Clause
2
The
territorial
committees
Question
proposed, That the clause stand part of the
Bill.
Jim
Fitzpatrick:
The clause provides for the territorial
committees to exercise virtually all the functions of the new council
on its behalf in relation to the territory for which each is
established. In the case of Northern Ireland the functions of the
territorial committee will be confined to postal service matters,
because the General Consumer Council for Northern Ireland already
covers the consumer interest in other markets.
In addition, the clause provides
for co-ordination between the committees and the new council in
relation to the carrying out of the council’s functions by
allowing the council to impose restrictions or conditions on the
exercise of functions by the territorial committees. The new council
may also give general or specific directions to the territorial
committees on the exercise of any function by the committees. The
committees will also have other functions, including the provision of
advice to the new council about consumer matters in the relevant area
or the exercise of its functions to the extent that they affect that
area, and any other purposes that the new council determines under its
powers.
Mr.
Prisk:
I am grateful to the Minister for outlining the
character and scope of the clause. As he said, its powers and functions
reflect the debate in another place, where the Government tabled some
amendments that shifted important functions to the devolved territorial
committees. Indeed, on Report, the noble Lord Truscott, speaking on
behalf of the Government, said:
“There are very few
instances where the functions of the council are not exercisable by the
territorial committees”.—[Official Report, House of
Lords, 30 January 2007; Vol. 689,c.
133.]
The Minister in effect
confirmed that in his opening remarks.
The interesting point is that,
in one sense, the argument in favour of a sectoral merger into a
unified body to deal with all consumer matters has nowbeen
dissipated by the establishment of territorial committees, notably in
Scotland and Wales. As we have heard, many of the council’s
functions and roles will not be exercised by the council per se, but by
those committees. Clearly the committees will—quite
understandably—develop their own views, and perhaps their own
procedures and approach to issues, not least to reflect the fact that
there is, for example, a different legal system in Scotland. No doubt,
the territorial committees’ views, approaches and procedures
will start to diverge. Does the Minister recognise that the change made
to the Bill in another place is of great significance to the operation
of the council? What is the Government’s view of that potential
for divergence? Do the Government regard that as positive and good; do
they take a neutral view; or will they be concerned if that divergence
grows too far?
Does
the Secretary of State for Trade and Industry intend to interact with
the territorial committees, or will it ultimately be a matter for the
Secretaries of State for Wales and for Scotland? What role, if any,
does he envisage the devolved assemblies having in relation to the
territorial committees? I recognise that there could be many positive
strengths to the provision, but what is important is that the character
of the Bill, since it was first published in another place, has changed
in quite important respects. It would be helpful to know what the
Government’s view is on that
matter.
Lorely
Burt (Solihull) (LD): We welcome the clause. The remit of
the territorial committees appears to have been greatly strengthened
from what was originally proposed in another place. We are very pleased
about that, but we make the point that the word used in the
clause is “may”. Although the territorial committees may
be able to exercise these functions, there is no compulsion for them to
do that. At least we welcome that fact that they could be reasonably
expected to exercise those functions, and for that we are grateful to
the Government.
Jim
Fitzpatrick:
The hon. Lady has outlined the
Government’s comfort zone in this respect. We must remember that
there will be a national work programme that we expect the new council
to be able to reflect across the country.
To answer the question asked by
the hon. Member for Hertford and Stortford, the clause reflects the
Government’s amendments on Report in the House of Lords
specifically to provide functions to territorial committees on the face
of the Bill. The original draft provided the new council with
discretion to delegate functions to territorial committees. The new
draft has been warmly welcomed by the Scottish and Welsh consumer
councils. The Government are relaxed; we do not say that there is any
threat to the efficient working on behalf of the consumer and we are
not exercised at all by the fact that these changes have been made and
accepted in the Lords after
debate.
Mr.
Prisk:
I am grateful to the Minister, and that is a
helpful answer. In terms of accountability, does he envisage, that the
Secretary of State for Trade and Industry would deal solely with the
council? If a problem arose with one of the territorial committees, who
would deal with
it?
Jim
Fitzpatrick:
That is a matter for the Secretaries of State
and for the devolved assemblies. There would be consultation, and
arrangements for communication, but ultimately, the new NCC will be
responsible for the work programme, and it will be accountable as
outlined in the
Bill.
In respect of
the hon. Gentleman’s question on divergence of territorial
committees, the new council’s powers will ensure coherence and
co-ordination. As reflected by our acceptance and
tabling of amendments, we believe that it is important that there are
territorial committees for Wales, Scotland and Northern Ireland. The
Bill deals with consumer issues, which are not in general devolved.
Accountability remains with the national body and with the Secretary of
State.
Question put
and agreed
to.
Clause 2
ordered to stand part of the
Bill.
Clause
3
“Consumer”
and “consumer
matters”
11.30
am
Mr.
Prisk:
I beg to move amendment No. 2, in
clause 3, page 2, line 43, leave
out subsection
(3).
The
Chairman:
With this it will be convenient to discuss the
following amendments: No. 70, in clause 3, page 3, line 3, at end
insert—
‘(ab) goods and services include those
provided by means of the
internet;’.
No.
4, in
clause 3, page 3, line 4, leave
out paragraph
(b).
No. 3, in
clause 3, page 3, line 6, at
end insert—
‘(d) a person
who purchases, uses or receives goods or services for the purpose of
their own
business.’.
