Leaving the EU: Consumer Protection

Yvonne Fovargue Excerpts

Tuesday 10th October 2017 Westminster Hall

[Yvonne Fovargue (Makerfield) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I congratulate the hon. Member for Chelmsford (Vicky Ford) on securing the debate and on her obvious passion for consumer issues.

There is often a good deal of complacency in this country when it comes to consumer protection. We often take it for granted; we only really think about our rights when we need to enforce them or seek compensation, and we expect it to be there. This country has quite a good record when it comes to consumer protection law. After all, did we not invent it in the 1970s, at the same time that we established the Office of Fair Trading? That might be a bit of an exaggeration, but we are highly regarded internationally for our consumer protection initiatives and—most pertinently in this debate—we have had an important influence on the scope of EU consumer protection legislation over the decades of our membership.

On many occasions, we have gone even further than the EU has required, as with the right to reject a product. As the consumer body Which? has pointed out, the limit is 30 days here, while the EU directive requires only 14 days. That is all very good, but as investment advisers like to warn, “Past performance is not an indicator of future results.” Many people are worried that the post-Brexit era will give us less to crow about. Certainly, many consumer bodies are worried that we could see a real watering down of consumer rights. It is not just consumer bodies that are worried: the Lords EU Justice Sub-Committee, in its ongoing inquiry on the subject, has observed that there is now a shadow hanging over consumer rights, with the Government’s approach to negotiation serving to

“cast doubt over the continued application of this significant body of EU law that protects the consumer rights of millions of people in the UK.”

Some observers have taken comfort from the European Union (Withdrawal) Bill, which will transfer all directly applicable EU law on to the UK’s statute books. But what does this guarantee? The Government’s stated intention is that there will be no loss of protection while we remain in the EU, but that only gives us until March 2019, or a little longer if transitional arrangements are made, and what happens afterwards is uncertain. Will the various protections be unpicked over the coming years, perhaps to secure favourable bilateral trade agreements with countries that value consumer protection less highly than the EU? Or will they be reduced in a misguided belief that business simply regards consumer rights as barriers to trade and red tape? We must avoid that race to the bottom at all costs.

Ministers have not made enough effort to reassure us about their long-term aims. While a business forum has been established with the likes of the British Chambers of Commerce, the Confederation of British Industry, the Institute of Directors and others, there is no such equivalent when it comes to consumers. There are many expert consumer bodies out there, including Which?, Citizens Advice and MoneySavingExpert, but they do not feel that they are being properly consulted on what is needed after Brexit. Will the Government now commit to establishing a working group with these bodies and with legal services groups such as the Law Society?

We need a real commitment to putting the consumer at the heart of the Brexit negotiations. That commitment is all the more necessary because it is a question not just of domestic rights, but of international ones, as we have heard. The critical issue for many consumers is how they will be protected when they buy goods from the EU, as they often do when they use internet sites such as Amazon—the 1974 protection is outdated on the credit card rule for internet purchases—or when they are travelling or holidaying abroad and want to hire a car or rent a hotel room.

What are the Government doing to ensure those reciprocal and cross-border rights? There is much discussion in the EU negotiations about people’s right to live and work in the EU and the right for EU residents to live and work here, but precious little about cross-border consumer rights. We have heard about mobile phone roaming fees, which were recently capped, and the EHIC. We have to secure these rights post-Brexit. They have been hard won. We cannot lose them.

The issue of reciprocity and cross-border rights must be an absolute priority, because this is the area where there is most uncertainty. At the moment, UK citizens are protected by various EU legislative measures when buying goods and services, such as the consumer rights and ecommerce directives, but after March 2019 that protection will not be automatic. I agree that we should look at these rights. We need to ensure they are updated to face the modern world. Unless agreements are reached with the EU, there is a real risk that consumers might not be able to enforce their rights in other member states. I hope we will not return to the days when the streets of Spain were more like the wild west, peopled by timeshare cowboys. When I was at the citizens advice bureau, I had a client who had bought three timeshares, one after the other, because the sellers of the first two had assured him that the agreements were cancellable. He ended up with three timeshares, having to negotiate Spanish law.

Some of these cross-border protections will depend on the UK’s continued co-operation with Europe-wide agencies, such as the European Food Safety Authority, the European Aviation Safety Authority, as well as the CPC, which is vital in detecting and stopping illegal commercial practices. We have collaborated well in the past: problems have been highlighted and enforcement has been co-ordinated. We must ensure that UK consumers continue to benefit from, and have confidence in, the high standards guaranteed by working with them. It would be good to know what the Government are doing to ensure that such collaborative work continues and whether they are working towards establishing a mutual recognition agreement on standards.

Enforcement is the watchword. Rights are of little use unless they can be enforced. Local trading standards officers are the foot soldiers when it comes to ensuring that unsafe counterfeit goods are stopped at the point of entry, but their vital work has been greatly undermined by funding cuts, as pinpointed in last year’s National Audit Office report. EU withdrawal will naturally add even greater complexity to their work. If they have to inspect every truck coming from the EU as well as those coming from outside, there will be a complete blockade of our ports. The Government must ensure that trading standards work is properly funded and that officers can continue to work closely with their international counterparts. For example, questions remain over the future of cross-border safety alerts via Rapex, which covers dangerous non-food products, and access to the CPC, which has already been mentioned. If nothing is done, we could be facing a genuine crisis as vital surveillance and enforcement are pared back.

As I said earlier, this country has a proud record on consumer protection law, but there is real danger that it could be weakened as we leave the EU. None of us would want to see those hard-won rights negotiated away. As the hon. Member for East Dunbartonshire (Jo Swinson) said, it is not just about ethics; it is also good economics. Consumers spend £100 billion in the UK. They are the vital ingredient of business success. If they are not confident that the contracts will be fulfilled or that they can get redress if things go wrong, they will be far less willing to enter the market in the first place. After all, who are the end beneficiaries of trade agreements and fundamental to their success? Consumers. Unless they have the confidence to buy goods and services knowing that they are protected, any trade agreement is not worth the paper it is written on.