House of Lords
Wednesday, 19 November 2014.
3 pm
Prayers—read by the Lord Bishop of Worcester.
Income Tax
Question
3.06 pm
To ask Her Majesty’s Government what is their assessment of the level of income tax receipts so far this financial year.
Lord Newby (LD): My Lords, the Office for National Statistics’ latest estimate for income tax and capital gains tax for the period April to September 2014 is £71.5 billion.
Lord Wood of Anfield (Lab): I thank the Minister for that precise answer. As today’s alarming ONS figures confirm, this Government are presiding over a recovery in which wages, far from recovering, have continued to deteriorate. As a result, the public finances are getting worse and social security spending targets are being missed by over £15 billion. The deficit continues to rise. Will the Minister tell us why this is the case, and say whether he agrees that in the light of this, the Prime Minister’s promise in October of further unfunded tax cuts lies somewhere between heroic and reckless?
Lord Newby: My Lords, I remind the noble Lord, and the House, that growth in the UK is the highest among the G7 countries; that unemployment has fallen by 324,000 in the past year; and that the other piece of news today, which he omitted to mention, is that the gender pay gap has fallen to an all-time low.
Lord Wrigglesworth (LD): Does my noble friend not agree that the most important point is that 3 million people at the bottom of the earnings pile, including 1.8 million women, have been taken out of income tax completely? At the same time, the Revenue’s take has increased by some £5.1 billion over the past year. Is that not a classic example of a stronger economy and a fairer society?
Baroness Nye (Lab): My Lords, will the Minister say whether the Government are planning to raise VAT again to fill the hole in the tax receipts?
Lord Newby: My Lords, the Government have absolutely no plans to increase VAT.
Lord Lawson of Blaby (Con): My Lords, is it not a bit cheeky for the noble Lord, who is the eminence grise of the party opposite, to talk about recklessness, when his party’s policy is to increase the deficit even more?
Lord Newby: My Lords, it is not always that I agree with my noble friend—but in this case I do.
Lord Davies of Oldham (Lab): My Lords, how will the deficit be reduced if wages continue to fall, as they have done for 71 out of 74 months, and if, as has happened for virtually the whole of this Administration, wages fall in real terms, so that less tax is paid?
Lord Newby: My Lords, wages have fallen, but they have started rising in real terms. The OBR and every other forecaster that has made projections of real wages for the next few years in the British economy are firmly forecasting consistent real-wage growth.
Lord Forsyth of Drumlean (Con): My Lords, will my noble friend tell us what the effect of cutting the top rate of tax from 50p to 45p was? Did revenues go up or did they go down? What was the effect of putting up the capital gains tax rate? Did revenues go up or did they go down?
Lord Newby: My Lords, the impact of the reduction in the 50p tax rate was about £100 million, when all the secondary effects were taken into account. In respect of capital gains tax, I will need to write to the noble Lord.
Lord Haskel (Lab): Did the Minister see the research recently which said that paying a living wage encouraged people to be more productive and raised the level of income tax? Why do the Government not just do it?
Lord Newby: My Lords, paying the living wage is something that the Government support but, as we have discussed before in your Lordships’ House, there is a balance between rising wages and unemployment. That is the basis on which the minimum wage is set. I gave an example from the Dispatch Box the last time we discussed this: having spoken to people working in the textile industry in Leicester, they demonstrated to me that a big increase in the wage that they were paid would mean that fewer of them would be earning it, because they would be out of the job.
Lord Phillips of Sudbury (LD): My Lords, is it not the case that income tax should be a good deal higher, particularly if those in the higher ranges of income paid their full amount of tax? What are we doing to tighten the receipt of income tax from all who should pay it?
Lord Newby: My Lords, the amount of income tax paid by the top 1% is now 28% of the total income tax revenues, which is the highest proportion it has ever been. That is because this Government have put substantially more money into fighting tax avoidance and evasion—far, far more—than the previous Administration.
Baroness Farrington of Ribbleton (Lab): My Lords, we have heard various Ministers refer to government employees in terms of paying the living wage. It appears
to be a sort of “This ministry does, this ministry doesn’t” situation. Why does not the whole of government do that, particularly given that some of the people who work in those government departments live in London, where the cost of living is very high?
Lord Newby: My Lords, the Government support the principle of paying the minimum wage. A number of government departments are already doing it and others are considering introducing it.
Lord Teverson (LD):My Lords, what progress are the Government making on multinational corporate taxation to ensure that UK-domiciled companies are not discriminated against in terms of international and UK markets?
Lord Newby: My Lords, as noble Lords will be aware, at the G20 last year the Prime Minister had this issue at the top of the agenda, since when the OECD has produced a whole raft of measures aimed at ensuring that companies pay their fair share of tax. Noble Lords will have seen the end of what was called the “double Irish” tax avoidance scheme in Ireland, and there are currently European Commission probes against tax avoidance in the Netherlands and Luxembourg. There has been a real tightening-up in this area, which was reinforced at the recent G20 summit.
Lord Hughes of Woodside (Lab): My Lords, will the Minister reflect on what he has just said? If I heard him right, he said that most government departments were paying the minimum wage and that some are considering introducing it. Was that a slip of the tongue? Surely, no government department is paying less than the minimum wage. Did he mix up the minimum wage and the living wage?
Lord Newby: I am not sure, my Lords, but what I meant to say was that while all government departments obviously pay the minimum wage, a number are paying the living wage and we are encouraging more to do that.
EU: Reform
Question
3.14 pm
Asked by Lord Maclennan of Rogart
To ask Her Majesty’s Government what discussions they have had with European Union institutions about proposed reforms of the European Union.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con): My Lords, Ministers regularly discuss EU reform with counterparts in the EU institutions. The appointment of a new Commission offers a new opportunity for continued engagement on this subject. The Foreign Secretary held discussions with the European Commissioners’
first vice-president on this subject only two days ago. We will continue to take every opportunity to work with our European partners to achieve the reforms that Europe needs.
Lord Maclennan of Rogart (LD): I thank the noble Baroness for her Answer. If the Government wish to see constructive and democratic reforms introduced into the governance and operation of the European Union, why are they not more open about their proposals? Would they not be more likely to succeed if they were to seek to initiate a new convention on the future of Europe which could achieve consensus about reform rather than threatening the other 27 member states with possible break-up?
Baroness Anelay of St Johns:My Lords, we have been very transparent about the reforms we want. The Prime Minister and the Deputy Prime Minister have set out publicly their vision for a more competitive, flexible and democratically accountable EU, with fair treatment for those within the eurozone and those outside it. That is in the interests of all member states. My noble friend refers to the potential for a convention. The only convention to date that has examined extensive revision of the treaties is the one in which my noble friend served some while ago. It compromised 105 full members, including Heads of State, members of national Parliaments, MEPs and Commission representatives, and the process took two and a half years. As a mature organisation, Heads of State are capable of talking to each other and coming to mature decisions.
Lord Liddle (Lab): My Lords, I am sure the noble Baroness will agree that Sir John Major commands enormous respect on all sides of this House. Will she therefore endorse very clearly what he said last week about our membership of the European Union: that despite the frustrations of membership, which are many, and despite the reforms that are needed, which are many, there is absolutely no doubt—without equivocation—that our interests lie in remaining a member of the EU? Do this Government agree with the former Conservative Prime Minister?
Baroness Anelay of St Johns: My Lords, I admire Sir John Major. I know the work he did as Prime Minister and within European matters, and the struggles that he faced. He above all people knows what is involved. I agree with what he said, which was that our future is within a reformed European Union. The Prime Minister David Cameron has said that, too.
Lord Howell of Guildford (Con): Does my noble friend agree that successful and fundamental EU reform, which is badly needed, requires two things: first, a very strong alliance of the peoples and the Governments of the European Union, many of whom are longing for really radical reform to bring the EU into the 21st century and, secondly, a deeply thought-out strategy for the kind of EU model we need to work in the 21st century, which is at present lacking? Will she assure us that at the highest level these matters are being given very strong attention and are being pursued vigorously?
Baroness Anelay of St Johns: My Lords, I can. The contribution made yesterday by the German deputy Finance Minister on “Newsnight” made it clear that strong and productive discussions are afoot.
Baroness Ludford (LD): Will my noble friend the Minister confirm that once the opt-back-in to the 35 measures is complete, the UK will be in a strong position to push for reform in the areas of policing and criminal justice and civil liberties, including reform of the European arrest warrant, which is needed, as well as staying within the instrument itself?
Baroness Anelay of St Johns: My Lords, this Government have already reformed the process of the European arrest warrant. It is different from that which this House passed in 2004. The Government are strongly of the opinion that further reform is necessary across all aspects of EU activity to make it more flexible, competitive and democratically accountable.
Baroness Symons of Vernham Dean (Lab): My Lords, will the Minister reflect a moment longer on the Answer she gave to the noble Lord, Lord Maclennan of Rogart, about the idea of a convention, which was echoed to some extent by the noble Lord, Lord Howell of Guildford? It is not just a question of Heads of Government making decisions; it is a question of Heads of Government being able to convince their Parliaments about what is necessary in a reformed Europe. To do that, we need a wider coming together of the various political groupings in Europe. I think the noble Lord, Lord Maclennan of Rogart, is on to something and I ask the Minister to reflect again on that.
Baroness Anelay of St Johns: My Lords, I agree that the European Union needs to be more democratically accountable, and any changes within the European Union should therefore involve the participation of national Parliaments. There is much that can be done to ensure that national Parliaments have a stronger role to play. We now have a new Commission and a new head of the Commission, and there are prospects for a very constructive discussion about how we take these matters forward. In the first instance, it takes leadership and that is what the various Governments throughout Europe are showing now.
Lord Garel-Jones (Con): Does my noble friend agree that the championing of the single market under the Single European Act 1986 was one of Margaret Thatcher’s great achievements as Prime Minister, aided by a Member of your Lordships’ House, Lord Cockfield? Does she further agree that, about 30 years on from that date, there will inevitably be a number of areas where adjustments can and should be made in the interests of all member states without undermining the basic principles on which the single market is based?
Baroness Anelay of St Johns: My Lords, yes, I agree with my noble friend. I have tried to argue over the last four or five weeks that the single market is, indeed, a
British success story—my noble friend makes an important point. The United Kingdom has played a leading role in shaping the single market. We have been instrumental in driving its continued liberalisation, particularly in services. My noble friend is right; this is 30 years on, so while the single market is Europe’s greatest success, it must reflect the needs of the 21st century, with a stronger market, particularly in services, both digital and in energy. Further reforms are needed and we can lead on that.
EU: Migration
Question
3.21 pm
To ask Her Majesty’s Government whether they have made any proposal to other European Union member states, either severally or collectively, which would limit (1) the right of United Kingdom citizens to live and work in other European Union member states, or (2) the parallel right of citizens of other European Union member states to live and work in the United Kingdom.
The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con): My Lords, the Government have regularly engaged with other member states on the issue of free movement, the Home Secretary has consistently pressed for action on abuse and the European Council has recognised that this issue needs to be tackled. The Government have also started a debate on reforming the transitional controls for new member states and will engage constructively with other member states in discussion on how best to achieve change in this area.
Lord Lea of Crondall (Lab): I thank the Minister for his reply, which means no. The reason it is no is that it has obviously dawned on the Government, belatedly, that this would require reciprocation by all the rest of the 28 member states.
I have two supplementaries. First, does the Minister agree that there is a broad balance at the moment, not by design but by the facts on the ground, between the number of Brits living over there, in the EU, and the number of Europeans coming here? Roughly 2.2 million gain a living there and there are a few more here. Secondly, is the Minister aware that it is not exceptional to have this arrangement in Britain? Does he agree that, for example, there are far more people from the rest of the EU living in Germany—not least from Greece and Romania—than are living here in Britain?
Lord Bates: First, my initial Answer was yes not no. It was that we have been engaging with Europe. The European Commission has endorsed this approach. The noble Lord referred to Germany. The German Government are passing legislation through the Bundestag to restrict the benefits of those who come to Germany when they are not genuinely seeking work. It was tested in the European Court of Justice. These are
exactly the types of reforms and reviews which we have been pushing, from our side, and which are getting greater support across the other member states of the European Union.
Lord Deben (Con): Does my noble friend agree that tone is very important in these issues? We should show quite clearly how much we benefit from the large number of people from the rest of the European Union working here, and how much the rest of the European Union benefits from people from the United Kingdom going there. If we talked a bit more cheerfully about this—the greatest peacetime achievement that has happened in Europe—perhaps people would be more willing to listen to our comments.
