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Consumer Rights Act 2015 (Enforcement) (Amendment) Order 2019

Volume 798: debated on Tuesday 25 June 2019

Motion to Approve

Moved by

That the draft Order laid before the House on 13 May be approved.

Relevant document: 52nd Report from the Secondary Legislation Scrutiny Committee

My Lords, this order aims to strengthen the ability of the Office for Product Safety & Standards to carry out its role in leading the response to national product safety incidents and to ensure consistency across the product safety system.

The order has a threefold purpose. First, it will enable the Secretary of State, and the Office for Product Safety & Standards on his behalf, to investigate potential safety issues related to consumer products regulated by the General Product Safety Regulations 2005, using the investigatory powers listed in Schedule 5 to the Consumer Rights Act 2015. Secondly, it will enable enforcement authorities in the UK, including local authority trading standards, district councils in Northern Ireland and the Secretary of State, to use those same investigatory powers to investigate claims about gas appliances and personal protective equipment. Thirdly, it makes a minor amendment to the Measuring Instruments Regulations 2016, and to the related reference in paragraph 10 of Schedule 5, to correct a typographical error.

The majority of claims about unsafe consumer products that fall under the General Product Safety Regulations 2005 are investigated by local authority trading standards in Great Britain and by district councils in Northern Ireland. So why give these investigatory powers to the Secretary of State? Part of the remit of the Office for Product Safety & Standards, created last year, is to take the lead in a serious product safety incident that needs managing at a national level. The office published Strengthening National Capacity for Product Safety: 2018-2020 Strategy, setting out its approach to managing this sort of incident. This order continues the process of developing the office’s national incident management capability. It allows the office to investigate claims of unsafe products in the context of a national incident, where a local trading standards authority or other relevant enforcement authority lacks the resources or expertise to do so. It does this by giving the office equivalent investigatory powers to those of local authority trading standards.

The order provides the full range of powers contained in Schedule 5 to the 2015 Act. This schedule includes powers to require the production and potential seizure of documents and to inspect and purchase products, as well as to test equipment and seize and detain goods. These are essential aspects of undertaking effective checks and actions in relation to unsafe goods. It is vital that our new national regulator has these powers across the broad spectrum of consumer products. These will enable it to provide leadership in incidents of national importance. The Secretary of State, and the Office for Product Safety & Standards on his behalf, can already exercise these powers in relation to the enforcement of sector-specific regulations, such as those for electrical equipment and lifts. The Government want to ensure that the Secretary of State can lead across the wide range of consumer products, not just those that fall under sector-specific regulations. The order therefore allows the Secretary of State to investigate any type of product covered solely by the General Product Safety Regulations 2005, should the need arise. The office will thus have the authority to provide the leadership and action needed to deal with national incidents.

The second purpose of the order is to make sure that the Secretary of State, local authority trading standards in Great Britain and district councils in Northern Ireland can investigate safety issues concerning gas appliances and personal protective equipment. New regulations were introduced last year by the negative procedure and this order provides for the amendment of the Consumer Rights Act by affirmative procedure. It now enables enforcement authorities to use the investigatory powers in Schedule 5 in relation to these products covered by the 2018 regulations.

Finally, the intention underpinning the enforcement of the Measuring Instruments Regulations 2016 has always been that the enforcement authorities should have access to the investigatory powers in Schedule 5. This order corrects that typographical error in the relevant provision in both the regulations and Schedule 5.

In conclusion, the order improves the ability of the Secretary of State to investigate claims about unsafe consumer products, protecting consumers and preventing injury and loss of life. It ensures that the Office for Product Safety & Standards can fulfil its regulatory role in the area of product safety by leading and co-ordinating responses to national product safety incidents across the wide range of consumer products within its remit. It enables the Secretary of State, local trading standards and district councils to investigate the safety of gas appliances and personal protective equipment regulated by the 2018 regulations. It contributes to the Government’s aim of promoting and protecting law-abiding businesses by preventing unfair competition through the placing of unsafe products on to the United Kingdom market. I commend the order to the House and beg to move.

