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Members of the House may be aware that this is my first undertaking on the Floor of the House since taking up my new role in the Department of Trade and Industry and the Foreign Office. These have been a few busy days. I am currently juggling some of my previous undertakings as Minister without Portfolio with my Foreign Office responsibilities, plus sections of the briefs of three previous DTI Ministers. I feel that I have moved from being the Minister without Portfolio to the Minister with all portfolios. It is pretty hectic. You might say I am becoming the Minister for Open All Hours.
Let me put on record my thanks to my hon. Friend the Member for Bradford, South (Mr. Sutcliffe) who puts his heart and soul into everything he does. This Governments proud record on consumer action is in large part down to his passion, commitment, drive and dedication. I wish him the very best in his new role in the Home Office.
I have had a long-term interest in consumer affairs, both in opposition and government. In opposition, I was involved in the campaign to prevent deaths caused by dangerous foam furniture. The current chairman of the Conservative party was the then Minister, and I give him credit for the action that he took jointly with me, which has led to some 10,000 lives being saved since the introduction of the legislation. New legislation was also introduced, with the help of a former Conservative Member for York who lost his seat in 1997it is still a Labour constituencyto ensure that smoke alarms were fitted in all new property. It also required that all old property for rehabilitation had to have such alarms fitted. Local authorities up and down the country have spent tens of millions of pounds, with Government support, to ensure that all houses have smoke alarms fitted. That legislation has also saved many lives since its introduction.
Mr. McCartney: I understand that the Department for Education and Skills is consulting on that. Also, one of the key elements of the fire service review is a preventive strategy whereby fire services work with local communities, community groups, local authorities and the voluntary and private sectors to improve fire prevention and knowledge of it.
Both in opposition and government, I ran the campaign for the regulation of the security industry. The regulation of security companies operating in pubs, clubs and shops, and in the private and public
sector, has resulted in new training for security staff and has led to many improvements. It has tackled organised crimes attempts to infiltrate a legitimate industry, rooting out dangerous and violent criminals who were a direct risk to actual or potential customers. It has ensured that people have a career structure, are better trained and have an opportunity to work in a good industry, and it has protected good companies from cowboys. Sadly, the Conservatives, for 10 years in government, refused to support the campaign.
The Governments commitment to consumers is clear. We have a proud record of providing greater protection for consumers, appropriate regulation for business and tough action against rogues who bully and rip off some of the most vulnerable in society. Today, I want to set out how we take that work to the next level. Before I do so, let me make clear Labours manifesto commitment that we will
continue to work to protect the rights of consumers.
It is a matter of record that the Conservative party proposed at the last election to axe 80 per cent. of the staff in the DTI, the very Department that deals with consumer affairs. It was not one of that partys greater ideas. It is odds-on that we will see a flip-flop on the matter before too long.
I am glad that the hon. Member for Hertford and Stortford (Mr. Prisk) is here today, and it was not until I saw him come into the Chamber that I realised that he would be answering for the Opposition. I notice that he has said a lot to the Federation of Small Businesses. He said:
We need to have a radical rethink about this
as far as I am concerned all options are on the table, including the abolition of the DTI.
the SBS is one of those things that is very good at Westminster or Whitehall level but means diddly squat to someone trying to run a shop in the real world.
The Small Business Service was established because small business asked us to do it. Hundreds of millions of pounds of investment has seen growth of small and medium-sized enterprises in the economy at all levels. Under the Conservatives, a business failed every two minutes.
Mr. Deputy Speaker (Sir Michael Lord): Order. I know that the Minister is a little rusty at the Dispatch Box, but if he casts his mind back, he will remember that we use different terminology when addressing each other in the House.
Sir Robert Smith: I welcome the Minister to the Dispatch Box and to his new portfolio. I just wanted to make it clear that our policy was to highlight consumers by creating a separate department for
consumer affairs. At the moment, the concern is that the Department of Trade and Industry is there to stand up for consumers and be the voice of business, so there is a danger that it is both poacher and gamekeeper. By separating the two roles, we would create a more powerful voice for the consumer at the heart of government.
Mr. McCartney: I apologise, Mr. Deputy Speaker. I will get some oil on the old bones by the end of this debate. I thank the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) for his explanation. I have heard of people getting their excuses in first, but the truth is that he did want to abolish it all and did not give any commitment at the time. Since then, the Liberal Democrats have done a flip-flop, but they are not the only party to do those.