Lord Bates: I totally agree with my noble friend about tone. The British people have a reputation for hospitality and tolerance and have welcomed people who are making a positive contribution to our society. However, that of course has its limits and we need to be mindful that there is great concern about unrestricted, uncontrolled immigration into this country and the impact it has upon social cohesion and our public services.
The Lord Bishop of Worcester: My Lords, the Minister mentioned the reputation that this country has for hospitality. Is he aware of an associated issue: the difficulty that members of the Commonwealth face in obtaining a visa even to visit, let alone to work and live in this country, which seriously hampers a lot of very important overseas links with dioceses, including my own—so much so that my friends in Tanzania were unable to be present at my wife’s funeral earlier this year? Is that sort of impediment government policy and, if not, can he assure us that it will be addressed?
Lord Bates: We very much encourage people to come to this country, whether to study or to work. We want to encourage the best and the brightest to come to this country, as well as tourists; there are many people we want to encourage—but there is a difference between that and people who significantly abuse the system in coming here because of benefits.
Lord Davies of Stamford (Lab): My Lords, following the point made by the noble Lord, Lord Deben, the very useful statistics on the numbers of EU citizens here as opposed to British citizens living in the EU brought forward by my noble friend Lord Lea—it is about exactly the same—and given the statement the other day by the director-general of the CBI, who does not know of a company in this country that is not in some degree dependent on immigration, will the Government agree that free movement of labour, apart from being a most valuable human right, is actually a factor of considerable economic importance in this country?
Lord Bates: We totally agree with that. I have to say that the figures that I have are that there are 2.3 million EU nationals living in the UK and 1.4 million British
citizens living in the EU. Those are very important for the success of the single market, which has already been referred to. Of course we welcome people who genuinely want to come here to work, study or visit.
Lord Teverson (LD): My Lords, the United Kingdom has a proud record of campaigning for the enlargement of the EU and bringing our eastern colleagues in Europe into the fold of the European Union. We have had great credit for that in the past. Is it not a great shame that through our rhetoric we are turning those countries that came into the European Union in 2004 from friends into people who resent our attitudes towards them?
Lord Bates: I do not accept the premise that we are alienating people. People recognise that there are legitimate concerns here; if proper transitional arrangements are put in place, that can aid relations between both countries, such as the ones that we have used in the case of Croatia, which will remain in place until 2019.
Baroness Sharples (Con): My Lords, is it not the fact that the number of children coming into school with English as their second language has risen from 6% last year to 16% this year?
Lord Bates: My noble friend is absolutely right, and that is one reason why we have said that it is a condition of immigration that the English language must be an important part of that.
Baroness Smith of Basildon (Lab): My Lords, the Minister will have heard the disappointment and concern on his side of the House that the Government do not seem to be building workable relations with other countries in the European Union. That makes any change much more difficult. Could the Minister tell me specifically which member states have backed the Prime Minister’s proposals to restrict free movement within Europe?
Lord Bates: We are not talking about restricting the free movement of labour—we are talking about restricting the free movement of benefits. I have already listed a number of countries, and Germany is a prime one, which have particular concerns on this that are shared. That includes some of the Nordic countries as well. Some of those countries also had transitional arrangements put in place when we enlarged with the A10 countries in 2004, which the previous Government did not put in place. That led to the major problem that we are now living under.
Lord Spicer (Con): My Lords, in the context of this Question, and the previous one, how do we reform the European court?
Lord Bates: I was going to say that that is a question for another day. That will of course be part of any wider negotiation, but let us recognise that in the case brought by the German Government before the European
court about benefit tourism—the Dano case—the court actually upheld the decision, which is something that we and the German Government welcome.
Alcohol: Sale to Children
Question
3.29 pm
Asked by Lord Brooke of Alverthorpe
To ask Her Majesty’s Government, further to the answer by Baroness Williams of Trafford on 17 November, in what manner the proposal to repeal the restriction on the sale of liqueurs to children formed part of the public consultation on the Deregulation Bill.
Baroness Williams of Trafford (Con): My Lords, the proposal to repeal the offence of selling liqueur confectionery to those under the age of 16 is part of the Government’s Red Tape Challenge, which seeks to remove unnecessary burdens from businesses. A public consultation led jointly by the Department for Business, Innovation and Skills and the Cabinet Office asked businesses and members of the public for their views on deregulating a wide range of regulated activity.
Lord Brooke of Alverthorpe (Lab): My Lords, I am grateful to the Minister for at last answering the questions I raised on that, but I find her Answer quite unacceptable. I have before me the policy guide to the Deregulation Bill, published by the Cabinet Office for the Minister responsible, which says under the details of consultation only:
“The proposal has not been part of the public consultation, but was suggested by business”.
That was produced by the Cabinet Office. Why do the Home Office, the Ministers and others concerned not know what is happening on this?
Baroness Williams of Trafford: My Lords, it is my understanding that the consultation was open to both businesses and members of the public.
Lord Naseby (Con): Is my noble friend aware that I sat on the pre-legislative scrutiny committee for the Deregulation Bill, and that it was made clear to the members of that committee that, yes, each department was asked to put forward proposals, and anybody— an organisation, an individual or any party that had validity in the United Kingdom—could make representations? Indeed, in some areas huge numbers of representations were received. My noble friend is absolutely right. Representations did not come just from business; it was open to anybody who wanted to make a submission on liqueur chocolates to do so.
Baroness Williams of Trafford: That is indeed my understanding. I thank my noble friend for his clarification.
Lord Elystan-Morgan (CB): Does the noble Baroness agree that it might have been a better hallmark of responsibility and of trust towards young people had there been an investigation by health authorities of the possible injurious effect of the ingestion of alcohol in any form on young people; and that that would have been much better than surrendering to the blandishments of business, which might not be entirely free of self-interest?
Baroness Williams of Trafford: My Lords, it is my understanding that concerns were not raised by any health bodies on the matters that we are discussing today.
Baroness Smith of Basildon (Lab): My Lords, I would press the noble Baroness on this, because there is some confusion. In Committee, when this was discussed, the noble Lord, Lord Wallace, who was answering for the Government, said that it was not a matter for business and business had not asked for this. He thought it was a retail issue. However, the consultation policy briefing document from the Cabinet Office says:
“The proposal has not been part of the public consultation, but was suggested by business”.
Given that there are some concerns, which may or may not be justified, about deregulating the sale of liqueur chocolates to children, would it not be better, as the noble Lord said, to consult those who have an interest in public health and are concerned about alcohol misuse, and ask what their views are? Would that not be the more sensible way forward on an issue that is becoming controversial?
Baroness Williams of Trafford: My Lords, obviously I was not there on the Deregulation Bill, but it is my understanding that this consultation was open to anybody who wished to respond to it. It was widely advertised on the government website and, as I just said to the noble Lord, health bodies did not raise concerns about liqueur chocolates on this theme of restricted goods.
Lord Avebury (LD): My Lords, did the Government take or seek advice from the BMA, Alcohol Concern, the Institute of Alcohol Studies or any other organisation concerned with the huge problem of alcohol harm in children?
Baroness Williams of Trafford: I am sorry, but I did not catch the last bit of my noble friend’s question. As I have said, I understand that those bodies did not raise concerns on this element of deregulation.
Lord Brooke of Alverthorpe: I regret having to come back to this but we must get to the truth. This was not part of the consultation. Indeed, this document has been taken down from the Cabinet Office website. Why, when the health of children is affected, have the Government not consulted their Chief Medical Officer, who is opposed, Public Health England and all the other health authorities that have a view—a view that they have so far not expressed because they have not been invited or asked to consult?
Baroness Williams of Trafford: My Lords, I can have a note sent to the noble Lord about why specifically health bodies were not consulted. In seeking to get the truth, I can assure the noble Lord that I am not evading it, but answering with the best information that I have.
Baroness Fookes (Con): My Lords, may I seek clarification? The Question refers to liqueurs; the Minister has referred to liqueur chocolates. Which is it?
Baroness Williams of Trafford: I think that the noble Lord is referring to liqueur chocolates.
Baroness Armstrong of Hill Top (Lab): My Lords, is not the issue that there was a general consultation, which asked, “Do you have any ideas for deregulation?”. That is how, on licensing, the idea of deregulating liqueur chocolates came into being. That is the issue and the truth. The truth is that the idea of carrying out this precise measure was never put to anybody else. Health authorities would probably never even dream that somebody would be daft enough to include that in the Deregulation Bill.
Baroness Williams of Trafford: I totally agree with the first part of the noble Baroness’s question, which she put very clearly—it was all part of the Licensing Act and general deregulation. As I said, there has been no response from health authorities on concerns over chocolate confectionery, but it was covered by the general strand of restricted goods.
Lord Cormack (Con): My Lords, is not the most dangerous ingredient in liqueur chocolates sugar?
Baroness Williams of Trafford: Judging by the unfortunate times when I have had to eat them, yes, it is.
Insurance Bill [HL]
Membership Motion
3.36 pm
Moved by The Chairman of Committees
That, as proposed by the Committee of Selection, the following Lords be appointed to the Special Public Bill Committee on the Insurance Bill [HL];
L Ashton of Hyde, L Carrington of Fulham, L Davidson of Glen Clova, Hodgson of Astley Abbotts, L Lea of Crondall, L McNally, L Newby, B Noakes, L Woolf (Chairman);
That the Committee have power to send for persons, papers and records;
That the evidence taken by the Committee shall, if the Committee so wishes, be published
Delegated Powers and Regulatory Reform
Membership Motion
3.36 pm
Moved by The Chairman of Committees
That Lord Trimble be appointed a member of the Select Committee in place of Lord Bourne of Aberystwyth, resigned.
Social Security (Contributions) (Amendment No. 5) Regulations 2014
Social Security Contributions (Limited Liability Partnership) Regulations 2014
Motions to Approve
3.37 pm
That the draft Regulations laid before the House on 13 October be approved.
Relevant documents: 9th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 17 November
Broadcasting (Independent Productions) (Amendment) Order 2014
Legislative Reform (Entertainment Licensing) Order 2014
Motions to Approve
3.37 pm
Moved by Lord Gardiner of Kimble
That the draft Orders laid before the House on 8 and 21 July be approved.
Relevant documents: 8th Report from the Joint Committee on Statutory Instruments, 6th Report from the Regulatory Reform Committee, considered in Grand Committee on 17 November
Infrastructure Bill [HL]
Third Reading
3.38 pm
Lord Newby (LD): My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Infrastructure Bill, has consented to place her interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
1: After Clause 3, insert the following new Clause—
“General duties of a strategic highways company
(1) A strategic highways company must, in exercising its functions, co-operate in so far as reasonably practicable with other persons exercising functions which relate to—
(a) highways, or
(b) planning.
(2) A strategic highways company must also, in exercising its functions, have regard to the effect of the exercise of those functions on—
(a) the environment, and
(b) the safety of users of highways.”
The Minister of State, Department for Transport (Baroness Kramer) (LD): My Lords, I agreed on Report to come back with amendments on two aspects over which noble Lords had concerns. I tabled Amendment 1 in recognition of noble Lords’ preference for the strategic highways company’s duties to be stated in legislation. It places a duty on the company in relation to the environment, safety and co-operation, noble Lords having expressed the strongest concern that that should be made clear. We have already made considerable change in taking on board concerns that were raised in Committee and on Report. It is the Government who must set broad policy on the environment and road safety and noble Lords will be aware that we have already amended the Bill to include an obligation on the Government to have regard to the environment and safety of users of the highway when setting or varying the road investment strategy. We are now taking this further by placing a duty on the company to consider those matters, meaning that the company itself is obliged to consider the impact of its operations on environment and safety.
Moreover, your Lordships will know that we have made changes to the powers of the monitor—the ORR—to hold the company to account and to measure and report on the company’s performance and whether it is meeting its duties, including on the environment and safety. I remind your Lordships that, in parallel with these high-level duties, we are using statutory directions and guidance from the Secretary of State to steer the company in the way it exercises its functions. We have extensively redrafted these prior to Report to reflect your Lordships’ concerns and these same issues are covered in great detail there.
In addition, your Lordships will note that we have also done even more than relying on statutory direction or guidance to ensure that the company co-operates. It now has a clear duty to co-operate in the areas of highways and planning with local authorities, devolved Governments, operational partners—such as the police and emergency services—other transport operators, and other bodies with a significant stake in the long-term development of the network.
