Kevin Hollinrake
MP for Thirsk and Malton · Conservative · United Kingdom
“That issue is one of the many things that the people who signed the petition are concerned about, Dr Huq. One of the big things that the Government promised, which I agree with them about, is the need to encourage faster growth in our economy. Of course that is right, but look at where that growth is.”
“The UK economy went through many challenges, of course, some of them caused by Brexit; the reality is that a change like that was bound to have a short-term effect—but only a short-term effect. The country grew faster than Germany and France during that period of time.”
“As I said before, governing is not easy; we had many challenges ourselves, and we did not get everything right, but what we did during that difficult period of time—those 14 years—was get 1.2 million more people employed in our economy. Unemployment was halved during our time in office.”
“Of course, many Government Members supported his leadership challenge. We are here now, looking forward to a general election coming down the track. We are ready for a general election when the Government are, because, unlike them, we have a strong leader—against their weak leader.”
“I was, absolutely. I thank my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) for his excellent opening speech. He made so many good points, not least about the level of support for this petition.”
“Members on the Government side of the House also feel betrayed and angry with their own leadership, for marching them up to the top of the hill and marching them back down again on many of these issues, but they do not feel as betrayed as the businesspeople in this country in particular.”
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“This means that contraventions of professional diligence are excluded from the offences to which the criminal liability of others applies. Clause 232 sets out the penalty for offences. It is a restatement of the same provision from the CPRs. Clause 233 sets out the time limit for prosecution. This is within three years of the offence taking place, or within one year of the discovery of the offence by the prosecutor, whichever is earlier. The time limit is the same as set out in the CPRs and enforcers will be familiar with their application. I hope that the Committee will support Government amendments 72 to 77 and clauses 229 to 233.”
“The innocent publication defence is available, in certain circumstances, to a defendant charged with a relevant offence that is alleged to have been committed by the publication of an advertisement. Government amendments 72 and 73 preserve the current effect of existing consumer law by excluding contraventions of the requirements of professional diligence from the offences to which these defences apply. Clause 231 sets out the rules on liability when a trader commits an offence as a result of an act or omission by another person, and when a body corporate commits an offence. It is a restatement of the same provision in the Consumer Protection from Unfair Trading Regulations 2008, or CPRs. Government amendments 74 to 77 preserve the current effect of the CPRs.”
“Clause 229 sets out that it is a criminal offence for a trader to engage in a commercial practice that involves any of the following: misleading actions, misleading omissions, aggressive practices, any of the practices in the list of banned practices in schedule 18, save for those expressly excepted, and/or knowingly or recklessly engaging in a commercial practice that contravenes the requirements of professional diligence. Clause 230 describes the defences that may be available to defendants charged with offences under clause 229. These are a defence of due diligence and an innocent publication defence. To avail of the due diligence defence, a defendant must prove that the offence was due to the act or omission of a third party or information provided by a third party.”
“The banned practices to which the shadow Minister and I have referred are not currently subject to criminal liability, and we did not consider it appropriate to introduce new criminal offences. On the “mistake or accident” defence, the defendant has an obligation to prove it was a mistake or an accident, which I think is a reasonable provision. The timescales are replicated from the current timescales in the 2008 regulations, so there is nothing new here. We are pretty confident the timescales will be appropriate but, of course, we will continue to engage with the relevant enforcement bodies to make sure they are appropriate.”
“We have continuing engagement with the various enforcement bodies, such as trading standards and the Competition and Markets Authority, through either officials or Ministers. If there were a problem, we are confident we would receive that feedback and be able to make a decision on how to act accordingly.”
“Clause 231, as amended, ordered to stand part of the Bill. Clauses 232 and 233 ordered to stand part of the Bill. Clause 234 Powers to amend this Chapter”
“This amendment ensures that the imposition of liability on another person does not apply in relation to an offence under clause 229(4) (offence of engaging in an unfair commercial practice which involves a contravention of the requirements of professional diligence). This replicates the current position under the Consumer Protection from Unfair Trading Regulations 2008. Amendment 75, clause 231, page 155, line 31, leave out “section” and insert “subsection”. This amendment is consequential on Amendment 74. Amendment 76, clause 231, page 155, line 40, after “under” insert “subsection (1), (2), (3), (6) or (7) of”. This amendment is consequential on Amendment 74. Amendment 77, clause 231, page 155, line 41, leave out “section” and insert “subsection”.— (Kevin Hollinrake.) This amendment is consequential on Amendment 74.”
