House of Commons - Explanatory Note
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EFFECTS OF THE BILL ON PUBLIC SERVICE MANPOWER

237.     The Consumer Voice provisions in Part 1include the consolidation of three Non Departmental Public Bodies, with the intention of creating a much stronger, more coherent body that can apply experience and best practice in one sector to other sectors as appropriate. This will also result in efficiency savings, resulting partly from the consolidation of staff and the removal of duplicated roles as the three bodies are merged into one. The number of staff at the new body will be determined in conjunction with the existing consumer bodies to ensure that the new body is fit for purpose and able to undertake its new functions effectively and efficiently. Provisions in the Bill relating to Estates Agents and Doorstep Selling have no effect on public service manpower.

SUMMARY OF REGULATORY APPRAISAL

238.     A Regulatory Impact Assessment has been prepared to accompany the Bill and will be published alongside the Bill and these Notes. A copy of the Regulatory Impact Assessment may be seen at http://www.dti.gov.uk/files/file35347.pdf. Hard copies of the document are available from CCP 2F, Bay 419, Department of Trade and Industry, 1 Victoria Street, London, SW1H OET.

Consumer Voice

239.     Having consulted widely the Government is of the view that these provisions in Parts 1 and 2 will have minimal effect on small firms, voluntary organisations and charities. They will also have minimal impact on competition in any of the sectors affected by the provisions.

Estate Agents

240.     It is expected that redress scheme membership costs for estate agents will be broadly similar to existing voluntary schemes (£130pa) resulting in additional costs to those estate agents currently outside schemes of about £600,000pa.

241.     Changes to the enforcement regime are not expected to result in any increased burden on enforcers. There will, however, be costs to business resulting from increased enforcement activity, but these will fall disproportionately on those agents who have complaints made against them.

242.     The changes proposed in terms of the duty to make and keep records will be minimal.

Doorstep Selling

243.     The Government expects that the measure will affect all businesses which make sales on the doorstep, including small firms in relevant sectors, without placing a disproportionate burden on business.

EUROPEAN CONVENTION ON HUMAN RIGHTS

244.     Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement about the compatibility of the provisions of the Bill with the Convention rights (as defined by Section 1 of that Act). On 6th February 2007 the Secretary of State for Trade and Industry made the following statement:

    "In my view the provisions of the Consumers, Estate Agents and Redress Bill are compatible with the Convention Rights."

General

245.     This section of these Notes comments on those provisions in the Bill which may engage Convention rights. The Government's conclusion in relation to these clauses is that there is no incompatibility with these rights. No specific reference is made in this section to clauses of the Bill, which it is believed do not engage Convention rights and do not therefore require further comment.

Provision of information to the Council

246.     As explained above, Clauses 24 to 28 give the Council powers to require certain persons to provide information. These provisions are considered to be compliant with Article 8(1) and Article 6(1) of the Convention. In relation to Article 8(1) the information to be provided is limited to information required by the Council to undertake its functions and the Council is under a duty to minimise detriment. These are necessary and proportionate powers to enable the Council to undertake its functions.

Transfer of property

247.     Clause 35 provides that the Secretary of State may direct any of energywatch, Postwatch and the Consumer Council for Water as well as the existing National Consumer Council to transfer its property, rights and liabilities to the Council. The Bill provides for consultation with all persons affected by the transfer.

248.     This provision may engage Article 1 of Protocol 1. However, these bodies have been set up to provide assistance to the Government and regulators on consumer matters. It is proportionate to require these bodies to transfer their assets to the new non-departmental public body that will undertake these functions and so there is no conflict with Article 1 of Protocol 1.

Requirements relating to redress schemes

249.     Part 2 of the Bill sets out provisions relating to redress schemes for gas, electricity, postal services and water industries and Part 3 sets out similar provisions in relation to estate agents. These provisions engage Article 6(1) because it is likely that the supplier's or estate agent's right of access to courts will be restricted when a complaint is the subject of a determination under a redress scheme. The schemes are to be approved by a regulator or OFT or administered by the Secretary of State (or on his behalf). In addition to safeguards in the Bill (e.g. as to the independence of the person determining a complaint) section 6(1) of the Human Rights Act 1998 requires a regulator, the OFT or the Secretary of State to act compatibly with the Convention rights specified in that Act.

Expansion of the circumstances which the OFT can take into account when considering the fitness of estate agents

250.     Clause 55 amends the circumstances in which the OFT can consider making an order prohibiting persons from doing estate agency work. Decisions of the OFT must comply with Article 6 of the Convention. The OFT is not an independent and impartial tribunal, but an estate agent has a right of appeal to the Secretary of State and this is subject to a further appeal to the courts. This means that the requirements of Article 6(1) have been met.

Powers of entry and inspection - amendments to the Estate Agents Act 1979

251.     Clause 57 extends the power to enter and inspect premises (contained in section 11 of the Estate Agents Act 1979 (the "1979 Act")) on reasonable suspicion that undesirable practices or breaches of the 1979 Act that do no amount to offences have occurred. Insofar as this power engages Article 8(1) of the Convention it is considered justified under Article 8(2) as an important element in the monitoring powers of enforcement authorities under the 1979 Act to enable them to carry out their functions of protecting consumers.

Modification of licence conditions

252.     Clause 33 and Part 5 of Schedule 1 each give a relevant regulator the power to amend licence conditions to recover the expenses of the Council and other related matters from licence holders. This engages Article 6(1) and Article 1 of Protocol 1. Article 6(1) may be engaged as a modification of licence condition may be a determination of a civil right. However, any such determination could be subject to judicial review and so the decision-making process is Article 6(1) compliant. Insofar as rights under a licence or instrument of appointment amount to "possessions" these provisions could be regarded as interfering with the right to peaceful enjoyment of possessions. However, such a control on use is in the general interest. Licence holders will be consulted on any changes. Therefore the power to change licence conditions may be exercised compatibly with Article 1 of Protocol 1.

COMMENCEMENT

253.     Sections 60 to 62, 65 and 67 will come into force on the day that the Act is passed. All other provisions in the Act will come into force on the day specified by the Secretary of State in the relevant order. The orders may specify different dates of introduction for the different provisions in the Act, although it is intended that all provisions regarding Estate Agents and Doorstep Selling be in place by April 2008 with the remainder becoming effective by the summer of 2008.

 
 
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Prepared: 8 February 2007