rose to move, That the Grand Committee do report to the House that it has considered the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008.

The noble Baroness said: We propose that these new regulations shall replace the current regulations, the Consumer Protection (Cancellation of Contracts Concluded away from Business Premises) Regulations 1987 under the vires of the Consumers, Estate Agents and Redress Act 2007 and Section 2(2) of the European Communities Act 1972.

The purpose of the proposed new regulations is to extend to solicited visits the cooling-off period and cancellation rights that currently apply to contracts made during unsolicited visits by traders; and to require that a notice of the right to cancel the contract be prominently and clearly displayed in the same document where the contract is completed wholly or partly in writing.

As in the current regulations, the proposed regulations apply to contracts made during visits by a trader to the consumer’s home; to his place of work; to the home of another person; or on an excursion organised by the trader away from his business premises.

There are certain contracts to which the proposed regulations do not apply. These include contracts made during solicited visits and relate to consumer credit and home purchase sales, where current regulation under the Consumer Credit Act 1974 and the Financial Services and Markets Act 2000 is considered adequate and satisfactory.

As before, under the proposed regulations the consumer will have the right to cancel the contract at any time during a cooling-off period of seven calendar days starting from the date of receipt by the consumer of a notice of a right to cancel. The regulations apply to contracts with a total payment value of £35 or more.

The proposed regulations will now require that the notice of the right to cancel must be prominently displayed in a contract that is completed wholly or partly in writing. The notice must be easily legible and where incorporated in a contract must be set out in a separate box with the heading “notice of the right to cancel”.

For certain types of contract, for example the sale of perishable goods, where a consumer has agreed to performance of the contract beginning before the end of the cooling-off period, we propose that the trader must include in the notice of the right to cancel a statement that payment may be required if the contract is subsequently cancelled, and the consumer must record their agreement in writing to performance of the contract beginning before the end of the cooling-off period, if that is what the consumer wishes. These proposals will give the consumer and the trader more certainty in what has been agreed and when performance of the contract can begin. In the event of a dispute, it will provide the enforcement bodies with a much clearer audit trail.

Again I thank the Minister for explaining these regulations, which I think originate in the Citizens Advice complaint to the OFT in 2002. I understand that they extend the existing right of consumers to a seven-day cooling-off period for unsolicited visits to solicited ones as well. We understand the impetus behind the regulations and certainly agree that vulnerable consumers need protection from unscrupulous vendors. However, I have one particular question to which I am sure the Minister can provide a satisfactory answer.

Once these regulations are in force, if, as an example, I invite a plumber to carry out some work on my house and within seven days I decide I do not like the quality of his work, can I avoid the contract with him? If so, can he sue me, and on what legal basis? I cannot believe that he would not be allowed to sue, but if he cannot, would it not simply allow me to take advantage of the regulations to get work done for free? Under the law as it stands, before confirmation of these regulations, I can argue with the plumber that his work was deficient, but at least he has a contractual basis on which to argue with me. The Small Business Advice Service made it clear during the consultation process that it believes these regulations will result in increased costs for many legitimate businesses while having a limited impact on real rogue traders. How does the Minister propose to ensure that such negative impact is kept to the absolute minimum and that the regulations are enforced effectively to curb the operations of such rogue traders?

Like the noble Lord, Lord De Mauley, I welcome these regulations and congratulate Citizens Advice, which has been leading the campaign to deal with what is clearly a serious problem. The only point I want to make is that under the cancellation notice the period is to be seven days. I think that I am right that during the consultation period before these regulations were brought in, a strong view was expressed in the lobbying that that period was slightly too short and that a 14-day period would be better. Moreover, when the regulations were debated in the other place, the answer the Minister gave then—which seemed to have some degree of spurious common sense—was that the seven-day period would bring it in line with solicited visits and the existing provisions in consumer credit legislation.

On reflection, I would have thought that that is not necessarily the case. When a solicited visit is made, the individual consumer has already determined in principle that they wish to enter into that particular form of contract, whereas unsolicited visits of the nature that this regulation is designed to deal with are often quite different. Have the Government had an opportunity to reflect yet again on whether a 14-day period would be better than seven days?

In response to the first question, I can safely say that it would not hinder the ability of the supplier to ensure that they can get payment. The cooling-off period is therefore not related to the quality of the work which, depending on the type of work, would have its own set of regulations for settling any disputes. It would therefore have no impact. Indeed, the regulation specifies that a consumer shall be required,

“to pay in accordance with the reasonable requirements”,

of the specified contractor for goods that were provided before cancellation and that were made to a customer’s specifications or had been incorporated into any contract. There is therefore no impact on the requirement on the consumer to pay.

I understand that the noble Lord is also concerned that the burden should fall only on rogue traders. In fact, many businesses already voluntarily provide consumers with a cooling-off period and a cancellation right in relation to a contract made as the result of a solicited visit by a trader. Members of the Direct Selling Association, whose member companies account for 59 per cent of total direct sales, offer consumers a 14-day cooling-off period as part of their code of practice.

There was some lobbying about whether the cooling-off period should be 14 days. My understanding is that, after analysing the issue, we were not persuaded that the cooling-off period should be increased because there was no quantifiable evidence to suggest that that was necessary. We also considered the point in light of the ongoing discussions in the European Commission, which will consider cooling-off periods in all the legislation that applies to consumer protection. The Commission will bring forward proposals later in the year.

On Question, Motion agreed to.