The Scotland Bill

Written evidence submitted by Consumer Focus Scotland

Introduction

1. Consumer Focus Scotland welcomes the opportunity to provide written evidence to the Scottish Affairs Committee on its Scotland Bill inquiry. Consumer Focus Scotland is the independent consumer champion for Scotland. We work on issues that affect consumers in Scotland, while at the same time feeding into and drawing on work done at a GB, UK and European level. As part of a UK body, we focus also on ensuring that consumers in Scotland are treated as fairly as those elsewhere in the UK. Where there are differences between Scotland and other parts of the UK (for example owing to our different demographic make-up) that mean uniform treatment would lead to significantly different results, we seek to highlight these and to secure proportionate benefit for consumers in Scotland.

2. Consumers in Scotland are generally very similar to consumers in the rest of the UK. But on occasion, Scotland’s different geography and demography needs to be taken into account if fairness is to be achieved. Much more of Scotland is rural than is the case for the UK as a whole, for instance; and in particular the special circumstances of those who live and work on islands is more of an issue in Scotland. Greater remoteness from urban centres often means fewer choices for consumers: e.g. in terms of energy supply, transport, telecommunications and retail services.

3. Consumers in Scotland are also more likely to be economically disadvantaged than UK consumers in general. They are less likely to be in employment, less likely to be high earners, more likely to be in poor health, more likely to be in fuel poverty and more likely to need benefit support. Consumers in Scotland also differ from UK consumers overall in being more loyal in their habits, often favouring Scottish service providers as a matter of principle and being less likely to switch providers to save money. [1]

4. Rather than comment on the provisions of the Bill itself, we will focus primarily on issues which are likely to affect consumers in Scotland most directly. We do support the Bill’s provisions in two respects, however. Firstly, we support the requirement on UK Ministers to reach agreement with Scottish Ministers before making a recommendation for appointment of the BBC Trust representative for Scotland. As a result of devolution, a wide range of key political, economic, social and cultural decisions affecting people in Scotland are taken at Holyrood rather than Westminster.  There is therefore a distinct Scottish news agenda, and the BBC has a critical role to play in offering the Scottish public in-depth information, coverage and opinion about the key political issues affecting many important areas of their lives.

5. Secondly, w e welcome the Bill’s provisions in relation to the regulation of healthcare professionals.  We support the general principle that this should be reserved, ensuring consistency and clarity throughout the UK in relation to all groups of professionals working within the health sector. Those who use healthcare services in Scotland should be able to expect the same standards to apply to such professionals as service users who live elsewhere in the UK.

6. The remainder of our comments relate to the last question within the committee’s terms of reference , namely : What further provisions could/should be included in the Bill in order to further amend and develop the Scotland Act 1998?

The consumer perspective

7. From a consumer perspective, although we consider that the Bill presents an opportunity to increase the Scottish Parliament’s powers in some respects, we do not believe that this is the primary issue. We consider that what is more important is how the Scottish Parliament and Government exercise the powers and influence which they already have, and how the UK and Scottish governments and relevant regulators work together to take full account of Scottish issues, regardless of whether they relate to reserved or devolved responsibilities.

8. Although consumer protection law in its narrowest sense is reserved to Westminster [2] , the breadth of the consumer interest is at the heart of devolved policy, including legal services, health, transport, food and diet, social care, energy efficiency, water, digital communications, housing and education. However from the consumer perspective, these issues are often dealt with in a way which can be piecemeal or disjointed.

9. We are aware of many instances where there has been a lack of clarity as to whether an issue is reserved or devolved. While the regulation of energy is reserved, for example, fuel poverty and energy efficiency are devolved. Another example is consumer protection for buyers of new build housing: while consumer protection law is reserved, the devolved law of property governs the contract between the builder and the buyer.

10. There are also areas of policy which are reserved to Westminster, but which raise particular issues within a Scottish context. The fact that the regulation of communications and other basic services is reserved to Westminster, for example, does not detract from the fact that these are a crucial component of Scotland’s social, environmental and economic fabric, cutting across a range of devolved responsibilities. How best to improve rates of internet access in deprived areas, for example, is a matter for Scottish policy on social inclusion. Broadband roll-out in rural areas of Scotland is also a crucial issue, which has implications for policy on devolved matters such as economic development, lifelong learning, public service delivery and cultural issues.

