Oral Answers to Questions

Debate between Jo Swinson and Robert Smith

Thursday 20th November 2014 Commons Chamber

[Jo Swinson]

We had extensive debates on these issues in Committee and on Report. The Government have introduced legislation that will now go to the other place to ensure that exclusivity clauses are banned. We have also made a commitment to introduce sector-specific guidance to promote best practice in the use of these contracts. That is action from this Government where the hon. Lady’s Government failed to act.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

With several hundred job losses already announced in the north-east of Scotland as projects come to maturity in the North sea and costs rise, what are the Government doing to encourage further investment and exploration and to underpin many vital jobs across the UK?

Post Office

Debate between Jo Swinson and Robert Smith

Wednesday 27th November 2013 Commons Chamber

[Jo Swinson]

We shall not compensate people to leave the post office network and leave communities without post offices because that would not be in keeping with what we want to provide for communities; so the compensation for sub-postmasters who want to leave is dependent on a new operator being found in that area. Obviously, at any stage sub-postmasters can decide whether they want to retire or to leave the network, but if we going to pay them and compensate them to do so, we want to ensure that the community still has a post office service that it can access.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

In West Aberdeenshire and Kincardine there are many small local communities where the community model will be an excellent solution to their need to sustain the last access to public services in the community. Can the Minister confirm that the extension of the card account, and the funding model that has been put in today, will be used to grow other services for the Post Office, particularly financial services?

[Jo Swinson]

My hon. Friend is right to highlight the vital role of the community post office, particularly where that is literally the last shop in the village. That is where the investment in those branches that did not qualify under the previous programme but will now, will help to ensure that they too can provide a modern service and make available the widest range of financial services in a community where there may not be other banking facilities. In such areas, where people may depend significantly on deliveries and online shopping because of the access it gives to large retail areas and conurbations, the parcels market is increasingly important as part of the business model of post offices.

Delivery Surcharges (Transparency for Consumers) Bill

Debate between Jo Swinson and Robert Smith

Friday 13th September 2013 Commons Chamber

[Jo Swinson]

I intend to come on to that point. Legislation already protects consumers in many ways, but there is clearly an issue about how well it is enforced and about what more we can do to ensure that it is enforced. I am certainly committed to working with my hon. Friend the Member for West Aberdeenshire and Kincardine and others to ensure that we deal with the problem through existing channels, as well as to see whether we can do more. We want to make sure that consumers are not disadvantaged by suddenly being notified of delivery charges late in the buying process.

Citizens Advice Scotland reported on the issue last year. It found that consumers encounter a range of problems. One is obviously that of additional delivery charges, but delivery performance can also often be a difficulty: as well as extra charges for the location, there is sometimes an outright refusal to deliver to a particular address or an unfair categorisation of a location as more remote than it actually is. Hon. Members have raised the problem of postcode areas that are quite large and cover places that are remote as well as others that are not.

Delivery charges and arrangements need to be made available early in the ordering process, because they are particularly important for some consumers; if not, that can add to the problems faced by those consumers in researching and investing time in sourcing the products that they want to buy. Underpinning all that is a recognition that the more confident consumers are about what they are buying and about having those products delivered in a reasonable way and at a reasonable price, the more confident they will be to buy, which is helpful for our economy. Creating confident consumers is absolutely what we want.

Let us consider what the law already does in this area. It is clear in requiring traders to provide all consumers, wherever they live, with information on freight, delivery or postal charges when inviting consumers to purchase products. That wording is particularly relevant. The invitation to purchase is the key point. There may be a difference in how some people define that point in the process, or some retailers may just be thoughtless, as my hon. Friend outlined. But if some retailers think that invitation to purchase occurs only at the very end of the process when the consumer clicks “Pay”, they might think that that is an acceptable time to give the information about the delivery charges. Clearly, others might interpret invitation to purchase as occurring at a much earlier point, when the consumer is browsing the website or the shopping app and is implicitly invited to purchase.

Specific requirements are set down for contracts concluded via electronic means. The consumer rights directive that the Government intend to implement by next summer will require traders to ensure that their website indicates clearly, at the very latest at the beginning of the ordering process, whether any delivery restrictions apply. I emphasise that that is at the very latest. The best practice would be for that information to be made available much earlier in the process.

[Sir Robert Smith]

Would it be in scope for my hon. Friend to issue guidance to industry about best practice and about the possibility of implementing it on a voluntary basis?

[Jo Swinson]

I thank my hon. Friend for that intervention. I would be delighted to do that. With the consumer rights directive and the consumer bill of rights that will come before the House later in the year, we will be publishing not just regulations and legislation, but guidance to go alongside that. It would be an excellent idea to include in that guidance information about how retailers might best serve their consumers and comply with the spirit of the regulations about giving that information and making it clear for consumers.

