Public Bodies Bill [HL]
Baroness Hayter of Kentish Town
My Lords, although I now have no involvement with Consumer Focus, I was on the National Consumer Council—something that I gather I share with the noble Baroness, Lady Wilcox—before its merger with Energywatch and Postwatch. The merger in 2008 that created Consumer Focus, under the Consumers, Estate Agents and Redress Act 2007, was the result of extensive parliamentary debate. The merger was carefully designed—including here in this House—and was implemented with good planning as well as wholehearted and widespread support. The merger has created a highly successful independent champion for all consumers across England, Wales and Scotland and for postal services consumers in Northern Ireland. Consumer Focus has specific responsibilities for energy and postal services users—and, from next year, for water users in Scotland—and is admired around the world as the leading voice for consumers.
I have a number of fears about the Government’s intention to abolish Consumer Focus and to pass its work to Citizens Advice. My concerns centre partly on the very different roles of Consumer Focus and Citizens Advice and partly on the duties that Parliament gave to Consumer Focus. I also have concerns about the impact on devolution, on consumer affairs and on accountability as well as on the capacity of Citizens Advice. There is also a fundamental concern about the undermining of consumer protection. Consumer Focus is not an advice or complaint-handling body but a policy and advocacy voice across the whole of consumer affairs with a record in industry-wide investigations and achievements. I have real concern about how Consumer Focus’s work on behalf of consumers—the least represented group in our economy compared with unions or business—will be maintained.
Let me start by taking the example of a current consumer topic—this may sound an unusual issue—which is the volume by which bread and beer may be sold. Over the Christmas Recess, David Willetts, the Minister in the other House, started his new year by suggesting the abolition of the regulations that provide the 400-gram rule for the sale of bread and that require beer to be sold in pints and wine to be sold in specified measures. I emphasise that the National Consumer Council and Consumer Focus have never been pro regulation for the sake of it. Indeed, Consumer Focus has often championed and helped to obtain deregulation, for example, over dispensing opticians and over the numbers of licensed hackney cabs. However, it seems to me that in any such discussions on the issue of how bread is sold or whether beer should be sold only in pints, it is absolutely right that the voice of the consumer is heard.
On such matters, producers will have their own view, whether that is about the profit that they can make or the freedom to innovate—which probably means selling smaller loaves. Government will have a view on whether, in the case of beer and whisky, a proposed change could affect the tax take, or, in the case of bread, on the cost of monitoring compliance. Regulators will have a view on competition and whether rules ease or hamper new entrants. However, where is the voice of the consumer without Consumer Focus? An experienced trading standards officer wrote to me when he heard about the possibility of bread quantities being changed and all those safeguards going. He said that he could not imagine that any well informed consumer would call for those changes. I do not know whether he is right or wrong, but I know that there needs to be a body that will obtain the views of consumers and reflect those in the debate.
Citizens Advice is much more focused on providing advice and guidance to individuals who come through the doors of citizens advice bureaux. Theirs is not the role of looking at market structures and at future regulation, in which Consumer Focus—independent of Government and with a specific consumer interest—is so expert.
Bread is just one current issue that requires what Consumer Focus can contribute to our national life, but another historic example is that of ombudsmen. Consumer Focus—then the National Consumer Council, which was possibly even chaired at the time by the noble Baroness, Lady Wilcox—made one of its most significant achievements for consumers by its original support for the concept of ombudsmen, which we all now take for granted. The National Consumer Council saw not only how consumers, once they knew that they could get their complaints heard and assessed independently, would have more confidence in the product or service but how businesses could learn from good systems of complaint handling and how regulators or the press could judge industries or individual suppliers from such intelligence. The ombudsman system has been copied worldwide, but the credit for this forward-looking advance for consumers must lie with the NCC as was. We risk losing that service to consumers by placing the policy function within an organisation whose local funding is seriously stretched and whose core function is to help those who come through its doors rather than to plan systems for decades ahead.
Lord Whitty
My Lords, I strongly support my noble friend’s amendment. The way in which she has constructed her argument in terms of six precise questions behoves the Government to give a clear answer, either tonight or in writing, as to how they see the future for consumer protection in the regime they are proposing here.
I declare a past interest in that up until last month I was the chair of Consumer Focus. I am now much freer to say what I think. It was a great experience, both there and at the NCC. I am extremely pleased to see that the Minister replying is one of my predecessors and that one of her predecessors is also with us—the noble Baroness, Lady Oppenheim-Barnes. I am pleased to see them because they will know what we are talking about. I am sorry for the Minister, however, because the part that will suffer most from the loss of Consumer Focus is the part that was covered by the old NCC. The energy and post will have to survive in some form or other. Politically, it is not possible for the Government entirely to retreat from those areas. What will go will be the more general work on consumer protection, consumer law, the international dimension, as my noble friend mentioned, and looking at markets which are not necessarily at the top of the Government’s agenda but which are at the heart of the experience of the average consumer and the most vulnerable consumer.
