Clause
20
Duty
to enter into co-operation
arrangements
Mr.
Prisk:
I beg to move amendment No. 18, in
clause 20, page 11, line 37, at
end insert—
‘(2A) Prior to
making an appointment under subsection (2)(d), the Secretary of State
must consult such persons as would be affected by such an
appointment.’.
The
Chairman:
With this it will be convenient to discuss
amendment
No. 19, in
clause 20, page 12, line 3, leave
out ‘As soon as practicable’ and insert ‘No later
than six
months’.
Mr.
Prisk:
The clause provides for a duty to enter into
co-operative arrangements on the part of the council. Subsection (1)
says:
“It is
the duty of the Council and each designated body to enter into
cooperation arrangements under this
section.”
A designated
body is defined in various ways, including, under subsection
(2)(d),
“a person
designated by the Secretary of State by order for the purposes of this
section.”
Amendment No.
18, which is a probing amendment, is intended to help us understand
more clearly the scope of the measure and the Government’s
intentions in that area. I hope that the Minister will be able to
clarify exactly how the Government intend to appoint such persons, so
we can understand that the process will be above board. I hope that he
will give us some assurances on
that.
Amendment
No. 19, which is another probing amendment, relates to subsection (4).
It seeks a little bit more clarity about how the Government intend to
approach the publication of their memorandum setting out what they have
done. At the moment, the subsection says that that should be done as
soon as is practicable, but we seek to amend it to include a timetable
of six months, not because six months is necessarily an instant panacea
or a perfect period of time, but to be clear as to
whether the Government think that it is adequate, or too long or short a
time, and what they expect will be appropriate. On that basis, I move
the amendment and look forward to the Minister’s
reply.
Lorely
Burt:
I have just a couple of brief
comments. We Liberal Democrats were slightly mystified, in respect of
the purpose of amendment No. 18, as to why the person would not be
consulted. We should like clarification from the Minister. Surely,
there would be a memorandum of understanding for anyone with whom the
NCC was going to have co-operation. We are not clear about why the
provision in question would be
necessary.
On
amendment No. 19, we think that the idea of having some sort of time
backstop could be quite helpful and we would be interested to hear the
Minister’s comments—not necessarily on the six months,
but on having a time backstop in
itself.
Jim
Fitzpatrick:
Clause 20 requires
the council and the designated bodies that are referred to in this
clause—namely, the Office of Fair Trading, the Financial
Services Authority’s Consumer Panel, and the Consumer Panel of
the Office of Communications—to enter into co-operation
arrangements, and it includes provisions relating to such arrangements.
The Secretary of State can require other bodies to enter into
co-operation arrangements by designating them by order.
Amendment No.
18 appears to be based on a misunderstanding of clause 20(2). These
co-operation arrangements are not about making appointments to the new
council; they are about specifying which bodies the council must work
with in the exercise of its functions, and are intended to encourage
effective communication channels, collaborative working, and to provide
an effective interface between the council and others where functions
and responsibilities coincide or overlap.
The word “person”
in clause 20(2)(d) is used in all legislation—and certainly in
this legislation—as shorthand for individuals and persons,
corporate or unincorporated. The word has that meaning throughout the
Bill. During the debate at our first sitting, the Minister for Trade
explained that the definition of “consumer” as a person
who uses or receives goods or services includes persons corporate or
unincorporated.
Over time, it
may be necessary to consider widening the co-operation arrangements to
include other bodies, and, in such circumstances, the Secretary of
State may designate others, such as other consumer bodies, to be
subject to these provisions. It is envisaged that such decisions would
be taken after appropriate consultation, and entry into new
co-operation arrangements would happen as a consequence. I hope that
that explanation clarifies that
point.
Mr.
Prisk:
In this context, I understand exactly the point
that the Minister is making. He is confirming that it is anticipated
that, in almost every instance, the Government will have in mind a
corporate body or an entity, rather than an
individual.
Jim
Fitzpatrick:
Indeed, I can give that confirmation. It may
be an individual, but it may be an office holder. In that regard, it
will be person who is a
single individual, but we are talking about persons corporate or
unincorporated.