It is therefore important, as the hon. Member for Edinburgh South said, that businesses are made aware of the extent of customer dissatisfaction with the current situation, and of the potential loss of business arising from delivery policies that may be fit for purpose for some parts of the country but not for others. When businesses are made aware of the situation, there can sometimes be success. Consumer Focus Scotland last year reported a case where a consumer queried the high surcharge for delivery and the retailer happily agreed to use another parcel delivery operator who charged much less to deliver the items.

My hon. Friend mentioned the rather excessive £235 courier charge that one of his constituents encountered, which was dropped to as low as £75 when it was challenged. That is still a significant cost but, as a proportion of the original price charged, it was significantly less. I was rather shocked by my hon. Friend’s example of someone who was charged £15 for the delivery of a simple gift certificate, which does not need to go by courier service. An item of that size could go in the normal post. Such examples need to be highlighted.

It is reasonable for consumers to ask for items to be sent via Royal Mail under the universal service obligation, which may not be as cheap as a courier company can offer for delivery to high population density areas, but in most cases will be substantially cheaper. Businesses should recognise that they can offer that, or alternative courier services or parcel delivery services. The first message is that consumers should be aware that it is certainly worth contacting the retailer and challenging a surcharge that they are unhappy about.

Good work has been undertaken by Citizens Advice Scotland, Consumer Futures and others to highlight the issue so that more consumers will feel that they can stand up and challenge a ridiculously high delivery charge. The Citizens Advice research was very specific. It acknowledged that many companies already provide a good service that customers appreciate, but it also identified that some do less well and that their customers feel rather let down. Trading Standards in Scotland has done a huge amount of work, particularly in the highlands, to highlight the issue to businesses and to help them understand and comply with consumer law.

Obviously, consumers with complaints about a retailer’s delivery policy should first ask the retailer for an explanation. If they are dissatisfied with the explanation and think that there is still a problem, I encourage them to contact Citizens Advice, which can then alert the relevant enforcement authority so that there can be an investigation. Encouragement and help to businesses—but ultimately with that enforcement as well—can ensure that consumers feel empowered and confident.

--- Later in debate ---

[Jo Swinson]

I thank the hon. Gentleman for that intervention. If I may add an anecdote, I was discussing the issue a few days ago in the Tea Room with my hon. Friend the Member for Argyll and Bute (Mr Reid), whose constituency is rather further south than West Aberdeenshire. He reported the frustration of some of his constituents in Dunoon when they telephone to ask why something could not be delivered or why it was so expensive. Dunoon, of course, is most often reached by ferry, and that information is clearly in a system somewhere, so the customer service assistant would explain to the customers that it was because they live on an island, which of course they do not, even if a ferry is often the most efficient way to reach it. That could create quite a lot of customer dissatisfaction. The important point for businesses to remember is that an unhappy customer is far more likely to tell other people that they are unhappy than a happy customer is likely to tell them that they are happy, so it is not necessarily in businesses’ interests for that to happen.

[Sir Robert Smith]

With regard to the Isle of Wight, it is notable that the hon. Member for Isle of Wight (Mr Turner) is one of the Bill’s supporters.

[Jo Swinson]

Indeed, and I suspect that is the result of experiences that the hon. Gentleman’s constituents have had.

I share the desire that my hon. Friend the Member for West Aberdeenshire and Kincardine has for the legislation protecting consumers to be clear, simple and transparent. Those are absolutely the qualities that underpin the consumer law reforms that we have set out and that the House is considering in draft. The draft Consumer Rights Bill is a fundamental reform of consumer legislation that will ensure that consumers’ and businesses’ key rights and responsibilities are clear, easily understood and updated to take account of purchases involving digital content. They are modern rights for a digital age. The Bill that we will introduce, once it has been scrutinised, will contain new protections for consumers, alongside measures to lower regulatory burdens for business. The aim is to make markets work better, which is good for consumers, good for business and good for growth.

I will just outline some of the core rights that our reforms will give consumers. I think that it is important that they are straightforward and in plain English. They are the right to clear and honest information before you buy; the right to get what you pay for; the right that goods and digital content are fit for purpose and that services are provided with reasonable care and skill; and the right that any faults in what you buy will be put right free of charge or that a refund or replacement will be provided. The first of those is central to our reforms, as well as to my hon. Friend’s Bill. I absolutely support the aim of transparency of information for consumers. The existing law and the reforms we are taking forward through the consumer bill of rights will continue to make sure that businesses cannot hide the charges they are levying on delivery costs and that they are made clear when the trader invites the consumer to buy. There is already a lot of good work on supporting compliance with existing law. That is positive, but more can be done.

