Clause 1 [The National Consumer Council and its territorial committees]:
1: Clause 1 , page 2, line 2, at end insert—
“(3A) The territorial committees may exercise, on behalf of the Council, the following functions—
(a) in the case of the Scottish Consumer Council, the Council’s functions under sections 7 to 16, 18 and 20 to 25, so far as they are exercisable in relation to Scotland; (b) in the case of the Welsh Consumer Council, the Council’s functions under those sections, so far as they are exercisable in relation to Wales; (c) in the case of the Northern Ireland Postal Services Committee— (i) the Council’s functions under sections 7 to 11, 14 to 16, 18, 20 and 22 to 25 so far as they are exercisable in relation to Northern Ireland, and (ii) the Council’s functions under section 21 so far as they are exercisable in relation to consumer matters which relate to relevant postal services in relation to Northern Ireland. (3B) For the purpose of facilitating or improving co-ordination in relation to the carrying out of its functions, the Council may from time to time—
(a) impose restrictions or conditions on the exercise by a territorial committee of a function by virtue of subsection (3A); (b) give a territorial committee general or specific directions relating to the exercise of a function by virtue of that subsection. (3C) Nothing in subsection (3A) prevents the Council from exercising any of its functions referred to in that subsection.”
The noble Lord said: My Lords, I rise to speak to the government amendments to Clauses 1 and 37. In so doing I wish to acknowledge the thoughtful and incisive contributions made in Committee by the noble Baronesses, Lady Wilcox, Lady Miller of Chilthorne Domer and Lady O’Cathain, and my noble friends Lord Williams of Elvel, Lord O’Neill of Clackmannan, Lord Borrie and Lord Whitty. I am grateful to noble Lords for the constructive way in which they have conducted all our deliberations on the Bill.
We have considered carefully the points made in respect of the functions to be accorded to the Scottish Consumer Council, the Welsh Consumer Council and the Northern Ireland Postal Services Committee. The amendments to Clause 1 are designed to provide the territorial committees with the power to exercise the key functions of the council and to enable the committees to exercise these functions within their relevant territories. In defining the functions to be given to the territorial committees under this amendment, I believe that we have gone further than some noble Lords may have envisaged in Committee where there was a focus on the core functions described in the Bill: the representative function, the research function and the information function, as provided in Clauses 7 to 9. This amendment provides these functions to the Scottish Consumer Council and the Welsh Consumer Council, and in addition provides the committees with the powers of investigation set out in Clauses 10 to 15 inclusive, the power to prepare and publish reports in Clause 16, the function of providing advice, information and guidance in Clause 18, the power to co-operate and give assistance in Clause 20, the power to undertake voluntary activities in Clause 21 and the supplementary powers set out in Clause 22. Information gathering powers in Clauses 23 to 26 are also provided to these territorial committees.
The powers given to the Northern Ireland Postal Services Committee also extend to the core functions described in the Bill: the representative function, the research function and the information function as provided in Clauses 7 to 9. In addition, the committee is provided with the powers of investigation in Clauses 10 and 11, the function of referring matters to the Postal Services Commission in Clause 14, the function in Clause 15 of making investigations into public post offices, the power to make reports in Clause 16, the provision of advice, information and guidance contained in Clause 18, the power to co-operate and give assistance in Clause 20 and the supplementary powers and information functions described in Clauses 22 to 25.
The committee will also be able to exercise the functions of the council under Clause 21—voluntary activities—in relation to relevant postal services in Northern Ireland. In addition, the amendments provide for the council to facilitate or improve co-ordination between the council and the Scottish and Welsh Consumer Councils and the Northern Ireland Postal Services Committee by imposing restrictions or conditions on the territorial committees’ exercise of functions and giving directions relating to the exercise of any function to the territorial committees.
There are very few instances where the functions of the council are not exercisable by the territorial committees and I should like to take this opportunity to explain to your Lordships’ House why this should be. First, in Clauses 4 to 6 there is an obligation for the council to provide a statutory forward work programme and annual report. It is anticipated that the territorial committees will have a very important role in the production of both the forward work programme and the annual report, which will incorporate their proposed activities and reported activities as appropriate and as agreed with the council. Consequently the statutory requirement would remain unchanged by the amendment.
Secondly, Clause 19 imposes a duty on the council to enter into co-operation agreements with designated bodies, including the Office of Fair Trading, the Financial Services Consumer Panel and the Ofcom Consumer Panel. We do not consider it necessary or desirable to replicate that requirement for each territorial committee because it would be unduly cumbersome to have a multiplicity of co-operation arrangements.
Thirdly, there is a function of the council in Clause 26 to provide information where required to do so by an authorised person. I hope noble Lords will agree that it would be onerous for the person making the request to be required to make the request for information to the council and each of its territorial committees. For that reason we have not provided that function to the territorial committees.
The amendments include a proposal to divide Clause 1 into two clauses for the sake of clarity, which I hope will find favour with noble Lords. Amendment No. 42 represents a consequential change to Clause 37 reflecting the proposed allocation of functions to the Northern Ireland Postal Services Committee. I beg to move.
My Lords, I am grateful to my noble friend for at least listening to the arguments that my noble friend Lord O’Neill and I put forward in Grand Committee. I am advised that the amendments go at least three-quarters of the way towards what the Welsh Consumer Council wanted. I am informed by my noble friend Lord O’Neill that the Scots take the same view.
I have a slight problem with the proposed new subsection (3A) in Amendment No. 1. This allows the national council to impose restrictions or conditions on the exercise of a function by a territorial committee by virtue of subsection (3A). In other words, the national council can at any time more or less pull the plug. I should be grateful if my noble friend, when he winds up, will explore with us exactly what that means.
My Lords, I was not able to take part in the proceedings so far on the Bill but I have read them with interest. The Minister has virtually rewritten this part of the Bill. Why on earth did the Government pay so little attention to the requirements of devolution that they did not do a lot of this in the first place? It seems to be an extraordinary waste of parliamentary time. Nevertheless, it is excellent that he has listened to the arguments and I am sure that everyone will be grateful for it.
My Lords, as my noble friend the Minister knows, in line with the noble Baroness’s comments, there is more joy in this House for one sinner that repenteth. I was worried initially about the clauses on devolution but the discussions the department has had with Welsh and Scottish interests in the mean time have led to a very good solution which largely reflects the practice that has been conducted, informally and without statutory basis, by the National Consumer Council and its Welsh and Scottish counterparts over the past few years. In that sense, the anxiety of my noble friend Lord Williams may be slightly exaggerated. In practice, this reflects how the Welsh council operates now and how an expanded body would operate in the future. It is a very successful conclusion of this part of the Bill.
My Lords, the correspondence I have had with the Scottish Consumer Council representatives “as is” tends to suggest that they are very happy with the outcome of these discussions. It is to the Minister’s credit that he took on board the anxieties of a number of us and the consumer councils in Scotland and Wales. They will now be able to operate effectively with the devolved Assembly and Parliament. How successful these things are will depend on experience, but the constructive approach adopted by the Minister is certainly giving the proposal a fair wind. My colleagues in Scotland are sympathetic to his intentions and objectives.
My Lords, I thank noble Lords for their contributions. I am grateful to my noble friends Lord Whitty and Lord O’Neill for their kind words and to my noble friend Lord Williams for his conditional kind words, saying that we have gone a long way to meeting the points he raised in Committee.
New subsection (3A), which my noble friend Lord Williams mentioned, is about co-ordinating issues and consumer representation that transcend national boundaries. There is no attempt to rule from the centre, as it were. Individual councils will have the full role that is intended in the Bill. As my noble friend Lord Whitty said, the department has been in contact with the consumer councils in Scotland and Wales, and they have supported these amendments fully.
To respond to the noble Baroness, Lady Carnegy, we have moved on these points, but then that just shows that Members of the Grand Committee were doing their job. They made their points; we took them on board and brought forward these amendments as a result.
On Question, amendment agreed to.
2: Clause 1, page 2, leave out line 3 and insert—
“(4) A territorial committee also has the following purposes—”
3: Clause 1, Divide Clause 1 into two clauses, the first (Establishment of the National Consumer Council and its territorial committees) to consist of subsections (1) to (3) and (5) and the second (The territorial committees) to consist of subsections (3A) to (4)
On Question, amendments agreed to.
Clause 2 [“Consumer” and “consumer matters”]:
4: Clause 2, page 2, line 25, at end insert—
“( ) a “consumer” includes a person who purchases, uses or receives goods or services for the purpose of their own business;”
The noble Lord said: My Lords, I return to this amendment following Committee, in part because I am still not wholly satisfied with the Minister’s answer, and in part because I believe that getting sole traders and small businesses involved in the context of the National Consumer Council will be a huge challenge. That challenge should be addressed by the provisions of the Bill.
