[2nd Allocated Day]
Further consideration of Bill, as amended in the Public Bill Committee.
New Clause 24
Duty of letting agents to publicise fees
‘(1) A letting agent must, in accordance with this section, publicise details of the agent’s relevant fees.
(2) The agent must display a list of the fees—
(a) at each of the agent’s premises at which the agent deals face-to-face with persons using or proposing to use services to which the fees relate, and
(b) at a place in each of those premises at which the list is likely to be seen by such persons.
(3) The agent must publish a list of the fees on the agent’s website (if it has a website).
(4) A list of fees displayed or published in accordance with subsection (2) or (3) must include—
(a) a description of each fee that is sufficient to enable a person who is liable to pay it to understand the service or cost that is covered by the fee or the purpose for which it is imposed (as the case may be),
(b) in the case of a fee which tenants are liable to pay, an indication of whether the fee relates to each dwelling-house or each tenant under a tenancy of the dwelling-house, and
(c) the amount of each fee inclusive of any applicable tax or, where the amount of a fee cannot reasonably be determined in advance, a description of how that fee is calculated.
(5) The Secretary of State may by regulations specify—
(a) other ways in which a letting agent must publicise details of the relevant fees charged by the agent;
(b) the details that must be given of fees publicised in that way.’—(Jenny Willott.)
This new Clause requires letting agents to publish a list of their fees and provides for where and how this must be done. The Secretary of State may also make regulations about what must be published and where.
Brought up, and read the First time.
I beg to move, That the clause be read a Second time.
With this it will be convenient to discuss the following:
Government new clause 25—Letting agents to which the duty applies.
Government new clause 26—Fees to which the duty applies.
Government new clause 27—Letting agency work and property management work.
Government new clause 28—Enforcement of the duty.
Government new clause 29—Supplementary provisions.
New clause 30—Letting Agents: Report—
‘Within three months of Royal Assent of this Act, the Secretary of State shall prepare and publish a report, and lay a copy of the report before Parliament, on—
(a) the consumer detriment caused to tenants by letting agent fees and the impact this has on the ability of tenants to secure and maintain tenancies, and
(b) the steps that the government intends to take to prohibit fees that cause detriment to tenants.’
Government amendment 23.
We know that consumers in the private rented sector are especially concerned about the fees charged by letting agents, particularly when they are unexpected or unreasonably high. There are calls for a ban on letting agents charging fees to tenants, but I am concerned, as we discussed on the previous debate on Report, that an outright ban would simply increase the pressure on rents. Making agents publish their fees is a better approach, giving consumers the information they want and supporting good letting agents. Such transparency would deter double charging and enable tenants and landlords to shop around, which would encourage agents to offer competitive fees.
The vast majority of letting agents provide a good service to tenants and landlords, but we are determined to tackle the minority of rogue agents who offer a poor service. Although good agents already make information about their fees and charges readily available, the new clause will introduce, for the first time, a financial penalty when an agent fails to display their fees. We are introducing legislation that will require all letting agents and property managers to belong to an approved redress scheme. That will give tenants an effective way to address complaints about fees, as well as, more generally, when the tenant is not happy with the agent’s performance.
It is a pleasure to see the debate on the Consumer Rights Bill come back to the House because many Members on both sides of the House are concerned about the impact of what the Minister calls unreasonably high fees. In relation to the Government’s proposal and our entirely reasonable new clause, the challenge for us all is to understand quite what damage such fees do to the private rented sector and how we can address those fees to give us a fair market in private rented accommodation.
I welcome the fact that the Government have now understood the case that the Opposition have been making, which is that we cannot ignore—try though the Government have in previous debates—the 9 million people in the private rented sector in this country. In particular, we must understand the impact of agency fees on people’s ability to keep a roof over their head, so it is worth thinking what kind of fees we are talking about. The Minister did not go into much detail, but it is worth reminding Members in the Chamber about the fees.
On average, tenants are forced to pay letting agents about £355 every single time they move. Indeed, some mystery shopping in my constituency has found average fees of £450, and Shelter has identified the eye-watering figure of £700 in total agency fees. Shelter has certainly found that one in seven of those using an agency is charged more than £500 a time, meaning that people have to find £500 every single time they move. That is a considerable sum, before we even consider the deposit and the rent. Such fees are putting huge pressure on people in the private rented sector, particularly in relation to their ability to make ends meet. Shelter’s research shows that 27% of those who have used a letting agency in the past three years have had to borrow or use a loan to pay the fees, and that 17% have had to cut down their spending on basic essentials, such as food or heating, to be able to cover them.
For the first day on Report, we tabled an amendment to recognise that there is a fundamental conflict of interest for an agent to take money from both the tenant and the landlord for the same transaction, and therefore to ban the laying of fees on tenants. In doing so, we were learning from the experience in Scotland. The Minister said, as she has again today, that banning fees will not make it cheaper for tenants, who will just end up paying higher rents through up-front fees.
In responding to our new clause 30, I hope that the Minister will use this opportunity to tell us what she takes from the research done in Scotland, where such a provision was made in 2012, because the research shows that the reverse is true—that there is no evidence that banning agency fees leads to an increase in rents. Indeed, fewer than one in five letting agencies interviewed in Shelter’s research said that it had increased fees to landlords. In fact, taking away the conflict of interest has had no impact on the market, but has done everything to help on the cost of housing.
I note the comments by the Deputy Prime Minister, who has admitted that there is a problem with fees and has said that there is an issue about the length of tenancies. The Opposition have been making those arguments for some time. In relation to the Government new clauses, what is it about our arguments and the evidence—that taking away fees does not increase rents, but makes renting a home more affordable for people—that explains why the Government have not as yet fully come over to our side of the argument.
The Government new clauses include some admirable claims about transparency. We certainly support the idea that it is important for tenants to be aware of the fees that they might be charged. However, I have several questions about how the new clauses are drafted, because it is not clear how they will work in practice. I am sure that the Minister would argue that all her proposed new clauses must work in practice, not just in principle.
One new clause mentions that the description of a fee must be understandable, but will the Minister clarify quite what that means? Will she require agents to break fees down and, for example, to say whether they will charge for a credit check and for an inventory fee, as often happens? In my constituency, I have seen tenants charged a pet fee, so will there be a description of all the fees that might possibly be applied?
What does the Minister mean by “likely to be seen”? We have seen examples of agencies putting a list of their fees in the toilets of their offices for tenants to read. Under the Bill, would that be considered a place where such a list is likely to be seen? What redress would a tenant have if they had not had cause to use the facilities of a letting agency and had therefore not seen the information?
Most crucially, fees are often charged not just when a tenancy is first signed, but when it is repeated. What will the Minister do about the repeat application of fees? She will recall that, in the last debate on Report, we discussed a tenant who had tweeted us live to say that they had been charged £1,300 to change the names on a tenancy. The Government new clauses do not recognise that fees are applied not just when a tenancy is started, but when it is renewed.