“Amendment 73, clause 230, page 155, line 5, after “under” insert “subsection (1), (2), (3), (6) or (7) of”.— (Kevin Hollinrake.) This amendment ensures that the defence provided for in clause 230(3) (defence of innocent publication) does not apply in relation to an offence under clause 229(4) (offence of engaging in an unfair commercial practice which involves a contravention of the requirements of professional diligence). This replicates the current position under the Consumer Protection from Unfair Trading Regulations 2008. Clause 230, as amended, ordered to stand part of the Bill. Clause 231 Offences: criminal liability of others Amendments made: 74, clause 231, page 155, line 30, after “under” insert “subsection (1), (2), (3), (6) or (7) of”.”
“I have concluded my remarks. Question put and agreed to. Clause 229 accordingly ordered to stand part of the Bill. Clause 230 Defence of due diligence and innocent publication Amendments made: 72, clause 230, page 154, line 32, at end insert “subsection (1), (2), (3), (6) or (7) of”. This amendment ensures that the defence provided for in clause 230(1) (defence of due diligence) does not apply in relation to an offence under clause 229(4) (offence of engaging in an unfair commercial practice which involves a contravention of the requirements of professional diligence). This replicates the current position under the Consumer Protection from Unfair Trading Regulations 2008.”
“On the penalties themselves, we will go much further than any UK Government have ever done before; we are empowering the courts and the CMA to impose fines of up to the higher of £300,000 or 10% of worldwide turnover for infringements of consumer-protection law.”
“I thank the hon. Lady for her amendment and her remarks. She will be aware that, ordinarily, when criminal offences are created, it is important and beneficial for Parliament to have ample opportunity to scrutinise them. That is usually via primary legislation, rather than powers given to Government. There is, of course, nothing to prevent Members of Parliament from introducing primary legislation to criminalise specific practices in future, should the House consider it desirable to do so. In the meantime, any new practices added to schedule 18 will continue to benefit from the relevant civil penalties, as well as the greater deterrent effect that we expect from the considerable reforms that we are introducing.”
“Members will accept amendment 78, and I commend the clauses to the Committee.”
“Clause 243 revokes the 2008 regulations and re-enacts their substance in part 4, chapter 1 of the Bill. It also makes a small number of consequential amendments to other UK legislation. Government amendment 78 makes a minor consequential amendment to section 393 of the Communications Act 2003 to include part 4 of this Bill. That will enable Ofcom and the CMA to collaborate in relation to matters covered by part 4 in the same manner that they do for the consumer protection regulations. Clause 244 sets out that the 2008 regulations will continue to apply to any unfair acts or omissions occurring before this Bill is enacted. The clause also provides that part 4A of the consumer protection regulations, which deals with private right of redress, will continue to apply until new regulations are made under this chapter. I hope hon.”
“It largely restates the equivalent provision from the Consumer Protection from Unfair Trading Regulations 2008. Clause 239 defines “average consumer” in situations where a group of consumers are particularly vulnerable to a commercial practice. It recognises and makes explicit that consumers may be vulnerable for a range of reasons, including their age, health, credulity and circumstances. Clause 240 defines “product” for the purposes of this chapter. A product can mean goods, services and digital content. That is important as it means consumers are protected from unfair trading practices when purchasing digital content from businesses online. Clause 241 defines a range of other terms used in part 4, chapter 1 of the Bill. Clause 242 provides an index of defined terms in this chapter.”
“Members will agree that it is critical to future-proof the Bill through these provisions, given the constantly evolving environment in which traders operate. Clause 235 establishes that the Crown is not criminally liable for any infringement of the regulations. This does not affect the application of the regulations in relation to a person in public service of the Crown. Clause 236 states that a contract or agreement is not void purely because of a breach of this chapter, except for cases where voiding of the contract arises as a result of a consumer exercising their right to redress. Clause 237 defines “transactional decision”. This is an important and broad definition, which includes decisions before any purchase has taken place as well as decisions after a purchase has taken place. Clause 238 defines an “average consumer”.”
