HC Deb 03 May 2001 vol 367 cc968-70
5. Mr. Simon Hughes (Southwark, North and Bermondsey)

What plans he has for reviewing the rights of consumers after (a) bankruptcy and (b) insolvency. [159062]

The Minister for Trade (Mr. Richard Caborn)

I have no such plans at present.

Mr. Hughes

That is not good enough. With that kind of answer, the Minister may not even get re-elected.

I have a constituent on jobseeker's allowance, and another who is a pensioner, who each lost about £1,000 deposit when they paid for some furniture offered for sale by Uno for World of Leather, which went into liquidation in March 2000. They are entirely dissatisfied, as are thousands of consumers, because the companies appear to have known that they were going into insolvency when they did the business. They reformed within two weeks, having been sold on to another company, and reopened as New World of Leather.

If the customers had been able to pay by credit card, they might have been protected. As they were not able to do so—as many poorer people are not—they had no protection. The law needs fundamental change. Can the Minister be much more effective, much less complacent and promise some action from Labour, because otherwise it might have to come from someone else?

Mr. Caborn

The hon. Gentleman raises a serious question. Some 21,000 customers of Uno were affected and we immediately asked the administrators to submit a report to the Secretary of State. An interim report was submitted in September 2000 and our insolvency service started working on the question of disqualification. The final report was submitted in April and we shall now consider what action to take on the disqualification of directors. In conjunction with the Office of Fair Trading, we are considering a new code, and a consultation document has been issued. The Government believe that the voluntary code of practice can still play an important role.

As the hon. Gentleman said, those with credit cards have some safeguard when paying a deposit if it is more than £100, and we recommend that people ensure that it is. We are taking action to ensure that rogue traders are rooted out and, if necessary, disqualified. I remind the House that some 2,800 directors have been disqualified in the past two years.

Mr. Andrew Reed (Loughborough)

It disturbs me to agree with the hon. Member for Southwark, North and Bermondsey (Mr. Hughes), but he and I, like many other hon. Members, have constituents who suffered as a result of the closure of World of Leather. I urge that action be taken for the sake of the consumer and for people such as a constituent of mine who runs a small engineering business. He was recently affected by the closure of Wadkin of Leicester, which left him with a £46,000 debt from that company. My constituent's company may go under as a consequence, yet Wadkin knew full well that it was going under at the time. Much more protection should be given to small businesses and individuals in that situation, and I urge my right hon. Friend the Minister to build on the code of conduct and consider further legislation in the next Parliament.

Mr. Caborn

As I said, a consultation document has been issued by the Office of Fair Trading, and I agree that we need to try to tighten up the operation of the code. However, we do not want to place an undue burden on business because the customer will have to pay for whatever policing we put in place. We will try to root out unacceptable behaviour through the voluntary code, and we are consulting with all parties to try to toughen the code of conduct.

Mr. Richard Page (South-West Hertfordshire)

Instead of giving such a weak and spinning answer to the hon. Member for Southwark, North and Bermondsey (Mr. Hughes), why does not the Minister apologise for the fact that the Government have broken their promise to introduce a consumer Bill in this Parliament? Why does he not say, "We are very sorry, but we have produced only half an insolvency Bill because we were late sending out the second half of the consultation"? Why does he not apologise for spending £200,000 and more persecuting a poor hapless Sunderland fruit and vegetable trader for the heinous and terrible crime of selling 34p worth of bananas in pounds rather than in kilograms? It takes a man to apologise, and I invite the Minister to be such a man.

Mr. Caborn

I think that is from the World of Leather to the world of blather. The hon. Gentleman has excelled himself in probably the last Trade and Industry questions in this Parliament, and I shall treat his remarks with the contempt they deserve.

Mr. Dale Campbell-Savours (Workington)

The first Bill on which I worked after my election in 1979 was the one that became the Competition Act 1980. We discussed this very issue during our proceedings, and for 20 years since then Back-Bench Members of all parties have pushed successive Governments on the matter. I will not be in the next Parliament, but may I express the hope that the Government will really sort the problem out? It is a major problem, and consumers all over Britain are very angry.

Mr. Caborn

First, may I, on behalf of the House, thank my hon. Friend for what he has done at Question Time while he has been a Member of Parliament? He has successfully probed many a Minister standing at the Dispatch Box. I know that my hon. Friend has campaigned for 20 years for consumer protections, and that is to his credit. When the Government are re-elected, I hope that we will take on board the serious comments that he has made over the years, and that we will be able to encapsulate that in the action that we take.