My Lords, I support this measure, which will improve the enforcement framework for unsafe consumer products—always a concern of mine because of my background in retail and at the business department. I want to raise two issues. The first is the adequacy of resourcing for trading standards in their important work on product safety. I welcome the new Office for Product Safety & Standards in Birmingham and hope that, through the Minister’s good offices, some of us might be able to visit it on some future occasion. Local authorities are squeezed. I fear that trading standards, which do such an excellent job across the country, do not have the funding they need to tackle product safety and product counterfeiting, which is often a cause of safety incidents in some local authority areas.

The second issue is Whirlpool. I would like an update on the recall of Whirlpool tumble dryers. I am not entirely clear on what this SI adds in the case of electrical white goods, which, as the Minister said, are already regulated, but Whirlpool is mentioned on page 3 of the Explanatory Memorandum and the 10 days of BEIS consultation on the recall are nearly up. What are the Government’s plans in respect of this matter and, even more importantly, of future enforcement of product safety more broadly? What are the criteria for recalls and speed of response, which in the case of Whirlpool has sadly been very slow—I think nearly four years, although I must commend current Ministers for moving ahead on that. Can the Minister clarify the numbers involved? I understand from Which? that the recall will involve 300,000 to 500,000 dryers, which is a fall of about 500,000 in the department’s estimate of the number of unmodified dryers since last year. Yet only some 50,000 have been modified since then, so I do not see how the numbers add up. Can the Minister also kindly advise—in writing if need be, because I appreciate that these are detailed questions—on the number of modified dryers that have caught fire, and on why the Government are comfortable, as stated in Parliament on 17 June, that they are low risk. I hope for all our sakes that this judgment is correct. We should give the owners of modified dryers further comfort if that is possible.

My Lords, I thank the Minister for his explanation of how the investigatory powers of consumer law enforcers will be consolidated and simplified through this statutory instrument. It seems that these measures are needed in the face of mounting consumer concerns over the safety of the products that we buy.

It seems eminently sensible for the Secretary of State, or the Office for Product Safety & Standards on his behalf, to be able to investigate claims about unsafe consumer products falling within the ambit of the General Product Safety Regulations.

As I understand it, trading standards, or district councils in Northern Ireland, will be able to investigate claims about unsafe gas appliances or personal protective equipment, through the investigatory powers invested in Schedule 5 to the Consumer Rights Act 2015. I am not too worried about the details encompassed by the General Product Safety Regulations 2005, under which this responsibility fell previously, or the amendments to paragraph 10 of Schedule 5. What I, and consumers throughout the United Kingdom, want to know is that the products we buy and use are safe and, if for some reason there is a concern they are not safe, that swift investigatory action will be taken and the issue sorted.

We know that trading standards in this country is struggling to do its job. The noble Baroness, Lady Neville-Rolfe, expressed her concerns about this eloquently. The reason for this, primarily, is that it is underfunded, with budgets having more than halved in the last 10 years. Repercussions fall not only on the consumer, worrying though that is, but on companies trading fairly and safely, within the safety rules and regulations. Unless the activities of firms supplying cheap and potentially unsafe imports are properly regulated, they will suffer, as well as the consumer. A fair playing field is all British manufacturers ask for but, unless trading standards in the UK and district councils in Northern Ireland have the resources to do their jobs, everyone will suffer.

Will the Minister give the House his analysis of what difference the establishment of the Office for Product Safety & Standards will make to consumer protection in this country? Will he comment on resourcing for this body, and how funding cuts have affected the effectiveness of trading standards and district councils in Northern Ireland? Are the Government considering a review of their funding in the light of the volume of demand for potentially unsafe products to be investigated? Will he explain something that I must have missed in the introduction? The Explanatory Notes say that this order does not affect the activities of small businesses. Why are the activities of small manufacturers excluded? Is it a matter of scale? Can the Minister assure the House that a small business will be subject to the same rules on safety, and liable to the same investigatory action, as anyone else? Finally, will he report to the House on the progress of the national incident management capability in response to serious safety concerns over consumer products, as set out in the strategy for the Office for Product Safety & Standards, published in August 2018?