“Clause 234 gives powers to the Secretary of State to amend this chapter. New regulations using the powers may not be made before consultation and will be subject to the affirmative procedure. For example, the power to amend the list of banned commercial practices in schedule 18 will allow the Government to respond more quickly to emerging consumer harms and ensure that appropriate levels of consumer protection are maintained. The power to amend the list of information deemed to be material in an invitation to purchase means that we can ensure that consumers get the information that they need when they prepare to make a purchase. The power to amend the list of prohibited practices in clause 224(7) will enable the Government to extend private rights of redress to further commercial practices, such as misleading omissions. I hope that hon.”
“I think the hon. Lady asked two questions, and I missed the second one. While she is thinking about what the second question was, I will address the first one, which was about why we are establishing the power to delete practices from the banned list. That is because some practices may become redundant or have needless duplication that we need to avoid. For example, Parliament may choose to provide for regulation elsewhere to better address a particular service so that we do not get duplication. The power will require parliamentary approval through the affirmative procedure. As a consequence, there will be a requirement for us to consult on any such changes.”
“Clause 245 Overview Question proposed, That the clause stand part of the Bill.”
“Clause 243 Consequential amendments etc relating to this Chapter Amendment made: 78, in clause 243, page 161, line 21, at end insert— “(3A) In section 393(5) of the Communications Act 2003 (exceptions to general restrictions on disclosure of information), after paragraph (r) insert— ‘(s) Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2023.’”— (Kevin Hollinrake.) This amendment enables OFCOM to disclose information to the CMA for the purpose of the CMA exercising its functions under Chapter 1 of Part 4 of the Bill in the same way that OFCOM may currently disclose information to the CMA for the purpose of the CMA exercising its functions under the Consumer Protection from Unfair Trading Regulations 2008. Clause 243, as amended, ordered to stand part of the Bill. Clause 244 ordered to stand part of the Bill.”
“The hon. Lady makes a very good point. Regulators play a part in this as well by ensuring that the average consumer is assessed correctly and that there is relevant assessment of any characteristics. Businesses can be challenged on the back of that to ensure that they do not exploit consumers, especially those who are vulnerable to a particular commercial practice. Question put and agreed to. Clause 234 accordingly ordered to stand part of the Bill. Clauses 235 to 242 ordered to stand part of the Bill.”
“In chapter 2 of part 4 of the Bill, we are introducing measures to give consumers new rights over their subscription contracts, while ensuring that businesses are not overburdened by regulations. The measures are an important part of the Government’s commitment to help consumers have more control over their spending. Together, they will deliver £400 million in consumer benefits per year. Clause 245 assists readers to navigate the chapter. Clause 246 provides a legal definition of a subscription contract.”
“The childcare sector, like many of the other excluded sectors, provides an essential service and these are not the type of contracts that we consider raise the risks commonly associated with a subscription trap. The exclusions in schedule 19 may need to change over time as the regulatory and legislative regimes for the excluded sectors change. That is why clause 247 ensures that the Secretary of State has the power to adapt the provisions through secondary legislation.”
“Clause 247 provides for specific sectors and subscription contract types to be excluded from the chapter and those sectors are detailed in schedule 19. The sectors have been excluded because they are already subject to regulation and may be supervised by a specialist regulator. To apply the chapter to them would overburden them with regulation and trespass on the remit of a specialist regulator. It could also potentially create conflict between the regulation and legislation, particularly if the sectors already provide consumers with similar protections. Sectors may also have been excluded on public policy grounds, such as the exclusion for childcare.”
“There may be some regulations to deploy after that. I can find out for definite if the hon. Gentleman gives me a few minutes. It is in the Bill, of course, so it should be pretty quick. Clause 246 provides a legal definition of a subscription contract, which is principally one that automatically renews or continues so that a consumer continues to be liable for payments unless they end the contract. That includes contracts that are of fixed duration but can be ended earlier by the consumer. Contracts that offer a free or reduced-cost trial for a defined period and then revert to a higher cost are also in the scope of the chapter. It is critical that such contracts are included as calculations show that each year, around a quarter of consumers get rolled over accidentally from free or reduced-price trials.”
