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Clause 10: The information function
48. Clause 10 sets out the third of the Council's core functions: to facilitate the dissemination of advice and information to consumers about the Council itself and its functions, and about consumer matters. The Secretary of State has power by order to add other matters in respect of which the Council is to exercise this function.
49. Subsection (2) gives the Council the power to make available that advice and information in any way it thinks suitable to bring it to the attention of anyone it thinks will have an interest, and also to work with other organisations to make the information available. Under clause 20 (described below) the Council is also required to enter into cooperation arrangements with other bodies, including the Office of Fair Trading and the Consumer Panels established by the Office of Communications ("the OFCOM Consumer Panel") 7 and by the Financial Services Authority ("the Financial Services Consumer Panel") 8. Such arrangements include those made to secure the coordination of activities relating to the provision of advice or information to consumers (see clause 20(2)).
7 i.e. the Consumer Panel which the Office of Communications ("OFCOM") is required to establish and maintain under section 16 of the Communications Act 2003.
8 i.e. the Consumer Panel which the Financial Services Authority ("the FSA") is required to establish and maintain under section 10 of the Financial Services and Markets Act 2000.
Powers of investigation
Clause 11: General powers of investigation
50. Clause 6(9) provides that the Council is not required to act for individual consumers (except in respect of disconnections - see clause 13). The Council is able to investigate complaints made by vulnerable consumers (clause 12). Clause 11 enables the Council to investigate a complaint by a consumer where the Council considers that the subject matter is of general relevance or may affect consumers generally or those of a particular kind.
Clause 12: Investigation of complaints by vulnerable designated consumers
51. Clause 12 provides that the Council may investigate a complaint made by a vulnerable consumer against a supplier. Subsection (2) defines a vulnerable consumer as an individual whom the Council is satisfied it is not reasonable to expect to pursue the complaint on his or her own behalf. This might apply to persons who are unable to pursue a complaint by reason of a mental or physical disability, a lack of basic skills (such as literacy) or due to their personal circumstances (such as a recent bereavement). If the Council thinks it is appropriate in order to help resolve the complaint, it may provide advice to the individual, or may make representations to the relevant supplier (subsection (4)).
Clause 13: Investigation of complaints relating to disconnection of gas or electricity
52. Clause 13 provides that a gas consumer may complain to the Council where the consumer's premises are disconnected or cut off by a gas transporter or gas supplier or where such action is threatened; or where the gas transporter or supplier refuses to reconnect the consumer's premises; or where there is a failure of a prepayment system. Similarly, an electricity consumer may complain to the Council where his premises are disconnected or threatened with disconnection by an electricity distributor, supplier or transmission licence holder or where the supplier etc refuses to reconnect the consumer's premises, or where there is a failure of a prepayment system. The Council must investigate any complaint made by the consumer, and must, if it thinks it appropriate, provide advice to the consumer or make representations to the supplier, distributor, transporter or transmission licence holder on behalf of the consumer.
53. The Council may refuse to investigate a complaint in certain circumstances (specified in subsections (4) and (5)).
Clause 14: Reference of matters to the Gas and Electricity Markets Authority
54. Clause 14 requires the Council to refer a complaint which it has the power to investigate under clause 11(1)(a) (complaints which raise general issues or affect consumers generally) or clause 12 (vulnerable consumers) or the duty to investigate under clause 13 (complaints about disconnections) to the Gas and Electricity Markets Authority if it considers that the Authority's enforcement powers may be exercisable in relation to the complaint. Having referred a complaint to the Authority, the Council is not obliged to investigate further until the Authority has had a reasonable opportunity to exercise its enforcement functions (subsection (3)). The Council is also obliged to inform a complainant if it considers that a complaint which has been referred to it relates to a matter which can be referred to the Gas and Electricity Markets Authority under the Gas Act 1986 (c.44) or the Electricity Act 1989 (c.29) (subsection (4)).
