Let me elaborate a tiny bit on what my hon. Friend said. Net neutrality is absolutely central to the operation of the internet. The principle that there should be no discrimination between services when providing

16 Jun 2014 : Column 900

internet access is fundamental to an open net. At the moment in this country we have no legislation, but we have a voluntary industry code of practice for internet and mobile service providers. However, the problem is that as it is voluntary the companies do not have to abide by it. European Commissioner Neelie Kroes has been working on proposals for net neutrality across the European Union as part of the single telecoms package. I was disappointed that the hon. Member for Shipley did not highlight that excellent proposal from the European Union, but we do not need to wait for the European Union to have this debate or to ask the Government what they are doing, because the issue is a central one.

The possibility of amending the Bill was brought to my attention by ITSPA, the Internet Telephony Services Providers Association, which is concerned that some internet providers have an interest in refusing to carry voice-over IP services because they have a competing product. Having discussed the question with Ofcom, I am not clear whether that is happening. If it is, it should not be, and if it is not, there is a risk that it might happen, and we in this House need to address that.

The point made by the hon. Gentleman about the lack of transparency and consumer awareness is extremely concerning. There is a problem when people buy a piece of kit or take out a contract with one ISP or mobile phone provider if, in doing so, they restrict their access to some material and if there is no description or warning of that. That is clearly a limitation of their access to information on a free net.

Ofcom is working to improve the effectiveness of the code of practice on traffic management transparency. My view is that transparency is not enough and that we need rules of the game that go beyond it. I am not convinced that even if the information was on a strapline across the packaging when people bought a piece of kit or signed a mobile contract they would fully realise what it meant. This is too important to leave simply to transparency, which is why I have put my name to amendment 19 and why I support these changes.

The Minister needs to tell the House what the Government are doing proactively to preserve net neutrality. It is not enough to take a reactive stance, as the Government are on many communications issues. The Communications Act 2003 is a very good Act, but it is getting out of date and this is one example of that. That is why we were particularly concerned to have this debate in the House today so that we could find out what Ministers are doing.

It is essential that we preserve free speech on the internet and net neutrality is part of that. There is a small exception in amendment 19 to enable us to continue with child protection—again, we have cross-party agreement on the importance of child protection—but we are all agreed that we want net neutrality, with that single exception, to be the modern form of free speech.

6.45 pm

Yvonne Fovargue (Makerfield) (Lab): I add my congratulations to those of my hon. Friend the Member for Bishop Auckland (Helen Goodman) and those that I am sure you have received from Members across the House, Madam Deputy Speaker.

16 Jun 2014 : Column 901

I want to concentrate on amendments 2 and 3. I think that there is cross-party agreement that logbook loans are an anachronism. If the Government do not remedy that anachronism, it will be a missed opportunity. To leave the Law Commission time to go through the outdated legislation would take too long for the vulnerable consumers who are affected. I know that because I have been a member of the Joint Committee on Consolidation Bills and in 2010 we repealed something to do with the dissolution of the monasteries.

We cannot wait that long for the bill of sale provision to come off the statute book. It was never intended to apply to loans on vehicles such as cars and it should be abolished now. If it is not abolished, consumers need to be able to challenge it in court. I am sure that they will be supported in that by the advice agencies that brought the attention of the House and the country to the anachronism that is the bill of sale legislation.

The Financial Conduct Authority said only two weeks ago that such loans are high risk. It is considering the issue already, but while it is doing so people are taking out the loans either because they are not aware of the pitfalls or because they are their last or only resort. They put their only asset, their vehicle, on the line, pay the companies, end up owing money and still have no vehicle. They are in a worse position than if they had not taken out the loan in the first place.

I also want to mention those whom we might call the innocent consumers—those who buy a vehicle that is subject to a bill of sale. It does not show up on the HPI register, as hire purchase does, and the first they know about it is when somebody comes round to repossess the car because they are not its legal owners. They can never be its legal owners while there is a bill of sale on it and they are left with no vehicle and no money. It is about time that we considered the bill of sale legislation. A law that was passed in the 1870s should not apply to today’s consumer market and should be allowed to be challenged in the courts if not repealed immediately.

I have long campaigned on debt management companies. It has always seemed particularly perverse to me that people in debt should pay to get out of it. There are usually two reasons given by the companies for why people turn to them. The first is the lack of knowledge about the availability of free advice. Frankly, I am not surprised. I regularly get texts telling me that there is new Government legislation, that my debts can be written off and that I am entitled to payment protection insurance compensation and various other things, and debt management companies are one of the worst offenders. The Information Commissioner needs more powers to stop that misleading advertising.

There is also a lack of provision for advice. I thank the Minister for her reply to my question on that point, which said that the Money Advice Service sets its own budget. Yes, it does, but as the Government rejected new clause 6, which would have meant the increased levy automatically going towards increasing the amount of debt advice, I hope that MAS will listen to the strength of feeling on both sides of the House and increase its budget to ensure that the introduction of payday lenders into the levy will increase the total

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amount raised and that it will not simply keep it at the same level with the other people paying less.

There needs to be more funding for free debt advice. As we know, some 2.5 million people are in fee-charging debt management plans. That is 2.5 million people who, if those plans were not available, would need free debt advice. There is obviously a need for that funding. If the interest rate were to rise by only 0.5%, which is quite likely, an extra half a million people would be pushed over the edge from just about coping. It is essential that the Money Advice Service looks at the trends and asks for an increased budget.

There is also a risk that those companies may go out of business and while doing so will not pay their creditors. A company in Manchester in my area of the north-west went out of business two weeks ago. About 2,500 people who had a plan with it were left with no money. People had been paying into that company, assuming that it was going to creditors, but the company has gone bankrupt. It is time that we challenge these debt management companies. They push people further into debt and can charge 50% of what somebody owes. Therefore, if someone owes £18,000, that is another £9,000 on the debt for something that an organisation such as StepChange or a citizens advice bureau can do just as competently for free. Indeed, in many ways they will do it better because such organisations have links with other companies and, for example, will know all the remedies for insolvency. They will put forward the remedy that is best for the consumer, not best for the company. To allow debt management companies to continue without being challenged on pushing people further into debt should not be allowable, and I fervently support the amendment to clause 3.

Jenny Willott: May I add my congratulations to you, Madam Deputy Speaker? You will get bored with it soon, but at the moment I am sure it is probably still quite a novel surprise.

I share the concerns of the hon. Member for Walthamstow (Stella Creasy) about the practice of double charging by estate agents. That issue has been raised in the House a number of times and in Committee. Under existing legislation—in particular consumer protection regulations and the unfair contract terms law—as well as their own industry codes, estate agents must already make fees and charges clear for consumers. I believe that there are risks in rushing into further legislative measures and applying them prematurely, which is why a better way of addressing the issue is through estate agent redress schemes.

As the hon. Member for Walthamstow mentioned, on 7 May I met the property ombudsman and ombudsman services: property, to draw their attention to my concerns on this issue, and those raised by hon. Members in Committee and the House. Both redress schemes have agreed to monitor any complaints they receive, and more is being done. The property ombudsman has committed to producing new guidance that will put in place strict controls on the practice of charging the buyer a fee, or charges being placed on both buyer and seller, and the potential for conflicts of interest. That guidance will ensure that agents recognise their obligations under the ombudsman’s code of practice for transparency, disclosure and avoidance of conflicts of interest. If the guidance is not complied with, agents will be in breach of that code.

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Estate agents must belong to an ombudsman service, and ombudsmen have strong powers to tackle bad behaviour by estate agents. For example, they can give a financial award to the complainant or enforce obligations on the estate agent. As a last resort, estate agents can be struck off a redress scheme. Because it is a requirement on estate agents to belong to a redress scheme, if they have been struck off, they are effectively out of business and cannot continue to operate. If they continue to operate under those circumstances, it is a criminal offence.

Andy McDonald: Does the Minister accept that instead of codes of practice and all that paraphernalia going round the houses, it is fundamentally a breach of the fiduciary duty that an estate agent owes to one client if they are in discussions with another and charging a fee for the same transaction? The interests are not united; they are completely and utterly divergent. Would it not be better to say simply, “You cannot charge two contracting parties a fee for the same service”?

Jenny Willott: As I said, I met both ombudsmen in May and discussed the best way forward. As a result, they are looking at the conflict of interest, which I think is key to this issue, and at how guidance can be tightened so that the responsibility estate agents have to the buyer and seller is made clear.

Mark Tami (Alyn and Deeside) (Lab): Can the Minister tell the House the size of some of those awards and how often they are handed out?

Jenny Willott: No I cannot, but I will write to the hon. Gentleman to give him more information on that.

The ombudsman has committed to calling an early meeting of all interested parties to discuss the need for stricter controls, and I assure hon. Members that new guidance is being worked up for the industry as a matter of priority. The hon. Member for Walthamstow raised concerns about estate agents discriminating against buyers who will not take services from them—for example, mortgages and so on. Discriminating against buyers for refusing services from an estate agent is already banned and covered by the regulations.

A number of hon. Members mentioned logbook lenders. We have discussed that issue a number of times and it is clearly a matter that concerns people across the House. Responsibility for consumer credit regulation, including logbook lenders, transferred from the Office of Fair Trading to the Financial Conduct Authority on 1 April.

Yvonne Fovargue: Will the Minister tell the House how many licences to logbook lenders have been revoked by the FCA? What has happened to the bills of sale for those who have borrowed from a company whose licence has been revoked, if indeed there are any?

Jenny Willott: That responsibility has only just been transferred to the FCA, and it is working with credit companies that must register with it. I believe that those companies start registering on 1 October, which gives them time to ensure that they comply with the regulations. From that date, therefore, the FCA will start to process licence applications. At the moment it is a little premature

16 Jun 2014 : Column 904

to answer the hon. Lady’s question, but the issue will be raised later in the year and I am sure she will ask Ministers at that point.

There are concerns about the way logbook loans operate and their impact on consumers. Consumers will be far better protected under the FCA regime than under the old system. Logbook loan providers are now required to meet the standards that the FCA expects of lenders, including making thorough affordability checks and providing adequate pre-contractual explanations to consumers. They are also subject to the FCA’s high-level principles, which include the overarching requirement to “treat customers fairly”.

Stella Creasy: I know the Minister has logbook loans companies in her constituency. Given what she is saying, why will she not support our amendment, which simply states that all borrowers should be treated equally and be able to have modern consumer contracts—the sorts of things she mentioned with the FCA? Why leave a loophole for bill of sale agreements?

Jenny Willott: If the hon. Lady gives me a chance I will come to that point.

As the hon. Member for Makerfield (Yvonne Fovargue) highlighted, logbook loans have been defined by the FCA as “higher risk activities”. As such, they will be in the first phase to require the full authorisation I mentioned, and they will face closer supervision and higher regulatory costs as a result. The Government have also ensured that the FCA has a wide enforcement toolkit to take action wherever its binding rules are breached. For example, there is no limit on the fines it can levy, and—crucially—it can force firms to provide redress to customers. It also has flexible rule-making powers, so if it finds further problems, it will not hesitate to take action. Indeed, the FCA has said that it is

“putting logbook lenders on notice”

because it is concerned about that issue. Furthermore, the FCA’s new rules give it

“the power to tackle any firm found not putting customers’ interests first”.

Treasury Ministers have asked the Law Commission to look at how best to reform the Bills of Sale Act 1878. As the hon. Members for Walthamstow and for Makerfield mentioned, the legislation underpinning logbook loans is extremely old, lengthy and complex, and the Government believe that the Law Commission is best placed to undertake a thorough assessment of how to bring it up to date. The hon. Member for Makerfield raised concerns about how long the process might take and suggested that it had been kicked into the long grass. I would like to reassure her that the Law Commission has responded favourably to the Treasury’s request for the review, and will confirm its work programme in the near future .

