Electrical Products: Online Sales

Kelly Tolhurst Excerpts

Tuesday 9th July 2019 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

It is a pleasure to serve under your chairmanship, Mr Bailey. I thank the hon. Member for Swansea East (Carolyn Harris) for securing this important debate. She is incredibly passionate about this issue and, as chair of the all-party parliamentary group for home electrical safety, has played an important role in keeping a focus on it. Her commitment to electrical safety is to be commended.

I want to make it clear from the outset that in my 12 months in this post, I too have taken electrical safety and the safety of British consumers extremely seriously. It has been a focus of mine; I have spent a lot of time working on it in my day job within the Department.

It is clear that there is considerable interest among hon. Members in this issue. They have personal, and in some cases tragic, reasons for that interest. I again thank the hon. Member for Swansea East, and I thank the hon. Members who intervened on her for participating in this short debate.

Our first duty as elected Members must be to ensure the safety of those we represent. It is important that consumers should have a choice when it comes to buying all kinds of products. In today’s world, more and more of us are turning to online retailers when we purchase all manner of things, including electrical products. The changing ways in which we consumers purchase goods, including online, pose specific challenges in relation to protecting consumers. For a traditional market, the law is clear: manufacturers and importers have a duty to place only safe products on the UK market, and distributors have a duty of care when it comes to the safety of electronic products. The online marketplace makes it possible for consumers to sell to other consumers. That clearly presents new challenges. We recognise those challenges and are working with the platforms to address the issues.

The OPSS is taking forward a number of strategic projects aimed at understanding and addressing cross-cutting safety issues to deliver better protections for British consumers. One of those is rightly focused on tackling the challenges of online electrical product sales. The OPSS, working closely with a number of key stakeholders—including Electrical Safety First, which the hon. Member for Swansea East mentioned, and major online retailers—is bringing together those with specific expertise in this area to make the system work more effectively. The project is at an early stage, but a first strand is focused on evidence gathering, so that we can really understand how and where electrical products are being sold online. That work will form the basis of ensuring that we have the best system in place to protect people when they buy goods in online or offline marketplaces.

In addition, the OPSS is working with local authorities to ensure that checks are being made by sellers on products being sold online to determine whether they are subject to a recall. If a business is found to be selling recalled products, the OPSS will inform the business of its findings, so that the business can take immediate steps to remove the product from sale.

[Gerald Jones]

Will the Minister recognise that in the current climate, the financial pressures on local authorities make it more difficult for them to have the capacity to deal with some of the issues that she is discussing?

[Kelly Tolhurst]

When we are talking about such a wide brief as consumer product safety, there will always be pressures on budgets, but the OPSS is working with local trading standards, with scientific, technical support. It is providing support, through training, to trading standards, to enable local authorities to carry out the job that they have been tasked with doing.

The hon. Member for Swansea East asked a direct question about Whirlpool and the published list of recalled models, and I want to address that straight off. If products on the recall list are being sold on online platforms, that is absolutely wrong, and I will instruct our officials to ensure that those online platforms are made aware of those products, and that the products are withdrawn, as I have outlined. The hon. Lady will appreciate, because she knows this area very well, that this is ongoing work. Market surveillance—the identification of illegal and unsafe products—is not a job done today or tomorrow, with one list. Market surveillance is ongoing, and is how we continue to protect consumers. It is right that our policy and research evolves. This is work that we do independently as a Government to ensure that consumer safety is always our top focus.

[Patricia Gibson]

The Minister has talked about fines and punishments for people selling illegal or unsafe products online. Does the product safety and standards unit monitor particular sites, or does it wait for the public to make representations about them? I am interested to know how the sites operate and how they are monitored. Where does the intelligence about illegal or unsafe products come from?

[Kelly Tolhurst]

As part of the OPSS’s ongoing work, it has developed a database through which information is shared with online platforms when we are alerted to problems and particular safety concerns. That list is changing every day or every week, as new illegal products are registered. It is an ongoing piece of work, and part of what we are doing weekly to combat people who act illegally by putting illegal products on the market, and also to ensure that unsafe products that are being marketed are removed from sale. I have already outlined that this is a big challenge; it is something that the OPSS is very mindful of. That is why it is included in the first part of the workstream about understanding the extent to which such products are sold and how that can be moved forward.

A further strand of this work relates to online sales in second-hand electrical goods. OPSS is gathering evidence on the extent of the second-hand electrical goods market across the UK, so that it can provide advice to sellers on their responsibility when selling second-hand goods online.

[Carolyn Harris]

Has the Minister’s Department seen the listings put up overnight, and has it taken action to remove Whirlpool products from online platforms?

[Kelly Tolhurst]

That is a conversation that I did not have with my officials prior to the debate, so I am unable to give a direct answer. However, I have already outlined that the list has been published on the website and has been shared with our enforcement agencies. Where products on the list are being sold by online platforms, our enforcement bodies such as OPSS or trading standards—whoever is available or appropriate to deal with it—should absolutely ensure that they are removed from sale. That is a sensible thing to suggest, and I am sure the hon. Lady would expect me to say nothing less.

We have been running a series of campaigns to raise consumer awareness on keeping safe. This is being done in partnership with the leading consumer bodies, including the Royal Society for the Prevention of Accidents, Electrical Safety First, the Chartered Trading Standards Institute, Netmums and the Child Accident Prevention Trust. I was lucky enough to visit the CTSI symposium a couple of weeks ago, where I met many of those organisations. As part of the programme, OPSS and those organisations are planning a specific consumer campaign targeting issues that relate to online sales. I am sure that hon. Members agree that consumers are better able to protect themselves when they have the information and are aware of the risks.

OPSS is working to address the challenges posed by the operation of fulfilment houses. New types of businesses have emerged, and it is recognised that we need to do more online. They provide a range of services to online retailers. This work aims to combat the distribution of unsafe and non-compliant products in the UK supply chain via fulfilment houses. OPSS is working closely with local authorities and trading standards, and is targeting those businesses that choose to place unsafe or non-compliant products on the market without regard for the safety of their customers. This is an ambitious, two-year project. Our early work with national trading standards, Her Majesty’s Revenue and Customs, Border Force and local trading standards has already identified targets.

The project is bringing together OPSS, local authorities, HMRC and the Intellectual Property Office to develop a multi-agency approach to tackling the new risks that the new model of sale and delivery poses to UK consumers. OPSS has been working to understand the scope of the challenge facing trading standards from fulfilment houses, and it has developed an up-to-date intelligence profile to ensure that activity in this area is targeted at the appropriate businesses. As I mentioned, the scale of this project is significant, and it has the potential to make a serious impact on the sale of unsafe products online. Projects on this scale bring together local and national bodies, and that is one of the reasons why OPSS was created. We now have the capacity and focus to identify and tackle issues on a national scale.

Although there are many challenges from online sales, a number of which the hon. Lady has outlined, many online sales businesses already have strong relationships with trading standards and work with them to ensure the safety of the consumers to whom they sell. Businesses with primary authority relationships with an individual trading standards department know that they have available to them an expert source of assured and tailored advice on complying with consumer product safety regulations. Working closely with trading standards can help online sellers identify and address at an early stage product safety issues that may arise. E-commerce marketplaces such as Amazon and eBay are uniquely well placed to play an important role in product safety. A significant number of electrical products are sold through these platforms, which have systems to track these products.

The hon. Lady mentioned that Amazon has yet to engage with her and the APPG, but eBay has. Amazon and eBay have strong primary authority relationships in place. In both cases, the partnership has established robust systems to monitor products and sellers. Should non-compliant or unsafe products be identified, there are arrangements in place to ensure that product listings are removed from those sites quickly. I want to make it clear that we are under no illusion about the scale of the task. Those companies are among the largest in the world, and we cannot afford to be complacent about dealing with them.

As this is a global issue, OPSS is encouraging major online retailers to sign up to the product safety pledge that was initiated by the EU Commission. Under the pledge, online retailers commit to taking specific actions on the safety of products that are sold on their platform by third parties. The aim of the scheme is to improve the detection of unsafe products before they are sold to consumers, or as soon as possible afterwards.

I have spoken about the work that OPSS is doing directly to tackle the risks from second-hand and online sales, but it is important to remember that local trading standards are the main enforcers of product safety up and down the country. They play a hugely important role, and OPSS has been working with them to provide the technical and scientific advice, data and intelligence that supports their work every day. OPSS has developed a new product safety database to capture and share information on unsafe goods, so that risks can be identified and action taken as quickly as possible. It is already being rolled out across trading standards, and OPSS provided £500,000 last year to fund the testing of products by trading standards. We have increased that sum to £600,000 for 2019-20.

The hon. Lady asked many questions on issues such as additional resources and changes to the law. She will appreciate that this is the first time such questions have been levelled at me. I am more than happy to attend a meeting of the APPG, as I indicated I would; unfortunately, diaries have meant that I have been unable to. I will happily write to the hon. Lady with further detail on that, or we can have a meeting to discuss the issues—whichever way she prefers to communicate with me.

I want to reiterate that this is “job not done”. This is about how we evolve in a changing market and ensure that importers, manufacturers and marketers place safe products on the market. The onus is on the companies to ensure that they place safe products on the market. We will do all we can to ensure that we continue to monitor products and try to protect consumers as best we can. That is something that I feel very strongly about.

I thank the hon. Lady for bringing forward this important issue. I understand her passion and am desperately sorry about what happened to her constituent. I look forward to constructive conversations with her in the future.

Question put and agreed to.

Consumer Contracts Regulation

Kelly Tolhurst Excerpts

Thursday 4th July 2019 Written Statements

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

Today, I am publishing the statutory report on the Objectives of Consumer Contracts (Information, Cancellations and Additional Charges) Regulations 2013. This report sets out the conclusions of the review of these regulations.

A key foundation of our modern industrial strategy is delivering a strong, transparent and attractive business environment in the UK. The strength of the UK’s business environment is founded on our fair and open regulatory frameworks. For our regulatory frameworks to remain fair and open, they must meet the ever-changing needs of the modern consumer, the modern business and the modern world.

There is often an imbalance of power between businesses and consumers; these regulations were intended to empower consumers and create a fairer balance between the two. This was to be achieved by increasing transparency surrounding contracts they are entering into and give them the time to understand the product and consider its price before deciding to enter the contract, building consumer confidence and willingness to trade remotely in the process.

The regulations also implement the EU consumer rights directive, an obligation we are committed to meeting under the single market. But the UK has a strong history of protecting consumer rights, which is achieved not by the creation of new legislation and its enforcement but always seeking to understand whether, and how well, we achieve our underlying objectives. This report will set out objectives intended to be achieved by the regulations, assess the extent to which those objectives have been achieved, assess whether those objectives remain appropriate, and, if so, the extent to which they could be achieved in a way that imposes less regulation.