No.
71, in
clause 19, page 11, line 10, at
end insert—
‘, including the
right of online consumers to online complaints
mechanisms.’.
No.
72, in clause 37, page 21, line 33, after ‘description’,
insert ‘, including online
consumers’.
Mr.
Prisk:
I will consider amendments Nos. 2, 3 and 4
together, but I confirm that they are all probing amendments, with
which I hope to clarify the purpose of the
legislation.
I draw
the Committee’s attention to amendmentNo. 2, to clause
3 on page 2. I will go quickly through the specifics and then the
related arguments. The amendment would strike out subsection (3). My
purpose is to clarify exactly how the Government define “a
future consumer”. An existing consumer is
entirely understandable, obviously, and one
understands why future consumers must be a consideration, but the worry
is that the resources of the council might be used to try to anticipate
people who might be consumers when there are more pressing and emergent
issues. I will be interested in the Minister’s
views.
Amendment No. 4
also relates to clause 3, but on page 3, and would leave out subsection
(4)(b). Again, we seek clarity. Hon. Members can see that subsection
(4)(b)
says:
“‘goods’
include land or an interest in
land”.
My
understanding is that, in law, “goods” has a distinct
meaning. I refer to the Sale of Goods Act 1979. But, goods as defined
here—namely,
including
“land or an
interest in
land”—
appears to
be different. Could the Minister explain the difference and indeed the
rationale? I ask that for perhaps one reason, although there are more,
which I suspect others will be able to identify.
Given that the reference to an
interest in land must, presumably, mean a financial interest, is there
not a prospect of conflict in the Bill? Someone losingout from
a property transaction could, as the Bill is currently drafted, seek
redress both under part 2, as a consumer, and under part 3 through the
estate agents scheme. That is a potentially conflicting message. I am
also interested to know whether the Government believe that a good
includes an interest in land, which I think would be a change in many
people’s
perceptions.
Lastly,
amendment No. 3 would insert a new paragraph into subsection
(4):
“(d) a
person who purchases, uses or receives goods or services for the
purpose of their own
business.”
The reasoning
is very simple: expressly to include and identify in the Bill small
businesses—whether sole traders or limited
companies—as consumers. Conservative Members, and I am sure many
other hon. Members, are keen to see small businesses recognised as
consumers; sole traders will be, because they act as individuals, but
there is a grey area.
Mr.
Tom Watson (West Bromwich, East) (Lab): I read the
amendment with some interest. As I read the Bill, the National Consumer
Council will not be prohibited from representing business consumers,
but amendment No. 3 would oblige it to represent them. That strikes me
as perhaps taking away from the work already done by the excellent
Federation of Small Businesses and the CBI. Has the hon. Gentleman
received representations from the Federation of Small Businesses? It
would be a shame if his amendment undermined its
work.
Mr.
Prisk:
The hon. Gentleman is right that our deliberations
need to be appropriate. That is why I began by saying that these are
probing amendments. I am concerned with ensuring that the legislation
is clearly expressed and that the Minister’s intentions are
clarified, so that we are clear that the Government regard small
businesses, whether incorporated or not, as having rights similar to
those of individuals. A classic example would be a small company that
faces the loss of its electricity supply. Does the Bill expressly
ensure that that small business has the same rights of redress as an
individual might? That is what I seek to
ensure.
Mr.
Watson:
This is an important probing amendment. I
understand the point that the hon. Gentleman is trying to make, but I
am concerned that we would inadvertently duplicate the work of other
organisations. I am interested to know whether he consulted the
Federation of Small Businesses before the amendment was
tabled.
Mr.
Prisk:
I talked to the Federation of Small Businesses at
its national conference in Belfast. Several members represented to me
their concern about the issue, which is that, sadly, small businesses
do not often have the opportunity to be regarded as in the same way as
a consumer. Similarly, I was at the British Chambers of
Commerce’s annual conference yesterday, where various chambers
expressed their concern to ensure that their members are properly
represented. The Institute of Directors has raised such concerns with
me as well.
The hon.
Gentleman’s concerns are understandable, but I want to ensure
that the Minister makes it clear in his reply that he regards, as I do,
the rights of the small business in this respect to be just as
important as those of the
individual.
Stephen
Pound (Ealing, North) (Lab): My right hon. Friend the
Minister compared himself and my hon. Friend the Member for Birmingham,
Hall Green to Butch Cassidy and the Sundance Kid. I recall that that
film ended in a hail of bullets with both of them dying, but not before
one of them had had the great pleasure of entertaining Katherine Ross
on a slow-moving bicycle, so there are always compensations. The hon.
Member for Hertford and Stortford has lowered himself from the high
moral pedestal that he occupies by daring to compare my right hon.
Friend to a diminutive, cross-dressing Glaswegian chanteuse called
Janette, one of the Krankies. I tend to think of the two of them as The
Proclaimers, wearing Arran sweaters.
I rise not to make some obscure
reference to Scottish folk duos such as The Humblebums, but to oppose
amendment No. 3, to which the hon. Member for Hertford and Stortford
just referred. I do so in the spirit in which the probing amendment was
moved; anyone who has had anything more than a cursory glance at the
Bill will quickly recognise that it is a consensual Bill. Quite simply,
we are seeking to do what all parliamentary representatives should do,
which is to represent those who need the support ofan agency.