I came across a case recently in which a tenancy was repeated. All that happened was that a copy of the original agreement was reprinted and sent off to be signed. There was all of about 30 pages of printing, which, even at the most expensive local high street printing outfit, would not amount to anywhere near the couple of hundred pounds that the agency was charging for that simple job.
My hon. Friend makes an important point about the kind of repeat fees we are seeing, which any legislation must address. More importantly—this relates to the proposals that we have made—I would wager that the landlord was also charged in that transaction for the same amount of photocopying. Fees are clearly being charged when a contract is repeated and that needs to be addressed.
New clause 24 talks about how a fee can be calculated if the amount is not yet known. Will the Minister set out what protection will be available to consumers if they miscalculate the amount based on the information that is provided? How clear does the information of the letting agency have to be?
All the issues that I have raised relate to enforcement. New clause 28 provides the power to impose a £5,000 penalty. It would be very interesting to hear what kind of enforcement process the Minister envisages. We talked in Committee about the cuts to trading standards—the Cinderella service that does not even have enough buttons at the moment to address the many issues the Government expect it to address under the consumer rights legislation.
The Minister talked in passing about the letting agent redress scheme. I must pay tribute to my noble Friend Baroness Hayter, who argued passionately for the redress scheme because of her experience of these issues. It is not clear to the Opposition quite what will happen. Will the Minister therefore set out what she thinks will happen if an agent does not display their fees clearly and what kind of enforcement action will be taken? She talked about issuing civil penalties. Will those penalties go to the tenant who has had to pay £1,300 for the photocopying to be repeated, but who was not told about that when they signed up to the letting agency?
All those questions speak to the fundamental challenge that we are dealing with, which is that information, although welcome, is not enough to deal with the fundamental problem of the impact that excessively high agency fees have on a person’s ability to rent a property. As we said in the previous debate on Report, it is a bit like telling someone who is tied to the train tracks what the timetable is for the trains. The fundamental issue that we have to deal with is the consequence of agents being able to charge tenants such fees.
That is why we tabled new clause 30. I hope that the Minister will recognise that it is an entirely reasonable response to the Government new clauses. New clause 30 would do two things. First, it would require the Government to produce a report on
“the consumer detriment caused to tenants by letting agent fees and the impact this has on the ability of tenants to secure and maintain tenancies”.
I am sure that everybody in the House would welcome such a report, because it would at least give some depth to the conversations that we have all been having about this issue. Secondly, it would commit the Government to taking action to
“prohibit fees that cause detriment to tenants.”
Surely, if fees are pushing people out of their homes and distorting the market in private rented accommodation, it is in the interests of all consumers and, indeed, landlords that we act.
I hope that the Minister will accept new clause 30 and commit the Government to truly tackling the issues in the private rented sector, including the impact of agency fees. I am sorry that the hon. Member for Brigg and Goole (Andrew Percy) is not here because he, too, has argued that banning agency fees would somehow lead to higher rents. I look forward to the Minister responding to all those tenants in Scotland who have not found the banning of fees to be a negative experience. What does she think we can learn from that experience?
If the Minister does not yet accept the case for banning fees outright, does she accept that there are fees that can be detrimental and that it is appropriate for the Government to intervene? Alternatively, is she simply saying that if a letting agency wants to charge somebody £700 a time to renew their tenancy, it is fine, as long as they have told them about it? I am sure that is not her intention and that she recognises that people do not shop around for a letting agency: they shop around for a property to try to keep a roof above their family’s heads. Because such costs cause detriment to consumers, they are unacceptable. If the Minister does not accept that they cause detriment, I hope that she will at least accept our amendment that would provide that the Government should carry out research on this issue and commit to action if detriment is proved. Nine million people are waiting on the Minister’s every move to see whether they can keep a roof above their heads, not just in 2014 but in 2015 and beyond. Should we win the next election, we will take action if the Government will not do so now.
The irony of the hon. Lady’s last sentence is astounding, given that the Government are legislating to tackle this issue, but the previous Labour Government did not. The issue has not suddenly arisen in the last three years, and the Government have committed to tackling the minority of rogue landlords, something that her party did not do.
We are taking action to ensure that tenants have proper redress and a fair deal. We recognise that there are real issues with a minority of rogue landlords who do not treat tenants fairly, and that is why we are taking action. Today, we are ensuring transparency and openness on fees so that landlords and tenants can shop around. The hon. Lady mentioned the experience in Scotland and the recent Shelter report on the impact of banning fees. However, concerns have been raised that the Shelter report ignores the widespread non-compliance with the ban in Scotland. I have seen an estimate that some 25% of firms are still charging admin fees for tenants who move in, and a higher proportion are still charging other fees during the tenancy.
As the hon. Lady said, those agents that are complying have got around the fact that they cannot charge fees to tenants by, for example, raising landlords’ fees, but that has had an impact on rents in certain areas. Landlords are not absorbing the increase in fees, but passing it on to tenants through the rent. For example, in Edinburgh, rents went up by more than 5% and in Aberdeen by more than 6%—significantly higher increases than in England and Wales. The evidence is that the introduction of the ban north of the border has had a significant negative impact on tenants.
Can the Minister clarify that she disputes what Shelter has said—that any increase in rent is not related to the banning of agency fees—or that she has her own research? She is telling a very different story from the evidence of the research conducted by Shelter in Scotland, and the House may be confused by what she is saying as a result.
I have made it clear that we have concerns about the Shelter report because, for example, it ignores the widespread non-compliance that I mentioned. The evidence on rents is that they have risen faster in Scotland than they have in England and Wales.
The hon. Lady raised some questions about how fees would need to be broken down and what evidence would need to be provided. The regulations will make that clear. For example, a general administration fee would need to be broken down to show exactly what it covered. That information will therefore be available to tenants. The hon. Lady also asked whether repeat fees would be covered, and I can confirm that the fees associated with property management would also be covered, so they would need to be provided and published.
The hon. Lady asked how the provisions would operate. The Bill provides a power, and we will consult on and publish secondary legislation to ensure that the provision is as tight as it can be. We will ensure that information is available to tenants and landlords so that they can make a judgment on the most appropriate agent for their business. The legislation will be enforced by local authorities as they are involved in the licensing of landlords and also have the local knowledge about the agencies in their area. They are in the best place to enforce it and to ensure it is operating in the best interests of tenants.
Finally, we have said that we will review it after a year of operation to see how it is working and to ensure that it has made a difference to tenants. We do not want rents to go up, as that would cause widespread problems for, as the hon. Lady says, the large number of people who rent in the private sector. We want to protect those tenants. We do not want their rents to go up; we want them instead to get a fair deal from agencies and to be able to see what the charges are. We want openness and proper redress in place to ensure they receive a fair deal.