I tabled Amendment 16 in recognition of your Lordships’ concern that there may be more than one strategic highways company provided for in Part 1 of the Bill. I have explained to the House that the
Government have no plans to create more than one company and that the Highways Agency—in its new status as a government-owned company—will be the only company appointed when we bring these provisions into force. I recognise that further reassurance is needed on this point and therefore propose an amendment requiring parliamentary approval if the Secretary of State wishes to make an appointment order under Clause 1 which involves moving away from a single company structure. This strikes a balance in providing the flexibility for future Governments to move to a different structure—for example, a regional structure—should it be needed or desired, without the need for further primary legislation on the point, while meeting your Lordships’ desire for further discussion and approval by Parliament on the detail of how a multiple company structure would work in practice before allowing it to proceed. I hope that this provides a sensible compromise between your Lordships’ concerns and our desire to maintain a potentially useful option for the future, and for this reason.
In summary, I hope your Lordships recognise the effort we have made to ensure that there can be no doubt about what responsibilities the company has or how it will be held to account and that we have advanced considerable changes to meet the views expressed in this House. I beg to move.
Lord Davies of Oldham (Lab): My Lords, I am grateful for these amendments, which certainly improve the Bill. I congratulate the Minister on the way she has conducted herself at the various stages of the Bill and on bringing forward these amendments in response to the arguments put forward in Committee. Those arguments were put forward particularly forcefully by my noble friends Lord Whitty, Lord Faulkner and Lord Berkeley. As the Minister will know, we started off with a great many reservations about the nature of the Bill and we are very pleased that the Government have gone some of the way towards making it slightly more difficult for multiple strategic highways companies to be set up. Amendment 16 ensures that Parliament will have a say on this, which is very much to be welcomed. I particularly appreciate Amendment 1, which ensures that the strategic highways company has regard to the environment and to the safety of users of the highways. These were issues about which we were very concerned on the Opposition Benches and we are pleased that the Minister has seen fit to propose amendments to the Bill as it then was.
However, it is still the case—as I am going to speak only once I hope the Minister will forgive me for moving a little further on—that there are questions which the Government have not adequately considered. An example is the needs of local roads in dealing with the challenges of huge numbers of potholes and the projected increase in traffic. The fact is that it is not the strategic system which creates the majority of problems for road users but local roads. The same applies to safety, where the Government have presided over a large reduction in road safety budgets and further action may be required. Among others, I obviously mention the issue of cyclists. That may seem marginal in a Bill that is predominantly concerned with strategic highways but, if one is talking about safety, one has to
look at the growing use of cycles on our roads. That is greatly to be welcomed in many respects—provided that cyclists obey the law, I hasten to add—but we must also ensure that we do not get the kind of significant increase in cycling accidents that we have seen in recent years.
3.45 pm
It would also be helpful if the Minister would provide further details on what is meant by—this is the phrase used—
“have regard to the effect of the exercise of those functions on … the environment”.
What will that mean in practice? Only today, the European Court of Justice called on the United Kingdom to establish the air quality action plan, which sets out measures to tackle air pollution. We know that traffic is inevitably a great dimension of the problem of air pollution.
A number of issues elsewhere in this part of the Bill are still unresolved. First, the process of setting the first road investment strategy looks somewhat rushed to us. It is clearly essential that the Government get this right, given the importance of this infrastructure development over a long period. Secondly, we are not entirely clear about the governance of the company—it still seems confused to us. Will it be through a licence that is not really a licence or will it be through statutory guidance? Those questions were not answered with total accuracy in Committee.
Finally, the fundamental question at the heart of this part of the Bill remains totally unanswered. It concerns the creation of the new company, which is what the Bill starts off with. I mention to noble Lords who may not have followed its progression in the greatest detail that one significant clause on fracking was added after we had cleared four parts of the Bill. Of course, it is difficult to respond when a Bill has no coherent pattern and has so many aspects to it. However, this point stands out. Is the creation of a new company really the best way to secure long-term funding for roads? I still suggest that the Minister has not been fully convincing on this point. I am sure that when the Bill goes to the other place the Members there will want to test this proposition further. But I am grateful to the Minister for the progress she has made thus far.
Clause 26: Property etc transfers to the HCA
Baroness Kramer: I shall speak also to Amendments 3, 4, 6, 8, 9, 10 and 12. Maximising the release of surplus public sector land is critical to supporting the Government’s ambitions to reduce the deficit, increase the number of houses being built and help to drive economic growth.
The new public sector land programme from 2015-16 will mean transferring a significant amount of surplus and developable land from government bodies to the Homes and Communities Agency and, in London, to the Greater London Authority. Disused government land can and does already transfer to the Homes and Communities Agency but the process is often more bureaucratic than is necessary. Clause 26 is about simply increasing the rate of delivery and efficiency by streamlining what essentially is an internal government procedure.
As I believe the House now largely accepts, the intention behind Clause 26 is not and has never been to sell off the nation’s forests. In recognition, however, of the strength of the House’s concern about the future security of the public forest estate, my noble friend Lord Ahmad committed on Report to table an amendment to make it clear in law that the public forest estate will not transfer to the HCA. The amendment we have tabled will prevent transfer of the public forest estate to both the Homes and Communities Agency and the Greater London Authority.
We have gone further than the amendment tabled by the noble Baroness, Lady Royall. Our amendment additionally seeks to address an oversight we have now identified in the original Housing and Regeneration Act 2008, which was passed under the previous Government. Section 51 of that Act makes it possible for land owned by central government to transfer directly to the HCA. The public forest estate is, of course, owned by central government and not—as we have repeatedly made clear when asked about these clauses—by an arm’s-length body. Needless to say, since the Labour Government introduced powers to transfer the public forest estate to the HCA six years ago, we have not used them. I am sure the fact that the legislation allowed this was an oversight rather than intentional, so we are now amending the 2008 Act to prevent any transfers under these existing powers. This now covers any transfers from a government department to the HCA where the land is part of the public forest estate.
I also make it clear that our amendment already covers the contingency that the amendments tabled by the noble Baroness, Lady Royall, seek to address. Our amendment will prevent the transfer of any land that is held by the Secretary of State and has been acquired, or is treated as having been acquired, under Section 39 of the Forestry Act 1967. This definition, therefore, covers all land that is under the management of the forestry commissioners at any given time, as well as land that is not being used for afforestation or purposes connected with forestry. I trust that this amendment will provide the comfort that noble Lords have sought on this issue.
In the same debate on Report, the noble Lord, Lord Phillips, raised a query about the potential scope of this clause, asking whether the definition of “public bodies” is too broad for the stated aims of the clause and whether it could, for example, allow for the transfer of land owned by charities. The noble Lord, Lord Ahmad, has written to the noble Lord, Lord Phillips, to set out why we think this clause is not likely to extend to the transfer of land from charities. However, for the avoidance of any doubt, we wish to make it
clear in the Bill that transfers to the HCA or GLA using this power may happen only with the consent of the transferring body. I trust that this will allay any concerns that there would be any potential for a future Government to misuse this power. I beg to move.
Baroness Royall of Blaisdon (Lab): My Lords, I will speak to Amendments 5, 7, 11, 13 and 14. I thank the Minister for coming back with the government amendments. I know that campaigners who have fought to protect our forests are also pleased that the Government have responded to their concerns. I am also grateful to the Minister and the noble Lord, Lord Ahmad, and their officials for the work they have put into ensuring that the exemption of the public forest estate from the Infrastructure Bill is in the Bill. However, while I accept what the Minister is saying about an oversight, her line of argument appears contradictory to statements at previous stages of the Bill when it was said that transfers of the PFE under this legislation could not happen. However, that is history.
I have tabled amendments to the government amendments with one aim—to make sure that the entire public forest is given the protection that noble Lords and campaigners have asked for throughout the passage of the Bill. However, I am still concerned about forest waste. Forest waste—in the forest that I know best, the Forest of Dean—is usually taken to mean land within or on the margins of the forest, not planted or used for forestry purposes. Forest waste is of great value in terms of biodiversity, ecology, amenity and recreation. Within the Forest of Dean there are a number of gales—shallow workings mined by free miners. These mines are clearly not used for afforestation or in connection with forestry, but they are a central part of the history and character of the Forest of Dean.
I am concerned that this forest waste may not be included and there could be some ambiguity as to whether it is suitable for afforestation or purposes connected with forestry. My disquiet is principally due to the part in brackets in Amendment 12 that states:
“(power to acquire land which is suitable for afforestation or purposes connected with forestry)”.
“together with any other land which must necessarily be acquired therewith”,
which is in Section 39(1) of the Forestry Act. I would be grateful for clarification from the Minister on that point. Will she confirm that forest waste is exempted from the Infrastructure Bill? In which case, I hope that she will accept my amendment as confirmation that this is the case.
Once again, this reflects the key message that arose repeatedly in our debate on Report on the need for the Government to legislate through a forestry Bill to protect the public forest estate. As the Woodland Trust said in its briefing ahead of Third Reading, for which I am grateful:
“We hope that the Third Reading debate, any subsequent further amendment—and scrutiny in the Commons—will ensure that protection is as strong as possible. Whatever the outcome of the Bill’s passage, however, it has to be said that this is a row of the Government’s own making through not bringing forward a Forestry Bill as promised. Indeed, this assurance within the Infrastructure Bill cannot be deemed a substitute for the bringing forward of legislation for the Public Forest Estate; a specific
Forestry Bill is still needed to settle the future of the PFE and for the avoidance of any future doubt or confusion as to its status. We want to see that legislation brought forward at the earliest opportunity after the election”.
I strongly echo those sentiments. Again, I thank the Minister, but I also pay tribute to the campaigners, particularly those from HOOF who, through their dedication, care and passionate love of the forest, have fought time and again to ensure that it is protected for future generations.
Lord Clark of Windermere (Lab): My Lords, I support my noble friend’s amendment. I take her point about forest waste. Equally, I am very grateful to the Government for the way in which they brought forward these proposals. On the face of it, they take us further forward and appear to give us greater protection.
I am delighted that the Government managed to find a weakness in the 2008 Act but it is very important that the assurance that I think the Minister gave today was that it included all land managed by forest commissioners. That is very important because, in recent years, we have had joint initiatives and joint ventures with the private sector that are not forestry—the provision of forest cabins, car parks, and so on. I remind the Minister that the Wildlife and Countryside (Amendment) Act 1985 required statutorily the Forestry Commission to manage economic forestry with environmental interests.
My noble friend referred to forest waste, which is vital. The Lake District, for example, includes a great many of the highest mountains in England, and is owned by the Forestry Commission but trees will not grow there and are not planted there. We must have an assurance that those areas of land are covered by the protection that the Minister seems to have brought forward today.
Lord Jenkin of Roding (Con): My Lords, I do not begin to claim the same amount of expertise as the noble Lord, Lord Clark of Windermere, who of course is a former chairman of the Forestry Commission. We listen to him with huge respect on these matters.
I was puzzled by the amendment tabled by the noble Baroness, Lady Royall, and was not quite sure about its precise aim until she explained. I was under the impression that when my noble friend Lord Ahmad of Wimbledon undertook to bring back amendments at this stage, he greatly satisfied the House. A very strong case had been made by the noble Baroness and by other noble Lords that there was a real need to declare in the Bill the protection of the public forestry estate. I supported that and I was very glad to hear my noble friend Lord Ahmad at the end of the debate recognise the strength of feeling in the House and undertake to come back at this stage with the amendments.
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Since then, I have read the letter that he circulated to us yesterday. It struck me that this spelt out very clearly how the amendments that my noble friend has tabled and to which she has spoken this afternoon seemed, at first sight, to go the whole way to giving the additional protection that the noble Baroness, Lady Royall, was seeking.
I understand the point about forest waste, but I have always felt that forest waste is an integral part of any forest. The noble Lord, Lord Clark of Windermere, mentioned car parks and huts. To my mind, it is inconceivable that a car park, which is sited in a forest for the purpose of visitors to the forest so that they can get there from wherever they are coming from and park a car so that they can from that point explore the forest, is not part of the forest. It must be part of the forest; it does not need to be specially mentioned.
I listened to the noble Baroness with some interest, but I am not clear even now that her amendment is necessary to achieve the protection that we all sought and which my noble friend Lord Ahmad was very clear that he was prepared to give. The amendments that my noble friend Lady Kramer will be moving really do meet the case. I remain to be persuaded that the amendments of the noble Baroness, Lady Royall, are additionally necessary.
Lord Judd (Lab): At earlier stages of the Bill, I drew attention to the widespread and spontaneous concern—quite unprecedented in some ways—that had come from people right across the country about the precious and special nature of our forests. I think, therefore, that among a lot of people, there will be a great sense of relief at the amendment that the Government have introduced. Credit should be paid to them for the very commendable way in which they listened to the argument, went away and came back and responded to what the House said.