7 pm

With regard to debt management companies, the Government recognise the importance of protecting vulnerable consumers using debt management plans. Our focus is on comprehensively reforming regulation of this sector. Like other consumer credit firms, such as the logbook loans, responsibility for regulating debt management firms has transferred to the FCA, and consumers will now be far better protected. The FCA has said that it is

16 Jun 2014 : Column 905

“unacceptable that those people who are struggling to make ends meet are being talked into unsuitable plans.”

It has raised concerns about that.

FCA rules make it clear that fees charged for debt management plans should not undermine the customer’s ability to make significant repayments to the customer’s lenders throughout the duration of the debt management plan. FCA guidance sets out that debt management firms should not allocate more than half the money received from customers in debt management plans to meeting their fees and charges from month one of the debt management plan. Once the initial fee for the arrangement of the plan has been paid, the proportion taken in fees should reduce.

Because the practice of front loading fees can make debt problems worse before they can get better, the FCA’s policy is designed to ensure that significant repayments must always go towards outstanding debts with creditors from the very start of a debt management plan. Debt management firms are now also required to signpost customers to free independent debt advice, and the FCA has also put in place binding prudential rules for debt management firms that hold over £1 million of client money to help to protect customers if things go wrong. As with logbook loans, the FCA proactively monitors the market, and it has broad powers to levy fines and to force firms to provide redress to consumers. The FCA will thoroughly assess every debt management firm’s fitness to trade as part of the authorisation process. Alongside the logbook loans, because of the risks to consumers, the FCA has said that debt management firms will be in the first phase of credit firms that have to be fully authorised.

On amendment 4, authorised persons in the financial sector are required to treat customers fairly. The property ombudsman service includes in its mandatory code of practice a specific requirement that a residential estate agent

“must avoid a conflict of interest”.

On 1 April 2013, the Government banned the payment and receipt of referral fees in personal injury cases, through provisions in part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012. That covers all the main businesses involved—solicitors, claim management companies and insurers. A firm cannot benefit through referring a consumer to a particular third party, which in effect removes the incentive on the trader to refer a consumer to a particular third party, just as the amendment would do. Breaches are subject to enforcement action by the relevant regulator and by the FCA.

The hon. Member for Middlesbrough (Andy McDonald) raised concerns about restricting access for members of the armed forces. The Government are committed to supporting our armed forces and the Ministry of Defence has worked with representative organisations of the financial services industry which have made a commitment to avoid disadvantaging members of the armed forces in the provision of products and services. If the hon. Gentleman has specific concerns, I am happy for him to write to me about those and I will pass them on to the relevant Minister, or he can contact the relevant Minister to obtain more precise details on a particular point.

The protections in the 2012 Act are strengthened further by the provisions of part 2 of this Bill. A core term that requires a consumer to use a particular third

16 Jun 2014 : Column 906

party or that limits access to advice would be assessable for fairness if it was not made prominent. Therefore, there is greater protection for consumers under this legislation.

Amendment 19 has brought out a rash of agreement across the House from some unlikely parties. The principle here is transparency. Consumers must be aware of any limitations on their service at the point of sale. They are then free to pick and choose a service that suits them. Internet service providers are already legally required—[Interruption.] If the hon. Member for Bishop Auckland (Helen Goodman) will let me finish, she may like some of the things I am about to say, even if she does not like what I am saying so far. Internet service providers are already legally required to be transparent with consumers about their traffic management practices, and industry has done a great deal of work in this area. All major ISPs, which include fixed line and mobile companies, have developed and signed up to a transparency code of practice for traffic management, requiring them to inform consumers of their traffic management practices at the point of sale. That includes any restrictions on services. The broadband stakeholder group, which co-ordinated this work, has worked with a number of comparison websites to ensure that consumers can readily see this information.

Ofcom recently reviewed the transparency code and found that traffic management policies are transparent and that the quality of information that consumers can access has improved since the code was launched. The research identified a number of areas in which ISPs could make information clearer, and Ofcom is working with industry to implement those. The Advertising Standards Authority has also published guidance to ensure that services advertised as unlimited genuinely have no data restrictions. So a great deal of work has already been undertaken jointly by industry and regulators to ensure that consumers get what they pay for and are aware of any restrictions on their service at the point of sale.

The hon. Member for Shipley (Philip Davies) raised concerns about mis-selling and unfair terms. Misleading practices are already prohibited under the consumer protection regulations, and if terms are unfair, they are not binding on the consumer. Under the Bill, all small print terms will be assessable for fairness.

Hon. Members have also raised issues about net neutrality. The UK is fully committed to an open internet and it believes that a self-regulatory approach can and does deliver this for consumers, as long as ISPs are transparent about traffic management practices that they employ, and consumers are aware of those at the point of sale.

I agree with the hon. Gentleman that traffic management should not develop into anti-competitive behaviour, as he has highlighted. We will be working with the European Parliament, the Commission and other member states to deliver a package that ensures an open, safe and secure internet. However, we do not support proposals that mean we cannot enforce our laws, including blocking child abuse images, and we are committed to protecting our children online. That includes ensuring that child abuse images can be and are blocked, as well as giving parents the choice to implement domestic filters for age appropriate content.

We continue to believe that regulation as proposed by the European Commission is unhelpful as it is too prescriptive and inflexible. Indeed, regulation may be

16 Jun 2014 : Column 907

unable to keep up with the pace of change of technology and may even have unintended consequences, such as higher consumer bills. I will ensure that the responsible Minister is made aware of the strong feeling across the House in this debate and the fact that Members on both sides spoke in support of this. However, I hope that I have reassured hon. Members that the Government understand that there can be issues in this area and that we are working with both UK regulators and within the EU to tackle this, and I hope that the hon. Member for Walthamstow will withdraw amendment 1.

Stella Creasy: I add my congratulations, Madam Deputy Speaker, to those of other hon. Members. Indeed, there is nothing like a dame. [Interruption.] Come on, somebody had to say it.

I do not know where to start with what the Minister has just set out. Loophole after loophole seems to be being built into this legislation, with the proviso that someone else will pick up the pieces. The Minister hopes that it will be various other regulators, but it is clearly the consumer who will be ripped off instead. I can see from the face of the hon. Member for Shipley (Philip Davies) that he too was disappointed, and I fear that it is time rather than intent that will mean we cannot make much progress today. I urge the Minister to watch the John Oliver video that is going round the interweb, if only to understand the real concern about net neutrality. I certainly hope that our colleagues in the other place will make some progress on this. The idea that at point of sale we can defend such a fundamental principle as free speech does not cut the mustard.

On debt management companies and log book loans, the Minister refers to the Financial Conduct Authority, leaving it to pick up the pieces from legislation that is antiquated and outdated, which at some unspecified time the Law Commission may look into. It is not good enough. We know that millions of people are in debt to such legal loan sharks. We know that the debt management industry is profiting as debt in this country goes up, not down. The right thing to do would be to get the consumer credit landscape to work for that problem, rather than to ask somebody else to deal with it, whether that is the Financial Conduct Authority or the Law Commission.

Again, this is the Consumer Rights Bill. A bill of sale is a consumer contract. There is no justification in the modern world for leaving them in place. The Minister is fond of saying that the Labour Government had 13 years to do something about it. That Government were on the verge of outlawing bill of sale agreements. I hope the Minister will change her mind.

The amendment that we must press to a vote is amendment 1 for those Members who were not here earlier to hear about estate agents charging both the buyer and the seller a fee. The Minister accepts that there is a concern. We are talking about fees of thousands of pounds for our constituents to buy a property—a fee that distorts the price that a seller will get. Yet again, the Minister calls for a loophole to be written in and calls for the property ombudsman to monitor the situation, when it is clearly a conflict of interest for an estate agent to act for both the buyer and the seller at the same time.

16 Jun 2014 : Column 908

Our constituents will rightly ask us what we are doing when we see these clear breaches of contract law taking place. Simply saying, as the Minister does, “Well, we’re going to monitor the number of complaints” is a green light for estate agents to undertake such practices. That is compounded by the fact that all estate agents in most of our constituencies are monitored from a rural Welsh constituency by Powys county council. It cannot understand how these half a million people are behaving, or how we reached the stage when a fee of thousands of pounds could be applied. There is complacency about a clear rip-off that our constituents are facing. [Interruption.]

The Minister of State, Department for Work and Pensions, the right hon. Member for Hemel Hempstead (Mike Penning) says, “Get on with it.” There are people in my constituency paying £6,000 or £7,000 as a fee. The Minister says we had 13 years. The present Government have had four years. We have given an example of how they could do something about it. The Government are failing to make progress, yet again, and all our constituents miss out. I fear for the Minister when one of his constituents comes to him with one of those contracts, under which they are paying £6,000 or £7,000 to an estate agent as a fee to buy a property under sale of tender, and he justifies doing nothing about it.

This Bill is an opportunity to make progress. We on the Opposition Benches—[Interruption.] The Minister comments that I was in diapers when he became an MP, but I am old enough to recognise when there is a rip-off to be dealt with—

Madam Deputy Speaker (Dame Dawn Primarolo): Order. Will the hon. Lady sit down, please. Minister, I hope you did not say that. You have just entered the Chamber and you have been shouting since you sat down. It is not in order to speak to any hon. Member at the Dispatch Box. Members need to calm down a bit, please.

Stella Creasy: Thank you, Madam Deputy Speaker. I was about to wind up.

I know that house buying arouses a lot of passion, but it arouses even more passion when people get ripped off by an estate agent. It is clear that the Government do not support an amendment that would make progress in tackling the problem, which occurs across the country. They are all noise and no action. The Opposition want to see action on estate agents who are ripping people off. I hope Members on the Government Benches who have seen it in their constituency and who fear the impact that it is having on the price of houses will join us in the Lobby in voting for amendment 1.

The House divided:

Ayes 205, Noes 272.

Division No. 5]


7.13 pm


Abrahams, Debbie

Ainsworth, rh Mr Bob

Alexander, Heidi

Ali, Rushanara

Allen, Mr Graham

Ashworth, Jonathan

Austin, Ian

Bailey, Mr Adrian

Bain, Mr William

Barron, rh Kevin

Beckett, rh Margaret

Begg, Dame Anne

Benn, rh Hilary

Benton, Mr Joe

Berger, Luciana

Betts, Mr Clive

Blackman-Woods, Roberta

Blomfield, Paul

Blunkett, rh Mr David

Bradshaw, rh Mr Ben

Brennan, Kevin

Brown, Lyn

Brown, rh Mr Nicholas

Bryant, Chris

Buck, Ms Karen

Burden, Richard

Byrne, rh Mr Liam

Campbell, rh Mr Alan

Campbell, Mr Ronnie

Caton, Martin

Champion, Sarah

Chapman, Jenny

Clark, Katy

Clarke, rh Mr Tom

Clwyd, rh Ann

Coaker, Vernon

Cooper, Rosie

Cooper, rh Yvette

Corbyn, Jeremy

Crausby, Mr David

Creagh, Mary

Creasy, Stella

Cruddas, Jon

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Dakin, Nic

Danczuk, Simon

David, Wayne

Denham, rh Mr John

Dobbin, Jim

Docherty, Thomas

Donohoe, Mr Brian H.

Doran, Mr Frank

Dowd, Jim

Doyle, Gemma

Dromey, Jack

Dugher, Michael

Durkan, Mark

Eagle, Ms Angela

Eagle, Maria

Edwards, Jonathan

Efford, Clive

Elliott, Julie

Ellman, Mrs Louise

Engel, Natascha

Esterson, Bill

Evans, Chris

Farrelly, Paul

Field, rh Mr Frank

Fitzpatrick, Jim

Flello, Robert

Flint, rh Caroline

Flynn, Paul

Fovargue, Yvonne

Francis, Dr Hywel

Gapes, Mike

Gardiner, Barry

Glass, Pat

Glindon, Mrs Mary

Goodman, Helen

Green, Kate

Greenwood, Lilian

Griffith, Nia

Gwynne, Andrew

Hamilton, Mr David

Hamilton, Fabian

Hanson, rh Mr David

Harris, Mr Tom

Havard, Mr Dai

Healey, rh John

Hendrick, Mark

Hepburn, Mr Stephen

Heyes, David

Hilling, Julie

Hodgson, Mrs Sharon

Hoey, Kate

Hood, Mr Jim

Howarth, rh Mr George

Hunt, Tristram

Irranca-Davies, Huw

Jackson, Glenda

James, Mrs Siân C.