Question put and agreed to.
New clause 24 accordingly read a Second time, and added to the Bill.
New Clause 25
Letting agents to which the duty applies
‘(1) In 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) “letting agent” means a person who engages in letting agency work (whether or not that person engages in other work).
(2) A person is not a letting agent for the purposes of 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) if the person engages in letting agency work in the course of that person’s employment under a contract of employment.
(3) A person is not a letting agent for the purposes of 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) if—
(a) the person is of a description specified in regulations made by the Secretary of State;
(b) the person engages in work of a description specified in regulations made by the Secretary of State.”—(Jenny Willott.)
This new Clause provides that the duty applies to a person who engages in letting agency work. Employees are exempt from the duty. The Secretary of State may make regulations exempting other persons or types of work.
New Clause 26
Fees to which the duty applies
‘(1) In 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) “relevant fees”, in relation to a letting agent, means the fees, charges or penalties (however expressed) payable to the agent by a landlord or tenant—
(a) in respect of letting agency work carried on by the agent,
(b) in respect of property management work carried on by the agent, or
(c) otherwise in connection with—
(i) an assured tenancy of a dwelling-house in England, or
(ii) a dwelling-house in England that is, has been or is proposed to be let under an assured tenancy.
(2) Subsection (1) does not apply to—
(a) the rent payable to a landlord under a tenancy,
(b) any fees, charges or penalties which the letting agent receives from a landlord under a tenancy on behalf of another person,
(c) a tenancy deposit within the meaning of section 212(8) of the Housing Act 2004, or
(d) any fees, charges or penalties of a description specified in regulations made by the Secretary of State.” —(Jenny Willott.)
This new Clause provides that the duty applies to fees payable in respect of letting agency work, property management work and other work done in connection with assured tenancies. The clause provides that certain payments are not fees for the purposes of the duty. The Secretary of State may make regulations to exempt other payments.
New Clause 27
Letting agency work and property management work
‘(1) In 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) “letting agency work” means things done by a person in the course of a business in response to instructions received from—
(a) a person (“a prospective landlord”) seeking to find another person wishing to rent a dwelling-house in England under an assured tenancy and, having found such a person, to grant such a tenancy, or
(b) a person (“a prospective tenant”) seeking to find a dwelling-house in England to rent under an assured tenancy and, having found such a dwelling-house, to obtain such a tenancy of it.
(2) But “letting agency work” does not include any of the following things when done by a person who does nothing else within subsection (1)—
(a) publishing advertisements or disseminating information;
(b) providing a means by which a prospective landlord or a prospective tenant can, in response to an advertisement or dissemination of information, make direct contact with a prospective tenant or a prospective landlord;
(c) providing a means by which a prospective landlord and a prospective tenant can communicate directly with each other.
(3) “Letting agency work” also does not include things done by a local authority.
(4) In 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) “property management work”, in relation to a letting agent, means things done by the agent in the course of a business in response to instructions received from another person where—
(a) that person wishes the agent to arrange services, repairs, maintenance, improvements or insurance in respect of, or to deal with any other aspect of the management of, premises in England on the person’s behalf, and
(b) the premises consist of a dwelling-house let under an assured tenancy.”—(Jenny Willott.)
This new Clause defines letting agency work and property management work. It provides that letting agency work does not include publishing advertisements, enabling landlords and tenants to communicate directly with one another or things done by a local authority.
New Clause 28
Enforcement of the duty
‘(1) The Secretary of State may by regulations—
(a) impose functions on a local authority in connection with the enforcement of the duty in section (Duty of letting agents to publicise fees);
(b) make provision for civil penalties to be imposed in respect of a breach of that duty.
(2) Regulations under subsection (1)(b) may provide for the amount of a civil penalty to be determined by the person imposing it, subject to subsection (3).
(3) The amount of a civil penalty that a person may impose by virtue of regulations under subsection (1)(b) may not exceed £5,000 for each breach of the duty in section (Duty of letting agents to publicise fees).
(4) The Secretary of State may by regulations amend the figure for the time being specified in subsection (3).
(5) Regulations under subsection (1)(b) must make provision about the procedure for imposing a civil penalty and, in particular, must require a person imposing a penalty to give the person on whom it is imposed a written notice stating—
(a) the amount of the penalty,
(b) the reasons for imposing it, and
(c) the date by which and manner in which it is to be paid.
(6) Regulations under subsection (1)(b)—
(a) may give a person on whom a civil penalty is imposed a right to request a review of the decision to impose the penalty, and
(b) must give such a person a right to appeal against the decision to the First-tier Tribunal.
(7) Regulations under subsection (1)(b) must, in particular, specify the grounds on which a person may appeal against a decision to impose a civil penalty, which must include the grounds—
(a) that the decision was based on an error of fact,
(b) that the decision was wrong in law, and
(c) that the decision was unreasonable (including that the amount of the penalty is unreasonable).
(8) Regulations under subsection (1)(b) may, in particular—
(a) specify the time within which a person must request a review of, or appeal against, a decision to impose a civil penalty;
(b) require a person to request a review before appealing;
(c) specify the grounds on which a person may request a review;
(d) make provision about the procedure for a review;
(e) make further provision about reviews and appeals (including provision as to the powers available on a review or appeal).
(9) Regulations under subsection (1)(b) may make provision about the recovery of a civil penalty, including—
(a) provision for the person by whom it is imposed to recover the penalty as a civil debt;
(b) provision for the penalty to be recoverable, on the order of a court, as if payable under a court order.
(10) Sums received by a local authority under regulations under this section may be used by the authority for the purposes of any of its functions.
(11) A local authority on whom functions are conferred by regulations under this section must have regard to any guidance issued by the Secretary of State about—
(a) compliance by letting agents with the duty in section (Duty of letting agents to publicise fees);
(b) the exercise of those functions.” —(Jenny Willott.)
This new Clause enables the Secretary of State to make regulations about enforcement of the duty. The penalty for non-compliance will be a civil penalty of up to £5,000. The regulations must provide for a right of appeal against the penalty to the First-tier Tribunal.
New Clause 29
‘(1) In 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)—
“assured tenancy” means a tenancy which is an assured tenancy for the purposes of the Housing Act 1988 except where—
(a) the landlord is a private registered provider of social housing, or
(b) the tenancy is a long lease;
“dwelling-house” may be a house or part of a house;
“landlord” includes a person who proposes to be a landlord under a tenancy and a person who has ceased to be a landlord under a tenancy because the tenancy has come to an end;
“long lease” means a lease which—
(c) is a long lease for the purposes of Chapter 1 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993, or
(d) in the case of a shared ownership lease (within the meaning given by section 7(7) of that Act), would be a lease within paragraph (a) of this definition if the tenant’s total share (within the meaning given by that section) were 100%;
“tenant” includes a person who proposes to be a tenant under a tenancy and a person who has ceased to be a tenant under a tenancy because the tenancy has come to an end.