As for my noble friend’s amendment, I totally see the logic and importance of it. If we have just said that the other amendment is essential because of the very special nature of the forests—let us not be afraid of these phrases: the atmospheric nature of the forests, the spiritual nature of the forests, the physical and recreational nature of the forests—it really is important that intrusions, by carelessness or deliberate action, which spoil that special nature should be dealt with in a way that preserves the special characteristics of the forest. The two amendments go completely together. I hope that the Government will be able to take very seriously what my noble friend has argued and accommodate it.
Lord Berkeley of Knighton (CB): I congratulate the Minister on listening to the points that a lot of us in this House made. As a rider to what has been said, a very important part of forestry—speaking as someone who has some—are those strips of land where you can extract timber to cut it up and prepare it to go to the timber mill or wherever it is going. This area that we talk of as waste is vital. To people in the country, it is not unlike those elements that you get at the sides of fields that are often put to set-aside or for biodiversity. The amendment makes a very good point and I am sure that the Minister will reassure us on it.
Baroness Kramer: My Lords, I think that we are all at the same place on this. My argument against the amendments of the noble Baroness, Lady Royall, is that they are unnecessary, because the issue is entirely
covered in the language that I hope we will be bringing into the Bill through amendment, if your Lordships agree. The amendments prevent the transfer of any land held by the Secretary of State that has been acquired—remember, this is government-owned land—or is treated as having been acquired under Section 39 of the Forestry Act 1967. As I said earlier, that covers all land that is under the management of the forestry commissioners at any given time—whether by freehold or leasehold—and includes any land that is not being used for afforestation but is still under the management of the forestry commissioners or is not being used for purposes connected with forestry.
The provision is widely drawn. Not only does it include forest waste, it includes the kind of ancillary facilities that many noble Lords have pointed out are necessary. Indeed, there is not even a necessary test: it simply has to be under the management of the Forestry Commissioners. I am sure that that is exactly what the noble Baroness, Lady Royall, and the various campaigners were attempting to achieve.
We think that we have done this rather effectively because one of the challenges of writing legislation is to make sure that we do not include another unintended loophole. We think that this approach is rather effective. I hope that noble Lords will understand why I will resist the amendment because I believe that its principle is well incorporated into the amendments that we introduced.
This may be the last time that I have the opportunity to speak in the House on this phase of the Bill before it goes to the other place. The last group of amendments will be led from the Government’s perspective by my noble friend Lady Verma. I want to say that, in a sense, this last discussion reflects what has been an extraordinary quality of this Bill, for which I thank the whole House. So many Members of the House have taken responsibility for raising issues of concern, strengthening the Bill, looking for ways to make it more effective and recognising the underlying purpose and intent. The collaborative attitude of so many Members of this House—I include the Opposition in that—has led us to a Bill that will serve its purpose even better than the Bill that we originally drafted.
At the same time, I want to thank the most extraordinary Bill team who have facilitated and made all of that possible, and the staff from the many departments that have contributed to the Bill. They have shown an exemplary service in making sure the legislation reflects the genuine intent of this House. I thank the House for allowing me to proceed with this as well. The last group of amendments will be led by my noble friend Lady Verma.
3: Clause 26, page 26, line 44, at end insert—
“(4A) The Secretary of State may not make a scheme under this section unless the specified public body to which the scheme relates has consented to its provisions.”
4: Clause 26, page 26, line 44, at end insert—
“(4B) A scheme under this section may not make provision in relation to land which is held by the Secretary of State and was acquired, or is treated as having been acquired, under section 39 of the Forestry Act 1967 (power to acquire land which is suitable for afforestation or purposes connected with forestry).”
Amendment 5 (to Amendment 4) not moved.
6: Clause 26, page 28, line 13, at end insert—
“(2A) In section 51 (property etc transfers) after subsection (3) insert—
“(3A) A scheme under this section may not make provision in relation to land which is held by the Secretary of State and was acquired, or is treated as having been acquired, under section 39 of the Forestry Act 1967 (power to acquire land which is suitable for afforestation or purposes connected with forestry).””
Amendment 7 (to Amendment 6) not moved.
9: Clause 26, page 28, line 37, at end insert—
“(3A) The Secretary of State may not make a scheme under this section unless the specified public body to which the scheme relates has consented to its provisions.”
10: Clause 26, page 28, line 37, at end insert—
“(3B) A scheme under this section may not make provision in relation to land which is held by the Secretary of State and was acquired, or is treated as having been acquired, under section 39 of the Forestry Act 1967 (power to acquire land which is suitable for afforestation or purposes connected with forestry).”
Amendment 11 (to Amendment 10) not moved.
12: Clause 26, page 31, line 15, at end insert—
“(5A) In section 408 (transfers of property, rights or liabilities to the Greater London Authority etc) after subsection (8) insert—
“(8A) An order under subsection (1) above may not make provision in relation to land which is held by the Secretary of State and was acquired, or is treated as having been acquired,
under section 39 of the Forestry Act 1967 (power to acquire land which is suitable for afforestation or purposes connected with forestry).”
(5B) In section 409 (transfer schemes for transfers to the Greater London Authority etc) after subsection (8) insert—
“(8A) A scheme under subsection (1) or (2) above may not make provision in relation to land which is held by the Secretary of State and was acquired, or is treated as having been acquired, under section 39 of the Forestry Act 1967 (power to acquire land which is suitable for afforestation or purposes connected with forestry).””
Amendments 13 and 14 (to Amendment 12) not moved.
Clause 38: Further provision about the right of use
15: Clause 38, page 45, line 10, at end insert—
“(4A) A person (“L”) who owns land (the “relevant land”) is not liable, as the owner of that land, in tort or delict for any loss or damage which is attributable to the exercise, or proposed exercise, of the right of use by another person (whether in relation to the relevant land or any other land).
(4B) For that purpose, loss or damage is not attributable to the exercise, or proposed exercise, of the right of use (in particular) if, or to the extent that, the loss or damage is attributable to a deliberate omission by L.
(4C) There is a “deliberate omission by L” if L, as owner of the relevant land, decides—
(a) not to do an act, or
(b) not to allow another person to do an act,
and the circumstances at the time of that decision were such that L would not have had to bear any of the costs incurred (whether by L or any other person) in doing or allowing the act.”
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con): My Lords, the UK stands to benefit enormously from the safe and effective development of the offshore shale gas and oil and geothermal industries. The Government have introduced provisions into the Infrastructure Bill which provide a right to use deep-level land 300 metres or more below the surface for the purposes of exploiting petroleum or deep geothermal energy.
I explained on Report that I had listened to the concerns expressed by stakeholders and by noble Lords that the right to use deep-level land could disadvantage landowners if claims were brought against them in connection with petroleum or deep geothermal operations. While the existing regulatory regime is robust, I agree that we can do more to reassure landowners. We need to be clear that these sorts of claims—brought by a third party against a landowner whose land is accessed through the right of use clauses—cannot be made against a landowner who has done nothing wrong. To this end, I committed to table an amendment to address this issue.
The amendment will provide protection for landowners against claims made by third parties for any loss or damage caused by the exercise of the right of use provision. It does, however, ensure that landowners—including persons with an interest in land, such as
persons licensing the land—will not benefit from the exemption if they deliberately fail to act, or decide not to allow someone else to act. To make this fair to landowners, we also propose that a landowner would not have to do anything that would ultimately involve them in bearing any costs. This means, for example, that if a landowner prevented an operator from accessing his land to remediate any damage caused, despite the landowner not having to bear any costs, that landowner could be deemed liable. If, by contrast, the landowner allowed for the damage to be remediated, this amendment ensures that, as well as benefiting from existing protections, the landowner would not be liable to claims from any third parties for loss or damage.
This amendment will complement the existing comprehensive statutory and regulatory regime by protecting landowners, while allowing this source of home-grown energy to develop in a way that is fair to communities. I beg to move.
Lord Teverson (LD): My Lords, I thank the Minister for having explained that amendment. I must admit that, when I went through it, I was not at all clear what it was trying to get at. I wondered whether this mystery person “L” would be listening to the debate or appearing in it. We have a number of such letters in this Bill.
My noble friend Lady Kramer has already thanked a number of people. I am not sure whether I am in the right area to do this but I want particularly to thank my noble friend Lady Verma for the work that she has done on this Bill. It has gone through everything from community energy to fracking to this whole area of oil. It has been a pleasure to work with her. We have our disagreements more in DCLG areas rather than here, but the Bill when enacted will make a number of things in the area of energy much better.
I also thank my noble friend Lady Kramer for guiding a Bill through the House when only about 10% included her departmental responsibilities. She has been present for a lot of our proceedings even when matters far from her department’s responsibilities were involved. Of course, I support the amendment.
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Lord Jenkin of Roding: My Lords, while agreeing with everything that my noble friend Lord Teverson said, I would like to make particular mention of my noble friend Lady Verma’s readiness to listen to the arguments on Part 4 concerning the community electricity right. The concession that the Government made on the timing of the power to introduce regulations has been widely welcomed by the renewables industry. It was very wise, and I was extremely grateful when my noble friend signalled that there would be an amendment on Report; I said so at the time.
I, too, thank both Ministers for their part in the Bill and, in his absence, my noble friend Lord Ahmad, who played quite a notable part in the whole question of planning and other responsibilities that fell to his department. I also echo what was said earlier by my noble friend Lady Kramer about the Bill team. They have been extraordinarily helpful. I do not mind at all if, when one raises a point at a private meeting, one receives a very good explanation from one of my
noble friends’ staff. Although it is always nice to get letters from one’s noble friends who are Ministers, to have such an authoritative statement from an official is equally helpful, and I thank them very much for that.
This has been a remarkable example of the House of Lords at its best in its role of scrutinising and revising legislation. There are still one or two issues which are not fully resolved, but it is with some relief that we will send the Bill to another place where, perhaps, they can be aired again.
As many noble Lords will have learnt, it is my intention to retire from the House shortly, and I am making it clear to anyone who cares that this will be the last Bill on which I will take an active part. I have enormously valued the opportunity to do that, and I look forward to what is now being called the valedictory speech—which is not today, it will come later—that retiring Peers will be entitled to make under the provisions of the report of the Procedure Committee. I have enjoyed it; I think we really have made a difference; and I think that that is what this House is for.
Lord Davies of Oldham: My Lords, as the House is in congratulatory mood, I briefly congratulate the noble Lord, Lord Jenkin. I first met his formidable intellect, advantages and knowledge on energy Bills a decade or so ago, when we went through a very long energy Bill. From what I can recall, he was present for virtually every minute of a Bill that went through 13 days or so in Committee, to say nothing of the extensive consideration elsewhere. Others will have the chance to congratulate him later, but with regard to this Bill, he has displayed his usual insight and talent to improve the legislation. I also, of course, second his point about congratulating the noble Baroness, Lady Verma, and the Bill team—although I may say that they have only started the long road. I predict challenges yet to come on all parts of the Bill but in the area of fracking, I think that they will have quite an interesting time in the other place.
Baroness Verma: My Lords, I am extremely grateful to all noble Lords for their participation in our proceedings on this Bill, particularly our discussions outside the Chamber, which have been very helpful. I end by thanking my noble friend Lord Jenkin for being there throughout all the energy Bills that I have worked on. He has provided a stream of information and expertise, and I have learnt a great deal from him in the past two and a half years at the Department of Energy and Climate Change. I wish him well. His forensic examination of legislation has made us all realise that this House has such excellence to offer that we should never underestimate the expertise among those who sit here.
Clause 45: Regulations and orders
16: Clause 45, page 51, line 5, at end insert—
“(1A) A statutory instrument which contains an order under section 1—
(a) appointing a strategic highways company for an area other than the whole of England, and
(b) which is the first exercise of the power in respect of such an area,
may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(1B) A statutory instrument which contains an order under section 1—
(a) appointing a strategic highways company for an area other than the whole of England, and
(b) which is a subsequent exercise of the power in respect of such an area,
is subject to annulment in pursuance of a resolution of either House of Parliament.”
Baroness Kramer:My Lords,I owe the most extraordinary thanks to two of the most brilliant colleagues, the noble Baroness, Lady Verma, and the noble Lord, Lord Ahmad. I also regret the fact that, sadly, the noble Lord, Lord Jenkin, may not be here again on another Bill. We shall desperately miss him. I beg to move the privilege amendment.
A privilege amendment was made.
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Bill passed and sent to the Commons.