With reference to the duopolies, it is unfortunate that I should be
praying in aid David and Goliath later on.
In opposing the amendment, one
has to ask why consumer organisations exist. They exist because there
is an imbalance of knowledge and power between business and consumers
and because consumers are unable to mobilise their interests in the
same way as businesses. It can be something of a David-and-Goliath
battle, as the Bill recognises. Consumers need a powerful
advocate.
Mr.
Prisk:
Will the hon. Gentleman give
way?
Stephen
Pound:
I am just getting into my stride, but of course I
will.
Mr.
Prisk:
I am grateful to the hon. Gentleman. As he
will have noticed, the amendment refers particularly to “their
own business”, so it is intended to apply to owner-managed
businesses. Does he recognise that such businesses sometimes face a
David-and-Goliath battle when dealing with some large utility
companies?
Stephen
Pound:
The hon. Gentleman makes a good point, which segues
with the point made earlier by my hon. Friend the Member for West
Bromwich, East. We have an existing imbalance. My hon. Friend mentioned
the CBI and the Federation of Small Businesses; there is also the Small
Business Service. There are agenciesto assist that sector. It
would inevitably confuse the purpose of the Bill, which is about
consumer protection, if we were to widen the scope and definition of
the wording in such a way. If agencies exist to support and advise, so
be it. If we wish to bring them within the ambit of the Bill, we can do
so. However, that is not what is being proposed today; this is about
consumer protection.
Lorely
Burt:
Is the hon. Gentleman saying that, as he understands
it, small businesses will not fall within the remit of the Bill?
Although, as he and other Labour Members say, small businesses are
represented bythe Federation of Small Businesses and its
ilk—organisations that are funded by their members—are we
going to deny small businesses the representation of national bodies
that are paid for out of taxpayers’
money?
Stephen
Pound:
Earlier, the hon. Lady structured an exegesis
around the word “may”. The new National Consumer Council
will, indeed, be able to represent such businesses, but that is not its
principle duty under the Bill. We certainly do not seek to exclude
anybody—the Bill is a model of inclusion—but it also
recognises specialisms and existing structures. We
do not wish in any way to cut across the bow of people such as the
excellent Stephen Alambritis of the FSB.
My point is that by
establishing the new NCC on a statutory footing we hope to level the
playing field. Businesses are consumers too. They purchase goods and
services; they heat and light their offices; theysend post to
each other—occasionally, it arrives—[Interruption.]
I am sorry, Mr. Weir. A basilisk stare from my hon.
Friend the Under-Secretary has almost turned me to stone. What I should
say is that, under this Government, the post always arrives and it is
always welcome.
It is
important for businesses of all sizes, like individuals, to have a
voice and a means to put matters right and to obtain redress when
things go wrong. It is recognised that a sole trader might well suffer
many of the disadvantages of the ordinary consumer. However, most
businesses are in a different position from that of members of the
public.
James
Duddridge:
This is indeed a probing amendment, and it
refers to someone’s own business. Initially, I thought that
businesses included large companies such as ICI. However, as my hon.
Friend the Member for Hertford and Stortford pointed out, the wording
is “their own” businesses. Would the hon. Gentleman be
reassured if the Government tabled an amendment that referred only to
sole traders, rather than one encapsulating all small
companies?
Stephen
Pound:
It is possibly a measure either ofmy
naivety or of my complete trust in this excellent Government that I
will always be reassured by any amendment that they table at any stage.
However, I can already imagine the confusion that would exist if we
were to seek to define the role of sole trader. We are not talking
about Del Boy with a barrow and a three-wheeler in Peckham. It will be
extremely difficult to define that role in the Bill. If I can make a
little progress, the hon. Gentleman will understand where I am trying
to get to.
As has
been said by my hon. Friend the Member for West Bromwich, East,
businesses already have effective representative organisations. In
addition to those that have been mentioned, there are trade
associations. We have mentioned the CBI, the FSB and the Small Business
Service. Like many, I was surprised to hear Lord Truscott
say—with some enthusiasm—in the other place that the new
NCC, which will be funded, let it not be forgotten, by the taxpayer,
could play a role in representing the interests of business consumers
alongside those of ordinary consumers.
As I said in response to the
intervention by the hon. Member for Solihull, nothing in the Bill will
prevent the new NCC from representing the business consumer, but there
is no obligation on it to do so. I am grateful for the briefing that we
have received from people such as the excellent Helen Newton of the
existing National Consumer Council, which clarifies that
point.
11.45
am
The new
organisation will decide which consumers to represent, in which areas
and by what means. As an independent body, it is right that it has that
freedom of
choice. However, when making decisions about its work plan, the NCC will
look to these debates tohelp it to decide which course to
steer. That is whyit is important that we put down these
points of clarification now, and I am sure that the Minister will
clarify this important matter in his summing up. Surely, the principal focus of
the NCC, put simply, must be to represent the interests of ordinary
consumers and those of vulnerable consumers in particular. That must be
the overriding purpose behind the whole architecture, structure and
thrust of the Bill. Frankly, that focus is what is needed most, and I
doubt that that is too contentious. To command public confidence and
legitimacy, it is essential that the NCC has a clear sense of purpose.
There cannot and must not be ambiguity, which is why I am worried that
there could be a muddying of the waters if we start to try to widen the
ambit of the measures that we are proposing.