Jamieson, Cathy

Jarvis, Dan

Johnson, rh Alan

Johnson, Diana

Jones, Graham

Jones, Mr Kevan

Jones, Susan Elan

Kane, Mike

Kaufman, rh Sir Gerald

Keeley, Barbara

Kendall, Liz

Lavery, Ian

Lazarowicz, Mark

Leslie, Chris

Lewell-Buck, Mrs Emma

Lewis, Mr Ivan

Love, Mr Andrew

Lucas, Caroline

Lucas, Ian

MacNeil, Mr Angus Brendan

Mactaggart, Fiona

Mahmood, Shabana

Mann, John

McCabe, Steve

McCarthy, Kerry

McDonagh, Siobhain

McDonald, Andy

McDonnell, John

McFadden, rh Mr Pat

McGovern, Alison

McGovern, Jim

McGuire, rh Mrs Anne

McKechin, Ann

McKenzie, Mr Iain

McKinnell, Catherine

Meacher, rh Mr Michael

Mearns, Ian

Miller, Andrew

Mitchell, Austin

Moon, Mrs Madeleine

Morden, Jessica

Morrice, Graeme


Morris, Grahame M.


Mudie, Mr George

Murphy, rh Paul

Murray, Ian

Nandy, Lisa

Onwurah, Chi

Owen, Albert

Pearce, Teresa

Perkins, Toby

Phillipson, Bridget

Pound, Stephen

Powell, Lucy

Qureshi, Yasmin

Raynsford, rh Mr Nick

Reed, Mr Jamie

Reed, Mr Steve

Reynolds, Emma

Reynolds, Jonathan

Riordan, Mrs Linda

Robertson, Angus

Robertson, John

Robinson, Mr Geoffrey

Rotheram, Steve

Roy, Lindsay

Ruane, Chris

Ruddock, rh Dame Joan

Sawford, Andy

Seabeck, Alison

Shannon, Jim

Sharma, Mr Virendra

Sheerman, Mr Barry

Sheridan, Jim

Shuker, Gavin

Skinner, Mr Dennis

Smith, rh Mr Andrew

Smith, Angela

Smith, Nick

Smith, Owen

Straw, rh Mr Jack

Sutcliffe, Mr Gerry

Tami, Mark

Thomas, Mr Gareth

Timms, rh Stephen

Trickett, Jon

Turner, Karl

Twigg, Derek

Twigg, Stephen

Umunna, Mr Chuka

Vaz, rh Keith

Vaz, Valerie

Watson, Mr Tom

Whiteford, Dr Eilidh

Whitehead, Dr Alan

Williamson, Chris

Wilson, Phil

Winnick, Mr David

Winterton, rh Ms Rosie

Wood, Mike

Woodcock, John

Wright, David

Tellers for the Ayes:

Tom Blenkinsop


Stephen Doughty


Adams, Nigel

Afriyie, Adam

Andrew, Stuart

Arbuthnot, rh Mr James

Bacon, Mr Richard

Baker, Norman

Baker, Steve

Baldwin, Harriett

Barclay, Stephen

Barwell, Gavin

Beith, rh Sir Alan

Bellingham, Mr Henry

Benyon, Richard

Beresford, Sir Paul

Berry, Jake

Bingham, Andrew

Birtwistle, Gordon

Blackwood, Nicola

Blunt, Crispin

Boles, Nick

Bone, Mr Peter

Bradley, Karen

Brady, Mr Graham

Brake, rh Tom

Bray, Angie

Brazier, Mr Julian

Brine, Steve

Brokenshire, James

Brooke, Annette

Browne, Mr Jeremy

Bruce, Fiona

Buckland, Mr Robert

Burns, Conor

Burns, rh Mr Simon

Burstow, rh Paul

Burt, rh Alistair

Byles, Dan

Cairns, Alun

Campbell, rh Sir Menzies

Carmichael, rh Mr Alistair

Carmichael, Neil

Carswell, Mr Douglas

Chishti, Rehman

Clarke, rh Mr Kenneth

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Cox, Mr Geoffrey

Crabb, Stephen

Crockart, Mike

Crouch, Tracey

Davey, rh Mr Edward

Davies, Glyn

Davies, Philip

Davis, rh Mr David

de Bois, Nick

Dinenage, Caroline

Djanogly, Mr Jonathan

Dorries, Nadine

Doyle-Price, Jackie

Duddridge, James

Duncan, rh Mr Alan

Duncan Smith, rh Mr Iain

Ellis, Michael

Ellison, Jane

Elphicke, Charlie

Evans, Graham

Evennett, Mr David

Fallon, rh Michael

Farron, Tim

Featherstone, Lynne

Field, Mark

Foster, rh Mr Don

Fox, rh Dr Liam

Francois, rh Mr Mark

Freer, Mike

Fullbrook, Lorraine

Fuller, Richard

Gale, Sir Roger

Garnier, Mark

Gibb, Mr Nick

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Graham, Richard

Grant, Mrs Helen

Gray, Mr James

Grayling, rh Chris

Green, rh Damian

Greening, rh Justine

Grieve, rh Mr Dominic

Griffiths, Andrew

Gyimah, Mr Sam

Halfon, Robert

Hames, Duncan

Hammond, rh Mr Philip

Hammond, Stephen

Hancock, Matthew

Hands, rh Greg

Harper, Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Haselhurst, rh Sir Alan

Heald, Oliver

Heath, Mr David

Heaton-Harris, Chris

Hemming, John

Henderson, Gordon

Hendry, Charles

Hoban, Mr Mark

Hollingbery, George

Hollobone, Mr Philip

Holloway, Mr Adam

Hopkins, Kris

Horwood, Martin

Howell, John

Hughes, rh Simon

Hunt, rh Mr Jeremy

Huppert, Dr Julian

Jackson, Mr Stewart

James, Margot

Jenrick, Robert

Johnson, Gareth

Johnson, Joseph

Jones, Andrew

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kelly, Chris

Kennedy, rh Mr Charles

Kwarteng, Kwasi

Lancaster, Mark

Lansley, rh Mr Andrew

Laws, rh Mr David

Leadsom, Andrea

Lee, Jessica

Lee, Dr Phillip

Leslie, Charlotte

Letwin, rh Mr Oliver

Lewis, Brandon

Lidington, rh Mr David

Lloyd, Stephen

Lopresti, Jack

Loughton, Tim

Luff, Sir Peter

Lumley, Karen

Main, Mrs Anne

Maynard, Paul

McCartney, Jason

McCartney, Karl

McIntosh, Miss Anne

McLoughlin, rh Mr Patrick

McPartland, Stephen

McVey, rh Esther

Menzies, Mark

Metcalfe, Stephen

Miller, rh Maria

Mills, Nigel

Mitchell, rh Mr Andrew

Mordaunt, Penny

Morris, Anne Marie

Morris, James

Mosley, Stephen

Mowat, David

Mundell, rh David

Munt, Tessa

Murray, Sheryll

Neill, Robert

Newmark, Mr Brooks

Newton, Sarah

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

O'Brien, rh Mr Stephen

Offord, Dr Matthew

Ollerenshaw, Eric

Opperman, Guy

Ottaway, rh Sir Richard

Parish, Neil

Patel, Priti

Paterson, rh Mr Owen

Pawsey, Mark

Penning, rh Mike

Penrose, John

Percy, Andrew

Perry, Claire

Phillips, Stephen

Pincher, Christopher

Poulter, Dr Daniel

Prisk, Mr Mark

Pritchard, Mark

Pugh, John

Raab, Mr Dominic

Randall, rh Sir John

Reckless, Mark

Rees-Mogg, Jacob

Reevell, Simon

Reid, Mr Alan

Robathan, rh Mr Andrew

Rogerson, Dan

Rosindell, Andrew

Rudd, Amber

Ruffley, Mr David

Russell, Sir Bob

Rutley, David

Sanders, Mr Adrian

Sandys, Laura

Scott, Mr Lee

Selous, Andrew

Shapps, rh Grant

Sharma, Alok

Shelbrooke, Alec

Shepherd, Sir Richard

Simpson, Mr Keith

Skidmore, Chris

Smith, Chloe

Smith, Henry

Smith, Julian

Smith, Sir Robert

Soames, rh Sir Nicholas

Soubry, Anna

Spelman, rh Mrs Caroline

Stanley, rh Sir John

Stevenson, John

Stewart, Bob

Stewart, Iain

Stewart, Rory

Streeter, Mr Gary

Stride, Mel

Stuart, Mr Graham

Stunell, rh Sir Andrew

Sturdy, Julian

Swales, Ian

Swayne, rh Mr Desmond

Syms, Mr Robert

Teather, Sarah

Thornton, Mike

Thurso, John

Timpson, Mr Edward

Tomlinson, Justin

Tredinnick, David

Turner, Mr Andrew

Tyrie, Mr Andrew

Uppal, Paul

Vaizey, Mr Edward

Vara, Mr Shailesh

Vickers, Martin

Villiers, rh Mrs Theresa

Walker, Mr Charles

Walker, Mr Robin

Wallace, Mr Ben

Ward, Mr David

Webb, Steve

Wharton, James

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, Mr John

Wiggin, Bill

Willetts, rh Mr David

Williams, Mr Mark

Williams, Roger

Williams, Stephen

Williamson, Gavin

Willott, Jenny

Wilson, Mr Rob

Wollaston, Dr Sarah

Wright, Jeremy

Wright, Simon

Yeo, Mr Tim

Young, rh Sir George

Tellers for the Noes:

Anne Milton


Mark Hunter

Question accordingly negatived.

16 Jun 2014 : Column 909

16 Jun 2014 : Column 910

16 Jun 2014 : Column 911

16 Jun 2014 : Column 912

7.25 pm

More than two hours having elapsed since the commencement of proceedings on consideration, the proceedings were interrupted (Programme Order, 13 May).

The Deputy Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

Schedule 5

Investigatory power etc.

Amendments made: 21, page 67, line 45, after “13(1)” insert “or (1A)”.

This amendment and amendment 22 reflect the establishment of the Competition and Markets Authority, in place of the Office of Fair Trading, which now has a power to enforce these particular regulations.

Amendment 22, page 67, line 47, after “19(1)” insert “or (1A)”.

The explanatory statement for amendment 21 also applies to this amendment.

Amendment 16, page 68, line 11, at end insert—

16 Jun 2014 : Column 913

16 Jun 2014 : Column 914

“A local weights and measures authority in Great Britain or the Department of Enterprise, Trade and Investment in Northern Ireland

Section 35ZA of the Registered Designs Act 1949”.

This amendment inserts a reference to section 35ZA of the Registered Designs Act 1949 into the table in paragraph 11 of Schedule 5 so that it falls within the enforcer’s legislation within the meaning of paragraph 9(1)(b) of the same Schedule. It also lists the relevant domestic enforcers of this provision.

Amendment23, page 68, line 41, at end insert—

“A local weights and measures authority in England or a district council in England

Sections (Duty of letting agents to publicise fees), (Letting agents to which the duty applies), (Fees to which the duty applies), (Letting agency work and property management work), (Enforcement of the duty) and (Supplementary provisions) of this Act”.

This amendment ensures that the investigatory powers in Schedule 5 to the Bill are available for investigating a breach of the duty to publicise fees.

Amendment24, page 73, line 15, after “to” insert “—(a)”.

This amendment and amendment 25 maintain the ability of enforcers to request information from the Crown when acting for the enforcement of the Consumer Protection from Unfair Trading Regulations 2008.

