Oral Answers to Questions

Debate between Stephen Timms and Kevin Hollinrake

Tuesday 29th November 2022 Commons Chamber

[Sir Stephen Timms (East Ham) (Lab)]

The Groceries Code Adjudicator has done a good job over the past 10 years, leading to a big fall in the number of breaches of the fair purchasing code, but bad practice is still rife in the fashion industry, with UK fashion retailers among the worst offenders. The Environmental Audit Committee called for a garment trade adjudicator. Will Ministers bring that proposal forward?

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

I thank the right hon. Member for all his work in this area; I know that he has done an awful lot. We have no plans to bring forward a garment code adjudicator, but we do take reports of illegal and unsafe employment practices very seriously. Since October 2020, a wide group of stakeholders, comprising retailers, manufacturers and non-profit organisations have been working with the Gangmasters and Labour Abuse Authority to address poor practice and working conditions.

Economic Crime

Debate between Stephen Timms and Kevin Hollinrake

Thursday 2nd December 2021 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

I am very pleased to follow the hon. Member for Thirsk and Malton (Kevin Hollinrake), and I welcome his collaboration with my right hon. Friend the Member for Barking (Dame Margaret Hodge). They both advanced powerful arguments in opening the debate.

I want to focus briefly on one specific point. I mentioned, in an intervention on my right hon. Friend, the Work and Pensions Committee’s inquiry into pension scams, which reported a little while ago. This is an important area of economic crime, and our report highlighted in particular the menace of online scams, which the hon. Gentleman has just mentioned. As he said, the Online Safety Bill presents a unique opportunity to address this menace. The Prime Minister has said that tackling online fraud is one of the Bill’s main aims, but the current version, which is undergoing pre-legislative scrutiny, leaves out the major part of the problem. That must be changed.

The campaigner Mark Taber gave evidence to our inquiry. He found the compare-uk-bonds.co.uk fake comparison site on Google, and reported it to Google in May last year. An elderly woman who had recently been bereaved contacted him after losing more than £200,000 to that scam site on Google in September. Google finally took it down in December. People think that if they find something on Google, somebody must have vetted it, but of course they have not. Google gets paid by scammers, and then also gets paid by regulators to warn about the scammers people find on Google. It is a pretty good business. I have no idea why Google did not take that scam down in May. Was it because the company was disorganised? Was it because it wanted to keep the advertising income coming in? Google will not say, and I do not imagine that we will ever know. What this shows us is that the law must be changed. If it is not changed, crooks will continue to ruin the lives of thousands by advertising scams online. That would be an unforgivable failure of Government.

Last year, the Pension Scams Industry Group estimated that £10 billion had been lost to pension scams by 40,000 people since the pension freedoms were introduced by George Osborne in 2015. I welcome some of the recent changes that have been made to help. The new Pensions Schemes Act 2021 will restrict the statutory right to transfer, which was given in the pension freedoms, where there are signs of a scam. The High Court recently ruled that the fraud compensation fund could be used to compensate pension liberation scam victims. Those are both welcome steps, but we need to do more. In particular, we must tackle the menace of online scams. The insurer Aviva told the Work and Pensions Committee that in the six months before it gave us its evidence it had found 27 scam websites purporting to be Aviva. Having found them, it takes quite a lot of effort to get them taken down, and there are always victims before the sites are removed.

In the Online Safety Bill, the Government are tackling user-generated scams, but not paid-for scam adverts. That needs to be changed, because it is the scam adverts that are the heart of the problem. That is not just the view of my Committee and the Treasury Committee; it is the view of almost everyone outside Whitehall who has looked at this, except for the internet companies. The Governor of the Bank of England told the Treasury Committee that the risk to consumers from online fraud

“could be tackled through the Online Harms Legislation, but the experience so far...is that there is strong resistance in other parts of the official sector to extending the legislation to financial services. This is a serious problem.”

He is absolutely right.

The City of London police wrote to the Work and Pensions Committee in May that the exclusion of advertisements and cloned websites from the Online Safety Bill

“leaves a gap in the protection provided for the public”.

The City of London police went on to call for

“legislation requiring a duty to protect and/or corporate criminal liability for failure to prevent across all online and telecommunications enablers.”

The Financial Conduct Authority told us in evidence to the Committee that

“financial harms should be included in the Online Safety Bill to ensure that online platform operators take responsibility for the material which they disseminate which could cause consumers financial harm.”

That is absolutely right as well. The Prime Minister told the Liaison Committee in July that

“one of the key objectives of the Online Safety Bill is to tackle online fraud”.

I welcome and applaud that pledge, yet the Bill as it stands entirely misses the major problem of online fraud, which is paid-for advertising.

Martin Lewis of MoneySavingExpert.com, Sir Richard Branson and Dawn French have all had their name or image used in online scams. They all wrote to the Prime Minister last month calling for the Online Safety Bill to tackle scams, pointing out that the current Bill will penalise someone who posts a scam, but not someone who pays to post the same scam. They went on to say that the

“Government has said it wants to eventually tackle scam adverts through changing advertising regulation—but this will have to go through a lengthy process of legislating in the face of fierce opposition from a powerful advertising industry.”

We understand that work to address the problem of scam advertising is going on somewhere—the Department for Digital, Culture, Media and Sport, I think—but on a much longer timetable. If that is the track we go down, it will be years before anything changes, and thousands more people will lose their life savings in the meantime.

[Kevin Hollinrake]

That is a really interesting quote. Who is in the “powerful advertising industry”? The only people I can see benefiting from scams posted in the paid-ads section of Google are those at Google, not those in the advertising industry.

[Stephen Timms]

That hon. Gentleman raises an interesting point. I know that Ministers have been looking into this issue. As I understand it, there is now a very complex infrastructure around advertising. Google is at the end of the chain, but there are all sorts of agencies and intermediaries—a whole industry—in the middle. I imagine that letter is referring to the fact that all those people in the middle would say, “No, don’t touch this because it’s working very well.” It is working well for them, but I am afraid that for the public it definitely is not. If we wait in the way suggested in the letter, it will let crooks and scammers continue to ruin people’s lives for years to come. That would be a catastrophic Government failure. My plea is for Ministers to change course now, face up to the undoubted technical challenges, and legislate in the Online Safety Bill.

Finally, I agree with a point made by my right hon. Friend the Member for Barking in opening the debate: this is an existential threat to the UK economy. Financial services account for a big part of our economy, and we have a worldwide reputation and provide a great deal of expertise and high-quality services. If people conclude that they can no longer trust our financial services sector because fraud is being allowed to run rife, that is a massive threat not just to that industry but to our entire economy. We really do need to tackle economic crime, face it head on, and make the kind of changes that my right hon. Friend and the hon. Member for Thirsk and Malton have argued for, to protect not just the customers of these services but the entire economy.