Clause 15: Reference of matters to the Postal Services Commission
55. Clause 15 requires the Council to refer a complaint which it has the power to investigate under clause 11(1)(a) (complaints which raise general issues or affect consumers generally) or clause 12 (complaints by vulnerable consumers) to the Postal Services Commission in certain circumstances, including where the Council considers that the complaint relates to the contravention of a licence condition.
Clause 16: Investigations relating to public post offices
56. The Council is specifically enabled by clause 16 to investigate any matter relating to the number and location of public post offices in any part of the United Kingdom.
Other functions of the Council
Clause 17: Reports by the Council
57. Clause 17 enables the Council to prepare and publish reports on any matter within the scope of its functions.
Clause 18: Secretary of State's power to require reports
58. Clause 18 enables the Secretary of State to direct the Council to prepare a report in respect of any matter that relates to consumer matters. The Secretary of State may publish these reports.
Clause 19: Advice, information and guidance
59. Clause 19(1) enables the Council to issue advice, information and guidance to improve standards of service to consumers and promote best practice in relation to complaint handling, or on any other matters related to the interest of consumers.
60. Subsection (2) enables the Council to publish advice and information about consumer issues if it thinks publication will promote the interests of consumers.
Clause 20: Duty to enter into co-operation arrangements
61. Clause 20 requires the Council to enter into co-operation arrangements with various bodies ("designated bodies"). The designated bodies are: the Office of Fair Trading, the Financial Services Consumer Panel, the OFCOM Consumer Panel and any other person designated by the Secretary of State by order. Subsection (2) sets out the matters which such arrangements should deal with. These agreements are intended to enable the Council and the designated regulators to work together in exercising their functions in relation to the provision of advice or information to consumers in areas where these functions overlap.
62. Subsections (4) and (5) provide that memoranda setting out each co-operation arrangement and any revisions must be sent to the Secretary of State. The Secretary of State must lay any memoranda detailing the cooperation arrangement received by him before Parliament (subsection (7)).
63. In addition to these cooperation arrangements, clauses 39, 40 and Schedule 1 paragraph 1(4) make provision about cross-appointments between the Council and the OFCOM Consumer Panel and the Financial Services Consumer Panel. This is also to ensure that the Panels and the Council work closely together.
Clause 21: Power to co-operate and give assistance
64. Clause 21 allows the Council to co-operate with or give assistance to any person if it thinks that doing so would contribute towards carrying out its own functions.
Clause 22: Voluntary activities
65. Clause 22 enables the Council to undertake other activities in addition to the functions described above. In particular, it has the power to give advice or assistance to others, including research or other services, in respect of any matters in which the Council has skill, experience or expertise. It may charge for services provided under this clause. This clause is intended to enable the Council to undertake paid work or other work for other persons (for instance research projects).
66. The Council is also given the power to establish a company or, subject to the approval of the Secretary of State to acquire an interest in one to exercise its functions under this clause (subsections (4) and (5)).
Clause 23: Supplementary powers etc
67. Clause 23 makes provision for the Council to do whatever it sees fit, apart from borrowing money, in the interests of performing its functions. However, the Council may not acquire or dispose of interests in land without approval from the Secretary of State except under a transfer of property scheme provided for in clause 35. Clause 35 gives the Secretary of State the power, in winding up the Gas and Electricity and Postal Services Consumer Councils, the existing National Consumer Council and the Consumer Council for Water, to transfer their property to the Council or another person.
Clause 24: Provision of information to the Council
68. Subsections (1) to (5) give the Council the power to serve a notice to require information from the persons specified in subsection (3), namely the OFT, a "designated regulator", any person who supplies goods or services in the course of business and any person or description of person specified by the Secretary of State. Designated regulator means the Gas and Electricity Markets Authority, the Postal Services Commission, the Water Services Regulation Authority and any other person prescribed by the Secretary of State (see subsection (9)). The Council may only request information that it needs for the purpose of exercising its
functions (subsection (2)). In making a request for information, the Council must consider the desirability of minimising the costs or any other detriment the request might cause for the person on whom the notice is served (subsection (5)).
