Consumer Rights Bill
Jenny Willott Excerpts(10 years, 10 months ago)
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Stella Creasy
I thank the hon. Gentleman for illustrating so vividly why the Government believe there must always be winners and losers in every element of policy. The Labour party believes that if we get the framework right, it would cover a range of industries. My point in describing the many different problems with current pricing and contracts is that if we took a different—indeed, stronger—approach to the laws on pricing and contract than that currently in the Bill, we could deal with a range of detrimental problems. Indeed, I would wager that if we get this right, two-thirds of the casework that many of us see would disappear overnight. Surely the merits of such a proposition alone would cause the hon. Gentleman to reflect on whether we can make the Bill stronger, and therefore better. That is the case we are trying to make.
We have already discussed letting agencies, and the way that charges and a lack of clarity over prices are a problem, but contracts do not cause problems only with pricing. The Minister will be as frustrated as I am about the lack of action on poor services, and I know she feels passionately that in her constituency, where residents are not receiving a mobile phone service they should be refunded. Despite raising the issue for months, she must be frustrated because nothing has happened, and I query whether her constituents are also frustrated. Although she is in charge of the Bill, and therefore has an opportunity to clarify when a refund for poor service would be due, the Bill will do little to help that issue. We would all like stronger powers of redress.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
On the contrary, the issue has been resolved and a mobile phone signal has been restored to my constituents, a number of whom are receiving compensation. It is perfectly possible to do such things under current legislation, and a lot of the issues the hon. Lady raises fall completely outside the remit of the Bill we are supposed to be discussing.
Stella Creasy
The Minister raises an interesting question about why, if the Bill will simply consolidate powers that she says are already effective, she does not use the opportunity to go further and deal with matters that she considers to be outside the legislation. She cannot have the argument both ways—either we need new consumer rights in this country, or we do not and she is wasting everybody’s time. Labour Members think there is a case for a new, stronger consumer rights legislative framework, which we are trying to set out, and part of that is about redress. I am delighted to hear that the Minister’s constituents have got redress for their mobile phone coverage, but I hope she will also consider how we can use the Bill for things such as nuisance calls, which she mentioned. This is about how we tackle such problems once and for all.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
This has been a wide-ranging debate with many useful and, on occasion, entertaining contributions from Members of all parties. I thank Members for their considered views.
I agree with the hon. Member for West Bromwich West (Mr Bailey) that this is an important area of work. When something goes wrong for a consumer, it can be devastating, as he said. The Bill will provide remedies for consumers with a wide range of problems, from a broken toaster to a dodgy kitchen installation and for things worth from a few quid to thousands of pounds. The wide range of matters encompassed by the Bill shows how complex an area this is.
I shall try to address as many of the points that have been raised as I can, but as a number of Members have said, we will have further opportunities to discuss the detail in Committee. Contrary to what the Opposition have argued, the Bill will provide a substantial improvement to consumers’ rights, remedies and protections. It is true that it consolidates the current law, which, as a number of Members have said, is spread across eight pieces of legislation and more than 60 sets of regulations. It also brings in major new rights for consumers, however, particularly in digital goods and services, although they have been completely overlooked by some Opposition Members.
It is important to note that the Bill has widespread support among consumer and business groups. The economic benefit is estimated to be more than £4 billion over 10 years. It is more than just minor tinkering, as some Members have suggested; it is an important piece of legislation.
I found the speech made by the hon. Member for Walthamstow (Stella Creasy) rather disappointing. She seems not to have read the Bill in detail as she seems to have rather a poor grasp of what it does and does not do. She barely mentioned much of what is in the Bill and I hope that she has a chance to read it in detail before Committee.
I am proud that the Government are taking such important action to improve the rights of consumers, when the previous Labour Government did very little over 13 years. For example, as a number of Members mentioned today, the issue of cowboy builders was raised repeatedly during the previous Parliament but no action was taken. The coalition Government are doing something for consumers rather than just carping from the sidelines.
As I said, the hon. Member for Walthamstow did not talk about a lot of the issues in the Bill. She laid out an extremely long wish list of things that she wanted to add to the Bill rather than engaging with what was already there. I appreciate that this is the sort of Bill that many people spot gaps in and want to add to, but there is more to it than that.
Hon. Members raised a number of issues that they want included in the Bill, including banking, utilities, telecoms and ticket touting. At the risk of disappointing them, I do not propose to go into much detail on those issues as they do not fall within the remit of the Bill. Although I have sympathy for many of today’s speakers and with a lot of the issues, many are issues for other Ministers and Departments to tackle.
The hon. Member for Walthamstow and a number of others mentioned concerns about consumers having access to their own data. We agreed that that information can be key to empowering consumers to take well-informed action. The hon. Lady mentioned midata and the voluntary approach the Government have taken to it has already had success, with all the major energy companies now providing midata downloads so that their customers can access their data in a consistent and machine readable format. My Department is reviewing progress on the voluntary programme and we wrote to chief executives of companies about that in November. The review, which will be completed in March, will help us to decide whether to use the power in the Enterprise and Regulatory Reform Act 2013 to require companies to release the data they hold on consumers, but we hope that the voluntary approach will make progress. There is progress and I hope that the hon. Lady welcomes that.
