Unscrupulous Builders

Ed Davey Excerpts

Wednesday 9th February 2011 Westminster Hall

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

I congratulate my hon. Friend the Member for Eastbourne (Stephen Lloyd) on securing the debate. I thank all hon. Members for contributing. Listening to my hon. Friends the Members for Ceredigion (Mr Williams) and for St Austell and Newquay (Stephen Gilbert) in particular, it was clear that this issue affects many of our constituents. I can confirm that it has affected my constituents. I represented one of my own members of staff on this issue. She ended up having to use the TV programme dealing with cowboy builders to sort out the problem. Through dealing with that, I understood how difficult these problems can be. My hon. Friend the Member for Eastbourne was therefore right to bring the issue to the House. Although I do not agree with his proposal for a compulsory licensing scheme, let me say up front that I hope that when he hears some of my other remarks, he will know that the Government take the issue seriously, along with many other consumer affairs where there is consumer detriment. Some of the general reforms that we want to make and the general research that we are undertaking will help to ensure that this issue and others like it can be better dealt with in future.

Let me say for the record, and so that my hon. Friend understands why I am less attracted by his proposal, that there are issues of practicality and proportionality, which I know that he, as a small business person, will be very mindful of. Many people are employed in the construction industry. The UK construction industry is one of the largest in Europe, with more than 2 million people employed and 200,000 businesses. That gives a sense of what a compulsory licensing scheme would have to do and the sheer scale and size of it. That would bring with it costs and complexity.

As my hon. Friend rightly said, some rogue, cowboy builders behave appallingly, but we must balance a number of issues as we put together our measures, and I hope to reassure him about those measures in the course of my speech. I am sure that he will agree that the vast majority of people operating in the construction industry do good jobs, work hard and perform well. We are talking about a relatively small number of rogue traders, and the question, therefore, is whether we put huge cost and complexity on 2 million people and 200,000 businesses to target that tiny minority. I say that not least because it is unclear whether a compulsory licence scheme would deal with the rogues who tend to work outside the system. One would have to be sure, even under my hon. Friend’s proposals, that the enforcement measures were such that one could catch these people. I have some concerns about such issues, not least when they are married to the costs and complexities that would come about under such a scheme.

Let me reassure my hon. Friend about one or two points that came up in the debate. We want a proportionate scheme. Through licensing and regulation, we want to target those trades where there is a high risk to public safety, and my hon. Friend’s points about health and safety were extremely well made. That is why the gas safe register scheme, which used to be known as the CORGI scheme, is important. It deals with the technical competence of people who ply their trade. There is also the competent persons scheme for electrical work. Clearly, gas and electricity raise other issues, and we need to ensure that they are properly regulated. However, it would be disproportionate to have similar schemes for the work done by painters, decorators and others.

I hope my hon. Friend realises that we are trying to take a proportionate approach that ensures that while legitimate businesses doing a fantastic job are not penalised with costs, measures are targeted on the real cowboys. If my hon. Friend looks at the legislative framework, he will see that it is designed to clamp down on underhand practices. The Supply of Goods and Services Act 1982 requires traders to provide a service with reasonable care and skill, in a timely manner and at a reasonable cost. The Government are examining how the Act might be modernised and simplified so that consumers have a clearer understanding of their rights, including their rights to redress when they have experienced shoddy workmanship or paid for goods that turn out to be defective. I hope that that work will lead to ideas that improve the situation.

The general consumer rights set out in the Act are accompanied by specific legislation to protect consumers from unfair selling in their own home. Builders, of course, fall within the scope of those provisions. The Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008—I am sure my hon. Friend is familiar with them—give consumers the right to cancel a contract they have signed without penalty within seven days. That cooling-off period is a valuable protection, especially for those who may have felt pressurised into agreeing to have work done as a result of the tactics of an unscrupulous builder. My hon. Friend will note that those regulations came in in 2008, and they are still being rolled out, so an understanding of them is still developing among many trading standards officers and the wider public. Those measures are in place, however, and I think that they will be increasingly effective.

