I am going to elaborate on that when I discuss digital measures. The hon. Gentleman is quite right: there are different consumer protection arrangements for the DVD—the physical equipment—and for content. The measures in the Bill specifically relate to how we strengthen protection on content.
The Bill was published in draft last summer and, as I have acknowledged, we are grateful for the feedback we received as a result of scrutiny, particularly by the Select Committee on Business, Innovation and Skills. Many of its recommendations are reflected in the Bill before the House, and I believe that it has been improved as a consequence of that scrutiny.
The first main measure in the Bill deals with goods, which are a critical part of the economy. There are roughly 350,000 retail businesses, but much of the law pertaining to this area is 30 to 40 years old. We have tackled the complexity that makes compliance burdensome for companies and confusing for consumers by setting out in one place the standards that have to be met. For example, we have defined a 30-day period within which goods have to be inspected. We have made it clear that, where consumers have a faulty item repaired or replaced, that repair or replacement must remedy the problem the first time round, or they can insist on some money back. Survey data show that all but 6% of faulty goods can be remedied the first time round, but we have embedded that in a clear set of rules.
We often hear, for example, about consumers trapped in a cycle of repairs that fail to fix a fault. Which? recently reported a case of a car owner who had fault after fault after fault, but he was consistently fobbed off
with further repairs that failed each time to fix the fault. Under the Bill, that will not arise, as we will narrow down the obligations.
The hon. Member for Stoke-on-Trent South (Robert Flello) asked about digital content. There is a good deal of legal uncertainty about consumer rights in relation to digital content, which is unacceptable in a rapidly growing segment of the economy with a turnover of around £200 billion. That is why we have introduced a new category of digital content with a set of quality rights. As I said, we need a distinction between the way in which we protect content, which is intangible, and the way in which we protect goods, such as DVDs, which are tangible and are dealt with under the goods provision.
For example, many people now download music albums, but if one of the tracks is corrupted and will not play, it is not clear what they are entitled to. Under the Bill, they are entitled to a repair or replacement of the digital content and, if that does not fix the problem, they will get their money back. This is a complex matter, and we recognise that, in relation to complex software, for example, there are flaws—that is the nature of the business—but we have tried as far as possible to narrow down the areas of fault and consumer obligation. Clear digital rights are good, not just for consumers but for responsive businesses, particularly new market entrants—a key part of the industry—which will find it easier to attract customers, even if they are not an established brand, because they can establish a track record in consumer service underpinned by the legislation.
Another part of the Bill deals with consumer protection in relation to services. We know from reviews by the Law Commission that the law governing the provision of services is difficult to understand and, when things go wrong, there is no statutory redress regime to put them right. However, we are talking about 75% of the British economy. That is why the Bill provides new statutory rights and introduces new statutory remedies when things go wrong. There is a great deal of debate about the specifics: the Business, Innovation and Skills Committee has suggested a statutory quality right, which we looked at, but we found it too complex. We considered the evidence from Australia, and we are certainly happy to engage in further debate on the matter.
As an example of how the new rights would apply, we can look at the case of cowboy builders. Almost all of us have dealt with such cases in our constituencies, and they cause particular anger. A cowboy builder is doing domestic work and altering someone’s bathroom. They start the work, but there are problems, with debris strewn around the house and disruptions to the water supply. Currently, it is unclear what the householder is entitled to, and a lot of frustration flows from that. Under the Bill, there will be a statutory right to ask for a poorly performed service to be redone if possible. If it cannot be redone within a reasonable time or without significant inconvenience there is a right to money back. I stress the example of cowboy builders, as I think that the hon. Member for Walthamstow (Stella Creasy), who may well want to discuss this, issued a press release this morning in which she singled out cowboy builders and said that there was no reference to them in the Bill. In fact, these measures will improve significantly consumer protection in that area.
Another area in which the Bill introduces reform is unfair contract terms—essentially the small-print problem. Legal ambiguity arises from recent landmark court
cases—the so-called banks case in particular—and our reforms endeavour to protect consumers from the small print while making it easier for businesses to understand how they can prevent contract terms from being challenged in court. In a typical example, someone joins a gym in January with a lot of enthusiasm, but they have not read or fully understood the details of the small print. When they cancel the contract in March, as many people do—I seem to remember cancelling my gym contract rather earlier in the year—they have to pay for a full year’s membership. Currently, it is not clear whether a court would find that unfair. Under our proposals, it is clear: a court can find it unfair, and if it is unfair the consumer is not bound by it.
The reforms endeavour to make clear what the courts can and cannot consider in assessing fairness. In particular, we make it a key test that price and subject matter in a contract need to be transparent and prominent—the operative word is “prominent”—to ensure that it cannot be challenged for fairness in court.