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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(Afternoon)[Mr. Martin Caton in the Chair]Consumers, Estate Agents and Redress Bill1.3
pm
Clauses 28
and 29
ordered to stand part of the
Bill.
Clause 30Abolition
of Energywatch and
Postwatch
Susan
Kramer (Richmond Park) (LD): I beg to move amendment No.
22, in
clause 30, page 17, line 25, leave
out subsection (2) and
insert
(2) The Secretary
of State may make an order by statutory instrument to abolish the
Consumer Council for Postal Services, provided
that
(a) no such order
shall be made unless a draft of it has been laid before, and approved
by a resolution of, each House of Parliament,
and
(b) no such order shall be
made before
2010..
The
Chairman:
With this it will be
convenient to discuss amendment No. 13, in
clause 30, page 17, line 25, leave
out subsection
(2).
Susan
Kramer:
For us, this is one of the most significant
amendments that we have tabled in Committee. The effect, Mr.
Canton
[
Interruption.
] Sorry,
Mr.
Caton
The twofold
effect of the amendment is to provide, first, that an affirmative vote
of the House is needed for Postwatch to be merged into the new National
Consumer Council and, second, that no such order can be made before
2010.
The
Minister will have gathered that my party is extremely concerned about
the timing of the merger of Postwatch into the NCC. We do not doubt the
long-term value of the merger, but we think that the NCC and its role
are sufficiently important that the council must start well, function
well and serve the long-term purpose in such a way as to be well
regarded by consumers in this country. In other words, it should not
get off on the wrong
foot.
We
are also entering a crucial period for the work of the current
Postwatch. As we said earlier our debates, and as others have
acknowledged, we are facing the closure of probably 2,500 post offices
under a compulsory
programme. In addition, there will be voluntary closuresthere
always are. There is every reason to think that the pace of voluntary
closure may tend to increase, rather than decrease, as uncertainty is
added into the general picture. There is a general sense of a network
in decline, rather than a network in
revival.
In addition,
Postwatch is taking on a second role, because Royal Mail has now
informed Postcomm that it wishes to change the way that it prices to
business. It is interested in a zonal system, which will have a huge
impact on rural businesses, which might well face much higher prices
for business post. Initially, the price differential would be small
but, from a reading of the details from Royal Mail, it would increase
significantly over time if the system were to go ahead.
The same
issues will face businesses in outer London, includingI may
say, for the purposes of conflict of interestmy constituency.
Consumers will be impacted upon, because, undoubtedly, business is
likely to change how it communicatescertainly with businesses
in rural or suburban areas, given the change in the pricing profile.
Postwatch is now taking on the work of surveying business, to feed into
the consultation on the issue, which will probably run until at least
this November. We are looking at two absolutely massive pieces of work,
which, frankly, do not overlap; they are completely different aspects
of the mail
service.
We were
concerned earlier that the core structure of the NCCs remit is
not regionally based. The council has the ability to put in place
regional committees, but that is not the core of its structure.
However, that is the core of Postwatch. In a sense, that is the
mechanism, through Postwatch, which will particularly focus on the
closure of those 2,500 post offices and any additional voluntary
closures. The Postwatch structure currently works regionally, and that
is how staff are organised, how the information flow is managed and how
authority spreads throughout the
system.
We
are looking at those massive pieces of work at the same time as the
proposed changeover. Unfortunately, I have spent a significant amount
of my life in business organisations going through great change. From
direct knowledge, I can assure the Committee that nobody ever
overestimates the damage to morale that happens in a period of
uncertainty and change. It is always underestimated. The impact will be
devastating, even on people who are responsible and determined to carry
out their job well and to function bestin this case, for this
countrys consumers. The uncertainties are shared by families,
friends and neighbours. The people affected must make decisions about
whether they are going to move, and they do not really know whether
they will have a job or quite what is entailed. There is no way to give
adequate reassurance. We will be asking people not only to function in
that particularly difficult environment, but to carry out those two
major cases of
work.
