Leaving the EU: Consumer Protection

Jo Swinson Excerpts

Tuesday 10th October 2017 Westminster Hall

[Vicky Ford (Chelmsford) (Con)]

I beg to move,

That this House has considered the effect of the UK leaving the EU on consumers and consumer protection.

It is an honour to speak under your chairmanship, Mr Streeter. I thank the Minister for coming this afternoon, and the many consumer organisations, businesses and others with an interest in consumer affairs that have written to me in preparation for today’s debate.

Consumers are key to the country’s prosperity. Consumer spending is more than £100 billion every month. Consumer confidence is vital for our stability and growth, so consumers must be a central part of the Government’s plans as we negotiate our future relationship with Europe. Leaving the EU without an agreement on many consumer issues would risk causing real problems for many people in the UK and elsewhere in Europe.

I am glad that the Prime Minister and the Secretary of State for Exiting the European Union have spoken about putting businesses and consumers at the heart of the Brexit negotiations. We have not yet seen detailed policy papers from either side, so this is a welcome opportunity to look at some of the details. It is essential that the Government work with consumer organisations as well as businesses. I understand that the Minister has invited consumer organisations to join her in stakeholder meetings to consider the issues, and I am grateful for that.

Recent research by the consumer organisation Which? showed that consumers’ top priorities for Brexit negotiations relate to maintaining lower prices, especially in key sectors such as energy, food, fuel and consumer goods. Our consumers are used to shopping across borders, and nearly half of British trade is with Europe, so it is absolutely right that the Government seek a deal with Europe that maintains as much stability as possible, avoids unnecessary financial shocks and keeps trade as friction-free as possible, otherwise costs will increase.

Consumer protection is also vital for maintaining consumer confidence. The UK has more than 40 years’ experience of working with the EU on consumer protection. European directives and regulations give consumers protection on issues such as unfair terms, aggressive selling, and poor quality and unsafe products. Those bits of European legislation not only protect British consumers when we shop in our domestic market and in other EU markets but, importantly, give EU citizens rights when they come here to buy from British organisations. It is important that there is no regulatory cliff edge and that the relevant EU legislation is brought on to the British statute books using the European Union (Withdrawal) Bill, so I was pleased to support that Bill in the recent vote. The Bill will mean that there is no change to the body of EU consumer protection law when Britain leaves the EU.

However, consumer protection is not provided by legislation alone; it is underpinned by product standards and market surveillance networks. In Europe, CE marking means that a product meets the safety standards required by law. It covers technical products, products used by children, electricals, building machinery, medical equipment and many other products. It has been suggested that the CE mark could be replaced by a more global standard, but global standard setting in many areas is still limited and lacking in detail. Given that nearly half of British trade is with the EU, any large-scale divergence on standards could lead to technical barriers for British businesses trading in Europe, which is why the vast majority of British manufactures want to keep a common marking scheme for standards, to avoid unnecessary costs.

However, we know that standards can be a tool for protectionism, to lock others out of a market, and it is important that British manufacturers retain a seat at the table where decisions are made. I hope that the Minister can update the House on the state of discussions regarding the future relationship between the British standards bodies and the European standard-setting bodies. Will we be able to retain our seat at those tables?

Changing the standard-setting regime would also raise questions about consumer safety. When I was a child, I lost my father in an accident that was caused by an electrical good. That would not happen today. The fire at Grenfell tower was started by an electrical good. This is not a time to drop safety standards. Consumers must be protected by strong safety standards, on our exit from the EU and afterwards. I am delighted that Ministers have said that we will not be responsible for lowering standards as a result of Brexit and have committed Britain to continuing to be a global leader on safety standards.

As well as those standards, we have the networks and authorities that are necessary for ensuring that the standards work and are enforced. The UK is part of the Rapex network—the rapid alert system for dangerous non-food products—which means that other countries are notified when dangerous toys and goods are found on the market. That makes it easy for trading standards across the country, in Essex and elsewhere, to take dangerous goods off the market quickly and keeps consumers safe. There is a similar system in the medical world; the pharmacovigilance network ensures that medical authorities and drugs companies across Britain are notified if a patient has an unexpected response to a drug, which helps to keep patients safe.

