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Session 2006 - 07 Publications on the internet General Committee Debates Consumers, Estate Agents and Redress Bill |
Consumers, Estate Agents and Redress Bill |
The Committee consisted of the following Members:Mr C.
Shaw, Committee
Clerk
†
attended the Committee
Public Bill CommitteeThursday 19 April 2007(Morning)[Mr. Martin Caton in the Chair]Consumers, Estate Agents and Redress BillClause 13Investigation
of complaints relating to disconnection of gas or
electricity
9
am
Lorely
Burt (Solihull) (LD): I beg to move amendment No. 53, in
clause 13, page 9, line 41, at
end add—
‘(8) If the Council
refuses to investigate a complaint under subsection (4) it must write
to the complainant as soon as reasonably possible, setting
out—
(a) its decision
not to investigate the complaint,
and
(b) the reasons for its
decision.’.
We
have a two-handed situation on the Liberal-Democrat Benches, so I
apologise in advance for any future confusion that we shall cause. I
welcome you to the Chair, Mr. Caton, of this extremely
well-mannered and productive Committee as it has so far proved to
be.
The amendment is
simple. It would introduce subsection (8) to ensure that, if the
council refuses to investigate a complaint, the complainant is entitled
to know in writing that it will not investigate the matter and the
reason why it has taken that decision. Such a provision would be
entirely reasonable and we look forward to hearing what other members
of the Committee think of this sensible
amendment.
The
Parliamentary Under-Secretary of State for Trade and Industry (Jim
Fitzpatrick):
Good morning, Mr. Caton. The
Committee warmly welcomed you and your co-Chairman on Tuesday and
expressed its collective confidence in your skill to guide us through
our deliberations. I am sure that I can say on behalf of Labour Members
what a pleasure it is to see you in the Chair this
morning.
Amendment No.
53 would require the new council to write to a consumer as soon as
reasonably possible if it decided not to take up a complaint made by
that consumer as a result of any of the exceptions listed in clause
13(4) and to provide reasons for its decision. At present, the
Department for Trade and Industry sets key performance indicators for
its non-departmental public bodies as part of the annual budget and
work programme round. That process results in targets. In the case of
Energywatch, for example, the body has targets to resolve 95 per cent.
of inquiries within 10 working days; to resolve 80 per cent. of
complaints within 35 working days; and to resolve 95 per cent. of
complaints within 66 working days.
Those targets and performance
against the targets are published in the Energywatch annual report. The
Committee can be sure that that will be a feature of the annual reports
for the new council as provided by clause 7(2)(c), which allows the
Secretary of State to specify matters to be included in the report. In
future, for the new council we will establish a comprehensive set of
performance targets that will be measurable and meaningful. They will
be challenging and more precise than what is envisaged by the
amendment, which refers to the council writing to the
complainant
“as soon as
reasonably possible”.
The
performance targets will cover such issues as response times to
consumers on any inquiry or correspondence and keep consumers informed
about the progress of their inquiries. We want to ensure that the new
council delivers on demanding targets to provide excellent service for
consumers. The amendment attempts to set what should be best practice
for the new council in dealing with consumers’ complaints. Since
the functions of the new council are focused specifically on aiding
consumers, the council should develop its own processes and targets for
communicating with
consumers.
We take the
purpose of the amendment seriously and do not disagree with the overall
objective. However, as I have explained, we are already doing what the
amendment seeks by setting targets for non-departmental public bodies
such as Energywatch. The system will provide us with the flexibility to
set the right targets for the new council to ensure that it provides
the high standards of service for consumers that we expect. In light of
my explanation, I hope that the hon. Lady will understand why the
Government are unable to accept the amendment and that she will
withdraw
it.
Lorely
Burt:
If the Minister is saying that the requirement to
respond in writing to the complainant is already covered in the clause,
I beg to ask leave to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Clause
13 ordered to stand part of the Bill.
Clause 14Reference
of matters to the Gas and Electricity Markets
Authority
Question
proposed, That the clause stand part of the
Bill.
Jim
Fitzpatrick:
Clause 14 requires the new council to refer a
complaint that it considers to raise issues of general relevance made
under clause 11(1)(a) to Ofgem. It will also be required to refer
complaints made by designated vulnerable consumers and those relating
to the disconnection or threatened disconnection of a gas or
electricity supply to which clauses 12(3) or clause 13 apply. The
council will refer such complaints when it considers that
Ofgem’s regulatory functions may be exercisable and when Ofgem
is not already aware of the complaint. When a complaint about a gas or
electricity disconnection is made to the council and referred to Ofgem,
the council is not obliged to investigate until the authority has had a
reasonable chance to exercise its enforcement functions.
Clause 14 focuses on resolving
problems in the most effective way. When the authority has enforcement
powers in respect of complaints made by the consumer, it is sensible to
ensure that Ofgem—the regulator—is aware of the matter
and that it has the opportunity to use its powers to resolve it. That
position is the same as the current provision.
It is
important that Ofgem is made aware of problems that arise from a
situation in which a licencee’s behaviour breaches licence
conditions. Ofgem has powers to enforce licence conditions by, for
example, imposing financial penalties of up to 10 per cent. of
turnover. Ofgem also has powers to determine connection charges. When a
consumer seeks connection to the electricity or gas network and is not
willing to accept the distribution company’s quotation for the
work, the issue can be referred to Ofgem, which can make a
determination on the reasonable amount that a consumer can be asked to
pay. That is an example of an issue that can be referred to Ofgem by
the council for resolution.
The clause provides for the new
council to notify a complainant if it considers that a complaint refers
to a matter that can be referred to Ofgem under existing legislative
provision. In our sitting of Tuesday 17 April, reference was made to the
need to ensure that the council notifies a complainant in accordance
with the key performance targets that we will set out. I commend the
clause to the Committee.