Whom would the public
think that the NCC was defending if the same businesses could, on the
one hand, have redress sought against them, while on the other hand
seeking redress? Builders, plumbers, second-hand car salesmen,
mechanics and the like often cause consumers some unhappiness. There
may well be occasions—not in my own case, obviously—when
the interests of consumers and small businesses overlap, but there may
also be times when those interests are in direct opposition. That would
certainly cause some confusion in the minds of the public.
For example, the NCC has
recently called for the abolition of quantity controls on taxis, which
cause longer waiting times but protect the incomes of taxi drivers. So,
on the one hand, there are the interests of the consumer, as the
passenger; on the other hand, there are the interests of the sole
operator of the cab. The NCC cannot fight in all directions at once and
nor, frankly, should
it.
One implication
should be placed on the record. To be an effective advocate, the NCC
will need to represent the consumer interest at local, national and
international levels, in all forums, acting alone and through
affiliations with international groups such as BEUC—I know there
is a “business”, a “European” and a
“consumer” in there, although I cannot remember exactly
what it stands for, but I know that my right hon. Friend the Minister
is familiar with it—and Consumers
International.
Quite
rightly, those organisations maintain strict membership rules.
Unsurprisingly, since they are consumer organisations, membership is
not open to organisations that represent the voice of business. So
those pillars are already in place. If the NCC were excluded from those
organisations, as it might well be if we were to widen its ambit under
the amendment, its effectiveness could be heavily
compromised.
Membership
of those groups has enabled the existing NCC to campaign magnificently
at European level and more widely on issues such as intellectual
property; the unfair commercial practices directive, which many of us
have spent an evening reading with great enjoyment; the marketing of
food and drink products to children, including, I need hardly add,
nutrient profiling and simplified food labelling, to name but a few.
The NCC has worked on all those campaigns, in partnership with bodies
such as BEUC and Consumers International, and frankly, they would
be severely jeopardised if the new body had to represent business
consumers, which would prevent it from joining such consumer
organisations. I have
no malice against the hon. Member for Hertford and Stortford; he and I
have sailed the deep oceans of the world together, and we have bonded.
He is a good and decent man, and I know what he is trying to do; but
equally, I would urge the Committee and the Minister to recognise that
there is the potential for a confusing ambiguity if we were to include
the business sector within the ambit of the Bill. For those reasons, I
hope that the Minister and the Committee will resist the
amendment.
Lorely
Burt:
Follow that, as they
say.
If I could just
pick up on amendment No. 2 and the idea of excluding future customers
from the remit of the Bill, the Liberal Democrats completely disagree
with that. We do not see why it should be necessary to restrict the
remit in any way, because the Bill already allows a great deal of
discretion for those carrying out its provisions. The Minister may wish
to explain that in a little more detail. Indeed, I take the point made
by the hon. Member for Hertford and Stortford: there may be more of a
probing element to the amendment than anything
else.
Amendment No. 4
would specifically exclude
“land or an interest in
land”.
Again, we are
unsure why that should be excluded. We look forward to hearing the
Minister’s comments. Amendment No. 3 is about including business
in the remit of the Bill in respect of purchasing goods and services.
In response to the erudite comments of the hon. Member for Ealing,
North, I have already raised one or two concerns about that. We feel
strongly that businesses are consumers too. We look forward to the
Minister’s confirmation that businesses of all sizes, but
particularly small businesses and small traders, are included in the
Bill’s remit.
I
should also like to say a word about amendments Nos. 70, 71 and 72.
Although there has been no discussion on them yet, I assume that they
are probing amendments. I am sure that the Minister will say that
purchases on the internet are automatically included in the Bill.
Nevertheless, the hon. Member for Gateshead, East and Washington, West
is right to emphasise the importance of internet purchases, because of
the lack of security that many people have experienced when buying
goods and services online. There is a huge problem with regulation on
the internet. I shall be interested to hear what the Minister has to
say about how we can make people who buy goods and services on the
internet more
secure.
Mrs.
Sharon Hodgson (Gateshead, East and Washington, West)
(Lab): May I, too, say what a pleasure it is to serve under
your chairmanship, Mr. Weir? I am pleased to be able to
serve on this Committee, to scrutinise such an important Bill, which I
am sure will give better consumer rights to every person in this
country.
I should
like to speak in support of my amendments Nos. 70, 71 and 72. Their
purpose is to put a spotlight on what is happening in the world of
online trading, giving us the opportunity to address a problem that is
emerging for consumers in this country. What I want to see is very
simple: consumers who purchase goods and service online should able to
complain online when things go wrong. These amendments would set down
explicitly that the Government and the newly established National
Consumer Council will make it a priority to resolve the inconsistencies
of the rights available to consumers online. That is why I am pleased
to have the support of the National Consumer Council, which
says: “It
should be as easy for consumers to make a complaint or to redress poor
customer service as it is to make a purchase. Consumers do have power
and they can do their bit by not settling for second best and sticking
to their guns on the standards they
expect.”
The
internet is clearly a fantastic tool, which is transforming peoples
lives. At the same time though, it is beginning to run away from
existing legislation. A failure to address that would leave us open to
the risk of damaging long-term consumer confidence in online markets,
and I am sure that no one wants to do that. More and more people have
access to broadband and are buying online. About half the population
are involved at present, although that is set to increase, as are the
connection speeds, which will in turn encourage more people to use the
internet.