Members on both sides of the House expressed concern about lookalike websites. As they will know, misleading information and advertising has long been the subject of consumer protection legislation, which was substantially updated and extended in 2008. Under the Consumer Protection from Unfair Trading Regulations 2008, it is illegal for a trader to mislead consumers to the extent that the average consumer is likely to make a decision that they would not otherwise make. That is slightly wordy, but it includes giving a false impression of cost, such as charging for something that would otherwise be free. That encompasses the example given by the hon. Member for Walthamstow of fake HMRC websites. We accept that there is a problem, but further legislation is not required. The Department for Business, Innovation and Skills has written to public enforcers to draw the issue of copycat websites to their attention and to ensure that the law is enforced appropriately.
Sheila Gilmore
If the law is there to deal with this problem, why is it still happening? A constituent contacted me about this only the other day. He was not uneducated or stupid in any way, but he was taken in by one of these websites. What should he do?
Jenny Willott
If the hon. Lady would listen, I just said that the Department has written to public enforcers to ask them to enforce the law properly. The problem is clearly still happening, and we are all aware of instances of it. Recently, there were reports about the issue on the radio, particularly about the fake HMRC websites. There are lots of things that are illegal that still go on until there is a crackdown. This is one such thing, and we are doing what we can to encourage public enforcers to take action to close down websites that are clearly in breach of the law.
On a technical point, the issue of devolution was raised by a number of Members from Northern Ireland, and I should like to clarify the situation. The issues covered in the Bill are reserved to Westminster with regard to Scotland and Wales, but they are devolved to the Northern Ireland Assembly. The devolved Administrations in all three nations were consulted throughout the drafting process, and both Cardiff and Edinburgh are perfectly satisfied with the measures and are happy for them to be implemented across England, Wales and Scotland. I completely agree with the hon. Member for Strangford (Jim Shannon) that we are all part of one country and that it is important to be consistent across it. I am glad to be able to tell him that the Northern Ireland Assembly has agreed to a legislative competence order so that the Bill will apply across the board to the whole of England, Scotland, Wales and Northern Ireland. There will be consistency in the application of all the measures to the whole of the UK.
Mrs Hodgson
Will the hon. Lady clarify something? I think I heard her say that some of the issues raised by hon. Members did not fall within the remit of the Bill, including the point that I made about the secondary market in controlling ticket touts. Am I correct in thinking that she is not going to respond to any of my points?
Jenny Willott
Some of the issues that the hon. Lady raised related to unfair contract terms, which I shall come on to in a minute. Many other issues relating to banking legislation and the regulation of energy markets do not fall within the remit of the Bill, and they are the responsibility of other Departments. However, I shall come on to the points that she made about ticket touting.
As the hon. Member for Mid Norfolk (George Freeman) said, many good businesses already offer enhanced rights to their customers. The Bill will help them, because it will create a level playing field, and it will help us to have fair competition. The hon. Member for Windsor (Adam Afriyie) made it clear that the Bill will bring significant benefits to businesses, saving them time and money, and helping them to provide a better service to customers. It will also make the market more competitive, which helps everyone.
On the specific matters raised, the hon. Member for West Bromwich West mentioned the issue of deductions for use when a product is returned to the trader. As he said, we accepted some of his Committee’s recommendations, and it is vital that we begin the debate by recognising the fact that current legislation allows for a deduction for use whenever the customer exercises their second-tier right to reject. The Bill strengthens that by saying that a deduction for use cannot be made until after the first six months from purchase with a limited exception. As a result of the pre-legislative scrutiny, ably led by the hon. Gentleman, we decided to tighten and limit that exception even further. It is important to maintain the ability to deduct for use, but to ensure that there is a fair balance between the rights of consumers and the pressures on business.
The hon. Member for East Antrim (Sammy Wilson) raised the issue of time- limiting the period available for repairing products, as did another hon. Member. A number of factors will be beyond the control of the trader and a fixed time limit may impose a significant burden on them. When providing a repair the trader must carry out a number of actions, including taking delivery of the goods, diagnosing the faults, and perhaps sending the goods away for repair or ordering in parts. Similarly, the trader may have to order in a replacement. We are concerned that imposing a time limit may lead to a reduction in the quality of the repairs, which may in turn lead to a loss of faith in the repairs, and ultimately to an increase in the number of goods being rejected. We do not want to see that, so we do not propose to lay down a specific time limit in legislation because it could be counter-productive to the interests of consumers.
A number of hon. Members raised the issue of digital content. For the first time, the Bill introduces consumer rights for digital content. We are one of the first countries in the world to legislate in this area. I hope that as well as benefiting consumers, this will help to give this sector of the economy a competitive edge in the future. Such an important and rapidly growing industry needs to be governed by a clear and effective consumer framework. Many consumers assume that they have rights at the moment and are confused and concerned when they find out that they do not. We heard from a number of Members about the scale of this. During the last year, 16 million consumers have had a problem with downloaded material. I accept that, where possible, we should align the digital regime with goods and services to make it as clear and simple as possible for consumers, but we should do that only where it makes sense, and we need to ensure that we neither over nor under-regulate this important sector to ensure that it can grow.
Another issue that was raised by the hon. Member for West Bromwich West concerned the outcome-based quality standard for services. The Bill reflects the current position, which, as he knows, requires services to be undertaken with reasonable care and skill. As part of the consultation ahead of the Bill, the Government asked for comments on additional proposals to move the services regime closer to the regime for goods by introducing an outcome-based quality standard for certain services, but the responses that we received gave a wide range of views, including contradictory views on whether an outcome-based standard would be easier to understand. While in some cases, such as repair or certain installation services, it may be quite simple, in other cases a view on the quality of a service is subjective, and therefore much harder to determine.