It is important to remember that our existing legislation has not normally treated sole traders and small businesses as consumers. The Federation of Small Businesses raised its concerns in 2002 in its response to the European Commission’s Green Paper on consumer protection regarding the then forthcoming unfair commercial practices directive. It raised many detailed objections to the directive, the main theme of which was that the Green Paper failed to understand the pressures faced by small businesses, and that it overestimated their capacity. It stated that,
“we are frightened that failure to include small businesses within the EU definition will lead to the removal of these protections at the national level”.
Small businesses rely on postal services and, especially, on energy provision. Where they are let down by their providers, their whole businesses can be threatened. Energywatch and the Federation of Small Businesses have launched a campaign to get better treatment of small businesses as consumers. I am concerned that if small businesses are not specified as consumers, they will be neglected.
The Minister’s response to the amendment in Committee did not quite answer the point. He merely stated:
“The definition of consumer in the Bill deliberately does not exclude any class of consumer”.—[Official Report, 18/12/06; col. GC170.]
Yet I am sure he will acknowledge that merely omitting a reference to sole traders and small businesses as not themselves covered by the Bill does not endorse them as consumers. The implication of what he said is that he is concerned about specifically including them on grounds that to do so would beg the question of who else must then be specified. But who else would need to be specified?
We have the perfect opportunity to clarify in the Bill the inclusive nature of the NCC. It is vital that sole traders and small businesses are aware that they are considered entirely valid users of Consumer Direct. We highlighted in Committee how important it is for small business and sole traders to correct problems such as energy disconnection as soon as possible for the sake of their businesses and livelihoods.
I hope that the Minister will accept the principle behind the amendment. If he cannot accept it in its present form, I hope that he will come back at Third Reading with a form of words, perhaps with an enabling definition, which would make this clear to both the NCC and the sole-trader and small-business consumer. I beg to move.
My Lords, I question the usefulness and desirability of the amendment. Indeed, I am rather surprised that the Opposition have brought it forward again on Report in more or less the same form as it was in Grand Committee. When the amendment was moved in Grand Committee by the noble Baroness, Lady Wilcox, she said, as did the noble Lord, Lord De Mauley, today, that it was intended to ensure that sole traders and small businesses are considered consumers for the purposes of the National Consumer Council. However, even at a glance, it can be seen that the amendment is not confined to sole traders and small businesses; it is wide enough to cover the largest of corporations, whether they are ICI or Tesco, buying things for their own business.
I am surprised that noble Lords on the Opposition Front Bench, which today includes the noble Baroness, Lady Wilcox, who is a distinguished former chairman of the NCC, consider that the National Consumer Council should spend any of its time looking after the interests of our major corporations, which are surely well capable of looking after themselves through their adequate legal staff and so on. I wonder whether their intention to assist small businesses and sole traders is helpfully improved by the broad wording of the amendment.
Clause 2 defines “consumer” as,
“a person who purchases, uses or receives, in Great Britain, goods or services”.
We all know that in law a “person” includes bodies corporate or corporate persons so, whether a small business is a partnership or incorporated as a company, it is a consumer when it purchases goods. The disadvantage of the amendment is that including especially words to demonstrate that businesses are consumers as well would encourage the National Consumer Council to consider their needs in buying goods and services as at least equal to those of the man or woman in the street purchasing goods in all the manifold ways available to us. That is not an appropriate function for the NCC.
Many small businesses, although they are far less able to help themselves than a major corporation, belong to trade associations. One very often hears them talking on the radio and elsewhere on the interests of small businesses, whereas the ordinary man or woman in the street does not have, as an ordinary consumer, any such trade association except for any voluntary bodies that they may join, such as Which?, the Consumers’ Association or the National Consumer Council.
This is an unnecessary and undesirable amendment, and I hope that it is not pursued to a Division.
My Lords, I declare an interest as a sole trader and member of the Federation of Small Businesses. I am grateful to the noble Lord, Lord De Mauley, for raising this point, although we have not added our names to the amendment, for some of the reasons outlined by the noble Lord, Lord Borrie, such as reservations about the size of the business and so on.
Between Committee and Report a problem I have had as a sole trader has arisen—quite fortuitously, in the light of this debate, as it has put into sharp focus the sort of problems that occur. Over a year ago I started my small business, and it took a year for the electricity supplier to resolve who was the electricity supplier, because although we had applied very clearly to a supplier, the bill had not been switched to our account. When we finally got a bill after 14 months, it was large enough to put a business under.
The Federation of Small Businesses is very helpful in such situations in giving advice across the board, but how the NCC will work with such organisations is crucial. Very small businesses are as vulnerable as individual consumers. Very often, a sole person working in a business is pushed for time to sort out such thorny problems. The noble Lord has raised an important issue, and it would be useful if the Minister could explain how he envisages the provisions working for smaller businesses.
My Lords, I am grateful to the noble Lord, Lord De Mauley, and the noble Baroness, Lady Wilcox, for affording us the opportunity to debate this important issue. I am also grateful to my noble friend Lord Borrie for his expert analysis. I shall refer later to some of the points raised by the noble Baroness, Lady Miller of Chilthorne Domer. I am mindful of the significant expertise of the noble Baroness, Lady Wilcox, in this field, as a former chair of the National Consumer Council, and I shall try to address the issues that she raised, to which the noble Lord, Lord De Mauley referred.
The amendment affords me the opening to explain the scope of the role of the new council in representing consumers’ interests. There will be no inherent constraints on the consumers which the new council may represent. I believe that it is essential that the council should have the opportunity to prioritise its work according to consumer detriment, while taking into account the important functions which we have set out in the Bill, for example on vulnerable consumers. The council will need to consider carefully where it can best utilise its resources in aid of the consumer and how its expertise can be deployed in their best interests.
The underlying question for consideration here is: who is the consumer whose interests are in need of protection or support? The precise identity of the consumer in greatest need of support and representation will vary according to different market sectors and different market conditions as they change over time. In some sectors the consumers facing greatest detriment at any given time will be domestic consumers. In other sectors the consumers most at risk may be, from time to time, small businesses or medium-sized enterprises, as the noble Baroness, Lady Miller, said.
We recognise the importance of providing the new council with the opportunity to consider these issues for the benefit of all types of consumers, from individuals to businesses, as referred to by my noble friend Lord Borrie. Some larger businesses and many smaller businesses have their own trade associations to represent their interests, and these associations are active and vigilant on behalf of their members. Even so, it is likely that the expertise of the new council could be deployed to great advantage from time to time in aid of business consumers, and we wish to ensure that that opportunity is reflected in the Bill.
This amendment has provided me with a very good reason to revisit the provisions relating to the definition of “consumer”. I have reaffirmed that the existing definition of consumers in the Bill does include businesses. The definition refers to,
“a person who purchases, uses or receives, in Great Britain, goods or services which are supplied in the course of a business carried on by the person supplying or seeking to supply them, or a person who purchases, uses or receives relevant postal services in Northern Ireland”.
The definition of a “person” in the Interpretation Act 1978 applies, which means that it includes a body of persons corporate or incorporate which purchases, uses, or receives the goods or services. The definition in the Bill is deliberately not limited to those who purchase, use or receive goods and services for private purposes and so already extends to businesses as the consumers of the goods and services offered by other businesses. As a result, although I very much appreciate the amendment in the names of the noble Baroness, Lady Wilcox, and the noble Lord, Lord De Mauley, and agree with the intent, Clause 2 effectively covers the position so the amendment is unnecessary. I hope that I have given succour to noble Lords who think that businesses have not been included and that I have provided appropriate comfort on that point.
My Lords, I thank the Minister for his response. I particularly thank the noble Baroness, Lady Miller, for her support. She makes precisely the point that we are concerned about. I thank the noble Lord, Lord Borrie, for his intervention. Interestingly, he seemed to say, on the one hand, that “person” included bodies corporate, but on the other hand, that they should not have as much entitlement to the services of the NCC as individuals. I found that confusing. As he will be well aware—I specifically asked about this—we are trying to encourage the Government to clarify that, unlike in other legislation, sole traders and small businesses are covered.
The amendment is not perfect. Defining small businesses is not straightforward. We shall take it away and consider it in the light of the Minister’s response, which was delivered at some speed. We need to absorb that and consider whether we want to bring the amendment back in some form at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 [“Designated consumers”]:
5: Clause 3 , page 2, line 37, leave out “may” and insert “must”
The noble Baroness said: My Lords, in Committee we explored the meaning of “designated consumers”. For the purposes of the Bill they are consumers who are losing their representative body, be it Postwatch or Energywatch.
I was moved to table the amendment by the Minister’s comments on designated consumers in Grand Committee, as reported at col. 162 of Hansard. We must remember that they are losing their dedicated consumer body, which will be merged with the NCC.
In debating whether that was wise, we argued in Committee that both the energy and postal markets were going through very volatile times. The Minister said that designated consumers,
“may or may not be a priority at any time, hence the description ‘designated’”.—[Official Report, 18/12/06; col. GC162.]