“I think the hon. Lady raised two points. The provisions apply specifically to traders to consumers, not traders to businesses. On how we determine the exemptions, such as for magazines, delivery services, gyms, software and so on, a range of stakeholders, including regulators, businesses and consumer groups, developed the list and the scope of sectors that are exempt from the subscription measures. [Official Report, 20 July 2023, Vol. 736, c. 13MC.] Question put and agreed to. Clause 245 accordingly ordered to stand part of the Bill. Clause 246 and 247 ordered to stand part of the Bill. Schedule 19 Excluded contracts”
“The hon. Member for Gordon makes an excellent point. As he said, the point was raised on Second Reading. We appreciate the work that society lotteries do in terms of fundraising—that £400 million a year is vital for many good causes. It is certainly not our intention to capture society lotteries, including the national lottery, in this chapter of the legislation on subscription contracts. We are working with the society lottery sector to understand whether we need to further clarify the legislation to reflect that. I am sure that we will discuss the issue again during later stages of the Bill.”
“Clause 248 places duties on the trader to provide the consumer with pre-contract information set out in schedule 20 before they enter a contract. All key pre-contract information must be given together to the consumer and separately from any other information. That is to ensure that it is not obscured by technical detail or marketing material and the consumer’s attention is focused on the information that they need to make an informed decision. Clause 249 sets out obligations on the trader in concluding a contract, such as ensuring that the consumer expressly acknowledges their payment obligation if the contract is made online. That will ensure that consumers are fully aware of the contract they are entering.”
“My hon. Friend is absolutely right that we do not intend to include national lotteries or society lotteries in this legislation. We are talking to those bodies to ensure that they are confident that that is the case. If we need to amend the Bill to do that, we will, but those conversations will continue. I am grateful to my hon. Friend for making that point. Clause 250 requires traders to send reminder notices in certain instances. A reminder must be sent on the first occasion that a subscription renews, including when a free or low-cost trial is coming to an end. That will ensure that consumers know they will soon become liable for payments, or higher payments, and can decide whether they want to continue the contract.”
“We have had dialogue with Sky, and many other organisations have contacted us to clarify some points. A subscription contract with Sky would fall under the provisions. Sky may be concerned about certain things, in terms of cooling-off periods, but I have not had any feedback from Sky or others that they have concerns about these particular provisions, unless the hon. Gentleman wants to mention something specifically.”
“I did not quite understand the hon. Gentleman’s point when he first made it. I think he is saying that it covers existing contracts as well as new contracts. Is that his point, and can I come back to him on it?”
“Reminder notices must include information on the forthcoming payment, including any increase since the last renewal. They must also include an indication of how long the consumer will be committed following renewal, and how to end the contract should the consumer wish to.”
“After the first renewal reminder, consumers with a monthly renewing contract will be sent a reminder around the six-month mark. For contracts that renew less frequently than every six months, such as annual subscriptions, a reminder will generally be sent whenever the contract renews. Clause 251 sets out the required timescales for serving reminder notices. Parts 1 and 2 of schedule 20 set out what pre-contract information traders must give to the consumer before they enter a contract. Part 3 of schedule 20 sets out the information that traders must include in a reminder notice. I can address the point made by the hon. Member for Bermondsey and Old Southwark right now, if he would like: the subscription contract clauses will apply only to new contracts taken after chapter 2 comes into force.”
“I may have misunderstood his point, but I think the example he gave was of a bank closing an account from Twitter. That is the other way around—that is the bank closing the account rather than the customer.”
“Okay, but I think clause 252 is clear that there must be a straightforward cancellation route for consumers to exit a contract. He appears to describe a convoluted route, but I did not quite understand it. Would he like to expand on his point?”