As the hon. Gentleman said, the issue is complicated and difficult. I completely understand where he and his Committee are coming from, but the Government feel that the evidence does not fully support the conclusion that they came to and we have decided to stick with the current legal position requiring reasonable care and skill rather than introducing an outcomes-based quality standard. The current system is understood and it seems easier to apply, rather than introducing a new system that could be complicated and subjective, particularly as there are strong views on either side.
Mr Bailey
I hesitate to have a mini-debate, but the difficulty is that under the reasonable care and skill provision, anybody who felt that they had a case to bring against a service provider would have no other course of action but a recourse to law. It is extremely difficult for them to prove that if they are not professionally qualified in the service that has been provided for them. An outcomes-based approach would at least give clarity and strengthen consumer rights because they would know that if they took action they had a much better chance of winning.
Jenny Willott
Because the services sector is so incredibly broad and varied, what is the case in one area would not necessarily be the case in another. For example, I like the way my hair has been cut, but someone else might not have the same view. That is much more subjective and difficult to identify, whereas whether or not it has been cut with due care and attention is a totally different matter. It is clearly a difficult issue, and one to which I am sure we will return in Committee, because there are strong arguments on both sides. It is a matter of weighing up the evidence and deciding which side to come down on. There is not necessarily a right or wrong answer; either is a possible outcome.
Alternative dispute resolution and an ombudsman service were mentioned. I believe that we must first consult on how to implement the alternative dispute resolution directive, which the Select Committee mentioned in its pre-legislative scrutiny. Having a single consumer ombudsman is one of several options that we are considering, but it would not be appropriate to legislate for that until after we have properly consulted and decided which avenue to pursue and how to pursue it. We intend to publish a consultation document shortly, and I look forward to hearing people’s views on what approach we should be taking and on having a single consumer ombudsman, but this Bill is not the vehicle for that.
I would like to clarify a point made about collective redress. The hon. Member for Windsor mentioned the right of small businesses to participate in collective redress. The proposals in the Bill on competition-based measures and collective action will be available to consumers and small businesses in the specific area of the competition tribunal. On the broader issue of whether small businesses should be eligible to access more of the rights in this legislation, I understand that research by the Federation of Small Businesses will be produced fairly shortly. I am interested to see the case it makes. I am fairly sympathetic to the idea, but I do not think that this legislation is the place to introduce it, because it is specifically about business-to-consumer relationships, not business-to-business or consumer-to-consumer relationships. We want to maintain that clarity. However, this is an issue that will come up again, so I look forward to reading the FSB research.
The unfair terms legislation relates to a very complex area of law. The Bill will make it easier for businesses to apply the law in practice while ensuring that consumers are not tripped up by the small print. The Government agree that consumers should be protected from terms that allow traders to make unilateral changes to a contract, and the so-called grey list of potentially unfair terms already includes terms that permit the trader unilaterally to alter the characteristics of a consumer contract. Through the Bill, we are protecting consumers from terms that are not made prominent and are left in the small print, because they can be considered for fairness by the court. We think that will address many of the problems that have occurred.
To respond to one of the concerns raised by the hon. Member for Walthamstow, under recent regulations implementing the EU consumer rights directive, traders cannot hide costs; they must make all charges and costs clear up front before the consumer buys. That will come into force in June 2014. We have already taken action to tackle hidden costs and do not believe that we need to legislate on it further.
As the hon. Member for West Bromwich West said, we also looked at proposals to make it harder for businesses to change terms, even when they are flagged to consumers as liable to change in certain circumstances, but we believe that could make businesses less likely to offer consumers good deals and bargains for fear of not being able to be flexible in future and to respond to changes outside their control. Our concern is that consumers would ultimately lose out, which clearly we do not want to see. That is why we have not gone ahead with those proposals.
The hon. Member for Washington and Sunderland West (Mrs Hodgson) talked about the charges added by ticketing authorities. That will be covered by the provisions on unfair terms. If consumers are subject to extra charges that are hidden, that would be covered by the measures in the Bill. We have also legislated to prevent companies from charging more to process a credit card payment than it actually costs them, so that should offer customers further protection. I am sure that we will debate that further in Committee.
My hon. Friend the Member for Eastbourne (Stephen Lloyd) raised the important issue of funding for those who tackle breaches of consumer law, and that was also mentioned by the hon. Member for Edinburgh South (Ian Murray). As my right hon. Friend the Secretary of State said, BIS is providing additional funding of about £13 million through the National Trading Standards Board for enforcement to tackle national issues, which is separate from the budget for local issues. It will ensure better co-ordination across local authority borders and improved intelligence-gathering.
Ultimately, the provision of local trading standards services, which I know is the concern, is a matter for individual local authorities, but by supporting the National Trading Standards Board we are working to help trading standards services make better use of their money and co-ordinate better across borders. We are also helping trading standards officers to make more efficient use of their time by introducing 48 hours’ notice for routine inspections, which was welcomed by the hon. Member for Dudley South (Chris Kelly). Businesses, especially small ones, welcome the requirement for notice, because it means that they can ensure the right people are present and that the paperwork is ready, which saves time for both businesses and trading standards officers.
We do not believe that the measure will reduce the ability of enforcers to tackle rogue traders and breaches of consumer law as it applies only to routine visits. Trading standards officers can still turn up unannounced if they feel that providing notice would defeat the purpose of the visit or if they suspect a breach or an imminent risk to public health and safety. The introduction of notice only for routine visits will help trading standards to operate more effectively and efficiently, and save time and effort for both trading standards and small businesses.