The bit of paper which the Government have provided as justification for this—I am grateful that we have a piece of paper—is deeply misleading. It says that the headline decision is to,
“Abolish, transfer functions to Citizens Advice and Citizens Advice Scotland”,
and that aim of the reform is to,
“rationalise the consumer protection landscape and reduce the number of bodies”.
Actually, the Bill does none of that. It does not provide for any transfer, nor does it provide for any rationalisation. I appreciate that the department conducted a major consultation in relation to the consumer landscape and was considering several propositions in terms of rationalisation. I agree with the view of the previous Government and the current Government that some rationalisation was necessary but this Bill does not provide it. Instead, it confuses the position, as I shall go on to argue.
My noble friend outlined the recent history of the construction of Consumer Focus out of the National Consumer Council, Energywatch and Postwatch. There is, of course, a much longer history to which she also alluded. The late Lord Young—by whom I do not mean my noble friend on the Front Bench but Lord Young of Dartington—was a progenitor of so much in the consumer field and in 1975 he argued not only for the establishment of a membership organisation, now Which?, but also for the National Consumer Council and for a consumer congress. That was the high noon of the corporate state and he and others saw that a representation of consumers alongside employers and representatives of workers in trade unions was an important part of that structure. But the NCC has developed through changes in government policy and institutions and through the disappearance of the nationalised industries. It has survived through all this. The regime of the noble Baroness, Lady Thatcher, quite rightly looked at the possibility of dropping the NCC but backed away from it. It is not a route which this Government, in an attempt to create the big society and to engage with groups such as consumers, ought to be going down today unless there is more to the story than we have yet seen.
What happened in the intervening years since 1975 is that we had a whole construction of different consumer bodies as well as the NCC. The privatisation and liberalisation of nationalised industries led to consumer bodies being set up in different sectors, on a different basis and in many cases with different forms of funding. There was a confusing picture and the previous Government quite correctly decided that they needed to address that and bring a lot of those bodies together in Consumer Focus. The previous Government did not go as far as they intended, partly because of internal Whitehall barriers and partly because there was some resistance from some of the industries. But they took a significant step in the right direction. It is clear that Consumer Focus made the best of a bad job in the sense that we were covering only part of the consumer representation that was laid down in statute and paid for, in part at least, by taxpayers or by statutorily laid down levies in one form or another on the other sectors.
Rationalisation, therefore, was sensible. At one point I thought that the Government would come up with a rationalised body, pulling together several of the institutions that existed into something like Consumer Focus. They need not have kept the name but could have created a new and wider body. Had that happened I would have been a strong supporter. I do not necessarily think that the status quo is defensible or the best possible representation of consumer interests in the best possible world. But they did not do that. Instead, they seem to have backed off the rationalisation, and this Bill has different bits of consumer interest representation in different schedules. For example, whereas Consumer Focus is in Schedule 1 for abolition, the Consumer Council for Water is in Schedule 7 for limbo and Passenger Focus is in Schedule 3 and Schedule 5. I am not entirely clear what will happen to that. There has been some threat about what will happen to the consumer panels within regulators, including the one that my noble friend chairs in the legal services area. There is no clarity on how any rationalisation will take place. What is stated here as the main aim of this reform, rationalisation, is not provided for within the Bill. Instead, further confusion is provided for.
Consumer Focus has carried out functions on behalf of vulnerable consumers and the average consumer—because average consumers and even quite well-off consumers are often vulnerable in certain circumstances. I am always pretty vulnerable when I am dealing with a garage mechanic. Most people of my age and technological illiteracy are pretty vulnerable to people arguing on intellectual property or new technology, and I know that that is also an interest of the noble Baroness. It is not just the most vulnerable who we represent but the most vulnerable are probably likely to lose out most from these changes.
However, I will not argue with the Government that this body should always be in the public sector. There are arguments for moving it into the third sector. I am reinforced in that view by the attitude that the Government have taken to quangos in general—by not distinguishing between the role of quangos. Quangos are not allowed to lobby the Government and make public statements that are critical of government policy. It is difficult to do that when you are in the tradition of the NCC and Consumer Focus. You are always criticising or trying to improve government policy, the policy of regulators as well as the policy of public service providers. Therefore, it is quite difficult to maintain a degree of silence in that context. In that sense, it might be more sensible to move it into the third sector. It would still require significant public support and the Government recognise that. Unfortunately, they are not providing that support.
