Leaving the EU: Consumer Protection

Luke Graham Excerpts

Tuesday 10th October 2017 Westminster Hall

[Luke Graham (Ochil and South Perthshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I commend my hon. Friend the Member for Chelmsford (Vicky Ford) on securing this debate. I will keep my comments brief, but as this is the Brexit Parliament, I welcome this opportunity to debate this important issue.

It is entirely right that as we go through the process of exiting the EU we should legislate to protect UK consumers and consumer rights. Indeed, the UK already goes beyond the minimum standard required by the EU in a number of areas. For example, UK consumers can reject goods that do not conform to the contracted sale within 30 days and receive a refund, whereas in the EU a refund is available only after replacement or repair. That is just one example, but the principle that we hear espoused to support it is already enshrined in UK law, so we need to use that example to make sure that we continue to protect UK consumer rights.

I recognise some of the comments from my colleagues in opposition, but I think that we should try to focus on Brexit as a real opportunity to strengthen consumer rights in many areas where the UK leads the EU and leads internationally, rather than raising red flags and—I do not want to use the word “scaremongering”—always focusing on the negative things that could happen, rather than the positives that the UK could put forward by operating internationally.

A prime example is the Consumer Rights Act 2015, which I referenced earlier. Introduced by the Conservative-led Government, it resulted in a marked strengthening of consumer rights in legislation, and it provides the precedent Members may seek when looking for reassurances from Conservative-led Governments on consumer rights. Among the safeguards provided, some of which I mentioned earlier, is the increase from seven days to 14 days in which consumers can return any item bought in a shop, online or over the phone. More crucially, the Act ensured for the first time that consumers were protected on the purchase of digital content, such as online films, games and books, with the clear right to replacement or repair, which is important in an increasingly digital world. I am assured that the Government are focusing on the right policy, securing the right direction of travel and legislating accordingly to make sure that we are leading the EU, not following it.

[Jo Swinson]

Will the hon. Gentleman give way?

[Luke Graham]

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

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

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

[Jo Swinson]

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

[Luke Graham]

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

[Vicky Ford]

I just want to point out that it is this Government who have been leading work on digital consumer rights, so we need to give some credit to the Conservative leadership during the 2015 to 17 Parliament.

[Luke Graham]

I thank my hon. Friend for that intervention; I always support giving praise where it is due.

I would like to end by highlighting the position of the Prime Minister and the Government. Only last week that was highlighted at the Conservative party conference, when the Prime Minister said that

“while we are in favour of free markets, we will always take action to fix them when they’re broken. We will always take on monopolies and vested interests when they are holding people back.”

Furthermore, in the Conservative manifesto a specific commitment was given to make sure that markets will

“work for consumers, as well as producers—with competition keeping prices low and encouraging new product development”,

while tackling issues such as

“poor information, complex pricing and exploitative behaviour”,

which prevent all markets from

“operating efficiently for the benefit of all.”

We realise that that is far from complete. To achieve that, we have set out a range of steps that we intend to take to further strengthen our consumer protection, in addition to the progress that has already been made and which I outlined earlier. I hope to work with Ministers and colleagues across the House to ensure that, as we debate the European Union (Withdrawal) Bill, and then the substantive Bills that will follow on customs and trade, we prioritise strengthening the hands of regulators and online consumers, making terms and conditions clearer—an issue that is recognised by consumers and institutions across the United Kingdom—and strengthening the powers of consumer enforcement bodies to include fines against companies breaking consumer law, and delivering redress for wronged parties. The desire and intent to protect consumer rights is clear and we must ensure that we carry on in that manner as we go through and complete the process of leaving the EU.

--- Later in debate ---

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I want to echo the thanks that the hon. Member for Weaver Vale (Mike Amesbury) expressed to the hon. Member for Chelmsford (Vicky Ford) for obtaining the debate. We must not underestimate, among the various aspects of Brexit, the importance of consumer protection. That vital matter is so wound around and ingrained into our daily lives that there is a danger that we may take the protections for granted but, as the hon. Member for Makerfield (Yvonne Fovargue) has pointed out, that must not happen.

Currently, the rights of consumers are enshrined in EU law, so naturally there is bound to be concern and uncertainty about what will become of those rights and the responsibilities of businesses post-Brexit. We need clarity. At the moment, the UK has to comply with EU consumer policy and law, which is estimated to affect about 90 pieces of legislation, making a body of EU law designed to protect consumers. However, the European Union (Withdrawal) Bill currently progressing through Parliament would repeal the European Communities Act 1972 and copy all EU legislation into UK law. The concern is that repeals, amendments and revisions could then be made to consumer law by any Government as they saw fit.

