Examination of witnesses (Questions 460
- 479)
TUESDAY 31 MARCH 1998
MS D WHITWORTH,
MS M WINFIELD,
MR B MIDDLETON
AND MS
O KLEVAN
460. But it may well be relevant in the
mind of the consumer who would rather like to know that the proprietor
has never been found wanting and therefore he is at minimal risk.
(Ms Winfield) There are reasonable expectations
of consumers and maybe there are expectations which might not
be reasonable at the time. If someone has re-opened and has a
clean bill of health then arguably their past history is not relevant
at that point. What one would hope is that the inspection process
was sufficient that they would be protected from that restaurant
sliding back into its bad behaviour.
461. What if that restaurant had been closed
and re-opened on three occasions in five years? Would that become
relevant?
(Ms Winfield) It is probably more relevant to
the inspection process. May I just go back to cowboy builders?
I have a letter here from the Chief Executive of the Local Authorities
Coordinating Body on Food and Trading Standards, known as LACOTS
which talks about the very issue: how much information trading
standards officers do feel able to give people. What he says is
that they would like to give people more information but then
he sends me a list of several Acts, the Fair Trading Act, the
Prices Act, the Trades Descriptions Act, et cetera, which prevent
them and leave them open to legal action for giving away certain
types of information. The point he is making is that it is very
unclear now what sort of information they are able to give consumers
and what they are not. We would hope that the Freedom of Information
Act would provoke a review so that they are absolutely clear about
what information they can give because the feeling was that there
is information that they could give that they are afraid to give
now. The lines need to be drawn more clearly because it is in
consumers' interests sometimes to know.
462. Although you would argue that a restaurant
should display the notice I was referring to, the consumer is
perfectly entitled to ring the environmental health officer and
ask whether the premises have a record. This touches this point
about active disclosure as opposed to access to information.
(Ms Winfield) The point we are making is that
it needs to be clarified whether the trading standards officer
at that point or the environmental health officer would be able
to give that information. It is not clear at the moment.
Mr Shepherd
463. And in the White Paper it is not clear.
(Ms Winfield) No.
Chairman
464. Do you think that at the end of the
day freedom of information to some extent replaces regulation
in the sense that if the consumer knows that the risk is such
and such, if the mathematical, scientific data were available,
the one in six million chance of catching new variant CJD, they
can make their own mind up, or similarly with cigarettes, one
in 50,000 chance of getting lung cancer, they make their own mind
up? You do not need to ban things you merely need to put the information
on the package or the cut of meat or whatever to say this is the
risk, this is the hazard. Do you think to some extent freedom
of information pushes you towards the point where Government does
not have to nanny people so much because they are informed and
can make the decision as to whether to take the risk of killing
themselves or whatever from this or that hazard?
(Mr Middleton) One certainly wants the position
where consumers are in a position to make more of those decisions
themselves. There are always going to be some areas where that
is never likely to be possible. One area we have been very closely
involved in is the financial services market where you are talking
about hugely complicated and complex products coupled with people
who are not necessarily going to feel the implications of a bad
decision for some years to come coupled with people who are actually
marketing, trying to market, poor products and using confusion
marketing to do that, purposely making a product impossible to
understand.
465. Not something we ever do in politics!
(Mr Middleton) Not something we ever do in the
consumer movement either!
Mr Bradley
466. It is a very difficult area which we
have opened up here which has to do with disclosure. Somebody,
government or otherwise, still has to take the decision as to
whether disclosure is merited in the public interest. Those decisions
will always be arguable and will place the onus on the citizen
to find out what he or she does not know.
(Ms Whitworth) In the area of risk, it is very
difficult for consumers to make decisions. The risk about smoking
a cigarette is probably pretty clear. The risk about eating beef
is not particularly clear at any particular moment. That is where
government has to make decisions for consumers because when we
go out and buy beef, we do not know whether that piece of beef
is going to hurt us. When we smoke a cigarette we do and those
are very different sorts of decisions.
467. Government also has to interpret complex
information for people who, even if it were presented to them,
would not necessarily be in a position to know.
(Ms Whitworth) Yes.
468. Ought this legislation to apply to
the private sector as well as to public agencies?
