Tuesday, 1 July 2014

Ben Stoneham writes: Scrutinising the Consumer Rights Bill

Today the Lords starts its scrutiny of the Consumer Rights Bill which has its second reading before going onto to clause by clause attention in the autumn. This is a Lib Dem Bill put together by Ministers Jo Swinson, Jenny Willott and Vince Cable.

The Consumer Rights Bill seeks to consolidate key consumer rights covering the contracts of goods and services, digital content (for the first time), and the law concerning unfair terms in consumer contracts. It introduces easier routes for consumers and small and medium businesses to challenge anti -competitive behaviour through the Competition Appeal Tribunal.

Currently key consumer rights are covered by 12 pieces of legislation and around 60 pieces of legislation cover the investigatory powers of consumer law enforcement. The aim is not only to consolidate this legislation but also to improve rights and greater clarity, through a Bill that is easier to understand. Overall reducing complexity and improving understanding will bring significant benefits for both consumers and business. The impact analysis for this Bill suggests quantifiable benefits of over £4bn.

Although there is strong support for the Bill there remain aspects which we will be seeking to improve and scrutinise. Vince Cable and Jenny Willott have already accepted Lib Dem amendments in the Commons to tackle unfair fees charged by letting agents. Under new rules tenants will be made to publicise and provide greater transparency of the fees they charge to tenants, helping renters avoid duplicated, rip-off fees when finding a rental property. We will want to make sure that the new provisions for digital content will not hinder innovation and improvement of software in that sector. We will be making sure that our domestic legislation fits in with the new European directives particularly the Alternative Dispute Resolution Directive.

Vince Cable has already highlighted that these reforms ‘lie at the heart of a crusade towards trusted business and trusted capitalism. We see them as part of the overreaching overhaul of UK competition and consumer legislation that we [the Coalition Government] have been undertaking in the past few years.’

The Bill aims to help consumers by reducing the time and cost of dealing with their consumer problems. (The estimated benefit of this Bill to the UK economy is £4 Billion.) It will provide more safeguards about the small print in contracts and increase means of redress. Through simplification and greater clarity it will reduce legal complexity and costs for business and protect legitimate businesses from anti-competitive practices. By encouraging greater confidence amongst consumers it should encourage them to buy new and innovative goods and services which will help encourage a vibrant, creative and competitive economy. It will hopefully emerge as a piece of legislation that future generations of Liberal Democrats committed to improving consumer rights and responsible capitalism can be justly proud of.