The Government are committed to a consumer and competition regime that is fair to consumers and business. We take seriously our responsibility to help the most vulnerable consumers in the market and have set ourselves a target of raising our consumer regime to the level of the worlds best by 2008. Some of our more recent initiatives will provide valuable assistance to the most financially disadvantaged in society, including extra funding for debt advice and tackling the menace of loan sharks. I shall explain those schemes further later.
The Government remain committed, as we have always said, to a system of competitive markets, with the pressure to retain custom as a powerful incentive on business to be efficient and act with integrity and responsibility. Companies that thrive in a competitive market are those that give their customers what they want. Those companies that do not do so will struggle to stay in the market. Confident, empowered consumers must be key to the success of competitive markets. That confidence helps drive markets. Consumers who are confident have the right information to know how to spot a good deal, have the confidence to know when they are being ripped off, and are confident that they are backed up by enforcers with the power to protect them from crooks and dodgy dealers.
We are undertaking several major initiatives designed to create those confident consumers. Last year, we published a strategy for empowering consumers, and I am pleased to report that we have made significant progress in meeting many of our objectives. Chief among those successes have been the establishment of the Consumer Direct helpline, the announcement of proposals to strengthen and streamline consumer advocacy and the introduction of the Consumer Credit Act.
Mr. Paul Truswell (Pudsey) (Lab): For Consumer Direct, which is a splendid initiative on which the Government should be congratulated, West Yorkshire had one of the pilot schemes, which has proved successful and has been rolled out nationally. I know that my right hon. Friend will want to achieve value for money in relation to the number of calls fielded by Consumer Direct, but will he also consider the quality of the response given, and not solely the number of calls made? In West Yorkshire, the service has a high satisfaction rate even though it might not be hitting the desired level of calls.
Mr. McCartney: I am grateful to my hon. Friend. When I visit the Yorkshire and Humberside region in the next few months, I would be happy for him to join me in looking at Consumer Direct. I shall set out some of the facts to which he has alluded, which are important.
We will need to ensure that Consumer Direct is not just value for money but gives appropriate advice. Let me describe some of the things that it has done in that regard. Consumer Direct has handled nearly 1.5 million calls since its launch. It currently receives 25,000 calls per week across England, Scotland and Wales. I can list the five most common complaints from consumers in 2005: 42 per cent. concerned defective goods, 17.8 per cent. concerned sub-standard service, 8 per cent. concerned misleading claims, 6.6 per cent. concerned delivery, collection and repairs and 3.7 per cent. concerned prices. One of the products that attracted most complaints was the second-hand car. Some things never change.
People clearly like Consumer Direct. A recent customer satisfaction survey reported that 87 per cent. of callers were satisfied or very satisfied with the service. Eight out of 10 callers now feel confident about dealing with similar problems should they occur in future. Because of Consumer Direct, an extra 350,000 people will have access to clear practical advice this year. That means total benefits to consumers through advice on sorting out their problemsfor example, money saved on repairs and replacements and through refundsof at least £135 million.
As well as educating consumers and giving them information, we are trying to improve consumer advocacy. That is why earlier in the year we announced plans to set up a new consumer body called consumer voice to bring together the National Consumer Council and some sectoral consumer bodies, including Energywatch and Postwatch, to represent the interests of consumers across markets and to offer the best possible consumer protection.
We have also proposed new ombudsman schemes in energy and postal services to deal with consumer complaints when companies have not provided satisfactory resolution, and to provide redress where necessary. The new schemes will be able to enforce the resolution of consumer complaints on companies, and provide compensation. That means that service providers will need to take proper responsibility for resolving consumer complaints. An ombudsman scheme that charges companies per complaint will provide directive incentives for companies to do that. Such schemes already operate in the telecoms and financial services sectors, and we want to build on that good practice and extend it to other sectors.
Sir Robert Smith: The Minister said that consumer voice would act as an advocate for the consumer. Will it be an advocate for the consumer in general, or will it be able to advocate in specific complaints on behalf of the individual?
Mr. McCartney: It will provide general advice and assistance. I shall explain later how the regime will develop in a coherent way. I shall write to the hon. Gentleman and to the hon. Member for Hertford and
Stortford to keep them in touch with developments, because I do not consider this to be a partisan issue. That sounds good coming from me, does it not? I may regret having said it.