As part of the review, we made the call for evidence, which ran from 7 March to 1 May 2019. We are acutely aware of some of the issues highlighted by the response, such as the challenge of consistent enforcement. The Government’s consumer White Paper will set out our proposals for the next phase of action to strengthen the consumer regime and will be the vehicle through which the Government consider this, and a range of other issues not addressed within this report. The Government’s consumer White Paper is due to be published later this year.

Overall, it was the expressed view that the regulations continue to meet the objectives for which they were established and that these remain appropriate five years on from them coming into force. Following comments we will, however, be reviewing the existing guidance to ensure that it is sufficiently clear to support the regulations.

I will be placing a copy of the statutory report on the Objectives of Consumer Contracts (Information, Cancellations and Additional Charges) Regulations 2013 in the Libraries of both Houses.

[HCWS1691]

Whistleblowing

Kelly Tolhurst Excerpts

Wednesday 3rd July 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

I thank the right hon. Member for North Norfolk (Norman Lamb) and my hon. Friend the Member for Stirling (Stephen Kerr) for securing today’s important debate. I should also like to congratulate the right hon. Sir Norman Lamb on his knighthood, in recognition of his commitment to public service. I thank all hon. Members for their contributions today, and for the passion that they have expressed in voicing the concerns and putting their arguments on UK whistleblowing policy.

The Government recognise how valuable it is that whistleblowers are prepared to shine a light on wrongdoing. That is important at an organisational level but also, more broadly, for society, so that issues such as abuse of power are brought to light. This afternoon, stories have been shared in the House of people who, having acted as whistleblowers, have been disadvantaged and experienced severe detriment.

Effective whistleblowing policies enable workers to speak up, to prevent wrongdoing and fraud. That helps to protect employers from financial loss and reputational damage, and builds their trust with customers. Those who blow the whistle should be able to do so without fear of recriminations. Employment protection enables workers who have blown the whistle to seek redress if they are dismissed or suffer detriment at the hands of the employer because they have made what is called a “protected disclosure” about wrongdoing that they have witnessed at work.

I can assure hon. Members that over recent years the Government have taken steps to support a cultural change in relation to whistleblowing in all sectors. A number of statutory and non-statutory improvements have been made. Those include the publication of guidance for whistleblowers on what they need to do to make disclosures while preserving their employment protections; and guidance for employers, including a non-statutory code of practice.

My hon. Friend the Member for Stirling and the hon. Member for Oxford East (Anneliese Dodds) mentioned guidance. The hon. Lady spoke about the extent to which MPs have clarity in dealing with people who come to them for advice. I would like to go away and see whether there is any kind of guidance that we might publish, particularly for MPs, to improve our ability to help our constituents.

[Kevin Hollinrake]

The Minister heard some of my comments about the Financial Conduct Authority and its, at best, quite tepid approach to whistleblowers. What are we to do when, effectively, an agency that is commissioned by the Government does not follow through on its whistleblower obligations?

[Kelly Tolhurst]

I thank my hon. Friend. I was preparing to come on to that, but he is absolutely right—the FCA falls under the control of Her Majesty’s Treasury. I shall go into greater detail later, but I want to meet HMT to raise with it some of the concerns that have been voiced today in the House about the FCA and whistleblowing policy.

[Norman Lamb]

I thank the Minister for her very kind comments. I am sure she will come to this, but would she agree to meet us to discuss the case for a review, because I think a review of the legislation—not just guidance—is absolutely necessary? It was a Conservative who introduced the private Member’s Bill, and it could be a Conservative Government who modernise it and ensure full protection for all whistleblowers.

[Kelly Tolhurst]

I am happy to meet colleagues to talk about things they would like done in this area, and I note that the right hon. Gentleman distinguished between guidance and a review, which I will come to.

I want to outline what the Government have done and what steps are being taken, though I understand that for some colleagues these have not gone far enough. We have increased the scope of the protections in whistleblowing legislation by extending them to NHS students, nurses, midwives and job applicants in the health sector. We have also fulfilled the commitment to keep the prescribed persons list up to date. In response to the recommendations from the Women and Equalities Committee, we have committed to adding the Equality and Human Rights Commission to the list of prescribed persons at our next annual update. It will be subject to parliamentary time, but we aim to present that to the House before the end of the year. As I outlined earlier, I will consider whether there are things we can do within that to make it clearer.

We have also introduced guidance for prescribed persons and employers to help them to support whistleblowers. The most recent reform was a new legislative requirement for most prescribed persons to produce an annual report on whistleblowing disclosures made to them by workers.

[Justin Madders]

I appreciate all the work that has been done, but, as I said earlier, does the 3% success rate at tribunals not tell the Government that the legislation is not working?

[Kelly Tolhurst]

The whistleblowing legislation at the moment is regarded as proportionate, but as new evidence comes to light and as things change, it is right that we keep these policies under review, and it is right that we have these debates in the House of Commons so that the Government can be challenged over what is happening now and how we can improve.

[Dr Whitford]

It has come out clearly from this debate that PIDA only allows 3% of people to get some redress—it is only some redress—so surely we require legislation that protects the whistleblower right at the start of the process, rather than trying to mop up afterwards.

--- Later in debate ---

[Kelly Tolhurst]

I understand the passion and concerns, and the statistics, but we need to implement a framework that works across all sectors, and actually in particular sectors some of the challenges are not easy. It is absolutely right that we do what we can at pace but that we also review and look at what happens in the future. That said, I take the hon. Lady’s point.

The relevant prescribed persons were required to publish the first of their reports by the end of September 2018, and those were placed in the parliamentary Libraries. The second annual reports will be due by the end of this September and will also be available in the House Libraries. The reporting duty increases confidence in the actions taken by the prescribed persons, because it enables greater transparency about how the disclosures are handled. With these improvements, we believe that the whistleblowing framework is proportionate, though I accept that as new evidence and practices come to light we will need to keep the legislation under review.

Hon. Members will be aware that the EU has developed a whistleblowing directive that we expect to be approved this summer. It is very wide-ranging and comprehensive, and we will have to consider how we take it into UK law. It could fall within the implementation period agreed under the terms of the withdrawal agreement, but, as we know, there are questions marks over that. The hon. Member for Ellesmere Port and Neston (Justin Madders) mentioned workers’ rights. As colleagues knows, the Government were clear throughout the EU negotiations that we would not reduce workers’ rights when we left the EU. Whistleblowing and how we proceed in that regard is covered by the overall provision for the protection of workers in employment. I hope that Members will take that as some kind of commitment from me, at least. As for more formal reviews, it is right and proper for us to review the Government’s whistle- blowing framework. It would be premature to do so now, but that does not mean that it will not happen.

I welcome the ongoing work of the all-party parliamentary group on whistleblowing, chaired by my hon. Friend the Member for Stirling and vice-chaired by the right hon. Member for North Norfolk. Officials are hoping to meet members of the APPG soon to discuss, in particular, the legislative framework and protections for workers, and to feed the results of those discussions into their internal work. I hope that my hon. Friend and the right hon. Gentleman have been able to speed up that process.

Many issues have been raised today, and I want to deal with as many of them as possible. The right hon. Member for North Norfolk talked about foster carers, and that is an issue about which I am particularly passionate. I understand the challenges faced by foster carers, and the importance of protecting people who are doing a fabulous job in looking after young people who desperately need help. Fostering services are required to have a complaints procedure and a whistleblowing policy. In addition, foster parents whose approval is terminated, or whose terms of approval are amended, have a right to challenge the decision, and the right to a review by means of the independent review mechanism. I understand that the right hon. Gentleman is to meet a representative of the Department for Education to discuss some of those challenges in more detail, and I shall be interested to hear about the outcome.

As the House will know, the Government embarked on a consultation earlier in the year. That has now closed, and we are ourselves consulting on the various elements. I know that there are certain opinions in the House. We will issue our response to the consultation very soon, but, as I have said before at the Dispatch Box, the use of NDAs in an attempt to cover up wrongdoing is unacceptable. We have made it clear that no NDA will prevent the protection of whistleblowers.

Many Members, including the right hon. Member for North Norfolk and the hon. Member for Central Ayrshire (Dr Whitford), have expressed concern about whistleblowing in the health sector. In 2016, the National Guardian’s Office was created, and there is now a network of “freedom to speak up” in every NHS trust so that staff can speak up and be given advice on raising concerns with their local guardian. There is also a national helpline. Following the independent inquiry into Gosport War Memorial Hospital, the Government responded by announcing they would legislate, subject to parliamentary time, for NHS trusts in England to report annually on the number of staff who speak up, thus increasing transparency. The Department of Health and Social Care is still considering further ways of strengthening protections for NHS workers.

I am very conscious of the time, Mr Speaker, but let me touch briefly on financial regulation. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) mentioned the work that he does in his role as chair of the all-party parliamentary group on fair business banking and finance. I have had many conversations with my hon. Friend about a number of issues. I understand that the Financial Conduct Authority is currently conducting two investigations of the activities of HBOS, including its communications with regulators, following issues relating to misconduct. I look forward to seeing the reports. As I have always said at the Dispatch Box, I am prepared to meet Treasury Ministers to take the matter further. The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) mentioned his constituent Ms Davey. I shall be happy to meet Treasury Ministers to discuss that as well. I understand that it is a live case, and I shall be more than happy to speak to the hon. Gentleman after the debate. I understand all the concerns about the FCA that have been raised by Members on both sides of the House, and I hope they accept my assurances that I will take them forward.

On blacklisting, the Information Commissioner is opening a call for evidence on the implications of modern employment practice and recruitment and selection, and hopefully that will shed further light on what can be done. As the hon. Member for Strangford (Jim Shannon) knows, we are undertaking reform of the FRC after the independent review by Sir John Kingman.

I hope I have given some reassurance to the House in the time I have had that I am taking this issue seriously. I cannot stand here and promise Members exactly what they want, but I am prepared to promise that while I am in this post I will do what I can to work with them and address as many of their concerns as possible.

Once again I thank all those whistleblowers, some of whom might be watching our debate, who feel that they have suffered detriment for what they have done, and I also thank those Members who have made sure their voices are heard in this Chamber.

Rural Areas in Scotland: Additional Delivery Charges

Kelly Tolhurst Excerpts

Tuesday 2nd July 2019 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

It is a pleasure to serve under your chairmanship, Mr Hollobone, and I congratulate the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) on securing this important debate on an issue that continues to be important for his constituents and those of other Members. I thank all hon. Members for their contributions and the passion with which they represent consumers in their communities.

As the hon. Gentleman will remember, we met last November to discuss his concerns about this issue and we have since corresponded, including my recent responses to the parliamentary questions that he has tabled. I understand the concerns that he and others who are here today have raised that consumers in some parts of Scotland are being charged more for delivery than those in other parts of the UK. I also recognise that similar issues exist for consumers in Northern Ireland.