The hon. Member for Edinburgh East (Sheila Gilmore) raised the issue of collective action, as well as the cost to consumers of taking individual action. The Bill will tackle that by giving public enforcers more flexibility to seek redress on behalf of consumers, so it will substantially improve the likelihood of consumers being able to get redress without having a court case, which is better for everybody, both consumers and businesses.
We are allowing for the business and the enforcer to reach agreement without the need to go to court, although the option to seek a court order will be available if agreement cannot be reached. The Bill will also allow for more flexible options to get the right solutions—for example, agreeing new delivery times for overdue goods, which might be more appropriate for the customer, or putting in place a better complaints system and joining an ombudsman service, as well as financial recompense. There is therefore a broad range of things that businesses could agree with enforcers to find a way forward. We want a system that is flexible enough to provide the most appropriate redress for consumers, and we believe that that is the right way to do so.
A couple of hon. Members mentioned the need to let people know about their rights and asked what we are doing to let them know about the changes. We have established an implementation group with members from the business community, consumer groups and the enforcement community. It is helping us to put together a strategy to ensure that consumers and businesses know about their rights and the changes that will be made by the Bill.
I completely agree with hon. Members who highlighted that information is absolutely key. The whole point of the Bill is to make legislation so much simpler that consumers will be much more able to understand their rights and to act when they feel that they have not been given the service or quality of goods they deserve. That is very important to us, and we are making sure that it runs alongside our work in the House.
The Bill will improve clarity and reduce the complexity of consumer law for both businesses and consumers. It will reduce the cost and time spent by both parties in resolving disputes, and it will lead to happier consumers and more successful businesses. The consumer law framework will be made fit for purpose in the 21st century by the introduction of a new category of digital content, and it will encourage consumers to shop around and take a risk on new businesses, helping our burgeoning digital industry to grow and to create wealth and jobs. The reforms will also build on and enhance the success of the current consumer and competition law enforcement regimes, making markets fairer and clearer. I therefore commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Consumer Rights Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Consumer Rights Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 13 March 2014.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of the proceedings.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on Consideration.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Gavin Barwell.)
Question agreed to.
Consumer Rights Bill (Money)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Consumer Rights Bill, it is expedient to authorise the payment out of money provided by Parliament of:
(a) any expenses incurred by a Minister of the Crown or a government department under the Act; and
(b) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Gavin Barwell.)
Question agreed to.
Consumer Rights Bill (Carry-over)
Motion made, and Question put forthwith (Standing Order No. 80A(1)(a)),
That if, at the conclusion of this Session of Parliament, proceedings on the Consumer Rights Bill have not been completed, they shall be resumed in the next Session.—(Gavin Barwell.)
Question agreed to.
Office of Fair Trading (Contingencies Fund Advance)
Jenny Willott Excerpts(10 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
The Department for Business, Innovation and Skills wishes to report that a cash advance from the Contingencies Fund has been sought for the Office of Fair Trading (OFT).
The advance is required to meet an urgent cash requirement on existing services pending parliamentary approval of the 2013-14 supplementary estimate. The supplementary estimate seeks an increase in the net cash requirement in order to settle material liabilities recognised in the prior year.
Parliamentary approval for additional cash of £5 million will be sought in a supplementary estimate for the Office of Fair Trading. Pending that approval, urgent expenditure estimated at £5 million will be met by repayable cash advances from the Contingencies Fund.
The advance will be repaid upon Royal Assent of the Supply and Appropriation (Anticipation and Adjustments) Bill.
Consumer Rights Bill
Jenny Willott Excerpts(10 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
Today the Government are introducing the Consumer Rights Bill. This Bill is a fundamental reform of consumer legislation so that consumers’ and businesses’ key rights and responsibilities are clear, easily understood and updated to take account of purchases involving digital content. It contains important new protections for consumers alongside measures to lower regulatory burdens for business, all with the aim of making markets work better, which is good for consumers, good for business and therefore good for growth.
Alongside the Bill, the Government are publishing a Command Paper, which includes the Government’s response to each of the recommendations made by the Business, Innovation and Skills Select Committee. We are very grateful to the Committee for their detailed pre-legislative scrutiny. A copy of that Command Paper can be accessed at: https://www.gov.uk/government/publications/ consumer-rights-bill.
Pub Companies
Jenny Willott Excerpts(10 years, 11 months ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
I thank the many Members who have spoken so passionately in the debate today. Almost all of us have heard tales of hardship from constituents who have worked in the pub industry. The need for action has been shown across the House. The hon. Member for Huddersfield (Mr Sheerman) appears to be the only one here who currently owns a pub, albeit closed, but there are clearly a number of Members who have an understanding of the industry.
Mr Sheerman
As my pub is soon to be crowdsourced, the hon. Lady can become a member.
Jenny Willott
I congratulate the hon. Gentleman on giving probably the best plug to his business, which has been mentioned four or five times in today’s debate—crowdsourcing will clearly not be a problem from now on.
A number of Members who have spoken have previously worked in the licensed trade, so they have been speaking from knowledge not only as constituency Members but as former licensees and so on, which has lent weight to the debate. My thanks go to the members of the Business, Innovation and Skills Committee and their Chair, the hon. Member for West Bromwich West (Mr Bailey). He and his predecessor, my hon. Friend the Member for Mid Worcestershire (Sir Peter Luff), have done crucial work over the years to raise awareness of this issue. I congratulate my hon. Friends the Members for Northampton South (Mr Binley) and for Leeds North West (Greg Mulholland) on their tireless work over a number of years.
