Consumers, Estate Agents and Redress Bill

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Clause 6

General provision about functions
Mr. Prisk: I beg to move amendment No. 9, in clause 6, page 4, line 42, at end insert—
‘(1A) The Council must, at all times, act independently of Government, regulators and providers of goods and services.’.
The Chairman: With this it will be convenient to discuss the following amendments: No. 7, in clause 6, page 4, line 43, leave out ‘have regard to’ and insert ‘implement’.
No. 8, in clause 6, page 5, line 9, leave out ‘have regard to the need to’.
No. 21, in clause 6, page 5, line 15, leave out from ‘must’ to second ‘to’ in line 16 and insert
‘develop policies and discharge its duties so that it contributes’.
No. 14, in clause 11, page 7, line 10, at end insert
‘and provide an account of how its resources were used in an efficient way.’.
Mr. Prisk: Thank you, Mr. Weir. Amendment no. 9 is at the very beginning of the clause and its purpose, like that of several other amendments, is to try to establish on the record the clear independence of the council. The Minister alluded to that in some earlier remarks, and we are keen to ensure that that is explored properly as we debate these probing amendments.
Members will be aware that if the new NCC is to maintain the well regarded reputation of the existing council, it is important that its independence and that of its work force are clear for all to see. Let us take, for example, the obvious controversy surrounding post office closures. In that context, if the NCC were not seen to be clearly independent, there would be a danger of its reputation—and, from a Minister’s point of view, its effectiveness and authority—being diminished. It is therefore important to establish the independence of the NCC.
The essence of the argument also relates to research. This is a most important area where the NCC must be seen to have an independent character if is to work effectively, as envisaged in the Bill. In relation to amendment No. 9, I want the Minister to give us a clear and unequivocal statement not only on the organisation’s independence in principle, but on how that will work in practice.
In amendment No. 7, we seek to address what I would describe as rather woolly language, which could mean that the forward work programme is just a generalised framework and therefore does not provide sufficient direction. That is parallel to a discussion that we have already had.
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I have been careful to seek in the amendment a requirement not that the end elements of the programme be implemented, because that will clearly be a matter for the council, but rather that the programme that includes those elements be implemented. The underlying concern is that the danger that a large effort might go into producing constantly updated and, as we now know, annual forward work programmes that are not actually implemented. That is a problem, and I will welcome the Minister’s reply to that point.
In amendment No. 8, we seek to leave out the words
“have regard to the need to”.
The purpose is to tighten up the language of subsection (6), to be confident that the most efficient use is made of resources, rather than the council merely having regard to the need for the possibility of efficiency, which is language that clearly leaves a lot of leeway.
The problem is that the NCC’s powers of investigation are widely drawn, yet the Bill is somewhat lacking in detail on the prudent expenditure of resources. We heard from the Minister in a previous debate a comforting setting out of the procedures by which the overall budgeting will be guided, but it would be helpful if he were a little clearer on the use of resources. The purpose of the amendment is to seek to put in place a specific duty, and I hope that the Minister will respond to that point.
The final amendment to which I shall speak in this group—amendment No. 14—would amend clause 11(1) by inserting the words
“and provide an account of how its resources were used in an efficient way.”
It has clearly been grouped with the other amendments because it relates to a similar principle: to try to place a clear obligation in the Bill. Some may say that such an obligation would be unnecessary and bureaucratic, but that a simple, standard measurement of manpower and money used would suffice. That would focus minds on providing value for money, which is the essence of the matter.
The purpose of each of these probing amendments is to draw from the Minister a clear set of principles on how resources will be used and to clarify the council’s role. In particular, to return to amendment No. 9, we seek the independence of the council. I hope that the Minister will respond positively to the debate.
As for amendment No. 14, it seems to us to be a recipe for endless pieces of paper. We assume that there should be good practice, imposed by the auditors on the National Consumer Council, so that it will track the efficiency and effectiveness of its projects, and, presumably, carry out various forms of cost-benefit analysis. However, producing a piece of paper discussing efficiency for everything it does strikes us as waste of time and a recipe for inefficiency.
