Schedule
1
The
National Consumer
Council
Mr.
McCartney:
I beg to move amendment No. 59, in
schedule 1, page 53, line 7, leave
out from ‘(b)’ to ‘before’ and
insert
‘send a copy of
the certified statement and the Comptroller and Auditor
General’s report to the Secretary of State, who shall lay
them’.
I do not
propose to detain the Committee long on the amendment, which is minor
and of a technical nature, making the Department rather than the
Comptroller and Auditor General responsible for laying the new national
consumer council’s accounts before Parliament. As presently
drafted, paragraph 32 of schedule 1 requires the Comptroller and
Auditor General to examine, certify and report on each statement of
accounts received from the new NCC. The Comptroller and Auditor General
must then lay a copy of each statement and of the report before
Parliament.
Discussions
between my Department and the National Audit Office suggested that the
requirement to lay copies of all the accounts and
associatedreports before Parliament should be the
responsibility of the Department rather than of the
Comptrollerand Auditor General. Under the provisions of the
amendment, the council will send a copy of the statement of accounts to
the Secretary of Stateand to the Comptroller and Auditor
General under paragraph 32(3) of schedule 1. Having examined, certified
and reported on the statement of accounts, the Comptroller and Auditor
General will then send a copy of the certified accounts and of the
report to the Secretary of State, who will be responsible for laying
copies before
Parliament.
Precedent
for the revised arrangements has been set with other newly created
bodies, such as in the Natural Environment and Rural Communities Act
2006 for Natural England and in the London Olympic Games and Paralympic
Games Act 2006 for the Olympic Delivery Authority. The Secretary of
State is responsible for laying the accounts of those new bodies. The
amendment therefore brings the new council into line with other newly
created bodies. In short, the Comptroller and Auditor General has two
requirements: to certify the accounts; and to report his or her opinion
of the accounts to the Secretary of State. The Secretary of State has
two requirements: a duty to lay the accounts and the report before
Parliament; and to report the Comptroller and Auditor General’s
opinion of the accounts to Parliament. As usual, they will be laid
before both
Houses.
Susan
Kramer (Richmond Park) (LD): Since this is the first time
on my feet, I am pleased to have the opportunity to take part in the
Committee under your chairmanship, Mr. Weir. This is the
first time that I have been involved in a Bill Committee, so I am
afraid that I will be turning occasionally to my colleague, my hon.
Friend the Member for Solihull (Lorely Burt), who has far more
experience here than me; I hope you will forgive my naivety from time
to time. I use this opportunity to join the Minister and others in
sending condolences to those who have lost dear loved ones and friends
in Virginia.
Given the short time that is
available for the consideration of the Bill, my hon. Friend the Member
for Solihull and I made a decision that we will get to our feet when we
have something to say, but not when we do not. I have to confess that
when I looked at amendment No. 59 to schedule 1, I found myself bemused
as to what it was about and why it was onthe amendment paper.
Will the Minister assure usthat that change does not
compromise in any way the independence of the Comptroller and Auditor
General or of the National Consumer Council? That fundamental concern
of ours is raised by the changing of the pathway so that reports come
via the Secretary of State, rather than directly to Parliament or the
public. It allows a negotiating or adjustment process, and provides the
opportunity to put out press releases and spin the story before the
report fulfils its end purpose. If the adjustment is merely technical,
we do not have a problem with it, but we do if it affects independence
in any way or provides a path for
influence.
Mr.
McCartney:
The hon. Lady should not worry about this being
her first Committee; this is my first Committee since 1999. In my
previous jobs, the Government have managed to hide me away from
Parliament. [ Interruption.] My hon. Friend the Under-Secretary
is accused of being my chaperone. Heaven forbid such a thing. Perhaps
we could be known as Butch Cassidy and the Sundance Kid, as we are in
that age
group.
Mr.
Tobias Ellwood (Bournemouth, East) (Con): How about Little
and
Large?
Mr.
McCartney:
That is far too predictable coming from such a
big man as the hon. Gentleman. I think that I am eyeballing him at the
moment.