It is easy
enough to click and buy a flight, a fridge or flowers for a friend.
Companies go out of their way to set up websites and encourage people
to order online, but many are not making it as easy to seek redress and
complain in the same way. Not only will they not allow online
complaints, but existing protection for the online consumer is very
fuzzy. Who pays if someone needs to send a product back? Which country
is the company that someone is purchasing from based in? When people
just bought goods in a shop and something went wrong, they could simply
pop back to the shop, see the manager and be compensated if the shop
was at fault. Now, they often have to navigate through a thicket of
premium-rate numbers and overseas call centres. Most decent retailers
probably either already have such a complaints system, or understand
that it is the smart way to attract and retain customers, but others
need to be obliged to do the right thing—and I hope that Michael
O’Leary is listening.
I was first alerted to the need
for legislation to look at online trading by people’s experience
of Ryanair—although it is not the only culprit—which
trades online but absolutely refuses to set up an e-mail for customers.
Instead, it says that people should phone a number that costs 10p a
minute, or write a letter or fax the company in Dublin. Ten pence a
minute might not sound a lot, but if people try to call it, they could
be online for about 40 minutes before they even get to speak to a human
at the other end, if at all. Ryanair refused even to take an e-mail on
this issue from me. It is no surprise that Ryanair has been described
as the irresponsible face of capitalism.
This led me to table early-day
motion 2643 last year on the Ryanair complaints mechanism, and I was
pleased to see that it attracted cross-party support and had nearly 60
signatures. The early-day
motion
“notes that
Ryanair is one of the main providers of cheap flights, which are
popular with consumers; regrets that Ryanair has no plans to provide an
email address for such purposes and directs its customers to use either
a telephone number”—
at a cost of 10p a
minute—
“or to
post or fax complaints to its head office in Dublin; calls upon
online-based companies such as Ryanair to improve the ability of their
customers to communicate with the company after sales by at least
publishing an email address for this purpose so that redress for poor
service is made less complicated and expensive”.
Given the company’s point-blank
refusal to play ball, my early-day motion took a drastic step in
noting,
“that Caroline
Green, Head of Customer Services for Ryanair can be contacted at
greenc@ryanair.com and that the geographical telephone number for its
head office in Dublin is00 353 18121212, which is cheaper than
its high tariff 0871
number”.
When
my office later phoned to double-check the company’s position on
establishing an e-mail, it refused to talk and insisted that I write to
Dublin. My e-mails still go unanswered; so, Michael O’Leary, if
you are listening, please get your act together and take e-mails.
Michael is, of course, free to e-mail me anytime at
hodgsons@parliament.uk, to say that he will set up an e-mail address. I
can assure him that his e-mail will not go
unanswered.
The
Chairman:
Order. I think that the hon. Lady has made her
point, and I am sure that she can send Mr. O’Leary a
copy of the report of the debate. I ask her to come back to the terms
of the amendments.
Mrs.
Hodgson:
Thank you, Mr. Weir, and I thank the
Committee for its patience on this matter. If the internet is meant to
make life easier, its benefits must be a two-way street. Ryanair could
not function without using online sales, and it should not function
without utilising online customer services. That is the worst possible
practice. Customer service should never be seen as an overhead, but as
an integral part of a company’s relations with the consumer.
People would not mind paying a few extra pence if they knew that they
could receive a quality service if things go wrong.
Last year, the NCC
produced an excellent report called “The stupid company: how
British businesses throw away money by alienating consumers”. In
one part of its analysis, the report
comments:
“The
stupid company appears distant from consumers and deals with them in a
clinical and sometimes uncaring manner. People detest impersonal
communications, and almost everyone complains about call centres,
automated telephone systems and cold calling. Consumers react
particularly badly when companies do not take ownership of a problem,
or where an individual inquiry is met with a computerised reply that
ignores the particular
circumstances.”
Accepting
these amendments would mean that we could seek to accept a rule of best
practice. Companies cannot maintain an ephemeral online
presence—“here when you want, gone when we
don’t.” The purpose of the Bill should be praised; it is
a good piece of Labour legislation that will give the little people the
chance to stand up to the big boys. It is a chance to square the
playing field and to ensure that consumers get the information that
they
need.
12
noon
Clearly, the
fact that the online world without borders and territories makes
enacting catch-all rules difficult and complex, and I am not suggesting
that we
should do that. There are already some EU provisions
in place—hopefully, more are to follow with theunfair
commercial practices directive—which would harmonise rights of
European online consumers, but Britain should be proud to lead the way.
We are proud to be doing so on climate change, with that leadership
achieved by taking bold steps and coercing companies to do the right
thing. We should be doing the same for online consumer rights. I am not
the only one who feels that way: I am sure that if anyone in this room
were to ask a colleague or friend, they would be able share tales of
frustration when things go wrong after purchasing online. The NCC is the focus of much of
the Bill, and it is clear that it feels that anything that makes it
easier for consumers to get what they deserve by complaining should be
welcomed. It seems that at present, nowhere is the need for greater
consumer rights so clear as in cyberspace. Any good Government should
enable their citizens to empower themselves, and setting out a clear
specification that the Government intend to do just that for those who
purchased goods and services online would be an example of good
governance from a good Government. Establishing lasting protection
forthe consumer as the internet age reaches maturity is the
reason that I commend the amendments to the
Committee.