Our amendment No. 21 is one of the more significant amendments in the group, and addresses sustainable development. I am conscious that, as a consequence of the debate in the other place, the Government strengthened the language on sustainable development, because of which I do not intend to press the amendment. However, it seems to me that this was an opportunity to express concerns that sustainability should be at the very core of the National Consumer Council’s work. We should have been very pleased if the Government had seen their way to using the slightly stronger language used in our amendment.
The National Consumer Council as it is today has engaged very much with issues of sustainability, and I know that the staff are very concerned that that should continue as a central focus of what they do. In the other place, the case of “Greening supermarkets”—the NCC report of September 2006—was quoted. The NCC called on leading supermarkets to green up their act; it put the top eight to the test on four green indicators. Lo and behold, organisations that had previously looked the other way on sustainability matters were suddenly in a race to prove themselves the greenest, when it was known that that public document was in the works. Before and after the launch, significantly, they improved their performance and commitments.
There have since been two other relevant NCC reports, which were not available to be covered in the other place. “Information blackout: why electronics consumers are in the dark” revealed that shoppers who want to choose energy-efficient electronic household products such as TVs, DVDs or laptops were, in effect, left in the dark. Of 350 items researched, only one—a television—had an energy label sticker on it. Now the NCC is calling for a colour-coded scheme for such goods. The effectiveness of that work has yet to be proved in the marketplace, but we expect it to be as effective as the earlier report.
Similarly, in the same month, a report entitled “Energy shouldn’t cost the Earth” brought together the issues of fuel poverty and energy efficiency. It pointed out that many people in fuel poverty are also in a very energy-inefficient environment. About 80 per cent. of people in fuel poverty live in homes with below average energy efficiency. Once again, that work leads towards a blueprint that may, hopefully, bring change. The report indeed calls for much more rapid smart metering technology, among other things, to encourage energy efficiency, even for the least well off.
I raise those matters as illustrations. I hope that we will get a strong commitment from the Minister that sustainability will be at the core of the NCC’s activities. If he can see his way to strengthening the language further, that is extremely desirable.
Mr. Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): Rather late in the day, I add my welcome to your chairmanship, Mr. Weir, and I want to say how muchI have enjoyed the proceedings. It is typical of the generosity of my right hon. Friend the Minister that he did not discourage me from speaking to this groupof amendments; perhaps, between us, and with the support of the Committee, we may emerge with more clarity in the Bill.
My attention was drawn to clause 6 and the amendments, because when we take a decision on those matters, we establish the ethos of the NCC as we would like to see it. That is important, particularly in respect of vulnerable groups.
My right hon. Friend the Minister shares my interest in these matters. Indeed, I had the opportunity some years ago to visit a group in his constituency who were involved in learning disabilities. They presented me with a wonderful set of carpet bowls, which remain in my cabinet to this day. I regret to say that I have not yet used them; perhaps others will regret it still more.
Mr. McCartney: Give us them back. [ Laughter. ]
Mr. Clarke: I say that as an indication that I hope that I am pushing an open door when I make the case, as I hope to do, for the kind of ethos in the NCC that many people, particularly those with a disability, would wish to see.
As it stands, I find clause 6 a little ambiguous. For example, clause 6(4) states:
“The Council must have regard to the interests of consumers that are one or more of the following—
(a) disabled or chronically sick individuals;
(b) individuals of pensionable age;
(c) individuals with low incomes;
(d) individuals residing in rural areas.”
Yet clause 6(8) says:
“The Council must exercise its functions in the manner which it considers is best calculated to contribute to the achievement of sustainable development.”
To be honest, I think that this matter really must be clarified.
As it happens, although I had planned to say a word or two about this matter today if I caught your eye, Mr. Weir, we were assisted this morning by the memorandum that appeared almost out of the blue from BOC Gases. I should like to quote BOC’s perception of what is going on. On energy prices, which I mentioned on Second Reading, BOC says:
“Generally speaking the market is dominated by very large companies and customers are at a commercial disadvantage.”
That is its view. My heavens, if that is the case, customers who happen to be disabled, disadvantaged or on a low income surely have the right to ask us, “Well, aren’t you thinking about us as well?” I am sure that the Minister would want to bear that in mind.