69. Subsection (6) means that, if the Council requests information from the OFT or a designated regulator and they fail to provide the information requested, the Council may require the OFT or the designated regulator to provide a notice setting out the reasons for its failure to provide the information requested. The Council may publish that notice.
Clause 25: Enforcement by regulator of section 24 notice
70. Clause 25 provides that where a regulated provider in the electricity, gas, postal services or water sectors fails to comply with a notice served by the Council under clause 24, the Council may refer the matter to a person prescribed by the Secretary of State or to the sectoral regulator if no person has been prescribed by the Secretary of State (in both cases the "designated investigator"). The designated investigator must consider any representations made by the Council or by the regulated provider and must determine whether the provider was entitled to refuse to provide the information requested by the Council (subsection (4)). If the designated investigator determines that the provider was not entitled to refuse, then he must direct the provider to provide the information. Such directions are enforceable by the sectoral regulator (see subsections (7), (8) and Schedule 2).
Clause 26: Enforcement by court of section 24 notice
71. Clause 26 provides that where a supplier of goods and services (or a person to whom clause 26 applies by virtue of a provision made under clause 24(7)(b)) refuses to comply with a request for information served by the Council under clause 24, the Council may apply to the court for an order requiring the person served with a notice to comply with that notice. This does not apply where the procedure in clause 25 applies in relation to the Council's request for information.
Clause 27: Provision of information by the Council
72. Clause 27 allows the OFT, a designated regulator or a person specified by the Secretary of State to require information from the Council that is necessary for the purpose of exercising its functions. In doing so, they must consider the impact (including the cost) that complying with the request will have on the Council.
73. Subsections (6) and (7) mean that, if the Council fails to provide the information requested, it must give the person who requested the information a notice setting out the reasons for this failure, and the person requesting the information may publish the notice of reasons given by the Council.
Clause 28: Exemptions from requirements to provide information
74. Clause 28 enables the Secretary of State to prescribe exemptions from the requirement to provide information to the Council. The power to prescribe exemptions also applies to the Council's duty to provide information on request to the OFT, to designated regulators, and to any person specified by the Secretary of State by Order.
75. Subsection (2) means that no person may be required under clauses 24 or 27 or under a court order under clause 26 to provide any information or document which he could not be compelled to provide in legal proceedings. This is to ensure that the information gathering powers under the Bill do not apply to information that is subject to legal professional privilege.
Clause 29: Disclosure of information
76. Clause 29(1) brings the Bill within the general regime that protects information from improper disclosure and use in Part 9 of the Enterprise Act 2002 (c.40). It does this by adding the Bill to Schedule 14 of the Enterprise Act. The effect is that information which the Council obtains under the Bill will be restricted and it will be an offence to disclose information about the business of a company or the affairs of an individual unless Part 9 of the Enterprise Act 2002 permits it.
77. Subsection (2) adds the Bill to Schedule 15 to the Enterprise Act 2002. The effect is that information that is restricted under the Enterprise Act 2002 obtained under legislation other than the Bill can be disclosed to the Council to help it carry out its functions under the Bill.
78. Subsection (3) makes information obtained by the Council under powers in legislation relating to the gas, electricity and postal services sectors subject to the disclosure regime in the Enterprise Act 2002. Without these provisions the information would be subject to the regime in the Utilities Act 2000 or the Postal Services Act 2000 (c.26) respectively.
79. Subsection (4) states that the Enterprise Act 2002 restrictions do not apply when the Council makes information available or publishes it under various powers in the Bill and in the Gas and Electricity Acts. In these cases subsection (5) requires the Council to consult the individual or business affected first; and subsection (6) requires the Council in these cases also to have regard to the considerations in section 244 of the Enterprise Act 2002 before disclosing or publishing it. These requirements do not apply to the Council publishing information about complaint handling under clause 45 of the Bill or publication of statistical information about the performance of gas and electricity suppliers.