Mr.
McCartney:
I will give a comprehensive reply to all the
amendments, and the reasons why I will resist them. I know from my
experience of being an Opposition spokesperson and a Back Bencher for
my first 10 years in Parliament how difficult it is to table probing
amendments. By their nature, they are rather lax in their wording. As a
consequence of that, three out of four of the amendments tabled by the
Conservatives are extremely anti-consumer in their individual
consequences and in the intellectual input to what is being proposed.
The other amendment makes a genuine, reasonable point. I hope to cover
all the Opposition amendments, and I will also deal with amendments
Nos. 71 and 72, tabled by my hon. Friend the Member for Gateshead, East
and Washington,
West.
I say to my hon.
Friend the Member for Ealing, North that I take his contribution in the
spirit in which it was intended. I shall not follow his line of
argument, but we both reach the same conclusion that we will resist the
Opposition amendment. I am not goingto do anything other than
support the concept ofsmall businesses being treated as a
consumer in all circumstances. I shall explain the legal basis of that
in a moment. I also hope that I shall comprehensively cover the points
made by the hon. Member for
Solihull.
The Bill
delivers real benefits for consumers with a new NCC, with a new remit
and statutory powers and duties for the first time. A new statutory
redress scheme for gas, electricity and postal services will resolve
consumer complaints, not just arrange for them to be handled. A key
objective of the Bill is to equip thenew council with the
flexibility to act on behalf of consumers today and to anticipate
consumers’ needs in the months and years ahead. Of course, that
flexibility is coupled with responsibility and accountability. The new
council will need to be able to identify and consult
on its priorities and it will need to be transparent, to account for
what it has done to advance consumers’ interests. Some of the Opposition
amendments would reduce flexibility, cut down the scope of the new
council and what it can do for consumers, and would prevent it from
looking at the future needs of consumers. I shall resist those
amendments, and others that try to undermine the new council and its
pursuit of consumers’ interests.
Amendment No. 2 would have the
effect of excluding future consumers from the scope of the new
council’s remit. We are naturally keen to ensure that, when
undertaking any of its functions, the new council should aim to
consider the long-term implications for consumers. The amendment would
not be beneficial to consumers. A responsible consumer body will need
to be able to balance short-term issues against longer-term consumer
benefit. A short-term focus on low prices in the market may not serve
consumers well if it leads to under-investment or lack of competition
and choice in the future. That is why the provision is inthe
Bill.
Excluding future
consumers would limit the flexibility of the new council to anticipate
changing customer pressures. That is why we seek flexibility. The new
council must be able to weigh the current position for consumers
against a future position and the impact of what we do now as a society
to address matterssuch as environmental conditions that will
affect consumption in future years. It is critical that the NCC has the
capacity to take account of all trends and the impacts—positive
or negative—on the rights of consumers, and to participate and
help with policy submissions. The NCC must be able not only to focus
but to help to fashion policy in future years. We do not want an
organisation that is just an advocacy body, which tends to deal with
situations when they break down and there is a need for redress. We
want a body with the ability to give the present and future Governments
and Parliament its best advice on the marketplace and on the impact of
changes in the marketplace on consumers. That is very
important.
Amendment
No. 3 purports to enable the new council to represent the interests of
business consumers, which is appropriate and necessary. However, the
amendment is not required, because the new council can already
represent business. Clause 3 provides for a “consumer”
as
“a person who
purchases, uses or receives...goods or
services”,
which includes
business. The standard legal interpretation of “person”
includes persons corporate or incorporate. In other words, the
definition of a consumer in the Bill already adequately includes
business consumers. That goes back to my hon. Friend the Member for
Ealing, North’s point about the taxi driver.
For the record, I once
represented London taxi drivers in my role at the Transport and General
Workers Union—I remember it fondly. Despite all the legitimate
complaints made about taxi drivers, who have to respond about their
conduct to the licensing authority, it is also true that taxi drivers
seek mortgages, purchase and sell property, and have to deal with
issues such as electricity costs and water. There is
a legitimate role for a business to conduct itself as a business as well
as, at the same time, having rights as a consumer. That is why the
provision is
important. I hope now
to give the legal explanation. From a personal point of view, I
consider all of us here as small business people in our own right: we
employ people and use goods and services to represent
effectivelyour constituents. From time to time we Members of
Parliament come across a problem with our own facilities, goods or
services. It is very important for there to be absolute clarity that
small businesses—or businesses per se—have the right to
utilise the legislation and will be able to do
so.
Amendment No. 4
seeks to exclude
“land or
an interest in land”
from
the definition of “goods” in the Bill. That would
certainly not be helpful to consumers.
[
Interruption.
] Does the hon. Gentleman want to
guess what I am going to say? But I will give way to
him.
Mr.
Ben Wallace (Lancaster and Wyre) (Con): The Sale of Goods
Act 1979 is very specific about the definition of
“goods”. That definition has remained unchanged for
nearly 30 years. Why have the Government decided to use the Bill to
extend that definition to include land, when defining
“consumer” by the consumption of services would probably
be
adequate?
Mr.
McCartney:
The hon. Gentleman should have waited for the
buzzer, but his intervention is well intended. As the law stands,
rights in land such as lease or tenancy are called “interests in
land”. That is what the law says and that is why the Bill is
designed as it
is.
