Consumer Rights Bill

Chris Kelly Excerpts

Tuesday 28th January 2014 Commons Chamber

[Stella Creasy]

The hon. Gentleman is absolutely right, and if the Bill met the test of providing the best consumer rights framework that this country can have, such scams would be addressed. Again, we find the Bill wanting on that point, and we will look to address such challenges in Committee.

[Chris Kelly (Dudley South) (Con)]

Does the hon. Lady agree that Members should encourage their constituents simply to use the Government’s own website at gov.uk, and not to google other alternatives that can lead to scam sites?

[Stella Creasy]

The hon. Gentleman’s question reveals one challenge that we face. I would love to sit at a computer with him, google those websites and see whether he could tell the difference. Making that difficult is one thing that the companies in question do. It is fair to ask how we can empower consumers, but it is also fair to ask what we can do to ensure that someone knows precisely what they are buying. That does not need to be an unreasonable requirement on terms and conditions, but the Bill does not address that challenge.

The Bill also fails to address the problem of people paying for services that they cannot get the details of. I beg the House’s indulgence to mention a second case in my constituency. At present, 4,500 leaseholders in Walthamstow have buildings insurance via their leases, on top of which they pay a premium for terrorism cover. According to the freehold manager, that is on the basis that the plane bomber lived in my constituency. Indeed, the freehold manager has sent me newspaper coverage to justify that additional charge of £80 a household to leaseholders in my community on top of their buildings insurance. Yet my constituents cannot get the details of the policy that they are paying for, because the insurer claims that its deal is with the freehold manager, not with the leaseholders. It seems that they cannot test in a tribunal whether the charge is fair, and consequently whether they can challenge it.

If the Secretary of State will not listen to my cases as arguments for why pricing and contract information need to be addressed, perhaps he will listen to the many other Members who have raised similar issues about contract terms and who is selling goods. In particular, there is the question of secondary ticketing sales, which my hon. Friends the Members for Washington and Sunderland West (Mrs Hodgson) and forEltham (Clive Efford) and the hon. Member for Hove (Mike Weatherley) have raised repeatedly.

We know that it is vital that there is a marketplace for the reselling of unwanted or unneeded tickets for events, because there is little scope for refunds or returns in that sector. However, there is also widespread abuse in the sector, because online touts can buy up tickets en masse to resell once an event has sold out. Indeed, Ticketmaster USA has estimated that for some high-profile events, up to 60% of available tickets can be taken in that way. Consumers who are unable to buy tickets on the first release must then pay over the odds to buy them from sites such as eBay or viagogo.

The secondary ticket market in this country thrives on a lack of clarity about who is selling a ticket and what right they have to do so, and it is estimated to be worth £1 billion a year. That is why I am surprised that the Secretary of State, as the Member for Twickenham, is not seeking to use the Bill to protect rugby fans in the run-up to the forthcoming world cup.

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[George Freeman]

My hon. Friend, as ever, makes an extremely interesting and shrewd observation. The truth at the heart of public services is that the taxpayers provide the money and the Government, as best they can, the service. In that loop, something is lost: a direct connection between the recipient of the public service and the point of payment. Most of the recipients of public services have, of course, already paid for them through their taxes, but the sacred moment of the empowerment of the consumer gets lost in a complex chain of public service delivery. She makes the point that we need to look across our public services at how we can restore that moment. I would like more parents and pupils in schools to feel that the choice they make—choosing which school to send their child to—is a choice that the system respects. I wholly welcome the reforms that the Secretary of State for Education is putting in place to that end.