We need to know that incidents like those with Whirlpool tumble driers, and tragedies like Grenfell Tower—although we hope that nothing like that, on that scale, could ever happen again—can be dealt with rapidly and effectively.

My Lords, like others, we welcome the draft order, the objectives of which we support. Anything that prioritises and increases consumer protection and safety is naturally welcome. It is just a shame that the way the Government are seeking to take us out of the EU will have exactly the opposite effect and risks reducing consumer protection. Indeed, it is notable how little involvement consumer bodies have been offered in the whole exit process—an issue we have raised repeatedly in this House, though sadly to nil effect.

We support the SI, but our concern is about the environment in which it will land, about which I shall make four points. The first is about the OPSS itself, which is, rightly, the key target for these new powers. Our worry is that, on its effective first outing, it has failed to convince. The Minister is well aware of the serious criticisms that Which? and others have of the OPSS Whirlpool review, which judged, inexplicably, that the modified machines posed only a low risk, as noted by the noble Baroness, Lady Neville-Rolfe. Which? described this early test of the OPSS’s intelligence and research abilities, and of its independence, or “bottle”, as “fundamentally flawed”. I do not know whether it was its research that let it down—it is interesting that it failed to interview any consumers. Indeed, had the OPSS sought some consumer input, it might have heard from my noble and learned friend Lord Goldsmith, whose grandchildren played in the kitchen completely unaware that immediately below them the tumble dryer had caught fire. Luckily, no one was hurt, but the family was out of the house for some months while the damage was repaired.

Was it its research that let it down, or was it the OPSS’s lack of bottle? It appeared, in the words of Which?,

“to favour business interests over people’s safety”.

It seems that the OPSS somehow had not grasped that it needed to look at Whirlpool’s miserable failure to deal with fire risk in its products, and therefore the resultant lack of public awareness of the risks posed in their own homes. I hope that by the time the order is activated we might see a more robust OPSS. Meanwhile, perhaps the OPSS could publish the list of affected Whirlpool machines, which we know it has and which Whirlpool refuses to release. It expects consumers to know about the potential problem, to know that their unit might be at risk, to be able to locate the serial number on their machine and then be able to type it into a very poorly advertised website.

Secondly, of course, there is the issue raised by the noble Baronesses, Lady Neville-Rolfe and Lady Burt, of the dire condition of trading standards departments, thanks to the Government’s cuts to local government funding. This reduction in funding has a direct influence on what trading standards can do. It is simply no good the Government boasting, quite rightly, that they have created powers, if they then starve the relevant authorities of the staff to employ those powers. Cuts in resources and staff of 50% mean that consumer protection that exists on paper simply cannot be effected in practice. Will the Minister assure the House that none of the powers in this order will lie dormant for lack of resources?

Thirdly, while we have strongly supported a number of the Government’s initiatives in consumer protection—particularly, I say in the presence of the noble Baroness, Lady Neville-Rolfe, the 2015 Act itself, but also progress on legislation on letting agents and other things—the problem is that it has all been a bit scattergun and without a coherent framework. Of course, it was much undermined by the Government’s abolition of the much-needed National Consumer Council, leaving a very patchy consumer representation landscape. As the Minister knows, we are delighted that the CMA seems to have picked up the cudgels on behalf of consumers, but we await a proper government response to this and across the patch. Will the Minister tell the House when we might expect the promised consumer White Paper? I offer him a range of responses—those pre-drafted ones that tend to come his way: “shortly”, “in due course”, “before long”, “in the fullness of time”, “very soon”, “imminently” or “before the summer”. We hope it might be the last of these, but it would be good to know.