Clause 3 enables the Secretary of State to amend by order the description of which customers are designated consumers for the purpose of this part of the Bill, and he may also by order provide that some consumers will cease to be designated consumers for those purposes. If the consumers are to give up their dedicated bodies, we need to explore here on Report in exactly what circumstances the Secretary of State would decide that those consumers would no longer be designated consumers. They would not receive the same focus of attention, but would that be because the market had calmed down, as the Minister seemed to imply in Committee? Over what period would that have to be? What guarantee would there be that the market would stay calm and that consumers would not therefore be particularly liable to great fluctuations?
In my remarks on the amendment, I have not included anything about vulnerable consumers, nor do I mean to, because they are an entirely separate group and are subject to later amendments. I am talking only about the whole group of consumers in each case who are to lose their specific body and then can lose the designation of being designated consumers because the Secretary of State decides to do exactly that. Why would that be? I beg to move.
My Lords, I am grateful to the noble Baroness, Lady Miller of Chilthorne Domer, and the noble Lord, Lord Razzall, for tabling the amendment and enabling us to discuss this issue once again. Clause 3 defines “designated consumers” as consumers of mains electricity and mains gas and postal services, and provides for the future addition of water consumers in England and Wales to that category of consumers. The clause also provides powers for the Secretary of State to remove classes of consumers from the “designated consumers” category.
The amendment would require the Secretary of State to make an order designating water consumers as designated consumers from the beginning, although we have said that we will consult in 2008 on whether to extend the Bill’s provisions to water. The second effect of the amendment would appear to be that the Secretary of State would be obliged to remove some designated consumers from the list in subsection (1), but the amendment does not say in which way and when that duty must be exercised. It is difficult to discern the intention behind the effect of the amendment on subsection (2)(b), despite the points made by the noble Baroness.
The powers of the Secretary of State under Clause 3 permit the possibility of incorporating the water sector in England and Wales in these new arrangements at some point in the future. We wish to retain that flexibility, although I accept that some noble Lords have expressed firm views that the water sector ought to be included from the beginning. The decision to consult in 2008 on whether to include water was taken following the public consultation. The circumstances under which consumers would cease to be designated depend entirely on the market. It would need to be clear that designation was no longer required, after consultation with the council, Scottish Ministers, Welsh Ministers and others.
My Lords, the question was: under what circumstances would consumers cease to be designated? The response was that that would depend entirely on the market. It would need to be clear that designation was no longer required, and after consultation with the council, Scottish Ministers, Welsh Ministers and others my understanding is that particular groups of consumers are designated as such because of the incorporation of, for example, Energywatch and Postwatch. Were the situation to change, if other groups came in or left, the group of consumers designated by the Bill would, by its nature, change.
My Lords, I am referring to consumers not suffering particular problems. I will write to the noble Baroness, Lady O’Cathain, on the issue. If I may continue to clarify that point, the concept of “designated consumers” permits the new council to undertake specific functions in respect of consumers of regulated utilities covered by the Bill and to provide continuity from the current sectoral arrangements for representation.
My Lords, my amendment was merely a means of exploring the problem further. I am glad that I tabled it, because the issue needs to be addressed. I am not sure that I am happy with the clarity of the Minister’s reply, because the three sectors concerned here—energy, postal services and water—are among the most volatile issues for consumers. The situation, certainly regarding energy and water, is unlikely to get any calmer in the foreseeable future. There would be very great concerns about water.
The Minister could perhaps bring back something more definite at Third Reading regarding the Government’s proposals for when the Secretary of State might remove the designation. If the Minister chose not to do that, I would flag it up for colleagues in another place to explore in much greater depth, because the Bill is asking people to give up their representative bodies on the basis that they will be better represented by this new overarching body, without knowing exactly what that means for designation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 [Forward work programmes]:
6: Clause 4, page 3, line 17, leave out “before each financial year publish” and insert “publish triennially”
The noble Lord said: My Lords, the amendment would replace the existing requirement on the NCC to publish its forward work programme every year with one requiring it to publish the forward work programme every third year. That is appropriate for several reasons. While it is important that the NCC is alert to the rapid changes in the consumer world—and I have every confidence that that will continue to be the case, given its new status—I remain to be convinced that that requires a forward work programme every year. A common criticism of organisations in both the public and private sectors is their short-termism and failure to plan properly for the long term. The amendment seeks to put that right.
Furthermore, it is important not to underestimate the time, effort and money that go into the production of a full forward work programme. Noble Lords will be aware of how debilitating a constant publication deadline would be, when an organisation could better spend its time working on its core purposes. What is more, the Government recognise this in both local government and mainstream government agencies. Local development schemes require councils to set out policy every three years, on a rolling scheme, and the police authorities set out three-year strategic plans. A three-year plan allows time to produce a report, while ensuring that planned work can be budgeted for much more efficiently.
In Committee, the Minister’s words were most encouraging. He stated:
“It is normal practice to provide indicative budgets for three years ahead to aid planning and provide certainty”.—[Official Report, 18/12/06; col. GC 174.]
If budgets need to be planned under a three-year framework to provide certainty, it is surely somewhat illogical for the programme of work to operate on any other basis.
Clause 6 requires the NCC to produce an annual report that informs the Secretary of State and Parliament of the council’s activities within the year, but I do not see why it is necessary for the NCC to do both these things on a yearly basis. I believe that it would be far more fruitful to the NCC to enjoy some flexibility and discretion in carrying out its duties to enable it to focus on the task of championing the consumer. I beg to move.
My Lords, I hope that the noble Lord does not wish to push this issue to a vote. I see the force of his arguments, but I disagree with them. The financial planning afforded by three years is sensible but, when we are dealing with consumer matters, long-term issues can easily be incorporated in an annual forecast of activities. Therefore, I do not think that only if you have a three-year plan will you be able to look beyond the horizon.
Let us take two of the areas for which the National Consumer Council will be responsible under the Bill: energy and postal services. It would have been most unhelpful if, over the past two and half years, a consumer council for energy had not had to indicate what it wanted to do for the 12 months ahead, given that we had energy prices of such volatility and given the difficulties that confronted the regulator, the consumer and, indeed, Parliament. Where you have rapid change, as we have had of late in the energy markets, it would be foolhardy not to do that. People would ask, “Why should the consumer council be looking into this? After all, it wasn’t in the three-year plan”.
This is not an area of disagreement. We assume that, when the Bill is enacted, one of the major responsibilities of the National Consumer Council will be the protection of the postal consumer at a time when the market is opening. We know from the 1990s, when gas and electricity markets were liberalised, that problems arose that we had not anticipated. If, in those days, the old consumer councils had said, “We’d like to look at that, but we’ve committed resource to other worthy causes”, there would have been a lack of flexibility. This is about the actions of the council and its freedom to operate. I think that, as the Bill stands, there is plenty of scope for longer-term planning within the documents and that the amendment would unduly tie the council’s hands.
One thing that has not been taken account of and which we have to recognise is that, after the Bill is enacted, the National Consumer Council will, I imagine, be of far more interest to whatever committee is responsible for it in the House of Commons. As someone who chaired the Trade and Industry Committee for a number of years, I have to say that we perhaps did not pay as much attention to the National Consumer Council as we might have done, although we paid plenty of attention to Energywatch and Postwatch. It would be of great assistance to our colleagues elsewhere—where a Select Committee looks at this area of operation, affording a degree of parliamentary accountability—to be able to meet the council annually to discuss the work programme. That would allow the council to accommodate the views of the other House. I think that, although the amendment is well intentioned, it is fundamentally flawed, and therefore I hope that the noble Lord will not push it to a vote. I am in favour of three-year financing but I am not necessarily in favour of over-prescriptive three-year plans, which could well be inflexible.
My Lords, I support the noble Lord, Lord O’Neill of Clackmannan, on this but not because I think that my noble friend is wrong. The turgid language in the Bill is not clear. I think—I should like the Minister to confirm or deny this—that what is envisaged is a three, four or five-year plan and, within that, a financial report on where the council expects to be each year. It will say at the end of each year how it is moving towards ensuring that the plan ultimately works out.
As the noble Lord, Lord O’Neill, pointed out, things can change drastically in a market. If the council cannot react because the sums are not there, surely, under the terms of best business practice, it should say that the three-year plan has been put off course due to whatever reason and that therefore, for this year, it needs to do this and, for next year, it needs to do that.
The wording in the Bill makes the reporting process appear highly complicated. I hope that my noble friend does not feel that I have taken his amendment in the wrong way, but I think that the Bill is probably set out as it is—I hope that the Minister will confirm this—to ensure that a big hole does not appear in year one of a three-year plan without anyone knowing about it and without it being addressed until the three-year plan is reported on. I think that the provision is probably common sense.
My Lords, I largely agree with my noble friend Lord O’Neill and the noble Baroness, Lady O’Cathain, but there is another dimension to this. I do not think that the new NCC, any more than its three predecessor organisations, would have any difficulty in preparing annual work plans. Those organisations do them now and they have a corporate plan along the lines set out just now by the noble Baroness. So I do not think that planning is the issue, but the finances could be.