I want to mention health care, in particular, as we are seeing an extraordinary change in modern health care. I do not think it is too profound or bold to claim that health care is going from something that traditionally, in the 20th century, was done to us by Governments when they decided we needed it, to being something that modern consumer health care citizens do for ourselves. We are seeing across the NHS much greater patient demand for information, transparency and choice. We are seeing click health care and modern patients wanting to be able to access information and be empowered. That is all to the good if we want a new generation of citizens empowered to understand what causes disease—how lifestyle, diet and even genomics affect one’s predisposition to disease. We want to empower consumer citizens to prevent disease. We will not do that without empowering them to make choices and receive information. That is why I have a ten-minute rule Bill on the very subject of releasing patient data to patients within the framework of acknowledging that it is their data—our data. By giving patients back their data, we empower them to use them better for public health care.

[Chris Kelly]

My hon. Friend talks about empowering health consumers to gain greater transparency. Does he welcome the improvements in the past several years to the nhs.uk website, which now provides a great deal of very useful information on all manner of health issues to our constituents?

[George Freeman]

Yes, I do. My hon. Friend makes an excellent point and I think this is a subject that we will debate more in the House. I am struck that some in the media are beginning to suggest that it is dangerous to release health care data because it challenges how health care is delivered and will create all sorts of unfortunate misunderstandings. It seems to me that those are prices worth paying to drive the revolution of transparency and accountability that the Government’s reforms are beginning to deliver with such benefit. We have seen in health care in the past two or three years a very difficult, at times, but powerful transparency revolution in which failings in the system have been exposed and those responsible for them held to account on behalf of the patients who ultimately paid for the service and have the right to expect that that service is delivered. That genie is out of the bottle and it is not in anyone’s interest to try to put it back. In fact, quite the opposite: at the heart of modern democracy and a modern economy, the notion of empowered citizens who are able to exercise choice in their supply chain—in public services, every bit as much as in private commerce—is an important idea that, although I appreciate the limits of the Bill, we ought to embrace in the rest of this Parliament and the next.

On supply chains, globalisation and technological change mean that in all sorts of sectors many of the goods, services, products, medicines and foods we buy have global supply chains. That globalisation and the extending of the distance of supply chains removes the consumer in many cases from the point of origin of the goods they are buying. In some areas, consumers do not appear to care very much, but in some, such as food, consumers are passionately interested in the source. We saw that most recently illustrated with the horsemeat scandal. Something interesting is going on: globalisation and technology are extending supply chains, but technology is also requiring, allowing and encouraging people to take more interest in the source of the products they buy. That creates a huge challenge. Many of the goods we buy digitally come from global websites that could be pulled down at the flick of a switch, destroying transparency. I welcome the measures to introduce transparency and accountability to the digital marketplace.

I note that the Secretary of State has, I am sure briefly, left his place, but I know that he has a strong interest in the role of supply chains in industrial policy. The turnaround in the British automotive sector has come about principally through important strategic work on how the UK’s strength in components, down at the bottom of the supply chain, can be better integrated through a policy for skills with the manufacturers at the top.

[Chris Kelly]

Will my hon. Friend join me in welcoming the many examples in the west midlands of reshoring, including in the automotive sector, where businesses are coming back to the UK for processes that they took away from the UK over the past 10 or 20 years?

[George Freeman]

My hon. Friend makes another excellent point. In fact, no industry is more symptomatic of the post-war British economy, culminating in the crisis of productivity in ’79 and the collapse of that model of growth under, it gives me no pleasure to say, a Labour Government, than the British automotive sector and its restoration over recent years—longer than just the past two or three years, I would grant; over the past 10 years—so that Britain is now a net exporter of vehicles. That has been brought about through a combination of enlightened supply chain work, fostering and supporting the UK’s extraordinarily strong world-class components sector with the bigger manufacturers at the top.

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[Sheila Gilmore (Edinburgh East) (Lab)]

The hon. Member for South Thanet (Laura Sandys) said that she had previously worked for the Consumers Association. Earlier in my career I worked for the Scottish Consumer Council. It is important to recognise that Governments of all colours have wanted to strengthen in various ways the rights of consumers. The National Consumer Council and its Scottish and Welsh equivalents were set up by the Labour Government of the 1970s, so everyone has aspired to putting the consumer at the heart of things. The problem sometimes is how to make that a reality for those consumers. How can we ensure that people understand how to use the rights that they are given?