I am pleased to take part in the debate and to outline the progress that has been made since this issue was last debated in Westminster Hall in a debate responded to by a previous Minister, my hon. Friend the Member for Stourbridge (Margot James), back in December 2017. The Government are committed to promoting growth in the UK economy. The growth in online shopping is increasingly important in achieving that and it is of particular importance to rural communities, where access to physical retail outlets is limited. As hon. Members have said, it is crucial that retailers are up front about their delivery charges, including where they deliver to, what they charge and when premiums apply. Consumers will then know where they stand and can make an informed decision before they purchase. That is what the law requires.

The Government strongly encourage businesses to provide consumers, as far as possible, with a range of affordable delivery options. To help to achieve that, the Government have ensured that everybody, including retailers, has access to an affordable postal service for deliveries across the UK under the universal service obligation, which has been mentioned in the debate. Through the universal service obligation, Royal Mail delivers parcels up to 20 kg, five days a week, at uniform rates throughout the UK. Let me make it clear that it is up to businesses themselves to determine the most appropriate delivery option for the consumers of their products. There are no rules to prevent differential charging between businesses for deliveries, and I do not believe that, for example, imposing a price cap is a practical answer. We should not seek to force retailers to use a specific supplier, such as Royal Mail, because competition in the delivery market is an important driver of efficiency. A competitive market should be a sufficient incentive to put pressure on charges applied by retailers and delivery operators.

There are positive signs that things are changing and businesses are listening. Wayfair took the decision earlier this year to scrap delivery charges for orders over £40 to anywhere in the UK and to charge a standard rate of £4.99 for orders below that threshold. That type of commercial decision will set the company apart from its competitors, drive competition and lead to lower costs. On the delivery side, Menzies Parcels launched a highland parcels service last year, which enables delivery to a virtual address for onward delivery at a fixed price.

Provided that consumers have the information they need at the point of purchase and the ability to shop around, shopping around is effective. Research from December 2017 shows that 59% of those faced with a surcharge often, or always, find the item elsewhere online. However, I can reassure hon. Members that the Government are not complacent. The Consumer Protection Partnership, chaired by my officials in the Department, has recognised the issue as a priority that needs to be addressed.

As hon. Members know, the CPP has been looking over the past year to improve online retailers’ compliance with consumer protection law and considering concerns raised about the level and fairness of parcel surcharging. Its work has involved partners including Citizens Advice Scotland, the Consumer Council for Northern Ireland, the Advertising Standards Authority, and the Competition and Markets Authority. The partners have been working with both the parcel and retail industries and other external organisations, including Ofcom. The work has included liaising with bodies representing both operators and retailers to try to understand the pricing models and structures that influence pricing decisions. The aim is to help industry—both parcel operators and retailers—to find a solution that works for all parties, including consumers.

We have also been liaising with officials in the Scottish Government, who launched a fair delivery action plan last November that maps both delivery hotspots in Scotland and what might constitute a fair charge. The CPP work will be informed by the outcomes and conclusions of that action. The CPP also worked with highland trading standards, the Citizens Advice consumer service and Advice Direct Scotland to launch the delivery law portal last year, which will gather information about delivery charges and parcel surcharging to inform the work and support enforcement. In the past year, the portal has received up to 1,000 hits per day. Referring potential breaches and unfair practices to the site will help enforcement agencies to ensure that retailers meet their legal obligations.

Significant work has been undertaken by the ASA and the CMA to ensure that businesses comply with the legislation, and both have acted swiftly where that has not happened. The ASA, which is responsible for ensuring compliance with the British code of advertising, sales promotion and direct marketing, has issued more than 200 enforcement notices to online retailers regarding their parcel surcharging practices and has achieved a compliance rate of more than 95%.

The CMA has issued a number of advisory notices to major retail platforms and, as a result, eBay and Amazon have reviewed and improved their policies and guidance for retailers who sell via their platforms. However, on the back of this debate, and the intelligence mentioned by the hon. Member for Caithness, Sutherland and Easter Ross that suggests that Amazon may be taking a retrograde step in what it allows its online retailers to do with delivery charges, I would be happy to raise the matter directly with Amazon. I would be very grateful for any information that could be provided to me as the Minister, and I thank the hon. Gentleman for raising the issue.

I reiterate that the advisory notices are making companies such as eBay and other online platforms look at their practices and review them. The CMA continues to work through primary authorities to ensure continued improvement in this area. On the legal compliance side, significant progress has been made and our enforcement partners will continue to monitor and take action where necessary.

I want to touch on a few of the issues hon. Members have raised, beginning with the hon. Member for Caithness, Sutherland and Easter Ross. He is right to highlight that we expect more of our online retailers and that they should be up front and transparent with their consumers. Applying large surcharges after a purchase has taken place is therefore something we take seriously on the enforcement side. I concur with what my hon. Friend the Member for Moray (Douglas Ross) said about when he has had issues and has been able to get the ASA involved to carry out enforcement. That is highlighted by the number of enforcement notices the ASA has levied over the past year.

I highlight again that the CMA has issued, and will continue to issue, advisory notices where it sees fit. My hon. Friend the Member for Moray was absolutely right to raise a concern about postcodes. Such issues need to be raised directly with retailers. I co-chair the Retail Sector Council with Richard Pennycook and, although this is not a workstream within the council, I commit here today to mention it at the next meeting as an issue that particularly affects Scottish consumers. At least then we can ensure that from a knowledge and a lobbying point of view those retailers understand that there are problems for their Scottish customers.

Companies are missing out on business when they choose to employ couriers that charge large surcharges for deliveries into the highlands. If the information is transparent, the consumer has the opportunity to shop around, and we have seen from research that 60% of consumers will do that and will find a cheaper price or a different supplier. Retailers need to understand that they are potentially missing out on a very valuable market by being restrictive with the Scottish market. The hon. Member for North Ayrshire and Arran (Patricia Gibson) is absolutely right about Scottish consumers. The evidence suggests that people in Scotland pay 30% more for their deliveries, and in the highlands the figure can go up to 50%. That is why the CPP’s work has yet to be finished; we are still monitoring the matter and will continue to engage with the industry and retailers.

I am not sure whether I have stood with the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss) and spoken about Scottish surcharges, but we have spoken about most things consumer. She is absolutely right to challenge me on when the potential White Paper will be launched. I can assure her that I have been particularly interested in and working on the enforcement side and, although I cannot guarantee a date today, we hope to introduce it as soon as possible. She is right to highlight the beauty of our universal service, which offers 20 kg at a fixed price to anywhere in the UK, and it is a shame that some retailers have moved away from using it.

We can never forget that the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney), who is no longer in his place, is a postman. Every opportunity he gets, he bangs the drum on behalf of Royal Mail, our posties and the great service they provide. It is correct that businesses can choose to use different couriers. Some businesses will argue that in certain cases, further costs are incurred for delivering within Scotland and the highlands, which need to be passed on to the consumer. However, we are committed to continue working on that.

[Douglas Ross]

On the point that the Minister has made about further costs sometimes being involved, I take her back to my example, in which companies are not looking at the costs involved; they are simply looking at a postcode. In Moray, when they deliver further because the address has a different postcode, some companies charge no more for delivery than they do for an address that is closer to the depot. If companies were looking at it strategically, based on their costs, I could maybe understand it, but they are not; they are taking a blanket approach for any IV postcodes, and that is not right.

[Kelly Tolhurst]

I agree; my hon. Friend has highlighted a particular example. Since he has been elected, he has spoken with me many times, and he is known as a champion in this area. He has been pushing me as much as any constituency MP to take action. He has raised the issue of postcodes with me, and he is right that in that particular circumstance, there seems to be an absolute unfairness for the Scottish consumer. That is why one of the most important things is that we are working with couriers and highlighting the unfairness of that example.

We are putting pressure on businesses to make sure that when they instruct a courier with a contract, they do so with the best interests of their Scottish and Northern Irish consumers at heart. In some cases, we are talking about large retailers that have buying power, and they have the ability to go into negotiation with those couriers and negotiate better prices and services. I am particularly concerned about the small online retailers that do not have buying power with the couriers and, because of the number of parcels they send out in a day, cannot negotiate with them to perhaps get those surcharges reduced. My hon. Friend the Member for Moray is absolutely right: we need to continue to move forward and get more transparency.

I welcome the work that the Scottish Government have been doing on this, because they are close to this area. We in the Department for Business, Energy and Industrial Strategy and the CPP will keep engaged with the Scottish Government, and a lot of their work and its results will inform what we are doing with the CPP. I understand hon. Members’ frustration about what they perceive as a lack of progress, but I believe we have made progress, although it may not have been along the lines they would have liked to see. We have taken enforcement action; we are looking at this area, and it is being monitored. It is also right that we continue to do our best to make retailers consider their consumers who are being disadvantaged, because in not being able to supply products to those Scottish consumers, those retailers are ultimately the ones that are missing out. I congratulate the CPP on its work to ensure that when consumers purchase goods online, information is up front and transparent, and to take action swiftly when that is not the case.

Although there might be no quick fix on this issue, and although I am unconvinced at this moment about the need for further legislation, that does not mean that the issue is being ignored. I look forward to hearing about further progress through the CPP’s work and the Scottish Government’s initiatives. I am happy to update Members about progress as that work continues, and I thank the hon. Member for Caithness, Sutherland and Easter Ross for having secured the debate.

I understand the concerns of Members. After the next meeting of the Retail Sector Council, I commit that I will write to Members present today to outline what I was able to raise there. This is about a two-pronged attack: dealing with the couriers, but also making the retailers recognise that their decision making has an impact on consumers in Scotland and Northern Ireland. As the consumer Minister, I of course want there to be fairness and transparency for consumers throughout the United Kingdom, including those in the Scottish highlands and mainland Scotland.

Groceries Code Adjudicator

Kelly Tolhurst Excerpts

Thursday 20th June 2019 Written Statements

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

I have today launched the statutory review of the Groceries Code Adjudicator (GCA).

The GCA was established by the Groceries Code Adjudicator Act 2013 (“the Act”). Its role is to monitor and enforce the groceries supply code of practice (“the code”), which the UK’s designated large grocery retailers must comply with when dealing with their direct suppliers.

Section 15 of the Act requires the Government to review periodically the performance of the GCA. The first review carried out in 2016 covered the period from the creation of the GCA (in June 2013) to 31 March 2016. The second review will cover the period from 1 April 2016 to 31 March 2019.

The primary purpose of the review is to look back over the period 1 April 2016 to 31 March 2019 and to seek views and evidence which will allow the Government to make an assessment of the performance of the GCA against the measures set out in the Act. These measures are explained in the terms of reference. The statutory review is not a review of the code or the remit of the GCA. The code is a competition measure owned by the Competition and Markets Authority as the UK’s independent competition authority.

The Act requires us to consult the following:

the GCA;

the Competition and Markets Authority;

the retailers subject to the code;

one or more persons representing the interests of suppliers;

one or more persons representing the interests of consumers; and

any other appropriate person.