Amendment 25, page 73, line 16, after “(3),” insert “or

(b) an enforcer acting for the purpose of ascertaining whether there has been a breach of the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277),”.

The explanatory statement for amendment 24 also applies to this amendment.

Amendment 26, page 88, line 14, at end insert—

(za) under section 35ZC of the Registered Designs Act 1949,”.

This amendment inserts a reference to section 35ZC of the Registered Designs Act 1949 into paragraph 45(2) of Schedule 5 to ensure the power of forfeiture under that Act can be exercised by area enforcers when operating across local authority boundaries.

Amendment 27, page 88, line 15, leave out “or” and insert—

(a) under section 97 of the Trade Marks Act 1994 (including as applied by section 11 of the Olympic Symbol etc (Protection) Act 1995), or”—(Jenny Willott.)

This amendment inserts a reference to section 97 of the Trade Marks Act 1994 (including as applied to section 11 of the Olympic Symbol etc (Protection) Act 1995) into paragraph 45(2) of Schedule 5 to ensure the power of forfeiture under that Act can be exercised by area enforcers when operating across local authority boundaries.

Schedule 6

Investigatory powers: consequential amendments

Amendments made: 17, page 89, line 27, at end insert—

“Registered Designs Act 1949 (c. 88)

A1 (1) Section 35ZB of the Registered Designs Act 1949 (enforcement) is amended as follows.

(2) Omit subsection (1).

(3) Before subsection (2) insert—

“(1A) For the investigatory powers available to a local weights and measures authority or the Department of Enterprise, Trade and Investment in Northern Ireland for the purposes of the enforcement of section 35ZA, see Schedule 5 to the Consumer Rights Act 2014.””.

This amendment makes a consequential amendment to section 35ZB of the Registered Designs Act 1948 in Schedule 6 by replacing reference to the investigatory powers contained in the Trade Descriptions Act 1968, which are being repealed by the Consumer Rights Bill, with those contained in Schedule 5 to the Bill.

Amendment 18, page 98, line 33, leave out

“local weights and measures authority”

and insert “person”—(Jenny Willott.)

This amendment modifies the consequential amendment to the Fireworks Act 2003 in Schedule 6 by replacing the words “local weights and measures authority” with “person” so that it is consistent with the consequential amendment to the Consumer Protection Act 1987 also in this Schedule.

Diana Johnson (Kingston upon Hull North) (Lab): On a point of order, Madam Deputy Speaker. At 10.50 this morning a reporter from The Sun, Tom Newton Dunn, tweeted:

“ISIS will be made a banned terrorist organisation in the UK by the Home Secretary today.”

That was before the Order had been laid before Parliament and before the shadow Home Secretary and the Chair of the Home Affairs Committee had been notified of the Government’s intention, which is the normal procedure. As these matters involve national security, and obviously the whole House takes them very seriously, I wonder whether you feel that that chain of events was in order.

Madam Deputy Speaker (Dame Dawn Primarolo): I am grateful to the hon. Lady for giving me notice of her intention to raise a point of order. Strictly speaking, it is not a point of order for today’s debate. However, I reiterate that Mr Speaker has made it clear to the House a number of times that any business that is to be dealt with in this House should be notified to Members of Parliament first. I see that the Government Chief Whip is in his place and am sure that he will ensure that no discourtesy to the House was intended and that he will reaffirm, and ensure that Ministers stick to, Mr Speaker’s clear preference, which is that this House should always be told first.

Third Reading

7.28 pm

Jenny Willott: I beg to move, That the Bill be now read the Third time.

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I am sorry that so many hon. Members are leaving the Chamber at this exciting point in this evening’s proceedings. Let me first convey my thanks to everyone in the House, including those currently leaving, and everyone outside who gave their time and expertise and shared their experience to help strengthen and improve this important Bill. We are most grateful. In particular, I would like to thank the Business, Innovation and Skills Committee and its Chair, the hon. Member for West Bromwich West (Mr Bailey), for conducting such invaluable pre-legislative scrutiny of the draft Bill. The Government accepted a great many of its recommendations. I firmly believe that our reforms are stronger and that the Bill is better as a consequence of that scrutiny.

I would also like to thank those individuals who gave oral evidence to the Public Bill Committee and the individuals and organisations who provided written evidence and suggested recommendations. I extend particular thanks to members of the Public Bill Committee, on which the hon. Member for Walthamstow (Stella Creasy) led for the Opposition, for their detailed examination and thorough scrutiny of the Bill’s provisions and for their extensive discussions about items of clothing, curtains, cushions and any number of soft furnishings.

We have spent almost two days on Report examining a wide range of issues that affect consumers. I sincerely thank Opposition Members and hon. Friends for providing the House with the opportunity to debate such a broad range of consumer issues. I am grateful for hon. Members’ incisive inquiries on these significant matters; they have helped to ensure that our important discussions, and the action that the Government are taking, will properly tackle harmful behaviour swiftly and head-on.

The Government’s reforms in the Bill amount to the most fundamental change to UK consumer rights in more than a generation. We want confident consumers who are willing to try new products and services, and to shop around. Consumers who understand their rights can play a crucial role in driving growth, because they encourage businesses to innovate and to be more responsive and efficient. That is why we are removing complexity and ensuring that the law keeps up with technological developments. The reforms proposed in the Bill make the rights and responsibilities of consumers and businesses clear and easily understood, and they take account of the way that modern consumers shop. There are an estimated 350,000 retail businesses in the UK, and goods are a critical part of the UK economy. That is why business and consumer groups agree that it is vital that we remove the complexity that makes compliance burdensome for business and confusing for consumers.

The market for digital content is growing more rapidly than ever, and has an estimated annual turnover of around £200 billion. The new category of digital content proposed in the Bill, with its own set of tailored quality rights, will make consumers more confident about trying something new. That not only benefits consumers but helps the most responsive businesses—especially new market entrants that are not well-known brands with established track records—to attract custom.

The services sector is worth more than 75% of the UK’s gross domestic product. That underlines just how important it is that the Bill gives consumers clearer, more accessible statutory rights, and introduces statutory

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remedies for the first time. As the Confederation of British Industry told the Business, Innovation and Skills Committee

“the time is right to make sure that consumer law keeps in step with how those areas of the economy have evolved”.

The law on unfair terms in consumer contracts is particularly complicated. We asked the Law Commission to look at unfair terms law in detail. It recommended three additions to the grey list, which we accept. It considered and rejected other additions—conclusions with which we also agree.

Creating the National Trading Standards Board was a key step towards better equipping enforcers to tackle complex criminal activity. We are building on that in the Bill by making it easier for trading standards bodies to work more effectively across boundaries. Those reforms together will help tackle the estimated £4.8 billion-worth of consumer detriment arising from rogue trading activities.

Setting out consumer law enforcers’ investigatory powers in the Bill will make them more transparent, which benefits both regulator and business. Clearly, we want enforcers to pursue rogue traders, but it is important that we do not disproportionately burden businesses that are already compliant. On the requirement to give businesses 48 hours’ notice of a routine inspection, the British Retail Consortium has said in evidence sessions:

“The safeguards in the statute are absolutely perfect”,


“If you have notice…it does not waste our time, and it does not waste the regulator’s time.”––[Official Report, Consumer Rights Public Bill Committee, 11 February 2014; c. 32, Q68.]

The Bill will also give public enforcers greater flexibility to seek new and innovative ways of dealing with businesses that have broken consumer law. More consumers will get their money back, and they will be better informed about those businesses that choose to flout the law. Consumers will be able to take the past performance of businesses that choose to ignore consumer rights into account when deciding whether to buy from them. The flexibility to get better outcomes for consumers is seen as a welcome addition to the enforcement toolkit by both Which? and Citizens Advice.

The UK has a world-class competition framework that benefits both business and consumers. However, evidence from the Office of Fair Trading highlights that the private actions regime is the least effective aspect of the UK’s competition regime. Anti-competitive behaviour harms consumers by lowering output, increasing prices and reducing quality, but the costs of going to court make it very hard for consumers to obtain redress. As Which? highlighted in its evidence during pre-legislative scrutiny:

“The whole Bill is aimed at empowering consumers. Part of an empowered consumer is that they are confident that when things go wrong they will be put right.”

Finally and importantly, we are determined to tackle the minority of rogue letting agents who offer a poor service. We are introducing legislation to require all letting agents and property managers to belong to an approved redress scheme, giving tenants an effective way of pursuing complaints. We are making agents publish their fees; that will give consumers the information that they want and support good letting agents. Such transparency deters double-charging and enables tenants and landlords to shop around, which encourages more competitive fees.

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The Bill contains important new protections for consumers and measures to lower regulatory burdens for business, so that markets work better and consumers are well protected. Overall, the suite of consumer law reforms is set to benefit businesses and consumers by more than £4 billion over 10 years. The Bill is therefore good for consumers, good for business, and good for growth, and I commend it to the House.

7.36 pm

Stella Creasy: It is fascinating finally to come to the end of consideration of the Bill in this Chamber.

Jim Shannon (Strangford) (DUP): On a point of order, Madam Deputy Speaker. I stand to be corrected, but I thought that those who wanted to speak on Third Reading did so before the shadow spokesperson. Am I wrong?

Madam Deputy Speaker (Dame Dawn Primarolo): You are wrong, yes. The Minister opens Third Reading, and the Opposition Front Bencher responds; we then hear from other participants. If we have enough time, and it is relevant to do so, we then hear the wind-ups. Do not worry—I will not forget you.

Stella Creasy: I am on tenterhooks to hear what the hon. Member for Strangford (Jim Shannon) has to say. Thanks to our consideration of the Bill, I am aware of my right to a return and a repeat performance if I do not think the skill and service is satisfactory; he should be aware of that.

Whereas poppadoms are not to be shared, I have feedback—the breakfast of champions, as it was once called—to share on the Bill and whether it works. Does it pass the Ronseal test—does it do what it says on the tin? The Bill says that it is there to

“Amend the law relating to the rights of consumers and protection of their interests”.

Certainly, as I hope I have just displayed, during our consideration of the Bill we learned what our rights will be: we will have the right to have legislation written with reasonable care and skill, and provided at a reasonable time and price to us all. The rights of our consumers—our constituents—to remedy and redress when they feel that we are not providing that are somewhat limited. That is why they rely on us as Opposition Members to hold the Government to account. However, our role is not simply to intervene, or identify injustice as it affects our constituents, but to act on it. That is what we have tried to do in proceedings on the Bill.

At the heart of this is the question of rights. Does the Bill give consumers the rights that they need if they are to act for themselves? That has been our central concern. In that, we were influenced by the words of the Mayor of London—who knows what else he will be in future?—who once said:

“The dreadful truth is that when people come to see their MP, they have run out of better ideas.”

If the Bill had been well written, it would have given people rights that would have meant that they did not have to come to us, their MPs, with such regularity with all the stories of consumer detriment that we heard

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about during proceedings on the Bill. A really robust Consumer Rights Bill would empower the British public, giving them the rights and the confidence that they need to be able to choose the goods and services that they desire. Under that test, the public could demand a refund on the Bill, for as we saw only today, loophole after loophole remains, and it is consumers who will have to pay the price.

The Minister talks of a consumer toolkit, but that toolkit has a blunt Stanley knife and a broken hammer in it. Time and again, throughout consideration of the Bill, the Government have failed to grasp how giving the public access to the information, advocacy and redress that they need to shape services to meet desired outcomes would be a better idea, in terms of dealing with markets and services when the odds are stacked against them. Indeed, one of the things we have not done so far is set out what a market that is not working looks like or what the problems are.

In setting out our concerns on Third Reading, let me be clear about where our amendments came from. We need to recognise that a market is not working when information is not flowing freely between actors, whether they be consumers or businesses, such that they are not able to make informed choices. A market is not working when companies use their advantage to crowd out new competitors, collude on prices or, indeed, create a monopoly. Such a market may also result in unintended consequences because of the behaviour of others. The result is always the same: consumers miss out when markets do not work.

