Consumers, Estate Agents and Redress Bill

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Clause 10

The information function
Mr. Prisk: I beg to move amendment No. 10, in clause 10, page 6, line 31, leave out ‘may’ and insert ‘must’.
The Chairman: With this it will be convenientto discuss amendment No. 11, in clause 10, page 6,line 31, leave out from ‘facilitate’ to end of line 32and insert ‘disseminate advice and information to consumers—’.
Mr. Prisk: I should like to deal with the two amendments together and with the arguments at the heart of each of them. The amendments seek to ensure that the new National Consumer Council provides the essential information about its activities and functions to all consumers. We debated earlier the need for openness and the vital function of that transparency if the National Consumer Council is to establish itself as a genuine voice and an advocate, as the Minister put it, for consumers.
At present, the clause merely suggests that the Secretary of State may
“facilitate the dissemination...of advice and information”.
That is a well-meaning phrase, but it feels rather generalised and undirected, could be open to interpretation and will fall short of how I suspect most consumers would expect that new body to function. There is also a danger that, unless there is a clear prescriptive intention, the council and its various component parts—we learned earlier that many of the council’s functions will be delegated down through its territorial and other committees—might not ensure that many key consumer issues are disseminated.
Concerns also extend to the dissemination of information about the council and its functions. As I have argued elsewhere, it is vital that not only is the council open in its functions and operation, but is seen to be open. The Minister has been positive in respect of similar amendments, so I should be interested to hear whether he accepts my points and whether, in doing so, he can provide some assurance.
As we made clear during discussion on amendment No. 44, the new council has been given three statutory core functions, and the amendment relates to the information function. We have a clear expectation that the council will make use of all three functions effectively and transparently. However, the amendment again raises the question of whether we should or will attempt to require the council to undertake all the functions at the same time, or set out its core functions and leave the new body to determine how and when they are exercised according to priority and need and in accordance with its forward work programme.
The hon. Member for Hertford and Stortford raised a fair point, not just intellectually but in practical terms. If we give the council three statutory core functions, what certainty and bottom line will there be? Will it be clear what the three functions are and how they operate? Will someone looking at the work programme be able to say, “Yes, this body is taking seriously all aspects of its functions”? Attached to those functions are two other things: financial resource and human resource. The council must have the capacity to put all three things together transparently.
My point should not be taken in isolation but with all the discussions that we have had on other clauses. They should be pieced together to get the picture. There will be a statutory function, a consultation process for the work programme and consultation and transparency about financial resources and which parts fall to Government and to other appropriate bodies. For those parts that fall to other appropriate bodies, to ensure transparency in the system, those bodies must say how and how effectively those resources are spent, and what their capacity is to meet the budget. The other locks are not just the annual report but the report on how the NCC is carrying out its work programme and its capacity to make determinations when the programme needs to change to meet circumstances.
We have chosen the hon. Gentleman’s second option. We cannot compel the council to discharge the core functions, because the functions do not stand by themselves. We cannot say that the council shall or must provide advice and information without saying to whom and about what it must provide it. The council must make that choice. It goes back in the end to the matter of independence, but independence does not mean an excuse to do nothing, or to turn a blind eye to a blatant injustice for the consumer in the marketplace.
I have no doubts whatever about how we are establishing the NCC. It will bring together the redress schemes and the panoply of other measures in the Bill. The NCC’s whole sense of direction when established will be that of an advocate, with a strong ethos of acting in the consumer’s interest. I am certain that in all circumstances, it will give the consumer the benefit of the doubt on the issues brought before it, whether policy issues or individual or collective complaints needing redress. It is therefore important that we give the council the opportunity to do so, which is why we have chosen this option.
On amendment No. 11, what we are trying to achieve is the creation of a strong body that can influence and bring about change for the better on consumers’ behalf. We are giving it the right to advocate for individuals or collective groups of consumers where something goes wrong, but we also want to give it as a preventive strategy the ability to influence policy outcomes to ensure that the marketplace operates effectively on the consumer’s behalf, and that those who provide goods and services have an ethos and a way of managing their business that protects the consumer’s interests and not just those of their own organisation. It is important that we provide the opportunity to act on behalf of consumers. To achieve that, there will be certain functions and circumstances in relation to which an autonomous approach can be taken. An example is the new council’s powers under clause 17 to prepare and publish
“a report in relation to any matter falling within the scope of its functions.”
However, the new body also needs to be able to work with and through others. A prime example involves the relationship to consumer education. That is an area in which the Office of Fair Trading has a statutory function under section 6 of the Enterprise Act 2002 to
“publish educational materials or carry out other educational activities”
and to
“support...such activities or the provision by others of information or advice.”
The new council would be expected to contribute to that process with a view to advocating the consumer interest in the provision of education and information by the OFT or other parties. That is very important. It is an innovation. The council will have not only an influence over its own role and remit, but a specific influence over the remit and role of others who have a duty towards consumers. That is vital and is why we have drafted the function as we have. It permits the council not only to facilitate the dissemination of information and advice by others, but to disseminate information itself. That is vital if the council is to be out there and seen there, marching forward on behalf of consumers. The ability is not just to put information out itself, but to ensure that others do so as well. That is innovation.
Amendment No. 11 would remove the ability of the new council to operate in this fashion, which is why I will resist it. I assume that it will not be accepted. I assume that it was tabled to enable me to give the Committee assurances about what the clause means and the role that we expect the NCC to play in operating the clause in a practical way on behalf of consumers.
Mr. Prisk: The Minister and I share a view that this debate is about practicalities as much as it is any form of discussion as to the intellectual essence of what the organisation should be. Clearly, in a legislative process, one challenge is how we ensure that what is written in the Bill is put into practice. As the Minister correctly articulated, that is the purpose of these probing amendments.
However, the essential point, which I wanted to draw from the Minister and which I am glad he has put on the record, is the key word “expectation”. It is the expectation of the Government that the council will ensure that the functions set out in the Bill are implemented. That is the critical part of the process. I am delighted to hear that put on the record and I am therefore only too pleased to beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 10 ordered to stand part of the Bill.