In particular, we have to bear in mind that this is not simply a question of a grant in aid from the DTI in the normal sense of general taxation, but of levies on designated consumers, which a large part of Clause 4 deals with. It is important not only that the new NCC knows what it has more than a year ahead, barring accidents, but also that the regulated industries know what they are expected to pay for those three years ahead. So it is sensible to deal with the finances on a three-year basis from that point of view, as well as from the point of view of general security of outlook. But, so far as concerns the planning, the wording of the Bill is perfectly okay.
My Lords, I am grateful for the contributions from noble Lords. With regard to annual reports and forward work programmes, the idea is that the plan might be done for three years but it is a rolling programme. I think that that meets the point referred to by the noble Baroness, Lady O’Cathain.
The amendment would require the new council to publish a forward work programme only once every three years. We believe that the publication of an annual forward work programme strikes a good balance with the requirement to prepare an annual report in line with financial years, as I mentioned. That is the basis of the provisions as drafted. This requirement replicates the current requirement on both Energywatch and Postwatch to produce a forward work programme annually. It is also consistent with the requirement to produce an annual forward work programme on the sectoral regulators, Ofgem and Postcomm, respectively.
The publication of an annual forward work programme, on which the council must consult, ensures that the proposed activities of the council are transparent and that it can be held to account for those activities. That is particularly important given that some of the new council’s funding will come from industry. Additionally, the consultation allows it to obtain the views of key stakeholders in determining its priorities and the activities it undertakes to achieve them.
I recognise that an organisation has to spend time and effort on preparing a forward work programme, but it is time and effort well spent. The forward work programme is the means by which the new council can set out a programme for consumer advocacy, set out its aims and priorities, and—because this is also important—set out its funding requirement. The Bill requires the forward work programme to cover the year ahead, but in many cases organisations are understandably keen to set out a programme covering a longer period, perhaps three or more years ahead. That enables the organisation to take a longer-term view, and by updating and renewing that vision each year, new and urgent priorities can be taken into account. Those points were made by my noble friends Lord Whitty and Lord O’Neill of Clackmannan.
The forward work programme is in many ways the showcase for an organisation. It is a statement of intent, certainly, but, more than that, it is a demonstration of ambition to make a difference and a statement of willingness to be held accountable for that ambition.
My Lords, I thank the Minister, my noble friend Lady O’Cathain and the noble Lords, Lord O’Neill of Clackmannan and Lord Whitty, for their contributions. I am pleased that we have had the opportunity of this debate; it has been useful and flushed out some helpful information, especially on budgeting. For the moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 [General provision about functions]:
7: Clause 5 , page 4, line 40, leave out “have regard to the desirability of acting in the manner” and insert “exercise its functions in the manner which it considers is”
The noble Lord said: My Lords, I shall also speak to Amendment No. 8, in the names of the noble Baroness, Lady Miller of Chilthorne Domer, and the noble Lord, Lord Razzall.
Both amendments seek to strengthen the new council’s sustainable development objectives and, I believe, are intended to have the same effect. Having listened carefully to the concerns raised by noble Lords in Committee, my amendment follows the precedent of Section 35(1) of the Water Act 2003, which inserts a new Section 27A(12) into the Water Industry Act 1991. This section places a duty on the Consumer Council for Water to perform its powers and duties in the manner it considers best calculated to contribute to the achievement of sustainable development. Amendment No. 7 places an equivalent sustainable development requirement on the new National Consumer Council; the terminology used is slightly different, as the new council has “functions”.
The term “functions” is defined in Clause 40 as including powers and duties. Such functions include, for example, the representative function under Clause 7, the research function under Clause 8 and the information function under Clause 9; the objective does not only relate to the internal operations of the council, for example. Both amendments therefore require the council to exercise its functions in the manner it considers best calculated to contribute to the achievement of sustainable development. Both amendments are intended to have the same effect, hence only one of them is required, and Amendment No. 7 is the preferred option. I beg to move.
My Lords, I am grateful to the Government for moving somewhat on my Amendment No. 8. We have tabled an amendment of our own to highlight that the Government could move further. I doubt that the NCC feels that the government amendment gives enough emphasis to the extreme importance of the sustainability duties.
The NCC’s recent work, for example, has clearly had a significant effect. A while ago, my honourable friend Norman Baker published How Green Is Your Supermarket?. The answer for all of them was, “Not at all”—the word “green” never crossed their minds. The NCC recently published a report called Greening Supermarkets, which addressed a wide range of issues and encouraged supermarkets to start to take action. We have seen headlines about supermarkets vying with each other to prove their green credentials, but they are still far from green. The Government will know that among the issues that still hang over how green a supermarket can ever be are the number of car journeys made to and from it and the amount of food being trucked up and down Britain’s roads. However, the issues raised by the NCC’s report have been immensely influential and underline how such a body can help consumers as a whole to encourage suppliers to change completely how they think about such issues.
The Government are resisting my amendment, which requires the NCC to,
“develop policies and discharge its duties so that it contributes”.
It is much firmer than the Government’s amendment, which leaves it to the NCC to judge. So if push came to shove and the NCC was not exercising its functions in that manner—a scenario I cannot envisage when it is under the chairmanship of the noble Lord, Lord Whitty—and sustainability did not seem to be a big issue for it, how would the Government judge whether the council was doing enough? We know from debates on this matter that climate change will not go away. It is bound to be important, yet the pulls on the NCC may not always be about it; they may be about price. That is where some of the biggest tensions will come from, especially in the field of energy, where there will be tension between maintaining as low a price as possible and some microgeneration issues—I shall not go down that path. How will the Government ensure that, despite their somewhat strengthened amendment, sustainability will be at the heart of what the NCC does?
My Lords, I apologise that I was not able to be present on the second day of Committee stage. I hoped that we would reach my amendment, Amendment No. 100, on the first day, but that was not possible, and on the second day I was speaking at a conference in Nottingham.
The noble Baroness, Lady Miller, rightly raised the issue of sustainability. As the Minister knows, Natural England was recently set up. For me, there is a question about where the responsibilities will lie. The new National Consumer Council will deal with complaints, but how much additional responsibility might it have for looking at sustainability? Will it make any judgments on sustainability, or will it look to Natural England to develop those policies and then react? While the NCC is being set up now, Natural England was launched only last October, so it is still in the early stages of its remit. On a later amendment I shall take up, in particular, the position of the Commission for Rural Communities and how it has not responded on behalf of post offices. Where does responsibility for sustainability lie? What interplay will there be between the organisations? Will one body deal just with complaints while the other deals with issues on a daily basis and looks at long-term sustainability?
My Lords, the noble Baroness, Lady Miller of Chilthorne Domer, when speaking to the two amendments, asked what was the Government’s intention. Amendment No. 7, in my name, would ensure that the council exercised its functions, including the core functions in Clauses 7 to 9, in a manner that it considers is best calculated to contribute to the achievement of sustainable development. We think that our amendment strengthens the clause. The term “functions” is used, as it is consistent with the drafting in the rest of the Bill and covers powers and duties.
The noble Baroness, Lady Byford, asked about the functions of the NCC. The council is subject to challenge if its functions are not carried out. My advice is that the council is also accountable through its annual report. I will write to the noble Baroness to clarify the point further.
On Question, amendment, agreed to.
[Amendment No. 8 not moved.]
Clause 6 [Annual report]:
9: Clause 6 , page 5, line 17, after “activities),” insert—
“( ) contain details about the most frequent complaints from consumers about post and energy for that year, ( ) contain recommendations, if any, for regulated energy and post companies to change their practices,”
The noble Lord said: My Lords, Amendment No. 9 would place a duty on the NCC to include in its annual report details about the most frequent complaints from consumers about post and energy for the year in question, and make recommendations, should it see fit, for regulated energy and post companies to change their practices. I return to this amendment from Committee as I believe that it would support and underpin the merger of Postwatch and Energywatch at what could be one of its weakest points.
The amendment would complement the duty that we seek to place on redress schemes in Amendment No. 74, which would ensure that all suppliers of services had effective internal complaints handling procedures. We will be able to go into further detail on that point in due course. The amendment would enable the NCC fully to implement its new duty of providing insight into consumer affairs and as a provider of a complaints signposting service under Consumer Direct. That is particularly important in the light of the services the NCC will be covering. Postal and energy services are essential to all consumers, especially the most vulnerable. The impending closure of thousands of post offices highlights that the consumer will soon need assistance more than ever before.
This addition to the annual report would be a simple task for the NCC to perform. Energywatch has informed us that, as it keeps records of all the complaints it receives as a matter of course, it would simply be a matter of pulling together statistics and displaying them in a suitable form. Page 8 of the Energywatch annual report shows that very well.