(2) In 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) “local authority” means—
(a) a county council in England,
(b) a district council,
(c) a London borough council,
(d) the Common Council of the City of London in its capacity as local authority, or
(e) the Council of the Isles of Scilly.
(3) References in 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) to a tenancy include a proposed tenancy and a tenancy that has come to an end.
(4) References in 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) to anything which is payable, or which a person is liable to pay, to a letting agent include anything that the letting agent claims a person is liable to pay, regardless of whether the person is in fact liable to pay it.
(5) Regulations under 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) are to be made by statutory instrument.
(6) A statutory instrument containing (whether alone or with other provision)—
(a) the first regulations to be made under section (Enforcement of the duty)(1)(b), or
(b) regulations under section (Enforcement of the duty)(4),
is not to be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.
(7) A statutory instrument containing regulations under 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) other than one to which subsection (6) applies is subject to annulment in pursuance of a resolution of either House of Parliament.
(8) Regulations under 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)—
(a) may make different provision for different purposes;
(b) may make provision generally or in relation to specific cases.
(9) Regulations under 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) may include incidental, supplementary, consequential, transitional, transitory or saving provision.”—(Jenny Willott.)
This new Clause provides definitions of the terms used in the new clauses and sets out the procedures for making regulations.
Brought up, read the First and Second time, and added to the Bill.
New Clause 30
Letting Agents: Report
Within three months of Royal Assent of this Act, the Secretary of State shall prepare and publish a report, and lay a copy of the report before Parliament, on—
(a) the consumer detriment caused to tenants by letting agent fees and the impact this has on the ability of tenants to secure and maintain tenancies, and
(b) the steps that the government intends to take to prohibit fees that cause detriment to tenants.”—(Stella Creasy.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Consumer contract terms which may be regarded as unfair
With this it will be convenient to discuss the following:
Amendment 2, page 51, line 15, at end insert—
“2A A term which relies upon any bill of sale, as defined in section 3 (Construction of Act) of the Bills of Sale Act (1878) Amendment Act 1882, to reduce the level of consumer protection in relation to contracts concerning consumer credit.”
Amendment 3, page 51, line 18, at end insert—
“3A A term that directly causes financial detriment to the consumer such that it can reasonably be seen to alter the capacity of the consumer to pay the costs of the contract, where the contract is for a financial service.”
Amendment 4, page 53, line 2, at end insert—
“20A A term which either—
(a) requires or encourages a consumer to contract third party services without informing them of their right to seek independent advice; or
(b) seeks to limit a consumer’s access to independent advice regarding third party contracts where there is a potential conflict of interest for the third party involved.”
Amendment 19, page 53, line 2, at the end insert—
“20A A term which has the object or effect of permitting a trader to block, restrict or otherwise hinder the access of a consumer to any lawful electronic communications network or electronic communications service on the basis of an unreasonable or unusual definition of ‘internet access’, ‘data’, ‘webaccess’ or similar word or phrase. Nothing in this prohibition shall affect filters for the purpose of child protection. Electronic communications network or electronic communication service shall have the same meaning as in the Communications Act 2003.”
Amendment (a) to amendment 19, after “trader”, insert
“engaged in the provision of fixed broadband internet access or mobile internet services.”
I shall speak to all the amendments in the group, which are about unfair contract terms. Unfairness is such a central concept to British values, I will wager, that it provides an apt discussion point for this week alone. All the amendments deal with where a market is stacked against one party and, we would argue, both miss out as a result. When service providers exploit a lack of information or collude to distort behaviour, it is not just the public who are badly treated: competition is stifled, creativity and innovation are weakened and, above all, the consumer is ripped off. The amendments thus reflect some of the problems affecting markets that we see in Britain and deal with what more could be done to make a stronger consumer rights framework that would give the public the tools to be able to prevent rather than have to deal with the problems that come from these distorted behaviours. There are four different issues, but we consider them all to be part of the conflicts of interest that cause detriment to the consumer.
Amendment 1 refers to what we call “double charging”, and particularly the behaviour of estate agents. We all know that buying a house is one of the biggest costs any of us will face in our lifetime. An English man or woman’s home is their castle, but it is often a very expensive one. The cost of buying a house has gone up so substantially in my constituency that it is now 30% more than it was a year ago—a source of extreme concern for many. Indeed, we know that the average home is worth eight times the average wage and that it can take 20 years for a family to save for a deposit. A million homes were bought in the UK last year, and prices have risen across the country by 8%, even if they have not risen as much as in some of our London areas. That is why the Governor of the Bank of England has warned that the biggest risk to the economy stems from the fact that people are getting mortgages—sometimes four or more times their salaries—that they cannot sustain. Housing is indeed a bubble underpinning our economy and leaving it in an incredibly precarious position.
The Government’s housing Bill will provide 15,000 houses, but people in my constituency know that we need to double that and then some, which is why Labour are proposing to build 200,000 houses, getting us closer to where we need to get to in order to deal with the pressures that people are experiencing. This amendment speaks, too, to some of the other charges that people face when buying a property. We may disagree about how many houses need to be built, but I am sure we would all want the housing property market to be as fair and open as possible so that it does not involve more expenses that mean people needing an even higher mortgage or an even higher level of debt—particularly in the form of the personal loans that people are taking out to pay the sort of fees necessary when they start ownership of a new property.
The amendment would deal with what the property ombudsman has called an “emerging commercial practice”—one that means that people such as estate agents, who benefit from the increase in demand for housing by exploiting the pressure on the country’s housing supply, reap the benefits. The practice involves a contract that we believe is ripping off consumers—both buyers and sellers—and therefore needs addressing. It is called “double charging” if the estate agent applies a fee to both the buyer and the seller of a property on the same transaction.
Let me explain the problem for the benefit of Members who have not yet observed the practice in their constituencies. It often results from the process of “sale by informal tender”. House owners are asked to accept sealed bids for their properties. Increasingly, estate agents are then charging successful bidders a “finder’s fee”, which, in some cases, is between 2% and 2.5% of the property fee plus VAT. According to the Consumers Association, an estate agent’s commission should normally be between 1% and 2%. Moreover, sellers themselves are paying to market their properties. Buyers must find the cost of the additional fee in order to bid.
When I challenged estate agents at Douglas Allen in Walthamstow about their behaviour, they admitted openly that they expected buyers to factor the introductory fee into their offers. Sellers do not benefit from the fee that is being offered. They do not gain the benefit of the additional sum that the buyers are paying for their asset—not the estate agent’s asset—but the estate agent does. That the sellers are paying for the privilege of the marketing of their houses in that way only compounds the scam that is affecting too many people in our country.
Is not the ability to charge two parties to a potential transaction nothing less than a direct conflict of interests? It should not be possible to owe a duty to a buyer and a seller in equal measure. An agent has one client, and it must remain that way.