Finally, I thank the wide range of people who responded to the Government’s consultation, including tenants, brewers, pub companies and their employees, interest groups, trade bodies, supply chain companies and consumers. Indeed, a number of Members from all parts of the House also submitted their views.
We have heard a number of stories from Members whose constituents are facing real hardship and adversity, which is clearly worrying. In his opening remarks, the hon. Member for Chesterfield (Toby Perkins) name-checked a large number of pubs that have been mentioned in previous debates, so I will not do the same. I would, however, like to highlight some of the Members who have given a passionate defence of pubs: my hon. Friends the Members for Leeds North West, for East Hampshire (Damian Hinds) and for Norwich North (Chloe Smith), the hon. Member for Huddersfield, my right hon. Friend the Member for Hazel Grove (Sir Andrew Stunell), the hon. Member for Clwyd South (Susan Elan Jones), my hon. Friend the Member for Tewkesbury (Mr Robertson), the hon. Member for Plymouth, Moor View (Alison Seabeck) and my hon. Friends the Members for Romsey and Southampton North (Caroline Nokes) and for Burton (Andrew Griffiths). That illustrates how important pubs are to a diverse range of communities across the UK. The constituencies about which Members have spoken today range from the urban to the rural and have very different issues, and that shows just how important pubs are.
As many Members have mentioned, over the course of a decade there have been four Select Committee investigations into the relationship between pub companies and their tenants and into whether a tied model causes an imbalance in bargaining power. The Government have received a large amount of correspondence from tenants about problems in their relationship with their pub company as well as from many hon. Members writing on behalf of constituents.
Although many pub companies behave well and some tenants have written in support of the tie, many others tell us that the tie arrangements with their pub companies are unfair and that a lack of transparency in particular causes a severe imbalance in negotiating power. Another issue that has been highlighted during today’s debate is the research commissioned by CAMRA based on self-reported income, showing that more than half of tied tenants earn less than £10,000 a year compared with only a quarter of those who are free of tie. The problems faced by tenants are real and clearly something needs to be done.
The Government consulted on the creation of a statutory code of practice to govern the relationship between large pub companies and their tenants and of an independent adjudicator to enforce the code. As a number of Members have highlighted, the proposals would represent a real step change for the industry, offering tenants the protection of a code of practice enshrined in statute and an independent and reliable body to which they could turn for assistance—[Interruption.]
The proposed code has at its core two important principles: the principle of fair dealing and the principle that a tied tenant should be no worse off—[Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. This has been a very important debate and everyone has been listened to quietly and with respect. There are far too many conversations going on and I cannot hear the Minister, who is speaking perfectly clearly. If Members are in the Chamber, they should be listening to the Minister. If they want to talk to each other, they should go outside.
Jenny Willott
Thank you, Madam Deputy Speaker. I completely agree; I have to say similar things to my children when they are bickering, as some Members appear to be today.
The two core principles at the heart of the code are fundamental. As the consultation made clear, there is a problem in the relationship between pub-owning companies and their tenants, and that was backed up by pretty much every Member who has spoken today.
Alison Seabeck
On the consultation and the Government’s work on the adjudicator role, have the Government come up with a figure for the cost of that adjudicator? That question was asked by Government Members.
Jenny Willott
As the hon. Lady will know, we are evaluating the responses and we will publish our response as soon as we can. That will give much more information about what we propose to do and the costs and impacts of those proposals.
Jenny Willott
I am afraid that I am very short of time and the hon. Gentleman has already intervened a number of times, so I will not.
The purpose of the consultation was to consider the proposals to address the problems in the relationship between pub-owning companies and their tenants, rather than to rehash the problems that we all know to be there. That leads me on to the response to the consultation; I emphasise again that the volume of responses we received was staggering, demonstrating the depth of feeling on the issue.
We received more than 1,100 written responses and more than 7,000 responses to the online questionnaire. One of those responses was 2,000 pages long, so the amount of evidence we have received is significant. That also shows that the situation is not as simple as some people have portrayed it, as illustrated by the speeches made by a number of Members today—not least those made by my hon. Friends the Members for Burton, for Tewkesbury and for East Hampshire and the hon. Member for Huddersfield. They raised concerns about what should be done to tackle the problems, including mentioning the views of the OFT, and highlighted that the matter is not simple but is far more complex than has been suggested by those on the Opposition Front Bench.
The responses to the consultation came from a wide range of interested parties. Since we published the responses online in December, they have been read several thousand times. If hon. Members have had the opportunity to look at even a little of the evidence that has been submitted—I am fairly sure that no one will have read the 2,000-page submission—they will see that views are often polarised on the degree and the nature of the problem, and what the best solutions would be. That has also been seen in today’s debate. The 2011 report of the Business, Innovation and Skills Committee noted that the evidence
“demonstrates a high level of acrimony within the industry and is littered with claims and counter-claims”,
which just shows that it is important to make sure that we get this right.
The breadth and depth of views expressed in the Chamber today and in the consultation help to illustrate what a complex issue this is, particularly if we aim to design a solution that is both effective and proportionate. As some hon. Members have highlighted today, the tie itself is not necessarily a problem; it is abuse of the tie that is the problem. Nor is the tie the only problem facing pubs, so finding the right solution is a complex matter.
As hon. Members have also highlighted, the Government had intended to publish their response to the consultation by the end of 2013. I know that those who are affected by the proposals, whether tenants or businesses, need clarity from us. This is, however, a complicated issue, and it is really important that we get the decision right. The excellent response to the consultation has created a broad evidence base upon which we can make our decision, and the evidence spans the range of proposals that we have discussed today, including the market rent only option, and puts us in a good position to make the right decision to ensure a fairer and more sustainable pubs industry.