Amendment No.
19 also relates to clause 20 and to the requirement for the council and
a designated body to prepare a memorandum setting out the co-operation
arrangements between them as soon as is practicable after agreement is
reached on the arrangements. Amendment No. 19 changes that so that a
memorandum has to be prepared no later than six months after agreement
is reached on co-operation arrangements. We see no reason why the new
council and a designated body would not prepare a memorandum of
agreement and send a copy of it to the Secretary of State at the
earliest possible opportunity. The Secretary of State would certainly
want to know the reasons for any delay. The imposition, or opportunity,
of a time limit would give the wrong impression of how the process
should work. Any time limit specified could end up being seen as a
target, and could result in the memorandum being sent to the Secretary
of State later and not sooner. Therefore, we cannot accept amendments
Nos. 18 and 19, and we request that the movers consider their
withdrawal.
Mr.
Prisk:
The Minister has just satisfactorily answered
amendment No. 18. I am not entirely confident that he has answered
amendment No. 19, although he has demonstrated that the Government
would expect a reply within six months. However, as the amendment says
“No later than six months”, the argument that this would
somehow be regarded as the target
date—
Jim
Fitzpatrick:
Given that these co-operation arrangements
are being negotiated, common sense suggests that signing a memorandum
of understanding would be the last thing to be done. Therefore, there
is an expectation that almost the first thing to be done after signing
it would be to send a copy to the Secretary of State. That is why we
are saying that six months does not really make sense. We think that it
will be a great deal sooner. I know that the intent is genuine but
“as soon as practicable” is more
appropriate.
Mr.
Prisk:
The Minister is being helpful, and I fully
understand that. I said at the outset that this is a probing amendment,
and so I do not intend to press it to the vote. My intention is to
ensure that the arrangements are clear, and are understood by the
parties who have to be engaged in them—and, indeed, by those of
us who must then seek to ensure that subsequent scrutiny is
appropriate.
In his
earlier remarks, the Minister said that he would expect—as any
Secretary of State would—a memorandum to be delivered as soon as
possible. That is an important point. I am grateful to the Minister for
his deliberations. However, on that basis, I am not entirely convinced,
although I am encouraged, if I can put it that way. I beg to ask leave
to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Question
put and agreed to.
Clause 20 ordered to stand
part of the Bill.
Clause 21 ordered to stand
part of the Bill.
Clause
22
Voluntary
Activities
Mr.
Prisk:
I beg to move amendment No. 12, in
clause 22, page 12, line 36, at
end
add—
‘(6)
The Secretary of State must publish the reasons for any approval given
under paragraph
22(4)(b).’.
This
is a probing amendment and our aim is to get the Secretary of State, or
perhaps in this case the Minister, to explain to us the basis for
making his decisions, or not. In what circumstances does the Minister
foresee that this would be unacceptable? For example, if an overseas
corporate body were involved, would that be something that would be
acceptable to the Government, or not? That is one example; there are
others. I would be interested to hear what the Minister has to
say.
Jim
Fitzpatrick:
This amendment relates, as
the hon. Gentleman said, to clause 22, the council’s voluntary
activities and functions in this part of the Bill. Clause 22
(4) (b) provides for the new national consumer council to acquire an
interest in a company with a view to exercising its function under this
clause. Following debates in the other place, a Government amendment
was moved to make the council’s power to acquire an interest in
a body corporate subject to the approval of the Secretary of State. As
a body which is part-funded by the taxpayer, there will be a duty on
the council to satisfy certain requirements regarding its financial
dealings. Having to obtain the Secretary of State’s approval for
expenditure in this area ensures that there is a consistent approach to
proposed expenditure across all aspects of the council’s
functions.
I am pleased
to say—and this might surprise the hon. Gentleman—that
the Government accept, in principle, his probing amendment laid to
clause 22 of the Bill, that the Secretary of State must publish the
reason for any approval given to a request by the new NCC to acquire an
interest in a body corporate. This will ensure that any decisions taken
are transparent and open to public scrutiny. Having considered this
matter, I can advise him and the Committee that we intend to bring
forward a Government amendment to like effect on Report on the basis
that we believe that the drafting could be technically improved. I hope
that, with this assurance, the hon. Gentleman will be minded to
withdraw his amendment.