Clause 11

General powers of investigation
Mr. Prisk: I beg to move amendment No. 15, in clause 11, page 7, line 11, leave out subsection (2).
The amendment is reasonably straightforward. Its purpose is to seek from the Minister the rationale behind the criteria chosen, rather than necessarily to remove any criteria from being chosen. I have a further point related to that. Will a “novel issue”, which is the term highlighted in the clause, have to be entirely new? One thought that occurred to me was whether, if an issue arose in Scotland and then a similar issue arose in Hertfordshire, it would be determined to be novel, not least given the fact that the two locations have different legal systems. Will the Minister clarify exactly what he means by “novel” and what its limits would be?
5.45 pm
Mr. McCartney: I will try to give the hon. Gentleman a rational explanation of what we are attempting to achieve with the clause. I accept from the outset that it is a probing amendment, and I hope to give a response to it and to provide the Committee with information that will be helpful in relation to the clause.
Clause 11 will provide the new council with general powers of investigation, and subsection (1)(a) will permit the council to investigate
“a complaint made by or on behalf of a consumer which appears to the Council to raise one or more issues of general relevance”.
A consumer could make a specific complaint on their own behalf and a wider issue could be raised by a general complaint. We need the capacity to deal with wider issues, while dealing with specific issues raised by the individual consumer. In other words, a distinction will be drawn between the investigation of a complaint that may be relevant to consumers generally and an individual complaint. The new council will not have a role in the investigation of individual complaints, other than those made by vulnerable consumers in the designated sectors.
The Bill will provide new and better ways to handle individual complaints and introduce new complaints handling standards, which will be set by the regulators in energy and postal services. It will provide a new redress scheme to determine issues that cannot be resolved by a consumer’s supplier.
On general complaints, subsection (2) empowers the new council to investigate complaints that involve novel issues that affect a group of consumers or consumers generally, or that may have an important effect on a group of consumers or consumers generally. The hon. Gentleman asked what a novel issue will be, and my practical explanation is that, as I said at the outset, it is an issue that is raised in a way that has wider implications for consumers’ rights in the marketplace. Therefore, a judgment will be made ina particular instance about what would affect such changes.
Susan Kramer: I wish to ask for clarification on a point. As the Minister takes us through this helpful discussion of the general powers of investigation, he will be conscious that people’s complaints have been important in exposing general underlying problems, rather than just an isolated problem. Information from complaints has not only been important to the various watchdogs, but to the regulators. Given the proposed change in structure, will the Minister discuss how the information flow that he describes as complaints to or from the National Consumer Council will also transfer, where relevant, to the regulators for their purposes?
Mr. McCartney: In that respect, “novel” does indeed mean new, but clause 11 will permit the new council to investigate other issues as well. We are therefore providing the new council with a wide scope, which I am sure that we all want to see, as it will give the council direction when exercising its powers of investigation.
I have heard the assertion that consumers will be stranded by the new arrangements. In the discussions on planning for implementation, the consumer bodies made it clear that they have no consistent means of recording contacts, inquiries and complaints and that they have no means of distinguishing the instances where consumers may be merely referred to companies or elsewhere for assistance. Consequently, consumer bodies have asked my Department to undertake a special project to get to the bottom of that matter, and we have agreed to do so with their assistance. That relates to one of the points made by the hon. Member for Richmond Park about certainty of what the process involves and about learning from the experiences of consumers, the issues that they raise and how best to resolve them.
The project consultants will first review the classification criteria across bodies—for example, contacts, inquiries, complaints, complex complaints and complex inquiries. Secondly, they will identify a set of comparable data between the bodies on volume and type of all contacts. Thirdly, they will map how inquiries and complaints are handled. Fourthly, they will develop recommendations for how designated vulnerable consumers, as defined by the Bill, will be identified across the bodies. Fifthly, they will apply any definition developed to provide a cut of the current data relating to consumers who might be identified as designated vulnerable consumers. It is important to future debates that we can make decisions based on evidence and in a way that is effective for consumers, particularly vulnerable consumers.
The project is currently under way, and I hope that work will be complete by the end of April or the beginning of May. I assure the hon. Members for Richmond Park and for Hertford and Stortford that when work is complete, I will brief them on the outcome. From my perspective, I want to provide certainty and an assurance to all concerned in the implementation of the project that no one will be left guessing about the direction that we are taking to set up the new organisation. When it is established, the organisation’s introduction will be phased in, so that everyone—not just consumers, but those who have taken the time to develop the proposal’s structure—can be certain about it. I hope that that explanation helps hon. Members.
The hon. Lady’s legitimate question referred to the implementation strategy, which we will discuss in more detail during a later sitting, when we have more information about this serious matter.
Mr. Prisk: It was nice to be provided unexpectedly with an additional piece of information, which I hope that the Minister will send to other members of the Committee. He understandably wished to show his willingness to share the information, but it is important that we all have the chance to deliberate on these matters. I am encouraged to know that work is taking place. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 11 ordered to stand part of the Bill.
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