11. This principle cuts both ways. Water policy, for example, is devolved in Scotland, but water is a basic essential that everyone must be able to access and afford. Any approach to ensuring that this happens must recognise that this element of social justice can only be achieved by acknowledging the need to look outwards to reserved areas of public policy such as social security, consumer protection, competition law and human rights.

12. There are three particular areas where we wish to comment on possible further changes to the powers of the Scottish Parliament, as set out below.

(1) Consumer enforcement, advice, education and advocacy

13. Consumers throughout the UK are protected by the same consumer protection and competition laws, and the same regulatory arrangements for financial services, energy, telecommunications and postal services. While we support this in principle, the mechanisms through which these are enforced and delivered have not always worked as well as they might to secure equity for consumers in Scotland. This is one of the key consumer issues arising from the current overlap of responsibilities between the UK and Scottish Governments, which has been brought sharply to the forefront by recent UK Government proposals for major changes to the delivery of: enforcement of consumer protection; consumer advice, information and education; and policy advocacy on consumer issues [3] .

14. For example, as we have recently highlighted, [4] there is a complex and confusing legal framework for consumer protection in Scotland.  Consumer protection legislation is reserved to the UK P arliament, but responsibility for its enforcement lies with Scottish local authorities’ trading standards departments . Following a strategic review of trading standards in Scotland [5] , we concluded that there are a number of areas of concern for consumers: the legal framework for consumer protection in Scotland is complex; the consumer interest is not embedded within Scottish Government, regulators or local regulatory services; local regulatory services do not focus on activities that could empower consumers; and there are no clear national priorities for local regulatory services and therefore no effective performance management.

15. This is not in the interests of consumers in Scotland, and requires to be addressed. Because many Scottish councils are much smaller than their English counterparts, trading standards services are often tiny, isolated and marginalized, leaving them struggling to deliver a full range of services to the public [6] . Yet the Scottish Government has no legislative locus to require councils to collaborate. Neither is there any clear mechanism for the Scottish Government to shape delivery of the greater enforcement role for trading standards services envisaged by the UK Government in its recent proposals for change. We would therefore suggest that a slight adjustment to legislative powers to give an administrative role here for the Scottish Government would add value for consumers in Scotland.

16. Another key issue here is the current division between responsibility for consumer protection laws and consumer education, [7] information, advice and advocacy, which lies with Westminster, and responsibility for delivery of financial capability and inclusion and legal education and advice, which lies in Scotland. While consumer education and advice are viewed as reserved matters, legal education, housing advice and financial inclusion and capability are seen to be devolved (even though financial services policy is reserved). Yet it is difficult to see how these matters can be separated in practice, as they are closely intertwined in people’s lives, as well as in administrative and policy terms.

17. We consider that it would be in the interests of consumers in Scotland if responsibility for delivery of consumer education and advice, together with the funding for their provision, were to be devolved to the Scottish Government. This would not affect the continued reservation of consumer protection laws as currently defined. Such a change would allow the Scottish Government to consider the delivery of education, information and advice on consumer matters, legal rights and responsibilities, housing advice, money advice and financial capability as one integrated policy, improving the access and availability of such information and advice for consumers in Scotland.

18. We also believe that it would be beneficial for consumers in Scotland if primary responsibility for the delivery of consumer advocacy in Scotland were to lie with the Scottish Government and Parliament rather than with Westminster. While consumer protection (in its narrow sense) and consumer law could remain reserved, many of the key issues affecting consumers on a day to day basis are devolved. Even where they are reserved, they will often impact differently on consumers in Scotland than on those in other parts of the UK: the different legal system, institutional landscape, and delivery of devolved policy by the Scottish Parliament and Government must all be taken into account and reflected when representing the Scottish consumer voice.

