Examination of Witnesses (Questions 215
- 219)
MONDAY 23 JULY 2007
Mr Dominique Forest
Chairman: Mr Forest, thank you very much
for coming again. We have met you before. I think we are ready
to commence. A warm welcome to Lord Whitty.
Lord Whitty: Thank you. I gather you
have had a fruitful morning so far, apologies for only doing half
of it.
Q215 Chairman: Before you
introduce yourself, and hopefully make an opening statement and
give us some general guidance, would it be useful if we went round
the table and explained roughly what our antecedents are?
Mr Forest: Yes, please.
Chairman: Might we start with Lord St
John.
Lord St John of Bletso: I am Anthony
St John, Crossbench member in the Lords for the last 29 years,
not that I deserve to be there!
Lord Powell of Bayswater: Charles Powell,
Crossbench member of the House of Lords.
Chairman: Roger Freeman, former Minister
for Better Regulation.
Lord Haskel: Simon Haskel, a Labour member
of the House of Lords.
Lord Whitty: Larry Whitty, Labour member
of the House of Lords and Chair of the National Consumer Council.
Baroness Eccles of Moulton: Diana Eccles,
Conservative member of the House of Lords. Sadly I have only done
17 years.
Q216 Chairman: So, Mr Forest?
Mr Forest: Thank you very much for having organised
this meeting. I have worked for BEUC, the European consumers'
organisation, for nine years. I am the Economic Adviser. Basically
I am in charge of advocating consumers' views on a range of issues
from competition to public activities, trade, financial services,
and that includes the Single Market in a way and also the other
aspects linked to the internal market, like the euro. What I would
like to mention today as the opening is to underline a few priorities
from the point of view of consumers. The Single Market Review
is a wealth of opportunity to put consumers at the heart of the
competition of the internal market. For many consumers in the
UK, but also in Europe, it is very difficult to see the concrete
benefits of the European internal market. As a consumer, you tend
not to buy cross-border very much. In certain sectors it is one
per cent of consumers, as has been told to us, buying cross-border
in the field of financial services, for instance. For many consumers
it is difficult to see any benefits from the competition in the
internal market and, therefore, difficult to see any concrete
benefits from Europe. It is key to have a more consumer oriented
focus on the review of the internal market. It is important for
us that competition is improved, not only in the internal market
as such but also at a national level, and that is why we see many
benefits from the sectoral inquiries of the European Commission.
There has been one in the energy sector and another one in the
area of banking. We would like to see some concrete follow-up
to these inquiries in terms of best practice, recommendations
and binding provisions, if there is a need for binding provisions.
Those are clearly what we see as the future priorities for the
Commission to make it concrete for consumers in this area. Even
if we have better markets, it is also important for consumers
to be able to seek redress if they want to buy cross-border. The
Equitable Life case was also important for us in terms of underlining
the need for better co-ordination between national authorities
in terms of supervision and in terms of redress being given to
consumers. We see the need for consumer confidence to be strengthened
because as long as consumers are not confident in the internal
market they will not even think about buying cross-border. That
is why redress is very important, as I mentioned. Also there is
a need for consumers to enjoy the same level of consumer protection
when they buy cross-border as when they buy at home otherwise
they will not feel like going cross-border. Consumer confidence
is really key. This is what we would like to see from the European
Commission because there is too much talk about easy catch-words
like, I am sorry to say, better regulation and competitiveness
and the need to have a citizen's agenda which sometimes hides
the need for efficient regulation—for us better regulation
should be efficient regulation—and the need for consumers'
needs to be taken on board, that is the need for consultation
of stakeholders and also proper impact assessments taking into
consideration the impact on consumers, that is consumer impact
assessments in addition to the normal impact assessments. I will
stop there.
Chairman: I am going to ask Lord Haskel
and then Lord Whitty to start the questioning.