“Clause 256, which we will discuss shortly, introduces an extra 14-day cooling-off period after a free or low-cost trial, and at the 12-month mark when a longer-term contract auto-renews. That means that, if for any reason a consumer has not been able to take action to cancel before renewal, they have an extra chance to do so. Together, those measures will ensure that consumers can make informed decisions about their subscription contract. They also make it easy to leave while avoiding creating additional steps for those who want to continue. I hope that reassures hon. Members that the Bill will enable consumers to manage their contracts effectively, and that they feel able to withdraw the amendments.”
“We are confident that the approach we have taken strikes the right balance of ensuring consumers are able to exit their contracts at various points during their contract, as well as maintaining consumer convenience. Furthermore, the existing clauses in this chapter already achieve much of the ambition of the amendments. As I set out earlier, clause 250 will ensure consumers are sent regular reminders about their subscription, including towards the end of a free or low-cost trial. These reminders will ensure that consumers have the right information at the right time to decide if they want to continue their contract, or cancel it. In addition, through clause 252 we will ensure easy cancellation routes so that subscriptions are as easy to leave as they are to enter. Finally, the Bill enhances consumers’ existing cooling-off rights.”
“However, we know that the majority of consumers enjoy the auto-renewing features of their subscription contracts and the convenience they provide. Through these new clauses, if a consumer had not opted-in to an auto-renewing contract, but they decide they want to keep their subscription, they would have to repeatedly respond to emails or similar to continue their subscription, or risk it unintentionally lapsing. That risk could be multiplied across each subscription they hold. For that reason, the Government decided not to pursue that approach, which was supported by our public consultation. It is also important to consider the burdens the changes could place on businesses. The measures would add significant regulatory costs to businesses as they adapt their business models to meet the proposals.”
“They propose that traders must obtain a consumer’s express agreement to an auto-renewing contract by the consumer’s active opt-in. Through new clause 5, when consumers sign up to a subscription contract, they would have to be given the option to choose whether their subscription auto-renews after six months. If they do not choose this auto-renewal option, the contract would end after six months unless the consumer expressly asks for it to continue. New clause 6 would apply equivalent requirements to contracts that auto-renew after a free or low-cost trial and may also auto-renew again subsequently. The Government share the view that consumers must be able to avoid being trapped in unwanted subscriptions and ensure their hard-earned cash is spent only on subscriptions they actually want.”
“I am not sure whether it does or not. I refer the hon. Gentleman to one of my earlier points: it is a straightforward cancellation route. What he describes to me is not a straightforward cancellation route. That is the key definition. We can have a discussion after this sitting. Clause 253 requires a trader to send a notice confirming when the contract was, or will be, ended once they have been notified of cancellation by the consumer. This also applies where a consumer exercises a cancellation right under this chapter. The trader must provide this notice promptly, and on a durable medium, and refund consumers any overpayment for which they are no longer liable. I now turn to new clauses 5 and 6, which I will address together.”
“Hence this notification must be given in a sufficiently clear manner. I think it is fair to say that a sole tweet probably would not be sufficiently clear.”
“Gentleman, to ensure that an appropriate transition takes place. When cancelling or ending a contract, is a single tweet enough? I think that was the hon. Gentleman’s point. The ability of the consumer to end their contract by notifying the trader by any means is a safety net whereby consumers can always use the fall-back option of a simple notification if it is preferable or easier for them, particularly if the trader has failed to provide a clear route for consumers to end their contract. Where necessary, the Government will provide further clarification in business guidance, which will obviously include discussions with stakeholders. However, as the provisions state, it is important that consumers notify a trader in a way that clearly communicates their intention to end the contract, which can be actioned by the trader.”
“There are a few points to pick up on there. The shadow Minister wanted clarification on what “as soon as practicable” means. We expect traders to provide consumers with the relevant pre-contract information immediately before concluding the contract. If the contract is concluded online, that information should be provided during the online order process. If face to face, the trader should give that information before a contract is agreed. The hon. Member for Bermondsey and Old Southwark raised a point about when the provisions will commence. We do not clearly have a set commencement date at this point in time, but we are keen to get these measures in place to protect consumers. We also recognise that there must be sufficient time for businesses to adapt, and we will engage with stakeholders, including the ones referred to by the hon.”