Many of the most
important and expensive issues facing consumers arise from their
interest in property, so it would not be sensible to exclude the sector
from the scope of the new council. With the powers provided in the Bill
the new council will be able to investigate all the issues concerning
consumers, including house purchase, sale or letting. The new council
will be able to draw the attention of the Government to any issue that
it considers need to be addressed. Therefore, it is important that
definitions in the Bill are the same as definitions in law. The measure
is not freestanding; the Government have not put it there on a whim.
The aim is to ensure that the legal obligation that is placed on the
new NCC, and its rights of investigation, inquiry and consultation,
give it the widest possible scope to deal with the issues that
consumers will raise with it.
Mr.
Wallace:
I am not a surveyor, but I am concerned that we
might be duplicating an existing provision. We already have the lands
tribunal system to resolve disputes and investigate conflicts between
the owner or provider of land and the consumer—the tenant. Are
we not replicating
unnecessarily?
Mr.
McCartney:
No. The hon. Gentleman is mixing up a number of
issues. I am not a lawyer, but we are dealing with leasehold and
freehold, which are entirely different. Leasehold and freehold
legislation relates, for example, to the rights of a leaseholder who
has been treated unfairly under his lease, or who wishes to purchase
the lease and turn it into a freehold but meets
resistance from the owner of the freehold. There is a legislative
process to ensure that the interests of the leaseholder are
represented.
Let me
give another example. Some years ago we changed the legislation to deal
with the situation in which the freehold of entire blocks of flats in
London was held by a single freeholder, but the tenant or owner of each
flat was a leaseholder. There is a requirement in law to protect the
interests of such individuals in case, for example, the freeholder
decides to refurbish the property, so that the refurbishment cannot
damage the interests of the leaseholder or increase the capital value
of the property to the extent that the freeholder can resist the
ability of the leaseholder to purchase the freehold from him
appropriately in the marketplace. There is a legal process for appeal
and for such matters to be determined; that has been set down in
statute for many years, under Governments of both major parties. From
time to time the law is upgraded, and every time some freeholders try
to find a way around it. However, most of them do not. Many freeholders
in this country are good, legitimate, well run companies that do an
effective job on behalf of their tenants and leaseholders. The hon.
Member for Lancaster and Wyre is mixing up these measures with other
parts of property law.
We are talking simply about the
ability of the new NCC to carry out the obligations set out for it in
the Bill. It should be free to conduct research and to represent
consumers, for example. However, let us be clear that there is no
duplication in part 3. If an individual consumer has a problem with an
estate agent, he can pursue it through the redress scheme approved
under part 3—that point was well made. It is not a double
whammy. People cannot pick and choose and seek redress from more than
one scheme; they must get it through the scheme with which the company
is registered. If it is not registered, it cannot conduct business as
an estate agent.
Mr.
Prisk:
I am grateful to the Minister for that
clarification. Unlike my hon. Friend the Member for Lancaster and Wyre,
I am a surveyor. The Minister is correct in terms of long leaseholds
and the change in the relationship under property law. I think that he
is saying that the definition here includes an interest in land and
land holdings, but not of a financial character. Clearly, that would
start to drift in the direction of the Financial Services Act 2000 and
other legislation that is not within the remit of the new
council.
Mr.
McCartney:
I think that the hon. Gentleman should have
given me a tip-off that he is professionally qualified. I am an
enthusiastic amateur for the purposes of answering this debate. I do
not use that as an excuse, but it is important to separate out what we
are talking about.
We
are considering issues that are in the purviewof the new NCC.
Beyond that, there is an array of organisations and legislation that is
covered differently. The Bill has no impact on that. We are trying to
achieve clarity by establishing a process of redress through the
Secretary of State, a redress scheme or
schemes and a requirement on the organisation to be registered as a
member of such a scheme, without which it cannot operate in the
marketplace as an estate agent. There are legitimate discussions that
we may have in later debates on whether the scheme should be extended
in future years. A
consumer will not pursue redress twice through different redress
schemes in different parts of the Bill. Part 2 of the Bill enables the
Secretary of State to require energy and postal services suppliers to
belong to a redress scheme. Part 3 enables the Secretary of State to
require estate agents to belong to a redress scheme, and any complaint
against an estate agent relating to residential property will be dealt
with via the redress scheme to which the estate agent must belong. I
hope that I have explained to the hon. Gentleman what we are trying to
achieve.
Amendments
Nos. 70, 71 and 72, tabled by myhon. Friend the Member for
Gateshead, East and Washington, West, raise important issues. I also
congratulate her on tabling an early day motion just before the summer
recess last year. I hope to give her a detailed response to the points
she raised and to set out the current position in respect of issues
relating to Ryanair.
It is important that consumers
who purchase goods and services online should be able to make
complaints and to seek redress online directly and easily from the
service or goods provider. Any lack of confidence in that respect would
negatively affect the longer term health and growth of the internet
shopping market and the consumer’s willingness to engage in it.
It is in everyone’s interest that those who provide goods and
services have a clear understanding of their obligations and the
standards expected of them, and that information is available for
consumers so that if things go wrong they can effect change whether
that is redress for the consumer or a change in the company’s
policy towards the consumer, individually or collectively.
