Consumer Rights Bill

Sheila Gilmore Excerpts

Tuesday 28th January 2014 Commons Chamber

[Adam Afriyie (Windsor) (Con)]

I support the Bill because the principles that guided it are exactly what the country needs in order to get back on its feet after 13 years of what could be described as misappropriation of the public purse by the Labour Government.

[Sheila Gilmore (Edinburgh East) (Lab)]

I am utterly astounded that the hon. Gentleman should believe that this is the legislation that will put the country back on its feet. The Bill is a consolidating measure. Surely we need something a bit more dramatic.

--- Later in debate ---

[Sheila Gilmore (Edinburgh East) (Lab)]

The hon. Member for South Thanet (Laura Sandys) said that she had previously worked for the Consumers Association. Earlier in my career I worked for the Scottish Consumer Council. It is important to recognise that Governments of all colours have wanted to strengthen in various ways the rights of consumers. The National Consumer Council and its Scottish and Welsh equivalents were set up by the Labour Government of the 1970s, so everyone has aspired to putting the consumer at the heart of things. The problem sometimes is how to make that a reality for those consumers. How can we ensure that people understand how to use the rights that they are given?

People often encounter the greatest difficulty when dealing with smaller retailers, because in larger companies staff are generally better trained and so better able to respond. Indeed, some larger retailers would rather allow the consumer to go away happy, even if that means going beyond the basic statutory minimum. Many smaller retailers, however, either seem unaware of what the law states or deliberately obfuscate when a consumer complains. They say, “You have to go to the manufacturer for that,” even though that has not been the case for many years.

Citizens Advice has suggested amending the Bill—perhaps the Minister will consider this—to make it a requirement that information on consumer rights is provided at the point of sale. It has made some suggestions on how such information could be presented, because it is aware that it could be quite difficult to convey simply. I think that that information, whether it is on a notice in the shop or on the till receipt, would be helpful, as consumers would be clear about what to do if something goes wrong.

Another relatively minor amendment that Citizens Advice proposes is including a time limit for repairs and replacements. I remember what things used to be like, when I had to try to explain to people what was going on with repairs, when they could get a refund and whether accepting a repair put them in a difficult position. The simplification is to be welcomed. However, the question remains whether there should be a limit on the time a company can take to repair and return a product. Citizens Advice suggests a 30-day limit. I would like to know whether the Minister will consider such a change.

Services have always been more difficult to regulate than goods—when we buy an object, it is much clearer what we are buying. The relevant legal wording, which effectively requires one to make a judgment on whether reasonable care and skill has been used in the performance of the service, has always been quite difficult. It is good to have that made explicit, rather than implicit. It is not an implied term; it is to be taken as an expressed term in the provision of services. However, that still leaves open the question of precisely what that means. Could it be measured in some way?

I was interested to hear what the Chair of the Business, Innovation and Skills Committee, my hon. Friend the Member for West Bromwich West (Mr Bailey), had to say on that and about the Committee’s recommendation. I hope that it can be explored more fully to see whether other measures could be used, at least in relation to some services, to give a clearer and more explicit measure of whether a service has been performed in the way it should have been, rather than having to rely on a debate on what is a reasonable level of skill.

Ultimately, we must also look at how people exercise their rights. Ideally, they should be able to exercise them face to face with the person providing the service or selling the goods. Things should be sufficiently clear that the consumer can go back, exercise their rights and get a good response, but we know that that does not always happen. We must therefore look at the means by which people can get redress.

Citizens Advice also wants the Government to consider the question of collective redress in relation to competition cases—if there is a particular kind of mis-selling or product or service failure—that affect not just individuals, but people in particular localities or up and down the country, and on which a collective response is available, because there is strength in numbers.

Although allowing an individual consumer to have all their rights and choices is clearly important, they are sometimes a small cog in the wheel, and it can be very difficult for them to push a case. Many people simply give up, because it is not worth the effort: if they are rebuffed at first, they will not necessarily pursue their case further, because they do not know how to do so or find the whole process so difficult.