My hon. Friend is entirely right. Let me give an example of the way in which this conflict of interests operates in practice. The example was given to us by a young first-time buyer who, because of her restricted ability to buy a property in the area where she wanted to live, accepted that she would have to take part in a “sale by tender” arrangement, and that she would have to pay an introductory fee of 2.5% of the sale price of the property. She made an offer of £258,000 for a house that was well within the guide price, and therefore committed herself to paying about £6,000 in fees to the estate agent. Her offer was accepted as the highest offer in the sealed-bid process. She then contacted us to say that her offer had not been accepted by the seller, and the agent was putting pressure on her to up her offer to £262,000. If she did not do so, the property would be put back on the market for another “sale by tender” exercise, because the seller wanted more. That was despite the fact that she was the one who had committed herself to paying the fee that the estate agent wanted to charge.
Some Members may think that that is an indication of the overheated London housing market, and the fact that house prices in my constituency have risen by 30% reflects that overheating. However, we are hearing about examples of double charging throughout the country. In the north-west, for instance, a gentleman who tried to buy a house for £45,000 was told that, as well as finding the £45,000 and the fee for the conveyancing, he would have to find £2,880 in order to pay the introductory fee to the estate agent. In the south-west, an estate agent wanted an introductory fee of nearly £6,000 plus VAT from someone who wanted to buy a house for £296,000. I must stress that the sellers of the properties, who do not benefit from the additional £6,000, are also paying a fee for the service.
The Minister had admitted that double charging is a potentially worrying emerging trend which seems to be on the increase, but at every stage in the Bill when we have sought to outlaw this conflict of interests, the Government have voted against our attempts, although the property ombudsman has agreed that the new approach to selling properties
“can also potentially disadvantage the seller. He”—
“will no doubt have to agree to accept only prospective buyers that follow the agent’s agreement with those prospective buyers and if a prospective buyer declines to submit to paying the fee, he”—
“will be out of the picture and the seller will have lost an opportunity to sell his house.”
That is what the property ombudsman has told us about the practice.
No doubt the Minister will say that this is an issue of the market, that other estate agents will not do this, and that it will all come out in the wash. The point is, however, that someone who goes out and looks for a house and then finds the one that he wants cannot choose the agent who is dealing with the property. That is why it is so crucial for us to sort this out now, rather than waiting until every single estate agent does the same, as though the market will somehow adjust itself.
My hon. Friend has raised an important point. I admit that I have been deeply concerned about campaigning on this issue and for our proposals, because I think that it is a bit like telling turkeys how to avoid Christmas. The more we make it clear to estate agents that the Government are currently letting them get away with this behaviour, the more they will engage in it. Indeed, I am sad to report that since February, when we began expressing concern about double charging, an increasing number of estate agent chains throughout the country have been using “sale by tender” processes involving the introductory fee. I must emphasise that we are objecting not to sale by tender per se, but to the fact that people are being charged a fee to be introduced to a property. That is what is causing such concern.
When I first observed that Douglas Allen in Walthamstow was engaging in the practice, I thought that perhaps we had just one rogue estate agent. I hoped that when Phil and Kirstie came to Walthamstow recently to film “Location, Location, Location”, they would take a dim view of it, but I am sorry to say that we are now hearing of cases at Your Move, Ellis and Co. and Reeds Rains. A number of estate agents are picking up the idea that applying such fees is acceptable behaviour, and the damage that that is doing to the interests of both sellers and buyers is growing.
There is a question for us here. We can see that the practice is distorting the housing market. If we want a free and fair market, these conflicts of interests must be resolved, so that sellers can be confident that buyers are always acting in their interests, and buyers can be confident that when they participate in a bid such as this, it is taken seriously. Should we act, or should we wait until the damage to consumers’ interests becomes worse? We tabled amendment 1 in order to make charging two parties a fee to the same transaction a term in a contract that can be challenged on the basis that it is unfair. We believe—as does the property ombudsman—that such charges are indeed unfair, and should be open to challenge.
This comes at a time when there is widespread concern about the estate agent industry, full stop. I accept that it may be another “British value” to complain about estate agents, just as people complain about traffic wardens and, indeed, politicians. We all recognise that we are not immune to that moment in the pub on a Friday night. However, we know that there are serious concerns because of the nature of the housing market. I have been contacted by people who have been told by estate agents that they cannot have access to the lists of housing for sale unless they commit themselves to taking out a mortgage through them, or using their financial advisers or lawyers. That is another clear conflict of interests for the seller.
We need a tough regulatory regime to ensure that we have a fair housing market in England and Wales. We continue to be concerned about the fact that the Government have delegated the monitoring of all estate agents in England and Wales to Powys county council’s trading standards body. A Welsh rural council has been charged with the task of examining the behaviour of nearly half a million estate agents. It should be taking account of the blatant and rampant exploitation of the demand for housing that these charges represent, but when people affected by them have contacted Powys, they have been met with indifference about whether it should be dealing with the issue. The council took over only in April—this may be a new moment—but it is clear that we need to take stronger action before the situation gets out of control.
My hon. Friend is highlighting the way in which the Government have contracted out different aspects of trading standards to various local authorities. Has she looked into the number of houses that have been for sale in Powys, and considered how experience in Powys can possibly inform an intelligent approach to the London housing market, which is totally different?
I think that there is genuine concern about whether Powys county council is equipped for the task. This is not necessarily just about its trading standards: after all, this is a council that has gone through three cabinets in as many months, and has had problems with the setting of its budget. Some have suggested that it needs to put its own house in order before putting our house sales in order. Certainly, double charging is a great example of the sort of problem that we would expect an effective regulator to be able to deal with. There is a clear conflict of interests. The fees being charged are clearly causing detriment to consumers.
I welcome the fact that the Minister has met the property ombudsman since we raised this issue with her, but I note that as yet there is no evidence of any progress in resolving this matter. As my hon. Friend the Member for Stoke-on-Trent South (Robert Flello) pointed out, the number of agents using double charging in contracts is escalating. Many of my constituents who have been hit by these contracts have asked whether their lawyers can challenge them. I ask the Minister to accept this amendment and give consumers the opportunity to challenge these sorts of contracts, and to give them the legal protection that enables them to say, “This is fundamentally unfair and it infringes my rights”, and, indeed, to give sellers the opportunity to challenge them. Under these contracts, buyers and sellers are told that they cannot communicate with each other; otherwise, the offer that has been made is void. A seller may therefore be unaware of an offer that somebody wishes to make for their property, and that has to be cut back because the buyer must also include the fee. I was surprised to hear from the estate agents in Walthamstow that they always achieve 102% of the asking price of their properties, and 2% was, perhaps unsurprisingly, the fee they were charging people to buy their houses. “Who would have thunk it”—who would have thought that there would be such a close correlation?