BOC goes on to say:
“While BOC has great respect for Ofgem...whose duty to protect customers is, while a primary one, only one of a number of duties, BOC believes that a body such as the present Energywatch organisation with a specific and focused purpose to look after customers is required.”
I do not see that that aim has been achieved in clause 6, which is why I am interested in my right hon. Friend the Minister’s response to the discussion on the amendments. Because he has an open mind, I know that he will want to address this point genuinely and honestly.
My concern, particularly on energy prices, which impact on a huge number of consumers, especially the disadvantaged ones whom I mention, is that Ofgem is apparently planning in the upcoming supply license review to regulate even less regarding disabled customers, arguing that that is covered by the Disability Discrimination Act 1995.
On that subject, I say very simply and briefly that I was heavily involved as that Act was going through Parliament, doing the job that the hon. Member for Hertford and Stortford is doing now, but I was then facing the right hon. Member for Richmond, Yorks (Mr. Hague), who had responsibility for the issue. I do not think that he would ever have argued—I certainly did not argue—that the DDA took on board the kind of advocacy role for disadvantaged and disabled people, including people with learning disabilities. There was an excellent debate about people with mental illnesses in the Chamber yesterday. None of us would have argued that we saw it as the role of the council, or of Ofgem, to take that on board.
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In that spirit, I say to my right hon. Friend the Minister that there is a great deal of interest in his response. We want the council to be proactive; we feel that it ought to deal not only with whether the market is right and whether regulators ought to be focused almost exclusively on that. We think that there is a role for advocacy and for monitoring what happens to people with disabilities and others, particularly whenit comes to the problems in respect of pre-payment energy meters. We can all tell stories from our constituencies of the traumas that arise from such issues.
My right hon. Friend is a person of vision. We need give the NCC the real powers that are important to enable the organisation to act in the way to which my party was committed in its general election manifesto. I hope that my right hon. Friend will give some regard to the points that I have made. I am sure that many people, particularly organisations of and for disabled people and pensioners on low pay, are looking forward to his response.
Mr. McCartney: This has been a short debate, but it has covered some fundamental issues. In my response, I shall attempt to be empathetic and sympathetic to what has been said, both generally and specifically. The hon. Member for Hertford and Stortford spoke to the probing amendments effectively. I recognise what the hon. Member for Richmond Park said, and I shall come to each amendment in turn. I thank my right hon. Friend the Member for Coatbridge, Chryston and Bellshill for what seemed like a tour round the area in which I was brought up. I was very misty-eyed. I shall respond to him.
Before the end of the Bill’s progress, there will be other debates about issues concerning vulnerable customers, which will allow a more detailed discussion. It is critically important that we establish the NCC and that we follow the good practice that exists for current regulators and those who represent vulnerable consumers. The term “vulnerable consumers” covers a wide spectrum, which ranges from people with physical and mental disabilities to people with impairments from alcoholism, drug abuse and mental illness. Itis a huge spectrum of individuals who require sustainability. They require a specific relationshipto look after their needs, to provide support and to advocate on their behalf, to ensure that the access to the marketplace that we give to consumers generally is given to those who are most vulnerable and difficult to reach. It is most difficult for them to exercise the rights that we give to the community in general. We therefore need to build capacity of the structure of services and of the skill match and the nature of the skills with which we provide our staff in the advocacy process.
In some areas, with Ofgem and other bodies, there is already a fundamental change in the practices of companies and their internal workings with consumers, particularly vulnerable consumers. We are all at one on the establishment of the NCC. Its role in representing vulnerable consumers is a moving feast; from the outset, the focus of that role must be practical to enable it to deal with the needs not only of vulnerable groups, but of individual consumers in their own right. That will require us to take the best practice programmes of existing organisations and build on them.
The skill match is important. Those who will be on the front line looking after the interests of people with a disability or other special needs should have an understanding, rapport and empathy with such issues. I know that from my former role at the Department for Work and Pensions. When we established the Pension Service, we had to change the skill sets of thousands of staff in an 18-month period. Under previous Governments of all persuasions, their role had been that of gatekeeper on behalf of the state, to prevent fraud—and rightly so. However, with the Pension Service, their role is now more than that. It is an advocacy service on behalf of people with special needs, and that requires special skills and talent. There will be a challenge, but the relevant people will be up to it. We have already seen the changes that are taking place. When we get to other clauses, perhaps we shall be able to debate more fully the issues around people with vulnerabilities.