Consumer Rights Bill
Report
4.22 pm
1: After Clause 3, insert the following new Clause—
“Consumer credit: bill of sale
(1) Where a person is a purchaser of goods subject to a bill of sale, made in connection with a regulated agreement under the Consumer Credit Act 1974, in good faith and without notice of the bill of sale, title to those goods shall pass to that person.
(2) A creditor is not entitled to enforce a bill of sale made in connection with a regulated agreement by recovering possession of the goods except through an order of the court.
(3) If goods are recovered by the creditor in contravention of subsection (2)—
(a) the bill of sale will be treated as invalidly made; and
(b) the debtor shall be released from any outstanding liability under the regulated agreement.
(4) If the creditor has disposed of goods taken in contravention of subsection (2), the debtor shall be compensated to the value of those goods.”
Lord Stevenson of Balmacara (Lab): The amendment stands in my name and that of my noble friend Lady Hayter of Kentish Town. I declare my interest as retiring chair of the charity StepChange. Your Lordships’ House will be well aware of the considerable influence that it has had in curbing the explosion of high-cost credit that has so disadvantaged consumers in recent years. However, there is more to do.
The purpose of the amendment is to level the playing field on logbook loans by requiring the lender to obtain a court order before repossessing goods being repossessed by this archaic system, which uses legislation first introduced in 1878. A logbook loan is a bill of sale securing a loan on an asset, often a vehicle, and it gets its name from the fact that the lender retains the vehicle’s logbook or vehicle registration certificate, the V54, until the loan and any outstanding interest are repaid. Logbook loans are another form of very high-interest credit, and share with payday loans the use of unfair terms and conditions. They tend to be used by people who have bad credit ratings but need cash quickly. If you check them out on the internet you will find that an application for a logbook loan can be completed in as little as 15 minutes.
Recent research shows that logbook loans secured by a bill of sale are generally for amounts ranging from £500 to £2,000; the average is about £1,000. They are typically repaid over a six to 18-month period. The APR varies, but tends to range between 200% and 500%. These are not cheap loans.
It is the use of a bill of sale that causes the most difficulty. The legislation governing such loans, which dates from Victorian times, means that, uniquely in the high cost credit market, the lender can repossess the debtor’s asset—the vehicle—without a court order. We need to change this, to level the playing field. Bills of sale are already illegal in Scotland. Should we not take a leaf out of its book?
The history of this is interesting. After reviewing the position in December 2009, the previous Government proposed to ban the use of bills of sale for consumer lending, but, after the election, the coalition Government decided not to go ahead but to rely on a voluntary code of practice. Recent research by Citizens Advice shows that there is likely to be a 60% increase in bills for sale registered from 2011 to 2014. We believe that it is now time to stamp out this arcane practice. The Victorians had much to commend them but this legislation is not their finest monument.
When we raised this issue in Committee, the Government response was twofold. First, the Minister confirmed that the Law Commission has agreed to a request from Treasury Ministers to look at how best to reform bills of sale. This is indeed somewhat ironic, given that we had a debate only yesterday on Schedule 20 to the Deregulation Bill, when the Government were rather limply trying to defend their decision not to ask the Law Commission to review acres of what they call “legislation no longer of practical use”. However, this process will take time and unless the noble Baroness has some more information to share with us, it seems highly likely that this issue will not get into the next Law Commission Bill, which is unfortunately not due until 2016. The Government also pointed out that the FCA is in charge of this sector of consumer credit and mentioned that it had defined logbook loans as “higher risk activities”. That is certainly not wrong but when, oh when, will they get around to doing something about it?
As we found with payday lenders, it does no harm to give the regulator a bit of a push when you think that it may not get to the right place quickly enough. Consumer detriment is happening now and it ought to
be stopped, so our amendment follows the approach that the House took to capping payday lending, as a sort of regulatory push. As well as welcoming the promised robust action by the FCA, we think it is appropriate to hasten it on its way. If loan book lenders have to use the courts to repossess goods, it will level the playing field with the other consumer credit operators and make it more likely that many will exit the market. That would be “job done”. I do not believe that the actions being proposed by the Government are sufficient to outlaw this scourge in good enough time. Our amendment will strengthen protections for consumers using logbook loans. I beg to move.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con): My Lords, before turning to Amendment 1 in detail, I would like to take a step back and set out why the Government do not believe that this Bill should be the vehicle for addressing issues in consumer credit and financial services more generally.
First, as noble Lords will be aware, the Government have introduced a major package of reforms to strengthen regulation of financial services markets. In the Financial Services Act 2012, we replaced the flawed system of financial regulation that we had inherited. We created the Prudential Regulation Authority to take the lead in ensuring that our banks and our insurers are safely and soundly run. We also set up the Financial Conduct Authority—FCA—as a consumer protection and market conduct regulator.
To ensure that the FCA has a clear and comprehensive remit covering all consumer financial services matters, we transferred the responsibility for regulating consumer credit from the OFT to the FCA. This means that the FCA’s statutory objectives, such as consumer protection, apply to the regulation of consumer credit. It also means that the FCA’s comprehensive and flexible rule-making powers can be used to help protect consumers from bad practices in the consumer credit market for the first time. For example, the payday lending rules introduced by the FCA have meant that the volume of payday loans has shrunk by 35% since the FCA took over regulatory responsibility in April 2014, demonstrating the strength of the regulatory regime. The Government therefore consider that the Consumer Rights Bill is not the place for making amendments to the law on consumer credit.
I turn to the detail of the amendment. Across government, we share concern about the risk to consumers from logbook loans, which were well described by the noble Lord, Lord Stevenson. The Government believe that people should be able to borrow and should have the tools to make an informed decision about which credit products are right for them but that consumers should be confident that they will be treated fairly when things go wrong. As I have said, responsibility for consumer credit regulation, which includes logbook lenders and the associated arrangements, transferred from the Office of Fair Trading to the Financial Conduct Authority on 1 April. Consumers are far better protected under the stronger, well resourced FCA regime.
Like payday loans, the FCA defines logbook loans as “higher risk activities”, as has been said, so lenders face closer supervision. Logbook lenders are subject to a range of binding FCA rules, including requirements to provide precontractual explanation to borrowers of their rights before any agreement is signed. The Government have ensured that the FCA has a wide enforcement toolkit to take action where its rules are breached. There is no limit on the fines it can levy and, crucially, it can force firms to provide redress to consumers.
4.30 pm
The FCA actively monitors the market. It has flexible rule-making powers, and if it finds further problems, it will not hesitate to take action. Indeed, the FCA has said that it is,
“putting logbook lenders on notice”,
and that its new rules give it,
“the power to tackle any firm found not putting customers’ interests first”.
Moreover, logbook lenders are in the first group of firms to require full authorisation, with the FCA thoroughly scrutinising firms’ business models and practices. Every firm will have to demonstrate compliance with the FCA’s rules and principles, including the very important requirement to treat customers fairly. I assure noble Lords that this authorisation process, beginning next month, will have a dramatic impact on the size of the industry.
In addition to this robust action from the FCA, the Law Commission has agreed to a request from Treasury Ministers to look at how best to reform the Bills of Sale Acts, as has been said. This legislation underpinning logbook loans is old, lengthy and incredibly complex, and affects businesses as well as consumers. Evidence suggests that around 20% of bills of sale are used by small businesses rather than individual consumers. As a result, the Government believe that the Law Commission is best placed to undertake a thorough assessment of how to bring this arcane—I think the noble Lord called it Victorian—legislation up to date. This project has been welcomed by Citizens Advice, and is now under way—it has started, so we are getting on with it. The Law Commission launched its call for evidence last month, which includes looking at the specific issues of how lenders take possession of vehicles and protections for third-party car purchasers, which we discussed in Committee.
The Government believe that this package of action will fundamentally strengthen protections for consumers using logbook loans. We have a combination of early action by the FCA and longer-term comprehensive reform. I therefore ask the noble Lord to withdraw his amendment.
Lord Stevenson of Balmacara: My Lords, I thank the Minister for that very full and positive response. I am glad that she reaffirmed that the FCA is doing all it can in this matter and that the Law Commission, even at its somewhat leisurely pace, is going to be moving in on this area. Clearly the field is moving, and that is a good thing, but is it not the case that although the FCA can do all it can about companies, their balance sheets, their terms of trade and their operations,
it does not have the power to make primary legislation, so it therefore cannot abolish bills of sale, nor can it require that any lending agreements should introduce court orders? We have a gap, a lacuna, between now and when the system kicks in, during which time the playing field is not level, the lack of a court order creates a significant imbalance between the consumer and the lender, consumers have fewer rights, and logbook loans will continue to cause severe consumer detriment. It is time to act. I wish to test the option of the House.
4.34 pm
Contents 176; Not-Contents 244.
CONTENTS
Adams of Craigielea, B.
Allen of Kensington, L.
Alton of Liverpool, L.
Andrews, B.
Armstrong of Hill Top, B.
Armstrong of Ilminster, L.
Bach, L.
Bassam of Brighton, L. [Teller]
Beecham, L.
Best, L.
Bichard, L.
Blackstone, B.
Boateng, L.
Boothroyd, B.
Borrie, L.
Bradley, L.
Brooke of Alverthorpe, L.
Brookman, L.
Campbell-Savours, L.
Cashman, L.
Christopher, L.
Clancarty, E.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cohen of Pimlico, B.
Collins of Highbury, L.
Corston, B.
Coussins, B.
Crawley, B.
Cunningham of Felling, L.
Curry of Kirkharle, L.
Davidson of Glen Clova, L.
Davies of Coity, L.
Davies of Oldham, L.
Dean of Thornton-le-Fylde, B.
Desai, L.
Donaghy, B.
Donoughue, L.
Drake, B.
Eames, L.
Elder, L.
Elystan-Morgan, L.
Evans of Temple Guiting, L.
Evans of Watford, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Finlay of Llandaff, B.
Foster of Bishop Auckland, L.
Gale, B.
Giddens, L.
Golding, B.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Grantchester, L.
Grocott, L.
Hanworth, V.
Harries of Pentregarth, L.
Harris of Haringey, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Hollick, L.
Hollins, B.
Hollis of Heigham, B.
Hope of Craighead, L.
Howarth of Breckland, B.
Howarth of Newport, L.
Howe of Idlicote, B.
Howells of St Davids, B.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Hutton of Furness, L.
Hylton, L.
Irvine of Lairg, L.
Jay of Ewelme, L.
Jay of Paddington, B.
Jones, L.
Jones of Moulsecoomb, B.
Jones of Whitchurch, B.
Jordan, L.
Kakkar, L.
Kennedy of Cradley, B.
Kennedy of Southwark, L.
Kerr of Kinlochard, L.
Kinnock of Holyhead, B.
Kirkhill, L.
Knight of Weymouth, L.
Krebs, L.
Laming, L.
Lane-Fox of Soho, B.
Layard, L.
Lea of Crondall, L.
Lennie, L.
Levy, L.
Liddell of Coatdyke, B.
Liddle, L.
Lipsey, L.
Lister of Burtersett, B.
Low of Dalston, L.
Lytton, E.
McAvoy, L.
McDonagh, B.
Macdonald of Tradeston, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Mallalieu, B.
Mar, C.
Martin of Springburn, L.
Masham of Ilton, B.
Massey of Darwen, B.
Maxton, L.
Meacher, B.
Mitchell, L.
Moonie, L.
Morgan of Ely, B.
Morgan of Huyton, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Morris of Yardley, B.
Nye, B.
O'Loan, B.
O'Neill of Bengarve, B.
Parekh, L.
Patel of Blackburn, L.
Pendry, L.
Pitkeathley, B.
Prosser, B.
Quin, B.
Radice, L.
Ramsay of Cartvale, B.
Rebuck, B.
Richard, L.
Rooker, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Sherlock, B.
Simon, V.
Smith of Basildon, B.
Smith of Finsbury, L.
Smith of Gilmorehill, B.
Snape, L.
Soley, L.
Stevenson of Balmacara, L.
Stoddart of Swindon, L.
Stone of Blackheath, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Temple-Morris, L.
Thornton, B.
Tunnicliffe, L. [Teller]
Turnberg, L.
Turner of Camden, B.
Uddin, B.
Wall of New Barnet, B.
Walpole, L.
Warner, L.
Warnock, B.
Warwick of Undercliffe, B.
Watson of Invergowrie, L.
Wheeler, B.
Whitaker, B.
Whitty, L.
Wigley, L.
Williams of Elvel, L.
Woolmer of Leeds, L.
Worthington, B.
NOT CONTENTS
Aberdare, L.
Addington, L.