I hope the Minister will accept that there is a genuine issue here that needs to be dealt with, and the sooner, the better. We know the pressures on our housing market are not going to go away any time soon, but although we might argue about the numbers of houses that need to be built, we can surely all agree that this is a conflict of interests that needs to be addressed. If, again, the Minister will not accept this amendment and this course of action, I hope she will set out how she will take action on this issue herself, so house buyers across the country do not have to find the extra thousands of pounds just to pay the nice fat fee for the agent.
The other amendments we have tabled in this group also address challenges we believe are creating problems in our economy, in particular through these conflicts of interest. Amendments 2, 3 and 4 relate to conflicts of interest around services, in particular debt management and log book loans. The Minister will know of the Opposition’s concern about the personal debt bubble that underpins much of our economy, and in particular the number of people who are over-indebted. We know from the Money Advice Service that 9 million people in our country are already over-indebted, and half of these families live on incomes of under £20,000. This fragile situation has arisen despite our having had for more than five years the lowest interest rates in 300 years. It is likely that interest rates will start to rise, and personal debt may well rise at the same time—after all, wages are still not keeping pace with prices—so it is all the more important that people can access credit, debt advice and debt management services in an affordable fashion.
Amendment 2 deals with the problems caused by log book loans. Members who served on the Committee will be familiar with the Opposition’s determination to reform this outdated and outmoded form of credit. There are widespread problems: more than 1,000 consumers complained about these loans to the Office of Fair Trading, and they were complaining about losses of over £1.5 million. Many of them come from the fact that these loans are based on bill of sale agreements, a Victorian type of contract that does not include modern consumer protection. Again, the Government have repeatedly voted against our proposals to reform bill of sale agreements and therefore end this outdated and quirky practice that is causing so much detriment. The Minister stated that there may well be an argument for updating the legislation, but that this is not the Bill to do it in. Those of us who saw from the title of the Bill that it was about consumer rights and protecting consumer interests were, of course, rather concerned by that, but let me point her to the concerns of the Financial Conduct Authority and Citizens Advice, which also want to see bill of sale agreements reformed.
Christopher Woolard, director of policy, risk and research at the FCA, states:
“People who use logbook loans are often in difficult circumstances with few other borrowing options…Logbook lenders have borrowers over a barrel. People don’t realise their car can be seized if they fall behind in repayments, with lenders often forcing borrowers to pay large amounts to keep their vehicle when they can’t afford to.”
Gillian Guy, chief executive of Citizens Advice, argues:
“The logbook industry is still in the dark ages and has been getting away with lawless practices.”
Its own analysis of log book loan cases found that 14% had experienced harsh debt collection practices, almost a third were not treated fairly or appropriately by the lender, and nearly 20% had not understood the terms of the loan clearly.
It is inexcusable to leave this outmoded form of credit arrangement available for lenders to use, and for them to exploit people in this way, particularly as we know that increasing numbers of people are going to need consumer credit in the years ahead because of the debts they have. We cannot understand why the Minister will not make progress on this issue. I believe she does understand that log book loans need to be reformed and that the case we are making—that bill of sale agreements have no place in a modern consumer protection landscape—so why does she feel that that should not be part of this Bill? We urge her to look very closely at our amendment, which would simply bring bill of sale agreements under modern consumer protection laws and, again, give consumers the right to challenge any agreement that does not uphold those laws. Indeed, it would be a sad indictment of all the work she has done on the other parts of the Bill and all the consumer protection laws in them if she were to say there would be a get-out clause in other respects.
Amendment 3 also speaks to our wish to deal with the consumer credit landscape, and in particular consumer credit contracts that are designed to push people into debt as a way of propagating a service. Payday lenders are a case in point. Pushing people into debt is part of how they continue to make money and is part of the way in which the contract is structured, but we see that also with other financial agreements, particularly around debt management fees. Some 7% of British adults report struggling to get to pay day because of the debt management repayment plan fees they have undertaken to pay. Of the 50% of the public who struggle to get to pay day, for a third of them it is debt repayment that is causing the problem. Getting the structure of the debt repayment and the debt management system right is therefore vital for those who are in difficulty.
There are already 2.5 million people in debt management plans, and that is a conservative estimate. The fact that people are able to charge fees that are sometimes up to 50% of the amount a debtor pays only compounds the length of time for which the person is in debt. Just as with payday lenders lending to people at a rate of interest that more or less guarantees they will have to come back and take out another loan, we believe that it should be challengeable in court if somebody gives a debtor a debt management plan that would prolong their debt.
Let me give an example. StepChange offers a free debt management plan. It talks about a client who owes £30,000. When they were in a debt management plan they paid almost £6,000 extra in fees, which would extend the length of time they were in debt by 18 months compared with a StepChange-organised debt plan.
Amendment 3 would make any contract for a financial service open to challenge if it is likely to push an individual into debt. I am sure people would recognise that there is a conflict of interests in that. If something is supposed to help someone’s financial situation but actually does the reverse because there is a financial incentive for the company involved, how can that be a fair term for a contract?
Amendment 4 deals with another conflict of interest and we believe it would be beneficial to consumers to have the ability to challenge that in court. I pay tribute to my hon. Friend the Member for Middlesbrough (Andy McDonald) who is an expert on this issue. The cost of taking legal action can be prohibitive, but if people might struggle financially to claim compensation following an accident or unfair dismissal from work, legal expenses insurance can help cover the cost of making a claim, and it therefore makes legal action accessible to more people. Legal expenses insurance is often sold as an add-on in insurance contracts. One of the challenges, however, is whether the company concerned can act in the interests of the consumer when that legal insurance is used: as an insurance company has to pay out to cover the cost of legal fees, it may be in their interests for those legal fees to be as minimal as possible, but that may not be in the interests of the client. That may determine the nature of the legal advice given and action taken.
We believe it is important that consumers are able to access independent advice in dealing with issues around legal insurance and whether there is an inadvertent conflict of interests. We therefore believe consumers should have the right to get independent advice before being sold such policies, so they know the consequences for their legal cover if they take out a policy. We also believe it should be an unfair contract term to sell a consumer a contract for a service that limits their access to independent advice.
Does my hon. Friend share my concern that the Ministry of Defence has approved a particular policy under the banner of PAX that prescribes a single point of reference for legal advice and does not give members of our armed forces freedom of choice in that respect? Is it not reprehensible that we are in that situation?
My hon. Friend has just illustrated why I believe him to be the expert on this issue. I hope that he will contribute to the debate to explain why this concern about independent advice is so important. He is right about upholding the need for independent advice.