I have a final point about vulnerabilities. Membersof Parliament know about it; we have to ensure that our staff have the skills to deal with vulnerable constituents. The first thing to establish with someone who has a vulnerability is a sense of being able to trust people. The hon. Members for Richmond Park and for Hertford and Stortford made an important point about the National Consumer Council and its reputation. It is vital, not only in its advocacy role in respect of policy making but in its role of representing people with vulnerabilities. The big thing about vulnerability is a mistrust of the system and of authority. To be able to advocate effectively, trust has to be built and that means having staff on the front line with the capacity to do that.
I hope that those general comments are helpful about the direction that I want the new organisation to take and why the clause offers a wide remit for it to work with the regulators and work on its role with various groups in respect of the needs of vulnerable people.
I shall deal with the other amendments. I reassure the Committee that the new council will be independent, exercising its statutory functions as it sees fit for the benefit of consumers. Amendment No. 9 attempts to set that out in the Bill and would require the new council to act independently of the Government, regulators and providers of goods and services. However, the amendment lacks clarity and causes uncertainty; I do not say that as a criticism, but as a response.
Does the term “Government” include local authorities, Government agencies and other non-departmental public bodies? The list is not exhaustive; the amendment does not target what it exactly means in its wording. I also remind the Committee that the new council will be a statutory body with statutory functions, which cannot be interceded upon by the Secretary of State. It must prepare a forward work programme annually and consult on it. The programme must contain a general description of the main activities, including any projects; that is what the hon. Gentleman wanted to know. It will be project-specific. Frankly, if it was not, that would be a complete waste of time. It is important that a work programme should mean exactly that—after consultation, a clear, transparent set of circumstances in which the organisation will task itself to perform.
During the year, the council will plan to undertake the programme, and the activities that it proposes to undertake will be in the public domain. It is also important that there should be clarity for the public and the consumer in general about the activities of the council. If the council proposes at any stage to act in response to representations made to it, again, it will have the independence to do so. For example, if the hon. Gentleman had an issue about something that had happened in the marketplace, he might put down a parliamentary question. He might even ask for a debate, or he might raise the issue in Parliament in some other form—writing to and asking for a meeting with Ministers, for example. However, because of the independence of the council, he could directly ask it to investigate without any recourse through the prism of a Department or a Minister and a Department. That is important. How we see the independence of the organisation is very important. If it were not independent, it would not be able to do the job required of it—that of representing and advocating for consumers in general and in particular.
I also question the logic of requiring the new council to act independently of Government, the regulators, and providers of goods and services at all times. I can envisage instances in which significant consumer benefit can be derived from joint working between the council and a regulator. For example, they could work together on a particular project. Indeed, clause 20 requires the new council to enter into co-operation arrangements with the Office of Fair Trading. We envisage that such arrangements will cover, among other key areas, the issue of consumer education and how the two bodies will work together to improve consumers’ knowledge of their rights and entitlements should things go wrong.
In a sense, the easy job is to establish the NCC. It might be difficult in itself but, relatively speaking, it is an easy programme of work. It is not so easy, however, as Governments of all persuasions know, to let people know about their new rights or to give them the capacity to exercise those rights. That goes back to the point made by my right hon. Friend the Memberfor Coatbridge, Chryston and Bellshill and in the amendments tabled by the hon. Member for Richmond Park about giving people who cannot exercise their rights independently assistance to get access to their rights. It is absolutely essential that we proceed inthat way.
Concerns were also raised in another place about the independence of the new council from Government. The Bill does not contain a power of direction over the council by the Secretary of State, which is significant. There is no power of direction in the Bill. The legislation therefore contains a clear signal that the council is an independent body and that will informthe decisions that it makes. The fact that the council will be required to report to the Secretary of State is critically important because through that, the council is accountable to Parliament. However, it is a reporting and not a controlling mechanism—it will not curtail the council’s independence.
