Plans for a shake-up of consumer law risk adding complexity to the system for retailers and creating a less business-friendly environment, retailers have been warned.
As part of David Cameron’s drive towards ‘localism’, the Department for Business has issued a consultation document that proposes devolving many of the responsibilities for consumer law – currently held by the Office of Fair Trading (OFT) – to the Citizens Advice service and Trading Standards. The OFT’s current responsibilities cover key areas for retail such as inspections, age-related sales and distance selling regulations.
But the British Retail Consortium has warned that the proposals could work against retailers by creating an environment that considers only the consumer point of view, while also lacking the teeth to deal with genuine rogue traders at a national level.
Under the plans, unveiled by Business Minister Ed Davey, almost all Government funding for consumer information would pass to the Citizens Advice service, while enforcement powers would pass to a strengthened Trading Standards service.
However, Tom Ironside, director of business and regulation at the BRC, warned if the plans went through, there could be negative implications for retailers. “If you’re going to restructure, you need to restructure in the right way and it’s hard to see how this is going to work.”
He said that retailers had benefitted from the OFT having combined consumer responsibilities with its competition powers, meaning that the point of view of business, as well as consumers, has been taken into account. “It has always seemed to us very sensible to have a single body that looks at both sides in a balanced way,” said Ironside. “But our fear is that the focus of Citizens Advice will primarily be on consumers.”
Ironside added that the BRC was concerned whether Trading Standards – which has traditionally been organised at local level between nearly 200 local authorities – would be able to take on a national enforcement role in stamping out bad practice. “Based on the likely resources, Trading Standards wouldn’t be able to take on a cross-border and internet role, and will struggle to take on national cases,” said Ironside.
There are also concerns that, with 197 Trading Standards authorities around the country, retailers will be blighted by inconsistent interpretation and enforcement of consumer law.
The OFT is set to lose its powers as it is merged into a new Competition and Markets Authority, comprising the OFT and the Competition Commission. Ironside said that not all aspects of the new proposals on consumer law were necessarily bad for retailers, but that the BRC is consulting with members before submitting a formal response ahead of the Government’s deadline of September 27.