Meeting of the Parliament 23 January 2020
There can be little doubt that consumer spending has a significant impact on the economy. We are all consumers, after all. The late Roger Scruton said that the label of consumer belonged to,
“Whoever realises the use-value of a good, say, by eating food, by hanging and admiring a picture on his wall, by wearing clothes”.
Indeed, we all buy things in shops and online. We also choose energy tariffs, compare insurance policies, switch phone providers, book train tickets and pay direct debits. Sometimes, we seek to get our money back. We might have problems with the things that we buy and try to use. We might even feel as though we have been exploited or scammed.
As the minister outlined, the Consumer (Scotland) Bill seeks to strengthen the rights of consumers through the creation of a new public body. The intention of the new body is to strengthen consumer advocacy and advice, to identify how and why consumers experience harm in Scotland, and to mitigate that harm. It is a welcome bill, but, in many ways, it raises more questions than it answers. Stakeholders, witnesses and committee members broadly supported the bill in principle, with many telling the committee that there were gaps in the current advice and advocacy provisions. However, one could be forgiven for questioning what the bill does and what difference the new body will make to Scottish consumers in practice.
With limited detail in the bill about the overall structure and the operational model and activities of consumer Scotland, witnesses had different ideas of what the body’s priorities should be. A wish list of work programme priorities emerged, with research, product recall, quality assurance of advice and alternative dispute resolution all highlighted as worthy areas for consumer Scotland’s attention.
How the new body would interact with existing bodies that already work in that area was a further area of debate. Consultant Sarah O’Neill told us:
“consumer Scotland will want to set out criteria for why it will do certain pieces of work and why they are important. For example, what is the level of detriment? How many people will it affect? Is anyone else working on it?”—[Official Report, Economy, Energy and Fair Work Committee, 5 November 2019; c 31.]
The minister offered assurances that consumer Scotland will collaborate with existing bodies to avoid duplication, but it remains unclear how that would be done. The committee has asked the minister to outline, in advance of stage 2, further detail on the form and functions of consumer Scotland, including how it will interact with other bodies. We welcome the minister’s commitment to do so.
The committee believes that the Scottish Government must ensure that the new body operates in a way that strengthens and does not impede the work of existing bodies. We saw concern from bodies such as Citizens Advice Scotland that their roles could be weakened. It remains unclear how consumer Scotland’s proposed advice and advocacy role will impact on the future role of Citizens Advice Scotland and its bureaux network.
Further questions were raised about respective remits and what that would mean for long-term funding. Many noted difficulties in separating consumer issues from other forms of advice, as people often experience problems in clusters. The committee recommended that the bill’s duty to collaborate is extended beyond public bodies to include third sector advice organisations, including CAS. I am pleased to say that the minister agrees and has committed to lodging an amendment at stage 2.
On a different matter, there was concern among some witnesses that consumer Scotland should have greater influence on trading standards and enforcement issues. Consumer enforcement, including trading standards powers, is reserved to the UK Government, which led some to question how consumer Scotland could seek to influence those areas. Matters of competition are also reserved, but are of equally great importance to how the consumer landscape operates. Given that background, the committee explored how information sharing with trading standards and other organisations could benefit consumer Scotland’s proposed evidence-led strategic role.
I move on to consumer duty. The bill creates a requirement for certain public bodies to consider the impact of their decisions on consumers. The Scottish Government considers that to be an important development in embedding consumer interests across policy areas and balancing what can, at times, seem like conflicting interests.
So far, so good. However, at the risk of sounding repetitive, I must say that many witnesses supported the idea of a consumer duty but were unclear about what that would involve, who it would involve and what impact it would have. Neither the nature of the duty, nor the processes for it, are specified in any detail in the bill, although consumer Scotland would have a statutory duty to publish guidance. Citizens Advice Scotland said:
“The Bill as presented is too greatly focused on the single output of creating Consumer Scotland and too little is said about how this action creates a better outcome for citizens in terms of an enhanced system to better protect their interests.”
The minister told the committee that the duty’s design and implementation will, again, be carried out collaboratively to avoid it becoming either a token gesture or an administrative burden. We await the outcome of those discussions, and I am sure that some of my colleagues in the debate will go into some of the issues in greater depth.
On another point, many witnesses criticised the bill’s definition of consumer for excluding individuals acting in a business capacity. The minister mentioned that point in his opening remarks. For example, sole traders who run their own businesses will not be covered and neither will small or microbusinesses. Some witnesses told us that small businesses often face the same disadvantages as individual consumers in their knowledge of markets, bargaining power and ability to enforce their rights when things go wrong. The Federation of Small Businesses Scotland identified the vulnerability of smaller businesses as consumers:
“From banking to online scams, from parcel delivery to energy and water contracts”
they
“can often find themselves the victims of unfair and exploitative behaviour.”
The committee believes that many challenges faced by consumers are equally, if not more applicable to people running small businesses. Those people often have limited resources to pursue complaints and may also be suffering additional detrimental impact on their ability to run their business. The minister has, of course, committed to exploring those issues with interested parties, which I welcome.
The committee received 54 written submissions to our call for views and we heard from 19 witnesses across four committee meetings. It is always important to the committee’s work to hear views from individuals—businesses and others—in any work that we do, so we thank everyone who informed our scrutiny of the bill.
Turning to another part, perhaps, of the political constellation from the one that I started with, according to President John F Kennedy:
“Consumers by definition, include us all. They are the largest economic group, affecting and affected by almost every public and private economic decision. Yet they are the only important group whose views are often not heard.”
The committee approves the general principles of the bill.
15:13