. At last the moment had come to do something to benefit everyone—consumers, employees and the general public. I well remember that not long after the Bill became law, I needed some electrical work done in my home. Along came a nice man from the new electricity company and I said to him, “I hope you are feeling much happier these days in your place of employment”. He replied, “I am not worried at all. I have bought shares”. So I have a very big kite to fly in that respect.

It is obvious that many practices today that regulators come across, such as the ones highlighted in previous amendments, are new. The marketplace, as it were, has changed completely as far as they are concerned and the Bill is the place to stress that there is a very important consumer role. That is why the end of the amendment, which is one of the most important parts, says that consumer regulators shall have a duty to consider whether, if consumers have been harmed or in some way not been given a fair deal, any fines levied should be used to compensate consumers. To my great delight, one regulator did that recently when a big fine was imposed and now £3 million of the fine is to be repaid to those consumers who had suffered either financial loss or other types of problems.

It seems to me that they do not need the Government or the law in order to do that—they could do it themselves—but it will help to have it firmly in print that they may. I do not know what negotiations they went into with the Treasury but they must have been very interesting indeed. People often say to one, “Oh, these regulators, what do they do with all the millions?”. Noble Lords probably know already that the money goes straight to the Treasury, and the Treasury is not by any means an easy nut to crack. They did very well indeed to get that amount repaid to those consumers who had suffered. I want that also to be part of the law and I want it to be a consumer right. That is not a great deal to ask for. It is long overdue. I commend the amendment to the House.

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Again, I salute the wonderful work being done by both noble Baronesses, and would be happy to meet them to discuss these issues in more detail as we get closer to the implementation phase. In the mean time, noble Lords can feel assured that much is already being done across the board to help consumers. I would ask the noble Baroness to withdraw her amendment.

[Baroness Oppenheim-Barnes]

I thank my noble friend for that very detailed reply. I wish I felt comforted, because I know she has spent a lot of time on and paid a great deal of attention to the issue. She said that these amendments might muddy the water. The problem is that the water is already muddy and the purpose of the amendment is to make it absolutely clear what the duties of regulators are in relation to consumers, along with all their other important interests. The effect of any practices that are being carried out by these industries which regulators have not seen, or have not thought that it was within their remit to deal with, is what this amendment clarifies.

Also, the Minister has rightly mentioned that most of these industries now have consumer representatives, or little personal consumer bodies. I would ask her only to try to get hold of one of them on an expensive 0845 number. They may work very hard but they do not have any powers of their own. I do not want that to be the way things happen—I prefer my amendment to that prospect. I do not want regulators to be hampered in the other important work which she has illustrated that they do. The great fines are not feathering their own nests; the regulators are doing what they consider to be their duty. I just want them to be given a new duty, and this amendment defines and clarifies it. I would like to consider this between now and Third Reading. There is a lot still to be done. However, for the moment, I beg leave to withdraw my amendment.

Amendment 30 withdrawn.

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In Committee, noble Lords were concerned that it was unclear when notice needed to be given. We listened carefully to the concerns raised and we have therefore tabled Amendments 32 to 39, which aim to put it beyond doubt that notice need be given only for routine inspections. Routine inspections under the Bill are any inspections that do not fall within the exemptions. They are typically made where trading standards considers that a business presents a risk, simply due to the nature of the sector in which it operates. Examples include visits to DIY stores and other retail outlets considered routine because there is no reason to doubt that the business is operating properly without any significant breaches of legislation, unless of course the exemptions applied. Such stores sell many different products and, as society changes more and more, services from dry cleaning to kitchen-fitting services. These need to be the subject of inspection from time to time. Notice ensures that the business is properly prepared so that the officer can check that the supporting systems are in good order.

[Baroness Oppenheim-Barnes]

Before my noble friend leaves that point, I wish—possibly—to help her. Is she aware that EU authorities have to give only 24 hours’ notice when coming to inspect a British company and, within that period, that the Secretary of State responsible has to provide supporting police for the inspection?

[Baroness Neville-Rolfe]

I am grateful to my noble friend for that factoid, of which I was not aware. Of course, our proposed regime provides for routine inspections and then, where there is a potential problem, for immediate inspections when they would be more appropriate. That difference is entirely justified, for the reasons that I have explained. Having worked in business, I know that when you have routine inspections you want to make sure that the people who understand all the rules and how the systems work—and have all the necessary paperwork—are available, because otherwise you often end up with a second visit. That is what we are trying to avoid, because that costs both parties.

We have clarified where notice needs to be given by adding to the Bill reference to what a routine inspection is. To offer further reassurance—