It is also
evident from our discussions in prior phases of the Committee and today
that much of the work that needs to be done to implement transition is
still in its early days. How is a vulnerable postal customer
identified? If someone calls in to complain about a letter, how do we
know whether they are vulnerable if we know nothing about their income,
their background or their history? All kinds of questions must be
answered before the NCC can step in properly to fulfil its
remit.
We are not opposed to the merger
of Postwatch into the NCC, but it must be done with clarity and
effectively. If it is rushed, that causes various problems. To rush it
in the context of two crucial and critical pieces of work that will
have a great impact on both consumers and businesses is asking for a
disaster in the NCCs early days and would fail the public. This
is a crucial set of issues, and I urge the Government to think again,
and 2010 would seem the ideal date to aim for. Let us make sure that
everything is done and dusted, and done well, and that the public have
been properly served before making this change. The NCC is a body to be
there for the long term; it loses nothing by having a little patience
at the
start.
Mr.
Mark Prisk (Hertford and Stortford) (Con): I welcome you
to the Chair this afternoon, Mr. Caton.
The hon. Member for Richmond
Park has highlighted many of the issues that we would like the Minister
to address. I do not intend therefore to repeat them at length. The
Opposition are concerned about the merger of Postwatch and the new
council, both in terms of the principle and the timing. The hon. Lady
mentioned the latter. While far from perfect, certainly in the view of
the National Audit Office, Postwatch is very important in ensuring
effective representation for all mail consumers.
Postal services are different
from utilities such as gas and electricity, both in their nature and
character, as the hon. Lady suggested. Sector-specific expertise needs
to be carried over. The Minister alluded to that in an earlier debate.
Therefore, what inquiries has he made to satisfy himself that such
expertise will be maintained? What processes and sector-specific issues
does he believe the new council will need to transfer? Is he satisfied
that the timing of the merger will not cause consumer interests to be
diminished? That is the heart of the concern, and it would be helpful
if he clarified that issue.
Before I was elected to the
House, I worked in the business world and it was clear to me that
mergers distract organisations and their management from focusing on
day-to-day issues. We have to be convinced that the Minister has taken
all reasonable steps and has considered what the problems will be, to
ensure the vital role of representing those consumers will not be lost
or diminished in the coming
months.
The
Parliamentary Under-Secretary of State for Trade and Industry (Jim
Fitzpatrick):
AmendmentNo. 13
would prevent the abolition of Postwatch under the Bill and would
therefore deny consumers in the postal services sector the benefit of
having a stronger, more coherent consumer advocate to represent their
interests.
Amendment No.
22 would require the Secretary of State to carry out the abolition of
Postwatch by making an order, approved by a resolution of each House.
Concerns were raised on Second Reading about the timing of the merger,
which coincides with the post office network restructuring programme.
Amendment No. 22 seeks to delay the abolition of Postwatch until at
least 2010, by which time the restructuring programme should have been
completed.
One of the
most fundamental objectives of the Bill is the creation of a
cross-sectoral consumer advocacy body, which is stronger than the sum
of its parts, to address the consumer issues that frequently exist
across sectors of the economy. The new body must have the critical mass
to engage effectively with the Government, regulators and industry
sectors, on the basis of expert and informed analysis, and the benefit
of being able to draw on experience and expertise from a number of
sectors.
As
Opposition Members have said, maintaining the existing sectoral
expertise in the postal services sector is vital to the new
bodys success and to the Governments proposals for a
sustainable post office network. A strong consumer advocate and the
expertise that it will inherit will be important in a sector that has
only recently been opened to
competition.
1.15
pm
In
recognition of the importance to consumers of post office
restructuring, the new council will be given the specific function of
investigating any matter relating to the number and location of public
post offices, as we discussed under clause 16. That replicates the
provisions in the Postal Services Act 2000 that apply to Postwatch. The
new council will therefore continue the role of Postwatch in
representing the views of consumers in the post office restructuring
programme, thus offering consumers a strong voice on that issue and on
similar matters that arise in other
sectors.