The consultation will run for 12 weeks and can be accessed at: https://www.gov.uk/government/consultations/groceries-code-adjudicator-statutory-review-2016-to-2019. Stakeholders have until 12 September 2019 to respond. Following this, BEIS will analyse the responses. A report on the findings will then be published and laid before Parliament.

The Terms of Reference for the GCA Review have today been placed in the Libraries of both Houses.

[HCWS1641]

Small Businesses: Late Payments

Kelly Tolhurst Excerpts

Thursday 20th June 2019 Written Statements

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

On 4 October 2018, we launched a call for evidence, asking for views on how to create a responsible payment culture for small business. I have published the full Government response to that call for evidence and placed copies in the Libraries of both Houses.

The Government are committed to supporting small and medium-sized enterprises (SMEs) to start well and grow, including a network of 38 growth hubs across England providing advice, guidance and support. As part of our industrial strategy we have an action plan to unlock over £20 billion of investment in innovative and high potential businesses. And where we see practices that unfairly constrain SMEs’ finance choices, we are prepared to act. For example, we recently removed a barrier that was preventing some SMEs from using invoice finance because of prohibitive contract terms imposed by their customers. This new measure is expected to provide a long-term boost to the UK economy worth almost £1 billion.

While there are a number of measures already in place to tackle late payment, from the prompt payment code, the ability to charge interest on late payments and increased transparency through the payment practices reporting duty, the call for evidence told us that there is more to do to improve the payment landscape. This is why I have announced that I will now take further and firmer action to tackle the scourge of late payments, while maintaining a holistic approach to culture change by using all of the avenues available to us in this space.

I will shortly be launching a consultation seeking views on strengthening the small business commissioner’s (hereafter “the commissioner”) ability to assist and advocate for small business in the area of late payments, through the provision of powers to compel the disclosure of information and seeking views on suitable sanctions for failure to comply.

I have also announced that the responsibility of the voluntary prompt payment code is to move to the commissioner and be reformed: this will unify prompt payment measures with the commissioner and address weaknesses within the current code’s operation.

I will take a tough compliance approach to large companies who do not comply with the payment practices reporting duty. The legislation allows for the prosecution of those who do not comply and I will use this enforcement power against those who do not comply where necessary.

The Government will launch a business basics fund competition with funding of up to £1 million, which will encourage SMEs to utilise payment technology.

I also intend to establish a ministerially led group to bring together key Government Departments to act on improving prompt payment across both the public and private sectors.

We are working with UK Finance and the finance sector to review the role supply chain finance plays in fair and prompt payment, including the potential for an industry led standard for good practice in supply chain finance. We also want to bring greater transparency to how supply chain finance is reported in company accounts and assessed in audits, by working with the Financial Reporting Council to develop guidance and build it into their sampling of companies’ accounts.

Our modern industrial strategy aims to make Britain the best place to start and grow a business and removing barriers to growth is key to this. The response to the call for evidence and the package of measures I have announced will tackle the continuing issue of late payments to ensure this happens.

[HCWS1645]

Businesses: Late Payments

Kelly Tolhurst Excerpts

Wednesday 19th June 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

With permission, I wish to make a statement about the Government response to the “Creating a responsible payment culture” call for evidence, which I have published today.

The Government are committed to supporting small and medium-sized enterprises to start well and grow, including through a network of 38 growth hubs throughout England that provide advice, guidance and support. As part of our industrial strategy, we have an action plan to unlock more than £20 billion of investment in innovative and high-potential businesses. Where we see practices that unfairly constrain SMEs’ finance choices, we are prepared to act. For example, we recently removed a barrier that was preventing some SMEs from using invoice finance because of prohibitive contract terms imposed by their customers. The new measure is expected to provide a long-term boost to the UK economy worth almost £1 billion.

Last year, we launched a call for evidence asking for views on how to create a responsible payment culture for small business. Although a number of measures are already in place to tackle late payment—from the prompt payment code to the ability to charge interest on late payments and the increased transparency through the payment practices reporting duty—the call for evidence told us that there is more to do to improve the payment landscape. That is why I am announcing today that I will now take further and firmer action to tackle the scourge of late payments while maintaining a holistic approach to cultural change by using all the avenues available to us in this space.

I will shortly launch a consultation to seek views on strengthening the small business commissioner’s ability to assist and advocate for small business in the area of late payments through the provision of powers to compel the disclosure of information. I will also seek views on the merit of the commissioner’s potentially being able to issue penalties for poor payment practices. In respect of large businesses that have poor or unfair payment practices, we want to seek views on whether the commissioner should be able to apply sanctions, such as binding payment plans or financial penalties.

I am also announcing today that responsibility for the voluntary prompt payment code is to move to the small business commissioner and be reformed. This will unify prompt payment measures with the commissioner’s other responsibilities and address weaknesses in the operation of the current code. We have seen the impact of the strengthening of the code since our announcement in October: earlier in the year, we saw the removal from the code of five businesses and the suspension of 12 others. The next compliance round is currently under way.

I will take a tough compliance approach to large companies that do not comply with the payment practices reporting duty. The legislation allows for the prosecution of those who do not comply. I will use this enforcement power against those who do not comply, where necessary. We are already writing to the businesses that we have assessed as being within scope to remind them of their duty.

The Government will launch a business basics fund competition, with funding of up to £1 million, which will encourage small and medium-sized enterprises to utilise payment technology. We have recognised that tech adoption has had a positive impact on the productivity of small businesses. This competition is coupled with the small business commissioner’s strategy to deliver advice, signpost and provide a clear pathway for small businesses when they feel that they need support.

I also intend to establish a ministerial-led group to bring together key Government Departments to act on improving prompt payment across both the public and private sectors. We are working with UK Financial Investments and the financial sector to review the role that supply chain finance plays in fair and prompt payments, including the potential for an industry-led standard for good practice in supply chain finance. This review will report back to the Business Secretary by the end of the year.

We also want to bring greater transparency to how supply-chain finance is reported in company accounts and assessed in audits. Working with the Financial Reporting Council, we want to develop guidance and build that into its sampling of companies’ accounts. Supply-chain finance can provide an affordable finance option for SMEs, but they need to be assured that the terms are fair.

Our modern industrial strategy aims to make Britain the best place in which to start and grow a business, and removing barriers to growth is key to that aim. The response to the call for evidence and the package of measures that I am announcing today will ensure that we will continue to tackle the issue of late payments. I offer great thanks to the Federation of Small Businesses and its Fair Pay campaign, which has campaigned so hard for movement from the Government. I also thank the hundreds of businesses that have taken part and engaged comprehensively with the Department in assessing the call for evidence.

Finally, I thank the Business, Energy and Industrial Strategy Committee for its significant work on this issue and the work that it will continue to do. I am sure that it will hold us to account on the improvements that we are announcing today. I will place a copy of the Government’s response in the Libraries of both Houses today. I commend the statement to this House.

[Bill Esterson (Sefton Central) (Lab)]

Unfortunately, I have only just received a copy of the Minister’s statement. I do not know why there was a delay, but it was not particularly helpful in preparing my response. [Interruption.] The Minister has just graciously apologised.

Late payment is believed to be the cause of 50,000 business failures each year, at a cost to the economy of £2.5 billion, along with thousands of jobs. Those are figures from the Federation of Small Businesses. The Minister is right to pay tribute to that organisation for the brilliant work that it does in advocating for small businesses on this issue and on so many others.

In her press statement, the Minister reported a fall in the scale of the problems facing small businesses, but let me caution her on that. She cited the excellent work of the Business, Energy and Industrial Strategy Committee, but it has suggested that it has evidence that payment terms are growing longer to mask some of these problems. Perhaps she can address that through some of the proposals that she has outlined.

We welcome the steps announced today as an important start in tackling the scourge of late payment. I tabled amendments to the Enterprise Bill that would have given the small business commissioner powers to insist on binding arbitration and fines for persistent late payment. The Government rejected those amendments, so we put the proposals in our 2017 manifesto, along with requirements for anyone bidding for a Government contract to pay their suppliers within 30 days. It is good to see the Government catching up with us today in their proposals.

The small business commissioner does great work with the £1.35 million in his revenue budget and, as I understand it, 12 members of staff at his disposal, but there are limits to what he can do. Although the £3.8 million recovered by the commissioner is important to the businesses affected, it is a fraction of the money withheld by late payers, which is in the tens of billions of pounds on any of the estimates available to us. What extra budget will the commissioner be given to discharge the additional responsibilities that the Minister is proposing, and what is the timescale for the consultation?

Accountability of company boards is a step in the right direction, but it will be important to compare the experience of the supplier with the reported practice in company accounts. How will the Minister ensure that what is reported is the time from the date of supply of goods and services rather than the date of recording the invoice, which any accountant knows can be significantly different and is often subject to delay when invoices are mysteriously lost or queried by accounts departments? How will this add to the existing duty to report? When will the consultation on giving the powers on the duty to report to the small business commissioner take place?

As the Minister told us, a number of companies that are members of the prompt payment code have been found not to comply with the code. The scandal of Carillion is an example of abuse of that code; we saw payment times of 120 to 180 days becoming the norm. Giving the policing of that code to the small business commissioner is a sensible idea, so will the Minister say what additional resources for these powers will be given to him?

The use of project bank accounts would have prevented the £2 billion loss to 38,000 suppliers in the Carillion fiasco. What consideration are the Government giving to extending the use of project bank accounts? I also note that the Government are pledging from 1 September to force bidders for Government contracts of more than £5 million to pay 95% of their invoices within 60 days. That is in line with the prompt payment code, but only with the lower end of its requirements. Why not make it a 30-day requirement?

One complaint of businesses is that the public sector is the source of some of the worst practice. The Minister mentioned the public sector in her statement. Another complaint is that smaller firms are often at fault in delaying payments. When does she expect action to be taken on public sector and other small business delays?

The problems of late payment need significant changes in practice. Today’s statement announces a series of measures which, if properly resourced, could make a significant difference. Businesses deserve a change of culture. The economy and the country need a change in practice. In broadly welcoming these measures, I hope that the Government’s delivery matches the rhetoric.

[Kelly Tolhurst]

I apologise to the hon. Gentleman for the fact that he did not receive a copy of my statement in sufficient time. That was not my intention at all. I hope that he will understand, following the many debates that he and I have had in the House, that that is not how I tend to work with him. I thank him for recognising that this statement should have an impact on the late-payment problems of many small businesses. One thing that has been made absolutely clear to me since I became a Minister—and actually prior to being elected, when I was a small business owner myself—is that late payment is always raised by companies that deal with large organisations. I am very pleased to be able to move forward on this matter.

The amount of money owed in late payments has halved. I wish to recognise the work that has been done by the small business commissioner since he took up his role one and a half years ago. He has collected more than £3.5 million in late payments. The hon. Gentleman is right to question his role and when the consultation will take place. We want that consultation to happen quite quickly. One of the key things that came out of the call for evidence was that people wanted more powers to be given to the small business commissioner. They saw his role as, in effect, an umbrella role encompassing a number of enforcement abilities for him to act on behalf of small businesses.