James Duddridge (Rochford and Southend, East) (Con): Forgive my ignorance, but why does the reporting mechanism have to involve the Secretary of State? Why is the council not required to report to Parliament itself? If the report goes to the Secretary of State, it can be delayed unnecessarily by a Government of whatever political persuasion.
Mr. McCartney: When we discussed schedule 1 this morning, we heard about the process by which the council will have a duty to report to the Parliament. I do not know how long the hon. Gentleman has been a Member, but the whole purpose of having Secretaries of State report to Parliament is to make the Executive accountable. There are a range of ways in which to make the Executive accountable: the discussion we are having in this Public Bill Committee, for example, or through parliamentary questions, or—my toes begin to tingle—through the Select Committee process. We can argue about whether those processes are as effective as they should be, but that is another matter. The whole purpose of coming through the Secretary of Stateis to ensure the accountability of the Executive to Parliament.
On amendment No. 7, I agree that it is important for the new council to undertake a work programme that has been subject to public scrutiny and consultation. However, the amendment would affect council’s flexibility and ability to respond to unforeseen changes in priorities that may only come to light after the forward work programme has been published, by requiring it to stick rigidly to the programme. We discussed that matter in more detail earlier and we need not add more to it, or to the discussion on the issue of the council being required to produce an annual forward work programme. The important thing is the matter of unforeseen issues. Hon. Members have spoken about the capacity of the NCC to intervene and to advocate and represent the interests of consumers in a fast-changing market place.
Amendment No. 8 would similarly place a duty on the new council to use its resources in the most efficient and economic way. I reassure Committee members that we expect the new council to use its resources as efficiently and as economically as possible—the Government will be responsible for a share of its funding. We went into the detail of how the process of the forward work programme would work when we discussed amendment No. 6. The only thing that I would add is that there will be, as there usually is, a chief accounting officer. Normally that would bethe chief executive but that would be up to the organisation to establish. The chief accounting officer will have clear responsibilities to ensure that that is the case. The amendment places an onerous burden on the council to demonstrate compliance as stated by the hon. Member for Hertford and Stortford. However, having worded the amendment in the way that he did, he made a sensible and very fair point. It is critical that anybody who is funded from the public purse or receives funds in the way that this body will, from the public purse and from industry sources, uses those funds transparently and effectively.
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I will make an assumption here if I may. Anyone who is appointed senior executive has responsibility for those processes. Part of their contract will be to ensure that they operate the organisation financially effectively and evince the normal standards that one would expect of accountancy and transparency of accountancy. I hope that that reassures the Committee that the accounting officer will ensure that all funds are used economically. Furthermore, the National Audit Office will be able to review the efficiency with which the council uses its resources to ensure that the requirements are being met. Of course, those reports are made public and a Select Committee can call them into account along with the organisations mentioned.
Amendment No. 21 would remove the existing provision for the council to judge how best to contribute to the achievement of sustainable development. The hon. Member for Richmond Park very kindly reminded the Committee that that issue was raised by our colleagues in the other place. We brought forward an amendment that I believe meets her requirements.
The objective of the new council as drafted will ensure that it exercises its functions in a manner thatit considers is best calculated to contribute to the achievement of sustainable development. The term “functions” is defined in clause 41 as including powers and, importantly, duties. In developing policies and in discharging its duties, the council is already required to act in a manner that it considers is best calculated to contribute to the achievement of sustainable development. That could be in relation to fuel policy, energy efficiency, issues that come up in future energy White Papers and subsequent legislation.
For example, DEFRA’s proposal for legislation on sustainable development that is coming before the House in the coming session. Those will all impact on the work of the NCC. As the years go by, there will be other issues because we are coming to a common approach across parties on sustainability and sustainable development. There will be nuances and, in some areas, there may even be a difference of opinion. However, there is one area in which there is no difference of opinion. Policy makers, bodies that are required to carry out decisions of Parliament, and bodies acting on behalf of consumers or in conjunction with regulators will all have a requirement and duty to ensure that the consumer interest is served effectively.