As part of Europe, we take part in the consumer protection co-operation network, which allows a British authority to ask an authority in another country to begin an investigation if it thinks that standards have been abused or consumer protection law has been broken. That is being used to help hundreds of British consumers involved in the French leaseback scandal, many of whom may have lost their life savings, and it helps to keep our financial products safe.

It is in the interests of consumers on both sides of the channel that we not only retain the European legislation but continue to be part of the co-operation networks that support it. It would be helpful if the Minister confirmed that the deep, special and bespoke partnership that the Prime Minister has mentioned will lead to exactly that type of co-operation.

I am not saying that EU consumer protection laws are perfect; in many areas, they are not, and Brexit will provide us with an opportunity to look again at burdensome areas. Anyone who listens to commercial radio stations will be used to the incredibly long terms and conditions that are read very quickly at the end of every radio advertisement for a mortgage or a financial services package. Apparently, less than 4% of consumers actually remember any of those details. That is all laid down in the consumer rights directive, and we may choose to diverge on such details. That is precisely why it is important that we have an ongoing mechanism for talking about future legislation and for enabling divergences.

[Jo Swinson (East Dunbartonshire) (LD)]

The hon. Lady is making an incredibly powerful speech that I think everyone in the Chamber is glad to be able to hear. She made the point that high product safety standards and consumer protection are good for customers, and obviously they are. Does she agree that they are also good for British businesses? When our businesses go to those high standards, that makes them competitive globally because of their reputation for providing goods of high quality.

[Vicky Ford]

I agree, and I thank the hon. Lady for her intervention. Interestingly, when the consumer organisation Which? surveyed British businesses, it found that those businesses, too, want to ensure that consumer interests are properly considered and maintained as part of the Brexit negotiation. That is precisely why British manufacturers say, “We want to continue to be part of the product-setting networks. We must have a seat at the table when they are agreed.” There are non-EU countries where manufacturers and standard-setting bodies are involved in the negotiations on the standards. It should be perfectly possible to maintain that in a deep and special relationship. It is in the interests of both parties.

It is also important to remember that consumer legislation continues to evolve. We need to ensure that legislation keeps up with the digital age. The digital world is increasingly borderless: our consumers are buying products not just from local retailers but, increasingly, from large global retailers, so it is important that we have international agreement on consumer issues. As I have said, the global forums for setting standards, particularly on digital consumer issues, often lack detail. Therefore, co-operation with Europe is necessary.

A key part of digital trade relates to the use of data. The ability of consumers to use comparison sites and to get consumer feedback means that they are increasingly empowered and informed. Our consumers need data.

--- Later in debate ---

[Jo Swinson]

Will the hon. Gentleman give way?

[Luke Graham]

I would like a few more minutes to develop my point.

The other legislative bulwark to consider is the European Union (Withdrawal) Bill. The Bill will convert all EU law into UK law wherever practicable when the UK leaves the EU. In practice, that means that wherever UK law does not already legislate beyond the existing EU minimum requirement, that minimum requirement will become UK law the moment we leave the EU. I think I speak for most of my colleagues when I say that there is little appetite for lowering standards once we leave the EU. The European Union (Withdrawal) Bill, in its current composition, is designed to provide consumers and businesses with continuity and to provide guarantees of consumer protections that are based on EU law and, as I mentioned earlier, UK law.

The UK leads not only in consumer rights and consumer protections, but in several international agreements where we are not in an official union. One example is the base erosion and profit shifting initiative that is being pursued through the OECD, where the UK has played a leading role in helping to strengthen tax avoidance measures around the globe. That proves to Opposition Members that we do not have to be in a formal union to do the right thing and promote consumer and institutional interests around the world.

[Jo Swinson]

I welcomed the hon. Gentleman’s praise for the Consumer Rights Act, which he rightly says was introduced during the 2010 to 15 Parliament. As the Liberal Democrat Minister who introduced that measure, in a Department led by a Liberal Democrat Secretary of State, I gently say to him that it was not just a Conservative achievement.

[Luke Graham]

I did say Conservative-led, but quite right—the coalition did a number of good things.