The consultation will happen soon, and I would like it to take place with speed. I reiterate that, as we seek views on whether we should allow the small business commissioner to apply sanctions such as binding payment plans and financial penalties, that would be a massive step change and step forward. The small business commissioner has been very vocal in requesting more powers to enable him to represent and help the small businesses that come to him.

We will also be seeking views on whether the small business Minister should have the ability to refer topics to the small business commissioner for investigation. The small business commissioner will currently investigate only once a complaint has come from a small business, so we are looking at other ways in which investigations could be carried out. Obviously, I am giving hon. Members just a sample of what will be included in the consultation.

The hon. Gentleman is quite right on the matter of boards. On the back of the Chancellor’s announcements in the spring, we are pleased to give audit committees the power to review payment practices and for that to be included in the annual report. We are working with the Financial Reporting Council and the frameworks department at BEIS to work out the best way for that to happen. The new strategic reporting requirement was introduced in January. We are asking the FRC how the payment reporting duty is covered by that new duty, if at all. I assure the hon. Gentleman that we will legislate to make that happen if necessary.

The Chartered Institute of Credit Management has worked hard on this issue over recent months, especially on the strengthening of the voluntary prompt payment code in October. We are pleased that cross-examining the data gathered under the payment reporting duty has helped with compliance with the voluntary code. We and the CICM believe that the best place for that duty is with the small business commissioner, so that the commissioner is, in effect, a one-stop shop and an easily identifiable pathway for small businesses.

The hon. Gentleman is right to talk about project bank accounts. Some hon. Members present, including my hon. Friend the Member for Bury St Edmunds (Jo Churchill), have lobbied me in the past on the matter of retentions. We have told the industry that we expect it to come to a consensus on a way forward, and we will take action if it does not.

As the hon. Gentleman knows, we have announced that from 1 September any company bidding for Government contracts over £5 million will be expected to pay 95% of their invoices within 60 days. If they do not achieve that target, they will not necessarily be able to bid for further contracts. In April 2019, we announced our new ambition that 90% of undisputed invoices should be paid to small businesses within five days.

[Mark Pawsey (Rugby) (Con)]

Like the Minister, I ran a small business, so I recognise the challenge of late payments for small businesses. It is to the credit of this Government that they created the role of small business commissioner. The Minister said that she is holding a consultation on additional powers for the small business commissioner, who has often said that he needs more powers. Will she be a little clearer about when those powers might be available to him, and whether they will include the power to fine businesses that fail to honour their commitments? The Business, Energy and Industrial Strategy Committee has heard about many businesses that signed up to the prompt payment code but failed to adhere to its terms, and the small business commissioner needs a little bit more beef to get his teeth into that issue. Finally, will she consider making it mandatory to add interest to overdue accounts, because that would give businesses that are delaying payments a real incentive to get their payments made on time?

[Kelly Tolhurst]

Primary legislation would be required to give further powers to the small business commissioner, so we will seek views and consult. We do want to give the small business commissioner further powers—for example, the ability to apply sanctions to businesses that do not comply with requests for information, court orders or financial penalties. Such sanctions could include binding payment plans.

My hon. Friend asked whether we would consider making it mandatory to apply interest to overdue accounts. There is currently low take-up of the application of interest to invoices, so there needs to be an education piece for small businesses, which we very much hope to achieve through the small business commissioner. With all these elements coming under one roof, he can launch an ambitious PR strategy to enable small businesses to understand what powers already exist for them.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I thank the Minister for advance sight of her statement, which in our case arrived in plenty of time for us to look at. We welcome initiatives to curb late payments, but let us be frank: this does not go nearly far enough. For anyone tuning in to last night’s Tory hard Brexit hustings, it will come as no surprise that the UK Government remain opposed to taking the steps required to protect Scottish business. Does the Minister have the good grace to agree that it is now beyond a joke that, in place of serious policy steps, her statement merely proposes some minor technological measures and platitudes on best practice? And she did not fully answer this question, so can she confirm that she has looked at the Scottish Government’s project bank account scheme? Has she learned any lessons about how that is protecting smaller contractors and subcontractors on public procurement projects?

With the Federation of Small Businesses stating,

“If all payments were made on time 50,000 more businesses could be kept open each year”,

it is clear that small business needs legal protection, so does the Minister now regret her Government’s failure to support the Construction Industry (Protection of Cash Retentions) Bill, with which my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) aimed to stop late payments in that sector? Indeed, does she regret her Government’s failure to extend that sort of protection across the economy to all small and medium-sized enterprises?

[Kelly Tolhurst]

I stand here today and make announcements, but we also need to recognise that this is about culture. We want to use all the tools in the box to legislate and take action where possible, but we also want to work with the industry and businesses to change the culture. It is not right that large firms take advantage of smaller businesses through late payments, so today we bring forward our response to the call for evidence, to stem the scourge of late payments.

The hon. Gentleman mentions project bank accounts. As I briefly outlined in my response to the previous question, project bank accounts and the use of retention is obviously a concern for many people. It is part of the whole late payment arena. That is why, as I have said, we have worked with the industry and heard the views of both sides. A consensus has yet to be found in the industry. The challenge that we have set is that the industry must come to a way forward or we will take action.

To answer the hon. Gentleman’s question, I have indeed looked at some of the work that has gone on in Scotland and at what has happened in Northern Ireland. I highlight what the Federation of Small Businesses said today:

“Small businesses will be delighted with today’s announcement. FSB has worked very hard with government to create a whole-board approach to late payment within the UK’s large companies, and empower Audit Committees to look after the supply chain. Together with measures to strengthen the Small Business Commissioner’s powers and reform the Prompt Payment Code, the measures today could finally see an end to poor payment practice.”

[Andrew Griffiths (Burton) (Con)]

The words that my hon. Friend just spoke were those of my constituent, Mr Mike Cherry. There can be no greater praise than that from such an advocate for small business. The FSB supports these measures, so I commend her on them.

Does my hon. Friend agree that one of the main challenges is not late but prompt payment? Far too many big businesses continue to extend payment terms—150 days, 180 days or even more. That is simply not acceptable and is unfeasible for many small businesses. Will my hon. Friend add that to her to-do list and really make a difference for small businesses?

[Kelly Tolhurst]

I thank my hon. Friend for his question and recognise his particular interest as my predecessor in this post. He is absolutely correct: prompt payment is a particular concern for small businesses, and some large companies alter their payment terms. We are seeking views on giving the small business commissioner more powers because he acts for small businesses that have struggled with getting prompt payment. Currently, his powers are not binding; we feel that if his powers were binding, that could be part of his suit of armour in tackling late and non-payments.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I call the Chair of the Business, Energy and Industrial Strategy Committee, Rachel Reeves.

[Rachel Reeves (Leeds West) (Lab)]

Thank you very much, Mr Deputy Speaker.

When our Select Committee looked into this issue, many small businesses insisted on giving evidence in private, so worried were they about retaliation from the big businesses that they supplied. Larger businesses, including Morrisons, Aldi and WH Smith, are not signatories to the prompt payment code, while Boots pays suppliers at a discount for the privilege of their being paid on time. The power imbalance is so great now between bigger and smaller businesses that. I urge the Government and the Minister to look again, make the prompt payment code mandatory and bring down the period to a benchmark of 30 days.

[Kelly Tolhurst]

I thank the hon. Lady and highlight again the significant work that her Committee has done on this issue, including with our Department. She is absolutely right to highlight the power imbalance, which is why many small businesses feel that they are unable to speak out. That is why we are seeking views in our consultation on powers for the small business commissioner. We will seek to enable the Small Business Minister to make a referral to the small business commissioner; to give the commissioner investigatory powers similar to those of the Groceries Code Adjudicator; and to empower him to carry out an investigation without the small business involved having had to report the issue. There is a suggestion that the process could be anonymised.

The hon. Lady raises an important point, and I am very much aware of it. It will be very much part of my drafting, with the team, in regard to the consultation.

[Sammy Wilson (East Antrim) (DUP)]

I welcome this statement from the Minister and I know that she is committed to ensuring that small businesses are dealt with fairly.

The project bank accounts introduced by the Northern Ireland Executive have already been mentioned. That measure now applies to hundreds of millions of pounds of Government contracts and ensures that the money goes not to the main contractor but directly to the subcontractors when they have completed the work. That stops the main contractor holding on to the money or bargaining with the small companies and means that the small companies do not have to take the initiative, which they are sometimes afraid to do. Will the Minister work with Northern Ireland officials to ensure that the lessons learned there can be applied here?

[Kelly Tolhurst]

I thank the right hon. Gentleman for raising that. I highlight his particular interest in this area and the fact that he was one of the Ministers responsible in Northern Ireland when project bank accounts were introduced there. He is right that there are absolutely some merits in such accounts; as he knows, I have taken a particular interest in the subject and I will continue to work on it. The Government are clear that where project bank accounts can be used with Government contracts, they will be, although they are not always a suitable measure in some large contracts.

Today, I have announced a suite of tools to tackle late payments. Am I going to stand here and say that in future we will not have to do anything more? Of course not. Part of government and what we need to do in a changing economy and business environment is to make sure that we keep looking at ways to make things easier for small businesses.

[Chuka Umunna (Streatham) (LD)]

I thank the Minister for advance sight of her statement. She talked about the challenges facing small businesses. Brexit, of course, will cause huge disruption to small businesses’ supply chains, given the added bureaucracy and tariffs.

This statement on late payments is welcome, but may I ask the Minister again the specific question put by the Chair of the Business, Energy and Industrial Strategy Committee, the hon. Member for Leeds West (Rachel Reeves)? Why not make the prompt payment code mandatory—compulsory for large businesses? Why is there is further delay with consultations and what have you? She should make it mandatory, as we have been arguing for.

[Kelly Tolhurst]

I thank the hon. Gentleman for welcoming the statement and the moves that the Government have made today. He is absolutely right about the prompt payment code: it is voluntary. As it stands, there are more than 2,000 signatories to it; they sign up and commit to paying 90% of their invoices within 60 days. As he will know, the Government initiated the new duty on companies to report biannually on payment practices. To date, we have had more than 15,000 reports for over 7,000 companies. That data has enabled the Chartered Institute of Credit Management to scrutinise the voluntary code payment data.

We have seen action. Five businesses have been removed from the code and 12 have been suspended. As I have outlined today, when people are not complying with the legislation, we will take action. We are continuing to move forward to strengthen the prompt payment code and close any holes and weaknesses that there are.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

When it comes to cash retentions, the Minister said twice that it was up to industry to find a way forward, but they are actually a Government responsibility. It is about 40 years since it was first recommended that the use of cash retentions in the construction industry be phased out. In my time as an MP, the Government have consulted twice on the issue, voted down amendments to the Enterprise Bill, and refused to back both my private Member’s Bill and that of the hon. Member for Waveney (Peter Aldous). Instead of listening to the large, tier 1 contractors, will the Minister pledge to take action and give a timescale for the phasing out of the use of cash retentions in the construction industry?