We have attempted to amend the Bill in this House and I am sure my colleagues in the other place will continue to do so in order to address some of those problems. Many markets in the UK do not meet the metrics of success whereby information flows freely and there is competition on creativity and innovation—not exploitation of captured consumers who have little option but to pay over the odds—and where the reasonable care and skill test can truly be applied.

At every stage of this Bill, colleagues throughout the House have raised issues that reflect those concerns about markets, including ticket touting, rip-off estate agent fees, copycat websites, logbook loans, product recall and even net neutrality. Every example involved scams and sharp practices, yet this Bill will not make progress in protecting the interests of consumers. As we have consistently been told by the Minister, that is outside the scope of the Bill and a matter for the mysterious implementation group, whose inner workings are still a secret to many of us.

At every single turn, the Minister has claimed that someone or something else can act. She has said that so often that we think it would be worth renaming the Bill the “computer says no” Bill. That may be an effective phrase for coalition government, but it is also a recipe to rip off consumers.

Despite the Minister’s best efforts to tell us, “There’s nothing to see here,” it has become clear during the course of our work that this Bill reaches far beyond how easy it is for any of us to return a jumper with a hole in it. We know there is much more to consider with regard to how the Bill will impact on the public sector. The Minister has still not clarified which services are covered, preferring to tell us only that most NHS care, state-funded education and law enforcement services

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are not covered. Of course, given that tuition fees, personal care payments and child care vouchers are covered, it would seem that this Bill is less a case of, “computer says no,” and more one of, “Yeah, but no, but yeah.” It has certainly felt like we have been asking questions of the sphinx at times, because we have had to find the right question in order to get the right answer for our constituents. The risk is that the Bill will devour all those who fail to solve its riddle.

In fear of yet again being cast into the pit of despair, may I again ask the Minister to clarify, with a yes or no answer, whether the following contracts are covered? Is the BBC licence fee covered? Given the recent comments of the Secretary of State for Culture, Media and Sport, surely that is an apposite and important point to clarify. Before the Bill goes to the other place, it would be incredibly helpful if the Minister could clarify whether it also covers parking permits and prescriptions.

Understanding this minefield and the impact it will have on consumers of public services now falls to our colleagues in the Lords. Given the evidence that we are a nation of silent sufferers—in particular, many elderly users of care services fear that they cannot complain—the fact the Minister is devolving getting this right to the Cabinet Office, as she declared on the first day on Report, simply will not stand. We put her on notice that we will not let public service users experience a two-tier system because she could not define what clause 2 does.

The Minister may sigh again and point to the long gestation of this Bill, including the Labour Government’s original 2009 White Paper on a new deal for consumers. We generally agree that there is a need to update the fundamental principles enshrined in the Sale of Goods Act 1979. That was published shortly after I was born—which, as the Minister of State, Department for Work and Pensions, the right hon. Member for Hemel Hempstead (Mike Penning), who is no longer in his place, would say, was, “A long time ago.”

It is certainly time for an update, which is why we will not oppose this Bill’s Third Reading, but it is also time for clarity, which the Bill does not yet deliver. I hope the Minister will not think it churlish of me to say that we welcome the fact that some of our proposals have been considered and, indeed, adopted. When the issue of speedier refunds was first raised, there seemed little hope of progress, but having had our call for a time limit of 30 days batted away, we were delighted with the Government’s amendment making 14 days the cut-off for consumers to get their money back. There have also been announcements on copycat websites and letting agent fees as the Bill has progressed. Those things have been encouraging and we wait with bated breath to see on what else the Minister will come full circle.

Like the Minister, I want to put on record my gratitude to the members of the Business, Innovation and Skills Committee and the members of the Bill Committee for playing their part. Having received during the course of our deliberations a marriage proposal, hair-dressing advice, loft-conversion concerns and a lecture in socialist ideology, as well as the opportunity to hear passionate debates on issues such as electrical safety, public service reform and data protection, I believe we have given much for our colleagues in the other place to ruminate. I also want to put on record my personal thanks to the Clerks of the Public Bill Office, who have been kind and generous with their time in drafting amendments and

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new clauses. However mean the Minister may wish to be about those amendments and new clauses, we certainly think they have made a difference.

As the Bill goes to the other place, let me say again what a missed opportunity it has been. Major consumer reforms come along very rarely—as the Minister of State, Department for Work and Pensions, the right hon. Member for Hemel Hempstead, would point out, I am now of a certain age. I fear there is little hope of a return, a refund or a repeat performance for our constituents if we get this wrong. They will not want to wait another 35 years. I have every confidence that the noble Lords will continue our work on issues such as letting agent fees, debt management, access to data, advocacy, trading standards and redress, and that they will also finally pin down the magicians of the implementation group and the mysterious work of ombudsman services.

Britain can do better. We will not oppose the Bill, but instead send it to the other place and ask it to continue our efforts to improve this Bill so that it can live up to the bold sales pitch of protecting consumer interests. If that does not happen, I for one will encourage the British public to exercise their right to a return at the ballot box in 2015 and finally cast out a Government who are clearly not fit for purpose.

7.46 pm

Fiona Bruce (Congleton) (Con): I am very pleased to see this important Bill complete its passage through this House. Economic development depends on those receiving goods and services knowing that they can depend on robust legal protection and clear redress. Knowledge of the reality of the protection that this Bill promotes and provides will enable people and businesses to get on with the important job of producing and accessing goods and services, in which context our economy can continue to grow.

The principle of fairness underpins this Bill. As the Minister has said, it is vital that the law keeps up with technological developments. It is vital, therefore, that in developing new medical technologies, such as mitochondrial transfer, we do not rush into them, especially when significant consumer protection concerns are in play. That is only right and fair. Just yesterday, the fertility expert Professor Robert Winston stated:

“I don’t believe there has been enough work done to make sure mitochondrial replacement is truly safe.”

For that reason, I regret that there was no time to debate my new clause 31, even though it was selected.

The situation also demonstrates the importance of not bringing to Parliament any proposed legislation permitting such procedures until all the necessary pre-clinical tests have been concluded, some of which have been described recently by the Human Fertilisation and Embryology Authority as “critical”. Only then should parliamentarians be asked to assess the evidence and vote on such measures. Only then will we demonstrate to our constituents that we are not rushing to adopt new medical techniques without treating safety concerns with the utmost seriousness.

I am very concerned we have not had the opportunity to debate new clause 31, because it needs parliamentary time. I very much hope that the concerns it addresses will be thoroughly debated in the other place at another time.

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7.48 pm

Jim Shannon (Strangford) (DUP): It is always a pleasure to follow the hon. Member for Congleton (Fiona Bruce), who is passionate about the subject she has just addressed. I hope the shadow Minister, the hon. Member for Walthamstow (Stella Creasy), will not be disappointed with my contribution. I want to put on record some important issues.

The Minister has outlined very well the issues that the Bill tries to address, but I and other Members still have concerns. I am particularly concerned about the issue of debt advice. There are many debt organisations in my constituency. Citizens Advice, Debt Advice NI and Christians Against Poverty are just three groups that give advice—they do not lend money—on the problems people face when they borrow money and build up debts that they are unable to pay.

The Consumer Rights Bill should be just that—legislation that protects consumers. Does the Bill do so entirely? Some of us feel that it might have done more, and we would be much more relaxed about it if it had done more.

The regulation of loan companies, which Members have referred to, is a very complex matter. We are all aware of the story about a lady who borrowed a couple of thousand pounds from a loan company, which developed into a six-figure sum over a number of transactions. She found herself in a very difficult position, and she then had her house repossessed. That may be an extreme example, but it illustrates our concerns.

I very much welcome the Government’s commitment on the territorial extent and application of the Bill. I want to comment on part 3, which does not extend the Sunday Trading Act 1994 to Scotland and Northern Ireland, for example. The decision in relation to that will clearly lie with the Northern Ireland Assembly. I must say that that is good news for the people of Northern Ireland who attend church, but have to work on Sundays or might potentially have to do so. Any decision will lie with the Assembly, which is good news.

I wholeheartedly concur with the concerns expressed by the hon. Member for Congleton about the controversial technological changes referred to in new clause 31 in relation to three-parent children. I am concerned that there was no opportunity to debate that on the Floor of the House, because I certainly wanted to speak about it, as did other hon. Members. I suggest that it seems very dangerous to go ahead with such a change, as has been indicated, without any consensus of support or a majority in its favour. I must put on the record that I am very concerned about the numbers of ladies who have such worries. Some 558 people responded by saying that they did not want the change. Thank you for giving me the opportunity to make that comment, Madam Deputy Speaker.

The Bill has addressed many of the issues about which we have concerns, such as the right to the repair or replacement of goods. I commend the hon. Member for Foyle (Mark Durkan) on the good work that he has done on the Bill. He fought very valiantly and got the changes that he had hoped for in relation to electrical goods. I am tremendously pleased to see in the Bill what he and many other hon. Members wanted it to include.

If the Minister cannot respond on this point tonight, perhaps she will come back to me at some time, but I do not yet see powers for people who take out holiday

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insurance and need consumer protection—for example, those who, having booked a flight, find that they have to cancel it, whether for health or whatever reason—but cannot get a reimbursement. I had hoped that the Bill might give those people more protection, but I am not sure that it yet does so.

I welcome many of the things in the Bill, as well as some of the things in it about which we are not entirely happy. None the less, I congratulate all hon. Members on their contributions to the Bill, and on their ability to bring to the Floor of the House provisions that can make a change.

7.56 pm

Jenny Willott: With the leave of the House, I will respond to some of the points made. The Bill has benefited from thorough and considered debate in this House. We have now had lengthy discussions on many subjects covered by the Bill, and possibly even more on those not covered by it.

The hon. Member for Congleton (Fiona Bruce) raised the issue of mitochondrial donation or transfer. The Human Fertilisation and Embryology Authority set up an expert panel, which has conducted three reviews on the safety and efficacy of the proposed treatment. I want to reassure her that any proposed regulations on this matter would be subject to debates in both Houses of Parliament under the affirmative procedure, so were measures to be taken forward, there would be a full debate.

Fiona Bruce: Will the Minister reassure me that regulations permitting such a treatment will not be laid before the House until clinical procedures that have been described by the HFEA as critical are concluded and reviewed?

Jenny Willott: I suggest that the hon. Lady take up that issue with Health Ministers, as this policy area sits firmly under their portfolio. She is asking a very technical question about the background to the regulations, and it might be more proper for one of them to respond.

I was a little disappointed by the response of the hon. Member for Walthamstow (Stella Creasy). She is very dismissive of the Bill, which she has described as full of loopholes. Consumer and business organisations all agree that the Government are doing the right thing and that the Bill will make a real difference, as we repeatedly heard in evidence to the Public Bill Committee and to the Business, Innovation and Skills Committee during its pre-legislative scrutiny.

It cannot be denied that the Bill is the most dramatic overhaul of consumer protection for a generation. The UK already has very high levels of consumer confidence and knowledge—higher than almost any other country in the European Union—but I believe that we can raise them higher. It drives huge change both in business and across society to have consumers who are well informed and confident of their rights, and who know what they can do when something goes wrong. Consumer protection drives innovation across businesses, growth in the economy and confidence among our consumers. I believe that this Bill is the way to achieve that, and I commend it to the House.

Question put and agreed to.

Bill accordingly read the Third time and passed.

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7.56 pm

The Parliamentary Under-Secretary of State for Education (Mr Edward Timpson): I beg to move,

That the draft Special Educational Needs (Personal Budgets) Regulations 2014, which were laid before this House on 9 April, in the last Session of Parliament, be approved.

The regulations are the first to be laid under section 49 and—it gives me great pleasure to say—under part 3 of the Children and Families Act 2014. As I think we can all agree across the House, the 2014 Act has the potential to make a massive improvement to the lives of children and young people with special educational needs and disabilities.