As I think the Minister has pointed out, Clause 44 already places a duty on the NCC to publish statistics on complaints, but not on any regular basis. The amendment puts complaints statistics, the most transparent insight into consumer relations with providers, at the heart of the NCC's self-evaluation.
Complaints demonstrate better than any poll the attitude of the consumer and how successfully providers are running their services. The amendment provides a low-cost, consumer-driven addition to the way in which the NCC will communicate through its annual report. It will also place complaints at the centre of how the NCC evaluates its own work. I beg to move.
My Lords, Amendment No. 9 would add to the obligations on the council in respect of the annual report by requiring it to include details of the most frequent complaints from consumers about post and energy for the year. It would also require the new NCC to include in the report any recommendations to regulated energy and post companies to change their practices.
I certainly agree with the objective of the amendment. I share the ambition of the noble Baroness, Lady Wilcox, and the noble Lord, Lord De Mauley, that the council should be vigilant and active in the pursuit of opportunities to increase the transparency of the relevant markets by drawing attention to the sort of problems encountered by consumers. I am also very supportive of the ambition that the council should be a positive force for change and should be able to make recommendations to companies that would improve their performance to the benefit of consumers—that is also a clear benefit to the companies. The noble Baroness, Lady Wilcox, has previously made the powerful and compelling observation that complaints are important to companies because they help them to improve their performance and develop their businesses. I support that view wholeheartedly.
Clause 9 provides the council with a general information function, which allows it to facilitate information provision to consumers, and Clause 44 obligates the council to publish information on the levels of compliance by an energy or postal services company with any complaint-handling standards set by a regulator.
I hope that there is general agreement that the new statutory functions conferred by the Bill will provide the council with every opportunity to pursue the objectives set out in the amendment. As I said, I endorse the objectives of the amendment. However, although the council may very well include such information in its annual report if it considers that appropriate, it should not be obliged to do so, because that might not be the most appropriate way to provide consumers with information on complaints or on its recommendations to regulated post and energy companies on their practices.
I hope that noble Lords will agree that, on balance, we should leave it to the council to decide how best to bring such information to the attention of consumers.
My Lords, I thank the Minister for his response and his supportive words agreeing with the objective of the amendment. I am not entirely sure that I agree with him but, having every confidence in the noble Lord, Lord Whitty, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 [The representative function]:
10: Clause 7 , page 5, line 29, leave out “may” and insert “must”
The noble Baroness said: My Lords, with this amendment are grouped Amendments Nos. 11 to 13. They return to the issue of whether the Bill should lay a firm duty on the council with regard to the representative function in Clause 7, the research function in Clause 8, the information function in Clause 9 and the general powers of investigation in Clause 10; or whether it should simply have the power to do that.
We explored that in Committee, but I felt that it merited further investigation in the light of the Minister's reply, as reported at col. GC155 of Hansard for 18 December. The Minister resisted the idea of the council having the duty as opposed to the power because he felt that the council should be able to set its own priorities, and that laying a duty on it would prohibit it from doing so. However, my amendment would not spell out in any way how the council should conduct its representative function under Clause 7(1)(a), (b) and (c); it would say simply that it must do these things. It should not have discretion on whether to provide advice and information to persons about consumer matters, and it should certainly not have discretion on whether to represent the views of consumers on consumer matters. That is the very core of what it is to do. I imagine that the Minister will say that that is covered in Clause 4, on the forward work programmes, but the fact that the council has its own clause, entitled “The core functions”, means that those are its core functions. Therefore, despite the Minister’s resistance in Committee, it would be interesting to know why the Government are not laying a very firm duty on the council to perform those core functions.
The research function is equally crucial to consumers, because if the council chooses not to obtain the information on consumer matters, it will be a fairly toothless creature. It must disseminate that advice to consumers, because that is the other reason for its being.
On the general powers of investigation, I cannot understand how the Government can draft the clause so that the council could exercise any discretion as to whether it will investigate. Of course it will have the discretion to decide how it will investigate and how much resource it puts behind that investigation, but surely that is exactly what this council is for and exactly what consumers will be relying on. If the Government say that a Bill such as this is there to improve life for consumers, it really must be seen to have the power to do so. That is why I re-tabled these amendments. I beg to move.
My Lords, I understand clearly the point made by the noble Baroness, Lady Miller of Chilthorne Domer, that the council should be required to fulfil its functions as provided by the Bill. There is no real difference between us on that point, but the amendment would remove the council’s discretion in exercising its key functions. The council would be required to make representations to government and others, to undertake research, to facilitate the provision of information and advice to consumers, and to use its general powers of investigation. The council already has the flexibility to do all or any of these things, but it is not possible under the Bill to require it to do any particular thing without defining precisely what must be done and when. That is why the clause is drafted as it is.
I hope that noble Lords will acknowledge that the Bill’s key purpose is to provide better and even more effective consumer representation to create a new body with important functions that go beyond those undertaken by the current National Consumer Council. The question is not whether the functions of the new council should be outlined in the Bill, or even whether the council should be sure to undertake the powers and duties represented by these functions; rather, it is a question of whether we should attempt to require the council to undertake all the functions at the same time in perpetuity, or whether we should set out the main functions of the council and leave it to determine how and when these functions should be exercised, according to the priority need and in accordance with its forward work programme. That is the position that the Government have taken.
The council will need to consult on its forward work programme, which will provide all interested parties with the opportunity to submit ideas for action and views on how the council should undertake its functions for the period ahead. In its annual report, the council will need to report on progress on any projects described in that forward work programme, which is a good example of transparency.
My Lords, I thank the Minister for his reply. I suppose we will see whether this works only when the council in its new guise comes into being. This will be an interesting debate for the other place too. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 [The research function]:
[Amendment No. 11 not moved.]
Clause 9 [The information function]:
[Amendment No. 12 not moved.]
Clause 10 [General powers of investigation]:
[Amendment No. 13 not moved.]
Clause 11 [Investigation of complaints made by vulnerable designated consumers]:
14: Clause 11 , page 7, line 1, after “vulnerable” insert “or otherwise disadvantaged”
The noble Baroness said: My Lords, with Amendments Nos. 14, 15 and 16, we turn to Clause 11 on vulnerable customers. The definition of vulnerable is given in Clause 11(2), which states:
“For this purpose a person is ‘vulnerable’ if the Council is satisfied that it is not reasonable to expect that person to pursue the complaint on that person’s own behalf”.
My amendment will expand our discussion in Committee. Of course, energy consumers in particular would be moving to be looked after by the NCC. Will the Minister expand on the Government’s understanding of who would be considered vulnerable? There is a gap between people who are considered vulnerable under the definitions in the Energy Act and the Water Act and the definition in this Bill. I wonder whether those vulnerable people are being downscaled. A person might be able to pursue the complaint, but he or she might be very ill for a short period, as in the example that I gave in Committee, which I will not repeat now. The council should have particular regard to vulnerable people. The purpose of this small group of amendments is to explore how seriously the Government are taking this issue. I beg to move.
My Lords, Amendment No. 14 would extend the category of vulnerable consumers who can be aided by the council in the investigation of their complaints to “otherwise disadvantaged consumers”. I am grateful to the noble Baroness, Lady Miller of Chilthorne Domer, for raising this issue. Again, I do not think that there is any real difference between us on the question of who should be aided by the council in the investigation of their complaints. It is important that those who are most in need of assistance should be able to turn to the council for support and guidance.
For that reason we have deliberately not sought to categorise those who constitute vulnerable consumers in the Bill. Our understanding of what makes for vulnerability develops and changes over time and we should be careful not to preclude any particular group of consumers from the possibility of assistance now or in the future. The Bill leaves it to the council to consider who should be regarded as vulnerable. Clause 11(2) states that,
“a person is ‘vulnerable’ if the Council is satisfied that it is not reasonable to expect that person to pursue the complaint on that person’s own behalf”.
The addition of the words “otherwise disadvantaged” does not add materially to the consideration. I hope that noble Lords will agree that this is the best way forward to meet possible future needs.
Amendments Nos. 15 and 16 would require the council to investigate complaints by vulnerable designated consumers and to provide advice or to make representations on behalf of the consumer. I would suggest to noble Lords that the interests of the most vulnerable consumers will be best served by permitting the council to exercise discretion as to which complaints by consumers need to be supported and, where the council sees a need to provide support, which means of support would be best in the circumstances.
The council should be able to use its judgment to define the groups of consumers who need help and to develop and refine that view to meet new or emerging circumstances. The council should have the discretion to decide how best to provide support for vulnerable consumers. It is important that the council should be able to determine how and when its important functions in respect of vulnerable consumers should be exercised according to the need and best use of its resources.
My Lords, I thank the Minister for his reply. I hope that the council will have a definition of those people it regards as vulnerable and will keep a very careful record both of those it has chosen to treat as vulnerable and those it has not chosen; it should then review both categories from time to time. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 15 and 16 not moved.]