What is likely to happen is that two-thirds of the activity of Consumer Focus will be in energy and post. Legislation going through Parliament reinforces that role. In the Energy Bill—particularly in relation to the Green Deal—which had its Second Reading in this House just before Christmas, there are functions for Consumer Focus inherited from Energy Watch and a recognition by DECC and Ofgem that there is a huge role for a consumer representative body within this area. I do not think any government would be allowed by their supporters in the Commons let alone by the opposition to get rid of the energy role. I think that will largely survive. The post role will probably also survive because of the present propositions for the future of the postal service and Post Office network. I do not expect the Government to be hugely generous in providing for consumer representation in those areas but I believe it would be politically difficult for them drastically to cut the support they give to consumer representation, whether the body is in the public sector or in the third sector.
That leaves the rest of the economy. Consumer Focus, inheriting this from the NCC, looks at consumer protection, customer service, consumer law, the general principles of regulation in this area, the EU level representation to which my noble friend referred and the international dimension of it. The reputation that Consumer Focus and its predecessors have in this area is an important asset. My noble friend referred to cuts in the budget here. The previous year’s budget for consumers in the rest of the economy, outside energy and post, is just over £5 million. That is going to be cut this year by about 30 per cent and indications are that next year it will be cut by something close to 80 per cent.
If it is intended to do that, and to switch this to Citizens Advice, we would expect some concomitant increase in the allocation to Citizens Advice—a partial if not a full one. There has been no such compensating allocation to Citizens Advice which, as my noble friend said, is under severe financial pressure itself because of the cutbacks by local authorities. There is no increase in the central government grant to Citizens Advice. It is not a transfer in terms of money because the money is simply being cut. The note we have been provided with says that the full transfer will not take place until 2013. By 2013, the budget will be less than 20 per cent of what it was last year. In terms of resources, what is there to transfer?
There is also the question of transfer of powers, which are significant in relation to information. It is not clear which powers the Government intend to transfer or which powers Citizens Advice could accept in view of its charitable status and its need primarily to act in pursuit of its charitable objectives. Nor is it clear that the Government can allocate powers of that nature to what is after all a private body without at least some degree of tendering process or whatever. The Government’s intentions here have always been unclear. I have heard it said that there are bodies other than Citizens Advice which could take these powers. I do not see them queuing up but maybe that is what is behind the Government’s intentions. At the moment it is not clear that the powers would be transferred or that any of the expertise represented by the staff would be transferred. It has not been clarified whether TUPE applies. My Amendment 105A deals with that aspect more generally. If the budgets are cut significantly then there will not be any staff left to transfer. That intellectual asset would disappear with the staff.
None of this is a criticism of Citizens Advice, which does a fantastic job in many respects under growing constraints and pressure for its services. There is little that Citizens Advice does that duplicates the work of Consumer Focus, despite what has been said. I would be surprised if 10 per cent of the non-energy, non-post budget is in any sense duplicated. Even in the sectors where we both work, we do different things. A savings rationalisation to avoid duplication is not a reasonable justification for this.
Citizens Advice will find it difficult to take on these roles. Nothing in the experience of Citizens Advice relates to the intense relationship that we have on energy and post with the regulators, with the energy companies and with Royal Mail or the degree of knowledge of those markets that has been established over the years. I therefore think that Citizens Advice would have to create a whole new division if it was to take on the energy and post functions. It will be necessary for the Government to provide for that in some form.
Lord Borrie
My Lords, I support the amendment proposed by my noble friends Lady Hayter and Lord Whitty. I have known this body very well for a long time. It was created in 1975, which was precisely a year before I became head of the Office of Fair Trading. We often had to work together, although I should not say “had to work together”, as it was a pleasure to do so. The NCC operated under the chairmanship of people of different political beliefs, but it always had a strong reputation for the quality of its research and its work and it was beneficial that its influence should be felt at every level of government. It has, as I indicated, had very different chairmanships, including Michael Young, the Labour Peer Lord Young of Dartington; the noble Baroness, Lady Oppenheim- Barnes, who had been a Minister in charge of consumer affairs at the DTI; Michael Montague, the Labour Peer; and not only the noble Lord, Lord Whitty, but the noble Baroness, Lady Wilcox, who is going to reply today. Each of them served Governments of varying political hues, not necessarily with the politics that they adhered to.
The National Consumer Council always researched and campaigned on a variety of consumer issues and we at the Office of Fair Trading certainly found its work and its publications to be of tremendous value. The coalition Government seem to intend—I think that we would all agree that nothing is all that clear at this present stage of flux—that the Office of Fair Trading’s consumer enforcement powers should be transferred to the local authorities’ trading standards services, for which I have the highest admiration. They do an excellent job at the moment and could do more.