Mr. Bone: Many people come to see me in my constituency about consumer problems, but they also visit the citizens advice bureau, which helps them greatly. Are the Government planning to fund local citizens advice bureaux directly?
Mr. McCartney: In a few moments I shall give some good news about citizens advice bureaux. First, however, I have good news about the energy sector. Anticipating what would be done by other sectors, the energy regulator, Ofgem, has asked energy suppliers to appoint an ombudsman on billing complaints by July, and I know that the sector is working hard to achieve that. It must be borne in mind that existing consumer bodies such as Energywatch cannotI repeat, cannotdecide on complaints or enforce redress for consumers. Ombudsman decisions are binding on companies but not on consumers, who can pursue their claims through other means if they wish. Ombudsman schemes are free to consumers: the companies pay the costs.
Our plans were subject to consultation earlier this year. We expect to announce the outcome of that consultation, and the details of how we intend to implement our proposals, in July. We will need primary legislation, and if that is passed, it may be possible to introduce the first changes towards the end of 2007. When I know more, I shall write to hon. Members.
As I said earlier, we have worked hard to establish better protection for consumers. Following the recent introduction of the Consumer Credit Act 2006, millions will enjoy greater protection when borrowing money. More than 74 million credit cards were issued by the end of 2004the hon. Member for Lichfield (Michael Fabricant) probably owns half of themand about 50 per cent. of households have at least one credit agreement. The new Act constitutes the biggest overhaul of credit legislation since 1974 in relation to both rights and redress. It also changes the licensing of consumer credit businesses, and introduces new powers to drive undesirable elements out of the market.
We shall implement the new Act in stages over the next two years. Consumers will then be able to take complaints about lenders to the financial ombudsman service, challenge unfair credit agreements in court and receive more information about the state of their accounts, which will help them to identify potential problems before it is too late.
Mr. Mark Prisk: (Hertford and Stortford) (Con) The Ministers predecessor generously ensured that all the principal political parties could meet the Association for Payment Clearing Services regularly, particularly to discuss the Consumer Credit Bill, so that we could work on a cross-party basis to apply pressure for the changes that we felt were important. Does the new Minister intend to continue that arrangement?
Mr. McCartney: As a former chairman of the Labour party, I am all for consensus with the Opposition. On
this and other issues, when I think it appropriate for people to work togetherwhen they need and want to work togetherI shall be found to be most accommodating. I am strongly in favour of access to both Labour Back Benchers and Opposition parties. That is how we operated in the Department of Trade and Industry before. We did not always agree, but people could not say that they did not have access to me. I think that that was the right answer to give the hon. Gentleman. If not, I shall be given a black eye by my officials later.
In addition to our objective of giving greater protection, another objective is to minimise the number of people who become over-indebted as well as to improving support for those who do. Credit is greater for those who can afford to repay it, but inevitably some get into financial difficulty and become over-indebted, often as an result of the unexpected events that life throws up such as divorce, redundancy and serious illness.
The impact of over-indebtedness on individuals and their families can be terrible. We aim to minimise the number of people who become over-indebted, as well as improving support for those who do get into difficulty. To that end we are funding, jointly with industry and other Departments, the National Debtline telephone advice service. We are also providing £45 million in a two-year programme to fund face-to-face debt advice, helping tens of thousands of families to tackle debt.
The funds will pay for 500 new debt advisers to help people to get their debts under control. It will fulfil the Governments commitment to achieve a step change in the availability of debt advice. It will focus particularly on the financially excluded, who are most in need of such advice.
About £16 million will go to citizens advice projects, about £7 million to other voluntary sector advice agencies, and the remaining £22 million to partnership projects involving both Citizens Advice and other advice agencies. Citizens Advice chief executive David Harks has said:
We are absolutely thrilled by this news, which represents a real vote of confidence in the debt advice already done by the CAB network, and means that a new generation of debt advisers will be able to help tens of thousands more people overcome serious debt problems.
I mentioned earlier the Governments commitment to tackling loan sharks. It is often some of the most vulnerable and excluded who fall prey to these illegal money-lenders, so we are funding pilot projects in Birmingham and Glasgow to investigate the impact of strong enforcement against illegal moneylenders. We have invested £2.6 million over two years in the project, and both pilots are performing well. Three high-profile prosecutions have been secured in the midlands, and more are in the pipeline both there and in Scotland.
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