Even for people who contemplate going to court, the process can be quite expensive. Other hon. Members have spoken about the difficulty of getting legal aid to go to court or even for legal advice. A court fee can be a considerable block to people’s ability to exercise their right. For example, in Scotland, an action for a small claim can be made for something worth more than £200, which is not a huge amount in relation to various consumer purchases, but it costs £71, which is quite a lot for someone to risk if they feel that they might not win the case. We therefore have to consider the whole idea of redress.

When I was involved with the Scottish Consumer Council, we did much work on developing proper small claims courts to which people could easily go, be represented and get a lot of help. There is still merit in trying to develop such an approach, rather than people feeling that their case cannot be taken forward. That is where the collective becomes important. For one individual, the cost and effort of pursuing a case will be great. As my hon. Friend the Member for Inverclyde (Mr McKenzie) said, even in relation to what seem very small amounts—less than a fiver—such amounts add up and, collectively, it should be possible to put such cases together.

I share the concern expressed by my hon. Friend the Member for Walthamstow (Stella Creasy) that no one wants a book of law of huge size, as was suggested by the hon. Member for Eastleigh (Mike Thornton), but this is an opportunity to legislate on some of the issues that hon. Members raise time and again because of their constituents’ experiences. Various people are campaigning on many of the issues, because they understand the detriment that people are suffering. This seems to be an opportunity to legislate, and it is sometimes important to legislate. Rather than end up with smaller pieces of legislation in future, which would recreate the difficulty that we now have in consumer legislation, we could take the opportunity of having this Bill to consider some of the issues.

My geographical, if not adjacent neighbour or political colleague, the hon. Member for Edinburgh West (Mike Crockart), has pursued the issue of nuisance calls. With other hon. Members, he has made some progress in highlighting that important subject. Nuisance calls are an irritant to those of us who thought that we were on the Telephone Preference Service, but still get calls that we are told are for research or some other spurious reason, or calls where only one in 20 people who have been rung is spoken to when they answer.

That is an irritant for those of us who cope with that sort of thing very or reasonably well, but it can be worse than an irritant for others. My father, who is now in his 90s, has got to the stage where he hardly ever answers the phone, which is not particularly practical. He certainly will not answer the phone if it is an unknown number. As Members will know, if somebody phones from an institution, such as this place, it comes up as an unknown number. He is not only exasperated by such phone calls, but anxious about answering the phone. It is highly harmful that nuisance calls are being made and it is important that we legislate to deal with them.

[Chris Kelly]

Has the hon. Lady found, as I have, that this matter is of particular concern to our older constituents because they tend to rely more on landlines than any other age group? Many young people do not have a landline or have one only for broadband services and use their mobile phone for incoming calls. They are therefore not affected in the same way as many older people.

[Sheila Gilmore]

That is correct. I suspect that that may be a reason why older people get so many nuisance calls.

A related concern, particularly for less well-off consumers, is the phone numbers that are used. When I tried to pay my electricity bill by calling from my mobile phone, because that was the most convenient way for me to call, there was a message to say that I would be charged if I called that kind of number. I put the phone down and made a mental note to call from a landline. That probably led to a delay in the bill being paid. However, some people would find it very difficult to call from a landline and so would be charged a premium.

Government Departments are not immune from the problem of premium rate numbers. It is a major issue for many people that the Department for Work and Pensions still uses numbers that cost them a lot of money when they phone in for information, to report changes in circumstances or to change an appointment because they cannot attend. We need to look at that problem. People should not be charged—sometimes they do not even realise that they are being charged—to engage with a private firm that is selling them goods or services, or with a public agency.