We intend to publish the Government’s response to the consultation as soon as we can, but we are working to reach a proportionate solution that delivers greater fairness for Britain’s publicans. We believe fundamentally that a tied tenant should be no worse off than a free-of-tie tenant. The beer and pubs sector makes a significant and valuable contribution not only to our economy, although that has been highlighted in today’s debate, but also to the more intangible benefits of social cohesion and a sense of community. We want to support a fair and flourishing pub sector, which is why we removed the beer duty escalator, as has been mentioned by hon. Members, and reduced the tax on beer in last year’s Budget. It is also why we support the community right-to-buy scheme, which several hon. Members have mentioned today, and why we are giving £19 million to help communities to take advantage of the scheme.
By ensuring that tied tenants are treated fairly and putting an end to the abuses of the tied model, we will create a sustainable and fairer industry to enable pubs to remain as mainstays of our communities, and that will be good for publicans, pubs and the public.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
Post Office Services
Jenny Willott Excerpts(10 years, 11 months ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
Thank you, Madam Deputy Speaker. Having not been allowed to speak in this Chamber for two years as a Government Whip, it is a little surreal to be at the Dispatch Box.
I congratulate the hon. Member for Glasgow North West (John Robertson) on securing this debate on an important subject. Despite the lack of Members present, the issue comes up regularly, and on most occasions a significant number of Members want to discuss the critical role that post offices play in all our local communities. The post office is much more than just a commercial entity. As the hon. Gentleman has said, it is important to hundreds of thousands of small businesses, which rely on it every day, as well as to the millions of customers who use the network for a range of services. I agree with the hon. Gentleman that post offices are particularly crucial to elderly residents, those on low incomes and the disabled, who make particularly good use of them in our communities.
In November 2010, we announced a funding package of the historic amount of £1.34 billion to guarantee the size of the network until 2015 and to end the closure programmes run by the hon. Gentleman’s Government, which led to the closure of 7,000 branches under the previous Administration. In November 2013, we announced our continued support of the network with a further £640 million to secure and continue its modernisation until 2018. That makes clear the Government’s commitment to the post office and its future success. Contrary to what the hon. Gentleman has said, that recent investment is a vote of confidence in the post office network and it is helping to move it to a more sustainable and secure long-term future.
Mr Weir
I understand what the Minister is saying and I think we all appreciate the money going into the transformation programme, but many small sub-postmasters in my constituency are concerned because they feel that they are being pressurised by the Post Office to give up their businesses, take extra redundancy or move to a local model that they feel is unsustainable. That does not seem to be a sensible way to pressurise people who have run post offices successfully for many years.
Jenny Willott
I cannot comment on the operational procedures of the Post Office, which is a separate entity, but the Government are very clear that we want to maintain 11,500 branches in the post office network across the country. That means ensuring that we maintain a branch in all communities that currently have branches, and the level of knowledge and expertise that exist among many sub-postmasters, who are extremely well embedded in their communities and extremely well known and trusted by members of their local community. That is one of the elements that make the post office so important in many of our communities, especially in rural or more deprived areas, where many people depend heavily on the local sub-postmaster and the post office branch.
Mr Weir
I do not want to labour the point, but experienced postmasters are being encouraged to give up and businesses are going to a local shop, on the post office local model, that generally offers fewer services than existing post offices. I appreciate that the Minister has said that the Post Office is independent, but Government money—taxpayers’ money—is being used to achieve the changes.
Jenny Willott
We are trying to ensure that the post office network is sustainable into the future. We cannot subsidise at historical levels. The previous Government’s way to tackle the problem was just to close post office branches, with significant losses. There were many losses in my constituency, as I am sure there were in those of other hon. Members in the Chamber.
This Government have taken a different decision, which is to look at different models to ensure that we can maintain post office services in all communities across the country. Services delivered in particular communities may have to change to ensure that they are viable, but it is incredibly important that we have post office outreach in communities across the country, and that we do not see any repetition of the previous Labour Government’s closure programme.
John Robertson
The point that the hon. Member for Angus (Mr Weir) and I are trying to make to the Government is that post offices supply a service to people who need that service. We do not need a downgrading of the existing service, but it appears likely that the Government’s project will downgrade post offices to such an extent that people will wonder what the point is of having them in the first place.
Jenny Willott
I could not disagree more with the hon. Gentleman. The vast majority of services available in post office branches across our communities will still be available. I cannot remember the exact figures—I hope that he will forgive me—but well over 90%, perhaps even 95%, of the services that people can currently access in their branches will still be available under the new models. There will still be every reason for people to carry on using their post offices, which will serve their communities in exactly the same way: the model will be slightly different, but they will provide just as vital a service to members of our communities as they currently do.
The £2 billion of funding that has now been approved by the Government will allow post offices to invest in transforming and modernising the network and helping to ensure the long-term sustainability that we all agree is absolutely critical. Despite what the hon. Gentleman said in his speech, the new models are attractive. I understand that he and the hon. Member for Angus (Mr Weir) both have concerns, but the models are attractive to those running post office branches. Some 2,500 sub-postmasters have already converted, or have signed contracts to convert, their branches to one of the new operating models. They have received investment to modernise and improve their branches, which will bring benefits not just to them in running their businesses, but to the consumers they serve and the communities in which they are based, including much longer operating hours, shorter queues and more attractive branch layouts.
