Delivery Surcharges (Transparency for Consumers) Bill

Mel Stride Excerpts

Friday 13th September 2013 Commons Chamber

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

I beg to move, That the Bill be now read a Second time.

I thank the hon. Member for Woking (Jonathan Lord) for his kind words, and I congratulate him on getting his Bill through to the next stage.

There has long been a frustration about additional charges for delivery to certain parts of the United Kingdom. This Bill is designed to shine a spotlight on the issue, highlight it and come up with some remedy to help move us in the direction of a fairer and more sensible system. The Bill requires

“online retailers to declare to consumers at the start of the retail process the existence of surcharges for delivery to certain addresses in the UK; and for connected purposes.”

In respect of this frustration in many parts of the UK, there are three concerns: the excessive charges for delivery to certain parts of the UK; the lack of transparency about those charges; and the often arbitrary nature of how those charges are calculated. There is a long-standing campaign by many in Scotland to try and tackle the issue. I am following in the footsteps of many others who have highlighted it, especially my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) who has a classic example of the arbitrary nature of this problem. Although his constituency is in mainland Scotland, it has the KW postcode—Kirkwall, in Orkney—so most websites classify him as coming from an island, and treat him as such for delivery purposes. Retailers need to look more carefully at how their systems allocate charges and identify areas that will be more expensive to deliver to.

Another issue is the excessiveness and lack of transparency of the charges. Citizens Advice Scotland, in an excellent research paper entitled “The Postcode Penalty”, published in December 2012, made it quite clear that 1 million Scots face surcharges, late delivery or are refused delivery shopping online. The Bill would tackle the issue in relation to online shopping by ensuring that people have a clear and concise idea of what they face before starting the shopping process.

On the website fairerdeliverycharges.net, which is part of the campaign, one person commented:

“About time this discrimination was dealt with as well as over charging by couriers, was once quoted £275.00 to the island but £45.00 to Ullapool. Complained and it was dropped to £75 to island, saying that was what the courier quoted them before they asked for reprice”.

The shopper online is shopping with the retailer, which then negotiates the delivery contracts. We want to encourage the retailer to think more carefully about the needs of the shopper and to make a better attempt at negotiation. As the example shows, the shopper just had to intervene and the charged dropped from £275 to £75, so the initial charge was clearly excessive and not thought out.

On the lack of transparency, I visited a constituent recently who went online to buy radiators for their house. The usual delivery cost was £20, but when they got to the end of the process, the cost increased to £60 for delivery to anywhere in the north-east and north of Scotland. The north-east of Scotland is not remote rural. It is the Aberdeen postcode—a major city, the oil and gas capital of Europe, and a major, thriving part of the UK economy.

[Mel Stride (Central Devon) (Con)]

May I clarify that there is nothing interventionist in the Bill that the hon. Gentleman proposes? I presume that there is no attempt to intervene in the amounts that those selling products on the internet are charging to those receiving them, but that the intention is to ensure transparency so that when shoppers go online they are aware up-front of the amount being sought by way of carriage, before they click to complete the purchase.

[Sir Robert Smith]

The hon. Gentleman has summed up extremely well the nature and purpose of the Bill. It is about transparency, so that shoppers do not have to spend ages shopping online only to discover at the end of the process, having put in all that effort, that they will have to face excessive charges, and then have to shop around elsewhere. The other benefit of early notification will be to encourage retailers to think more carefully about how they calculate those charges and about the nature of those charges.

--- Later in debate ---

[Mel Stride]

What penalty does the hon. Gentleman envisage for a business using the internet which failed to comply with the requirements that he is seeking?

[Sir Robert Smith]

The Bill requires the Government to state in the regulations the penalties that would be applied. They would obviously have to consult on that during the process of drawing up the regulations. One penalty might be a requirement to comply, and to place the details of the charges on the website so that they are established and clear.

Members will be reassured to learn that I have opted for the affirmative process. Any regulations that are produced as a result of the Bill will have to be debated and voted on in the House, so that Members can scrutinise them in detail. We do not want to impose excessive regulation or unnecessary burdens on industry. When the market is failing, giving more information to consumers can help it to become more focused and effective and to deliver a better deal to consumers, while also ensuring that retailers can sell their products in a competitive market.