Finally, my fourth point returns to Brexit. Which? warns that we could be flooded by a rising tide of unsafe toys, cars and white goods if the Government fail to reform consumer enforcement, because of our potential exit from Safety Gate, the rapid warning system through which European countries alert each other to products with serious safety problems. It flagged more than 2,000 non-food products last year. Not only do the Government need to negotiate the UK’s continuing participation in Safety Gate, they must ensure that the OPSS and other regulators have the tools to act on incoming alerts.

To repeat the thrust of our comments, we support this order. We need the powers, but also the intelligence and the enforcement if UK consumers are to be properly protected, so I hope the Minister will be able to offer some reassurance on that point.

My Lords, I am grateful for the general support for the order from my noble friend and the noble Baronesses, Lady Hayter and Lady Burt, and for the questions they have asked.

I am also grateful, as always, to the noble Baroness, Lady Hayter, for offering me drafting advice, with a number of different options as to which word I could use for when a consumer White Paper might come out. I think I have used all those words at one time or another in the past; I even tried to tell the House many years ago that something would be published later that spring—I have to admit, in July it was quite difficult to argue that it was still spring. On this occasion I will try to be even more helpful to the noble Baroness. It will be published later this year; that gives her a final cut-off point. It will be there during 2019. If it is not there, she will have to come back to me and tell me that I have misled the House. If so, I will make the appropriate apology, but here is an assurance that it will be there.

I also assure my noble friend and the two noble Baronesses—I am grateful for everything that they have said—how important we think this is. This order is obviously essential as part of the process that the Government maintain as a priority to ensure that people across the United Kingdom continue to have confidence in the safety of all products that they buy and use every day. I assure the noble Baroness, Lady Burt, that without this order the Secretary of State would not be able to fulfil as effectively his lead role in managing national product safety incidents through the Office for Product Safety & Standards. He would not be able to assist the investigations of local authority trading standards in Great Britain, and district councils in Northern Ireland, that require the specialist expertise and capacity that the office can provide.

A number of questions have been raised, and I will deal with them in turn. I will start by giving an update on Whirlpool, which my noble friend Lady Neville-Rolfe asked about. As she knows, we made a Statement which was repeated in this House only a week or so ago. I assure her that the investigation into Whirlpool is ongoing. We will need to write further to her and others on the specifics of the case, but the statutory instrument adds to the enforcement regime of the OPSS and allows it to offer further support on that to local authorities.

However, as my noble friend will be aware, I can confirm that Whirlpool responded to the notification of intent from the Office for Product Safety & Standards to issue a recall notice on unmodified dryers. It is currently reviewing the information provided in detail, and we continue to urge anyone with an unmodified machine to unplug it and contact Whirlpool. Again, as I made clear to the House when I repeated the Statement, those who have a modified machine can be assured that it, as far as possible, will be safe—in so far as anything can be safe. It would probably be better if I wrote in further detail to my noble friend on the process and copied it to others, because obviously that process is ongoing.

Before the Minister moves on, I asked a specific question about Whirlpool. The people who do not have modified machines still do not always know that they have a Whirlpool machine, because they were sold under a lot of different names—perhaps 14 of them. You, the Government, know the list of the machines that they were marketed under; some are Hotpoint—I cannot remember all the names. Not everyone knows them. The Government know them, as do Whirlpool, but neither of you will publish that list. You will not give them to the electrical safety consumer bodies so that they can get them out, or put them on a website, and you are expecting people to know that their machine is one of them. If the Minister cannot give me the undertaking now that the Government or the OPSS will publish that, will he explain to the House why that vital piece of information is not being put in the public domain?