Mr.
Mark Prisk (Hertford and Stortford) (Con): Thank you,
Mr. Caton. I, too, welcome you to the Chair. I do not think
that I have had your guidance before in a Standing Committee or, as we
must now call them, a Public Bill Committee, but I am delighted to have
such guidance now as we continue our deliberations.
I welcome the Minister’s
opening remarks on the clause. He rightly said that it will require the
council to refer a complaint that stems from clauses 11, 12
and13 to Ofgem when it considers the authority’s powers
to be exercisable which, in principle, is a perfectly reasonable
measure. However, as the Minister will know, there will be cases on the
margins of Ofgem’s power, as it were, over which there may be
some dispute, particular regarding disconnections. It would be helpful
if the Minister would express his views or give some guidance to the
Committee now or in the future as to what will be the guiding
principles in cases that involve a dispute over whether a matter should
be referred to Ofgem.
Susan
Kramer (Richmond Park) (LD): Thank you, Mr.
Caton. We are making the matter of who is speaking for the Liberal
Democrats very complicated, so I much appreciate your powers of
observation.
For the
sake of clarification, as I understand it, Ofgem will be responsible
for setting the standardsfor complaints procedures for
electricity suppliers. Presumably, Ofgem will need to get information
about the kinds of complaints that are being made from the National
Consumer Council, whether or not suppliers’ complaints
procedures are adequate, or whether the process is effective in the
real world. Does the Minister see the Bill as providing the structure
that will allow the transfer of necessary
information?
Jim
Fitzpatrick:
In our Tuesday sitting, there were quite a
few references to double acts—I myself was subject to some of
the knockabout. The hon. Members for Richmond Park and for Solihull
were not referred to then as Thelma and Louise, but I can assure them
that if they ever were, it would be in a complimentary sense.
[Interruption.] The hon. Member for Rochford and Southend, East
(Mr. Duddridge) clearly does not have a problem with which
Minister will respond to him today.
The
arrangements about whose uncertainty the hon. Member for Hertford and
Stortford asked will to a certain extent have to be worked out in the
implementation and work programme stage in the months ahead to identify
the lines of responsibility. The new council will clearly have a keen
interest in ensuring that it knows when it will have responsibility and
when it can and cannot pass matters on. There will need to be
co-operative arrangements and understandings between the regulators and
the NCC on how to handle complaints, who should do so and how to
resolve issues that could be handled by either or both. They will have
to identify in due course how the arrangements are working and I am
sure that that will be of direct interest to the consumer, who needs to
be confident that it is seamless. The consumer will need to understand
that a complaint that they register will be dealt with. Whether it is
handled by one or by the other will be a matter for the organisations,
but they will need to communicate that to the consumer so that the
consumer knows that their complaint is being handled and who they can
contact.
On the point
made by the hon. Member for Richmond Park, flows of information will be
established between the regulators, the redress schemes and Consumer
Direct under the redress provisions. I know that she has informally
raised matters about complaints handling procedures, and we shall deal
with those in detail later—probably under clauses 47 to 52. We
are happy also to talk to her informally to give her as full an answer
as possible before the matters are raised in more detail in due
course.
Question
put and agreed
to.
Clause 14
ordered to stand part of the
Bill.
Clause 15Reference
of matters to the Postal Services
Commission
Question
proposed, That the clause stand part of the
Bill.
Susan
Kramer:
I wish to raise an issue similar to that which I
raised on the previous clause, but there is a slightly broader set of
questions here. With the disappearance of Postwatch, can the Minister
clarify which of its responsibilities the National Consumer Council
will pick up and which will be left to be picked up by Postcomm? He
will be conscious that Postwatch has effectively acted as the consumer
arm of Postcomm and that the situation has been a little different from
the energy utility arrangements.
In that context, we are
particularly concerned by earlier discussions in the Committee. The
Minister will know that 90 per cent. of Royal Mail’s activity is
related to businesses rather than domestic consumers, and there is a
new consultation on a proposal by Royal Mail to change its pricing to a
zonal basis. Yet in our earlier discussions there seemed to be a fair
amount of ambiguity about how much the National Consumer
Council’s remit would include the importance of focusing on
business. It could, but it was clear that that played a secondary role
to that of the domestic consumer in the view of many Government
Members. A critical issue for business arises: where on earth will that
responsibility lie? Postcomm focuses on the licence criteria, which do
not capture any notion of consumer benefit or
disadvantage.
As in
the earlier clause, Postcomm will need to set up complaints standards.
Royal Mail has a modest complaints process, and in the past everyone
has relied on Postwatch to add a complaints arm. Postcomm will need to
develop and approve a proper complaints system. How does the Minister
envisage that process going forward so that we do not have a hideous
gap in the transition from one system to the
other?
9.15
am
Jim
Fitzpatrick:
The hon. Lady raises several fair points. To
a certain extent, the hon. Member for Hertford and Stortford raised the
principle of working out the details of complaints handling procedures,
responsibility, accountability and communications, and that is work in
progress. I will be able to say a little more on that when we deal with
clause 16 stand part.
I am grateful that the hon.
Member for Richmond Park told me informally outside Committee that she
was going to raise the question of complaints—business
complaints in particular. I know that we are going to have another
informal discussion in the interval today to ensure that we can give a
more substantive answer when we get to the part of the Bill that deals
with complaints handling and redress procedures. I hope that we can
deal with that matter in due course.
The new council will provide
consumer advocacy and support for vulnerable consumers and businesses
as well as consumers generally. It will be a matter for the new redress
schemes to resolve the complaints, which we will be coming to between
clauses 47 and 52.
Question put and
agreed
to.
Clause 15
ordered to stand part of the
Bill.
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