People often encounter the greatest difficulty when dealing with smaller retailers, because in larger companies staff are generally better trained and so better able to respond. Indeed, some larger retailers would rather allow the consumer to go away happy, even if that means going beyond the basic statutory minimum. Many smaller retailers, however, either seem unaware of what the law states or deliberately obfuscate when a consumer complains. They say, “You have to go to the manufacturer for that,” even though that has not been the case for many years.

Citizens Advice has suggested amending the Bill—perhaps the Minister will consider this—to make it a requirement that information on consumer rights is provided at the point of sale. It has made some suggestions on how such information could be presented, because it is aware that it could be quite difficult to convey simply. I think that that information, whether it is on a notice in the shop or on the till receipt, would be helpful, as consumers would be clear about what to do if something goes wrong.

Another relatively minor amendment that Citizens Advice proposes is including a time limit for repairs and replacements. I remember what things used to be like, when I had to try to explain to people what was going on with repairs, when they could get a refund and whether accepting a repair put them in a difficult position. The simplification is to be welcomed. However, the question remains whether there should be a limit on the time a company can take to repair and return a product. Citizens Advice suggests a 30-day limit. I would like to know whether the Minister will consider such a change.

Services have always been more difficult to regulate than goods—when we buy an object, it is much clearer what we are buying. The relevant legal wording, which effectively requires one to make a judgment on whether reasonable care and skill has been used in the performance of the service, has always been quite difficult. It is good to have that made explicit, rather than implicit. It is not an implied term; it is to be taken as an expressed term in the provision of services. However, that still leaves open the question of precisely what that means. Could it be measured in some way?

I was interested to hear what the Chair of the Business, Innovation and Skills Committee, my hon. Friend the Member for West Bromwich West (Mr Bailey), had to say on that and about the Committee’s recommendation. I hope that it can be explored more fully to see whether other measures could be used, at least in relation to some services, to give a clearer and more explicit measure of whether a service has been performed in the way it should have been, rather than having to rely on a debate on what is a reasonable level of skill.

Ultimately, we must also look at how people exercise their rights. Ideally, they should be able to exercise them face to face with the person providing the service or selling the goods. Things should be sufficiently clear that the consumer can go back, exercise their rights and get a good response, but we know that that does not always happen. We must therefore look at the means by which people can get redress.

Citizens Advice also wants the Government to consider the question of collective redress in relation to competition cases—if there is a particular kind of mis-selling or product or service failure—that affect not just individuals, but people in particular localities or up and down the country, and on which a collective response is available, because there is strength in numbers.

Although allowing an individual consumer to have all their rights and choices is clearly important, they are sometimes a small cog in the wheel, and it can be very difficult for them to push a case. Many people simply give up, because it is not worth the effort: if they are rebuffed at first, they will not necessarily pursue their case further, because they do not know how to do so or find the whole process so difficult.

Even for people who contemplate going to court, the process can be quite expensive. Other hon. Members have spoken about the difficulty of getting legal aid to go to court or even for legal advice. A court fee can be a considerable block to people’s ability to exercise their right. For example, in Scotland, an action for a small claim can be made for something worth more than £200, which is not a huge amount in relation to various consumer purchases, but it costs £71, which is quite a lot for someone to risk if they feel that they might not win the case. We therefore have to consider the whole idea of redress.

When I was involved with the Scottish Consumer Council, we did much work on developing proper small claims courts to which people could easily go, be represented and get a lot of help. There is still merit in trying to develop such an approach, rather than people feeling that their case cannot be taken forward. That is where the collective becomes important. For one individual, the cost and effort of pursuing a case will be great. As my hon. Friend the Member for Inverclyde (Mr McKenzie) said, even in relation to what seem very small amounts—less than a fiver—such amounts add up and, collectively, it should be possible to put such cases together.

