Public Bodies (The Office of Fair Trading Transfer of Consumer Advice Scheme Function and Modification of Enforcement Functions) Order 2013

Tuesday 12th March 2013 Grand Committee

Considered in Grand Committee

16:03

Moved By

[Viscount Younger of Leckie]

That the Grand Committee do report to the House that it has considered the Public Bodies (The Office of Fair Trading Transfer of Consumer Advice Scheme Function and Modification of Enforcement Functions) Order 2013

Relevant documents: 15th Report from the Joint Committee on Statutory Instruments, 24th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)]

My Lords, the purpose of this order is, first, to finalise the transfer of the consumer education and advice function, including Consumer Direct, from the Office of Fair Trading to the Citizens Advice service, and to transfer the relevant industry levy arrangements; and, secondly, to ensure that consumer enforcement is allocated appropriately between trading standards and the OFT by amending consumer legislation.

The Government are committed to promoting growth in the UK economy and empowering and protecting consumers is a vital element of our approach. The current landscape of bodies responsible for these tasks is confusing, duplicative and therefore inefficient, leaving consumers uncertain as to whom to turn to for help and advice when things go wrong. We recognise that there are many good things about the individual organisations but, taken together, they form a complex landscape that can be difficult for consumers to understand. For example, when someone has bought a faulty second-hand car they do not know whether to seek advice from the Office of Fair Trading, Consumer Focus, Citizens Advice or Trading Standards.

This complexity and the lack of clarity about divisions of responsibilities have led to gaps in enforcement. The National Audit Office’s 2011 report, Protecting Consumers – the System for Enforcing Consumer Law, found that consumer detriment occurs at national and regional level, but the incentives for enforcement officers are weighted towards tackling issues within their local authority boundaries. Similarly, the University of East Anglia’s 2002 report, which sought to benchmark the UK’s consumer empowerment regime, identified uneven enforcement as a key weakness.

The OFT estimated the cost to those consumers affected and the wider economy of rogue practices, such as intellectual property crime which occurs across local authority boundaries, to be at least £6.6 billion annually. Any gap in enforcement has, therefore, significant impact on members of the public and the wider economy. In response to the Government’s 2011 consultation Empowering and Protecting Consumers, there was widespread agreement that the current landscape of information and advice bodies is confusing and should be simplified.

This order will, first, confirm the premier position of the Citizens Advice services as the publicly funded bodies in England, Scotland and Wales providing information and advice to consumers. Citizens Advice will draw from consumer intelligence gathered by local bureaux and the telephone advice line to support the enforcement community as it prioritises its efforts to maximise outcomes for consumers.

At a national level, enforcement responsibility is currently split between trading standards and the Office of Fair Trading. Historically, the Government have provided support for national and cross-boundary schemes. These included projects to combat illegal money lending, enforcement against internet scams and a fighting fund for large and expensive cases which local trading standards might not otherwise have been able to take on. In light of the strong support for these proposals in the consultation, a decision was taken to create immediately the National Trading Standards Board, giving the trading standards profession greater responsibility for the funding and co-ordination of large national and cross-local authority cases. Our vision is for the majority of consumer law enforcement to be undertaken by Trading Standards with the support of the NTSB and the consumer enforcement bodies in Scotland.

Additionally, this order makes changes to the enforcement provisions of the OFT and Trading Standards, clarifying the responsibility of Trading Standards to tackle cross-boundary threats and cases of national significance. Let me be clear: this is not about adding to the powers of the enforcement agencies, but about clarifying their relative roles within the landscape so they can take up cases that more appropriately fall to them. Except in relation to unfair terms, Trading Standards will retain a duty to enforce consumer legislation while the OFT will have powers. This means that Trading Standards will take the lead, but the OFT will be able to step in to enforce, where appropriate. In relation to unfair contract terms, the OFT and, in the future, the CMA will retain primary expertise so they can take enforcement action in cases where there are structural market failures; for example, where there is evidence of market-wide problems on tie-in contracts.