Anelay of St Johns, B.
Arran, E.
Ashdown of Norton-sub-Hamdon, L.
Ashton of Hyde, L.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Baker of Dorking, L.
Bakewell of Hardington Mandeville, B.
Barker, B.
Bates, L.
Benjamin, B.
Berridge, B.
Blackwell, L.
Blencathra, L.
Bonham-Carter of Yarnbury, B.
Borwick, L.
Bottomley of Nettlestone, B.
Bourne of Aberystwyth, L.
Bowness, L.
Brabazon of Tara, L.
Bradshaw, L.
Brinton, B.
Broers, L.
Brougham and Vaux, L.
Browne of Belmont, L.
Browning, B.
Byford, B.
Caithness, E.
Callanan, L.
Carrington of Fulham, L.
Cathcart, E.
Cavendish of Furness, L.
Chadlington, L.
Chalker of Wallasey, B.
Chester, Bp.
Chisholm of Owlpen, B.
Clement-Jones, L.
Colwyn, L.
Condon, L.
Cope of Berkeley, L.
Cormack, L.
Cotter, L.
Courtown, E.
Craig of Radley, L.
Craigavon, V.
Crathorne, L.
Crickhowell, L.
Crisp, L.
De Mauley, L.
Deben, L.
Deighton, L.
Denham, L.
Dholakia, L.
Doocey, B.
Dykes, L.
Eaton, B.
Eccles, V.
Eccles of Moulton, B.
Empey, L.
Erroll, E.
Evans of Bowes Park, B.
Falkner of Margravine, B.
Farmer, L.
Faulks, L.
Fellowes, L.
Fink, L.
Finkelstein, L.
Fookes, B.
Forsyth of Drumlean, L.
Fowler, L.
Framlingham, L.
Freeman, L.
Freud, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Gardner of Parkes, B.
Garel-Jones, L.
Geddes, L.
German, L.
Glasgow, E.
Goddard of Stockport, L.
Gold, L.
Goodlad, L.
Grade of Yarmouth, L.
Greaves, L.
Greenway, L.
Grender, B.
Hamilton of Epsom, L.
Hamwee, B.
Hanham, B.
Harris of Peckham, L.
Henley, L.
Heyhoe Flint, B.
Hodgson of Abinger, B.
Hodgson of Astley Abbotts, L.
Holmes of Richmond, L.
Home, E.
Hooper, B.
Horam, L.
Howard of Rising, L.
Howe, E.
Howe of Aberavon, L.
Howell of Guildford, L.
Humphreys, B.
Hunt of Wirral, L.
Hussain, L.
Hussein-Ece, B.
James of Blackheath, L.
Janke, B.
Jenkin of Kennington, B.
Jenkin of Roding, L.
Jolly, B.
Jones of Cheltenham, L.
Jopling, L.
Kilclooney, L.
King of Bridgwater, L.
Kirkham, L.
Kirkwood of Kirkhope, L.
Knight of Collingtree, B.
Kramer, B.
Lamont of Lerwick, L.
Lee of Trafford, L.
Lester of Herne Hill, L.
Lexden, L.
Lindsay, E.
Lingfield, L.
Linklater of Butterstone, B.
Listowel, E.
Livingston of Parkhead, L.
Loomba, L.
Lothian, M.
Lucas, L.
Luce, L.
Ludford, B.
Lyell, L.
Maclennan of Rogart, L.
Maddock, B.
Mancroft, L.
Manzoor, B.
Marks of Henley-on-Thames, L.
Marland, L.
Marlesford, L.
Mawhinney, L.
Mawson, L.
Mobarik, B.
Moore of Lower Marsh, L.
Morris of Bolton, B.
Moynihan, L.
Naseby, L.
Nash, L.
Neville-Jones, B.
Neville-Rolfe, B.
Newby, L. [Teller]
Newlove, B.
Noakes, B.
Norton of Louth, L.
Norwich, Bp.
O'Cathain, B.
Oppenheim-Barnes, B.
Oxford and Asquith, E.
Paddick, L.
Palmer of Childs Hill, L.
Parminter, B.
Perry of Southwark, B.
Peterborough, Bp.
Phillips of Sudbury, L.
Pinnock, B.
Plumb, L.
Popat, L.
Purvis of Tweed, L.
Ramsbotham, L.
Randerson, B.
Rennard, L.
Ribeiro, L.
Ridley, V.
Risby, L.
Roberts of Llandudno, L.
Rodgers of Quarry Bank, L.
Rogan, L.
Roper, L.
Rowe-Beddoe, L.
Sanderson of Bowden, L.
Sassoon, L.
Scriven, L.
Seccombe, B.
Selborne, E.
Selkirk of Douglas, L.
Sharkey, L.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Sheikh, L.
Shephard of Northwold, B.
Sherbourne of Didsbury, L.
Shields, B.
Shrewsbury, E.
Shutt of Greetland, L.
Skelmersdale, L.
Smith of Clifton, L.
Smith of Newnham, B.
Spicer, L.
Stedman-Scott, B.
Steel of Aikwood, L.
Stephen, L.
Stewartby, L.
Stirrup, L.
Stoneham of Droxford, L.
Stowell of Beeston, B.
Strasburger, L.
Strathclyde, L.
Suttie, B.
Swinfen, L.
Taylor of Goss Moor, L.
Taylor of Holbeach, L. [Teller]
Taylor of Warwick, L.
Teverson, L.
Thomas of Gresford, L.
Thomas of Winchester, B.
Tope, L.
Trenchard, V.
Trimble, L.
True, L.
Trumpington, B.
Tyler, L.
Tyler of Enfield, B.
Ullswater, V.
Verma, B.
Wakeham, L.
Wallace of Saltaire, L.
Wallace of Tankerness, L.
Walmsley, B.
Warsi, B.
Wasserman, L.
Wheatcroft, B.
Whitby, L.
Wilcox, B.
Williams of Trafford, B.
Willis of Knaresborough, L.
Worcester, Bp.
Wrigglesworth, L.
Younger of Leckie, V.
4.50 pm
Baroness Jolly (LD): My Lords, the Bill’s provisions on consumer contracts for goods build on existing legislation, such as the Sale of Goods Act, and on court- developed common law. Government Amendments 2, 4 and 6 are to ensure that the greater clarity the Bill provides does not override an existing common-law distinction between severable and entire contracts. A severable contract is divisible into parts, which are intended to be independent of each other, so different parts of the payment can be assigned to different parts of the trader’s performance. The amendments make it clear that, where a contract is severable, the consumer may have the right to reject those faulty goods or they may have the right to terminate the whole contract. That will depend on the nature of the goods and the fault and the details of the contract. In some cases, it will be quite right for a consumer to reject all the goods under a contract, even if it is severable. The existing common law recognises that and the amendments are to make it clear that the common law on this applies.
The noble Baroness, Lady Hayter, asked in Grand Committee whether these amendments could create a new incentive for traders to try to make their contracts severable. I hope I have given reassurance that the amendments refer to an existing concept. A contract will not be severable simply because it is described as such but will depend on the genuine agreement and arrangement between the parties in the circumstances. The guidance to the Bill will cover when a contract is severable and when a consumer might be entitled to terminate the whole contract. As I have explained, these amendments are to ensure that the consumer’s clearer rights in Clause 20 should not override the common-law position for severable contracts.
Clause 20 reflects the equivalent provision for Scotland in the Sale of Goods Act—that is, Section 15B—and in related legislation. Therefore, for Scots law, Clause 20 is intended to restate the existing provisions without altering the common law. I beg to move.
Baroness Hayter of Kentish Town (Lab): I thank the Minister for agreeing to give us some extra time to look at these amendments, which of course were not seen in the Commons or in the Select Committee.
Having had time to consider them, and in particular with the reassurance that has now been given by the Minister and the clarity that will be in the forthcoming guidance on the Bill, we are content with the amendments.
3: Clause 20, page 11, line 23, at end insert—
“(7A) Whether or not the consumer has a duty to return the rejected goods, the trader must bear any reasonable costs of returning them, other than any costs incurred by the consumer in returning the goods in person to the place where the consumer took physical possession of them.”
Baroness Jolly: My Lords, the Bill sets out key remedies for consumers but the Government recognise that it is also important that consumers are not discouraged from exercising them. These amendments relate to the costs of returning rejected goods to the trader. It is important that such costs do not put consumers off rejecting goods. We debated this issue at some length in Grand Committee.
We listened to the point made by the noble Baroness, Lady Hayter, and the noble Lord, Lord Stevenson, and agree that it does make sense to make it clear on the face of the Bill that the trader bears responsibility for the return costs. These two amendments provide that clarity and set a sensible balance. The trader is responsible for any reasonable costs of the consumer returning rejected goods. This would apply whether or not there is an agreed requirement for the consumer to return rejected goods. The amendments do not cover the costs of the consumer returning the goods in person to the place where the consumer took physical possession of them. We think that these are sensible amendments that meet the needs of consumers by making the law clearer without a causing significant burden to business. I beg to move.
Lord Stevenson of Balmacara: My Lords, I am extremely grateful to the Minister for accepting the words that we used when we proposed the amendment the first time around. It does not happen very often; I will relish this experience. It is a curious irony that, in Committee, in the place where I had to sit in the Moses Room—I am sorry to take up the time of the Chamber in this way—the Minister responding was framed against the television on which, as noble Lords may now remember, those little swinging bells had just been introduced. It struck me that it was Christmas: it felt like Christmas. However, her words did not say, “Christmas”; they said, “No, go away; this is silly; this is already in legislation”. Now she has changed her mind and come back. I am so pleased.
4: Clause 20, page 12, line 14, at end insert—
“(19) Subsection (20) qualifies the application in relation to England and Wales and Northern Ireland of the rights mentioned in subsections (1) to (3) where—
(a) the contract is a severable contract,
(b) in relation to the final right to reject, the contract is a contract for the hire of goods, a hire-purchase agreement or a contract for transfer of goods, and
(c) section 26(3) does not apply.
(20) The consumer is entitled, depending on the terms of the contract and the circumstances of the case—
(a) to reject the goods to which a severable obligation relates and treat that obligation as at an end (so that the entitlement to a refund relates only to what the consumer paid or transferred in relation to that obligation), or
(b) to exercise any of the rights mentioned in subsections (1) to (3) in respect of the whole contract.”
Clause 21: Partial rejection of goods
5: Clause 21, page 12, line 40, at end insert—
“(7A) Whether or not the consumer has a duty to return the rejected goods, the trader must bear any reasonable costs of returning them, other than any costs incurred by the consumer in returning those goods in person to the place where the consumer took physical possession of them.”
6: Clause 21, page 13, line 11, at end insert—
“(12) Where section 20(20)(a) applies the reference in subsection (1) to the consumer treating the contract as at an end is to be read as a reference to the consumer treating the severable obligation as at an end.”
Clause 23: Right to repair or replacement
Lord Clement-Jones (LD): My Lords, I was clearly sitting in the wrong place in Grand Committee, because I did not see any Christmas bells, and that is why I am returning to the fray on Clause 23 on behalf of the motor industry.
The amendment today differs from Amendments 20A and 20B, which were tabled in Grand Committee, by the addition of a new proposed subsection (9). This additional subsection would set a time period for completion of the process of repair to give the repairer the opportunity of a further attempt or attempts at repair. This directly addresses the concerns voiced by the Minister, my noble friend Lady Jolly, and, indeed, the Opposition Front Bench. My noble friend said in Grand Committee:
“The Bill is clear that a repair is an attempt to bring the goods into compliance with the Bill’s requirements. One repair is complete once the trader returns the goods to the consumer in response to the consumer’s request for a repair”.—[Official Report, 15/10/ 14; col. GC 118.]
For the Opposition, the noble Baroness, Lady Hayter, acknowledged that the repair need not be done “in one go”.
The purpose of this amendment is to clarify “one repair” in law, permitting a process of repair to take place. This is to address concerns from industry that the Bill as currently drafted does not provide traders of complex consumer goods, such as motor vehicles, a fair opportunity to repair. This is an issue because complex products may show a fault that requires more than one repair, involving, for example, more than one visit to a garage so that a car’s fault can be diagnosed and tested, and causes ruled out. In addition, a repair may appear complete, but the fault may reappear—as can be the case with electrical faults—and a second or subsequent repair may fix the problem.
My previous amendment regarding this issue, moved and withdrawn in Committee, met with concerns from my noble friend as it was thought that the consumer could become locked in a never-ending cycle of repairs. This revised amendment addresses this very issue while still giving scope for a process of repair to take place. This is through the addition of a determinable end-point for the process of repair, which would be commenced on the occasion that the consumer had to return to the trader for a second attempt at the repair. At that point, the trader would have to complete the process of repair within the requisite time, to be set down by the Secretary of State.