(Ms Winfield) We certainly feel that it should
apply to any private sector company which is carrying out any
sort of a function on behalf of the state. That is an increasing
number of private sector companies as the state pulls back the
services it provides and contracts out more frequently. There
is a great number of private sector companies which are going
to be covered in one way or another by the legislation. Whether
it should come to the whole of the private sector is beyond our
horizons; it is not something we have considered the full implications
of. There will be enough for us all to get on with to see how
that works with the private sector companies which are caught
up in the Freedom of Information Act. What we would hope is that
the Freedom of Information Act will create a public expectation
of more openness. Certainly we should like to see much more information
about the activities of companies, for instance all private sector
companies, published in their annual reports. We hope that the
Freedom of Information Act will create a public expectation which
will eventually make that happen either voluntarily or maybe in
the future by statute.
469. To return to my example of the restaurateur,
if a restaurant is entitled from time immemorial to publish the
bouquets it has won, ought it not to be required also to indicate
where it may at some stage have failed? Does that not help consumers
make informed choices? Maybe a restaurant is a bad example.
(Ms Winfield) There are things like companies'
pollution convictions, health and safety convictions, things like
that which we should certainly like to see.
470. Alongside the charter mark on the front.
(Ms Winfield) Yes, alongside the charter mark
and all the kudos and alongside how much money they have given
to an environmental award or something like that or an environmental
project, we should like to see whether at the same time they are
dumping gallons of toxic waste into the local river. We should
like to see that information in the public domain. This is the
first step. In the way that the charters made a real cultural
change in people's attitudes toward what services they were entitled
to expect from both public and private sector service providers,
I think we have great expectations that freedom of information
will cause the same sort of change in public attitude.
471. You would like to see that following
on; not as part of but following on from freedom of information
legislation.
(Ms Winfield) It would certainly merit a review
once we have seen the Act up and running to see how much further
it could be taken.
Helen Jones
472. May I take you on from there? You were
talking about private sector companies which carry out activities
on behalf of government. I am particularly interested in how this
legislation will operate in respect of the privatised utilities.
I should be interested in hearing from you first of all exactly
what kind of information you think the public need to have access
to and also how that will interact with the functions of the regulator.
Should we be looking at disclosure which just covers regulated
functions or the non-regulated ones as well? Where do the consumer
interests lie? How is that going to interact with the whole question
of commercial confidentiality which those privatised companies
will no doubt pray in aid for not disclosing certain information?
(Mr Middleton) The issue from the consumers' perspective
is very much about ensuring the regulation is being done properly.
The regulators themselves in the past have identified the problems
they face with the interaction between the regulated part of utilities
and the unregulated part of the utility; issues such as transfer
pricing, using contracts to transfer profits from one part of
the organisation to the other and cost allocation is a problem
Ian Byatt recognised in respect of the water industry in a report
in 1996. We should very much like to see the requirements of the
Act extended to those parts of the unregulated bits of the business
which interact with the regulated bits of the business. How widely
you cast that is clearly going to create problems. One example
is Severn Trent Water who own BIFFA which is a waste management
company. There are clearly problems of cost allocation between
research and development costs there, between sewage treatment
by BIFFA and sewage treatment by the water side of the company.
It is going to be important for the regulator to be able to get
access to that information. It is also going to be important for
people to be able to make sure the regulator is dealing with that
and making decisions about price levels for that utility company
on a sound basis.
473. It appears to me that consumers have
slightly wider interests than that. Let us take the whole question
of the drops in water pressure which was in the news recently.
There is a case in my own constituency where the firemen said
they could not get the hoses to work properly because the water
pressure was too low. Consumers surely have an interest in that
kind of thing because they have an interest in whether their fires
are going to be put out. How would you envisage that sort of information
being dealt with?
(Ms Winfield) That would be information on policy
decisions which would probably be disclosable under the FOI Act.
We do not know yet but that is the assumption we would make that
that information from privatised utilities would be disclosable.
We do quite a lot of work on the privatised utilities and our
specialist on that was very keen that I put forward our views
on the utilities and we are going to leave you with a couple of
reports which we have produced. Money always flows from regulated
businesses to parent companies and sometimes back. We need to
be able to track it. For example, in the past few years we estimate
that water companies have transferred £5 billion to parent
companies, of which £3 billion went to the shareholders and
we were not able to track what happened to the other £2 billion.
We need to be able to track finance to ensure that price controls
are as stringent as they should be. Domestic consumers provide
the bulk of the revenue of the utilities and they are entitled
to see what use is made of the money. They need to know in general
if the company's behaviour is in the interest of consumers. We
need to be able to check for anti-competitive behaviour. For instance,
you often have a parent company owning a regulated business and
owning various services which could be provided to that regulated
business. We need to know that those services are being bought
through open competition and not because of a relationship between
an owned service provider and the core company and the parent
company. Also it is not enough just to disclose the information.
