Hansard

I, too, thank the committee clerking team, the witnesses and all those who gave evidence at stage 1 of the bill.

The Consumer Scotland Bill is enabling legislation. It sets out the framework for the creation of consumer Scotland, a body whose primary objective will be to provide consumer advocacy and advice. The powers in that area were devolved to the Scottish Parliament following the passage of the Scotland Act 2016. We, of course, support the devolution of those powers, and we will support the general principles of the bill today. However, at the same time, we will be asking the minister to take action on the recommendations that are set out in the committee’s report. I welcome the minister’s positive response to the committee’s recommendations, as set out in his opening speech. We look forward to working with him to address some of the concerns.

With that in mind, I will highlight some of the key recommendations on which we are looking to the minister to respond. The first relates to the definition of “consumer” and identifying those who will benefit from the bill. During the evidence sessions, that definition was a primary area of concern, as was whether the protections afforded by the bill would extend beyond individuals to small businesses, whose needs are, in many respects, identical to those of individual consumers.

The bill defines a consumer as

“an individual ... who purchases ... goods or services which are supplied in the course of a business carried on by the person supplying them”,

providing that they are not acting

“wholly or mainly in the course of a business carried on by the individual”.

The committee’s reading of that is that the bill would not afford protection to those acting as sole traders, small businesses or microbusinesses. Indeed, they would be excluded from the protections in the bill.

The Federation of Small Businesses wrote to the committee specifically on that issue, highlighting that

“half of all”

new

“businesses are based in homes and over one in ten Scottish workers are now self-employed.”

It further explained that,

“when purchasing goods and services, the smallest businesses often find themselves at a disadvantage because of their lack of expertise ... in making informed purchasing decisions; their lack of time to research the market; a lack of knowledge of their rights and ... poor bargaining power. But, because they are excluded from certain legal safeguards which protect individual consumers, smaller businesses”

often find themselves with

“fewer protections”.

We heard other evidence supporting those concerns. Shetland Islands Council highlighted that

“The definition of consumer excludes small businesses (of which there are many in remote rural areas and island communities) even though they often purchase goods or services in”

a manner that is very

“similar to those of”

individual

“consumers.”

The committee calls for the inclusion of small and microbusinesses in the definition of “consumer”. There is precedence for that approach. Jonathan Lenton from Ombudsman Services informed the committee that the Financial Ombudsman Service has

“expanded its remit to cover businesses with up to 50 employees.”—[Official Report, Economy, Energy and Fair Work Committee, 1 October 2019; c 56.]

I am not quite sure that the committee thinks that that is the right figure. However, we also heard evidence that Ombudsman Services deals with microbusinesses, which are defined as businesses with “10 employees or fewer.” To my mind, if we want to extend the definition to small businesses, that would be a good starting point. We can discuss the issue further down the line, but that is why the committee supports the calls to include sole traders, small businesses and microbusinesses in the definition of “consumer”. As I said, I was pleased to hear the minister say in his opening speech that he is open to the suggestion, and I look forward to working with him in stage 2 to broaden the definition in that respect.

The committee also recommends that there should be clarity on how the new consumer Scotland agency will avoid overlap and duplication with existing public bodies.

On a related point, the committee recommends that consumer Scotland be empowered to support the work of existing consumer protection bodies. For example, Citizens Advice Scotland gave evidence that its role and financing may be compromised as a result of the introduction of consumer Scotland. The committee recognised the concerns relating to the potential impact on the work and financing of Citizens Advice Scotland. I supported the recommendation that calls on the Scottish Government to clarify

“Consumer Scotland’s role in relation to advice provision”.

Such clarification is needed

“in light of the expectation that”

Citizens Advice Scotland

“will lose its levy related funding, worth approximately £1m in 2019/20 with ... no commitment from the Scottish Government beyond 2020/21.”

There are concerns about the introduction of the new consumer body and how it will impact on other bodies that already provide advice, including Citizens Advice Scotland. To address some of those concerns, the committee recommends that a Scottish consumer protection partnership be created, to support better communications and co-ordination between the different agencies involved in consumer protection in Scotland, including the new agency. I look forward to the minister addressing some of those issues in his closing speech.

Questions were also raised in relation to the bill’s financial memorandum. Evidence from Energy Action Scotland suggests that the proposal for 20 staff with a budget of £2.5 million would not be sufficient for the new agency to properly carry out all the functions for which it shall be responsible. EAS highlighted that

“we are already seeing so many issues mount up”

for the agency to deal with, and said that

“we need to be explicit in the bill about its role and be more realistic about a budget.”—[Official Report, Economy, Energy and Fair Work Committee, 1 October 2019; c 54.]

We are not in the business of advocating for significantly more money for another public quango. However, there has to be a realistic match between the expectations, role and functions of the new agency, and the funding and staffing resources that it will be able to rely on. I look forward to the minister addressing the questions about the budget and resourcing of the new agency, either in his closing speech or—if he wants a bit more time to think about it—at committee during stage 2.

Finally, the committee heard evidence that—as I think the minister himself recognised—much greater clarity is required on the scope of the legislation and the exact circumstances in which consumer protection will be afforded. I ask the minister to clarify in his closing speech whether legislation would protect consumers in the following circumstances: consumers who do not have superfast broadband as a result of the Scottish Government missing its targets for roll-out; the thousands of train passengers who cannot get on overcrowded trains every day; the ferry passengers across Scotland who have suffered 80,000 ferry cancellations; and the 14,000 Scottish students who applied to university, but who were rejected because of the Scottish National Party student cap.