[Kelly Tolhurst]

The hon. Gentleman raises the issue of retentions. He says that this is not for industry, but for the Government. I have spoken to industry representatives and businesses about this issue, and it is clear that the industry has not come to a single way forward to deal with this. We hope that the measures that I have announced today on supply chain finance will make a big difference. With regard to cash retentions, I have been clear that if industry cannot come to a consensus on a way forward, the Government will step in and take action.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I welcome the Minister’s statement, and I thank her for meeting me after I introduced my Public Sector Supply Chains (Project Bank Accounts) Bill earlier this year. However, the measures she has introduced are actually recommendations from the 2013 inquiry that I led into late payments. Six years on, this is a little late, although I recognise her commitment. These measures will be no comfort to Neil Skinner, who owns a business in my constituency and lost £176,000 when Carillion collapsed. That was not a one-off; we know that there are other Carillions out there. Some 380 small businesses closed directly as a result of Carillion’s collapse. I cannot understand why she is so reticent after decades of this issue and why she will not act on project bank accounts.

[Kelly Tolhurst]

I recognise the hon. Lady’s passion and commitment. As I have said to her in previous meetings, I am happy to continue to work with her on this issue. Project bank accounts have value. I have announced the measures we are taking, following the call for evidence. I understand that she is disappointed in the time it has taken to bring these measures forward, but we are taking action. These bad practices have been happening not only in recent years but for decades, and this Government are finally taking action.

The hon. Lady is right to mention her constituent and the losses that his business suffered through the collapse of Carillion. Carillion’s debt was estimated to be £900 million at the end, which excluded £500 million of supply chain finance. That is why we will work with the Financial Reporting Council to find ways to bring transparency to companies’ accounts and reporting, which we hope will address any larger failures in the future.

Recall of Tumble Dryers

Kelly Tolhurst Excerpts

Monday 17th June 2019 Commons Chamber

[Andy Slaughter (Hammersmith) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on his decision to recall 500,000 unsafe tumble dryers manufactured by Whirlpool UK.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

The Government take the safety of electrical products very seriously. For our children, relatives and families, we all want our homes to be places of safety and security. I provided an update to the House at departmental questions last week on the most recent steps taken by the Office for Product Safety and Standards in respect of Whirlpool tumble dryers. This follows the OPSS review of the actions taken by Whirlpool in relation to its corrective action. The findings of the review were published on 4 April. The OPSS review examined in detail the modification programme put in place by Whirlpool as well as technical documents supplied by Whirlpool. The review concluded that the risk posed by modified tumble dryers is low.

The Office for Product Safety and Standards produced a list of required actions for the business to take, and Whirlpool was given 28 days to respond, outlining the actions that it would take. The response received from Whirlpool was considered to be inadequate. As a result, the OPSS has written to Whirlpool to inform the company of its intention to serve a recall notice under the provisions of the General Product Safety Regulations 2005 in respect of the unmodified tumble dryers that remain in homes in the UK. As required by law, Whirlpool was given 10 days’ notice of that intention, which allowed it time to submit its views prior to the service of the recall notice or to seek arbitration in line with the provisions in the GPSR. Officials in the OPSS are reviewing Whirlpool’s response to determine whether it fully meets the requirements laid down in the draft recall notice.

At this time, all enforcement options remain on the table, including serving a formal recall notice. It would be inappropriate for me to comment further while the legal process is ongoing, but I will update the House in due course. It is important to stress that consumers who have had their affected tumble dryers modified can continue to use them and that those with an unmodified affected tumble dryer have been urged to unplug them and to contact Whirlpool. I encourage all consumers to register their appliances to ensure they receive updates on product modification and recalls. The OPSS will continue to monitor the situation closely and will take any steps it deems appropriate to ensure that consumers in the UK continue to enjoy the high levels of protection they have come to expect.

[Andy Slaughter]

I thank the Minister for her response, although, given the lack of action by Whirlpool, and indeed the Government, over a four-year period, there are many questions to be asked. If they cannot all be answered today, I would be grateful if she could write to me and perhaps meet me and other interested Members, as this is clearly an ongoing matter.

The fire that destroyed 20 flats in a 19-storey block in my constituency in 2016 was one of hundreds of fires caused by over 100 models of tumble dryer manufactured between 2004 and 2015 by companies now all owned by Whirlpool, but when I met Whirlpool a couple of weeks ago, it could not even say how many reports of fires it was receiving each week. This is the most serious consumer safety issue for many years. At one stage, it was estimated that one in six households in the UK had a faulty Whirlpool tumble dryer in use. Why has it taken four years to reach this point, despite repeated requests for recall from the fire brigade and others? What steps will the Government now take to ensure that unmodified dryers are recalled? I heard what the Minister said, but anything less than a recall now would be considered wholly inadequate.

What is the basis for the estimate of 300,000 to 500,000 unmodified machines in service, given that 5.5 million were sold and only 5,000 have been modified since Whirlpool estimated itself that there were 1 million unmodified dryers in December 2017? If it goes ahead, how will the recall process work, as a matter of law and in practice, given that, as the Minister said, it is unprecedented? What progress has the OPSS made on setting up the recall database that we were promised would be live by the end of this year? What further advice is being given to the owners of Whirlpool tumble dryers? Why has Whirlpool still not published on its website the list of model numbers affected, and why is it refusing to give one to Which? and Electrical Safety First? Why did the advice change from the OPSS? It seemed quite happy with the advice in April. Will the Government look again at the modification process and at the evidence compiled by Which? saying that the modified machines are still liable to catch fire?

Finally, does the Minister agree with what her predecessor, the hon. Member for Burton (Andrew Griffiths), said in asking the planted question last week, which is that there remain grave concerns about the “straightness” of Whirlpool? What will the Government do about this company, which has flouted the rules here? Is it not time to get tough?

[Kelly Tolhurst]

I appreciate the hon. Gentleman’s concern, specifically for his constituency, given the desperately sad incident that occurred there. He is absolutely right to ask these questions and raise these concerns, as would be any consumer who believed they were at risk.

We carried out the review at the behest of my predecessor, my hon. Friend the Member for Burton (Andrew Griffiths), who ordered a review of the Whirlpool modification process in 2018. As the hon. Gentleman will know, the review looked at the effectiveness of the technical modification and the adequacy of the outreach programme. It concluded that the risk was low, and was further reduced by the modification. Following the review, we issued a 28-day notice letter to Whirlpool, specifying issues on which we wanted more information and assurances. We were unsatisfied by its response, which is why, on 4 June, we issued a letter of intent of notice of a recall.

Following conversations that I had with the hon. Gentleman last week, he wrote to me at the end of the week asking for a meeting. As I said to him last week, I should be more than happy to meet him to discuss any of his concerns about the ongoing process. My absolute intention is to ensure that we hold companies to account when we do not believe that they are carrying out their legal obligation, which is to place safe products on the market.

The hon. Gentleman is entirely right to be concerned about the future prevention of fires. I can tell him that, according to Home Office data, there were 224 fires caused by tumble dryers in 2017-18, a 10% reduction on the previous year’s figure of 808. We will obviously do all that is required to ensure that consumers are kept free of harm. We are following due process, in line with the regulations, in order to ensure that Whirlpool carries out its obligations.

I am more than happy to answer any further questions from the hon. Gentleman in detail as the process continues, and, as I have said, I am also more than happy to meet any colleague at any time.

[John Redwood (Wokingham) (Con)]

Can the Minister give us some indication of how many machines the Government think are still out there which could be risky, in the light of the high incidence of fires that she has reported?

[Kelly Tolhurst]

In response to a query from Which?, Whirlpool said that 1.7 million cases had already been resolved. It estimates that another 500,000 machines are still in people’s homes.

[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

Thank you for granting the urgent question, Mr Speaker. I congratulate my hon. Friend the Member for Hammersmith (Andy Slaughter) on his relentless campaigning, and for securing this important question.

The Government stated their intention to initiate a recall notice to Whirlpool on 4 June, but that only became apparent in the House during topical questions to the Secretary of State for Business, Energy and Industrial Strategy on Tuesday 11 June. Can the Minister explain why she did not make a statement about the decision, which she has described as “unprecedented”, but which she considered not to be “unprecedented” enough to inform the House about it?

The issue of Whirlpool and its faulty products has been one of the biggest consumer safety issues for many years. The relevant fault affected more than 5 million tumble dryers under brand names that are now owned by Whirlpool UK, which were manufactured between 2004 and 2015. I welcome the recall notice regarding the 500,000 unmodified products, but I am seriously concerned about the millions of modified Whirlpool products that are still in people’s homes, and whose owners have reported fires and faults despite the modifications. Which? spoke to more than 30 owners who have said that their “fixed” tumble dryers have caught fire, or have produced smoke or a smell of burning. There are millions of those modified machines out there in people’s homes. Consumer safety must be our utmost priority, so will the Minister demand a full investigation of those reports, and go further by demanding a recall of the modified products too?

In April, the Office for Product Safety and Standards published findings of its inquiry into Whirlpool’s handling of the risk of the machines. It found that the risk of fire was “low”, and therefore no recall notice action was taken. Which? considered that the “inquiry is fundamentally flawed”, and that

“it appears to favour business interests over people’s safety”.

The investigators failed to speak to any affected Whirlpool customers as part of the review, and further failed to verify the history of the 28 Whirlpool dryers that it tested, which meant that it was unable to draw conclusions about when the machines had been modified and by whom. The inquiry was published in April and the Minister’s subsequent contradictory decision to issue a recall notice obviously raises serious questions about the OPSS. Will the Minister clearly outline why she came to a different decision from the OPPS in April? Does she now believe that the OPSS investigation was fundamentally flawed and will she announce an investigation into that review to look at whether it was properly undertaken and whether there are lessons to learn for the future?

[Kelly Tolhurst]

I must start by outlining that the protection of consumers, the safety of consumers and the safety of products placed on the market are of utmost importance to me and this Government. I did indeed update the House last week in response to a question about the action that we have taken in regards to Whirlpool; it is part of a legal process, as I have already outlined. All complaints about modified or unmodified tumble dryers that have been duly registered were included in the review. The review was significant: it looked at many areas, took all the data into account, and carried out the assessments, as the hon. Lady has outlined, and I am absolutely satisfied that the review undertaken by OPSS was appropriate and robust.

I have not taken a different decision from OPSS. We were very clear. OPSS wrote to Whirlpool after the review outlining areas where it wanted a guarantee of further work. Whirlpool had 28 days in which to respond. It responded, and the OPSS reviewed that information and was not satisfied, finding that the commitment was inadequate. We therefore decided to issue a notice—an intention to recall. As I have outlined today, we will be reviewing what has been submitted by Whirlpool. There is no intention to put, as has been suggested, big business over the needs and safety of consumers, and we will not do that. Fundamentally, the safety of people in their homes is of utmost importance to me and the Government and I will do everything in my power to make sure that large companies and manufacturers absolutely comply with their legal obligation to place only products that are safe on the market. If they fail to do so, this Government will take appropriate action to hold them to account.