The hon.
Member for Richmond Park asked a fair, reasonable question. I give her
an absolute assurance that a duty will be placed on the Secretary of
State to lay before both Houses not only the Comptroller and Auditor
General’s report on the accounts, but the accounts themselves.
The amendment arose from discussions with the Comptroller and Auditor
General and members of his office. We feel that it is the best way of
transmitting the information to Parliament.
Question put and agreed
to.
Question
proposed, That the
schedule, as amended, be the First schedule
to the
Bill.
Mr.
Prisk:
The Minister is right to suggest that he and his
colleague are not Little and Large. I suspect that the hon. Member for
Ealing, North (Mr. Pound) will remember the Krankies;
perhaps that would be a closer comparison. Having teased the Minister
in that
way—
Mr.
McCartney:
I do not want to be sexist, but one of the
Krankies is
female.
Mr.
Prisk:
I have always trusted the Ministerto be
capable of performing any function in the Government, and he has shown
his dexterity in that manner.
I shall return to the order of
the day and move delicately and swiftly to schedule 1, about which I
should like to raise a number of practical concerns. Paragraph 1
provides the Secretary of State with the power to appoint members. Will
the Minister tell us how many members are to be appointed? What would
be the overall size of the council? That might be set out in
regulations, or the council might be able to determine it. Given that
the Secretary of State will be granted the power to make appointments,
it would be helpful to know the scope of the organisation.
Subparagraphs (4)(a) and (b) relate to the Financial Services Authority
and Ofcom. During our consideration of clause 1, I mentioned that they
are included in, although not merged into, the organisation.
Appointments are permitted in that area. Will the Minister explain the
rationale behind that
decision?
Paragraph 10
says:
“(1) The
Council may make arrangements with such persons as it considers
appropriate for assistance to be provided to
it.
(2) Arrangements
may include the paying of fees to such
persons.”
Could the
Minister tell us exactly what the Secretary of State has in mind here,
in particular the form of assistance and therefore the fees that will
be paid for that help?
In part 3, which starts on page
45, paragraph 12, which starts on page 46, deals with the regional
committees; paragraph 12 establishes that particular set of
organisations. Could the Minister confirm what the boundaries of those
regional committees will be? This measure provides the council with the
ability to establish committees
“for areas within the United
Kingdom”.
“Areas”
is, of course, a different word from regions. The measure then refers
to regional committees. What I am seeking to establish is the
boundaries of those regional committees. For example, most Members
would assume that a regional committee relates, perhaps, to the
existing regions that the Government seek to administer their funds
through; for example, the Government office for the south-west of
England, or whatever. Would these committees be similarly bounded, or
would they be smaller? Would there be one, for example, for Lancashire,
or one for Yorkshire, or one for Cornwall and Devon? It would be
helpful to know whether or not the Secretary of State would approve,
because in the end these committees have to be approved by the
Secretary of State. It would be helpful to understand the nature of
this particular set of organisations.
Similarly, in part 3, paragraph
15 on page 47 is a “General provision about committees”.
Paragraph 15(4)
states:
“The
members of a sub-committee established by a committee may include
persons who are not members of the
committee.”
That is
entirely understandable; one may wish to have outside experts join the
sub-committee to discuss a particular issue. However, it would be
helpful to know whether or not these sub-committees could be made up of
a majority of non-committee members. I ask that because a lot of the
council’s powers are delegated down to these committees and the
Committee herein the House might wish to consider whether or
not
delegated powers that have financial implications could end up being
exercised by a sub-committee that is not made up of people who are part
of the principal organisation but instead made up of outside experts.
It would be helpful if the Minister could clarify what the Secretary of
State’s intention is, and what he would or would not
approve. Paragraphs
17(1) and 17(3) on page 47 deal with the “Terms of appointment
etc” and examine the issue of pay and remuneration. It would be
helpful for the Committee to understand what the current powers of
remuneration are and how they would change. After all, the existing
National Consumer Council is somewhat different to the newly enlarged
organisation. It would therefore be helpful—if not now, then
certainly in due course once the Committee is sitting—for us to
be told what that change is likelyto
be.