What we have found is that it is impossible to track money because
the way the parent company keeps its accounts is different often
from the regulated business. It is very difficult to follow money
through the businesses and there needs to be some rationalisation
of the way that accounts are kept. We are going to be doing a
case study of one utility company which will be available, and
we will make available to the Committee, in four to six weeks,
which illustrates the problems we found. Finally, in the United
States there is no commercial confidentiality in relation to public
utilities. Consumers can even see the minutes of meetings between
the company and the regulator where prices are fixed and to our
knowledge this has not caused the downfall of any American utility
company.
Chairman
474. That is not true in this country.
(Ms Winfield) No. Even in the most competitive
utility market, telecoms, BT still has an 80 per cent share of
the market and that is in the most competitive utilities. We are
not looking at a time in the very near future when there will
be so much competition that we will think about abandoning the
FOI element.
Helen Jones
475. That is a very interesting point and
I agree with what you are saying but it raises two questions,
does it not? If you have public utilities and then subsidiary
companies how would you suggest dealing with the question of commercial
confidentiality in the subsidiary companies because if you are
talking about tracking the money and looking at decisions on buying
in there are all sorts of complicated relationships
there? The second question is how could that sort of information
be made available in easily digestible form to the consumers because
you are talking about tracking fairly complicated financial transactions,
are you not? If we are talking about the consumers knowing where
their money goes, which is quite right, how could that information
be made easily available in a digestible form to them?
(Ms Winfield) What happens in the United States
is that it tends to be groups like Consumers' Association or the
National Consumer Council which process the information and make
it available to consumers for a specific purpose and that is when
prices are fixed. Prices are often fixed in open meetings and
consumers' groups or individual consumers if they want to are
able to feed into that based on the information which has been
got through the FOI Act digested by consumer organisations and
then given to them to inform their input.
Mr Campbell
476. The NCC said with regard to the security
services that the blanket exclusions on disclosure should be abandoned
in favour of exemptions for specific harm, subject to a public
interest override. I am trying to find out what you are looking
for. We know it is going to be very difficult to get any information
about the security services. I am just trying to weigh up what
you are looking for from the service or what you think will be
exempt.
(Ms Winfield) There has been quite a lot of uncertainty
based on whistleblowers about some of the actions of the security
services and some of the policy decisions about who should be
put under surveillance, for what reasons. There are all sorts
of policy decisions about the security services, apart from the
actual investigations which would imperil national security, which
should possibly be open to public scrutiny. We certainly feel
that it is against the spirit of the Act and what the Act is trying
to achieve and the overriding objective of the Act to have a blanket
exclusion for any area of activity, provided that it is not going
to cause substantial harm to an identified interest.
477. Let me give you a scenario. There is
obviously a file on me in the headquarters and I am a consumer
and I want to get these files, maybe 20 letters, documents, maybe
tape recordings, phone tapping, whatever these people do. It is
all related to me personally. What chance do I have of getting
that information under the Freedom of Information Act?
(Ms Winfield) It very much depends on how the
Act is framed. If you were the subject of an active investigation
then you would be hard pushed to get anything under the Act as
it is going to be framed now, or even under our scenario. If you
were the subject of an active investigation then there would obviously
be substantial harm in you finding out that information at that
time.
478. The harm would be me finding out the
information they hold personally on me.
(Ms Winfield) If there were a policy that certain
MPs from a certain party, who were considered by perhaps the party
in power to be undesirables, should be put under surveillance
for something the public would not consider a justifiable reason,
then that sort of a decision should be potentially disclosable
so that it could be discussed. There are administrative functions,
there are policy decisions, there is actual investigative work,
there are actual deep security activities. They need to be separated
out in the same way they do with the police. We do not feel that
every activity of the police, even in its investigations——
479. The information held on a person should
not be released if it is a detriment to the security of the country;
that goes without saying. I agree with that. But that does not
mean if it is something that happened 20 years ago and I was under
surveillance 20 years ago that is going to harm the country, so
why can that not be released?
(Ms Winfield) Under our scenario, if it were not
going to cause substantial harm then it could be released. What
we are saying is that we would agree that instead of a blanket
exclusion there should be some sort of weighing process in the
same way that there is going to be a weighing process for other
types of information.
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