The regulations will introduce the option of a personal budget for education, health and care plan holders from September 2014. The SEN pathfinders have shown that personal budgets can make a real difference to children and young people; indeed, according to some parents on the pathfinder programme, they can be life-changing. However, the introduction of personal budgets is complex, and hon. Members may want some reassurances about their introduction in September, especially in relation to the testing of direct payments for SEN provision.

If personal budgets are to work, parents must be given clear, up-front information about their availability, as well as advice and support on requesting, taking up and managing a personal budget, including on direct payments. Personal budgets must be embedded in the education, health and care planning process, rather than seen simply as an addition to the system. Their introduction from September, as part of the wider reforms, means that councils are developing personal budgets as a coherent element of the system, rather than just a mere bolt-on. I must stress that, building on the experience of the pathfinders, our approach to implementation will be one of evolution, rather than the proverbial revolution.

The draft code of practice, which was laid before Parliament on 11 June and is subject to debate in its own right, is abundantly clear on that important underlying principle of successful implementation. Subject to the will of Parliament, the code of practice will, along with regulations covering the local offer and EHC plans, set out a flexible framework for implementation, while providing a clear expectation of what councils must have in place in September 2014 and of how it should evolve over time as joint commissioning arrangements and local offers mature.

To turn to the substance of the regulations, they contain many of the provisions that we have previously debated as part of the pilot scheme for direct payments for SEN provision. They give parents and young people the right to ask for a personal budget when an EHC plan is being prepared, or during a statutory review of an existing plan. Parents must be given up-front information about personal budgets, including the information that will be required in, and consulted on as part of the local offer.

We have maintained the considerations in relation to value for money and the impact on other service users—an issue that has been of concern in debates in this House and the other place. We have repeated the requirement for the permission of a school or college and added early-years settings where a direct payment is being

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used on their premises. I understand that there are concerns that that could be a get-out clause and a barrier to inclusion, especially in further education. However, we have seen no such evidence from the pathfinders. It is only right that institutions have the final say on who can work on their premises. I can, however, reassure hon. Members that we will keep a careful eye on that aspect of our reforms.

Finally, I want to return to my earlier theme of the complexity of implementation. I draw the House’s attention to the comprehensive package of support that is in place to help councils meet this important challenge. An ever-increasing array of materials, including practical advice, case studies, checklists and frameworks for implementation, is available on the SEN pathfinder website. All those materials have been developed with expert support from local authorities, their partners, and voluntary and community sector groups that work in the area, including those that represent parents.

Mark Tami (Alyn and Deeside) (Lab): Last year, the Minister kindly met me and representatives of CLIC Sargent to consider the position of children who suffer from cancer. Will he assure Members that there will be the necessary flexibility—this is the key issue—to deal with children with varying abilities and concerns?

Mr Timpson: I can reassure the hon. Gentleman absolutely on that point. The meeting that we had last year informed not only the legislation, but the underlying code of practice, which is now in draft form. The whole point of personal budgets is to embed flexibility and personalisation in the support that is available to parents, and to put them much more in control of the choices to ensure that they and their children get the relevant support when they need it. I hope that he will take time to look at the code of practice. I know that CLIC Sargent, which works closely with the Department, has done so. I am grateful for the work that he and that charity have done.

Our SEN advisers are visiting councils the length and breadth of the country to establish what more local areas may need and, when necessary, are making referrals to our pathfinder champion support team and the newly appointed national champions for personal budgets.

That package will be complemented by a thematic evaluation of personal budgets and integrated resourcing, which will be undertaken by SQW, the evaluator of the pathfinder programme, and will be published this summer. The research will re-examine the progress that has been made by pathfinder and non-pathfinder areas to identify good practice and lessons learned to inform the development of less advanced areas.

To conclude, with the framework for implementation set out in the regulations, the code of practice and the support that we are providing with our partners, I am confident that we have an approach that will, in the coming years, make a huge difference to the lives of children and young people. I hope that hon. Members will give it their support.

8.3 pm

Steve McCabe (Birmingham, Selly Oak) (Lab): The Opposition support the principle of personal budgets and direct payments, so we will not oppose the regulations. However, I have a number of questions about safeguards and how the proposals will work in practice.

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The draft code of practice, to which the Minister referred, states in paragraph 3.39 that, as an “integral part” of the process of planning personal budgets,

“partners should ensure children, young people and families are involved in the decision-making processes at both an individual and a strategic level”.

How will the Minister monitor that and ensure that those fine words are translated into deeds? In the same paragraph, the code indicates that

“the new joint commissioning strategies will support greater choice and control year-on-year, as the market is developed and funding streams are freed from existing contractual arrangements”.

What steps will he take to ensure that he does not preside over a postcode lottery, with innovation and greater choice in some parts of the country, and reactionary, conservative obstacles in others?

The Minister may be aware of the suspicion directed at his Government that what he describes, understandably, as “choice” could be used by some as a device to save money. As he will know, a number of organisations in the field of special needs education are reporting cuts to the provision for young people, particularly in areas such as speech and language therapy, and are consequently expressing doubts about how the Minister’s brave new world will fare in an environment where severe cuts in local authority services and welfare changes mean that families with disabled children and young people are already facing extremely difficult times.

Will the Minister cite some good examples from the pilots of the kind of joint commissioning models he wants to see, which could be regarded as exemplars that others might follow? It is worth noting that last year, in a survey by the National Deaf Children’s Society, only 12% of parents were aware of the detail of the Government’s plans and only 17% of parents in the pathfinder areas were aware of them. I understand that only six of the 31 pathfinders have piloted personal budgets and that, across the country, only about 500 personal budgets are in existence. Is the Minister confident, therefore, that he has sufficient evidence to support the regulations?

One issue that was raised during the pathfinders was the need to comply with the requirements of Her Majesty’s Revenue and Customs when families end up acting as employers because they are contracting their child’s support. Is the Minister happy that the guidance on that is sufficiently clear? He will know that those who have experience of personal budgets and direct payments have complained that large parts of the budget can be consumed on administration and paying for insurance and payroll services.

Whose responsibility will it be to ensure that the work force and cultural changes that are necessary for a person-centred approach, for which the Minister has called, actually happen? If that falls to the existing service-level development managers, is there not a risk that they will have an incentive to protect their own roles by tying up organisations such as parent participation groups in bureaucratic service-level agreements, thus weakening their capacity to assist parents, children and young people? What practical steps will he take to guard against that?

There seem to be two potential risks in this approach. There will be authorities that see it as a classic opportunity to minimise the direct provision of services, and which therefore overstate the benefits of personal budgets.

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There will be other authorities that want to use regulation 6(1)(c) to argue that, however valid the individual request, to accede to it would mean disaggregating funding that supports the provision of services for a number of children and young people. There are obviously legitimate concerns that it will be harder to engage in the planning and co-ordination of services in an environment where much of the funding is in the hands of individual parents and families.

The experience in Essex was that providers were concerned about the impact that spot purchasing would have on their security because of the unpredictability that it brought to the amount of money they would receive over a set period. That is likely to have planning implications. Similarly, Essex county council claimed that the back-office implications included increased invoicing overheads as a result of moving from a large block to individual family contracting. Does the Minister recognise those dilemmas? How does he plan to be kept informed and to intervene to address those problems, if it is necessary? Will the first-tier tribunal be given any guidance on how it should consider such arguments? Indeed, should not regulation 7 specify the exact grounds on which a local authority may refuse? In the circumstances in which a person moves to a new authority, which opts to conduct a new needs assessment, what is to stop it drastically redrawing the terms of the personal budget? That is a common problem with the direct payment provisions for elderly people that already exist. What safeguards will the Minister put in place to prevent this further possibility in postcode lottery funding?

Who will be charged with identifying and encouraging agencies and organisations in each area to be in a position to be nominated to receive direct payments? Will it be necessary for such organisations to be added to an approved list? How will that work and how will a body—especially a new one offering a new type of service—gain access? Conversely, what safeguards are in place to ensure that money is not spent on programmes of dubious or unproven effectiveness?

The Minister helpfully told us that he was looking at the concerns about further education and direct payments, but how will he ensure that colleges do not simply see the money as an opportunity to offer more of the same, rather than personalisation? It is interesting that the disabled students allowance, which I believe the Government plan to scrap, is a personalised, portable payment for the individual rather than a direct payment to the university.

I support the principle of personal budgets, as I have said, but the Opposition would not be doing our job if we did not speak up for the many parents, children and young people on whom the Government plan to unleash this system.

8.11 pm

Mr Timpson: I am grateful to the hon. Member for Birmingham, Selly Oak (Steve McCabe) for his comments and questions on the regulations, as well as his support for the principle of personal budgets and direct payments. I recall that when we last debated this issue in a Committee Room upstairs he had a host of relevant and pertinent questions, so I would have been disappointed if he had not had a further raft of questions to pose on this important issue in his usual manner. I shall try to answer as many of his questions as I can, and if I fail to cover any of them in detail I will write to him with a further and better answer, as I did after the last debate.

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The hon. Gentleman asked about the evaluation of the implementation of these reforms and specifically about how children will be involved in the decision-making about personal budgets and more generally. Throughout the whole process, we have been at pains to involve children in the formulation of the new legislation, both through the EPiC group—Equality, Participation, Influence, Change—which works within the Department, and more widely through the Council for Disabled Children, which is a strategic partner. That relationship will continue. We are also ensuring that Ofsted is involved in looking carefully at how the reforms are bedding in. It will provide us with an evaluation that will form a good evidence base to determine whether the reforms are having the impact that we all want to see.

In relation to the financial implications and the burdens on local authorities imposed by the reforms—of personal budgets in particular—we have done an assessment, as we always do. That is why a £70 million reform grant has been made in this financial year, and I announced last week a subsequent £43 million for implementation in the first year. It is also worth noting that there is not necessarily a direct correlation between personal budgets and additional costs. In fact, the evaluation of personal health budgets in the pilot that was undertaken found them to be more cost-effective in delivering services. I am confident that the reforms will not only help to deliver better services, but will alleviate some of the financial pressures on local authorities.

The hon. Gentleman asked about joint commissioning and whether I could point to any exemplary work that showed that it was starting to make a difference to families. I encourage him to look at what is happening in Wigan, which has made excellent progress. It has demonstrated substantial change to its arrangements, and joint commissioning is at the heart of the work it is doing. It has subsequently seen an improvement in the services available to parents and children.

The hon. Gentleman asked about how parents will be made aware of the availability of personal budgets, and that is an important point. It is why I wrote to parents through the various networks available to give them as much information as possible about what will happen in September. We are also working closely with schools, which are often the first port of call and the daily contact that parents have with the special educational needs system, so that they are informing parents now about what they can expect to happen in September and the role that personal budgets can play.

The hon. Gentleman asked how we can ensure that we have a person-centred approach and what practical support we are providing to make sure that that is the case. Above all, I would direct him to the £30 million that we are providing to recruit and train some 1,800 independent supporters. They will not be from the local authority or health providers, and are the one aspect that parents have consistently told us are the most helpful addition to the support they receive as they enter the SEN system, both at the point of assessment and in the further work required to ensure that children achieve the desired outcomes.

The hon. Gentleman also asked how organisations that are not currently involved in the delivery of services can make themselves known to potential users of personal budgets. That is, of course, the whole basis of the local offer that will be brought into being through consultation with parents and children, and should be a showcase of

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what is available in special educational needs services in a local area. I would expect that to include all those organisations that have the capacity to help to deliver some of the services that personal budgets and direct payments are designed to obtain.

The hon. Gentleman mentioned the experience in Essex. I recall that when we last debated this issue he mentioned the experience in Solihull. I hope the fact that he has now moved on to Essex suggests that I have satisfied him that Solihull is ready for these changes. In fact, we have done a readiness survey of all 152 local authorities to satisfy ourselves that they are ready to go come September, not only on personal budgets but more widely across the reforms that we are bringing in. Some 90% of local authorities have said that they are confident that they are ready, but I am seeing some personally to satisfy myself that they have managed to deal with some of the issues that remain so that they are up to speed come 1 September.

