NCF Consumer Congress 2017 brought experts from around the UK together to explore what Brexit means for consumers. Our aim was to send a clear message to the government about the importance of consumer protection, and what needs to be done to maintain and enhance this. Brexit provides a unique opportunity to take a fresh look at consumer protection in the UK, to change the way that consumer issues are addressed, and bring positive benefits to consumers and the UK economy.
The European Commission is asking the question “The Services Package: Is the EU on the right track?” As President of ANEC, the European Consumer Voice in Standardisation, I presented a consumer view to a policy dialogue at the European Policy Centre on 1 March 2017. Although this EU initiative on the delivery of services within the EU focusses mainly on barriers for professionals, it is possibly a step forward for consumers. However, our primary concern is that there is still no legal framework to ensure the safety and fitness for purpose of EU services.
More and more service provision is cross-border, with most consumers believing the rules on safety are the same across the EU. Unfortunately they are not, so many service providers do not take the needs and expectations of consumers properly into account.
Without a European legal framework for quality, safety and liability of services, European standards will not be able to provide a level playing field for businesses and consistent protection for consumers. With national regulations continuing to take precedence, the result will continue to be legal uncertainty as well as business and consumer detriment.
EU framework legislation ensures the safety of consumer products across the EU. The standards that underpin the legislation ensure a level playing field for business and acceptable levels of safety and product performance for consumers, wherever they purchase their products within the EU. No such comparable legislation exists for the safety of services, leading to legal uncertainty as well as to business and consumer detriment. Whilst consumers find the services situation unacceptable, we can be confident of two things: Firstly, consumers products complying with EU legislation and standards are generally safe across the EU, and secondly, that the European Commission is working to improve the safety of services, although Member States are slow to recognise the benefits to business and consumers from the harmonisation of rules.
How will Brexit affect this dynamic? To trade within the EU British products will need to meet the EU legal requirements and standards. If the UK rules diverge from these requirements we shall no longer be able to sell into the EU without additional costs, and may end up with a series of different rules for different markets and further additional costs to meet these differing standards. Applied to the consumer product sectors, divergence will add to UK business costs. This needs to be avoided.
In the services sectors where improvements can be expected within the EU, the UK will not have a seat at the EU table to influence legislative improvements as they develop. This could disadvantage UK businesses and add costs due to our lack of influence.
Recourse to international standards (ISO/IEC) will mitigate these costs to some extent but will not fully compensate for the loss of influence at European level.
What does an EHIC card provide?
Twenty-seven million of us have a European Health Insurance Card (EHIC) which entitles us to free or reduced- cost medical care if we are visiting European Economic Area (EEA) countries (includes Iceland, Norway and Liechtenstein in addition to EU members) or Switzerland. Effectively, this means that visiting patients are treated in state hospitals as if they were residents of the country they are visiting. Britons who have retired to live in the EEA or Switzerland are likely to be holders of an S1 Certificate, in effect a longer-term version of the EHIC, which provides healthcare for British retirees in receipt of a UK State Pension on the same basis as citizens of the country to which they have retired.
When we leave the EU, what will happen to these reciprocal social security schemes?
What would be the impact of a Hard Brexit?
The EEA permits free movement of people within the Area. A Hard Brexit focussed on immigration and border control, would mean that Britain would no longer be a member of the EEA. Unless we were to remain in the single market and permit free movement of labour, like Switzerland (which is neither an EEA or EU member) it seems unlikely that we will be able to retain the EHIC or S1 Certificates. On the other hand, the EHIC encourages British tourists to visit Europe, generating significant income for other EU member states, so perhaps there may be some room for manoeuvre in Brexit negotiations.
What is likely to happen to travel and healthcare insurance costs post-Brexit?
Currently, insurance companies recognise that a considerable portion of potential healthcare costs are covered by an EHIC, which helps to keep travel insurance costs down. Some insurers will even reduce or waive your excess if you have an EHIC. It is very probable that the cost of travel insurance will increase if EHICs are abandoned. Additionally, closure of the S1 scheme would mean that the 400,000 or so British pensioners living in the EEA would have to fund their own healthcare. This could result in many of them having to return permanently to the UK to be able to obtain treatment under the NHS, either because of the high costs of health insurance or because they are uninsurable due to poor health. Loss of the EHIC would not only mean increased travel costs for British tourists visiting European destinations, but also mean increased travel insurance costs for European visitors to Britain. The implications are that British tourists may elect to holiday in the UK, or select non-EEA holiday destinations and European holiday-makers may think twice about visiting the UK.
Should the government lobby the EU to allow the UK to retain EHICs as part of Brexit negotiations?
Brexit – RRegulation an opportunity for the UK to get it right
UK Consumers are about 66% of the UK economy spending over £1,200,000,000,000 per annum.
How we are served by both public and private sectors of the economy is fundamental to the UK’s success, our prosperity, better jobs, more money in our pockets, not being scammed and being able to do want we want and not what others force us to do.
UK regulation of all this will be different post Brexit and the NCF has a thought provoking paper on the likely expansion of UK regulation post Brexit and what we should be doing about it The Consumer and Brexit – Regulation and Regulators: are we worried?
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