5 pm
Traders need both flexibility and certainty in carrying out repairs, and consumers need the certainty that, if a process of repair fails, they can reject the goods and get their money back, subject to a deduction for use if it is after 30 days.
It is important to note that the amendment does not propose a fixed period within which a repair needs to be completed. If a consumer visits a car dealer with their car to have something repaired and the repair is successful, irrespective of how long it takes, as long as it is a reasonable time and does not cause significant inconvenience to the consumer, that is the end of the matter. However, if the car requires re-examining and further work to eliminate the fault, requiring the consumer to bring the car back to the dealer, at that point the dealer knows that they have a set period within which to complete the process of repair.
At the very least, my noble friend needs to amend the BIS draft goods guidance, which states at page 39 that, “The consumer only has to accept a single attempt to fix the issue with the goods by repairing or replacing the goods before s/he has a right to some money back”. This is completely inconsistent with the statement made by my noble friend in Grand Committee, to which I referred earlier. I urge whichever Minister is replying today to confirm that one repair may involve a process that requires the consumer to return to the trader with the goods on more than one occasion. I also urge the Minister to undertake to review the draft goods guidance—specifically the wording on page 39 of the current draft of 10 November.
I also take the opportunity to look forwards slightly to the Minister’s amendment to Clause 24, which has a bearing on this matter. The motor industry, through the SMMT, has told me that it supports the Minister’s Amendment 10 to Clause 24. It states that a deduction
for use in the first six months would be permitted for motor vehicles and it removes the requirement for an active second-hand market. The industry acknowledges that this amendment may well encourage consumers to accept further repairs on a new vehicle rather than bear the cost of a deduction for use if they reject. However, in this instance, the trader would be reliant on the customer’s voluntary conduct in accepting further repairs. The industry believes that the Minister’s amendment alone does not go far enough in clarifying the law for consumers and traders alike on what “one repair” entails. Such clarification would increase certainty and protection for consumers and traders. I beg to move.
Viscount Simon (Lab): My Lords, it had been my intention to speak. However, I, too, have been briefed by the SMMT, so I shall not repeat what the noble Lord has spoken about.
Viscount Younger of Leckie (Con): My Lords, my noble friend Lord Clement-Jones makes an interesting point about extending the law to allow multiple repairs beyond repair one but within a defined period of time. It is still not entirely clear what this time period would be. I noted that he said that it would be a determinate end-point of repair.
It is a laudable proposition but for the fact that it could put undue cost burdens on small businesses. I give the example of a local business selling a complex piece of machinery. It comes in for repair once and then on a couple of other occasions before it dawns on the trader that the repair is as a result of the customer perhaps not using it properly or misusing it. However, up until this point, it is the trader who by law, under my noble friend’s amendment, would bear all the costs of the transport and the re-repair.
Therefore, although the trader could make the sale contractual to pre-empt or prevent this, I believe that it is more proportionate and less prescriptive to retain the one-repair proposal as laid down in the Bill.
Baroness Neville-Rolfe: My Lords, following the discussion my noble friend Lord Clement-Jones described in Grand Committee, I recently met representatives of the motor industry to discuss their concerns about the issue of one repair and we had a constructive discussion that included other amendments. I am very pleased also to hear from the noble Viscount, Lord Simon, about his discussions with the motor industry and, of course, to see my esteemed predecessor, my noble friend Lord Younger, making a very good point about the costs on traders.
I understand—although I am not a huge fan of motor cars—that motor vehicles are very complex goods and there can be a tendency for faults to reappear after repair. However, a limit of one mandatory repair or replacement sets an important and appropriate balance. The Bill provides key simplifications, as we all know, which we expect to benefit both consumers and traders, including the motor industry. The Bill sets a 30-day period for consumers to exercise the short-term right to reject, whereas in the past, claims have been made in relation to motor vehicles some months after
the car was bought. The amendments we have laid on deduction for use, which my noble friend Lord Clement-Jones referred to, recognise the particular nature of motor vehicles, being complex and subject to rapid depreciation. He also noted in Grand Committee that the issue of one repair is pertinent to the final right to reject. I am grateful to my noble friend for going away and amending his amendment.
To the extent that the Bill’s provisions regarding one repair may impact on the motor industry, I think that being able to apply a deduction for use in the first six months mitigates against that and is an important and complementary protection. I am not blind to the needs of the industry, but the revised amendments go too far. They would undermine both the consumer protection and the clarity that the Bill provides. The limit of one mandatory repair or replacement before a consumer is entitled to some money back follows consultation by both the Law Commission and BIS, both of which identified that approach as being the preferred option. The Law Commission recommended that there should be greater clarity as to when a consumer can move from repair or replacement to access some money back. The Bill’s one repair or replacement provision gives that clarity and I am concerned that it should not be undermined. Importantly, the Bill does not prevent the consumer from agreeing to further repairs. I think consumers—certainly a consumer like myself—tend to act reasonably with a motor trader, especially if they are treated reasonably in return. As long as the trader keeps them well informed I think most people would be willing to accept further repairs. If, however, the relationship breaks down, the consumer should, and will under the Bill, have the right to exit the contract if the trader has tried and failed to fix the fault.
I also feel that a time limit set by the power included in the amendment would fail to provide the necessary safeguard to protect the consumer fully. There is a real risk that such a time limit would become the default, leaving consumers stuck waiting. Without the certainty of being able to ask for money back after one failed repair, consumers would have to show that a repair process had caused them significant inconvenience or taken more than a reasonable time. While these are important protections within the Bill, we do not think they are sufficient alone for goods. This was the very issue on which the Law Commission recommended that there should be further clarity. The evidence submitted to the Law Commission’s consultation showed that it is unclear when the point of significant inconvenience is reached, allowing considerable scope for dispute.
All of these concerns are compounded by the fact that these amendments are so broad in scope. We believe that as drafted they could apply to all goods, even a table that needed more than one repair. Essentially, the amendment seems to cover both complex faults in simple goods and simple faults in complex goods. It would be unclear whether or not the consumer had to make the goods available to the trader more than once. It would also be all too easy for an unscrupulous trader to argue for repeated repairs—even on simple non-complex goods if they claimed that the nature of the fault justified it.
My noble friend mentioned guidance and perhaps, without commitment, I can come back to him on that issue.
Lord Clement-Jones: Perhaps I can interrupt my noble friend to see what her reaction is before I respond. Does she accept that there is a conflict between what Ministers have been saying about the one repair concept and what is in the guidance? If so, clearly she could go further in undertaking that the guidance should be revised.
Baroness Neville-Rolfe: My advice is that there is no conflict, but as my noble friend has raised the issue, I shall certainly take a look and write to him. The amendments cut across the simple, clear provision set out in the Bill, so I ask my noble friend to withdraw his amendment.
Lord Clement-Jones: I detect in a mild kind of a way that that is a no—a fairly firm no. The motor industry will be very disappointed by that response, and I thank the noble Viscount, Lord Simon, for his support. I am somewhat surprised by the noble Viscount, Lord Younger, because this amendment is heavily supported by dealers and manufacturers. It is designed for their benefit; it is certainly not designed to add to their woes, which I believe Clause 23 has the capacity to do. It will bear unduly harshly on dealers, in particular, but I recognise a stone wall when I see one. I very much hope that my noble friend will undertake to review the guidance on page 39 and the conflict between what on the face of it seems to be a completely contrary statement to what is in the guidance. Perhaps we can make progress in that respect. In the mean time I beg leave to withdraw the amendment.
Clause 24: Right to price reduction or final right to reject
Baroness Hayter of Kentish Town (Lab): My Lords, I rise to move the amendment in my name and that of my noble friend Lord Stevenson of Balmacara, and to speak in support of others in this group. We will not be pushing our amendment to a vote as what it proposes and what our Amendment 21 in Committee asked for is now almost completely achieved in the Government’s Amendments 10 and 12. While it remains the case that a car salesman can deduct some of the price of a new car when taking back a faulty vehicle in accordance with its second-hand value, we are delighted that this will not apply to other faulty goods, which was our concern, and which the Bill’s original wording would have allowed.
I thank the Minister—there is a lot of that going on today—for considering so carefully our case made in Committee and for accepting perhaps 70% of it. It is a sort of advent present rather than a Christmas present but we are delighted with it all the same. I beg to move.
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Baroness Neville-Rolfe: My Lords, I thank the noble Baroness, Lady Hayter, for her kind words and acceptance of my amendment. I thank her for not wishing to press her amendment.
Baroness Hayter of Kentish Town: I thank the Minister for clarifying that she will be supporting Amendment 11 in my name, to which she has added her name, and moving her own Amendments 10 and 12, as we get to them. We will move our Amendment 11 in its place. I know that the Minister has put her name to it, but I think she will probably be moving Amendments 10 and 12 in their place. For the moment, I beg leave to withdraw Amendment 9.
10: Clause 24, page 15, line 40, leave out paragraphs (a) and (b) and insert—
“(a) the goods consist of a motor vehicle, or
(b) the goods are of a description specified by order made by the Secretary of State by statutory instrument.”
12: Clause 24, page 16, line 12, at end insert—
“(13) In subsection (10)(a) “motor vehicle”—
(a) in relation to Great Britain, has the same meaning as in the Road Traffic Act 1988 (see sections 185 to 194 of that Act);
(b) in relation to Northern Ireland, has the same meaning as in the Road Traffic (Northern Ireland) Order 1995 (SI 1995/2994 (NI 18)) (see Parts I and V of that Order).
(14) But a vehicle is not a motor vehicle for the purposes of subsection (10)(a) if it is constructed or adapted—
(a) for the use of a person suffering from some physical defect or disability, and
(b) so that it may only be used by one such person at any one time.
(15) An order under subsection (10)(b)—
(a) may be made only if the Secretary of State is satisfied that it is appropriate to do so because of significant detriment caused to traders as a result of the application of subsection (10) in relation to goods of the description specified by the order;
(b) may contain transitional or transitory provision or savings.
(16) No order may be made under subsection (10)(b) unless a draft of the statutory instrument containing it has been laid before, and approved by a resolution of, each House of Parliament.”
13: After Clause 32, insert the following new Clause—
“Secondary ticketing platforms: seller profiles and ticket information
(1) Secondary ticketing operators must, on the website on which tickets are offered for sale or transfer, provide information concerning the sellers of tickets so that sellers may be easily identified.
(2) Information provided by virtue of subsection (1) must include, but is not limited to—
(a) the name of the seller;
(b) if the seller is an undertaking, its registered number, jurisdiction of registration, registered office address, and if registered outside the United Kingdom, a valid address for service; and
(c) the VAT registration number of the seller, if applicable.
(3) Information provided under subsection (1) must be—
(a) accurate; and
(b) prominently displayed before a buyer is able to complete the purchase of the ticket.
(4) Secondary ticketing operators must disclose clearly and prominently where the seller of a ticket is—
(a) the secondary ticketing platform or a subsidiary undertaking or parent undertaking of the secondary ticketing platform;
(b) a person or persons employed or engaged by the secondary ticketing platform;
(c) other persons connected to employees, directors or shareholders of the secondary ticketing platform, or any of its subsidiary undertakings or parent undertakings;
(d) the event organiser or an agent acting on its behalf;
(e) any other party connected to the organisation of the event.
(5) Where a ticket is offered for sale or transfer through a secondary ticketing platform—
(a) the seller must provide all relevant information about the ticket;
(b) the secondary ticketing operator must publish all relevant information about a ticket in a prominent and clear manner; and
(c) the secondary ticket operator must immediately remove the ticket from sale when it is informed by the event organiser that the information provided is inaccurate or incomplete.
(6) Information to be provided by the seller and published by the secondary ticketing operator for the purposes of subsection (1) must include, without limitation—
(a) the face value of the ticket;
(b) any age or other restrictions on the user of the ticket;
(c) the designated location of the ticket including the stand, the block, the row and the seat number of the ticket, where applicable; and
(d) the ticket booking identification or reference number.
(7) Where tickets are being resold in contravention of the terms and conditions agreed to by the original purchaser, this must be stated prominently by the secondary ticketing platform at every stage of the purchasing process.
(8) Information provided by virtue of this section must be—
(a) accurate; and
(b) prominently displayed before a buyer is able to complete the purchase of that ticket.