I said at the start that this is a complex issue, and I think that point was behind some of the hon. Gentleman’s questions. It will create dilemmas for some of the funding streams and the disaggregation of finances. We are aware of those possibilities and we will keep a close eye on how they develop, not only through Ofsted but with the CDC and the evaluation that we have done, up to now, with SQW. I am confident that we are in a good position to ensure that personal budgets play a key role in delivering much better services for children and young people with special educational needs. I am grateful for the hon. Gentleman’s support in principle for the steps that we are taking, and I will keep a keen eye on how these important changes are delivered on 1 September for many young people. I am sure that they will benefit from the Government’s work.

Question put and agreed to.

Business without Debate

delegated legislation (Financial Assistance to Industry)


That the Motion in the name of Secretary Vince Cable relating to Financial Assistance to Industry shall be treated as if it related to an instrument subject to the provisions of Standing Order No. 118 (Delegated Legislation Committee) in respect of which notice has been given that the instrument be approved.—(Mr Lansley.)

National security strategy (joint committee)


That Mr James Arbuthnot be discharged from the Joint Committee on the National Security Strategy and Rory Stewart be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)


Removal of Trees from Thirsk Market Place

8.19 pm

Miss Anne McIntosh (Thirsk and Malton) (Con): Would it be in order to congratulate you on the preferment that was shown to you in the Queen’s honours, Madam Deputy Speaker? [Hon. Members: “Hear, hear.”]

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It is a pleasure and a privilege to present a petition on the removal of trees from Thirsk Market Place on behalf of residents of Thirsk and Malton. The petition is in the name of Mike I’Anson, the chair of Thirsk Community Woodlands Group, Lesley Rolfe, a resident, and 1,011 other petitioners, which underlines its importance. I add that trees are the logo of the Conservative party and people do love their trees in local areas.

The petition states:

The Petition of residents of Thirsk and Malton,

Declares that the Petitioners believe that Hambleton District Council has not explained in detail how it came to its decision to remove five healthy birch trees from Thirsk Market Place; further that the trees were located in a conservation area; and further that the Petitioners believe that no public consultation was undertaken in relation to the removal of these trees.

The Petitioners therefore request that the House of Commons urge the Government to encourage Hambleton District Council to replace the five trees which were removed and further requests that the House urges the Government to call Hambleton District Council to account for its actions.

And the Petitioners remain, as in duty bound, will ever pray.


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Work Capability Assessments

Motion made, and Question proposed, That this House do now adjourn.—(Mr Evennett.)

8.22 pm

Sheila Gilmore (Edinburgh East) (Lab): I am very grateful to have secured this debate. I have been pursuing work capability assessments for those on employment and support allowance since I was elected to this House. Indeed, I think I mentioned in my maiden speech that I would take up this issue. This is my sixth debate on specific aspects of the WCA.

I want to develop an issue I first raised on 6 September 2013: the support that people receive while they challenge a decision on their entitlement to benefit. This will generally involve somebody who has been found fit for work, but who believes that the decision is wrong and that they are entitled to ESA. It could, in some circumstances, also apply to someone placed in the work-related activity group, as opposed to the support group.

In the past, a claimant could immediately lodge a formal written appeal with a judge from Her Majesty’s Courts and Tribunals Service. A Department for Work and Pensions official, known as the decision maker, would look at the original decision again, and either change it in the claimant’s favour or uphold it and pass the appeal on to a judge. That initial stage was, and still is, referred to as a reconsideration. What has changed is that since October 2013 claimants have to apply for reconsideration formally and separately before they can lodge an appeal. This two-stage process was introduced following the passage of the Welfare Reform Act 2012 and its subsequent regulations.

I emphasise, as I have done before, that I do not object to the introduction of even a mandatory reconsideration process. It can be quicker, less stressful for claimants, a lot cheaper for taxpayers, and, as I think the Minister himself said last week, it may be contributing to a reduction in the number of formal appeals. There are, however, serious practical consequences to mandatory reconsideration: the gap in payment to claimants prior to the formal appeal process, long delays in receiving a decision on reconsideration, and the lack of statistics on outcomes.

Claimants, although they may not be aware of it, have never formally been entitled to employment and support allowance during the reconsideration process. However, prior to October last year the benefit was usually paid at the assessment rate because reconsiderations —we could, perhaps, call them informal reconsiderations —took place under the auspices of having lodged an appeal, and when claimants lodge an appeal, they are entitled to receive assessment-rate employment and support allowance. Now that claimants have to apply for reconsideration and then appeal at a subsequent date, there is a gap in payment. Official advice suggests that during this period claimants can apply for jobseeker’s allowance, rather than employment and support allowance, while their reconsideration request is being considered. They can then go back to claiming ESA at the assessment rate if their original decision is upheld and they submit an appeal.

As I noted last year, however, JSA comes with a high level of conditionality. Claimants have to be available for work, actively seeking work, attending work-focused

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interviews, searching for jobs and making a minimum number of applications every week. In itself, that can prove tiring and stressful, and can exacerbate existing physical or mental conditions. Even more important is the fact that those who apply and fail to meet these conditions can be sanctioned or refused benefit altogether. In my previous debate, I predicted that this would lead to people having no support from the state, with people being too fit for ESA and too sick or disabled for JSA. I have encountered many such examples in my constituency. Citizens Advice Scotland, which has given me a great deal of support for this debate, has today published a report on this issue. It describes some of the situations in which people find themselves. These are real cases that have come to their bureaux. I suggest that the Minister look at the report.

Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): I am glad that my hon. Friend has secured this debate. She mentions the Citizens Advice Scotland report, which I too have seen. Does she agree that the Minister should look at its recommendations? Like her, I deal with many of these problems in my constituency casework. The Government cannot just leave the situation as it is.

Sheila Gilmore: Indeed. The report’s recommendations are very sound. One fundamental recommendation is to reinstate the payment of ESA for practical reasons, and I will come on to that.

Of those cases, most who applied for JSA while their reconsiderations were ongoing were either refused outright or failed to attend necessary appointments, owing to their mental health condition, perhaps, or, in some cases, their learning disability. Others did not apply because they could not face another benefit application, or simply because they did not know that they could. In one case where a claimant applied and was paid JSA, he emphasised that this was only as a result of support he received from his Jobcentre Plus adviser. For those who did not receive JSA, few had savings or other income to fall back on and had to rely on already overstretched food banks. Others took out high interest loans, amassing debts they will struggle to repay even if they subsequently receive backdated payments at a later date. One constituent sold off his few remaining possessions to survive.

When I first raised these concerns last September, the then Minister, the hon. Member for Fareham (Mr Hoban), assured me, as he did in subsequent correspondence, that claimants with an outstanding reconsideration request could ask for what was described as “flexible conditionality” when they met their Jobcentre Plus adviser. Last week, however, the Benefits Director at the DWP acknowledged to the Work and Pensions Committee that

“not all advisors had been aware of this”

and that new guidance to jobcentres had been circulated at the end of April this year—several months after the introduction of mandatory reconsideration. That is welcome, but it is hard to have confidence in the Department, given that previous assurances were clearly unfounded.

In addition, we were told at the same meeting that people should never be refused JSA outright without the opportunity to have a meaningful conversation about conditionality with a jobcentre adviser. However, the DWP’s own guidance specifically states that

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“a claimant will not be able to remain on JSA if their period of sickness exceeds 14 days”.

Citizens Advice Scotland has suggested that this is a particular problem for those claiming JSA during an ESA reconsideration. I would be grateful for the Minister’s comments on that.

More broadly, however, I question the whole rationale for preventing claimants from receiving ESA at the assessment rate during this period. Last week the Minister tried to hide behind legal semantics, arguing that claimants are deemed to be fit for work during this period and must apply for benefits accordingly. However, that ignores the fact that claimants are also deemed fit for work during a formal appeal, yet because of the way in which regulations are framed, they are entitled to ESA at the assessment rate during that process. If the problem is how the regulations were set out following the Welfare Reform Act 2012, they can be changed. There is no real reason why people should be treated differently during the reconsideration period and the appeal period.

There is also an administration cost involved in a claimant receiving the assessment rate of ESA, ceasing to receive it, claiming JSA and then potentially claiming the assessment rate of ESA again. These are significant costs when multiplied by the number of people involved. In addition, if everybody claimed JSA successfully, they would receive benefit at exactly the same rate as they would have been getting on ESA, so if there are any savings to be anticipated, is it because Ministers thought that people would, in fact, struggle to claim JSA during the reconsideration process, given that administration costs are likely to outweigh anything else? I am sure that cannot be the case.

The other issue that has come up as mandatory reconsideration was rolled out since the end of last year is the length of time that people are waiting for decisions. We were initially told that reconsideration should take around two weeks, but in many of the cases I have seen, as well as in those seen by Citizens Advice and many of my colleagues, the time taken has varied between seven and 10 weeks. Those delays have exacerbated people’s health conditions and the financial and other issues they face as a result of receiving no benefit at all. The Minister acknowledged in evidence to the Work and Pensions Committee last Wednesday that there was a backlog. My staff have been told by our local office that there is indeed a backlog—that is how it was referred to. I would like the Minister to confirm today how long claimants are being told they will have to wait, and when he will publish statistics on average times and the total number of claimants who are waiting for a decision.

Mark Lazarowicz: My constituents are served by the same office as my hon. Friend’s and we have had the same experience. Would it not also be useful for the Minister to tell us whether the backlog is increasing or declining? If measures are not taken to deal with the problem, the danger is that it will get worse, not better.

Sheila Gilmore: I agree. One of the problems with many of the backlogs we are experiencing is that they are increasing.

Last week the Minister also defended the decision not to set a statutory time limit on how long reconsideration decisions take. This issue was raised with Ministers when the legislation was going through the House and

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in subsequent sittings of the Work and Pensions Committee, for example. In April 2012, the Administrative Justice and Tribunals Council warned that the absence of a time limit could have the effect of

“delaying indefinitely the exercise of the right of appeal to an independent tribunal”.

Just last month, Judge Robert Martin expressed concern that judges could no longer intervene if they felt the reconsideration process was taking too long, because cases do not reach them until after reconsideration is completed. Setting a time limit will be one option before the Government at this stage, but a much simpler option might be not to have to do so, and instead simply to reinstate assessment rate ESA during that period. Indeed, that might be an incentive for the Government to speed up the process in any event.

Finally, I return to another issue I have raised previously. In a debate on 9 April this year, I argued that, given that reconsideration is now mandatory and that, as a result, we might expect many more decisions to be overturned in that way, the DWP should now publish statistics on the number of successful reconsiderations—something that is currently done only for successful appeals. Successful reconsiderations are lumped in with original decisions, so it is impossible to tell exactly what has happened. If we do not have separate overturn figures for reconsiderations, that might make the performance of whichever contractor is involved—including a new contractor in future—more difficult to monitor and track.

The Minister’s response at that time was that doing so would be premature, because mandatory reconsideration had only started in October 2013 and would need some time to take effect. However, it would appear that informal reconsideration has been taking place for some considerable time, even before the mandatory process was introduced. A previous Minister—I think it was the previous Minister but one—told the Work and Pensions Committee in March 2012 that the Department was

“effectively putting every case that is going to appeal, or where a person is not happy with it, through a reconsideration where we look for additional evidence”.

It would therefore appear that, as long ago as March 2012, reconsiderations were taking place in virtually every case that went to appeal. By this stage, therefore, we must have a considerable amount of management information—at least two years of reconsideration decisions—which could be published as official statistics in due course and which would give us an impression of what was happening.

Although I have to go on what the Minister said on that occasion, that might or might not have been an entirely accurate reflection, given that in the same evidence session the same Minister told us that although there had been a slight backlog at that time because of the implementation of some of the Harrington recommendations, everything was back on track and by the summer—the summer of 2012—there would be no backlog of ESA assessments. Two years later, however, there are now apparently 700,000 people awaiting an assessment as new claimants.

