Consumers, Estate Agents and Redress Bill

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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.
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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Prepared 20 April 2007