The electronic commerce
directive implemented in the United Kingdom by the Electronic
Commerce(EC Directive) Regulations 2002 requires information
society service providers to provide certain information on their
websites and on other electronic commercial communications. Information
society service providers include services normally provided for
remuneration at a distance by means of electronic equipment at the
individual request of a recipient of a service. Article 5 requires
internet providers of goods and services to provide the recipient of
the service with the name of the service provider, the geographical
address at which the service provider is established, and details of
the service provider, including his or her e-mail address, which is
very important as it makes it possible to contact them rapidly and to
communicate with them in a direct and effective
manner.
The primary
enforcement authority in respect of EU information society service
providers is the member state in which the provider has its
headquarters. In the case of Ryanair, to which my hon. Friend the
Member for Gateshead, East and Washington, West referred earlier, it is
the Republic of Ireland, but we have not left the matter there. The
Ryanair case was brought tothe attention of the Office of Fair
Trading, which contacted its Irish counterpart, the Office of the
Director of Consumer Affairs, which is giving the
matter its full consideration and has already communicated in writing
with Ryanair. I have asked the OFT to keep me up to speed with
developments. Members
of the Committee should be aware that an unfair commercial practices
directive, which will be implemented in April next year, will also
require traders inviting consumers to purchase goods and services to
provide information such as geographical addresses and a complaints
handling policy. The distance selling directive also requires traders
to provide their address, but it does not apply to transport services.
I am glad that my hon. Friend raised the issue and I will write to her
and to the hon. Members for Solihull and for Hertford and Stortford
when I receive information via the OFT about the action, if any, that
is proposed by the Irish authorities on Ryanair. I hope to be able to
answer hon. Members’ questions on the
matter.
Susan
Kramer:
Will the Minister confirm that the national
consumer council as it will be constituted will be able to look beyond
the territories of the United Kingdom and the European Union to pursue
consumer issues?
Mr.
McCartney:
I will give the hon. Lady an example. Let us
say that we were at the start of a process under the unfair commercial
practices directive and a draft proposal had been put forward by the
Commission. As well as the Government, the NCC would have the
opportunity to be consulted, and it would also consult its regional and
territorial groups. It will have the wider remit of being able to
influence not just policy direction here in the United Kingdom but all
consumer policy matters across the single market and the European
Union. That is critical because a great deal of the consumer protection
covered by amendments Nos. 71 and 72, tabled by my hon. Friend the
Member for Gateshead, East and Washington, West, is in fact provided by
the European Union.
In
short, the NCC will have the capacity—indeed, the
obligation—to make representations and to propose ideas and
suggestions. It will be able to work directly with the European
Commission on any policy direction that it wishes to take and in any
consultations on the outcome of policy direction on consumer
matters.
Mr.
Prisk:
I should have mentioned the hon. Member for
Gateshead, East and Washington, West and said that her amendments are
well intentioned. I shall not speak to them at length, but if I did not
mention them I suspect I might get an e-mail, and who knows what might
happen?
I turn to the
three amendments that I tabled. As I said at the beginning of the
debate, which has been productive and helpful, they are probing
amendments and their purpose is to help to clarify the legislation. On
amendment No. 2, the Minister rightly described the purpose of the
provision in question: to ensure
that the definition of a consumer includes a future consumer. He rightly
pointed out the need for a strategic vision, which I entirely endorse.
I am glad that we have got that on the
record. As the
Minister said, amendment No. 4 would remove from the definition of
“goods” an interest in land. I sought the
Government’s rationale for that definition, and I understand its
purpose. It was important to have that clarified because the functions
being given to the council are not of enforcement but of consideration.
As we know, and will consider under part 3 of the Bill, matters of home
ownership and so on are of great concern to consumers, so I am glad
that the Minister has clarified the
matter.
We had an
interesting debate on amendment No. 3 and I was happy that the hon.
Member for Ealing, North, made, as usual, erudite and loquacious
remarks. As always, he was able to argue what appeared to be at least
three different points of view in the same sentence—I always
admire his ability to do that. Although it is true that we have bonded
on the high seas, I think that the less said about that, the better. He
did not note that the noble Lord Truscott made it clear in the Lords
debate that the Government’s view isthat the definition
of “consumers” includes business.
Although the hon. Gentleman’s aim was
understandable, the Minister then confirmed that definition quite
clearly.
The hon.
Gentleman was absolutely right to say that the purpose of the council
should be to work for consumers, as we understand the term in common
parlance, and for vulnerable consumers in particular. My intention was
to ensure that we had a clear view that the definition should include
persons corporate and incorporate. The Minister gave us that view, and
it was an important
debate.
Mrs.
Hodgson:
I, too, thank my right hon. Friend the Minister
for his response. I feel somewhat reassured by it, and I know—I
hope that he will not take this the wrong way—that he is on the
side of the little people. The only proviso that I wish to give is on
the EC directive requiring companies to provide an e-mail address,
which is fantastic. That is the first step, and the Minister is going
to take up the fact that Ryanair is not fulfilling that requirement. I
want an online complaints mechanism so that the whole process of a
complaint can be dealt with online. Some companies provide an e-mail
address, but someone who e-mails gets a reply telling them to write or
telephone to take the process further. With my right hon.
Friend’s assurances, I am happy not to press my
amendments.
Mr.
Prisk:
I beg to ask leave to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Clause
3 ordered to stand part of the
Bill.
Further
consideration adjourned.—[Steve
McCabe.]
Adjourned
accordingly at twenty-six minutes past Twelve o’clock till this
day at Four
o’clock.
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