19. As the full impact of the recession unfolds, its profound impact on the lives of consumers makes it all the more critical that the consumer voice is heard at strategic level in the Scottish Government and the Scottish Parliament. Going forward, it will be important to ensure that there is a strong, expert and accountable body that will speak for consumers of both public and private essential services in Scotland, whether devolved or reserved, and to act in their interests. The UK Government’s proposals for change to the delivery of consumer advocacy are not based on a specific and in-depth appraisal of the situation in Scotland. There are clear gaps at present in the consumer advocacy arrangements for Scotland. There is, for example, a clear need to establish an effective voice for consumers of public transport, as the current arrangements for public transport advocacy in Scotland are crowded, fragmented and complex. There is also a need to establish an effective voice for consumers of broadcasting services in Scotland. The Communications Consumer Panel, which is part of Ofcom and which has a Panel Member for Scotland, is soon to be disbanded, leaving a significant gap in the consumer landscape. 

(2) Regulation issues

21. Where markets are reserved, it is important that UK authorities and regulators take into account how those markets operate within the devolved context and to demonstrate that they are working effectively with the Scottish Government and relevant stakeholders to ensure that these markets are working for consumers in Scotland. It is also vital that issues of devolved policy that may arise as a result of regulatory or supplier activity are addressed in light of the UK legal and regulatory framework.

22. We welcome the fact that some UK regulators have established offices in Scotland in recent years, and have made considerable efforts to ensure that they feed back intelligence about what is happening in Scotland and engage constructively with the Scottish Government. We are concerned, however, that the current financial situation may lead to a reduction in resources for this important work.

23. In terms of how issues affect people’s daily lives, no one policy area works in isolation from others. The Scotland Act 1998 recognised that cross-border authorities that are accountable to the UK Parliament would continue to be significant in the social and environmental life of Scotland. The Act provides that UK Ministers should consult Scottish Ministers before exercising certain functions in relation to cross-border public authorities, [8] and allows for their functions to be modified by Order in Council. [9] This is particularly important in light of the current Public Bodies Bill, which proposes wide-ranging powers for UK Ministers to change the functions of public bodies or abolish them without full parliamentary scrutiny. There is clear scope under the 1998 Act for the Scottish Government to put in train measures to increase the accountability of bodies such as UK regulators whose activities have a clear impact on issues devolved to the Scottish Parliament, and we would like to see this happen. The UK Parliament could also do more to recognise this impact when setting up or changing existing statutory bodies by routinely assessing this during the passage of every relevant bill.

(3) The post office network in Scotland

24. The Scottish Government and Scottish Parliament currently have no direct responsibility for the post office network, despite its vital importance to social cohesion, access to services, and the sustainability of many local communities in Scotland. We believe that the Bill offers an ideal opportunity to address this issue, by giv ing the Scottish Government a clearer role in relation to the post office network in Scotland.

25. The post office network in Scotland needs to reform and modernise if it is to be sustainable, and to widen the range of services that it offers to customers.  Increasing the number of Scottish local government services that are delivered through post offices could help secure a sustainable post office network and improve consumers’ access to a range of important services.  However, Scottish service providers need to be confident that post offices offer an attractive route through which they can deliver services to customers. At present they have very little scope to influence this situation.

26. Giving the Scottish Government a clearer remit in relation to the post office network would bring considerable benefits for consumers in Scotland. It would ensure that the vital role of the post office network is recognised, taken into account and developed within the overall strategies for public service delivery, social inclusion and economic development in Scotland. It would also give the Scottish Government a clear locus to intervene to ensure that forthcoming changes to the post office network, such as the roll out of the Post Office Locals model, take account of the particular interests of consumers in Scotland.

27. We are not arguing that responsibility for the post office network should be fully devolved to the Scottish Parliament.  The network is a coherent UK-wide network, and post offices and consumers in Scotland clearly benefit from being part of this single network.  The integrity of the network must be protected whatever solution is applied.  However, we believe that giving the Scottish Government a clearer role in relation to the network would bring significant benefits for consumers in Scotland . It would also help to protect the integrity of the network by ensuring that key issues of particular importance to post office consumers in Scotland are fully recognised, taken into account and acted upon. 

28. We have no set view on how this role for the Scottish Government in relation to the post office network might be achieved. Some policy areas where it may be worth investigating whether the Scottish Government might be given a role could include the post office access criteria in Scotland; the Scottish element of the post office subsidy; or the role of post offices and public service delivery. However, it is essential that a comprehensive impact analysis is carried out before any of these, or any other approaches are taken forward, to explore how any measure would work in practice and ensure that there would be no unintended or detrimental consequences for consumers in Scotland or in other parts of the UK.

January 2011