Clause 12 [Investigation of complaints relating to disconnection of gas or electricity]:
17: Clause 12, page 7, line 27, after “of” insert “, or a threat to disconnect,”
The noble Lord said: My Lords, in moving Amendment No. 17 I shall speak also to the other amendments grouped with it. These amendments supplement and expand the scope of the obligation on the council to investigate complaints relating to disconnection of gas or electricity supplies. First, they extend the obligation to investigate complaints of consumers who are threatened with disconnection in addition to those whose supply has already been disconnected or, having been disconnected, are experiencing difficulties in securing reconnection. Secondly, they extend the obligation to cover the investigation of complaints from consumers who use prepayment meters where the meter, the means of charging the meter or the prepayment meter facilities which enable the consumer to purchase credit for the meter have failed and the consumer is unable to obtain a supply.
These enhancements are important and represent a positive and practical response to advice we have received from Energywatch and others. The noble Baroness, Lady Miller of Chilthorne Domer, made the point most persuasively in Committee, while the noble Baroness, Lady O’Cathain, and my noble friend Lord O’Neill also contributed to the debate on this important issue. As a result I am glad to be able to bring forward these amendments which I believe will address the structural issue of the scope of the new council’s remit in this crucial area of potential consumer detriment. They will also provide the council with the obligation to extend its advice and support to consumers with prepayment meters and those who are threatened with disconnection.
I should like to take this opportunity to emphasise once more the importance we attach to retaining the considerable skills and expertise of Energywatch staff in the transition to the new arrangements. They will clearly have a major role to play in the success of the new council. I beg to move.
My Lords, I join the noble Baroness in thanking my noble friend. I agree that the Government have co-operated on this issue. A number of organisations had approached noble Lords and I think they will take considerable consolation from the comprehensive character of the amendments that have been tabled in so far as they have met almost all of the concerns we expressed. I hope, therefore, that this important gesture, which may be more than a gesture, will go a long way to speeding the passage of the legislation.
My Lords, I support the amendments. They make it clear that all issues concerning cut-off of supply, whether through a threat of disconnection or a failure somewhere else in the system, will be treated in this way. I simply make the point that I might have made on the previous group of amendments that these are the kind of complaints that would fall to the new National Consumer Council. I know that Energywatch takes the view that there is a wider set of priority complaints over and above those dealing with disconnection or failure of supply. At some point it will need to be made clear what boundaries will be considered by the National Consumer Council, by the normal information function of Consumer Direct or by the companies themselves in the first instance, and, if they fail, by the ombudsman system.
It would be helpful if such clarity were placed on the Postwatch side of the equation so that the new structures and consumers can be clear where each form of complaint will fall.
On Question, amendment agreed to.
18: Clause 12 , page 7, line 32, after first “of” insert “, or a threat to cut off,”
19: Clause 12 , page 7, line 36, at end insert—
“(da) a complaint by a gas consumer against a gas supplier, in respect of the failure of a prepayment system;”
20: Clause 12 , page 7, line 39, after “of” insert “, or a threat to disconnect,”
21: Clause 12 , page 7, line 45, at end insert—
“(g) a complaint by an electricity consumer against an electricity supplier, in respect of the failure of a prepayment system.”
22: Clause 12 , page 8, line 8, leave out subsection (4)
23: Clause 12 , page 8, line 47, at end insert—
“( ) in paragraphs (da) and (g), references to the failure of a prepayment system are references to— (i) a failure in the facilities for payment for the supply of gas or electricity which results in a consumer with a prepayment meter being unable to make a payment for the supply of gas or electricity, or (ii) where a payment has been made for the supply of gas or electricity through a prepayment meter, a case where the supply is not given through the prepayment meter because of a defect in the meter or in the facilities for payment.”
24: Clause 12 , page 8, line 48, leave out subsection (8) and insert—
“(8) In this section—
“electricity consumer” means an individual who is a consumer in relation to electricity supplied by an authorised supplier;
(a) an Act of Parliament, (b) an Act of the Scottish Parliament, or (c) a Measure or Act of the National Assembly for Wales, whenever passed or made; “gas consumer” means an individual who is a consumer in relation to gas supplied by an authorised supplier;
“the consumer’s premises”—
(a) in relation to an electricity consumer, means the premises to which the electricity supplied to the consumer by the authorised supplier is supplied; (b) in relation to a gas consumer, means the premises to which the gas supplied to the consumer is conveyed by the gas transporter; “redress scheme” means a scheme under which complaints may be made to, and investigated and determined by, an independent person.”
On Question, amendments agreed to.
Clause 17 [Secretary of State's powers to require reports]:
25: Clause 17 , page 10, line 15, leave out “may” and insert “must”
The noble Baroness said: My Lords, the amendment would place a duty on the Secretary of State to publish any reports that are submitted to him by the National Consumer Council. It seems only right that reports from the National Consumer Council, which will be a partially publicly funded body and provide services to the consumer through Consumer Direct, should be accessible to the public.
In Committee the Minister said that, in some cases, it would not be appropriate to publish reports from the National Consumer Council and that there could be cases where reports from the National Consumer Council were not,
“of wider interest or relevance”.—[Official Report, 9/1/07; col. GC 54.]
I cannot see how reports from a council dealing with national consumer matters would not be of some interest to some consumers. The Minister noted publication costs. Surely if a report is published for the Secretary of State there cannot be great expense incurred in merely attaching a link to that report to the NCC website.
I have not been convinced by the Government’s refusal to allow the publication of all NCC reports. This is a matter of transparency for the consumer and of public accountability. I was worried by the Minister’s words that the Secretary of State and the National Consumer Council would between themselves decide what was appropriate information to give to the public. That does not seem to be the best way for a champion of consumers to operate. I hope the Minister can give a more substantial reason than publication costs, which I contend would be non-existent, and the supposed relevance or not of reports. I beg to move.
My Lords, because the amendment obviously seeks transparency, one feels very much in favour of it in principle. However, one should put the amendment into context. The National Consumer Council is required by other provisions in the Bill to publish its annual reports and its forward work programmes. The noble Baroness did not refer to Clause 16, which immediately precedes the clause with which we are now dealing, under which the council may prepare a report on any matter within its function and may publish the report. Some of the noble Baroness’s remarks would be applicable to Clause 16 because it provides that the National Consumer Council may publish reports of its own volition on matters it has itself chosen to consider. The logic of her argument suggests that if that report is of interest to consumers nationally it ought to be published.
Leaving that aside, the noble Baroness has alerted us to Clause 17, under which the NCC is required to report on “any matter” that the Secretary of State specifies, and the Secretary of State may publish any report under that clause. The noble Baroness seeks to have the word “may” altered to “must”. Surely the NCC itself is free to publish a report on any matter it considers, whether it considers it of its own volition or at the request of the Secretary of State. Perhaps I am making a legalistic point to the Minister. I hope I am right about it and that the power of the council to publish any report under Clause 16 is not confined to that clause but that the council could publish a report as it wishes if that has been requested by the Secretary of State under Clause 17. I hope I am correct that the NCC is entitled to publish any report on anything it studies, whether at the request of the Secretary of State or not.
The amendment proposed by the noble Baroness would be unduly burdensome by requiring the Government, at the taxpayer’s expense, to publish a report that neither the Government nor the National Consumer Council thought was of sufficient interest to justify publication. There must be some situations where a report is not worthy of publication simply because the work that has been done demonstrates that there is no problem where previously it was thought that there was.
I fear that the amendment might inhibit the use by the Government of the power to seek the help of the NCC on matters relating to consumer interests. Surely the last thing we want is for the Government to feel inhibited or that they had better not risk asking the NCC for a report because of some compulsory obligation to publish that report in any circumstances and at whatever cost. I doubt the value of this amendment.
My Lords, Amendment No. 25 relates to Clause 17 and to the actions that fall to the Secretary of State in this respect. I was grateful for the opportunity to debate this amendment in Committee. From that debate, it is clear that the intention behind the amendment is essentially the need for transparency in the Government’s dealings with the new council and the importance of the new council maintaining its independence. I confirm our wholehearted support for those intentions.
As I explained in Committee, Clause 17 gives the Secretary of State the power to require the council to prepare and submit reports on any matter, permitting the Secretary of State to call on the expertise of the council to prepare and submit a report on issues that are judged important enough to the consumer interest to warrant further attention. Such a report would be for the purpose of reaching a decision on what further action, if any, was needed on the issue. We envisage that such a need could arise where the issues in question have not been identified in the council’s consultation on its forward work programme.
The amendment would place a duty on the Secretary of State to publish all the reports submitted by the council under this clause irrespective of whether or not they are of wider interest or relevance, a point rightly made by my noble friend Lord Borrie. Having requested a report from the council, the Secretary of State would take into account any recommendations made on how best to progress the particular issue and would work closely with the council and others in coming to decisions about what would be appropriate in each circumstance. The current drafting allows for the discretion needed for that to happen.