John Robertson
I am sorry to interrupt the Minister again, but perhaps we can solve the whole problem. Why does she not come up to Glasgow and meet the same sub-postmasters that I have spoken to? Let me assure her that what she says is not what they are telling me. She can come and see for herself.
Jenny Willott
I have met the National Federation of SubPostmasters. I represent Cardiff Central, and I have spoken to my local sub-postmasters. I appreciate that this is clearly a period of change that will be very unnerving for many sub-postmasters, particularly for those who have to change how they operate their business, but a significant amount of investment is available for those who want to carry on and to sign contracts to change to a new form of business. They are getting a lot of support from the Government. Others might want to leave the network or to retire, including those who have run businesses for a long time, and there is support for them as well, but it is important to recognise that many sub-postmasters are happy to alter their properties and to change to the new model.
Customers are getting significant benefits from the new models. Across the network, there are an additional 34,000 opening hours a week, which is equivalent to 700 more traditional post offices. The programme of investment will see the modernisation and protection of all branches by 2018, ensuring that every community and customer that relies on access to a post office today will continue to have access to post office services in the future.
The Government have ensured that all sub-postmasters can benefit from the investment. For the first time, a dedicated fund has been set up for post office branches that are important to the communities they serve, but where one of the new models would not be viable. That is an issue in large, remote rural areas, such as those in Scotland, where the post office is often the last shop in the village, as it were. The community fund to ensure that those post offices are kept open is a real departure. It will protect those branches well into the future and ensure that people have access to post office services. That is particularly important in areas where the post office provides an important service to more vulnerable consumers.
Mr Weir
I thank the Minister for giving way yet again; I do not want to push my luck too far. I remember taking this matter up with the hon. Member for East Dunbartonshire (Jo Swinson) when she announced the fund. The fund is for doing work on the post office to make it better, but that is not the difficulty in many of these very small post offices. The difficulty is that the postmaster’s income is simply insufficient. Postmasters want to keep going, but there is nothing in the fund to give them an uplift in their income to help the post office survive. The fund is for physical changes to the post office, which is not the issue at most of the post offices we are discussing.
Jenny Willott
I will come on to talk about income and the services that we are supporting in post offices to ensure that they are viable.
The hon. Member for Glasgow North West spoke about Crown post offices. As he mentioned, the funding package that was set out in 2010 required the Post Office to eliminate its substantial losses. In 2012-13, £37 million of losses were incurred by the 373 branches that made up the Crown segment of the network. It is a key part of the Post Office’s strategy to make the network sustainable in the long term. The Government support the business in delivering that strategy. The current losses of the Crown network contribute a third of the losses incurred by the network as a whole. That is clearly unsustainable. No business, including the Post Office, can maintain a situation in which its high street branches cost substantially more to run than they bring in.
As part of its strategy to eliminate the unsustainable losses, the Post Office identified about 70 branches where there is no prospect of eliminating the losses at a local level under the current structure. In those locations, it is seeking a suitable retail partner to take on the operation of the branch under a franchise arrangement. The Post Office has made it clear that under each franchise proposal, the full range of current post office services, including the more complex transactions such as passport applications and identity services, will continue to be available in close proximity to the existing Crown branch. In the event that a suitable retail partner cannot be found, Post Office Ltd has given a commitment that a post office service will be retained in the area. I hope that what I have said reassures the hon. Gentleman that communities will not lose these vital local services.
John Robertson
The hon. Lady has not reassured me at all, I am afraid. Some of the Crown post offices that are closing are in areas where people simply cannot get about. There is no transport to get to where the new post office is because the bus services have been cut. How are those people supposed to get to the facilities that they need? They cannot go online because they do not have a computer and they cannot afford one.
Jenny Willott
The Post Office operates to the strict criteria that 90% of the population must live within a mile of a post office and 95% within three miles. Although there may be some changes to the exact buildings in which branches are provided, as I said, services including the more complex ones available at Crown branches will still be available in the area. We are maintaining the access criteria so that more than nine out of 10 people will live within a mile of a post office. We recognise that more vulnerable members of the community in particular will find it hard to travel longer distances to access services, so we are ensuring that they are maintained locally.
The investment that is being made is helping to ensure that an independent Post Office will remain a strong and long-term partner for Royal Mail—that is another issue that the hon. Gentleman raised. A transformed network will offer Royal Mail and the many companies, Government Departments and agencies with which the Post Office works better access to customers than ever before, which is crucial to winning new contracts and retaining existing ones.
The hon. Gentleman referred to the decision to separate the Post Office from Royal Mail. Far from being a mistake, it has allowed the Post Office to focus on its own priorities and needs. It is important to recognise that the two companies are very different. Royal Mail is a logistics company whose business is collecting, sorting and delivering mail. Although we can access Royal Mail services at post offices, the Post Office is different. In addition to mail services, it provides access to a wide range of government services, from pension and benefit payments to passport check and send services and Driver and Vehicle Licensing Agency motoring services, all the way down to fishing rod licences. It also provides access to a wide range of financial services products, from savings accounts to mortgages, insurance and foreign exchange. It is now piloting a range of current accounts. Separation is allowing the Post Office to focus on its business and make the right decisions in the long-term interests of its staff, sub-postmasters and customers.