Lastly on this
schedule, I would like to turn to part 5, on page 49, which deals with
“Funding and accounts”. I think that the existing
National Consumer Council relies for 81 per cent. of its funding from
the Department. It is that sort of amount; the Minister nods, so I
assume that the figure is in that field. As we know, the Chancellor has
already indicated that there will be a reduction in funding for the
Department as a whole; there were announcements on that earlier in the
year. What impact would that reduction in funding have on the council
and indeed on Consumer
Direct?
I know that Ministers hope that
the new council will be able to achieve savings by merger. However, it
would be helpful to know whether the new council will be able to rely
on a similar amount of money and what proportion of its income the
Government anticipate will come through to the new
Department.
11
am
Susan
Kramer:
I have two quick questions about the schedule.
First, looking at the membership of the council, the provision gives a
lot of “permissions”—for example, to appoint
individuals who will liaise with other relevant bodies, or to include
within the membership disabled persons or persons with special
needs—but perhaps the Minister can give us a better idea of the
intention. Having participated on the board of Transport for London, I
know that the importance of having a range of stakeholders with
expertise in different areas on that board was extremely evident in its
effective functioning. Can the Minister give us a better feel for what
he sees as the scope of the membership? That will affect the
functioning and flavour of the council.
Secondly, much of the funding
for the range of services dealt with by the new NCC—other than
that coming from the Department of Trade and Industry, which funds the
current NCC—will come from the industries that are brought into
the scope of the new organisation, such as energy suppliers and postal
services companies. However, it seems unclear in discussions with those
industries whether they know where they will be heading in future. Will
they continue to be asked to provide the same level of funding, or will
that change if the new NCC changes its focus and
priorities, so that it spends most of its energies
looking at other industries rather than those that have been regulated
by the individual bodies? In that case, how will the funding issue be
resolved? I ask the
Minister to look forward and tell us not only where funding will come
from immediately after the new body is constituted—we assume
that that will be pretty much the same as it is today—but where
it will travel in future. What sort of assurances can be given to
consumers that it will be adequately funded, and to present funders
that their concerns will remain in focus?
Mr.
Ellwood:
I have a couple of questions to ask the Minister
to clarify the points made by my hon. Friend the Member for Hertford
and Stortford. First, the schedule gives scope to a number of
committees, and I seek clarification of the difference between a
territorial committee and a regional committee. How do they work
together, who is accountable to whom, and what size of area would they
cover?
My second
question relates to paragraph 14. It is one of those vague paragraphs,
which is probably intended to cover a specific issue, but is written in
such a way as to give a broad scope. I ask for some detailed
clarification of its meaning. The paragraph
states:
“The
Council may establish such other committees as it considers
appropriate.”
That is a
general, bland statement, and the Minister should provide a bit of
detail. Who would sit on that type of committee, what would it do, and
to whom would it be accountable?
Mr.
David Gauke (South-West Hertfordshire) (Con): May I say
what a pleasure it is to serve under your chairmanship, Mr.
Weir? I, too, have a couple of points to make with regard to the
schedule and the powers that the Secretary of State has to appoint the
council chairman and other executive members. What, if any, role will
Parliament have within that process?
I ask that question at a time
when many politicians, including the Chancellor of the Exchequer, are
talking about rebalancing the relationship between the Executive and
Parliament. It is most often talked about in the context of the royal
prerogative and declaring war, which is, thankfully, a rare occasion;
none the less, there are many appointments to be made. The most obvious
and frequent exercise of the royal prerogative is in appointments to
organisations such as the one that we are discussing today, the NCC. If
we are looking at rebalancing the relationship between Parliament and
the Executive, some degree of parliamentary scrutiny of the
appointments would be welcome.