(9) For the purposes of this section—
“secondary ticketing platform” means an internet-based facility for the resale of tickets to events in the United Kingdom of Great Britain and Northern Ireland, regardless of the jurisdiction in which the owner of the service is registered;
“secondary ticketing operator” means, in relation to a secondary ticketing platform, the person (whether incorporated or not) operating that secondary ticketing platform;
“ticket” means anything which purports to be a ticket, including any item, tangible or intangible, which grants the holder the right to entry to an event;
“event” means any sporting, music or cultural activity taking place at a specified time and place for which tickets are issued and required for entry or attendance;
“event organiser” means the person responsible for organising and holding an event and receiving the revenue from the event;
the term “undertaking” has the meanings given in section 1161 of the Companies Act 2006 (meaning of “undertaking” and related expressions);
the terms “subsidiary undertaking” and “parent undertaking” have the meanings given in section 1162 of the Companies Act 2006 (parent and subsidiary undertakings);
the term “person” refers to a natural person or a body corporate.
(10) This section will come into force no later than six months after this Act is passed.”
Lord Moynihan (Con): My Lords, I am grateful to the Minister for the time that she has devoted to this issue. She shares the passion for sport and the arts of the movers of the amendment and has spent many hours with the governing bodies of sport, as well as event promoters and colleagues hearing our case. Before I speak to the amendment, I will set out the scale of the problem and then address the current legislation, which I will argue has been proven to be ineffective. I will then explain the rationale for this amendment. At all stages, I will draw on the position taken by the Minister at Second Reading and in Committee and look to match the arguments so e1oquently made then by my noble friends Lord Clement-Jones and Lady Heyhoe Flint, the noble Lord, Lord Pendry, the noble Baroness, Lady Grey-Thompson, and the noble Lord, Lord Stevenson.
The size of the problem is well documented. I refer the House to an extract from the National Fraud Authority’s Annual Fraud Indicator of 2013—the National Fraud Authority was then the executive agency funded by the Home Office. The report states:
“Online ticket fraud £1.5 billion … Online ticket fraud occurs when victims purchase tickets for an event such as music, sport, theatre or a performance, which do not materialise. These tickets are often purchased from fake ticketing websites and through online auction and shopping sites … Research carried out by the OFT in September 2009”—
three years after the passing of the Fraud Act, which was meant to deal with these issues—
“identified that 1 in 12 of those surveyed admitted to being caught by scam websites. The survey also showed that about eight per cent were a victim of online ticketing fraud, having bought music, sport or theatre tickets from a website that appeared to be genuine … The NFA has calculated an annual fraud loss estimate using the prevalence rate identified in the OFT survey multiplied by an average fraud loss of £637 per victim identified by Action
Fraud in relation to online ticketing fraud during 2012 … Based on this data, an estimated 2.3 million people fall victim to this type of fraud each year, resulting in losses of £1.5 billion”.
The Government are on record as saying that this is not a major issue. I would argue that £1.5 billion lost to consumers is a major issue requiring urgent action.
One can look simply at the evidence of the past 12 months and take some random examples. On 23 February last year, 80 people arrived excitedly at the O2 Arena to see One Direction only to find out that the tickets they were holding were not going to let them in. Of the 80 tickets, 40 were sold through viagogo. The next biggest source was Seatwave and the rest were bought through GET ME IN! and eBay. In July last year, Stuart Cain, head of ticketing at Birmingham’s LG Arena said:
“On a big show where there are a lot of e-tickets you can get up to 100 people a night affected”.
In November 2012, fans of Mumford & Sons were left disappointed after the tickets they bought from controversial secondary ticketing seller viagogo for a gig in Portsmouth turned out to be fake. I am sure that noble Lords will have examples from their own experience of this serious issue.
I turn to current legislation. There was all-party support and agreement with the International Olympic Committee to deal with ticket touting for the 2012 Olympic Games. Under Section 31 of the London Olympic Games and Paralympic Games Act 2006, it was an offence to sell a ticket or anything that purported to be a ticket for an event held as part of the Olympics or Paralympics in a public place or in the course of a business without the written authorisation of LOCOG, the event managers. There was no secondary market and a fine up to level 5 on the standard scale—some £5,000—for anyone convicted of such an offence. With all-party support in both houses, we tackled the problem of ticket touting by making the secondary market illegal. In 2011, there was further legislation. The fine was upped by Parliament to £20,000, again, with all-party support and no requirement for this latter measure from the International Olympic Committee.
What were the lessons learnt from the Olympics on this subject? My noble friend Lord Clement-Jones reminded us in Committee that the Metropolitan Police did a lot of work and reported through Operation Podium after the Olympic Games the need for an open and transparent system for ticket reselling with clear and appropriate regulations. Secondary websites, the Met argued, should be required to publish details of the ticket being offered including the original face value, seat number and location. They should identify the seller, state whether the seller has the permission of the originator to resell the ticket and declare whether the tickets have been listed by the event organisers. That was the position of the Metropolitan Police. The All-Party Parliamentary Group on Ticket Abuse recommended amendments to the Bill along the lines of those before the House today.
Our amendment addresses the reselling of event tickets usually, but not always, for profit. It specifically does not pursue the route followed, with all-party support, for London 2012; namely, the criminalisation of the secondary market while leaving the primary
market completely unregulated. I believe that we need a secondary market. Everyone speaking to the subject in Committee emphasised the importance of an effective secondary market. There are often prima facie reasons why a “real fan” may feel the need to pass on a ticket. That includes the obvious scenario of when the purchaser has a spare ticket for which they cannot get a refund and so have no option other than to sell the ticket on the secondary market to recoup their expenditure. The Minister states that the consumers are protected by the Fraud Act 2006 and the Government have issued guidance on the 2013 regulations, specifically on tickets.
The Minister is also concerned that we would be regulating consumers. I agree with the Minister and would be the first to resist obtrusive consumer regulation. While it is wholly appropriate for, let us say, health and safety, it would not be here. That is why we propose, as your Lordships will have read, an amendment with a very light-touch approach which all genuine consumers should welcome for the transparency and empowerment that it would give them.
Just four, short, key facts are required. All that is now proposed is the name and location of the tickets and/or booking number, together with a tick box of whether resale complies with the terms and conditions. This takes about 15 seconds to type in—fractions of the time compared with what we have to go through to establish our profiles and register with a secondary selling site—but it gives the consumer the information he or she needs to check the validity of the ticket. Of course, it will not completely cease counterfeit activity but professional event organisers and all the sports governing bodies widely agree that this information will substantially reduce fraudulent activity in the £1.5 billion industry that is so damaging to consumers.
Having reviewed the Minister’s contribution to the early stages of the Bill, I believe that the Government may be unclear as to the distinction between a trader and a consumer. Surely anyone selling their £50 ticket for £500 on a website is no longer a consumer; they are automatically defined in law as a trader. It is not, as we have been told, relegislating. At present the information required in the regulations is only for traders and is only set out in guidance, not in the Bill. As I shall demonstrate, it is woolly, to say the least, and it is easily avoided. A review of thousands of tickets today on the online sites shows none complying with 2013 regulations. No one who has put their name to this amendment seeks to abolish the secondary market. We all seek to improve its operation in the interests of consumers, placing key best practice obligations in the Government’s 2013 regulations on the face of this consumer legislation.
I turn to the regulations on which the Government rely. I regret to say that you can drive a coach and horses through them. The fact that there is a £1.5 billion fraud market demonstrates that this is the case. As I have mentioned, the regulations apply only to sellers, who are defined as traders, and not to consumers selling to other consumers, as happens so often and is the business model for the secondary ticketing sites. Schedule 2 to the regulations lists the information you must provide to the consumer. Information on the main characteristics of the tickets and their total price,
including delivery costs and other charges, must be given in a clear and comprehensible way before the consumer purchases the ticket. The main characteristics include—and here are the four key words, “if known to you”—the date and time of the event and its content; for example, who is performing. For a ticket associated with a particular reserved seat—say row A, seat 1—the seat number is a main characteristic that should be given to the consumer—if you know it. You do not have to find it out; you simply put it on there if you know it. That is fine, if you know it but, “Sorry, guv, didn’t know the date; sorry, guv, didn’t know who was playing; sorry, guv, didn’t know which seat it was or where it was in the stadium”. “I didn’t know” is a let-out clause as wide as the Blackwall Tunnel and as congested, full of unscrupulous ticket resellers. That is why the 2013 regulations are ineffective, as witnessed by their inability to impact the market and, in practice, are as good as being voluntary. That is why we need to address the £1.5 billion market that exists today.
One of the strongest arguments against the position that my noble friend took in Committee is that all the amendment would largely do is enforce what is currently set out in the guidance. It removes the loopholes that I have just mentioned and makes sure that it applies to secondary selling sites. If the Government feel that the guidance is sensible and required, it must follow that the Government cannot object to making the key elements of the guidance enforceable.
The Government argue that regulation of the marketplace is not needed, as these regulations provide effective legislation and that, if we legislate today, we would most likely push sales back underground and away from these legitimate marketplaces. However, as we are proposing only that four key elements of the existing regulations already approved by the Government should now be in the Bill, I can deduce only that the Government must believe that, if the regulations were properly followed, we would push sales underground. In other words, they must have been introduced to be ineffective. If so, we can only congratulate the Government on achieving this objective.
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The amendment is supported by 300-plus sport and recreation organisations represented by the Sport and Recreation Alliance. It has the strong support of all the major sports governing bodies, from the England and Wales Cricket Board to the Rugby Football Union, from the Lawn Tennis Association to the Rugby Football League. If the House accepts the scale of the problem that I have outlined, the ineffectiveness of the current legislative approach and the vital principle in the Bill of protecting consumers, I hope that it will support the amendment.
We have had plenty of meetings, government reports, valuable reviews of the lessons learnt from the London Olympic and Paralympic Games, roundtables and consultation exercises. The Bill provides an opportunity for action on behalf of consumers, the many people who daily find themselves to be the victims of market abuse, the sports fans who turn up at the Ryder Cup in Gleneagles to be turned away, and our children and grandchildren who go to music festivals to be turned away. The amendment would go a long way to reduce
a massive problem. It is absolutely clear that regulating the secondary market is fundamental to stopping ticket crime and abuse. I beg to move.
Baroness Heyhoe Flint (Con): My Lords, once again, I return to the subject I raised at Second Reading and in Committee by speaking to Amendment 13, to which I have added my name. I also have to declare an interest to the House: I am a board member of the England and Wales Cricket Board.
Like so many of my colleagues on both sides of the House, I want the very best for sport and entertainment and their fan bases. I make this address feeling a bit like Mrs Echo of my noble friend Lord Moynihan. As the House has heard, this is a redrafted amendment. It is shorter, sharper and has absolute clarity. It is designed to empower consumers by placing extremely light requirements on the reselling of tickets. Crucially, it does not in any way prohibit or ban the resale of tickets. It seeks to replicate the standards that the Government intended—I stress the word “intended”—to introduce through the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.
Frustratingly, the regulations are not working at all. I have now studied many online ticket sales sites, as have the major sports groups mentioned by my noble friend Lord Moynihan. We can find no sales at all complying with the stated regulations. In meetings with officials working for the Minister, they, too, have been unable to cite evidence of the consumer contracts regulations having any effect. The regulations are clearly ineffectual. That is why I plead from my sporting heart that we need the amendment. It clarifies matters by placing in legislation key characteristics that must be provided by the seller when a ticket is resold, rather than the existing vague guidance and confusion about what constitutes a trader and what constitutes a consumer. That creates a huge loophole that can be exploited by the unscrupulous leading to, as my noble friend Lord Moynihan said, a £1.5 billion racket.
I hope that all sides of the House will support me when I emphasise what we are trying to achieve. Those who buy a ticket from a secondary seller should be provided with the same information and protection when they buy that ticket as they would expect to receive when purchasing direct from the event organiser. It is as simple as that. But you would not think so, judging by the anguish that sports governing bodies are having to suffer in seeking a satisfactory resolution with this amendment.
If the amendment is made, every purchaser will be told the original face value of the ticket, the location of the seat in terms of block, row and seat number, whether it has restricted vision, and whether it is a seat for a child or senior citizen being sold at what I think is called a top-whack price. It will also allow people to check with the venue that the ticket is genuine. Importantly too, they would be told the original terms and conditions relating to the ticket purchase, and whether the resale was in breach of those original terms and conditions.
As has already been said, it takes only a matter of seconds to provide this information online. Remember that anyone who sells online has to create an account with a secondary seller or website in any event. This is
an infinitely longer process than just providing three key details when selling a ticket. If you are extremely modern, you could even take a photo of the ticket and upload it.