The hon. Member for Hertford and Stortford was absolutely right about the NCC’s work. There is no intention of throwing away any work that is going on now when the new body is created. There will be a transfer of the ongoing work and activities that willbe incorporated into its work programme. The work that is being done by the various organisations on sustainability will go on, but in a more co-ordinated and more effective fashion. Therefore, there is much more to be said and done on the matter. Perhaps before the end of the session, we will have a full debateagain on the issue. There is a common agreement here that the NCC must be a significant major playeron sustainable development when it comes to implementing policies and programmes to help the consumer to make good choices and decisions. The products consumers purchase for sustainability should be effective, and the processes used by the various organisations to provide goods and services to them should be taken into account when it comes to making policies on sustainable development.
The objective as drafted follows the precedent of section 35(1) of the Water Act 2003 which inserted a new section 27A(12) into the Water Industry Act 1991, which placed an equivalent sustainable development duty on the Consumer Council for Water.
I make that point not just about the change we madein the House of Lords, but remembering that inthe future—in 2008, after consultation—Ofwat will compact the process. We are thinking ahead and pre-planning to ensure that any additional activities that come into the NCC have got an ethos of sustainability.
Finally, clause 7 provides for the preparation of an annual report on the council’s activities for each financial year, which the council must publish. In addition, it is routine practice for bodies such as the new council to be set performance targets in the course of discussions over the budget. Achievement against those targets is monitored by the sponsoring Department. The accounts of the new council willbe certified and reported, as in paragraph 32 of schedule 1, clarified by this morning’s amendments.
I hope that, with those explanations, the hon. Ladies and Gentlemen will now be prepared, first, to withdraw their amendments and, second, to give me the benefit of the doubt for the further discussions that we will have on vulnerability and sustainability later in the Bill.
Mr. Prisk: It has been a helpful and rounded debate. I particularly commend the contribution of the hon. Member for Coatbridge, Chryston and Bellshill—I always try to get that name right—who as usual spoke with care and passion on the subject. He secured a helpful and informed contribution—as we would expect—from the Minister on an issue of which he has considerable experience over many years, namely consumer affairs, and also about which he rightly feels very passionately, as he so clearly demonstrated this afternoon.
Stephen Pound (Ealing, North) (Lab): This is not germane to the discussion, but as the hon. Gentleman took so much trouble to pronounce my right hon. Friend’s constituency correctly, he may wish to note that he is in fact a member of the Privy Council.
Mr. Prisk: I apologise to the right hon. Gentleman. I was so focused on making sure that I got my geography right that I got his status incorrect. I apologise for that, but I am delighted that the representative for Coatbridge, Chryston and Bellshill has been so elevated and congratulate him.
Mr. Clarke: I am touched by the comments of both hon. Gentlemen. I have the feeling that I will be remembered more as a member of the Monklands district council, much as I am delighted to be a member of Her Majesty’s Privy Council.
Mr. Prisk: We are in danger of drifting slightly away from the subject and I will do my best to return to the essence of the issue. The debate has been useful. We have touched on questions of ethos and on the new organisation’s independence, accountability and indeed sustainability. I am encouraged by many of the points made by the Minister in response to my probing amendments, particularly on the issue of independence. He very clearly set out the independent route that will be important for the consumer council to adopt and to have at the heart of its purpose.
On the other amendments—on accountability and efficiency—I was encouraged by the clear statement from the Minister on the wish to see the work implemented. That is very important, and we have that on the record. With reference to amendment No. 14, I entirely agree on the issue of the National Audit Office being able to participate in ensuring that the new organisation is efficient and uses its resources effectively. His clear statement on that is most encouraging.
Susan Kramer: I appreciate the time and effort that the Minister put into picking up the issues we raised with amendment No. 21 and making it clear that the intent is for the national consumer council not to lose the focus that it has been building on sustainable development, which will be an inherent part of where it goes in the future. He spent a lot of time talking about the issues of vulnerability and disadvantage, but we see that there are relevant places further on in discussion of the Bill where they will need to be raised again. We will look forward to hearing once again what really is the best contribution on these issues from the right hon. Gentleman, the former member of Monklands district council.
Mr. Prisk: I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 ordered to stand part of the Bill.
Clause 7 ordered to stand part of the Bill.
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