1.Since the UK joined the European Economic Community in 1972, the (now) European Union institutions and the individual Member States have shared responsibility to legislate to protect consumers’ rights.1 During this time, the EU has used its powers to create a wide range of EU legislation, estimated to be in total around 90 Directives and Regulations,2 which together form the EU’s consumer protection acquis. Mr Chris Woolard, Executive Director of Strategy and Competition at the Financial Conduct Authority (FCA), summarised the “landscape” between the EU and its Member States in this context as “complex and interconnected”.3
References to consumer protection are scattered throughout the EU Treaties. For example, Article 12 (TFEU)4 states that: “Consumer protection requirements shall be taken into account in defining and implementing other Union policies and activities”. Article 38 of the EU’s Charter of Fundamental Rights says that Union policies will ensure a “high level of consumer protection”. Article 169 (TFEU) sets out the fundamental aims of the EU’s power to legislate in this field: “In order to promote the interests of consumers and to ensure a high level of consumer protection, the Union shall contribute to protecting the health, safety and economic interest of consumers, as well as promoting their right to information, education and to organise themselves in order to safeguard their interests.” Alongside the Treaty Articles that specifically address consumer protection, and on the basis that diverse consumer protection rules create barriers to cross-border trade, the EU has also frequently legislated in this area via recourse to the general single market legal basis.5 |
2.This complex and interconnected system touches on all areas of the UK’s economy and protects a wide range of rights, on which UK citizens rely when they undertake the myriad transactions of everyday life. The Minister responsible for consumer rights, Margot James MP, said that “when we leave the EU we will be leaving a system of consumer rights and protection … which sits very well with the needs of consumers in the United Kingdom”.6
3.We decided to launch this inquiry in February 2017 (before the General Election was called), because we were concerned that the Government’s public pronouncements on Brexit failed to do justice to the issue of consumer protection. For example, the White Paper The United Kingdom’s exit from and new partnership with the European Union7 made only vague references to the general interests of consumers, and did not address directly how the Government might approach the subject in its preparations for Brexit.
4.Then, in March 2017 after we had begun taking evidence, the Government’s White Paper on Legislating for the UK’s withdrawal from the European Union8 promised that the (then) so-called Great Repeal Bill “will preserve the relevant EU [consumer protection] law to ensure that domestic law functions properly after exit … It will help ensure that UK consumers’ rights continue to be robust after we have left the EU”.9
5.Most of the EU’s consumer protection acquis that provides the baseline for legislation in the UK takes the form of Directives, which are implemented via national law (see Boxes 2 and 3). Given this, our evidence suggests that the (now) European Union (Withdrawal) Bill (‘the Bill’) will, for the most part, be sufficient to address the future application of the EU’s consumer acquis to the UK post-Brexit. However, while praising this aspect of the Bill, our witnesses were concerned about its inability to address the potential loss of the EU’s reciprocal systems for coordinating cross-border information exchange, cooperation and enforcement.
6.For example, Mr Leon Livermore, Chief Executive of the Chartered Trading Standards Institute, described the Bill as a “very good starting point”, but the “bigger challenge” lay “in relation to some of the specific references in some legislation to European bodies of which we will cease to be members”.10 The Consumer Protection Cooperation Regulation11 (CPC Regulation) (see Box 6), which facilitates cross-border cooperation between national bodies responsible for protecting consumers such as the Competition and Markets Authority in the UK, emerged as a key item of EU legislation, as did the UK’s membership of various EU Executive and/or Regulatory Agencies.
7.Aside from those items of EU law identified by our witnesses as particularly important and set out in this report, we did not have the time to take evidence on the merits of individual items of EU consumer protection legislation. Rather, we sought to explore the “bigger challenge” referred to by Mr Livermore, and to consider the Government’s proposed approach to this challenge.
8.Following the referendum in June 2016, the European Union Committee and its six Sub-Committees launched a series of coordinated inquiries, addressing the most significant aspects of Brexit. The inquiries are intended to be short and to inform and explore the major challenges and opportunities of Brexit.
9.To that end, in March we begun by taking evidence from the consumer organisation Which? and the Citizens Advice Bureau (CAB). Our inquiry recommenced in July, after the General Election, and we continued taking evidence until October. We also received a number of written submissions. We are grateful to all those who submitted evidence to our inquiry.
10.We make this report to the House for debate.
1 This shared competence is now confirmed in Article 4(2)(f) Treaty on the Functioning of the European Union (TFEU), OJ C 326 (consolidated version of 26 October 2012) pp 1–390
2 European Parliament, Consumer Protection in the EU, Policy Overview, September 2015, p 5: http://www.europarl.europa.eu/RegData/etudes/IDAN/2015/565904/EPRS_IDA(2015)565904_EN.pdf [accessed 22 November 2017]
4 Article 12, Treaty on the Functioning of the European Union
5 Now Article 114, Treaty on the Functioning of the European Union
7 HM Government, The United Kingdom’s exit from and new partnership with the European Union, Cm 9417, February 2017: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/589191/The_United_Kingdoms_exit_from_and_partnership_with_the_EU_Web.pdf [accessed 20 November 2017]
8 Department for Exiting the European Union, Legislating for the UK’s Withdrawal from the European Union, Cm 9446, March 2017: https://www.gov.uk/government/publications/the-repeal-bill-white-paper/legislating-for-the-united-kingdoms-withdrawal-from-the-european-union [accessed 20 November 2017]
9 Ibid.
11 Regulation 2006/2004 of the European Parliament and of the Council of 27 October 2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws (the Regulation on consumer protection cooperation) Text with EEA relevance (OJ L 364, 9 December 2004, pp 1–11)