Delaying
the inclusion of Postwatch in the new arrangements for consumer
advocacy would not only delay the benefits to consumers of having a
strong voice to represent them, but prolong the period of uncertainty
for existing staff and consumers and increase the likelihood of staff
departures and retention
problems.
As
I mentioned this morning, we envisage that the new arrangements will be
in place within a year of the Bills receiving Royal Assent.
Postwatch is fully engaged in early planning for the implementation of
the new arrangements. Two groups have been set up, tasked with ensuring
that the consumer interest continues to be effectively represented
during the transition to the new arrangements and when the new
arrangements are in
place.
For
example, work undertaken by the groups so far includes the preparation
of a timetable setting out key milestones on a critical path to
implementation; the mapping of existing work, resources and best
practice to be transferred to the new council, as well as additional
work that the new council could usefully undertake, such as greater use
of web-based consumer advocacy; the identification of tasks required to
close down Energywatch, Postwatch and the NCC; and early planning to
extend the consumer direct service to the energy and postal services
sectors. That service already provides help and advice to consumers
with inquiries and simple complaints relating to other sectors. Its
extension to consumers in the energy and postal services sector will
provide them with a first port of call for help, whatever sector their
inquiry or compliant relates to.
As hon.
Members would expect, we are taking great care to ensure that the work
being undertaken by Postwatch on post office network restructuring will
not be disrupted during the transition period. Additional staff and
other
resources are being allocated to Postwatch to assist with the programme,
and those resources will be carried forward into the new arrangements
for the duration of that
work.
Mr.
Prisk:
I am interested in the additional resources. By
whom are they being provided and who is
paying?
Jim
Fitzpatrick:
Postwatch is working up what it believes to
be the appropriate number of additional staff, and discussions are
going on with the shareholder executive. No financial problems have
been flagged up, so as far as I am aware, the budget is covering the
resources that are required.
Susan
Kramer:
Is the Minister referring to the
temporary staff that Postwatch always takes on to deal with a project
on this scale, or is he suggesting that an additional resource is being
put in, because he is trying to manage the transition on top of that? I
had understood that the standard number of staff associated with a
project on this scale would be involved.
Jim
Fitzpatrick:
The hon. Lady is correct in her assumption
that the additional staff are those who will have to deal with the
additional work load that will need to be undertaken when Post Office
Ltd publishes its proposals in the way that we have described and has
to engage with local communities, parliamentarians and so on.
Arrangements are in hand for them. Discussions are taking place to
identify what is required to make the transition as smooth as
possible.
I do not
underestimate the challenge, as the hon. Lady depicts it, that the new
NCC will face in ensuring that the transition is as seamless as
possible. Discussions and negotiations are taking place to ensure that
the appropriate arrangements are in place. The need for resources, such
as staff, will have to be taken into account. In the same way, full
weight is being given to the need to provide certainty to Postwatch and
the other consumer bodies about the location of the new
councils headquarters.
We are considering the issue
with the benefit of input from each of the consumer bodies. The
decision about where the new council will be located will take into
account such matters as the cost of the existing property portfolio and
concerns about the retention of staff and therefore the expertise of
the sectorissues raised by the hon. Members for Richmond Park
and for Hertford and
Stortford.
We
recognise the importance that Postwatch places on the work of its
regional committees and the role that they will play in the assessment
of the post office network restructuring programme. The Bill makes
specific provisions to enable the new council to establish regional
committees where it considers that they will be beneficial to
consumers, as we have already discussed. That is a matter for the new
council to determine. However, as I have said, we are working with the
existing consumer bodies to plan for the implementation of the new
arrangements.
The
role of Postwatch in handling complaints by consumers is self-evidently
important. The new arrangements for the postal services sector as a
whole
include the introduction of redress schemes, to ensure the resolution of
complaints and to provide compensation or other forms of redress where
they are warranted. The redress mechanism must be independent from both
parties involved in a complaint, to ensure that the decisions reached
on each case are fair and impartial. That is why Postwatch does not
have the statutory functions to ensure complaint resolution, rather
than simply complaint handling. However, the redress schemes will
ensure that consumers receive resolution of each complaint, as the
decisions made by the redress schemes will be binding on suppliers in
the postal services
sector.