I share the concern expressed by my hon. Friend the Member for Walthamstow (Stella Creasy) that no one wants a book of law of huge size, as was suggested by the hon. Member for Eastleigh (Mike Thornton), but this is an opportunity to legislate on some of the issues that hon. Members raise time and again because of their constituents’ experiences. Various people are campaigning on many of the issues, because they understand the detriment that people are suffering. This seems to be an opportunity to legislate, and it is sometimes important to legislate. Rather than end up with smaller pieces of legislation in future, which would recreate the difficulty that we now have in consumer legislation, we could take the opportunity of having this Bill to consider some of the issues.

My geographical, if not adjacent neighbour or political colleague, the hon. Member for Edinburgh West (Mike Crockart), has pursued the issue of nuisance calls. With other hon. Members, he has made some progress in highlighting that important subject. Nuisance calls are an irritant to those of us who thought that we were on the Telephone Preference Service, but still get calls that we are told are for research or some other spurious reason, or calls where only one in 20 people who have been rung is spoken to when they answer.

That is an irritant for those of us who cope with that sort of thing very or reasonably well, but it can be worse than an irritant for others. My father, who is now in his 90s, has got to the stage where he hardly ever answers the phone, which is not particularly practical. He certainly will not answer the phone if it is an unknown number. As Members will know, if somebody phones from an institution, such as this place, it comes up as an unknown number. He is not only exasperated by such phone calls, but anxious about answering the phone. It is highly harmful that nuisance calls are being made and it is important that we legislate to deal with them.

[Chris Kelly]

Has the hon. Lady found, as I have, that this matter is of particular concern to our older constituents because they tend to rely more on landlines than any other age group? Many young people do not have a landline or have one only for broadband services and use their mobile phone for incoming calls. They are therefore not affected in the same way as many older people.

[Sheila Gilmore]

That is correct. I suspect that that may be a reason why older people get so many nuisance calls.

A related concern, particularly for less well-off consumers, is the phone numbers that are used. When I tried to pay my electricity bill by calling from my mobile phone, because that was the most convenient way for me to call, there was a message to say that I would be charged if I called that kind of number. I put the phone down and made a mental note to call from a landline. That probably led to a delay in the bill being paid. However, some people would find it very difficult to call from a landline and so would be charged a premium.

Government Departments are not immune from the problem of premium rate numbers. It is a major issue for many people that the Department for Work and Pensions still uses numbers that cost them a lot of money when they phone in for information, to report changes in circumstances or to change an appointment because they cannot attend. We need to look at that problem. People should not be charged—sometimes they do not even realise that they are being charged—to engage with a private firm that is selling them goods or services, or with a public agency.

I hope that the Bill has room to cover the problem that less well-off consumers and older consumers often pay more for their utilities than the rest of us, which the hon. Member for Harlow (Robert Halfon) and I have raised. I think that he was planning to seek a debate on that issue at the Backbench Business Committee this afternoon, because he has approached various Members for support. It is one thing for companies to say that direct debits are so much more convenient and cheaper to process than other forms of payment that they will give direct debit consumers a discount and everybody else will pay a standard charge, but companies have gone beyond that and are making other customers pay an additional charge. Not only energy companies but organisations such as BT are charging people a £6 fee to pay via PayPoint.

The constituent who brought that issue to my attention did so on behalf of her elderly uncle, who was insistent that he wanted to pay in that way. He had always managed his finances in cash and was going to go on doing so. He could no longer use certain methods that he had used before and the only way in which he could pay by cash was to use PayPoint. It is not only people on low incomes who are affected, but such people are more likely to use the cash economy and can be wary of banks.