I am conscious that other Members wish to speak in this debate, so let me say a little about net neutrality, and our amendment to amendment 19. I recognise that this is a new and evolving debate. Our discussions have ranged from the Victorian bill of sale to the contemporary net neutrality, both of which reflect this stress over conflicts of interest. For those Members of this House who have not yet had the chance to watch the viral videos about net neutrality, let me explain the concern. Net neutrality is the principle that internet service providers and Governments should treat all data on the internet equally. They should not discriminate or charge by user, content, site, platform, or application. In layman’s terms that means that, whether we are looking at iPlayer, Sky on the Go or Netflix, there would be equal access to services. There would be no speed differential in accessing them.
In America, some broadband and internet providers have been exploring the idea of charging companies different rates for providing their services. That means that they could offer access to some websites at a faster rate than others, and therefore change the way in which consumers access them. The fear is that that would create a two-tier internet, because it will limit the number of sites that consumers can access with ease, and the number of companies that can access and operate services equally. In particular, if large companies were to use their financial muscle, or their internet provision, to restrict access to their competitors or to new entrants to the market, it could limit creativity and innovation in the provision of services. An internet without net neutrality moves huge market power to those who are the gatekeepers to our online services. It is little wonder that 100 companies, including Google, Facebook, Twitter and Amazon, have expressed concern about this issue. Indeed, “father of the internet” Tim Berners-Lee, who was rather unfairly described as a web developer recently, has argued that there is a real concern. He says:
“Unless we have an open, neutral internet we can rely on without worrying about what’s happening at the back door, we can’t have open government, good democracy, good healthcare, connected communities and diversity of culture. It’s not naive to think we can have that, but it is naive to think we can just sit back and get it.”
We welcome the amendment that has been tabled by the hon. Member for Shipley (Philip Davies), but we are concerned that the way in which it has been drafted may inadvertently imply that those sites that are providing pay-per-view services, such as Netflix, would be required also to provide access to some of their competitors, and I am sure that that was not what he intended. We have tabled a clarifying amendment to make it clear that we are talking about those services that provide access to the internet, rather than content.
It would be useful to hear from the Minister about what discussions she has had with her colleagues on the issue of net neutrality and about what action she is taking to ensure that consumers’ interests in the operation of net architecture are being upheld so that we do not have the concerns and challenges experienced by America. In particular, does she feel that existing protocols are strong enough to protect the interests of consumers and avoid competition issues between content providers, and has she done an assessment of the impact on consumers in the UK of a possible two-tier internet?
We have here some very different but interlinked issues around conflicts of interest, freedom of markets and consumer interest, and an effective piece of consumer rights legislation should provide consumers with the tools with which they can mount a challenge to any of them. We hope the Minister will accept our amendments in the spirit in which they are intended, which is about applying clarity in what is meant to the list of unfair contract terms that would give consumers the right to challenge issues in court. I therefore hope that the House will support them accordingly.
I seek to restrict myself to speaking to amendment 19, which I tabled. I am grateful to the hon. Member for Walthamstow (Stella Creasy) for what she said and for her general support for the thrust of my amendment. In the spirit of that cross-party co-operation, I should also make it clear that I am perfectly happy to support her amendment to my amendment. It is not my intention to press my amendment to a Division, but if the hon. Lady decides to press hers, I will of course support her, because her amendment does exactly what I intended my own to do. I hope that it will not come to that, because I hope that the Minister will make it clear that the Government accept there is an issue, understand it and say that they will do something to resolve it. If that is the case, I hope that the hon. Lady will withdraw her amendment, but we should wait to hear what the Minister has to say before we make any decisions along those lines.
Over the past 30 years, competition in the telecommunications industry has gone from a monopoly, through a duopoly to what is widely regarded now as one of the greatest success stories of privatisation, with the UK having one of the most vibrant and competitive markets in the world.
Additionally, the internet has become an essential part of our national infrastructure, transforming the way we work, play, gather information, communicate and trade. The internet provides the underlying infrastructure for many thousands of businesses and has slashed the cost of global communication.
In 2010, the Government, through the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey), said that they were supportive of open internet, which I hope is still the case. The reality is that some major fixed-line internet service providers and mobile network operators have not participated with the major industry-level agreement towards meeting that objective.
The success of the internet is based on global interoperability—the ability for anyone to interact with any legal internet site anywhere in the world. That has created new opportunities, businesses and jobs, while also reducing costs for consumers. I hope that both sides of the House will agree that an open internet is vital for the future economic, social and political health of our nation. New services are coming online at an incredible rate, and it is important that this vibrant sector is able to develop as society becomes more mobile and people’s habits change.
It is vital that organisations controlling access to the internet do not abuse their position by discriminating against legal services, data, traffic and content for commercial or political purposes, and from a protectionist perspective. Although telecommunications providers should be allowed to use certain traffic management techniques to manage the integrity of their network, it should not be at the detriment of rival services purely for anti-competitive reasons.
Over the past year, I have been made aware of increasing evidence that certain internet service providers are undertaking various marketing and operational practices that are distorting a competitive market, creating consumer harm, hurting a number of specific internet industries and stifling innovation. The activity includes blocking internet services that compete with their own on purely commercial grounds; not communicating to customers clearly at the point of sale that they offer only restricted access to the internet; and refusing to participate in the Government-supported pan-industry code of practice, which seeks to uphold open internet principles and which has been signed by some of the largest players, including BT, O2, Sky and 3. I believe that that verges on mis-selling. The lack of transparency and clarity that has persisted in the market has allowed consumers to be deceived by the practice of selling internet access when in fact significant parts of the internet cannot be accessed under the terms and conditions of some price plans.
It seems like the voluntary ways of ensuring greater transparency in providing internet and telephony services have failed. There have been clear examples where certain operators, particularly in the mobile sectors, have misled their consumers by claiming to offer internet access, or UK internet, when some legal internet services are not available within the package that has been provided. In other cases, the small print—when I say small print I mean it, as one would need binoculars to see some of the terms and conditions—outlines extra costs that the consumer would face if they dared to use the internet they have paid for to access services that compete with their provider’s own.
The fact that any operator is able to offer a product advertised with “internet access” and only have to clarify this policy in the small print is unacceptable. Unknowing customers who use popular services such as Skype, WhatsApps or Viber could see their service suspended but continue to be held responsible for paying their bills. That lack of transparency and clarity on these issues is totally unfair to these unknowing customers, and it continues, as consumers are in many cases unable to leverage competitive pressure because it is difficult to understand whether or not certain traffic types are allowed, blocked or just charged additionally. Ofcom’s consumer guide on internet traffic management from 2013 outlined the fact that consumers were not aware about traffic management practices undertaken by internet service providers and whether such practices would affect specific internet services that they used. How can consumers make an effective and informed choice if they are not fully aware of the practices of their internet service provider or mobile provider, and the potential of those practices to inhibit certain services?
The record will show that the hon. Member for Shipley (Philip Davies) and I do not agree on many issues, but on this one I agree with him completely and utterly. He and I are supporters of the Internet Telephony Service Providers Association, which has had many concerns about abuses in this area. Does he agree that we are talking not just about transparency, but about setting a fundamental rule that such bias simply cannot be allowed? Does he agree that we should support net neutrality throughout and not simply tell people when it is being broken?
