Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss the following:

Clauses 246 and 247 stand part.

That schedule 19 be the Nineteenth schedule to 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.

Can the Minister clarify from when the Government expect these specific clauses to be implemented?

From the—first we have to get Royal Assent, of course—

With immediate effect?

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.

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. 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 245 provides an overview of this chapter, which centres around duties on traders in relation to subscription contracts and the rights of consumers if those duties are breached. The chapter also introduces further rights and protections for consumers in relation to subscription traps, specifically regarding the right to cancel contracts during cooling-off periods, and the information that must be made available to consumers.

We welcome the principles of the chapter and I note that before the Bill was bought before the House, the Labour party had already announced that we would legislate in government to tackle subscription traps and protect consumers, particularly in the light of the Conservative cost of living crisis, because we know that things have become worse for consumers. Any time the Government want to adopt a Labour proposal, we will welcome it. We have tabled some new clauses in this area, which I will come to later.

Let me start by welcoming the action on subscription traps taken by the Government so far in the Bill. As I said before, Citizens Advice estimates that £306 million a year is spent on unwanted subscriptions in the UK, so we need to act and, in that spirit, to work constructively with Ministers to ensure that the measures are as robust as possible.

Clause 246 defines the scope of subscription traps, which are defined as a business-to-consumer contract for the supply of goods, services and digital content that either auto-renews for an indefinite or fixed period or contains a free trial or specified reduced price for a specified period in the contract, after which time the contract renews and the consumer becomes automatically liable for payments. We welcome the definition and the important inclusion of subscriptions that start with a free trial, a technique that is commonly used. However, I want to press the Minister on subsection (1), which sets out that

“a subscription contract is a contract between a trader and a consumer”.

The Minister will probably have a straightforward answer on how business-to-business subscriptions are covered. There are plenty of instances where a business may pay for a subscription, so I would welcome assurances about how businesses are covered, particularly smaller businesses and those run by the self-employed.

Clause 247 sets out that certain types of contracts are “excluded contracts”, meaning that they are not subject to the regulations in this chapter. We see the clause as necessary to ensure that certain types of subscription are not affected by the Bill, specifically subscription contracts for which it would be impractical for the regulations to apply. We welcome the power in the clause and recognise the need for the Secretary of State to have the flexibility to add other types of contracts to the list of excluded contracts, which is subject to the affirmative procedure. The clause sets out that if a contract is listed in schedule 19, it falls under the definition of an excluded contract.

Included in schedule 19 as excluded contracts are utility bills such as those for electricity, gas and heating, as well as medical prescriptions, insurance, rent payments and childcare, among others. We understand some of the reasons for those common-sense exclusions, but can the Minister tell us whether the Government have consulted relevant stakeholders on the exclusions? Were there any suggestions to include in the schedule contracts that have not made it into the Bill?

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.[This section has been corrected on 20 July 2023, column 13MC — read correction]

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.