I appreciate that that matter
cannot necessarily be addressed in the Bill—it is a matter for
the House—but I would be grateful to know whether, for example,
the model for appointing members of the Monetary Policy Committee of
the Bank of England could be used. Following appointments to that body,
hearings are held by a Select Committee—presumably the Trade and
Industry Committee—to review them. Alternatively, could there be
a more substantial process whereby Parliament has a role in confirming
any appointment to the NCC?
That is important, partly, to
demonstrate that whoever gets the role as chairman of the council is
appointed on his or her merits and that the post is not
seen as some sort of sinecure in the gift of the Secretary of State that
could be given for service to the governing party, rather than for
suitability for the post. In order to avoid any unnecessary suspicions
along those lines, I urge Ministers to consider some role for
Parliament within that process.
Mr.
McCartney:
I thank hon. Members for their questions and
will go through the schedule as best I can. In doing so, I will take on
board what the hon. Member for Bournemouth, East, has said. There are
questions to which I will not be able to give an adequate answer, which
I would give in normal circumstances. It might be helpful to give
members a note and I will explain what I mean by that when I get to
each stage.
The
membership of the council has yet to be decided. There will be
appropriate consultation with the stakeholders as part of the
implementation strategy. I give the assurance that at each stage of
implementation strategy, which will run from this summer into next
year, we will ensure that Opposition Front Benchers are kept informed.
I am also more than happy to allow our officials to discuss the matter
with them during the process of implementation. There should be no
secrets; we want a non-partisan approach. We intend to ensure not only
that there is appropriate consultation with stakeholders within that
process, but that there is certainty at each stage both for the staff
in the bodies that are to be merged and for Parliament about the
process leading to the implementation of the measures in the Bill. That
will, of course, include appointments.
Questions have been asked about
accountability. Let me be absolutely clear: in the end, the Secretary
of State will make the appointments technically, but there is a
procedure laid down to ensure independence and transparency in the
public appointments system—and quite rightly so. The Labour
Government introduced that procedure because of the failures under the
previous Government, who almost weekly appointed cronies from their own
party to run everything that they could possibly get their hands on.
That procedure will apply but I will send a note to hon. Members about
the process, so that they are clear about it.
To go back to a point made by
the hon. Member for Richmond Park, it is important that the number of
people appointed reflects the needs of the organisation. To be entirely
consistent, the appointments should reflect the skills, knowledge and
background of consumers as a whole. That cannot, of course, mean a
council of 60 or 70 people, but the point that the hon. Lady makes is
more than reasonable. The effectiveness of the operation will be
determined by the nature, background, skills and knowledge of those
appointed. I assure her that when appointments come before me as a
Minister and I have to go through the process, I try to ensure that
issues of gender, race, disability and knowledge are dealt with, as I
told the hon. Member for Bournemouth, East. Our aim must be not to
shoehorn someone in on that basis, but to ensure that the membership
has the capacity to represent consumers as a whole. Those who represent
consumers must have the knowledge, skills and capacity to do an
effective job. I give the Committee those assurances.
On the question of a
co-ordinated approach, it is also important that the bodies are
established in such a way that their relationships with other parts of
the consumer movement, either the regulatory bodies or the consumer
panels, are coherent. We will deal with this later in the
Bill—in clauses 39 and 40, I think. It is important that the
structure reflects the capacity for a coherent and co-ordinated
approach to the work of the new organisation.
The hon. Member for Hertford
and Stortford asked about co-ordination and memberships of panels, and
in many ways he gave the answer himself. It is important that we allow
the capacity for expertise to be drawn in on specific issues and to
ensure that when there is a report to be done or recommendations to be
made, the NCC is able to bring into the organisation individuals or
organisations who can add value to the decision-making process. Later
clauses in the Bill relate to accountability for the work programme and
the relationship between the work programme and resources. It is
important to ensure that there is not only co-ordination,
accountability and consultation about the work programme, but
transparency about the resources
available.
Mr.
Prisk:
I welcome much of what the Minister has said. Will
he confirm that the sub-committees, which could have delegated
financial and other powers, would be made up predominantly of committee
members—in other words members of council who have been
delegated? The inclusion of experts is fine, but I suspect that hon.