I recognise, as I think we all do, the importance of the Post Office’s relationship with Royal Mail. As the hon. Gentleman mentioned, prior to separation the two companies negotiated and signed a long-term commercial agreement. It was a 10-year agreement, the longest permissible at the time, and ensured that Royal Mail services would continue to be offered at post offices until 2020. That cemented the long-term relationship between the two businesses. As the post office network modernises and the parcels market continues to grow, the relationship will only get stronger. Indeed, Royal Mail’s chief executive has said that it is “unthinkable” that the two companies will not always have a close relationship. I am reassured that the relationship will be maintained long into the future.
It is important to remember that the relationship is equally important for both businesses. The Post Office benefits from a continuing commercial relationship with the largest postal operator in the UK, and Royal Mail benefits from exclusive access to the largest retail network in the UK and the millions of customers who use post offices every week.
Alongside its work for the Royal Mail, the Post Office is making good progress on its ambition to become a front office for government. As the hon. Gentleman pointed out—slightly dismissively, if I may say so—the Post Office has won every Government contract that it has bid for in the past two and a half years. That is a notable achievement that should not be underestimated. The contracts have been secured in highly competitive markets against fierce competition, and the Post Office’s success represents a vote of confidence in the business, in the Government’s funding and, more importantly, in the thousands of highly skilled postmasters and post office staff who deliver the services every day. That shows the regard in which they are held.
The contracts that have been won include the vital cross-government front office framework contract, which was led by the DVLA and won by the Post Office in 2012. It has extended the Post Office’s contract with the DVLA and broadened it into new areas. Because it is a framework contract, it also means that other Government agencies can contract more easily with the Post Office and deliver value for money to the taxpayer. The contract is already in use by Her Majesty’s Passport Office, which sees in it an opportunity to modernise the passport check and send service. With a stable and modernising network, the Post Office is well placed to build on those successes.
I hope that the hon. Gentleman and all other Members who are in the Chamber will support me in encouraging Government Departments and agencies, local government bodies and, as he said, the devolved Administrations to seek out new opportunities to work with the Post Office. That includes new and emerging digital and identity markets, but also counter services. As he has said, branch security is important to so many Post Office and Government customers.
The Post Office has shown time and again the benefits it can bring to the Government in driving value for money for the taxpayer and in improving the accessibility of Government services, including to vulnerable and disadvantaged groups across the UK. That has brought many benefits to the Post Office. Additional new work will be crucial in helping to ensure the network’s long-term future.
However, I want to be clear that, in accordance with EU procurement regulations, the Government cannot simply award contracts to the Post Office or, for that matter, to any other company. We must secure suppliers through an open and competitive tender process. That ensures fairness, drives innovation and delivers value for money for taxpayers, which is important in these times. That the Post Office is winning contracts in such circumstances shows that it meets those competitive criteria and does an excellent job.
There is more to the Post Office than mail and Government services—the hon. Gentleman highlighted that. The company has been growing well in new areas in recent years and is now one of the leading providers of financial and telephony services in the UK. Growth in the Post Office’s award-winning financial services business under this Government has made it one of the leading challengers to the high street banks. Post Office’s 3 million customers have deposited more than £17 billion in a variety of savings products. Customers rely on the Post Office for insuring their homes and holidays. It also helps them to get on or move up the property ladder with the range of mortgages it has available. Recently, the Post Office’s current account pilot was extended and is now available in more than 100 branches.
The Post Office acknowledges the important role its network plays in local communities. The business is already in conversation with the Association of British Credit Unions and the credit union sector to explore how they can work together to reach more families and give access to credit union services in more communities. I am sure hon. Members welcome that.
The Post Office remains committed to ensuring that communities continue to be able to access cash and banking services—the hon. Gentleman highlighted that important issue. Ninety-five per cent. of UK current accounts are available over the post office counter. With the support of the Government, the Post Office is continuing to work with the one remaining high street bank—Santander—that does not offer this service. Those services are important in ensuring local convenient access to cash, particularly, as he said, for the communities that have been left with no high street branch. Unfortunately, that is many of our communities in the UK.
In conclusion, I am confident that the hon. Gentleman can see that the Government believe strongly in the future of the Post Office and that we are working hard to ensure its future success. We are investing in modernising the network. Under this Government, the Post Office is flourishing. Customers are benefiting from longer opening hours at improved branches. The company is winning new contracts and providing its customers with an increased range of services. The Government are laying the foundations for the long-term, sustainable and successful future of the Post Office. Hon. Members agree that it is essential for our communities that the Post Office continues to thrive in the years to come.
Question put and agreed to.
Public Service Pensions
Jenny Willott Excerpts(13 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Danny Alexander
The right hon. Gentleman asks who will be worse off, which is a fair question. One flaw with the current final salary arrangements in the public sector is that the contributions of low-paid workers go towards subsidising the pensions of the highest earners. That is one reason why we want to move to a career average basis. Some of the losers from that would be the highest paid, particularly those such as chief executives of local authorities, who receive a large jump in salary at the end of their career and then get a pension as if that were their salary for their whole lifetime.
Jenny Willott (Cardiff Central) (LD)
There has been much concern over the last few years about a race to the bottom with pensions, particularly given the parlous state of pensions in much of the private sector. Can the Minister reassure us that the proposals currently on the table will remain a gold standard and will ensure generous but sustainable pensions in the public sector in the long run?
Danny Alexander
My hon. Friend is right to remind us of the context in which 13 million workers in the private sector have no pension provision at all. That is something that will be taken care of as the NEST—National Employment Savings Trust—scheme is introduced. These will remain gold standard pensions. It is quite right that public sector workers who make a lifetime of contribution to serving this country should get the best pensions available, but the proposal will ensure that the costs are brought under control and that it is affordable to the taxpayer—not just now, but in the decades to come.