Consumer Rights Bill

Mark Durkan Excerpts

Tuesday 28th January 2014 Commons Chamber

[Vince Cable]

As the hon. Gentleman says, I have discussed that with him before. Indeed, there was a discussion in the European Union last week about rules of origin legislation. I am very sympathetic. The potteries are reviving somewhat and the ceramics industry is returning, and we want to ensure that that is sustained. I think that the issues raised are somewhat different from the content of the Bill. We might be talking about fraud, trading standards or enforcement, and there is an issue about mandatory origin reporting, which is currently being debated in the European Union. I fear that the Bill’s provisions will probably not help to solve the problem, but those are important issues.

[Mark Durkan (Foyle) (SDLP)]

I want to raise a further question that is not addressed by the Bill as currently drafted, surprisingly. It relates to electrical product recalls, which are clearly a matter of safety for people and properties. The law is currently deficient, and the Electrical Safety Council has made it clear that it wants it improved. It points out that the recall checker on its website often lists products for which there is no procedure in place and no traceable manufacturer. Surely, with regard to consumer rights, that is an area that needs to be addressed.

[Vince Cable]

The hon. Gentleman is right that the safety aspects are dealt with separately. I was under the impression that the relevant law was tightened up several years ago. I am familiar with it because a colleague who formerly represented Richmond Park in the House had a family tragedy in circumstances similar to those that the hon. Gentleman describes. I understood that the regulations relating to defective electrical equipment had been tightened, but that is a specific point that we can check.

--- Later in debate ---

[Mark Durkan (Foyle) (SDLP)]

Like the hon. Member for Dudley South (Chris Kelly), and others, I have no problem in welcoming any Bill that successfully consolidates quite a number of existing pieces of legislation, and helps to clarify practice as well as better codify the legal basis. However, it is a long way to jump from that consolidation to implying that the Bill will deal with all the consumer issues that we know exist, and the active and pressing matters that hon. Members from across the House regularly express, not only in debates such as this but through other means such as early-day motions.

A number of hon. Members mentioned areas where the Bill could be improved or go further, and indicated that they hope that that will happen in Committee. One point that has been mentioned is the issue highlighted by Citizens Advice in its submission about better information at point of sale. I fully support that, including the points raised by the hon. Member for Edinburgh East (Sheila Gilmore). However, in any future improvement of the standards and requirements for point-of-sale information, the fact and quality of that information should not of itself become a new marketing lure, where businesses imply to customers that they are doing everything in their interests as consumers. Many hon. Members have complained about claims management companies. Claims management companies ring people and tell them they are ringing on behalf of, for example, the Department of Justice. They imply that they have been appointed by the Department to tell people they have a claim simply because they have been licensed as claims management companies. We do not want to assist any firm or supplier, whether online or in-store, in any other mis-selling, but they might use the fact that they are giving point-of-sale information to new consumer legislation standards to do so.

Many hon. Members have heard complaints from their constituents about extended warranties. They have become something of a racket. People find it very hard to buy goods without being spooked into buying extended warranties. The small print that attaches to extended warranties is not matched by small prices. People often find that they have cancelled out any headline discount by buying an extended warranty, but also that, if they need to use it, it does not do the job for them. Many people mistake an extended warranty for an extended guarantee—they believe that it absolutely guarantees against any problem, but do not realise that they are buying a fairly narrow form of insurance, which will be fought and resisted using all means in the small print.

I fully endorse the point made on point-of-sale information, but we need to recognise that point-of-sale abuses take place. The Bill does not give us very much to deal with those problems and does not tell us where consumers stand. We must test the Bill not only on how far it consolidates existing law, but on how far it mitigates the problems consumers encounter.

More needs to happen on a time limit on repairs and refunds. I fully endorse everything other hon. Members have said on that.

On part 3, a point was made on the idea of collective redress. I welcome the important concept in the Bill which suggests that, if action is taken by consumers in relation to a product or service, the eligibility to benefit from it should apply to other consumers—people need not be party to the action to benefit. Of course, it would not apply to anybody who had specifically opted out. That raises an interesting question, which goes back to my intervention on the Secretary of State.

On time limits on repairs and refunds, and on collective redress in respect of known faults that are identified and pursued, there is a glaring omission in the Bill on product recall. Even if faults become known to the product manufacturer and the supplier, they might remain unknown to the consumer. There are problems with product recall, particularly in relation to electrical goods. The Electrical Safety Council runs a recall check and says that only 10% to 20% of the products it tracks are subject to successful recall. We should remember that those products are recalled because of a risk to people and property. Hon. Members have argued about what the Opposition want and what the Government want, but we should remember that we are talking about products that go inside consumers’ houses and represent a real risk. There is something of a dereliction in the law in terms of what is expected or required in product recall. Under existing legislation and under the Bill, consumers will have their rights asserted and addressed only in respect of faults that they know and identify, not in respect of serious and risky faults that are known to others.

The Electrical Safety Council also says that for many of the products on which it is running a recall check there is no traceable manufacturer. Many products are supplied under the names of other brands, so the actual manufacturer is unknown. Recalls are made according to codenames, so even if people have accessed any of that information they will still not be sure whether they have the product. There is such diversity in sales and distribution chains—hon. Members have made significant points about supply chains—that the issue arises of whether the standards we set on product recalls are tight enough. Only this month an article in The Guardian highlighted the risks and dangers of unsafe products and the incidences of fires in homes. We should heed those warnings and listen to bodies such as the Electrical Safety Council, and consider whether there is more we can do in the proposed legislation to address that significant gap.

I raised the effectiveness of electrical product recalls in a written question to the Minister. She replied:

“Liability and responsibility for unsafe products lie with the manufacturer or the importer placing them on the European market. Local authority Trading Standards services in Great Britain and district councils in Northern Ireland are responsible for enforcement. They have powers to order a recall, but rarely use them. The majority of recalls are undertaken by industry on a voluntary basis to address their obligations. Recall actions are expensive and often complex; manufacturers work with the enforcement authority to tailor the action to the product and the specific circumstances.

The electrical products industry monitors the impact of these actions to continually improve their effectiveness. I fully support their efforts and consequently have not undertaken my own assessment of the effectiveness of electrical product recalls. However, my officials are keeping this under review.”—[Official Report, 7 January 2014; Vol. 573, c. 190-1W.]

I ask the Minister to listen to what the Electrical Safety Council is telling us. Legislators, Ministers and the Department need to pay attention to this issue and I hope that the Bill will be amended to make good the gap. It seems strange that we are talking about time limits on repairs and refunds when people identify a fault and that we are talking about people being identified and being eligible for rights as a result of a collective action that they may not have been party to themselves. That is right and good, but it is odd that we are not showing care—as consumers and as people who should expect health and safety standards from products that we have brought into our own homes—in relation to product recalls, especially those that have taken place on the basis of an identified danger or risk.

I join many hon. Members who are currently signing early-day motions and doing other things to highlight the injustice of differential charges for paying by direct debit or by other means, and the penalties that appear to be imposed. It is one thing for people to understand that discounts are made available to those opting out of receiving bills by post or by any method that has overheads, but many people believe that many utilities are now charging a standard rate for those on direct debit and a penalty rate for those who pay by other means. This is a concern to all hon. Members, including many who welcome the Bill, but it will not be mitigated by it. I hope that that gap will be taken care of in Committee.