As regards other protections given to consumers, it is important to ensure that the enforcers—at national level, it is the Office of Fair Trading, but there are also local authority trading standards officers—have the right tools at their disposal to deal with dodgy builders. The Consumer Protection from Unfair Trading Regulations 2008—again, they are relatively recent—give the enforcement bodies more effective means of tackling unscrupulous practices and rogue traders. Indeed, they ban traders in all sectors from unfair commercial practices against consumers, particularly in relation to the sale and marketing of services. They set out broad rules, which enforcers can use to determine whether a practice is unfair. As I said about the other set of regulations from 2008, these regulations are still relatively new. Trading standards officers are beginning to use them and beginning to understand their use. The regulations are spreading best practice. These tools have come into the toolkit relatively recently, and they will help. They also ban any commercial practices that use harassment, coercion or undue influence that is likely significantly to impair the average consumer’s freedom of choice in relation to goods or services.

If we take those various measures together, it is clear that the legislative framework is quite robust, but I would not claim that it is perfect, and we always need to think about how it could be improved. That is why the Government support a project being undertaken jointly by the Law Commission and the Scottish Law Commission to examine how private law might be reformed to provide consumers with a clear, simple right of redress when they are victims of misleading or aggressive selling. My hon. Friend may be aware of that because it comes from a Liberal Democrat consumer document called “Are you being served?”, which he may have read before the election.

In addition to providing effective remedies for people who have suffered at the hands of rip-off builders, it is important that we put resources into preventing problems from occurring in the first place. At the end of last year, we announced £3.2 million of funding for scambuster teams so that they can continue the fight against rogue traders and builders who deliberately set out to defraud consumers. The fact that we have been able to continue this important work, despite the tough choices that we have had to make elsewhere, is a clear sign of how important we think this issue is. Rogue builders and others who prey on vulnerable and elderly people will not be tolerated, and scambuster teams will lead the fight against them. My hon. Friend valiantly champions the needs of elderly people in all areas of public policy, and I hope that he will talk to scambuster teams in his area to ensure that constituents who are occasionally preyed on by rogue builders are aware of the teams’ work.

I appreciate that it can be difficult for consumers to judge whether a builder is genuine. For extra peace of mind, therefore, they can look for tradespeople who belong to approved traders schemes. This is where the TrustMark scheme, which has been mentioned, comes in. TrustMark is an easy way for consumers to identify a builder who has agreed to abide by industry standards of competence and fair trading and to be independently inspected to ensure that they are meeting those standards—the point my hon. Friend made about enforcement. Those in the industry who are approved by one of the operators of the TrustMark scheme are independently inspected, which can give people reassurance. This is a free service to the consumer. Last year, there were 3.5 million inquiries, with people checking out builders and other tradespeople. My hon. Friend is right that we need to raise awareness of the scheme, but the 3.5 million inquiries last year suggest that an awful lot of people are aware of it. That awareness is growing, and we need to continue to help it grow. In addition to the TrustMark scheme, many local authorities run assured trader schemes in their areas to help residents find trustworthy local builders. Again, I would encourage consumers to use those schemes wherever they exist.

The debate is timely because we need to ensure that colleagues across the House and others who are interested in this issue know that the Government take it seriously. As we look at general consumer legislation and do a lot of detailed work on it and the consumer landscape, we will be thinking about the difficult cases that have been mentioned. In the back of our minds, we will be thinking about how provisions will apply to cases in which constituents have been very badly done by. I give my hon. Friend my assurance as consumer affairs Minister that the Government will bear such cases in mind as we review the legislation— indeed, we are doing that very actively.

I reassure my hon. Friend that regulations are now in force—I admit that they are very recent—and that they will assist our work. I assure him that TrustMark is a very good scheme, and I would encourage hon. Members to promulgate it, and local authority trader schemes, when they talk to constituents.

I thank my hon. Friend once again for bringing this matter to the House. Although I have not been tempted by the compulsory licence scheme that he so eloquently proposed, I hope that I have reassured him that many other measures that are in place, or which we are considering, will have a good effect on the problems that he raised.