Consumer Rights Act 2015 (Consequential Amendments) Order 2015

Lord Taylor of Warwick Excerpts

Monday 7th September 2015 Grand Committee

[Lord Taylor of Warwick (Non-Afl)]

My Lords, I thank the Minister for her opening remarks and continuing work on this matter.

I appreciate that the Act to which the orders relate is a consolidation Act designed to simplify, and obviously I support that. There are challenges ahead and I hope that the Government will focus on them, in particular the internet. We know that the online retail market is the fastest-growing sale sector. It is now worth well over £100 billion.

The expansion of click-and-collect services and mobile-phone commerce has played a large role in this. Only last night a lady from America sent an e-mail to my website, wanting to know what my opening hours are, because she wanted to buy some clothes. She confused me with Lord & Taylor, the clothing department store in the USA. She was quite happy, however, that I was not in fact Lord & Taylor. This just goes to show that many consumers now are dealing with companies that are outside the jurisdiction and that in many ways the Government are playing catch-up with the internet. They still have to wage the battle against that.

Paragraph 7 of the guidance notes states that the Government consulted extensively on reforming consumer law, and that this was based on broad support for reforms from business and consumer stakeholders. But for many start-up firms the owner is also the person who makes the tea and puts out the rubbish. Keeping abreast of changes in consumer law is a challenge too far. I still feel that there is too big a gap between small business and government, and indeed between consumer and government.

One must look at what the consumer can do when things go wrong. I appreciate that this was in essence a consolidation Bill, but the Government have to be a champion of the consumer. Some argue for a consumer ombudsman, just one person. I do not share that view, but I feel that companies owe more of a duty of care to consumers to advise them on what to do when things go wrong. Caveat emptor, or buyer beware—there is still consumer law, but it is the new language of the internet, not Latin, that is fast taking over. So the Government must take into account that that changes, almost by the minute, the way in which we buy and sell goods.

[Baroness Hayter of Kentish Town (Lab)]

Well, we are back again. I thank the Minister for not just introducing the draft orders, but for the update on progress on the product safety review, which is of particular interest to me. We had not formally seen it but I had obviously heard about it. The decision that she or whoever made it to appoint Lynn Faulds Wood to chair the review was a brave one, as she is very much her own lady. I have worked with her before, on bowel cancer, which was rather different, but I know that she will take no prisoners. We look forward to that report and trust that it will be out this year.

The EU directive on alternative dispute resolution in a way touches on the area, just raised by the noble Lord, Lord Taylor of Warwick, about whether there should be a consumer ombudsman. In principle, I am more or less with him on that. If you have an ombudsman it is compulsory for the industry covered to allow a consumer to take its complaint there. The problem that we have with the ADR directive, to which the Government signed up in only the most minimalist way, is that there will be alternative dispute resolution organisations in existence. For example, if you were John and Taylor—a wonderful firm, I am sure—but it was in Warwick and you were selling clothes there, you would in future have to say that the clothes-selling ADR provider is that well-known company, Stevenson and Hayter. However, we will not necessarily accept that a consumer should take their complaint there. So we have a very odd situation now which falls short of what the noble Lord would want: basically, anyone can set up an ADR and, as long as it is approved by the trading standards people, it exists but consumers cannot necessarily take their complaints there.

When she replies, perhaps the Minister will confirm when the full implementation of the ADR directive, although it is very minimalist, will take place. I know that it is later than was originally intended, but I missed the date. How many of those ADR schemes have been approved and what proportion of the consumer market does she now consider is covered by some sort of ADR scheme?

I turn to another issue on which the Minister helpfully updated us, which was the announcement made by the Minister in the other place on 29 July—which was, strangely enough, just when we were all going off on holiday and had packed our buckets and spades—of the six-month delay in the services provision of Chapter 4 of the CRA for the rail, aviation and maritime services. It may be that the Government had foreknowledge of what was going to happen at Calais over the holiday and were absolutely sure that they did not want consumers to be able to use their new rights under the Act. I hope that that was not the case.

What concerned me, not in what the Minister said today, but in the letter of 29 July from the Minister in the other House, was the suggestion that the passenger transport sector might be exempted permanently from the Act in certain respects. We would have very serious questions about any suggestion of completely removing the rail sector from the Act. The existing consumer protections under the national rail conditions of carriage are much narrower than those introduced in the new Consumer Rights Act. They basically cover only delays and cancellations, not quality of service, passenger assistance, on-board wi-fi, which gets more and more important, and cleanliness. In fact, they do not cover what the Minister referred to in the rest of the Act: whether the service could be said to be fit for purpose.

Although there are some improvements under the national rail conditions of carriage regulations, in that there is now provision for cash compensation rather than just a rail voucher—which is no use at all if you do not want to go back to where you have been—that compensation is still essentially limited to delays, not those wider issues. We obviously want the Consumer Rights Act to apply to passengers.

The Government had initially reassured the Committee in the Commons that the national rail conditions would be excluded only when they offer equivalent protection to that in the Bill—which is not currently the case. At that point, we were reassured that there was to be no undercutting of what is now the Act. However, the letter from the Minister in the Commons worries us slightly. We know that even with the present level of protection, which is not as good as the CRA, the Office of the Rail Regulator found that more than three-quarters of rail passengers know not very much or nothing at all about their rights to a refund or compensation when trains are delayed or cancelled.

We believe it is vital that the travelling public get the full rights under the Act. Given that the Conservative manifesto pledged,

“to improve compensation arrangements for passengers”,

will the Minister confirm that there is no intention to provide lesser rights for passengers than those in the Bill to which I think she can quite proudly put her name? Will she also undertake that in that six-month pause Transport Focus and other consumer groups are fully consulted and that it will not be just the industry deciding what rights it will deign to give its customers?

--- Later in debate ---

My noble friend Lord Taylor also asked about ADR and whether there should be a consumer ombudsman, although I do not think he was advocating that.

[Lord Taylor of Warwick]

I was not.

[Baroness Neville-Rolfe]

I agree with him. The answer is that we do not believe that that is the right approach because there are lots of existing ombudsmen who are experts in their area.

[Lord Taylor of Warwick]

The problem is that there are several ombudsmen and they all have different procedures.

[Baroness Neville-Rolfe]

That is a fair point, which we ought to reflect on. We have been impressed by the way that the private sector has responded to the ADR directive. An increasing number of ADR providers are entering the market, which will be good for business and for consumers. That will increase choice and drive down the costs of ADR.