Government will fight Brussels over EU consumer rights law

The House of Lords has backed the Government's position, saying that it should not support a Directive that erodes UK consumers' rights.

UK consumers have the right to reject goods if they are faulty or not fit for purpose and receive an immediate refund. The Commission's proposed Directive says that retailers can instead choose to repair or replace goods.

The Government ran a consultation process to find out what the views of industry and consumers were about the proposed changes. It has now published its view in the aftermath of the consultation responses. It wants to fight for UK consumers' refund rights, it said.

"We remain concerned that the Commission’s proposal on consumer remedies for faulty goods would result in a significant reduction in consumer protection," it said. "We will continue to work to secure an amendment to the Directive to allow the 'right to reject' to be retained in the UK."

The Directive is proposed as a 'fully harmonised' one, meaning that all countries would have to adopt its provisions and ensure that its own laws did not conflict with it. The Department for Business, Innovation and Skills said that it hoped not only to secure the UK's right to give its consumers the right to reject, but that it would argue for making that compulsory across the EU.

"[We will explore] the possibility of introducing a fully harmonised 'right to reject' which will be available to consumers across the EU," said its consultation response. "We are optimistic that we will be able to achieve a satisfactory solution."

The House of Lords's European Union Committee has backed the Government position in its own report, which says that the UK should not agree to a proposed Directive that erodes consumer rights.

"We … recommend that the protection offered by the existing Directives covered in this proposal should be taken as the base upon which to build," said the Lords report. "We consider it of utmost importance that the overall level of protection afforded to consumers should not be reduced."

The Lords Committee not only sought to protect consumer rights but also cast doubt on whether or not the proposals would have the intended effects.

"We are not convinced that by itself the action proposed by the Commission (that is, harmonisation of consumer law across the EU) will necessarily boost cross-border retail trade as the Commission desires," said the report. "We recommend that the Commission gives further consideration to other factors, such as language, culture, distance of delivery and handling of cross-border complaints, and the extent to which these may also be responsible for current low levels of cross-border retail trade."

Seperately, the Government is also creating a new Consumer Rights Bill which it says will go further than the proposed Directive in protecting consumers. In a White Paper published earlier this month it vowed to appoint a Consumer Advocate with powers to sue on behalf of consumers and to change the rules for selling digital downloads.

The Government said that the Commission's proposed new EU law should cover not just some goods but also services and digital downloads.

"We believe there are strong grounds for fully including services, mixed products and digital products within the scope of this Directive," said the BIS response to its consultation results. "We agree that these are complex issues and it would take time to get the provisions right, but feel that we should not miss the opportunity to agree a Directive which fully addresses the whole consumer experience and takes account of the rapid developments and growth in the market for digital products, especially as these are products which are particularly suitable for cross-border selling via the internet."

The Government said that as well as enshrining the right to reject faulty goods, it wanted the Commission to change the proposed Directive so that consumers and not businesses could choose what action to take. The Government also insisted that there should be clarity about any automatically unfair contract terms named in the law.