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Gareth Thomas MP, Former Minister for Trade, Development and Consumer Affairs (jointly with DFID)
Royal Horseguard Hotel, London, 13 May 2009
A key issue for any government whose country is facing a global recession into consider how to help rebuild economic confidence, recovering from recession simply just doesn’t happen.
We have discussed a range of specific measures, but there is a broader role for government.
BRC members will be acutely aware of this. For retailers, encouraging and retaining consumer confidence is a constant priority, but even more so during this tough economic climate.
And it is a key priority for the Government.
We are very clear that consumer confidence is an integral part of economic health and forms an essential part of recovery.
As Consumer Affairs Minister, I am challenging my department to play its part by reviewing the role our consumer policies can play in helping to encourage this return to economic health.
We need a consumer regime that is fit for the modern day consumer.
In this current climate that means a consumer who is demanding more choice, lower prices and increasingly embracing new technologies.
The regime should support both confident and capable consumers, and champion those who are vulnerable.
This is why we have been conducting a review of our consumer regime, and why we intend to publish a White Paper in the summer addressing real consumer concerns and offering solutions around five key themes:
I hope business, consumers and enforcers will support the White Paper’s work and proposals.
Hoe do we help build consumer confidence, maintain and improve a fair consumer protection system? How do we catch and drive out of business the rogue operators who undermine proper business?
A key element in our drive to boost consumer confidence is how we can work together to ensure better informed and better educated consumers.
My Department is already working closely with OFT and Consumer Focus to launch our own national consumer rights awareness campaign later this year.
There is a lot of good work already being done. But the Consumer Law Review suggests there is scope to bring coherence and a more structured national approach to delivering consumer education.
We also need to simplify and modernise UK consumer legislation.
Developed over decades and comprising more than 100 different pieces of legislation, the UK’s current system offers high standards of protection.
But it is often too complex for consumers to understand and we now know costs business an estimated £1.25 billion every year.
In Europe we are negotiating the Consumer Rights Directive, which has the potential to offer big gains in simplicity and improved confidence in the Single Market.
We still have a long way to go before that Directive meets its full potential and BRC members will know that we are concerned about a number of the proposals that could have a negative impact on our consumer framework.
And I am particularly grateful for the helpful and constructive approach that the BRC has taken to the ‘right to reject’ issue, which is a core consumer right that we would like to see enjoyed across Europe.
Consumer rights are legal protections but we should not need to be lawyers to understand them.
Both at the EU level and domestically we are committed to reducing the burden on business and making the system more efficient and clearer for everyone to understand.
Enforcement is also central to a healthy consumer regime. As the growth of the online world shows, it is vital that consumers are confident in buying through the internet, making good purchasing decisions and knowing their rights and where to seek advice.
The UK has the largest internet shopping market in Europe.
But our current enforcement system has not caught up with the change in shopping habits and distribution methods.
So we must focus more on tackling e-crime, which means building capacity within enforcement agencies to investigate major online scams which cause significant detriment to consumers.
And we must do all we can to help good businesses succeed by concentrating resources on tackling the rogues.
Helping local trading standards to concentrate on rogue traders rather than route inspection of businesses – of whom the great majority fully comply with the law.
Lastly I want to address the issue of helping consumers to recover their losses when they are victims of breaches of consumer protection.
Over recent years our approach to enforcement has developed so that inspection is not routine but risk-based and that enforcement action is proportionate and targeted.
As part of this, it is important that we seek compensation for a loss suffered by consumers, especially vulnerable ones. This of course should not affect the majority of compliant businesses and will bolster confidence in consumer transactions.
We should always try to achieve voluntary compensation from business.
Enforcers should be encouraged to use the new powers in the Regulatory Enforcement and Sanctions Act to create an enforcement approach that puts at its heart restoring the loss suffered by consumers.
This policy debate is also being driven by our colleagues in Europe and the Commission’s Green Paper on collective redress shows that there is an increasing appetite for taking group actions on behalf of consumers.
This is a complex issue and we are interested to hear your views, in particular about the role of public enforcers in taking cases where other avenues are neither suitable or have already been tried – as has been the case in Denmark, Finland and Sweden.
I welcome a debate on these issues and I know we are discussing this and a number of issues on our Consumer Panels.
This will feed into our preparations for the White Paper this summer and I look forward to our continued engagement with BRC members as we develop a consumer regime fit for the 21st Century consumer.