The lack of clarity and the uncertainty about Brexit is a cause of great concern, since we simply do not know what leaving the EU will mean for consumers or businesses. Will the UK stay in the single market? It looks as if that will not happen, so the rights of consumers in the UK will not be enhanced or keep pace with the rights of consumers in the EU. That could leave them exposed and lacking protection. Consumers are already feeling the Brexit pinch even though we have not yet left the EU. The devalued pound is pushing up inflation, and that alone has reduced purchasing power. Most consumers do not think too much about consumer protection until they need it. We need only look at the recent cancellation of Ryanair flights to find a good example of why consumers benefit from being part of the EU single market, and from sharing rights and protections across the EU. The personal example given by the hon. Member for Chelmsford brought that point home strongly. The hon. Member for Bristol North West (Darren Jones) also touched on the issue, and outlined various sharp practices indulged in by some airlines.

Fundamentally, a lot of minds would be put at rest by an end to the uncertainty—by the knowledge on the part of consumers that the UK Government are willing absolutely to guarantee that consumer rights and protections will not be watered down post-Brexit, and to provide specific assurances of that in the European Union (Withdrawal) Bill. We need a cast-iron guarantee that current protections derived from EU legislation will remain in force. I fully understand the Government’s position that they do not want a

“black hole in our statute book”

and that they will convert EU laws into UK laws. However, no one can predict the longer-term impact of Brexit on consumers, since we do not know what the UK’s future relationship with the EU will look like, or even whether the UK will retain any access to the single market.

What can be said is that following our withdrawal from the European Union, EU consumer protection legislation and that of the UK are likely to drift apart over time. I fully concur with the hon. Member for Bristol North West and the hon. Member for Chelmsford, who discussed the evolution of consumer law. Even if the UK adopts autonomously all EU legislation in the field of consumer protection, the interpretation of such legislation will vary, as UK courts will not be subordinate to the European Court of Justice, despite what the hon. Member for Ochil and South Perthshire (Luke Graham) said. We do not know what kind of divergence will take place.

[Luke Graham]

Does the hon. Lady recognise that the example that I used showed the UK going above and beyond what the EU was putting forward? If she would like to be “Stronger for Scotland”, perhaps she would begin by engaging positively with those details and looking at the opportunities we have, rather than always looking at the negative and trying to do the UK down.

[Patricia Gibson]

I listened very carefully to what the hon. Gentleman said, because I had this point in my head. He cannot negate the legitimate concerns that I have raised by simply saying, “We’ll always go one better.” I will give him a concrete example. There are fears in some quarters of a race to the bottom—for example, on food safety. The Secretary of State for International Trade has said that he is completely relaxed about a diminution in food safety. People cannot simply hide all the time behind the notion that the UK will always do something better than anything that is offered by the EU. That is asking us to take too much on trust.

[Luke Graham]

Will the hon. Lady give way?

[Patricia Gibson]

I will press on if the hon. Gentleman will permit me.

Consumers in the UK spend £1,160 billion each year on goods and services, and about £14.8 billion is the estimated value of consumer detriment that needs to be tackled by consumer protection bodies. That is with the current protections; diminution of any of those protections can only increase consumer detriment and undermine consumer confidence.

With increasingly complex and wide-ranging threats—in particular, a rise in e-commerce and scams—consumer protection needs to be as robust and match-fit for the modern world as it possibly can. The UK consumer cannot be left behind post-Brexit. I contend that remaining a member of the single market would guarantee that UK consumer protection law moved in line with that of the rest of the EU and would certainly reassure consumers and businesses that the current framework would continue to keep pace.

Regardless of what the future relations between the UK and the EU finally look like, the laws governing relations between consumers and businesses are vital to the future success of the UK as a whole. Consumers must have confidence in the purchases that they make, be confident about safety, and be confident of redress if anything goes wrong with the goods that they purchase; they must be confident that their rights as consumers are enforceable. My concern in relation to the uncertainty surrounding those rights, which will be subject to the whim of the Government of the day, is that the rights may be diluted or eroded over time as the EU moves ahead in this area, leaving the UK consumer rights agenda behind the curve, looking outdated and not fit for purpose in the modern world.

I hope that the Minister can provide cast-iron assurances that protecting and maintaining consumer rights is firmly on the Government’s agenda as Brexit unfolds, because consumers have a right to expect nothing less.