Abolition of Consumer Bodies
Clause 30: Abolition of "energywatch" and "Postwatch"
80. Subsection (1) abolishes energywatch.
81. Subsection (2) abolishes Postwatch.
82. Subsection (3) transfers the functions of energywatch and Postwatch to the Council.
83. Subsection (4) provides that certain references to energywatch and Postwatch in existing legislation shall be replaced with references to the Council established under the Bill. The existing consumer bodies have statutory functions under legislation (i.e. the Gas Act 1986, Electricity Act 1989, Utilities Act 2000 and Postal Services Act 2000) which the new Council will take over. In particular, there are a number of statutory requirements to consult energywatch and Postwatch on certain issues. In future, those requirements will relate instead to the Council. Subsection (5) introduces Schedule 3, which contains transitional provisions in respect of the abolition of energywatch and Postwatch. As the existing National Consumer Council is a company limited by guarantee, there is no need to dissolve this body under the Bill. Instead, it will be dissolved under the Companies Acts.
Clause 31: Designation of the Consumer Council for Water for abolition
84. Clause 31 gives the Secretary of State the power to designate the Consumer Council for Water for abolition. The Consumer Council for Water is the statutory consumer body established by section 27A of the Water Industry Act 1991. The Consumer Council for Water looks after the interests of consumers of water and sewerage services in England and Wales. An order designating the Consumer Council for Water for abolition must give the earliest date on which a transfer order or an abolition order under clause 32 may take effect. Before making an order under clause 31 the Secretary of State must consult the Consumer Council for Water, the Council, and anyone else that the Secretary of State considers appropriate. An order under this clause can be made only with the consent of Welsh Ministers (subsection (4)) and the order may not be made unless a draft has been laid before Parliament and approved by resolution of each House.
Clause 32: Transfer orders and abolition orders
85. Clause 32(1) gives the Secretary of State the power to make transfer orders and an abolition order in respect of the Consumer Council for Water. A transfer order is an order that transfers the functions of the Consumer Council for Water to the Council. An abolition order is one that abolishes the Consumer Council for Water. These orders may not take effect before the date specified in the designation order under clause 31. A transfer order or abolition order in respect of the Consumer Council for Water may be made only with the consent of Welsh Ministers.
Clause 33: Supplementary provision about transfer and abolition orders
86. This clause enables the Water Services Regulation Authority ("Ofwat") to modify water and sewerage undertakers' conditions of appointment and water suppliers' licences as a result of or in preparation for the abolition of the Consumer Council for Water or the transfer of its functions to the Council. The powers under clause 33 may only be exercised if the Consumer Council for Water has been designated for abolition under clause 31 (subsection (1)).
87. Subsections (2) to (6) enable conditions in an appointment or a water supply licence to require the company holding the appointment or licence to pay sums towards various expenses described in subsections (4) and (5). These include the expenses incurred in abolishing the Consumer Council for Water and transferring its assets and liabilities to the Council; in expanding and operating an OFT scheme (described further below) to cater for water consumers; and a proportion of the expense of the Council having regard to its functions in respect of water consumers.
88. Subsection (7) enables Ofwat to make other consequential and incidental modifications to the above conditions. This power might be used to substitute references to the Council for references to the Consumer Council for Water in licence conditions.
89. The reference to an OFT Scheme is included to cover Consumer Direct. This is a telephone and internet based consumer advice service supported by the OFT that offers advice on consumer issues. The intention is to expand the activities of Consumer Direct to deal with individual consumer problems in relation to water and sewerage in England and Wales if the Consumer Council for Water is abolished after consultation.
Clause 34: Compensation for loss of office
90. Clause 34 provide for the payment of compensation by the Secretary of State, with the approval of the Treasury, to members of energywatch, Postwatch, the Consumer Council for Water or the existing National Consumer Council who cease to be members of these consumer bodies because the bodies are abolished as a consequence of the measures in this Bill. Compensation may cover loss of office or loss or diminution of pension rights.