Members would be concerned if they formed the majority of a
sub-committee that had financial
powers.
Mr.
McCartney:
I was getting to that point. The hon. Gentleman
is correct. The measure is not about subcontracting out the democratic
role of those appointed by the Secretary of State, where there is a
responsibility for both the executive directors and the staff, through
the Secretary of State, to Parliament. It will be for the committee to
decide whether it wishes to have sub-committees. It may have some and
it may not. It may have them from time to time, and their role and
period of existence may be limited.
The boundaries of regional
committees will beat the discretion of the new council. The
territorial committees represent the nation of Scotland, the
principality of Wales and Northern Ireland. The regional committees
will be established as and when required to cover specific areas. Again
that will be part of the process of consultation and implementation
proposals. I will come back to that
later.
Mr.
Prisk:
That is an excellent explanation of the territorial
side. Will the Minister confirm whether regional
committees are based simply on the boundaries of existing government
regions or are more
flexible?
Mr.
McCartney:
There has to be some flexibility.I am
doing this without a brief: I am giving thehon. Gentleman my
opinion. That is why the Under-Secretary of State for Trade and
Industry, my hon. Friend the Member for Poplar and Canning Town, is
here. An organisation that is independent is
best able to represent the interests of consumers. We will give it that
independence. It will be for the new NCC to determine, after
consultation on its work programme, the best way to do that and how
effective consumer voices should be in the regions. Again, this is work
in progress. I repeat the commitment I gave at the outset: as the
process of implementation goes on apace, I will keep the Opposition
Front-Bench teams aware of what we are
doing.
Mr.
Ellwood:
It is wonderful to see some independence of
thought from a Minister. I do not know how long it will last. I would
be surprised if the original regional boundaries, which the Government
have spent so much time establishing, were ignored, but it is good to
see that we might be able to work around that. Will the Minister spell
out what the other committees mentioned in paragraph 14 are all
about?
Mr.
McCartney:
I was going to come to that. The hon. Gentleman
is a lot younger than me, but the boundaries of the regions of England
were established by Lord Heseltine. If he has a beef, perhaps he can
take it up with him. I have tried to be so non-partisan this morning. A
partisan politician, I have been trying to be non-partisan this
morning, but the hon. Gentleman keeps tweaking my tail and I will not
be able to resist much longer.
11.15
am
James
Duddridge:
The Minister said that there may be some
flexibility about the regions. Is he thinking of altering the
boundaries only slightly, but keeping the same number of regions, or of
splitting regions as well as altering the boundaries, which could
result in many more regional committees and a larger associated
cost?
Mr.
McCartney:
We must remember that the council delegates the
functions to the regional committees and it is for the council to
determine the best way of doing so. The hon. Gentleman is trying to
paint a picture of a bureaucratic arrangement, which the Government
will impose on the NCC and its delivery organisations, but that is not
what will happen.
Let
me give an example to illustrate why some flexibility is needed. There
are cross-border activities in all the English regions on issues that
relate to matters that the new NCC will deal with. It would be
nonsensical if, when investigating a matter on behalf of consumers, it
had to say, “Sadly, we cannot discuss that in the north-west
because the bulk of the problem arises just south in the west midlands
or in Yorkshire and Humberside.” It would be sensible for the
committees to be co-ordinated and to co-operate; that is my point. We
want to give them the maximum flexibility to speak up and speak out on
behalf of consumers, to raise issues effectively and to resolve them. I
hope that that answers the hon. Gentleman’s question.
There will be no cut in
resources to Consumer Direct. The hon. Gentleman is trying to discover
our strategic thinking on the end game—what will happen in the
review and the spending round for the next three
years—but he will have to wait; I can be quite open about that.