The Consumer Direct line will go to Citizens Advice. I do not want to examine closely this evening the problems that this proposal gives rise to, but the abolition of the National Consumer Council or Consumer Focus—with the Postwatch and Energywatch powers that it has been given in more recent years—raises at once the issue of who is to perform the powerful and important high-quality research and advocacy campaigning role, if anyone is. It seems—no doubt the Government have had to search around to see who they can say will take on these roles—that the answer is Citizens Advice. Of course, I share the view of my noble friends Lady Hayter and Lord Whitty that Citizens Advice is something of which everybody in this country, whatever their politics, must be hugely proud. It gives advice across a whole range of things—not just consumer matters but welfare matters and all sorts of things.
However, I noticed recently at a meeting that the chief executive of the charity Citizens Advice—I emphasise that it is a charity—Gillian Guy, whom my noble friend mentioned, has bravely expressed delight at Her Majesty’s Government indicating confidence in Citizens Advice to the extent that it is to be given those extra powers now held by the National Consumer Council. It admits that it will need more finance; that is always more easily said than done, of course. The Minister will correct me if I am wrong but, as far as I can see, Citizens Advice has been given very little reassurance, if any, that adequate finance will be available to provide it with the expertise that it would otherwise lack or the other things that it must need in order to replicate in any way the work of the National Consumer Council.
The Government seem to have ignored the value that the National Consumer Council has in statutory powers and expertise. Consumer Focus and the National Consumer Council have built up expertise and developed statutory powers over the years. The noble Baroness has already raised this point, but will the Government give or be willing to give to a charity the sort of statutory powers that they and successive Governments have been willing to give to the National Consumer Council? Will the Government give a charity statutory powers to demand information from companies, which is essential if that charity wants to investigate the company and its behaviour towards consumers? There is, as far as I can see at the moment, no reassurance on that score at all.
The idea of the National Consumer Council way back in 1975 was very ambitious. It was to give the consumer a voice equal to that of the employer in the CBI and the worker in the TUC—to exaggerate in the manner of the speeches of the day. It was probably always a bit of an overstatement and an overambitious thing to try to achieve, but the National Consumer Council has over a quarter of a century and more certainly done a great deal for the consumer, which would be missing if it disappeared.
Finally—I say this only in passing, because I do not wish to emphasise it—I do not agree with the noble Lord, Lord Whitty, about charities and the third sector perhaps being able to do this work just as well as a statutory body. I doubt it. I would prefer to speak on the basis that I agree entirely with the amendment—namely, that the NCC should not be among those public bodies listed for abolition.
Baroness Deech
My Lords, I speak with no expertise but as a down-trodden consumer, which is probably how many people in this House see themselves. I therefore have the greatest admiration for the work that has been done for years by the noble Baroness, Lady Hayter, and others in this House who have fought for consumers. However, things have never been worse. Just look at the past few months. What agony it has been to be a rail or airport passenger, to suffer from the delays in post and from the inefficiencies of our garbage collection, to suffer at the hands of the banks and pension providers. I could go on. It seems to me that the voice of the individual consumer is not being heard; that we need more individual voices, less ideology and fewer vested interests.
This Bill has come under more attack than perhaps any Bill that I remember in recent years. But if it can result in a thorough shake-up and rationalisation of consumer matters, it will be a good thing. Citizens Advice is an institution of which we are all proud and which has been run on a shoe string. There will be even more demands on its services in future years because of the cuts in legal aid. With my legal hat on I can see that the citizens advice bureaux will have an enormously important part to play as more and more people, unable to afford legal advice, go to them. They need every support that we can give them. If there was an undertaking that the 154 staff apparently working for Consumer Focus, and its £13.9 million of funding, were to move over to Citizens Advice, it would offer some reassurance.
In many respects things have changed regarding its lack of statutory powers. Data protection and freedom of information legislation have enabled individuals to find out more than was the case in the past about the way that their consumer affairs are being handled. However, as an outside observer, it seems to me that there are too many bodies in this field. Google and you will find hundreds of consumer panels and consumer advice organisations. Consumer Direct lists about 50 organisations with which it co-operates. There must be room for some rationalisation and saving. There must be a way in which the voice of women, passengers, landlords and tenants—and not so much the voice of politicians, other regulators and so on—can be heard. I would support any move resulting from this Bill that would enable the Government to look—not ideologically but in helping the individual—at the whole field of consumer protection and advice because I believe that things have not gone well for consumers in recent years. If the recession continues and things do not improve, it will be equally bad for consumers who are a very important part of our citizenry. In fact, we are all consumers and need looking after. The Government should take this opportunity to ensure that consumers are cared for individually and should show great respect towards, and support for, Citizens Advice.
Baroness Oppenheim-Barnes
I remind the noble Baroness that the National Consumer Council did not give, and was not created to give, individual advice to consumers. Some considered that a great drawback. The noble Lord, Lord Whitty, rightly drew attention to the Consumer Council for Northern Ireland, which did indeed provide that service—I was always extremely envious of the fact that it was able to do so—and was a far better organisation as a result. To combine consumer research and services with CABs, which can give advice or, indeed, with the organisation to which the noble Lord, Lord Whitty, has referred, would be a step forward, not a step back.