I was talking recently to one of the housing associations that took part in the pilots set up by the Department for Work and Pensions for the direct payment of housing benefit. The DWP would like people to get bank accounts and pay by direct debit, and that would certainly help housing associations as well, because it would help people to be responsible for their own payments. The problem that the housing association found was that a lot of its tenants were not comfortable with doing that, either because they had had bad experiences of being charged because their direct debit went out at the wrong time of the month or because they knew people who had. They preferred to pay when they wanted to pay, preferably in cash or through some other payment mechanism. They were not keen on banks and direct debits, even if they could get a bank account, which still not everybody can. We must think about the aspects of the system that harm the least well-off consumers as well as competent and able consumers. It would be helpful if room could be found in the Bill for some of those issues.

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[Chris Kelly (Dudley South) (Con)]

I support the Bill, because it must be right to simplify a complex area of law by reducing eight pieces of legislation to one consumer Bill that is easy to understand. I wish to concentrate particularly on two matters: the help that the Bill contains for digital consumers, who are a fast-growing part of the economy, and the reforms to trading standards, which will support small businesses as they seek to compete with bigger rivals and bring vital competition on price and usually also on service.

The hon. Member for Edinburgh East (Sheila Gilmore) stated that customer service is sometimes better in larger organisations, because they have departments purely to deal with customer complaints and customer service issues. In my experience, many nimble small and medium-sized enterprises in my constituency offer excellent customer service and are doing a great job of taking on their larger rivals.

At the core of the Bill is the principle that people have a right to get what they pay for. In 2012, UK consumers spent more than £1 billion on downloaded films, music and games. I confess that, as you would expect, Mr Deputy Speaker, I was one of those consumers. Until now, the law has lagged behind in protecting consumers who do not get what they pay for or who receive poor-quality content. Apple’s iTunes service is dominant, and I am sure that its customers nearly always get what they have paid for to the correct standard. However, there are new entrants to the market all the time, seeking to take some of Apple’s market share, that may not provide a proper service or genuine content. Consumers in my constituency deserve protection from shoddy or spurious content providers, and the Bill certainly goes a long way towards protecting their hard-earned money when they make online purchases.

In 2011, a staggering 16 million people experienced at least one problem with their digital content, as my hon. Friend the Member for Stockton South (James Wharton) mentioned. I imagine that many Members consider themselves digitally savvy, but it is easy to get caught out by an attractive price proposition online. I believe that my constituents deserve protection from rogue businesses supplying poor-quality, corrupted or inferior downloads. More and more people will download content on mobile and smartphone devices, where sometimes the telltale signs of a rogue or spurious site are much harder to spot.

As more “silver surfers” go online, perhaps without the experience of having operated online for some time already, they may be unsure of the difference between http and https, for example, or less able to spot a problem site or the telltale signs of a spurious site, before using it and entering their card details. I believe that the Bill is welcome in helping to correct such problems, and it is a correct use of the House’s time today.

I know my hon. Friends on the Treasury Bench are determined to help small and medium-sized businesses by reducing unnecessary red tape and regulation, and the Bill helps to deliver that aim. Enforcers such as trading standards officers will be required to give 48 hours’ notice to businesses when carrying out routine inspections, saving businesses an estimated £4.1 million per year—a welcome saving. Trading standards officers will still be able to carry out unannounced inspections where illegal activity is suspected. Therefore, the new start-up businesses in my constituency, and all the growing SMEs in the black country, can go about serving their customers to the best of their ability and introducing innovative new products and services, without the worry of unexpected, unannounced and unnecessary inspections by trading standards. There is something to fear only when there is something to hide. We need trading standards to work closely and fruitfully with our small businesses, and the proposals in the Bill will help businesses on the smaller end of the scale to get on with serving and innovating.

I welcome the Bill’s Second Reading and the prospect of my constituents having their key consumer rights for goods, services and—for the first time—digital content set out in one place. As my hon. Friend the Member for Mid Norfolk (George Freeman) said, there is a 59 million man-hour saving to be addressed, as that is the amount of time consumers spend dealing with goods and services problems, at an estimated cost of £3 billion a year. The Bill will go some considerable way to saving many millions of those hours and many hundreds of millions of those hard-earned pounds.