Clause 35: Transfer of property etc
91. Clause 35 and Schedule 4 provide for the Secretary of State or the existing consumer bodies to make transfer schemes to transfer property, rights and liabilities from energywatch, Postwatch, the Consumer Council for Water and the existing National Consumer Council to the Council.
92. Subsection (1) lists the bodies to which the section applies. Subsection (2) allows the Secretary of State to direct these bodies either to make a transfer scheme to transfer property, rights and liabilities to the Council, or to transfer specified property etc. to another specified person or organisation.
93. Subsection (3) provides that, before giving, varying or revoking a direction under subsection (2), the Secretary of State must consult both the consumer body from whom the property, rights and liabilities are being transferred, and the person to whom the property etc is being transferred (either the Council or another specified person).
94. Subsection (4) requires a consumer body which is directed to make a scheme transferring property to the Council to consult the Council before doing so.
95. Subsections (5) and (6) state that a transfer scheme must be approved by the Secretary of State before it has effect and can be modified by him, subject to consultation with the consumer body from whom the property etc is being transferred.
96. Subsection (7) allows the Secretary of State to make a transfer scheme from energywatch, Postwatch, the existing National Consumer Council or the Consumer Council for Water to the new Council.
97. Schedule 4 makes further provision in relation to transfer schemes. This does not apply to transfers to third parties (that is, to persons other than the Council) under clause 35(2)(b) as such transfers are not made by way of a transfer scheme.
98. The existing National Consumer Council is a Cross-Border Public Authority under section 88 of the Scotland Act 1998. In view of this, the Secretary of State will be required by that section to consult Scottish Ministers before making a transfer scheme in relation to that body.
Clause 36: Directions
99. Subsections (1) to (3) allow the Secretary of State to require information from energywatch, Postwatch, the existing National Consumer Council and the Consumer Council for Water about their property, rights, liabilities and functions, and to set out requirements for receiving that information, such as timescale and form.
100. Subsection (4) means that the Secretary of State can direct energywatch, Postwatch, the existing National Consumer Council and the Consumer Council for Water not to take a specified action, or not to take a particular action in specified circumstances. For example, the Secretary of State may direct the existing consumer bodies not to sign up to additional property leases which extend beyond the date that the consumer body will be abolished. Subsection (5) requires the Secretary of State to consult both the consumer body to which the direction is being given and the Council before giving, changing or revoking a direction under this clause.
101. This clause is intended to facilitate the making of transfer schemes, in part by ensuring that the Secretary of State is able to obtain the information he needs to make such a scheme.
Clause 37: Extension of the Council's functions: Great Britain
102. Clause 37 allows the Secretary of State to make an order giving the Council additional functions if he thinks this is in the interests of consumers. Such functions must appear to the Secretary of State to be connected with the Council's existing functions. Before making an order, the Secretary of State is required to undertake a consultation. If the exercise of the function to be conferred might affect Wales in relation to any matter in respect of which functions are exercisable by Welsh Ministers, then he must consult Welsh Ministers.
103. The Secretary of State may not make an order under this clause which makes provision which is within the competence of the National Assembly for Wales without the consent of that Assembly. Also the Secretary of State may not make any provision under this clause which is within the legislative competence of the Scottish Parliament.
Clause 38: Removal of the Council's functions in relation to Northern Ireland
104. Clause 38 provides that if the Secretary of State is content that a body other than the Council is to exercise the Council's functions in relation to Northern Ireland, then he may repeal the relevant parts of this Bill that extend the functions of the Council to postal services matters in Northern Ireland. Before making an order under this clause the Secretary of State must consult the Council and anyone else he thinks appropriate.
Clause 39: The Financial Services Consumer Panel
105. Clause 39 inserts new subsections (5A) to (5C) into section 10 of the Financial Services and Markets Act 2000. These allow the Secretary of State to direct the Financial Services Authority to appoint a non-executive member of the Council to the Financial Services Consumer Panel.
106. Paragraph 1(4)(a) of Schedule 1 to the Bill enables the Secretary of State to appoint a member of the Financial Services Consumer Panel to the Council.
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