Baroness Deech
The noble Baroness is, of course, right. It seems to me, as a consumer, that the need for individual advice is very great and will become greater. There is perhaps less of a need for research at the moment but the nation is replete with individual sector-specific consumer bodies and national ones. There should be rationalisation. As I say, I am not an expert but I see a great need for individual advice and perhaps a slightly lesser need at the moment for research. Noble Lords who have been involved in this field for years, as the noble Baroness has been, have made us all very much aware of the needs of consumers. To some extent a battle has been won but things have been bad in recent months. I suspect that they may get worse for the individual in the future.
Lord Berkeley
Is the noble Baroness aware that the Passengers’ Council is included in Schedule 7, and is therefore due for abolition, transfer or heaven knows what? That body is also funded by the Government at present and looks after rail and bus passengers. Does she have any views on whether the rationalisation should encompass that or whether bus and rail passenger issues should be taken over by a consumer organisation?
Baroness Deech
The noble Lord makes a good point. I am a long suffering commuter and I will not bore the House with my experiences on rail and bus. I do not feel that the voice of the consumer has been properly heard. I have stood on Oxford railway station and argued with the guards in relation to the passenger charter when the queues were too long and they would not let us on. I am not convinced that rail passengers are well protected at the moment. This passenger body exists but things are bad on the ground. I just hope that someone more expert than me can do more for those such as myself who have suffered.
Lord Maclennan of Rogart
My Lords, this has been an authoritative debate which has brought into the discussion on the future of consumer protection the voices of those who have given great public service in the field and who speak from direct knowledge. My personal credentials are somewhat dated although I was a Minister at the Department of Prices and Consumer Protection when the National Consumer Council was established in 1975. My concern about the inclusion of Consumer Focus in Schedule 1 reflects concerns that have been expressed across the Committee: namely, that it is not clear how the functions exercised by that body, which were endorsed by Parliament as recently as three years ago, should be redistributed. It has been suggested that the work of Consumer Focus should pass to Citizens Advice. I am bound to say that in its present form it would not seem to me sensible to pass the work of the NCC to the Citizens Advice network. That body draws its strength from its localism, from its ability to speak for the individual and from its selfless commitment to work with all the other agencies, tribunals and sources of legal advice to amplify the effectiveness of individual citizen protection. The work of the NCC has always been very different. I do not believe that a marriage between these two bodies would work. In fact, it would probably lead to a subsequent divorce.
Before Parliament takes a final decision on this, we need to have much greater exposure of the thinking across government about how consumers should be protected, particularly in the times in which we are living.
When the NCC was set up, inflation was rising to the peak of 26 per cent. We are not in that situation at present, but we see inflation rising by an amount which is approximately twice that predicted by the Bank of England a year ago. There are very clear threats to individual consumers in the present economic climate. The voices of those consumers will be represented in their individual difficulties and Citizens Advice has a very great role to play in that. Its work will be enormously added to by the changes in legal aid which have been adumbrated—indeed announced—by the Government. But it does not seem to me to be an organisation that is at all suitable for work which requires probing, research and access to information which, notwithstanding the changes in freedom of information and data protection, is still very hard to grapple with. It is even harder to influence the way power is exercised by those commercial bodies that have it.
I am not attempting to turn back the clock. I am susceptible to the arguments that the noble Lord, Lord Whitty, made earlier that there could be a number of different ways of ensuring that the voice of consumers is expressed. I am clear, however, that an ad hoc active citizenship role cannot provide that. It needs to be professional; it needs to be committed; it needs to be knowledgeable; and it needs to be authoritative if it is going to influence policy judgments. We have that at present. We have an authoritative body. If a complete rethink of consumer protection is required, then I profoundly hope that no steps will be taken to implement any change of this kind unless and until the voices around the industry and around the country have been thoroughly tapped into and collated, and a consensus is arrived at how best to give structure to the change. I do not think that that is impossible, but at present it is not in the forefront of people's imaginations or discussions and we need to get it there again. It is of interest that in 1974, at a time of economic crisis, the Labour Government established a separate department of state to try to deal with these matters. That was taking upon government responsibility and accountability. I remember well having to answer questions about these matters. My noble friend was a very distinguished predecessor.
Baroness Oppenheim-Barnes
My noble friend is almost bound to have to add that the Department of Prices and Consumer Affairs was created by a Government—of whom he was the Minister for Prices and Consumer Affairs—that presided over an inflation rate of more than 26 per cent, which we inherited.
Lord Maclennan of Rogart
My noble friend must have been momentarily nodding during the part of my speech in which I referred to inflation of 26 per cent. I was about to refer to the embarrassment of having to answer questions about the prices of fundamental items in the domestic budget at that time.