On the issue of the independence of the new council, particularly in response to my noble friend Lord Borrie, I confirm that Clause 16 enables the council to prepare and publish reports on any matter within the scope of its functions, while Clause 18(2) enables it to publish advice and information about consumer issues if it thinks publication will promote the interests of consumers. Those powers allow the council to take separate action in the interests of the consumer, or indeed in the interests of transparency, should it consider that appropriate. While I am sympathetic to the amendment, I believe we meet all the substantive points raised.
My Lords, I am told that because we are on Report, I may be breaking a rule. In that case I shall use the record instead.
I was chilled by the words of the noble Lord, Lord Borrie. I thought, “What am I listening to? I’m listening to the National Consumer Council being changed from the body it is: brave and strong and able to publish its reports as it has done all these 25 to 30 years, not hindered by the Government in any way, fully funded by government but free to choose its work and to report as it wished”. Then I heard it said that the Secretary of State and the NCC will between them decide when things are published. All of this shows how important the amendment is. We should use the word “must”. The National Consumer Council is being tied up in these words. I worry when I hear “appropriate”, “discretion”, “drafting”. I worry that the National Consumer Council is being subsumed by a great, big body on which lies the Secretary of State’s hand, stopping it doing what it wishes to do. The provision does not sound clear or transparent. It does not sound like what we want the National Consumer Council to be.
I am sure that the Minister has thought carefully and been well advised by his civil servants on how he should respond to me at this stage. I do not wish to divide the House on this point but I am disappointed by the answers. I was particularly disappointed by the reaction of the noble Lord, Lord Borrie. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 21 [Voluntary activities]:
26: Clause 21 , page 12, line 6, at end insert—
“( ) The Council may acquire an interest in a body corporate under subsection (4)(b) only with the consent of the Secretary of State.”
The noble Lord said: My Lords, the amendment relates to Clause 21, which 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 would be able to give advice or assistance to others and be paid for providing this service.
This clause also gives the new council the power to acquire an interest in an existing body corporate with a view to that body exercising certain functions on its behalf. Following a very useful debate in Committee, we have given this aspect of the provision further consideration and concluded that it is appropriate to make this power subject to the approval of the Secretary of State, as was raised in Committee. I beg to move.
On Question, amendment agreed to.
Clause 24 [Enforcement by regulator of section 23 notice]:
27: Clause 24 , page 13, line 10, leave out “supplier” and insert “provider”
The noble Lord said: My Lords, I shall speak also to the other amendments in this group. The amendments have arisen as a result of changes to the group of persons to whom the complaints-handling and redress provisions in Part 2 of the Bill apply.
Following representations by Ofgem, Clauses 41 and 48 are being amended to extend the Bill’s provisions for redress schemes in the energy sector to include the holders of licences to distribute electricity and gas transporters. The changes mean that the complaints-handling and redress provisions will now be applicable to a wider group than can reasonably be defined by the term “supplier” which is used in the current drafting. The term “provider” better captures all those concerned. The amendments are necessary to make the minor drafting improvements needed across the Bill to substitute the term “provider” for “supplier”, and include a consequential change to the Long Title. I beg to move.
On Question, amendment agreed to.
28: Clause 24 , page 13, line 16, leave out “supplier” and insert “provider”
29: Clause 24 , page 13, line 17, leave out “supplier” and insert “provider”
30: Clause 24 , page 13, line 22, leave out “supplier” and insert “provider”
31: Clause 24 , page 13, line 24, leave out “supplier” and insert “provider”
32: Clause 24 , page 13, line 25, leave out “supplier” and insert “provider”
33: Clause 24 , page 13, line 28, leave out “supplier” and insert “provider”
34: Clause 24 , page 14, line 2, leave out “supplier” and insert “provider”
35: Clause 24 , page 14, line 3, leave out “supplier” and insert “provider”
36: Clause 24 , page 14, line 6, leave out “supplier” and insert “provider”
37: Clause 24 , page 14, line 8, leave out “supplier” and insert “provider”
38: Clause 24 , page 14, line 9, leave out “supplier” and insert “provider”
39: Clause 24 , page 14, line 18, leave out “suppliers” and insert “providers”
On Question, amendments agreed to.
Clause 29 [Abolition of “Energywatch” and “Postwatch”]:
40: Clause 29 , page 16, line 40, leave out subsection (2) and insert—
“(2) The Secretary of State shall bring forward an Order subject to an affirmative resolution in both Houses of Parliament to abolish the Consumer Council for Postal Services.
(2A) The Order set out in subsection (2) shall not be made before 2010.”
The noble Lord said: My Lords, the purpose of the amendment is very clear. We propose that the merger of the Consumer Council for Postal Services should be postponed until at least 2010. We are specific about the reasons why we are moving this amendment. Nobody who has listened to the debates in your Lordships' House and another place and paid attention to the consultation that has gone on across the country can doubt that both the Post Office network and the Royal Mail are in disarray. Four thousand post office branches have closed since Labour came to power in 1997, on top of the 3,500 post offices and sub-post offices closed during the period of the last Conservative Government. On 14 December, the Government announced plans for Post Office restructuring, which they expect to lead to the closure of a further 2,500 branches by 2009. The consultation on those proposals goes on until 8 March.
We are aware that one difficulty that the Post Office network has suffered is the phasing out of the Post Office card account, on which many pensioners rely to receive their state pension and on which thousands of branches depended to keep them in business. On 14 December, in the face of a huge outcry, the Government backed down and announced a replacement for the card account. It is a matter of knowledge for your Lordships that in recent years the Government have directly or indirectly overseen the Post Office network losing TV licences, vehicle excise duty and passport authentication work.
I do not need to go on, as this is not a debate about the decline of the Post Office network, but that decline is highly relevant to the amendment that stands in my name and that of my noble friend. As for the Royal Mail, noble Lords will be aware that a significant loss of business occurs almost every week, now that it has lost its monopoly in a number of areas in the delivery of postal services. We have the benefit through the pages of the financial press of seeing the dispute going on between Allan Leighton, chairman of the Royal Mail network, and the Government about whether they will permit proposals for any form of share issue to Post Office workers or any form of shares sell-off in the Royal Mail network.
Against that background my noble friend Lady Miller and I believe that this is not the time to interfere with the very effective method of consumer consultation which is in place as we speak. We wonder what is the point of transferring en bloc the expertise in the Consumer Council for Postal Services to the new consumer council. If the people with the skills necessary to perform the very effective job done by that organisation over the past few years are to be made redundant, there will be a significant loss of effectiveness over the next three years, which in the public’s eye will be an absolutely crucial period for the future of the Post Office network and Royal Mail. I beg to move.
My Lords, I am very grateful to the noble Lord, Lord Razzall, for tabling this amendment. I again apologise to your Lordships’ House that I was not able to speak to it at an earlier stage as I was speaking at a conference in Nottingham.
The noble Lord, Lord Whitty, will well know that for six years after 2000, when he was a Minister responsible for rural matters, I expressed my concerns about the future of post offices. I share the concerns that have been expressed on that issue. Part of the Bill is concerned with redress. Consumers want things to go right. Today, through no fault of the railway company concerned, I had the most horrendous journey getting here. A fire on a freight train outside Berwick totally blocked the line and it will be blocked for 24 hours due to the nature of the cargo on that train. I should say in fairness to the railway company that it was very good and made arrangements for some passengers to be transported via the west coast line. In that context it is important that we do not water down the Bill’s new provisions. I am particularly concerned about the part that concerns the postal services. I have made various rail journeys back and forth to Scotland. I had a difficult journey going up on Sunday as I was delayed three times, which was the railway company’s fault. However, the second occasion on which I experienced difficulty was certainly not its fault.
The noble Lord, Lord Razzall, made various points on post offices, but I want to comment on the situation from a slightly broader perspective. As the practice on Report is to examine Ministers’ responses, I want to highlight the Minister’s response and to explore whether we are happy with it and therefore confident about where it will take us. As the Minister indicated clearly in Grand Committee:
“Postal services consumers will also benefit from the introduction of redress schemes”.
But we want to ensure that we enhance, and certainly do not detract from, the service that is offered by the new consumer council.
The noble Lord, Lord Razzall, touched on the number of post offices that are likely to close. I share his concern. The Minister also stated in Grand Committee that,
“99 per cent of the population will be within three miles of an outlet”.—[Official Report, 9/1/07; col. GC 60.];
that is, a post office outlet. However, in order to achieve that percentage, are not some of the most rural and remote post office outlets more likely to be closed in the future cuts so that the Government can achieve their target of having 99 per cent of people living within three miles of an outlet? Having travelled down through the country today, I am aware that some very remote areas will be in great jeopardy of losing their outlets. Will the Minister clarify the response that he gave in Committee as I do not think that he responded to that point?