[Andrew Griffiths (Burton) (Con)]

I congratulate both the OPSS and the Minister on having the cojones to hold Whirlpool to account, because there is no doubt that Whirlpool has been shifty on this and the Minister has called it out, so I say well done. Does she agree that it sends a clear message to business that either they put their house in order and ensure that their products are safe or the Government will act and have a product recall?

[Kelly Tolhurst]

I thank my hon. Friend for his comments and acknowledge his role in instigating the review of Whirlpool’s modification programme last May. Let me reiterate that the law is clear: manufacturers have a responsibility to ensure that only safe products are placed on the market, and appropriate action must be taken when a safety issue is identified. We will make sure that any organisations placing unsafe products on the market are forced to comply with the law, and we will continue to hold them to account.

[Kirsty Blackman (Aberdeen North) (SNP)]

This matter does not seem to have been handled well, either by Whirlpool or by the UK Government, from start to finish. Surely our first priority should be, as the Minister said, to protect our constituents and ensure that they are not at risk from fire. If there are still 500,000 unmodified products out there, and if the risk of them going on fire is 1%, we are looking at a potential of 5,000 fires. If the risk is half that, we are still looking at 2,500 fires and the risk to life that comes with them. What assessment has been made of the risk from the modified tumble dryers? Concerns have been raised that modified dryers are also continuing to go on fire.

The other thing I am confused about is why the Government took so long to take action, given that this issue was first recognised by Whirlpool in 2015. If it takes the OPSS and the Government so long to undertake a review and put sanctions in place against a company, there is surely an issue with the system. Will the Government, as a result of the issues raised, look at the product recall system in general and ensure that a review is undertaken, so that we no longer have such incredibly lengthy waits when products are recalled, and so that the Government can take action more quickly than they have done in this case?

[Kelly Tolhurst]

As I outlined earlier, the review of Whirlpool was a review of the modification programme. It looked at the effectiveness of the technical modifications and the adequacy of the outreach programme. The review concluded that there was a low risk from unmodified machines, and an even lower risk from modified ones. The wider review was concerned with the actions that Whirlpool took to resolve any risk of lint fires in its machines. I believe that its findings were robust and proportionate. The info that was provided to us via Which? and “Watchdog” and the testing carried out by Which? were also featured and taken into account in the review. However, the review very much focused on the technical effectiveness of the modifications.

The reason that this has taken so long, as the hon. Lady suggests, is that we followed due process in carrying out a substantial review, making our assumptions and providing Whirlpool with laid-down notice to come back to us with what it would do to rectify the situation. I would just highlight that part of enforcing consumer and product safety involves ensuring that we carry out a review when we believe that manufacturers are not fulfilling their obligations under the regulations, and that we follow due process in doing so. We will continue to do that where there are concerns about any product that is placed on the market. We will ensure that organisations and large manufacturers comply with the law.

[Bill Grant (Ayr, Carrick and Cumnock) (Con)]

All too often in my previous life I saw the damage, despair and devastation—not to mention the risk to life—that fire can bring to a family home. Will my hon. Friend confirm that product safety and standards remain a priority for this Government, and that manufacturers of white goods such as Whirlpool must act promptly and responsibly when faced with the evidence of goods not being fit for purpose? This journey of risk has been unacceptably long, but I thank her for the robust action that she has recently taken.

--- Later in debate ---

[Kelly Tolhurst]

I thank my hon. Friend for that, and I note his particular interest in this as a result of his past career. He is absolutely right to suggest that we will ensure that large manufacturers such as Whirlpool comply with the regulations if they find that a technical change needs to be made to their products. We expect them to take appropriate action where a risk has been identified. This is indeed a priority for this Government. It has been a priority since I have been in post, and we will continue to ensure that these organisations comply with the law.

[Carolyn Harris (Swansea East) (Lab)]

The recall has been far too long coming. As soon as Whirlpool became aware of the problem, it should have acted immediately and recalled every affected machine. As it is, it has sat back and waited years, and consumer safety has been at risk, with the Government finally stepping in last week. The public are rightly terrified of the danger that could be sitting in their homes. People who contact Electrical Safety First, Which? and other consumer bodies are struggling to find assistance because Whirlpool has refused to publish a list of the affected machines. Instead, members of the public have to wade through a series of hidden steps on the Whirlpool website to try to establish whether they have a potential fire hazard in their home. Why has Whirlpool been allowed to get away with that? A list should be readily available, so will the Minister commit to ensuring that Whirlpool publishes one immediately?

[Kelly Tolhurst]

We are following due process, and we are taking action. This has been an ongoing piece of work. When issues with the modification programme were raised, my predecessor, my hon. Friend the Member for Burton (Andrew Griffiths), instigated the review, and OPSS has been working since then and has been in continual communication with Whirlpool. It is vital that we follow due process and, whether the organisation involved is small or large, that we ensure that any action is proportionate and correct. Any consumer with concerns about the tumble dryer in their home can get in touch with Whirlpool by entering the serial number and model to check whether their product is affected, and we encourage anyone who is worried about the product in their home to contact Whirlpool immediately.

[Vicky Ford (Chelmsford) (Con)]

I do not talk about this in public a lot, but I lost my father in an electrical accident when I was 10, and there has not been a Father’s Day in 40 years when I have not wished that he was still here. Consumer safety must come first, and I thank the Minister for the action she has taken. We have some of the strongest consumer safety standards in the world, but enforcement is sometimes challenging. Will she therefore take this opportunity to consider ways of strengthening the enforcement, and will she examine whether the penalties for producers are effective and strong enough?

[Kelly Tolhurst]

I thank my hon. Friend for that question. I am sorry to hear about her father, particularly since this urgent question comes the day after Father’s Day. She is absolutely right. This action serves as a warning to manufacturers that if they put unsafe products on the market, this Government will act to make them comply with the law. The beauty of the OPSS, which this Government set up in January 2018, is not only that it is a national body that takes responsibility for national crises, but that it supports local enforcers on the ground with scientific and research-based knowledge. I assure my hon. Friend that we are taking the matter seriously, and this is a warning to manufacturers that we will enforce the law if we believe that they are not complying.

[Ms Karen Buck (Westminster North) (Lab)]

I congratulate my hon. Friend the Member for Hammersmith (Andy Slaughter) on his dogged pursuit of this consumer scandal. Is not too much onus being left on consumers to understand the potential risks to their machines? If half a million Whirlpool machines are still unmodified, how exactly are the Government tracking progress? If they proceed to recall, which they should, how will they ensure that Whirlpool is successful in getting the message through to the owners of all those machines?

[Kelly Tolhurst]

The hon. Lady raises an important point on how we reach consumers, and part of the review covered the adequacy of the outreach programme. Our review found that Whirlpool needs to do more in that space, which is exactly why we issued a notice for Whirlpool to tell us what it will do further on the intention to recall. Whirlpool had time to respond, and we asked for further information on how it will get that information out to consumers. That will be a key part of how we review anything that Whirlpool submits to us, and the process will be ongoing if the recall notice is served or if Whirlpool decides to undertake a recall itself.

[Sir Peter Bottomley (Worthing West) (Con)]

We ought to recognise that Whirlpool took over Indesit Hotpoint in 2014. It identified the problem in 2015 and has been trying to take action, but not fully adequately.

Will the Minister ask Whirlpool to make sure that the website better identifies the EU product safety site, as with Creda, Proline or Swan? Will she also ask the search engines, especially Google, to feature product recall information on the first search page, preferably even before the advertisements? Finally, will she indicate that safe products have a green dot inside the door? If people want to know the serial number and model, that is also inside the door.

[Kelly Tolhurst]

I thank my hon. Friend. As he requests, I will ask Whirlpool how it can make its website more user-friendly. I cannot give him any guarantees on Google’s actions, but I am sure that is something we can take forward. He has previously raised his final point in the House, and consumers will therefore have heard him. I reiterate that, if consumers are concerned about the products in their home, they can go on the website and call the Whirlpool helpline. If their tumble dryer has been modified, continued use is a low risk. We recommend that unmodified dryers are unplugged and not used and that Whirlpool is contacted.

[David Hanson (Delyn) (Lab)]

By the Government’s own admission, there are 500,000 unmodified machines in existence, which equates to around 700 per constituency. The Minister has just reaffirmed that the Government’s advice is to unplug these machines. How are those 700 people in Delyn supposed to know that?

[Kelly Tolhurst]

The right hon. Gentleman outlines that there are 500,000 machines, which is not a Government estimate—we have used data to estimate the number of dryers still in people’s homes. As I said to the hon. Member for Westminster North (Ms Buck), Whirlpool has an outreach programme to communicate with individuals who have not yet contacted Whirlpool and who it believes to have faulty equipment.

We recommend that anyone who buys any kind of electrical appliance should register it so that the manufacturer can easily contact those who have a particular product—this is not just for Whirlpool but for any kind of electrical product that is sold. It is vital that consumers take the time to register their purchase so it is easy for the manufacturer to contact them if any faults or problems are found with the machine.

[Stephen Kerr (Stirling) (Con)]

I congratulate the Minister on the action she has taken. One of the first cases I received as a newly elected Member of Parliament was on the safety of tumble dryers; the issue came up at my first surgery. As a member of the Select Committee on Business, Energy and Industrial Strategy, I have to say that I have been singularly unimpressed with Whirlpool’s attitude to this problem. Part of the problem lies in trying to find where these machines are, so is the Minister entirely satisfied with our current system for the registration of appliances in this country? It is sometimes very difficult to find serial numbers and model numbers, especially where appliances have been fitted in kitchens or utility rooms, for example. These are real, live issues. Is she satisfied that this system is adequate for purpose?

[Kelly Tolhurst]

I thank my hon. Friend for that. He is right to raise concerns about whether the system is suitable, and whether all appliances are easily identified and registered. We definitely need to look, on an ongoing basis, at whether some of the products being placed on the market are easily identified. He is right to highlight the issue with built-in appliances, as it is sometimes difficult to remove them to get the serial number. As I have said, I recommend that all consumers register their appliances on the registermyappliance site. We will keep all information under review, but I remain determined to ensure that where manufacturers do not comply with the law we will take enforcement action. That is why I am pleased to be standing here today outlining the steps we are moving through to make sure that we comply with the regulation on the enforcement.

[Cat Smith (Lancaster and Fleetwood) (Lab)]

With an estimated 700 affected appliances per constituency, it is not surprising that I have been contacted by a number of constituents affected, including Linda Thomas, who was advised to contact Peterborough trading standards, it being the trading standards body responsible for this Whirlpool issue. She tells me that she feels very much that Peterborough trading standards are

“on the side of Whirlpool and ‘not the consumer’”.