Under our reform of the consumer landscape, more enforcement work is being done by local authority trading standards services, with a great deal being done in the highlands. In Scotland, the Convention of Scottish Local Authorities is responsible for co-ordinating the delivery of significant national and regional cases that cut across local authority boundaries. Of course, this issue does cut across local authority boundaries, and across the entire United Kingdom, as hon. Members have said. It might be worth involving the National Trading Standards Board and the Consumer Protection Partnership, which aims to get together all the enforcement agencies from different parts of the country, to see whether these problems can also be addressed at that level.

The Government significantly fund much of the work on this issue and have allocated more than £1 million to enforcement in Scotland in 2013-14. As I said, trading standards services in the highlands have done significant work, with some success, because some businesses have eliminated or reduced surcharges for the highlands as a result. Others have made changes to their websites to ensure that any surcharges that they may have concluded were unavoidable are at least indicated early in the buying process, so that no false claims are made. That was all achieved under the existing legislative framework.

A consumer will need to consider many factors, apart from delivery costs, when making a purchase. As required by the new directive, information will need to be provided to consumers on price, payment arrangements, delivery times, complaint-handling policy, rights to cancel, return costs, after-sales services and assistance, and duration of contract, to name but a few. All those factors, or in some cases only some, might be crucial for a consumer to know, depending on the person and their circumstances.

I support my hon. Friend’s work on promoting clarity and fairness for consumers, but I am not convinced that extra legislation is necessary or the best option for us to pursue. What should we do if this Bill is not the answer? I have been considering what more we can do to help enhance transparency as much as possible, because he has raised genuine concerns highlighting a specific problem that his constituents and others are experiencing. There are limitations on what can be specified in regulations about the timing of information provided to consumers, because some of the legislation derives from EU law and needs to be the same across Europe. However, we can play a part in highlighting good practice and drawing it to the attention of businesses. The work done by Citizens Advice and trading standards services has shown that this can have some success.

I am glad that my hon. Friend suggested publishing guidance alongside the new regulations that will implement the consumer rights directive in the UK towards the end of the year, because that will draw businesses’ attention to how important it is to alert consumers to extra supplementary charges early in the purchasing process. Some are already effective in this regard. In 2012, a study by Citizens Advice found that two thirds of retailers made delivery information very easy to find on their website. We need to use the opportunity provided by the consumer rights directive not only to draw attention to the good practice of those businesses but to draw attention to those that do less well. Two thirds is good, but it also means that a third of businesses are not making the information easy to find.

I would like to give my hon. Friend a couple of examples of where we could take action to help improve the situation for consumers. First, I would like to draw the issue to the attention of the British Retail Consortium, which, as a trade body, has members that include, I am sure, many of the companies that are causing some consternation to my hon. Friend’s constituents. It would be helpful if the BRC considered whether it can encourage its members to consider what hon. Members have said and what it could do to address the problems. I would be happy to bring retailers to a summit to discuss the problem with my hon. Friend. It would be good to have a mix of attendees, including exemplars—businesses that provide information at an early point and that give alternative delivery options to customers. Perhaps we could also invite businesses that were not doing well but that have improved their game and made the situation better for consumers as a result of the work of Citizens Advice and trading standards. We also need to include offenders—those that do not give consumers the right information and for which the detriment exists. We could then have a discussion on how businesses can solve the problem and recognise their responsibilities.

[Sir Robert Smith]

I welcome the idea of the summit. Bringing together best practice and those that need to learn and understand how to proceed will be welcome. My hon. Friend reinforces the point that online retailers need to be more aware of the need to shop around to ensure they get the best deal for their customers.

[Jo Swinson]

rose—

Groceries Code Adjudicator Bill [Lords]

Debate between Jo Swinson and Robert Smith

Monday 19th November 2012 Commons Chamber

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

I greatly welcome this Bill and I hope it makes good progress through the House. The Minister emphasises that it will help suppliers, but it is important to get across the fact that it will also help consumers by ensuring that a range of suppliers stays in the market and that there is variety and good security of supply.

[Jo Swinson]

My hon. Friend is absolutely right. We are introducing the adjudicator because of the benefits it will bring in dealing with potential issues of consumer detriment, as identified in the Competition Commission report.

I believe that our large supermarkets can be a very good thing for consumers, for employment and for our economy. In the vast majority of cases, they treat their suppliers lawfully and fairly. Unfortunately, as the House will be aware, the Competition Commission’s 2008 report on the supply of groceries showed that in some cases large supermarkets were transferring excessive risks and costs to their suppliers. That included practices such as the retrospective varying of supply agreements to force suppliers to take on unexpected extra costs, which is why the Groceries (Supply Chain Practices) Market Investigation Order 2009 came into force in 2010. The order contains the groceries supply code of practice and requires the 10 largest retailers with an annual turnover of over £1 billion to incorporate the code in all their supply agreements. The code sets out a general principle that retailers must treat their suppliers lawfully and fairly and also contains more specific requirements on how retailers should deal with their suppliers.