Lord Greaves
My Lords, if we are now going into history, it should be put on record that the inflation rate, which peaked at 26 per cent, was going down at a substantial rate by the 1979 election after the beneficial influence of the Lib-Lab pact.
Lord Maclennan of Rogart
I am not trying to resurrect history tonight, but merely to call in aid some of the relevant factors. It is true that inflation dropped to 10 per cent, but that is still more than three times what it is at present.
I agree that the nexus and concatenation of consumer protection bodies played a considerable role in helping to focus policy-making on what was necessary. I appeal to the Government to recognise the inadequacy of the present proposals for change. The Bill is primarily about winding up bodies, not about indicating what is to take their place. That is one of its defects. It is an attempt to make things possible, but it will not command the approval of Parliament if we do not know what are to be the alternatives, and if we are not satisfied that they are satisfactory and will deliver what the bodies that are for the chop have delivered. No one can pretend that this body has passed its sell-by date or ceased to have a useful potential purpose in future. I say yes to rationalisation and reorganisation—but let us know how it is to be done.
Lord Liddle
My Lords, briefly, I support the amendment. We have had an excellent debate. I cannot believe that the Minister, who knows a lot about this subject, is not somewhat uneasy in the light of what she has heard. We have had excellent contributions from my noble friends Lady Hayter, Lord Whitty and Lord Borrie, and the noble Lord, Lord Maclennan, who really know their stuff in this area, as I know she does. If she is thinking about how to win an argument within government for a change of policy on this issue, perhaps I may suggest that abolishing the National Consumer Council—Consumer Focus—is a deeply anti-big society move. If you look at the history of the consumer movement in Britain, you will see that in the 1950s there was a tremendous growth of interest in consumerism on the part of social democrats, such as the late Lord Young of Dartington and some of the progressives from the Conservative Party who wanted to see a different kind of politics from the clash between employers and trade unions, and who wanted a third voice—a consumer voice—to be represented.
Lord Young of Norwood Green
As a number of my noble friends have said, there are real concerns about the viability of the coalition Government’s proposals on the vital issue of consumer representation. As my noble friend Lady Hayter reminded us, Consumer Focus was created under the Consumers, Estate Agents and Redress Act 2007. It was a new organisation, carefully designed with good planning and as a result was implemented with widespread support. It has become the acknowledged champion for consumers in England, Wales and Scotland, and for postal customers in Northern Ireland.
I think my noble friend Lord Borrie talked about the enthusiasm of the chief executive of Citizens Advice for the new role, and I reflected on the comments of the chief executive of Consumer Focus, who said:
“Consumer Focus has achieved big wins for consumers in just two years—including a £70 million energy bill refund and cash ISA reforms saving over £15 million a year. We’ve delivered our biggest results in the last few months but the biggest challenges for consumers are ahead, with major reforms to the energy, post and financial services markets … What matters now, is that the transfer happens in a way that works in consumers’ interests. The expertise and knowledge that has enabled us to fight for consumers must not be lost. Changes must not be at the expense of the public’s rights and needs—which organisations like Consumer Focus were created to protect”.
That is an important and interesting comment.
There has not been much reference to the role of trading standards. The response states:
“Trading Standards is at the centre of the Government’s proposed new regime. Local challenges to fair trading will continue to be handled at local authority level, but national and regional consumer challenges will be handled by one or more dedicated, expert teams, within Trading Standards with work co-ordinated nationally for this purpose”.
Perhaps the Minister in her reply can expand on that national role of trading standards. It also states:
“In respect of Scotland and Wales, specific arrangements may need to be made”.
In the light of this debate, that is perhaps a bit of an understatement.
I am conscious of the time, so I will cut my contribution much shorter than I had intended—for which relief, much thanks; I see the Minister nodding. I cannot help remembering, given the history of inflation that we have heard tonight, negotiating a wage increase of about 23 per cent during that period in the 1970s. I was reminded of those heady days.
I shall make a couple of quick points in summation. At the moment, Consumer Focus receives approximately one-third of its funding from BIS. The remainder is gained from a mixture of licence funding paid by energy suppliers and the postal industry and funds that it may raise itself—for example, through externally funded projects. I add my voice to the cause and ask the Government whether they yet know how much it will cost to outsource those services to a local community group. What proportion of that money will come from the Government? How will the plan help to ensure that the body performing those functions is more accountable? A thread through what, as a noble Lord already said, has been an authoritative and interesting debate is that question of accountability either to the people that the body seeks to serve or to the funding providers—in the case of the Government, the funding providers being the British public. In the interests of time, I will let the Minister respond.