My next point was raised by colleagues. How will the Government ensure that the most vulnerable people in the remotest areas who have the greatest difficulty accessing these outlets will continue to be able to do so? I take up the point made about the squeeze on the Post Office bank card, which, as we have heard, has been overturned temporarily, but who will fight that corner in the longer term? I understand that the National Consumer Council will deal only with complaints; it will not set strategy. Perhaps the Minister can answer my earlier question in that regard. I refer him to the setting up of the Commission for Rural Communities. When that announcement was made I assumed that the Commission for Rural Communities would be the watchdog that would ensure that the rural voice and people’s concerns about the closure of post offices were heard. I was desperately disappointed that that was not heard in the national press.
I am trying to get the Minister to respond to some of the comments he made in Committee. I ask him to clarify whether the council is going to deal just with an individual complaint or whether it will be able to look over the longer term at the repercussions of government decisions and the Royal Mail’s decisions on squeezing post offices. Having read carefully through the Committee stage, I find that not at all clear. I seek clarification from the Minister on those points which were debated in Committee but not clarified to my satisfaction. I am sorry that I was not here to raise the matter at the time.
My Lords, I have some sympathy with the concerns expressed by the noble Lord, Lord Razzall, and the noble Baroness, Lady Byford, but I draw exactly the opposite conclusion on what should appear in the Bill. It seems to me that the problems of the Post Office have not been resolved by dealing with them in isolation from everything else that happens to rural areas. The whole rationale of the Bill is to create a trans-sectoral organisation which is able to bring expertise from other markets into markets such as the post office and the energy market, and to use the expertise in those markets to create more generic solutions to consumer problems. The longer you delay the establishment of those arrangements—and we are already putting water back until after the initial establishment of the arrangements—the longer it will take for that new organisation, the new consumer council, to achieve that level of strength and influence in general decision-making.
On rural post offices, the noble Baroness, Lady Byford, and I have been very much concerned with services for rural areas. So has the noble Baroness, Lady Miller, who is just about to contribute to the debate. Post offices have been dealt with in a silo, entirely separately from the concerns of Defra and of the rural community more widely. Post offices are but one of the losses of services, both public and private, in rural areas. The losses have taken place partly as a result of market changes and demography and partly as a result of government decisions over recent years. It is much better that the issue is placed in that wider context, with an influential body that can influence government policy in a wide range of areas, rather than in the narrow area of departmental Post Office sponsorship by the DTI. That is what I see the new National Consumer Council doing.
In response to the noble Baroness, Lady Byford, I say that the new National Consumer Council is primarily about strategy and issues of broad concern to consumers and not so much about individual complaints. In this wider context, the strategy on the Post Office network can best be dealt with by a larger, more all-embracing body. If we put back the Post Office consideration until 2010, as is suggested by the amendment, we will fall short of achieving the Bill’s objectives in a relatively short timetable. On the immediate issue of the current review of rural post offices, Postwatch is already setting up the way in which that will be conducted. It needs to get expertise from the National Consumer Council and the Commission for Rural Communities to broaden the base of that review. It can go on; it will have started by the time the new organisation reaches its vesting date, and it will continue thereafter. It is a ring-fenced process that is dealt with somewhat separately from the rest of Postwatch’s activities. Therefore, it will not be jeopardised by creating the new organisation. Clause 15 specifically requires the new council to conduct an assessment of the network of rural post offices, in the same way as Postwatch currently has this obligation.
That responsibility is preserved. The influence on future post offices will be stronger, and the context in which such rural services are delivered will be broadened in a way that, as a whole, ought to benefit the rural consumer and not simply be seen in one dimension depending on the Government’s attitude to the Post Office in general. Rural consumers and indeed urban consumers who have lost their post offices in recent years will be better protected under this system. The sooner we introduce it, the better it will be.
My Lords, I support the amendment tabled by my noble friend Razzall. It does not state that the merger shall never take place; it accepts that, in time, that may be the best thing, and the Government have put a strong case for it. I understand the argument of the noble Lord, Lord Whitty, that that should happen now. Without in any way doubting his competence to manage the whole process, it is over-optimistic of the Government to expect that to happen at a time of enormous upset in the post office service and at a time when a consultation on the closure programme is under way. Notwithstanding the fact that the noble Lord, Lord Whitty, says that that process is ring-fenced, however much that is the case, you cannot stop disheartened staff leaving because they do not see a future for them within a new organisation. You cannot stop the expertise leaking out.
All we are suggesting is a delay until 2010 and that Parliament will have another look at the matter. The noble Baroness, Lady Byford, who spoke on this issue at Second Reading—I fully understand why she could not be present in Committee—was quite right to say that the Commission for Rural Communities had been pretty silent on this. As she will know, I opposed the setting up of that quango, which can be no more than a voice. However, it is supposed to have direct access to the Prime Minister through its rural advocate and I wonder what he has been saying recently on this issue to the Prime Minister and if it has had any effect at all.
The amendment will provide a chance for the Post Office reorganisation, as the Government might euphemistically call it, to take place under detailed scrutiny from Postwatch, which it is best placed to deliver because it has been working on this issue for several years. No one can take its place in that regard. Our amendment offers a middle way. We are not saying that the reorganisation should never happen but simply that it should not happen at this time of enormous turbulence for the Post Office, which provides a crucial service for people in rural areas and is equally important for people in suburban and urban areas.
Finally, noble Lords on the Conservative Benches have raised the issue of the business sector. The business sector has asked me to express its disappointment at the Minister’s response on this issue. In particular, a letter stated that,
“no detailed responses were made about the need to preserve sector-specific expertise and the representation of business interests in the postal sector”.
In rural areas, nothing is more important for small businesses than the postal sector, and that applies equally to the business sector throughout the UK.
My Lords, the amendment would require the Secretary of State to make an order to abolish Postwatch and to make that order subject to the affirmative resolution procedure in both Houses. Furthermore, the Secretary of State would not be permitted to make the order before 2010.
I recognise the concerns raised by the noble Lord, Lord Razzall, and the noble Baronesses, Lady Byford and Lady Miller, but I agree with my noble friend Lord Whitty that one of the main objectives of the Bill is the creation of a cross-sectoral consumer advocacy body that is stronger than the sum of its parts in addressing consumer issues that frequently exist across sectors of the economy. The new body must have the critical mass to engage effectively with government, regulators and industry sectors on the basis of expert and informed analysis and have the benefit of being able to draw on experience and expertise from a number of sectors. We recognise that maintaining the existing sectoral expertise in the postal services sector is vital to the success of the new body. We also recognise the importance of this in a sector that has only recently been opened up to competition.
We had a lively and informative debate in Committee on the principle of merging Postwatch with Energywatch and the National Consumer Council, and, given the extensive prior consultation on this issue, I am not convinced that it is necessary or appropriate to subject the proposal to incorporate Postwatch into the new council to the affirmative resolution procedure at a later date.
On timing, I understand the concerns raised by noble Lords that the postal services sector needs a strong advocacy body in order effectively to represent consumer interests in the post office network restructuring programme. In recognition of the importance of this issue to consumers, the new council will, under Clause 15, maintain the current function assigned to Postwatch of investigating any matter relating to the number and location of public post offices. Having a strong consumer advocate in the postal services sector and maintaining the sectoral expertise that Postwatch has built up and which the new council will inherit are vital to the Government’s proposals for a sustainable post office network.
We believe that delaying the inclusion of Postwatch in the new arrangements for consumer advocacy would merely prolong the uncertainty for existing staff and consumers and would increase the likelihood of staff retention problems and departures precisely at the point when Postwatch needs its staff most to feed into the post office network restructuring programme. The amendment would exacerbate the problem and be counterproductive, as it would extend that period of uncertainty, with consequent damage to morale and staff retention.
After careful consideration, therefore, I am not convinced that a delay in the creation of the new National Consumer Council and the associated abolition of Postwatch would benefit consumers of postal services, who would be faced with a delay in the creation of a stronger consumer advocate, as mentioned by my noble friend Lord Whitty, to represent their interests, and redress schemes to provide them with complaints resolution and redress as appropriate. Indeed, a delay might actually be harmful, creating a longer period of uncertainty for the existing staff of Postwatch, which I do not think was the intention of the noble Baroness, Lady Miller.
My Lords, I thank the Minister for his reply. We debated this extensively in Committee. I suppose that the best argument against the amendment tabled in my name and that of my noble friend is that it will be the noble Lord, Lord Whitty, who is responsible for proving us wrong. However, I am afraid that I am not persuaded, for two reasons.
First, I would be better persuaded if the world of this integrated authority to which the noble Lord, Lord Whitty, refers was that which is actually going to be put in place. We already know that the Department of Trade and Industry lost the internal turf wars and failed in its attempt to have a number of other councils, in particular the transport one, merged into the empire of the noble Lord, Lord Whitty.
Secondly, the Government have already conceded that water will not come in until 2010. I am not sure why the arguments that apply to water do not apply in spades to the Post Office and the Royal Mail, for all the reasons that I set out. I do not want to repeat those arguments, as we know what they are, but on this occasion I should like to test the opinion of the House.