“That is a balance we intend to strike, because we fully recognise the needs of business as well as the needs of consumers. Question put and agreed to. Clause 248 accordingly ordered to stand part of the Bill. Schedule 20 agreed to. Clauses 249 to 253 ordered to stand part of the Bill. Clause 254 Terms implied into contracts Question proposed, That the clause stand part of the Bill.”
“No, I am not giving way, thank you very much, because I want to address the hon. Gentleman’s points. Regarding when these provisions will commence, of course we do not know how quickly this legislation will pass through both Houses of Parliament. It will be subject to much debate, including by people such as the hon. Gentleman. However, I have said clearly that the Government will give guidance and work with stakeholders to make sure that they fully understand the provisions in this legislation and have time to prepare for them. That is what I said in my earlier remarks, so I think the hon. Gentleman is being a bit churlish in terms of that perspective, perhaps for political purposes. However, all the way through this legislation, we have been keen to strike a balance between what is right for consumers and right for businesses.”
“Clause 254 sets out that a trader’s compliance with their main duties under this chapter is an implied term in every subscription contract. The clause is necessary as it gives the consumer access to legal remedies or defences to a claim by the trader where the trader has failed to comply with duties set out in this chapter. Clause 255 gives consumers a right to cancel their contract if a trader fails to give the required key pre-contract information or reminder notices, or if their failure to provide an easy way of ending the contract means that a consumer remains trapped in their contract. Consumers who cancel their contract as a result of such breaches will be able to do so without penalty, and in prescribed circumstances may be entitled to a refund.”
“We heard several examples of consumers who missed the end of their free trial by a short period, and were then committed to an expensive contract because they had not cancelled in time. However, my hon. Friend makes a good point because there are particular circumstances around the supply of digital streaming services that have to be taken into account to ensure the Bill is fair to businesses. We will engage with businesses, regulators and consumers to ensure that refund and return sales are fair and practical, and work across all sectors, including digital streaming. We intend to return to this issue in secondary legislation to ensure the provisions are fair to providers and the services they provide. I very much hope my hon. Friend feels able to withdraw his amendment. We will engage in further discussions in due course.”
“I thank my hon. Friend for his amendment. He is absolutely right to draw attention to this issue. The initial cooling-off period ensures that a consumer has 14 days to cancel after signing up if they change their mind or do not like the product. The renewal cooling-off period further strengthens consumers’ cancellation rights by giving them an additional 14-day window to cancel their contract later on in some circumstances. My hon. Friend makes important points. Cancellation rights should be fair to businesses, of course. The aim of the measures in the Bill is to give consumers a window in which they can change their mind before taking on, or renewing, a contract for what can be a significant ongoing liability.”
“As I mentioned in relation to amendment 113, clause 259 creates a regulation-making power. The regulations may provide for conditions or restrictions on the exercise of a cancellation right. They will set out detailed rules on the consequences of cancellation for the consumer’s refund rights and any arrangements for goods to be returned to the trader. Clause 259 also gives power for a cooling-off period to be extended in specified cases. The regulations will set clear expectations on traders and consumers, so that they know their respective rights and responsibilities when a consumer cancels their subscription contract. Government will work with a range of stakeholders in developing the regulations. Where we intend to make regulations containing rules extending a cooling-off period, we have committed in clause 259(5) to consult.”
“Clauses 256 and 257 set out an initial cooling-off period, and, in some circumstances, a new renewal cooling-off period. They provide that the consumer can cancel any time after signing up until 14 days after receiving goods, or 14 days after the date of the contract for anything else, such as services or digital content. The renewal cooling off period will apply when a free or low-cost trial ends and the consumer becomes liable for payments or higher payments. It will also apply when a contract auto-renews to a new term of 12 months or longer. Clause 258 requires traders to give consumers a cooling-off notice whenever a renewal cooling-off period applies. This information confirms that the contract has renewed and informs consumers of their right to cancel.”
“However, the penalties are designed to be consistent with those for failure to provide information about cancellation rights for off-premises contracts in the 2013 regulations, which currently govern all consumer contracts and will continue to govern other off-premises contracts. Consistency is important to ensure that breaches of equivalent rules are treated fairly and consistently, regardless of the type of contract. I therefore urge that the amendment be withdrawn.”