Q217 Lord Haskel: Thank you,
my Lord Chairman. We have just come from a meeting where much
of this was discussed and we certainly welcome what you have to
say about strengthening consumer confidence and making the consumer
feel that the Single Market does something for them, but of course
the paper in the spring of 2007 that the European Council delivered
was called A Single Market for Citizens and it sees the
consumer as a citizen. Do you think that as a citizen the consumer
has had benefits, for instance freedom to travel, freedom to education,
freedom to shop across borders even though familiarity needs to
be increased? Do you think that it is taking too narrow a view
looking at the consumer purely as somebody who buys things, surely
we should be looking at the consumer as a citizen as well?
Mr Forest: I am not working for the citizen
so it is difficult for me to take a view on this which would not
be biased. Of course, all these aspects are interlinked. Possibly
it is much easier for the consumer to actually buy cross-border
when travelling, so in a way if it is easier to travel to some
extent it is easier to buy cross-border because that might be
just the opportunity to benefit from the price differentials between
the country you are visiting and your home Member State. At the
same time, behind this idea of considering the consumers there
is also a reflection of how European integration has been managed
in terms of economic integration being a priority as compared
to political integration. I am not taking a stance on this, but
in my view that is an aspect which needs to be considered. In
terms of freedom to travel, freedom to education, of course there
have been benefits to the citizens but that is only somehow a
small fraction of your life. The other much more important fraction
of your life would be dedicated to your work, to your family life
and, as such, the economic concrete benefits would be more important
to you. It is a bit of an exaggeration to call freedom to travel
a fringe benefit but somehow it is a fringe benefit to the Single
Market which is more or less dedicated to economic integration.
Q218 Lord Haskel: We were
told that the benefit to the consumer, if you want to put a number
on it, over the last 15 years was €500. I am sure you have
seen that paper as well. Where do you think the priority areas
need to be to allow consumers to reap the full benefits of the
Single Market in general? Where do you think the Commission should
concentrate in trying to give the consumer more benefit from the
Single Market?
Mr Forest: In my view I would say there are
two priorities. One is to consider the consumer as somehow being
rational, that is you would tend to think about buying cross-border
only if you get a benefit from buying cross-border. You would
have to consider the costs of buying cross-border even if there
is a price differential that is to your benefit. In terms of physically
buying cross-border that would be quite limited. The two key areas
which need to be prioritised are in terms of e-commerce and trying
to improve the confidence of consumers when getting on-line and
buying on-line, in terms of the security of payments, the liability
of consumers in case of theft, loss or misappropriation of your
means of payment, and also in terms of joint liability; what happens
if you do not get what you have ordered, you get it but it is
damaged or you never get it. All of these aspects will need to
be considered. The second key priority is in terms of improving
competition in the sense of the way the national markets are functioning,
in terms of dealing with market concentration, in terms of unbundling,
in terms of trying to build a real Single Market from the wholesale
perspective in the area of energy, banking perhaps, so that it
is easier for consumers to benefit from the Single Market when
staying at home, so to speak, because there is more competition
from the Single Market and they can benefit from better offers
and more choice.
Q219 Lord Haskel: Of course,
the euro makes all of this much easier and more transparent. Do
you think that the consumers in the non-euro countries are at
a disadvantage?
Mr Forest: That is a difficult question to answer
because the benefits of the euro are meant to be long-term, I
would say. There is a very concrete benefit in terms of transparency
but what can you get concretely as a consumer from transparency
if you cannot buy cross-border because it is too expensive, too
burdensome, you do not know anything about your rights and obligations
when you buy cross-border. Transparency as such is a benefit but
it needs to be accompanied by very concrete measures to make it
beneficial to consumers. The euro is basically what a currency
is about, trying to put some oil in the economics and making it
easier for the different markets to function, but as such it is
not dealing with the concrete issues of competition, or lack or
competition, and the lack of transparency or the uncertainties
about your rights and obligations as a consumer. As such it has
some benefits but it is not a panacea.
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