I hope that the Bill has room to cover the problem that less well-off consumers and older consumers often pay more for their utilities than the rest of us, which the hon. Member for Harlow (Robert Halfon) and I have raised. I think that he was planning to seek a debate on that issue at the Backbench Business Committee this afternoon, because he has approached various Members for support. It is one thing for companies to say that direct debits are so much more convenient and cheaper to process than other forms of payment that they will give direct debit consumers a discount and everybody else will pay a standard charge, but companies have gone beyond that and are making other customers pay an additional charge. Not only energy companies but organisations such as BT are charging people a £6 fee to pay via PayPoint.

The constituent who brought that issue to my attention did so on behalf of her elderly uncle, who was insistent that he wanted to pay in that way. He had always managed his finances in cash and was going to go on doing so. He could no longer use certain methods that he had used before and the only way in which he could pay by cash was to use PayPoint. It is not only people on low incomes who are affected, but such people are more likely to use the cash economy and can be wary of banks.

I was talking recently to one of the housing associations that took part in the pilots set up by the Department for Work and Pensions for the direct payment of housing benefit. The DWP would like people to get bank accounts and pay by direct debit, and that would certainly help housing associations as well, because it would help people to be responsible for their own payments. The problem that the housing association found was that a lot of its tenants were not comfortable with doing that, either because they had had bad experiences of being charged because their direct debit went out at the wrong time of the month or because they knew people who had. They preferred to pay when they wanted to pay, preferably in cash or through some other payment mechanism. They were not keen on banks and direct debits, even if they could get a bank account, which still not everybody can. We must think about the aspects of the system that harm the least well-off consumers as well as competent and able consumers. It would be helpful if room could be found in the Bill for some of those issues.

[Mr David Hamilton]

More and more people are coming to my surgeries and indicating that, because of the type of contract they have—zero-hours contracts, for example—they cannot use direct debits. They pay when they can pay. That is a major issue that is beginning to develop in my area.

[Sheila Gilmore]

I thank my hon. Friend for that intervention. We must examine that issue more carefully, because there is an assumption that people will have bank accounts. The Government have stated that they want to make that assumption in relation to universal credit payments, for example. People who are working will be affected as well as those who are not. People are naturally wary of that, because they do not want to be caught up in the payment of high charges. There has been talk of trying to find some form of bank account that would avoid that happening, which would be all the better. I am sure that Members of all parties have had cases come up, whether localised or not, that have made them realise the need for legislative change to protect people. The Bill provides us with an opportunity to make that change. I do not want to rewrite “War and Peace” or create a huge doorstop of a Bill, but we could take this opportunity, perhaps in Committee, to improve the Bill and improve the lives of many of our constituents.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

This has been a wide-ranging debate with many useful and, on occasion, entertaining contributions from Members of all parties. I thank Members for their considered views.

I agree with the hon. Member for West Bromwich West (Mr Bailey) that this is an important area of work. When something goes wrong for a consumer, it can be devastating, as he said. The Bill will provide remedies for consumers with a wide range of problems, from a broken toaster to a dodgy kitchen installation and for things worth from a few quid to thousands of pounds. The wide range of matters encompassed by the Bill shows how complex an area this is.

I shall try to address as many of the points that have been raised as I can, but as a number of Members have said, we will have further opportunities to discuss the detail in Committee. Contrary to what the Opposition have argued, the Bill will provide a substantial improvement to consumers’ rights, remedies and protections. It is true that it consolidates the current law, which, as a number of Members have said, is spread across eight pieces of legislation and more than 60 sets of regulations. It also brings in major new rights for consumers, however, particularly in digital goods and services, although they have been completely overlooked by some Opposition Members.

It is important to note that the Bill has widespread support among consumer and business groups. The economic benefit is estimated to be more than £4 billion over 10 years. It is more than just minor tinkering, as some Members have suggested; it is an important piece of legislation.