Baroness Wilcox
My Lords, this has been an amazing debate. I knew that it would take some time, but I hope that the noble Baroness, Lady Hayter, will be pleased at the amount of time and thought that has been put into some of the speeches heard here tonight—I know that I have been. It has been a real trip down memory lane too. The only person who seemed to be missing was the noble Baroness, Lady Williams, who, I believe, in those distant days gone by, set this all going in the first place. It is amazing who we have heard from: the noble Lord, Lord Maclennan, the noble Lord, Lord Whitty, the noble Lord, Lord Borrie and too many others. I shall try hard to answer some of the questions, but I hope that noble Lords will understand that, given that it is six minutes to 10, I will try not to keep you here past 11 o'clock. Settle on down then.
Consumer Focus has been placed in Schedule 1 because the Government believe that its functions will be better carried out by transferring them to the citizens’ advice service, which includes Citizens Advice and Citizens Advice Scotland. There will therefore be no need to retain Consumer Focus. The National Consumer Council, in its original incarnation, has a proud record. Over three decades, it established a fine reputation for representing the interests of consumers through careful research, robust policy development and by using its influence with policy-makers. I, of course, declare an interest as a former chairman of the National Consumer Council from 1990 to 1996. Prejudiced though I may be, I say that it was certainly right for its time.
The previous Government merged the National Consumer Council with Energywatch and Postwatch; and the new National Consumer Council, which took the name of Consumer Focus, opened its doors for business in October 2008. I recognise that barely two years have passed, but over those past two years, Consumer Focus has eagerly grasped its new range of powers and responsibilities on behalf of consumers. I pay tribute to the noble Lord, Lord Whitty, who chaired Consumer Focus with flair and commitment from the very start until stepping down rather loudly and cross only in November last year.
I will try to answer some questions as I go, which may distort the speech a bit, but will give some answers. The noble Baroness, Lady Hayter, asked whether abolition of Consumer Focus means that the Government are giving up on consumers. Not at all. The Government will continue to provide funding for these objectives, which we regard as highly important, and we see Citizens Advice as the most effective conduit to deliver the desired outcomes.
What about vulnerable consumers? Consumer Focus and its predecessors have played a very important role in this area. Citizens Advice also has substantial experience of addressing the needs of vulnerable people across a wide range of subject areas and we are confident that it will be able to deliver the outcomes with no loss in quality. While Consumer Focus currently assists around 7,000 customers directly, Citizens Advice is advising and supporting millions of individuals. Citizens Advice also has well developed policy and research functions as will be known to some noble Lords.
The noble Baroness, Lady Deech, asked whether the Government need to look at the whole landscape of consumer protection right across the economy and make it more effective for consumers. I agree. The Government’s proposal is further to improve consumer protection and advocacy in general and we believe that the shift of Consumer Focus’s role to Citizens Advice will deliver those services and protections closer to the citizen via the network of citizens advice bureaux, making it even more relevant and effective than it currently is.
The noble Lord, Lord Whitty, asked whether vulnerable consumers will be those who lose out most. The Government propose to transfer Consumer Focus’s statutory powers with regard to vulnerable consumers to Citizens Advice. Discussions about how we can achieve this appropriately are still going on with Citizens Advice and internally within BIS.
My right honourable friend the Secretary of State for Business, Innovation and Skills announced on 14 October last year that the Government would consult early this year on proposals to rationalise the functions of consumer protection bodies, eliminate confusion and duplication, strengthen local delivery and provide a stronger role for front-line consumer services. This is what we hope will be achieved.
We are taking the next, great, positive step forward in consumer advocacy, building on the strengths, the expertise and the bold initiatives that have gone before and of which we have heard so much tonight. Consumers need protection no less now than in the past. Increasingly sophisticated products and services need an increasingly clued-up consumer to take maximum advantage and avoid coming a cropper in the marketplace. We need to deliver assistance and advice to individual consumers at the point of need at a local level. At a national level, we need a body to continue with quality research which is capable of taking on the big policy issues of the day and fighting for the consumer interest with businesses, regulators and Government.
The noble Baroness, Lady Deech, says that things have never been worse. Maybe she is the consumer on the Clapham omnibus and not one of us who have been involved deeply in our parts of the consumer world and do not like to see any of the bits we were involved with go. Maybe her voice is the one we should be listening to now.
Citizens Advice is widely recognised and trusted by the public. It has a distinct advantage which we should seek to turn to our advantage. It has local representation, through the citizens advice bureaux, in communities throughout the country. It offers a presence on the high street so that people can call in to get advice and information. It can cater for those who need personal contact people who are not necessarily comfortable with a telephone or online service. It can assist vulnerable consumers face-to-face, identify problems and help with solutions. Citizens Advice has an excellent track record of advocacy on behalf of consumers at a national and local level. We therefore intend to direct almost all central government resources for non-financial consumer education, information, policy and advice to Citizens Advice.