However, there is other evidence to suggest that the statistics are there to be captured and reported on. There appears to have been a reduction in the number

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of appeals. The most recent statistics on appeals—which were published just last week, on Thursday 12 June—appear to show a reduction in the rate of cases going to appeal, from around 42% to 43% up to mid-2011 to around 35% for claims begun in November 2012, with possibly a further reduction, to perhaps even as low as 25%, for cases started in March 2013. I say “possibly” because some of the March 2013 cases may well be still in the reconsideration process—indeed, they might even have barely got out of the assessment process, because of the backlogs.

However, there appears to have been some change in the number of cases going all the way to appeal. That is not necessarily a bad thing, because we have all criticised the cost of appeals, the stress of appeals and the time taken. That is happening, and even though this may be in everyone’s best interests, we really need to know what is happening. The publication of statistics at the earliest possible opportunity, based on at least the last two years of experience, if not more, would enable us to judge the performance of the contractor far better. Given that we are going to have a new contractor for these assessments very soon, it would be good to have this in place well before that starts.

In conclusion, will the Minister confirm when he expects statistics on successful reconsideration to be published, and will he reconsider his position on the statutory time limits? More than anything, I want to emphasise to him that many claimants who claim JSA in this situation are, in effect, being denied it. They are told that they are too fit for one benefit and too sick or disabled for another. Let me ask the Minister again: why not amend the law, so that ESA claimants can continue to receive the benefit at the assessment rate during the reconsideration process? The only way that could be more expensive for the Government would be if Ministers expected sick and disabled people to go without any benefit—and I am sure that that cannot be the case.

8.39 pm

Dame Anne Begg (Aberdeen South) (Lab): As the previous debate wound up earlier than expected, I have the chance to say a few words on this subject.

I do not think anyone is saying that a reconsideration process in deciding whether someone should receive a benefit is a bad thing. I do not think anyone would complain if it cut the number of appeals, caused less stress on the claimant, could be done very quickly—in less than a month—and benefits were secure during the process, but that is not what is happening. People are having to face very long delays before they get a decision the other side of the mandatory reconsideration and that is probably causing the most anxiety.

On top of that, people are never very sure to which benefit they are entitled. Will the Minister confirm that we are talking not only about people who were on incapacity benefit and have been found to be fit enough for work and should therefore be on jobseeker’s allowance, and it is to that that the appeal applies, but about those who in the original assessment were awarded employment and support allowance in the work-related activity group and are appealing because they think that they should have been in the support group? In other words, someone has been found eligible for ESA, appeals to go into the support group but still has to go through the mandatory

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reconsideration, at which stage their benefit stops and they are expected to apply for JSA. I have heard anecdotal evidence from a number of different people that those who have gone through the mandatory reconsideration find themselves in the support group, so no longer need to visit a personal adviser in Jobcentre Plus. During the period of the mandatory reconsideration, however, they were expected to be signing on for JSA, but were so ill in the meantime—that is why they ended up in the support group—that they could not make the weekly signings, as a result of which they and their benefits have been sanctioned. I would like the Minister to clarify that position.

The other problem is the interrelationship between the benefit someone receives and other benefits. Sometimes, a person undergoing the mandatory reconsideration who is not yet in payment of JSA might find that their housing benefit or council tax rebate has been stopped because the council has been told that they are no longer eligible for ESA, which they are not, but because of some of the problems highlighted by my hon. Friend the Member for Edinburgh East (Sheila Gilmore) they have not yet put in an active claim for JSA. As a result, their housing benefit might be disrupted, even though they are entitled to it on the basis of their overall household income. There should not have been a break in the claim, but that is not how the system works.

If the changes could be made smoothly and very quickly, with the person being very clear about the benefits to which they are entitled and being able to remain on them without a break in the claim, the reconsideration might be acceptable. So far, however, that is so far from the reality of what is happening that it is no wonder that people are so anxious.

Julie Hilling (Bolton West) (Lab): Does my hon. Friend share my concern about other anecdotal evidence that crops up all the time—about people who during this period of reconsideration and upheaval, end up taking their own lives, dying or making themselves much more ill? Financial worries are not the only ones at stake, because people’s health and lives can be put at risk, too.

Dame Anne Begg: We know that people can get incredibly anxious about any kind of health assessment that they are put through. We know, too, that people are not only anxious at the time of the mandatory reconsideration; they will have been anxious much earlier, perhaps when they first received an ESA50 form through the door to fill in. That may be followed by the worry of the work capability assessment, after which they might be found fit for work when they do not think they are fit for work; and they may be put in the WRAG when they think that they are ill enough to be in the support group. There is a whole range of pinch points at which people feel extremely anxious.

Let me give an anecdotal example. Two community psychiatric nurses came to see me in my surgery a few months ago. They were very concerned about their clients, whom they had fostered and helped, and who were almost reaching a stage at which they could start thinking about work and how they might return to the workplace. At that very point, however, the ESA50s dropped through the door, and their health suffered a setback.

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The nurses were particularly concerned about a very vulnerable group of people who found the whole process—which was not helped by all the publicity surrounding it—terrifying and worrying. The extra burden imposed by the mandatory reconsideration is yet another reason for the deterioration in people’s health as they go through that process. It is not a zero-sum game. A whole range of external forces can worsen the condition of people who are in ill health, who may have mental health problems, and whose condition may fluctuate. People can be made to feel very ill, and we know of cases in which the process of applying for ESA has been cited as the reason for suicides. That is a tragedy. I am not suggesting that mandatory reconsideration is entirely responsible for it, but it constitutes yet another pressure on people who are already vulnerable, already quite ill, and already finding it difficult to cope with illness or disability.

I hope that the Minister will examine the process, and how it is working in practice. I cannot believe that it is working in the way he would like it to work. I am pretty sure that long delays, failures to reach a determination, and the fact that people may not know to which benefit they are entitled and may end up with nothing as a result—perhaps with huge rent arrears because of problems with housing benefit claims—are not part of the Minister’s plan, and I hope that, if they are not, he will be able to give us some idea of how he will improve the process.

8.47 pm

The Minister of State, Department for Work and Pensions (Mike Penning): I congratulate the hon. Member for Edinburgh East (Sheila Gilmore) on getting here this evening. I know that she was delayed on the train. I think it very important for a debate that is on the Order Paper following a Member’s success in the ballot to be heard: that is only right and proper. Actually, this is a bit like groundhog day. According to my file, this is the hon. Lady’s fifth debate on the subject. She said that it was the sixth; perhaps we missed one.

I thank the Chair of the Work and Pensions Committee, the hon. Member for Aberdeen South (Dame Anne Begg), for being present this evening. I am slightly concerned, because I said many of the things that I am about to say to her Committee only a few days ago. I hope that its members will pay attention to what I say, because during the speech of the hon. Member for Edinburgh East I feared that the report might have already been written. I said openly and honestly that I wanted to do exactly what the Chair of the Committee said should be done—to make the process fairer, better and quicker, which I think is what we all want.

Sheila Gilmore: Will the Minister give way?

Mike Penning: I should like to make some progress first, not least because I want to congratulate the hon. Lady a little more. We have plenty of time, after all—with your permission, Mr Deputy Speaker.

Mr Deputy Speaker (Mr Lindsay Hoyle): The Minister is all heart.

Mike Penning: Perhaps, on that note—with all heart— I will give way.

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Sheila Gilmore: May I just say, for the purpose of clarification, that any comments that I made about the Select Committee related to evidence that had been given in public? I was not in any sense referring to what the Committee would or would not recommend in due course, because we have not yet reached that stage.

Mike Penning: I was questioned extensively by the Committee about mandatory reconsideration delays, which are the subject of this evening’s debate. As you will probably have noticed, Mr Deputy Speaker, I rarely speak from notes, but I shall try to stick to what I said during the Committee’s evidence sessions.

There are two or three points I can make, but in some respects we will have to wait for the statistical analysis. I would love the data to be published now, but it is not ready. As soon as it is ready, I will publish it. As I said to the Select Committee recently, the statistics are being analysed and they will be published as soon as they become available.

Mandatory reconsideration is being done in order to get decisions right—to give decision makers the opportunity to look at things and make sure we have got the decision right. If there is any new evidence, it can be brought forward at that stage. That, among other things, is clearly having an effect on the number of appeals going to the tribunals—although we do not know to what extent, as the statistical analysis has not yet been released—and I think that is a good thing. As I said to the Select Committee, if this means that fewer judges are employed handling tribunals, that is a good thing. I am not certain the judges feel that way, and some of the comments from some judges more recently may indicate that. However, it is important that tribunals are gone to as a last resort in order to make the judgment as to whether DWP officials and decision makers have made that final decision correctly to the best of their ability.

If we can have fewer people going to appeal, that will be better. Appeals are dropping across the benefits handled by the Department, and especially those in respect of WCA. That is not solely due to mandatory reconsideration. There are about 80% fewer appeals, like for like.

Have delays been caused as we brought in the process? I have been open and honest about that before, and the answer is yes, but I would rather have slightly more delays than have decisions incorrectly taken and then turned over at tribunal. The decision on the mandatory reconsideration was prompted in part because I had sat in on a tribunal hearing and so much evidence was being brought in on the day of the tribunal. Everybody has the right to do that, and judges certainly have the rights and powers to look at that evidence, but my decision makers and officials had had no opportunity to look at that evidence. It is very important that we get this right.

At this stage in the process, the decision has been made that the person concerned is not going to get ESA. That is why we refer them across to JSA while the process is continuing.

The hon. Lady quoted from the DWP guidance specifically on the 14-day question. She pointed this out:

“The 14 day Temporary Periods of Sickness rule in JSA is in place to protect people from losing their entitlement when they

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have a short period of sickness. It was never intended to protect people with long term conditions.”

The following bullet point is very important, however:

“Claimants with longer term conditions can have their availability”—

for work in this case—

“restricted because of a physical or mental condition as long as the advisor thinks it is reasonable to do so”

based on the information before them.

Sheila Gilmore: The guidance the Minister quotes is one thing, but there is clear evidence—not just from Citizens Advice Scotland and my advice surgeries and those of my colleagues, but from up and down the country—that people in this position are not being allowed to claim JSA. They are being told that, because of their unfitness for work and in order to keep to the conditions, they cannot receive that benefit and they are turned away. Can the Minister assure us that he will make sure that will not happen?

Mike Penning: I will do everything I can, but I think it would have been right and proper for the hon. Lady to have gone on to say that there is specific guidance for people with long-term illness, as it is important to put that on the record. On the point she makes, I want all the staff in the DWP who have face-to-face contact with claimants and members of the public to have as much information as possible to make sure they can make the right decision. That is exactly why the guidance was changed in April. It was a decision that I made, and I asked my officials to make the change. I am not in any way saying that mistakes do not take place. We have a very large benefit with huge amounts of face-to-face contact across the board, whether it is in Jobcentre Plus or with officials in my own Department, and we make mistakes; no one could say otherwise. It would not make any difference who the Government were or who was standing here as Minister. I hope that they would all say, “We never get it perfect all of the time.” However, we should get as much of it right as we can and as often as we can, which is why mandatory reconsideration is vital to ensuring that the system works. As the hon. Lady and the Chair of the Select Committee said, when we are re-looking at a case and find that a person is entitled to benefit, we should ensure that their housing benefit and council tax benefit are not affected. All that must join up together.

Without a shadow of a doubt, we will work very hard to put in place the right training and guidance to ensure that the decision makers get things right. It is a big job, and I have only been here a short time, but we are getting there. As a Minister in the DWP, I am absolutely determined that we will ensure that taxpayers’ money is spent wisely; that it goes to the people who need it; that we put in place training for the right people; that any delays that are taking place—and they are taking place—are brought to a minimum; that we get out statistics; and that we are open and honest with the public, which I will be if there is a debate again next week or the week after, and that will remain the case for as long as I am a Minister in the DWP.

Question put and agreed to.

8.56 pm

House adjourned.