However, what is absolutely certain is that whatever the outcome, the
new body will not be hobbled by a lack of financial resources. The
basis for its establishment is to provide a strong, independent voice
for consumers and to achieve a fundamental change by bringing together
organisations that do things well but do not have appropriate redress
schemes and have no direct link with Consumer Direct, which is a very
important organisation. We made a decision some time
ago about Consumer Direct’s budget. This year alone, more than
350,000 consumers have been able to access advice and to benefit from
it, saving them £135 million. It was agreed that Consumer
Direct’s budget of £19 million a year for 2006-07 and
2007-08 would be transferred to the Office of Fair Trading, which will
have responsibility for managing Consumer Direct. The transfer is
taking place now, and the OFT is in the process of recruiting
additional staff to manage that process. As part of the commitment that
I gave earlier to the hon. Members for Hertford and Stortford and for
Richmond Park,I will provide fuller information about it at an
appropriate time. The OFT is independent of Government and I have no
problem with the organisation talking to hon. Members about its role
and its work in respect of Consumer Direct, which is a critical first
pathway for consumers to get advice, support and assistance when things
go wrong.
The
decisions about resources will be made in due course and reported to
Parliament. Whatever those decisions are, the organisation will be
given the necessary resources to act
effectively.
Mr.
Ellwood:
I feel I am being denied, as this is the third
time I have risen to ask about paragraph 14. Unless it is a state
secret, will the Minister please respond to my
question?
Mr.
McCartney:
I apologise to the hon. Gentleman. I was trying
to give a comprehensive reply to the points made in the debate without
utilising my notes. Paragraph 14 simply gives the council the
flexibility to determine which committees are appropriate. What do we
mean by “appropriate”? The Bill sets out the
council’s statutory obligation—what it is required to
do—in representing consumers. In addition, it willbe
required to determine its work programme by consultation, which will be
a transparent, public process. That will give the council the
flexibility from time to time in its programme of work—whether
that is research work, work to improve access and advocacy for
consumers who have been wronged, work to establish redress schemes, or
any of the work set out in the Bill—to determine whether it
needs a small group of people to work effectively on behalf of
consumers. The provision is designed to achieve no more or less than
that, and the matter will be for the NCC andits appointed
members to determine with its chief executive officer and its chair. No
doubt, if it does establish such committees, its annual report to
Parliament will set out what they are for and what their work and
outcome
are.
Mr.
Prisk:
On paragraph 17, on pay and remuneration, the
Minister said that he hoped to write to us, but it would be helpful to
know about it.
Mr.
McCartney:
Yes. I believe that the matter is technically
determined in law by the Secretary of State, but staff remuneration
will be a matter for the new body to determine in the contracts of
employment for staff. I have no doubt that that will be done through
the national arrangements with the public sector unions, which will
continue to represent their members after the
merger.
On other
appointments, the remuneration scales are set down, and I shall write
to the hon. Gentleman and the hon. Member for Richmond Park on the
matter.
Susan
Kramer:
The Minister addressed the funding transfer of
£19 million from the Office of Fair Trading to Consumer Direct
but, as he will be aware, a significant amount of funding for
Energywatch comes via the licence for the energy supply industry, and
for Postwatch from the Post Office. I could ask the Minister to address
the future of that funding later, when we discuss the work programme,
but since he has entered that area, this might be an appropriate
moment.
Mr.
McCartney:
Again, I apologise. That is a very fair point.
As I have set out, we are not setting up a cross-subsidy arrangement.
Those bodies will be responsible for their own areas, and appropriate
consultation will take place on the level of their budgets and the
resources that they will have to provide. That is no different from the
present situation, which we understand and know, so it will not be a
difficulty. The bodies concerned are currently involved in an
implementation and integration strategy, and that will
continue.
The areas in
which the Government have historically been responsible for payment
will remain where they are—with the Government. They will be
part of the open budgetary process that I described. If the hon. Lady
wants an assurance that we will not turn up on the doorstep of the
postal industry or another industry in a few months and say, “By
the way, the cost of running this service for you is, say, £2
million, but we want £10 million off you,” I assure her
that the process does not and cannot work that way. There is statutory
provision to prevent that from
happening.
Question
put and agreed
to.
Schedule 1,
as amended, agreed
to.
| 