Mr.
Prisk:
I am grateful to the Minister for that. I think
that it would probably be wise to shut up and sit down at this point,
when one is moving slightly ahead. I am delighted that the Minister has
been able to look at this in a positive way and I am happy to withdraw
it on the basis that has just been
explained.
Amendment,
by leave,
withdrawn.
Question
proposed, That the clause stand part of the
Bill.
Mr.
Prisk:
I have a couple of points that I
wish to raise on the clause as a whole without wishing to detract in
any way from the genial state of our discussion. This is a broadly
worded clause which enables the council to undertake a wide range of
paid and unpaid research and related activities. Subsection 3, as
members of the Committee will see, says that the council
may:
“Spend
such sums as it considers reasonable”.
I entirely accept, and we have
always argued, that the council must be independent. However, it would
be helpful if the Minister confirmed that he is confident that there
are satisfactory management and audit oversight provisions to ensure
that, as public money is involved, it is to a standard that our
constituents would expect.
Turning to subsection 4, the
council is allowed to set up a limited company to exercise a particular
function. This is, again, quite a wide power. If that company were to
fail or to face significant liabilities, how would the Secretary of
State be able to intervene; or is it the intention that the Secretary
of State should not intervene?
10.15
am
Lorely
Burt:
I would appreciate a bit of
clarity from the Minister about what he envisages. The measure will
give the NCC the power to set up a subsidiary organisation or buy an
organisation. The Liberal Democrats are wondering what sort of
activities he envisages. The NCC could, if it wished, change its nature
and function as we understand it. It could do stuff for
money— [Interruption.] Sorry; it could conduct activities,
I should say, for money. It is the nature of the beast that we are
interested in understanding where he believes the limits of the
NCC’s activities should
be.
Jim
Fitzpatrick:
The clause provides the council with the
power to carry out commissioned work in any area where it has skill,
experience or expertise. Under the clause, the council will be able to
give advice or assistance to others and be paid for providing that
service. The provision is intended to give the council the power to
participate in voluntary activities of its own choosing such as
research projects and to receive remuneration for the services
provided.
Clause 22(3)
allows the council to spend reasonable sums in pursuing commercial
opportunities that arise in the fulfilment of its functions, a point
raised by the hon. Member for Hertford and
Stortford.
Stephen
Pound:
I am not trying to be awkward; I am not an awkward
person. But if the NCC expanded its remit and spread its wings to
involve itself in some semi-commercial organisation, and a consumer of
the services provided by that organisation—the Minister probably
knows where I am going with this—was unhappy about the
organisation, to whom would that consumer
complain?
Jim
Fitzpatrick:
My hon. Friend raises an interesting
conundrum. Although he protests that he is not a member of the awkward
squad, I must remind him that I was his Whip for four years, and I know
exactly his talent. I will research his question and get him an answer
but I am sure that, as in any organisation, there will be Chinese walls
and accountability lines. The new national council will have the
sectoral expertise to handle a complaint from one section about dealing
with
another.
I
was talking about accountability. In response to the point raised by
the hon. Member for Hertford and Stortford about financial decisions,
like any organisation the council will have an accounting officer,
usually the
chief executive, who will be ultimately responsible for providing the
necessary assurances that the Government’s strict accounting
guidelines will be adhered to. On responsibility and liability, any
companies set up would be limited companies and would therefore have
limited liabilities, so there would be protection. The arrangements
laid down for the council contain protections both for the public in
how finance is expended and for the council in any exposure to
liability that it might have.
Question put and agreed
to.
Clause 22
ordered to stand part of the
Bill.
Clauses
23 to 25 ordered to stand part of the
Bill.
Schedule
2 agreed
to.
Clauses 26
and 27 ordered to stand part of the
Bill.
Further
consideration adjourned.—[Steve
McCabe.]
Adjourned
accordingly at twenty minutes pastTen o’clock till this
day at One
o’clock
.
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