The hon.
Member for Richmond Park raises an important point about the
identification of vulnerable consumers. She raised it this morning,
too. Obviously, we recognise the need to ensure that vulnerable
consumers can be identified, and, in any case, that process goes on at
present.
I can
understand why the hon. Lady discussed Postwatch and Energywatch. They
deal with all complaints, and therefore evidence of a customers
vulnerability can emerge during their exchanges with the consumer. We
are currently working with consumer bodies, businesses and established
redress schemes on all aspects of addressing complaints in practice,
including the identification of vulnerable consumers. However, the new
council will need to ensure that there are strong and effective
communications with Consumer Direct redress schemes and electricity,
gas and postal services companies. Some companies already have
specialist teams to help vulnerable consumers. We need to capture that
expertise and provide a system of communications to ensure that,
wherever vulnerability is identified, the right sort of help can be
provided.
We all know
that consumers will contact anyone in the first instancethat is
entirely understandableand they often contact us as Members of
Parliament, or write directly to Ministers. What we need to do and what
we will do is to bring to bear a new, coherent and cohesive approach to
dealing with consumer complaints generally and dealing with vulnerable
consumers in particular. As I mentioned to the hon. Lady, that work is
ongoing.
We believe
that these amendments do not best serve the interests of consumers. We
understand exactly why they have been proposed, and we recognise that
there is a genuine concern. However, we are confident in the
arrangements that we are making, and we therefore believe that the
amendments are unnecessary. I ask the hon. Lady to withdraw the
amendment.
Susan
Kramer:
I appreciate the answer that the
Minister has given, and he was very good in expanding beyond the
narrowness of some of the issues that I raised; I appreciate that.
However, one of his arguments was that to delay the mergerI
think that it is actually the takeover by NCC of Postwatch and that it
is clearly not a mergerwould deny mail users the advantages of
a redress scheme. I point out to him that, for a lost letter, the
typical redress is one book of 12 first-class stamps; that is hardly
what one would call a massive financial benefit. The value of following
up complaints in the mail service is to get improvements for the
future. So the redress scheme, although it will always be valuable and
I would always like one to be in place, is not the most urgent element
when dealing with the post.
The Minister was very kind in
addressing the issue of vulnerability. I raise that matter at this
pointit will be raised again at other pointsto
demonstrate how early in the process we are, because it is exceedingly
difficult to find a way to identify vulnerable users. I am talking
about a clause affecting the Post Office. However, as I said before,
when someone calls up and complains about a lost letter, what is done?
There is not some sort of financial history, as there might be if they
were being provided with electricity and they have an account. What do
we do? Do we say, Are you recently bereaved and feeling great
grief, so you cannot deal with this? Is your IQ rather low? Have you
had a recent bout of depression? How does one identify a
vulnerable user in that case? Perhaps there is a way to do it, but we
certainly have not arrived at it.
We are talking about merging
the organisations. Anybody who raises a complaint will lose the benefit
of Postwatch, which followed through any complaint, and complaints will
be narrowed down to the specified group. If we were doing only the
merger, I would understand that the Minister needed to progress as fast
as possible, but it is being done in the context of two major pieces of
work. One of them tends to be missed; I heard no reference to the
enormous piece of work that must be done on zonal pricing. It deals
primarily with the business sector and with consumers who will be
impacted, in addition to all the closures.
I appreciate that the Minister
intends for all the work to succeed; I am objecting not for the purpose
of prevarication, but because I want the process to be successful, both
for consumers and for the NCC. I must therefore press the amendment to
a Division.
Question proposed, That
the amendment be
made.
The
Committee divided: Ayes 2, Noes
8.
Division
No.
1
]
AYESNOES
Question
accordingly negatived.
Clause 30 ordered to stand
part of the
Bill.
Schedule
3 agreed
to.
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