It is a red-letter day for me when the hon. Members for Cambridge (Dr Huppert) and for Walthamstow agree with me. I could not have envisaged such cross-party support, and if the Minister is able to withstand that I will be disappointed. We have a political consensus, of which I am usually very suspicious. I agree with the hon. Gentleman that the principle of net neutrality is the most important point. It is not simply a question of transparency; transparency is the minimum that people can expect. With my amendment, I am trying to ensure that we have net neutrality and truly open access to the internet, and to put an end to protectionist and restrictive practices that are against consumers’ interests.
I am referring to services including voice over IP, which is similar to Skype. Voice over IP allows consumers significantly to reduce their phone bills by using voice over the internet, instead of their mobile provider’s phone minutes and messaging services that use mobile data rather than text. It is especially important for consumers that that market works efficiently given Ofcom’s research finding that a quarter of the UK’s poorest households are mobile-only and are wholly beholden to mobile operators’ tariffs to enable them to access crucial services.
It seems perfectly reasonable to me that if a consumer signs a mobile phone contract that offers internet access, he or she should be entitled to use any legal internet service that they deem fit, not just the parts of the internet that suit their mobile phone company. I hope that hon. Members understand that customers who buy a mobile phone package rarely have the time or inclination to read through all the minutiae in the small print, even if they have the foresight to imagine all the services that they might want to use over the two-year life of their contract. Surely, customers have the right to expect that an internet service will do what it says on the tin. Consumers should, therefore, be able to rely on statutory consumer protection regulations to protect them from such abusive practices.
Given the rapid evolution of the internet, I do not think that it would be wise for Parliament to attempt to define everything that the internet is and does for the future, but I am convinced that the current unfettered ability of telecommunications providers, whether they be internet service providers or mobile operators, to decide what customers can and cannot access is harmful to consumers and to the wider economy. As I have outlined, those practices not only create significant consumer harm but stifle competition—for example, in the market for non-geographic and international calls—which leads to exorbitant prices and discourages new entrants to the market.
There is also concern surrounding future innovation and economic growth. If innovators have no certainty that networks will carry their services, particularly if they rival products offered by the networks, companies will be less likely to invest in new services because the return on investment will be unpredictable. How can a provider who wants to build a mobile app have any certainty that the mobile network operator will not block his rival service and/or make it extremely opaque at the point of sale whether consumers can actually access those services? Such things should be of great concern to us, because they will stifle growth in a sector that is incredibly important to the future prosperity of the country.
When I asked representatives from Ofcom about the matter during a Select Committee on Culture, Media and Sport hearing last summer, there was an acceptance that some undesirable blocking was being undertaken by certain mobile operators around specific internet services, and that more needed to be done to ensure that telecommunications providers were transparent and up front with their customers. Ed Richards, the Ofcom chief executive, outlined the industry voluntary code on the transparency of information given to consumers about traffic management practices. I have grave concerns about whether the information that providers are supplying to their customers is helping in any way, shape or form. Ofcom’s research in September 2013 demonstrated that consumers were not aware about traffic management practices when making their purchasing decisions.
Together with the internet code around transparency, the industry has created a voluntary self-regulatory code on maintaining the open internet. I believe that the code is a good one, and it will be an effective tool for protecting consumers and businesses. The significant problem is that some major providers are yet to sign up, nearly two years after the launch of the initiative. Given that there is no obligation on UK telecommunication providers in that area, those providers that are transparent and allow access to services could easily change their minds tomorrow and not be subject to any action.
Therefore, I think it is time that the House recognised that unless more action is taken, certain industry players will continue to use clever marketing tactics and rely on the lack of consumer understanding to mislead their customers, distort the market and damage new and innovative internet services that threaten their own products. That is why I have proposed amendment 19, which would protect consumers from the practices that I have described. The amendment would ensure that anyone selling internet access, or using any similar term, will not be able to rely on any unreasonable or unusual definition of that term to restrict their customers’ access to legal parts of the internet.
I have made it clear, and I am grateful to the hon. Member for Walthamstow for doing the same, that I do not seek in any way to limit the ability of internet service providers to block access to sites for the purposes of child protection. Nor would my amendment prevent internet service providers from offering age-related content blocks where customers request them. I certainly would not want to do anything to change that. That is why I would be happy to support the hon. Lady’s amendment if she seeks to divide the House.
Amendment 19 would give customers confidence that when they sign a two-year contract that offers internet access, they will get full internet access and will not be left with a contract that they cannot get out of that does not do what they thought it would when they signed up to it. It is essential to preserve and protect consumer access to the legal internet. We cannot allow internet service providers to decide for themselves, based on their own commercial interests, what customers can and cannot access while still marketing their service as internet access.
The protection offered by amendment 19 would benefit all consumers, but it would also spur innovation, growth and job creation in a sector that is vital for the future prosperity of the country. Therefore, I urge hon. Members to support my amendment or the amendment tabled by the hon. Member for Walthamstow. I hope that we will not have to press the matter to a Division, because I hope that the Minister will understand the strength of the case that we have made and reaffirm that the Government will deliver on open internet access. If she is not prepared to do that, I hope that the hon. Member for Walthamstow will press her amendment to a vote, which I would support.
I would like to congratulate you, Madam Deputy Speaker, on your recent damehood. I know that a knighthood is a real thing, but I am not sure whether a damehood is a thing. However, it is a very well deserved recognition of your excellent service to the House over many years, and I am sure that all hon. Members were delighted to hear the news.
This is a marvellous occasion for another reason. It is wonderful to be in the Chamber in agreement with my hon. Friend the Member for Walthamstow (Stella Creasy) and the hon. Members for Shipley (Philip Davies) and for Cambridge (Dr Huppert). That is a fantastic coalition, and it shows what a beacon of free speech the House of Commons is, because that principle has motivated everybody to get involved in the debate. I believe that the principle of net neutrality is the principle of free speech in the modern world. My hon. Friend set out a clear and cogent case for amendment (a) to amendment 19, and the hon. Member for Shipley proposed amendment 19 comprehensively. I shadow the Minister with responsibility for communications and creative industries, the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Wantage (Mr Vaizey), and I hope that the Minister at the Dispatch Box, the Under-Secretary of State for Business, Innovation and Skills, has had some conversations with him since, in many ways, this issue falls into his bailiwick.
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 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.
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.
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 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.
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.
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.
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”?
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.
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.
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 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”.
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?
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 .
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
“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 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 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.
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.
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—
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.
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.
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).
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—
“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.
Amendment 23, 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.
Amendment 24, 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.
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.
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.
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.
I beg to move, That the Bill be now read the Third time.
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 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.
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.
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.
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 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 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 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.
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.
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 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.
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.
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.