I found the speech made by the hon. Member for Walthamstow (Stella Creasy) rather disappointing. She seems not to have read the Bill in detail as she seems to have rather a poor grasp of what it does and does not do. She barely mentioned much of what is in the Bill and I hope that she has a chance to read it in detail before Committee.

I am proud that the Government are taking such important action to improve the rights of consumers, when the previous Labour Government did very little over 13 years. For example, as a number of Members mentioned today, the issue of cowboy builders was raised repeatedly during the previous Parliament but no action was taken. The coalition Government are doing something for consumers rather than just carping from the sidelines.

As I said, the hon. Member for Walthamstow did not talk about a lot of the issues in the Bill. She laid out an extremely long wish list of things that she wanted to add to the Bill rather than engaging with what was already there. I appreciate that this is the sort of Bill that many people spot gaps in and want to add to, but there is more to it than that.

Hon. Members raised a number of issues that they want included in the Bill, including banking, utilities, telecoms and ticket touting. At the risk of disappointing them, I do not propose to go into much detail on those issues as they do not fall within the remit of the Bill. Although I have sympathy for many of today’s speakers and with a lot of the issues, many are issues for other Ministers and Departments to tackle.

The hon. Member for Walthamstow and a number of others mentioned concerns about consumers having access to their own data. We agreed that that information can be key to empowering consumers to take well-informed action. The hon. Lady mentioned midata and the voluntary approach the Government have taken to it has already had success, with all the major energy companies now providing midata downloads so that their customers can access their data in a consistent and machine readable format. My Department is reviewing progress on the voluntary programme and we wrote to chief executives of companies about that in November. The review, which will be completed in March, will help us to decide whether to use the power in the Enterprise and Regulatory Reform Act 2013 to require companies to release the data they hold on consumers, but we hope that the voluntary approach will make progress. There is progress and I hope that the hon. Lady welcomes that.

Members on both sides of the House expressed concern about lookalike websites. As they will know, misleading information and advertising has long been the subject of consumer protection legislation, which was substantially updated and extended in 2008. Under the Consumer Protection from Unfair Trading Regulations 2008, it is illegal for a trader to mislead consumers to the extent that the average consumer is likely to make a decision that they would not otherwise make. That is slightly wordy, but it includes giving a false impression of cost, such as charging for something that would otherwise be free. That encompasses the example given by the hon. Member for Walthamstow of fake HMRC websites. We accept that there is a problem, but further legislation is not required. The Department for Business, Innovation and Skills has written to public enforcers to draw the issue of copycat websites to their attention and to ensure that the law is enforced appropriately.

[Sheila Gilmore]

If the law is there to deal with this problem, why is it still happening? A constituent contacted me about this only the other day. He was not uneducated or stupid in any way, but he was taken in by one of these websites. What should he do?

[Jenny Willott]

If the hon. Lady would listen, I just said that the Department has written to public enforcers to ask them to enforce the law properly. The problem is clearly still happening, and we are all aware of instances of it. Recently, there were reports about the issue on the radio, particularly about the fake HMRC websites. There are lots of things that are illegal that still go on until there is a crackdown. This is one such thing, and we are doing what we can to encourage public enforcers to take action to close down websites that are clearly in breach of the law.

On a technical point, the issue of devolution was raised by a number of Members from Northern Ireland, and I should like to clarify the situation. The issues covered in the Bill are reserved to Westminster with regard to Scotland and Wales, but they are devolved to the Northern Ireland Assembly. The devolved Administrations in all three nations were consulted throughout the drafting process, and both Cardiff and Edinburgh are perfectly satisfied with the measures and are happy for them to be implemented across England, Wales and Scotland. I completely agree with the hon. Member for Strangford (Jim Shannon) that we are all part of one country and that it is important to be consistent across it. I am glad to be able to tell him that the Northern Ireland Assembly has agreed to a legislative competence order so that the Bill will apply across the board to the whole of England, Scotland, Wales and Northern Ireland. There will be consistency in the application of all the measures to the whole of the UK.