Leaving the EU: Consumer Protection

Margot James Excerpts

Tuesday 10th October 2017 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Streeter. I am pleased to have the opportunity to discuss the impact of the UK’s exit from the European Union on consumers.

First of all, I congratulate my hon. Friend the Member for Chelmsford (Vicky Ford) on tabling a debate on this very important issue. As the Prime Minister has made clear, most recently in her speech in Florence last month, the UK’s vote to leave the EU was not a vote to abandon our relationship with the EU. We want to maintain our deep and special partnership with it. We are leaving its institutions, but we remain a close ally, and we are committed to working with it to secure the best outcomes and to maintain strong consumer protections.

As hon. Members have made clear, consumers are crucial for UK prosperity. Household expenditure accounts for around 60% of our economy. In 2016, 83% of UK consumers used the internet to order goods or services, and 23% used it to order goods or services from another EU country. Engaged, confident consumers stimulate competition in markets and drive responsible business practices, benefiting businesses and consumers alike. This is crucial to ensuring that our economy works for everyone, which is a key objective of our industrial strategy, which will put the UK in a strong position for the future.

British people do not want shoddy goods or services and we will ensure consumers are protected from dangerous products and unfair trading practices. Making sure consumers are protected, wherever and however they purchase goods and services, is a top priority. As the hon. Member for Makerfield (Yvonne Fovargue) pointed out, the UK has a strong history in its own right of protecting consumers. The Consumer Rights Act 2015 updated the laws governing every business selling directly to consumers and gave consumers clear rights. UK consumers have also relied on domestic laws in advance of EU legislation; for example, laws outlawed unreasonable contract terms almost 20 years before the EU legislated to ban them.

We have demonstrated our commitment to high standards for consumers by going beyond EU minimum standards in a number of other areas. For example, the UK led the way in protecting consumers purchasing digital content in the 2015 Act, before the Commission brought forward its proposals on digital content later that year. That point was made by my hon. Friend the Member for Chelmsford, who played a key role in the development of that consumer protection framework as chair of the European Parliament’s Committee on Internal Market and Consumer Protection. Her scrutiny of EU proposals has been crucial to ensuring the law works for citizens and businesses alike. As she knows, the UK has worked closely with the European Commission, and in the Council, to develop a robust regime.

While we remain an EU member, we are continuing to fulfil our obligations fully and in good faith. We are setting the agenda where we can, to ensure that our legislation remains fit for purpose in the digital age. For example, the Digital Economy Act 2017 includes important measures to protect consumers and the UK’s position as a world leader in the digital economy. It includes protections against spam mail, and against children easily accessing online pornography, just as protections exist offline.

At EU level, we have secured general approaches in the Council on two pieces of consumer legislation this year: the digital content directive and the consumer protection co-operation regulation. Both files will increase consumers’ protection when buying online and set clear obligations for traders and businesses. Those are just two examples of how we have achieved robust protections. We will seek to continue working closely with the European Union on issues such as information sharing and enforcement co-operation.

We have a proud history of protecting consumers, but I agree with hon. Members that that should not make us complacent, following our exit from the European Union. I turn to our plans to protect UK consumers through the European Union (Withdrawal) Bill. The Bill will ensure that we exit the EU with maximum stability and provide certainty for businesses and consumers. It will ensure that UK consumer protections based on EU legislation are clearly retained, and that when a consumer buys from a trader based in the UK after exit, they can rely on the same rights that they currently enjoy. The way consumer protections apply internationally in the future is a matter for negotiations. However, our starting point is that we must continue to have effective protection for consumers, particularly those buying across borders, and we will work with the EU to secure the best possible deal for consumers in that respect.

Hon. Members have raised the question of how well we are working with stakeholders. I am disappointed to hear that, according to the shadow Minister, the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss), stakeholders have been frustrated in their desire for ministerial attention, and I can assure her that I will do my best to put that right. It is essential that we work with stakeholders to understand the impacts on consumers of the UK’s exit from the EU. As the hon. Lady pointed out, Minsters and officials have met a range of stakeholders, including Money Saving Expert, Citizens Advice and Which?, and in April 2017, when he was in post, Lord Bridges of Headley opened the National Consumer Federation’s consumer congress, which explored how we can secure the best outcomes for consumers after Brexit. I am pleased that Which? has been conducting an in-depth analysis of the range of impacts that EU exit will have on citizens.

My hon. Friend the Member for Chelmsford mentioned some important areas for consumers, showing what a wide-ranging and integral issue this is. Flights, data roaming, insurance: it is vital that we have the complete picture of consumer concerns. That is why I agree that talking to consumer groups and businesses is vital. I have invited consumer groups and the devolved Administrations to meet me and the Secretary of State for Exiting the European Union, so that we can hear their views and discuss key EU-exit issues. I look forward to continuing that engagement.

A number of other issues were raised concerning travel protections. Consumer protection for flights based on EU law will be retained in the EU withdrawal Bill, meaning that British consumers will be able to rely on the same rights after we leave the EU as they have now. On advance booking, it is a high priority to identify new arrangements at least 12 months before we formally leave the EU, to ensure legal certainty for consumers.

More broadly, maintaining liberal access to EU markets is a high priority for the Government. We recognise the importance of air services to the health of the economy. The hon. Member for Bristol North West (Darren Jones) spoke with great knowledge about that subject and others relevant to this debate, reminding us that we must ensure that our post-Brexit consumer protection is fit for the future. I hope that his justifiable complaint against WOW Air is resolved.

The hon. Member for Makerfield raised a valid point about the future of our connection with the Rapex rapid alert system for dangerous non-food products. Intelligence sharing will remain vital post-Brexit, and we are working already with the EU to explore options for maintaining information sharing across borders. I agree with her that it is vital.

Various hon. Members mentioned product safety. Maintaining high standards for product safety is a high priority for the Government. I was asked specifically about the state of discussions on whether the British Standards Institution will continue to be involved in European standards setting. The BSI, the UK’s national standards body, is independent of Government, but we are working with it to ensure that our future relationship with the European standard-setting bodies continues to support a productive and open competitive business environment in the UK. They are assisting us as we roll out improvements to the product safety and withdrawal regime. The European standard-setting bodies, such as the European Committee for Standardisation, are not EU bodies, although they have a special status in the EU.

We remain committed to securing the best deal for UK citizens during the Brexit negotiations. That is as true for citizens as consumers as it is of any other aspect of their lives. As I said, the UK’s framework already sets high standards, and the EU withdrawal Bill will ensure that EU-derived protections are enshrined in existing UK law. Our aim is no reduction in protections for UK consumers after EU exit. It behoves us all, and certainly me while I am responsible for consumer protection, to work hard after EU exit to ensure that our consumer protection regime continues to be an example to the rest of the world. That will be a responsibility for future parliamentarians, but I certainly sense from the remarks made in this debate that we are all concerned not only to put in place a regime that is as good as it has been throughout our membership of the European Union, but to work to continue to improve it and ensure that it is fit for the future environment.

We recognise that for protections that rely on co-operation with, or action by, EU member states, negotiation is needed, and we enter those negotiations with ambition and some optimism. We start from a strong position of trust in one other’s institutions, and a spirit of co-operation stretching back many decades. Through open and honest dialogue with our European partners, we remain committed to achieving strong outcomes for consumers through the Brexit negotiations, and to continued co-operation with EU consumer protection sources of information, and to sharing, post-Brexit. With that, I hand over to my hon. Friend the Member for Chelmsford.