My Lords, I think the noble Baroness is probably right that Whirlpool has absorbed something in the order of 14 different companies, so that what an individual will think of as an X machine is in fact a Whirlpool one. If it is possible to publish that list, I will certainly make it public; I do not think that there is any secret about it. The important thing is that we try to identify as many of those who still have unmodified machines so that they can be identified. My understanding is that Whirlpool—I do not speak for it—has already achieved considerable success in previous recalls in identifying quite a high percentage of potential owners of machines, certainly compared with other recalls that have happened. However, it will probably be better if I write in greater detail to my noble friend, copying it to the noble Baroness, on the names of the individual companies to deal with that point at greater length.

A letter from my noble friend would be extremely helpful. Regarding food safety, which I also know a lot about from my background, there was a practice whereby unsafe products would be listed in a newspaper or on a website almost as a routine matter. Even if for some reason it is not possible to do that on this occasion, that is one of the criteria that should be looked at for the future so that when there is publicity about a product safety problem, consumers can check easily whether there is an issue with their machine.

Again, my noble friend is absolutely correct. I can remember seeing campaigns of exactly that sort. It is important for the consumer, or rather the original purchaser of a machine, to be able to identify what it is, which is why on occasion there have been such advertisements, as my noble friend points out. As I said, I would prefer to write in further detail to her on that issue.

I will now deal with the whole question of resourcing, not only of the new OPSS but of local authorities. As we have made clear, some £12 million has been made available to the OPSS, and we believe that that figure is an adequate sum. My noble friend asked whether she could visit its office, and I am sure that such a visit can be arranged through my department. If she would like to get in touch, we can send her up to Birmingham as soon as the Whips allow such visits to take place, and if other noble Lords wish to take part, that is obviously a matter for them. That money is for the OPSS; local authorities are funded through the general local authority grant, and there is no ring-fenced budget. However, we believe that, whatever difficulties local authorities might have, by giving the OPSS equivalency of investigatory powers, it can certainly support trading standards at a local level. The support of the OPSS, which employs some 300 staff, can be of extraordinary use to local authorities, providing training, for example.

I turn next to the question of EU exit, raised by the noble Baroness, Lady Hayter. Again, I make it clear that—although this issue is possibly beyond my pay grade—delivering the negotiated deal remains the priority and we continue to make appropriate arrangements in the event of no deal. We have created a new, UK-specific market surveillance database that will allow market surveillance authorities to record product safety and compliance incidents. That database will give the United Kingdom a rapid alert mechanism for dangerous products which will allow for product recall to protect consumers.

I turn now to the impact on small business. The noble Baroness, Lady Burt, was worried about the lack of an impact assessment. There is no impact assessment because the order gives powers to public bodies and does not place a burden on business itself. A full impact assessment was carried out in 2013, which I can make available to her. It concluded that there was a zero cost to business and a net benefit to business of £5.3 million by consolidating and simplifying the process. There is no reason to assume that those underlying assumptions have changed.

Before the Minister sits down, paragraph 13.1 of the Explanatory Memorandum states:

“This instrument does not directly apply to activities that are undertaken by small businesses”.

I am not sure that what the Minister is talking about is quite the same thing. Perhaps I am getting confused here, but would he have a look at this issue and write to me? I should be very grateful.

I think it is probably best if I write to the noble Baroness about the meaning of paragraph 13. I think it makes it clear that the instrument governs the investigatory powers of the Secretary of State and others with enforcement processes, so there is no specific impact on small businesses. It does not suggest that small businesses are exempt from the effect of the order, should they be making electrical goods, but I had better write to her on that detail if there is more I can offer.

Without the order, we would not be maximising the potential of the new regulator, the Office for Product Safety & Standards, to take effective action against unsafe products. If we did not do that, ultimately, the British public would have less protection from unsafe products and non-compliant businesses. That is not what the Government want. We are committed to making the United Kingdom’s product safety system the best in the world and ensuring that our regulators have the right tools to protect our people. This is a further step towards achieving that goal, and I commend the order to the House.

Motion agreed.

House adjourned.