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Consumer Rights

I am grateful, Mr. Sheridan, for this opportunity to discuss consumer rights. I shall highlight three constituency cases, in each of which an individual or group has been treated badly as a consumer, and then suggest how each problem might be dealt with. They are very different, and there is no common theme, but this is too good an opportunity for me not to raise issues that have caused me and those constituents great concern. Although there is no common theme, I shall conclude by making some general comments about and suggestions for improving consumer protection. The first issue that I want to cover is the problems frequently faced by people who buy newly built houses from a developer. I raised the issue first in a debate in April 2002, less than a year after I became an MP, and again just over a year ago in February 2008. The problems may be numerous and include lengthy failure, sometimes over years, in getting snagging work completed; dates of entry being delayed time and again; serious defects, such as flooding, not being dealt with; problems with property management companies, and so on. I will not go into all of them in full detail this morning as I have covered them before. The particular problems that I want to raise this morning were highlighted for me in the case of the Corinthian Quay development at Granton harbour in my constituency, to which I referred at length during my debate in February 2008. There were water supply problems, sewage coming through floors, and external finishes and areas not completed. I will not go into all the problems, except to say that some of them were first reported by residents in early 2005 but have still not been dealt with. After I highlighted the specific case of Corinthian Quay in my previous debate, there seemed to be some movement. Two senior directors of the development company came to my office and promised action. For a while, things seemed to improve, but that did not last long and residents told me that the situation deteriorated again. Earlier this year, on 20 February, there was a dramatic development. My constituents discovered that the company from which they thought they had bought their houses and would receive after-sales service was not Elphinstone, but its wholly-owned subsidiary, Holyrood Services Ltd, even though all communication with residents had been from a company going by the name of Elphinstone, and its name was on all the sales and marketing boards around the site. The original seller's brochure made no reference to Holyrood Services Ltd, but referred only to Elphinstone, saying that over 10 years it had built up an enviable reputation for its ability consistently to initiate and manage high-quality residential projects. All correspondence seemed to come from Elphinstone, as did the packs given to would-be buyers. Indeed, my correspondence was with Elphinstone and not the mysterious Holyrood Services Ltd. However, it turned out that the eventual contract between the purchasers and the building company was with Holyrood Services Ltd, not Elphinstone, with which they thought they had been dealing. On 20 February, matters moved on dramatically, and the residents discovered that Holyrood Services Ltd had gone into administration, while Elphinstone had escaped scot-free from any liability, reducing the chance of a satisfactory outcome for the residents. The National House-Building Council became involved and, to be fair, seems to be actively dealing with the problems, but the residents are not certain whether all the outstanding issues will be dealt with because, for example, they complained not to Holyrood Services Ltd, as they should have done formally under the terms of the NHBC guarantee, but to Elphinstone, the parent company, which seems to have walked away from the problems. That experience highlights three issues. First, there are clear questions about the way in which Elphinstone seems to have been able to escape its responsibilities using a front company, Holyrood Services Ltd. That happens in areas other than building, but I would like a request to be conveyed to the Minister that his Department urgently investigate the circumstances in which builders—in this case, Elphinstone—are apparently able to evade their responsibilities by using a subsidiary. Will the Minister investigate whether that arrangement is legal, and whether his Department can take any action in this case?