What assessment has the Minister made of the impartiality of Peterborough trading standards, in the light of the emails revealed by the BBC as a result of freedom of information requests?

[Kelly Tolhurst]

Trading standards, in Peterborough or anywhere else nationally, are carrying out, every day, the important work of enforcing safety issues; they are taking lots of enforcement action. I, for one, am very proud of and grateful to trading standards officers, who sometimes work in challenging circumstances but do some fantastic work. One reason the OPSS was set up was in January last year was to look at product safety and standards, and it was the body that carried out the review of the Whirlpool modification programme, working with regional trading standards, including Peterborough’s. Trading standards do have the ability to work with the OPSS on the scientific research and data, using the expertise the OPSS brings to help them carry out their duty locally. Therefore, I very much disagree on this; action taken by any enforcement body is being taken on behalf of the consumer, not in the interests of large manufacturers.

[Mr Philip Hollobone (Kettering) (Con)]

If any of my constituents correctly identify their tumble dryer as a potentially unsafe model, how quickly would the Minister expect them to be given a replacement by Whirlpool?

[Kelly Tolhurst]

My hon. Friend asks when his constituents would have a replacement. I would say that the affected tumble dryer should be modified, but any action must be taken swiftly. The particular circumstance, the age of the model and the brand of the model would dictate which action Whirlpool takes.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

I thank the Minister for her comments, but I am still extremely concerned that 500,000 machines are at large. As the chair of the all-party group on disability, I am particularly concerned about whether notifications have gone out in accessible formats, because if people have disabilities they might not see a fire so quickly or be able to leave their homes so quickly should one start. Will the Minister speak to Whirlpool and make sure that the notifications are in formats that are accessible for all?

[Kelly Tolhurst]

I thank the hon. Lady for raising that issue and will do as she asks.

[Nigel Huddleston (Mid Worcestershire) (Con)]

The UK may well have one of the strongest consumer protection regimes in the world, but does the Minister agree that things need to be under constant review? Can she assure me that the OPSS has sufficient resources, powers and skills to do what we expect of it?

[Kelly Tolhurst]

I can reassure my hon. Friend that the OPSS has the powers and funds necessary to carry out its work. The beauty of the OPSS is that it is absolutely focused on product safety and standards. Part of its £12 million per annum funding is for building scientific and technical expertise. It works with trading standards locally and nationally and provides the national leadership required on national issues such as this one.

[Yvonne Fovargue (Makerfield) (Lab)]

The Minister will know that registration rates for white goods are typically less than 30%, which means that more than 70% of people typically do not register their products. That is understandable—they are frightened of being sold to or contacted for lots of other reasons—so surely it is now time to take the onus off the consumer and have a central register, from the point of sale, that can be used only in the event of a recall.

--- Later in debate ---

[Kelly Tolhurst]

I thank the hon. Lady for that suggestion. I will commit today to making that a topic for discussion at the Consumer Protection Partnership, which is the group of organisations that sit together to consider consumer protections. Perhaps we can look into whether that would be more beneficial for consumers. I reiterate that the Government have a recall website that gives the details of all white goods that are subject to recall or fire risk. All consumers should register their appliances. It is down to the manufacturer to make sure that the products are safe, but if consumers take the simple step of registering their goods in the first instance, when they buy them, before any changes are made, that is the best way forward.

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

Might not many of these tumble dryers have been resold in the second-hand market? If so, what is the Minister doing to assess the dangers of the resale of such machines, bearing in mind that local authority trading standards have been decimated by Tory austerity cuts?

[Kelly Tolhurst]

As I have outlined, it does not matter whether the product is second hand or has been with its original owners since purchase. If a dryer is affected and is unmodified, consumers should contact Whirlpool. I reiterate that when the OPSS carried out its review of the modification programme, it took all the data into consideration and the risk was deemed to be low and further reduced for modified tumble dryers. I therefore urge any consumer with a tumble dryer in their home to look to see whether it is one of the products affected and make contact with Whirlpool.

[Tom Brake (Carshalton and Wallington) (LD)]

The Minister has said that modified machines are low risk, yet last year the BBC’s “Watchdog” live consumer programme uncovered cases in which machines had caught fire even after being fixed. Can modified machines be deemed to be low risk, even though they catch fire?

[Kelly Tolhurst]

The right hon. Gentleman talks about modified machines. When any information or testing that had been carried out at any particular event by “Watchdog” or Which? was submitted to the Department or to the OPSS, it was scrutinised and looked at during the review of the modification process. The outcome was to put the risk level at low. However, anyone who has a concern about any machine should contact Whirlpool. In actual fact, if anyone has any concern about any electrical appliance within their home, they should stop using it and contact the manufacturer.

[Alison Thewliss (Glasgow Central) (SNP)]

A number of my constituents contacted me with their concerns about Whirlpool. With Electrical Safety First research pointing to the fact that only 10% to 20% of recalled products are ever returned or repaired, we should perhaps consider looking at a statutory basis for online retailers to contact people who bought products online, because they certainly will have a means of contacting their consumers—they will have email addresses and other details for the products that have been dispatched. Perhaps that could be an easier way for some retailers to contact people to get that recall information to them.

[Kelly Tolhurst]

I thank the hon. Lady for highlighting that point. One of the issues that we considered in last year’s review was the outreach programme. There are many ways in which Whirlpool should be able to contact the people who have bought its products. This is very much the responsibility of the manufacturer, and it is one of the reasons we are taking so much care with this review, and why we are asking so many questions. It is the responsibility of the manufacturer to make sure that it has a programme that is sufficient to reach its customers. We are dissatisfied with what it has done. That is why we issued the intention to issue a recall. She is absolutely correct: Whirlpool should be using everything at its disposal to make sure that it contacts anyone who has purchased its product by any means necessary.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

The Whirlpool situation has highlighted a problem exposed by the Electrical Safety Council about the difficulty of identifying the owners of the defective appliances it recalls. Can the Minister say a little more about what progress has been made on requiring the registration of purchase of electrical goods at point of sale by the retailer, rather than by consumers registering afterwards? Consumer registration patently does not work, and the point raised by my hon. Friend the Member for Makerfield (Yvonne Fovargue) is not a new one; it has been knocking around for years and the retail industry needs to own up to its responsibility.

[Kelly Tolhurst]

I thank the hon. Gentleman. I know that he has a particular interest in this matter. He will know that, when I last sat in front of him at the meeting of the all-party group on fire safety, I was very clear that if action needed to be taken I was not fearful of taking it. As I tried to outline to the hon. Member for Makerfield (Yvonne Fovargue), it is a valid suggestion, and I do agree that we need to look at it. That is why I have said here today that I am prepared to bring that to the Consumer Protection Partnership to see whether we can progress it further. He is absolutely right: we need to do all we can to ensure that consumers are protected, but fundamentally I am here today to talk about holding Whirlpool to account, and I am proud to be standing here and doing that. This Government want to ensure that, no matter how big manufacturers are, we will still make them comply with the law.

[Nick Smith (Blaenau Gwent) (Lab)]

Where is the Whirlpool list of model numbers that may be at risk?

[Kelly Tolhurst]

I thank the hon. Gentleman for his question. As I have outlined, anyone who has one of the brands that are affected—Hotpoint, Indesit, Swan, Proline and Creda, manufactured between April 2004 and September 2015—should go to the Whirlpool website and put in their model and serial numbers to find out whether it is an affected model. If they do not want to go on to the website, they should ring Whirlpool’s helpline.

Points of Order

Kelly Tolhurst Excerpts

Wednesday 12th June 2019 Commons Chamber

[Andy Slaughter (Hammersmith) (Lab)]

On a point of order, Mr Speaker. In a brief answer in Business, Energy and Industrial Strategy topical questions yesterday, the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Rochester and Strood (Kelly Tolhurst), who, helpfully, is on the Treasury Bench, announced that she intended to order the recall of 500,000 tumble dryers made by Whirlpool UK, an action that she described as “unprecedented”. In fact, over 5 million such machines were manufactured with a fault that makes them liable to burst into flames without warning, and they have caused several hundred fires, including one in a 19-storey block of flats in my constituency that destroyed 20 flats and could have caused serious loss of life.

This is the most serious consumer safety issue for many years, yet we have had no statement from the Government on when and how the recall will take place, and why it has taken four years for them to act. I am wondering whether you, Mr Speaker—perhaps with the assistance of the Minister—can say how these matters will be addressed in this House.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

rose—

[Mr Speaker]

It is certainly open to a Minister to seek to respond, and it looks as though one is minded to do so.

[Kelly Tolhurst]

Further to that point of order, Mr Speaker. I would like to clarify what I announced in the House yesterday. Since the Office for Product Safety and Standards review, we have kept Whirlpool’s actions under review. A letter was issued to Whirlpool, which was given 28 days to respond, and it did just that. We have informed it of our intention to issue a recall. That is part of the regulatory process. That is what I was updating the House on. We had 10 days to inform Whirlpool of that, and I believe that Friday is the deadline for that. I hope that satisfies the hon. Member for Hammersmith (Andy Slaughter).

[Andy Slaughter]

indicated dissent.

Smart Data: Consultation

Kelly Tolhurst Excerpts

Tuesday 11th June 2019 Written Statements

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)]

Today I will be placing a copy of a consultation document entitled: “Smart Data: Putting consumers in control of their data and enabling innovation” in the Libraries of both Houses. This outlines the conclusions of the Smart Data Review that was announced in the Modernising Consumer Markets Green Paper and consults on future action by the Government.

The consultation sets out our vision for an economy where consumers’ data works for them and not against them. Data needs to be smart: easily and instantly accessible to consumers and be able to be safely and securely transferred to third party services who can use this data to provide innovative services for consumers. This is what we mean by smart data.

The consultation focuses on introducing new smart data initiatives to improve consumer outcomes and promote innovation in regulated markets. The key proposals we are consulting on include:

Accelerating the development of innovative data-driven services through the establishment of a new cross-sectoral smart data function to support, manage and govern the delivery of smart data initiatives

Introducing an open communications initiative in the telecoms market to require communications businesses to provide consumers’ data to third party providers at the consumer’s request to increase switching and stimulate innovation

Establishing a vulnerable consumer challenge to encourage data-driven innovation to improve outcomes for vulnerable consumers

Introducing strong data protection requirements and a cross-sectoral approach to regulation of third-party providers using smart data to build trust and minimise burdens on business.

These initiatives build on the approach in open banking, which is enabling consumers to ask their bank to share their current account transaction data securely with third parties. We have seen an explosion of new services that seek to make life easier for consumers—for example, through bringing together their current accounts into one platform or finding new ways to help consumers build an accurate credit score.

As announced by the Prime Minister yesterday, we are also signalling our agreement with the recommendation of the digital competition expert panel’s recommendation to establish a new digital markets unit to promote, among other things, data mobility and data openness across all sectors. As we take forward proposals on smart data, we will work closely to co-ordinate and integrate the recommendations as appropriate.

[HCWS1612]