Lord Greaves
My Lords, the Minister waxed lyrical and fluently about a vision in which services were concentrated on what she called the “high street”, directly providing services of advice and everything else for consumers. The question that comes to mind is: have the Government got any plans of what they will do if, as a result of local government cuts in the funding of citizens advice bureaux locally, there is not a comprehensive service on the high streets of this country? If there are big gaps and towns where citizens advice bureaux disappear from the high streets, is it the intention of the Government to provide extra funding directly to keep those services going? The vision that she put forward depends on a comprehensive network of Citizens Advice in every town in the country.
Baroness Wilcox
My Lords, late though the hour is, that is a very good question. The consultation that we will have will take on board everything that has been raised tonight and is raised by people taking part in the consultation. Obviously, if we intend doing something as changing as this, everything will be considered. It would be foolish indeed if we just allowed everything to close. We must remember that Citizens Advice back at base is where so much of the work will be done. People will be able to contact Citizens Advice online, but I agree that the high street is where Citizens Advice as majored and I am sure that we will do all we can to make sure that that visible presence does not get reduced.
It is perhaps worth saying that the consultation will happen in the spring, which of course is within the next few weeks. We propose to make any changes in the consumer landscape by April 2013, so we have plenty of time to get this right and to see exactly what is happening out there and what we are creating.
Baroness Hayter of Kentish Town
My Lords, I thank the speakers, who have been impressive, if not overwhelming, for me today. They include a former director-general of OFT, three—including the intervention —former chairs of the NCC and a former Minister in this area. It shows the degree of concern about how consumers within civil society can have their voices heard in decision-making, whether that be in the public sector through industry, by regulators or by elsewhere. It seems to me that this is a key area.
The original purpose of the Government was to reduce the number and cost of quangos—hence its so-called review. We hear that the consultation will be early this year or in springtime. It is at least something that that review has taken place. The House of Commons Public Administration Select Committee in its report thought that the review to date was poorly managed. I fear that even the Minister’s answers have substantiated that. I am delighted to hear her say that the Government will look at, are looking at and are giving consideration. That is great. It is just rather sad that that has happened after the decision and after this Bill is before us rather than before.
There was precious little consultation with Scotland and none with Wales, none with the wider consumer movement or representatives of users or clients, or indeed anyone else. As my noble friend Lord Whitty said, the Bill does not provide for a transfer of functions—it is an abolition. My noble friend Lord Borrie did not ask who is going to provide help on the high street, important though that is, but put the vital question of who will do the high-quality research, investigatory and advocacy work across the whole economy that is being done by Consumer Focus and the NCC before that. I do not think the Minister has answered that question.
The proposal, according to my noble friend Lord Liddle, is anti-big society, and I think that is right because the big society should be about having the consumer voice at the heart of every decision that takes place. The reasons given for other bodies in the Bill is that they are old, a bit cranky and in need of an MOT, or even removal. That is not the case with Consumer Focus because it is two years old. Nevertheless, I agree very strongly with what the noble Baroness, Lady Deech, said. If this Bill had led to rationalisation and to better protection and advice, she would be with it. At the time when I was still with the NCC and we were discussing the mergers, we would have loved to have the water watchdog, Passenger Focus and others coming in so as to provide a really strong and dynamic voice for consumers. Had this led to such a rationalisation, I would not be here arguing against it—I would be cheering it on. We need consumers across all sectors to have a stronger voice, so if the desire expressed by the noble Baroness, Lady Deech, was to be met, I too would be with it.
As the noble Lord, Lord Maclennan, said, it is not a positive proposal for change; rather it is a winding-up process. I think he also agreed with the notion of “Rationalise, yes; abolish, no”. He said he did not think that the Bill would achieve the aims of better consumer protection and certainly is not going to save public money. The noble Lord fears that this marriage will not work. I think he may be right and that it may be a marriage made in hell. He also asked whether Citizens Advice could undertake the probing, analytical work that has been done. Citizens Advice is about solving individual problems, but we need a consumer voice that goes to Government, to industry and to services.
I am delighted that the Minister said that discussions and talks are now taking place. They may be late, but better late than never. I will also be delighted if Scotland and Wales have time to consider whether there is an alternative model that suits the devolved areas better. The Select Committee also said that the Government face the much larger challenge of successfully implementing these reforms. That is right because there are still questions about funding. I was sorry to hear the Minister use words like “efficiency” and “savings” in her discussion on funding when I had rather hoped to hear about a promise and, “Yes, that is fine”. I would have liked that better. There are still questions of accountability and about whether Citizens Advice is the right organisation to do this job. There is also the question of what happens if finally it says no.
I hope that the Government will continue in their thinking and do a proper consultation, even if it is being done a bit later than perhaps it could have been. But in order to assist them, of course I beg leave to withdraw the amendment.