Loft Conversions

Ed Davey Excerpts

Wednesday 2nd November 2011 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

I thank my hon. Friend the Member for Colchester (Bob Russell) for bringing this matter to the House and securing the debate. It certainly gives me a chance to put on the record our view about consumer protections. Clearly, he will be aware that I am not au fait with all the details of his constituent’s case. The record will show that my hon. Friend has referred to his box file, which could no doubt add to my weekend reading. However, I would welcome his writing to me with a summary of the proposals, possibly providing a bit more detail than he has had time to do today. Although I cannot say that there will be a formal investigation, I will at least look at the matter with my officials and provide him with some comments that I hope he and his constituent will find helpful. I will take a dispassionate but constructive approach to the problems that he has raised.

Like him, I have constituents who have had problems with, shall we say, cowboy builders, who disappear and are difficult to trace or who reappear in a different form. The Secretary of State has raised the matter in the past, and we are therefore minded to consider what can be done in terms of consumer legislation and the consumer framework. My hon. Friend recognises that no law or framework can deal with absolutely every single circumstance, but we clearly need to improve things. I hope that he will not take what I will say today as being complacent and that he will recognise that we are trying to develop the strengths of the existing system and to improve it where we can.

My hon. Friend knows that loft conversion work comes under general consumer legislation covering the construction industry. He also knows what an important role the construction industry plays in our economy and how many of the business people in that sector are honest traders who do a fantastic job, many of whom have small businesses. He has given an example of a builder who appears to have been trading in a dishonest manner. Obviously, I will need to look at the details of the case before I can comment further, but we are aware that a small minority of builders apply their trade in a dishonest way and deliberately target specific groups of consumers—for example, vulnerable consumers and the elderly—and we therefore need protections.

[Bob Russell]

I point out that Ms Handley is a very articulate person and is not a vulnerable person. I am concerned that she could be duped in that way. What the Minister says is right, but if a very articulate person can be duped, we are talking about serious issues.

[Mr Davey]

From the way in which my hon. Friend has articulated his constituent’s case, it is clear that his constituent is a very capable lady who can fight her corner. However, I am sure that he accepts the point that we need to ensure that vulnerable consumers are protected in the regimes that we design, because if can protect vulnerable consumers, we are much more likely also to support those who are more articulate.

We must take a multi-pronged approach to protecting consumers in the broadest sense. The new Government have taken an approach that seeks to empower the consumer and make sure that they have all the relevant assistance from organisations to get the right information, so that they can make the right choices. The matter cannot simply rest there. We must have a legislative framework, which, of course, there is. The question is whether that framework can be reformed. We currently have the Supply of Goods and Services Act 1982, which requires traders to provide the services being offered with reasonable care and skill, in a timely manner and at a reasonable cost. However, the Government are examining how that law might be modernised and simplified, so that consumers can have a clearer understanding of their rights and a greater awareness of their right to redress when they have experienced shoddy workmanship or have paid for goods that turn out to be defective.

On 19 September, I announced that, subject to consultation, we hope to introduce a consumer bill of rights, which will bring together 12 separate pieces of legislation to try to achieve those objectives. The 1982 Act is accompanied by other measures to protect consumers from unfair selling in their homes. Builders, including those undertaking loft conversions, fall within their scope. The Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008 give consumers the right to cancel a contract that they have signed without penalty within seven days. That cooling-off period is a valuable protection. It may well not have applied in the case presented by my hon. Friend, but he will understand that it is an important part of the protection framework.

In addition to empowering consumers and having a legislative framework of consumer protections, there are enforcement bodies. It is important to ensure that enforcers, such as the Office for Fair Trading and local authority trading standards officers, have the right tools at their disposal to deal with dodgy builders. The Consumer Protection from Unfair Trading Regulations—known as the CPRs to those, such as myself, who write lots of letters about them—give enforcement bodies more effective means of tackling unscrupulous practices and rogue traders. That was a welcome reform introduced by the previous Government. CPRs can be used to ban traders in any sector from unfair commercial practices against consumers, particularly in relation to the sale and marketing of services. The regulations also ban any commercial practices that use harassment, coercion or undue influence that is likely to impair significantly the average consumer’s freedom of choice in relation to goods or services.

Taking those various measures together, there is a robust legislative framework. However, I have indicated that we want to reform it, because it is clearly not perfect. We also support a project being undertaken jointly by the Law Commission and the Scottish Law Commission, which is examining how private law might be reformed to provide consumers with a simple, clear right of redress where they are the victims of misleading or aggressive selling. We have also given funding this year worth £3.2 million to scambuster teams, so that they can continue the fight against rogue traders. We maintain their funding, despite the difficult financial circumstances, because we want to chase these rogues down.

[Bob Russell]

That is all very well. This situation involved a company knowing that it was going to be taken to the cleaners and going into liquidation, and the owners starting up another company and carrying on as if nothing had happened. Where is the legislation to deal with that?

[Mr Davey]

There is legislation, and the Insolvency Service, for which I am the Minister responsible, can take action in certain circumstances. One reason why I invited my hon. Friend to write to me is to consider what action could have been taken in that case. The Insolvency Service targets cases of misconduct or criminality and submits reports to the court for disqualification of directors for terms of various years based on the seriousness of the offence. I had a case in my constituency that was not dissimilar to my hon. Friend’s, and that was the route that we were advised to go down.

As I do not know the details of my hon. Friend’s case, it is difficult for me to comment further, or indeed pass any judgment, on what has happened. However, that is why I started my remarks by inviting him to write to me with a synopsis of the case to see how it could potentially have been dealt with in a different and more successful way.

In the remaining time left to me, I want to touch on TrustMark, which my hon. Friend mentioned in his speech. It is sometimes difficult for consumers to know whether a builder is entirely genuine and can be trusted. For extra peace of mind when people are looking for tradespeople, the TrustMark scheme has been developed as a form of accreditation. It is a fairly easy way for consumers to identify a builder who has agreed to abide by industry standards for competence and fair trading, and to be independently inspected to ensure that they are meeting these standards.

In his case, my hon. Friend explained how the Federation of Master Builders, which I assume—I am not absolutely sure from his remarks—was accredited by the TrustMark scheme in this case, appears, from the remarks that he has made, not to have taken the action that he and his constituent wanted it to take. Again, one needs to look at the detail before making a judgment on exactly what happened. However, TrustMark scheme operators, such as the FMB, are required to investigate complaints against tradespeople and can de-list traders where it is found that traders are not up to the required standard. In many cases, TrustMark can carry out that role in addition to other schemes, such as the competent persons scheme and those operated by other trade bodies. It is, therefore, an important body in the building industry.

I do not know about the involvement of TrustMark and whether it investigated how the FMB dealt with the complaint. That is one of the reasons why I invited my hon. Friend to write to me, so that we can have a look at the details of his case. Clearly, the TrustMark scheme, which I think is valued and highly thought of by many people, needs to ensure that, if cases are brought to its attention, they are dealt with in a proper fashion, which is the way forward. The TrustMark scheme has an important role to play, and it is therefore important to ensure that it retains the confidence of consumers and those in the industry.

I hope my hon. Friend feels that I have dealt with his case. I have given him the chance to contact me personally, and he has given me the chance to describe the overall system that is in operation to support consumers.