Let me now turn to compliance with the Public Bodies Act. Section 8(1) of the Public Bodies Act provides that Ministers may make an order only where they consider that it serves the purpose of improving the exercise of public functions. Such orders must have regard to efficiency, effectiveness, economy and securing appropriate accountability to Ministers. I would like to address these points in some detail. The order is focused on improving the effectiveness and efficiency of the consumer landscape. As I explained earlier, a variety of publicly funded bodies are involved in consumer advice and representation. The proposed changes will create a simplified and easily accessible and nationally consistent advice service for consumers.

The transfer of Consumer Direct from the OFT to the Citizens Advice services in April 2012 consolidated its position as the principal source of government-funded consumer advice. Citizens Advice has implemented a more efficient delivery model, increasing capacity to provide advice within existing budgets. The industry-paid levy to fund those consumer contacts in relation to the regulated gas, electricity and postal services industries will continue and will pass to Citizens Advice through this order. Empowering Trading Standards to take on more cases of national significance will ensure that national activity is linked to local intelligence. For example, there may be several reports of a rogue online trader from consumers across the country. The NTSB will be able to link these complaints and build a strong case for enforcement, which will have a national impact. This clarification of functions and improved co-ordination of enforcement will ensure better use of limited resources through more effective leadership and integration of effort at a national level. National funding for enforcement activities will facilitate a more integrated approach to national and cross local authority boundary threats. This activity will be more effectively co-ordinated at national level by chief Trading Standards officers. This will ensure that enforcement gaps do not arise and that activity overall is targeted to achieve better outcomes for consumers.

I turn to accountability. The work of Citizens Advice and the National Trading Standards Board will be accountable to the Consumer Minister through grant arrangements set up by the Department for Business, Innovation and Skills. These grant arrangements will set out challenging performance targets, which will be closely monitored by the department. The bodies will be collectively accountable through the Consumer Protection Partnership, which will also report to the Minister for Consumer Affairs on a six-monthly basis to ensure there are no gaps or duplication in enforcement within the reformed landscape.

These reforms focus on increased efficiency and effectiveness, rather than economic benefits. For this reason, the department took the decision not to provide detailed analysis around the economy test in the explanatory document. These changes are not predicated on economic savings, but on a need to deliver increased efficiency and improved service levels in the most economic way.

As your Lordships will know, members of the Secondary Legislation Scrutiny Committee asked for a fuller articulation of the economy considerations set out in the explanatory document which supports this order. The Consumer Minister wrote with additional details. When making its report on the order, the Secondary Legislation Scrutiny Committee noted that the Minister’s letter did not expunge the omission in the explanatory document and decided to exercise the enhanced affirmative process for consideration of the order as set out in the Public Bodies Act. The Consumer Minister and I took full and due regard of the committee’s decision, noting in particular that it saw no reason to dissent from the view that the draft order meets the Act’s requirement to improve the exercise of public functions. The Government also conclude that the order meets the requirements of the Act and consider that it should be made.

For the benefit of the Committee, I should like briefly to set out those economic benefits in the remaining few minutes. The enforcement proposals were estimated to have a cost of £3.2 million. The value of the benefits proved impossible to quantify, but included improved leadership and co-ordination of Trading Standards enforcement through the creation of the NTSB. There will also be better co-ordination of enforcement between Trading Standards and OFT/CMA, managed by the Consumer Protection Partnership. The transfer of consumer information, advice and education functions to Citizens Advice was assessed as delivering benefits of £6.3 million. This proposal will strengthen frontline consumer protection by forging a stronger link between the activities of Citizens Advice and provision of information, advice and education. Citizens Advice is highly regarded and respected by all, and its brand is much better known to consumers than Consumer Direct. As a result, Citizens Advice expects the volume of calls to increase over time compared to Consumer Direct. This proposal will also reduce the complexity of the consumer landscape and create opportunities for substantial synergies in data and IT infrastructure.

Let me remind the Committee of the key benefits of this order. First, it will finalise the transfer of the consumer education and advice functions to the Citizens Advice service, making the trusted brand of Citizens Advice the first port of call for consumers with a problem to solve. Secondly, it will enable a more appropriate allocation of consumer enforcement cases, enabling Trading Standards to take on more cases of national significance and ensuring that national activity is linked to local intelligence. I commend the order to the Committee and I beg to move.

16:15

[Lord Borrie]

I thank the Minister for his very clear explanation of what is in front of us. I did not find it quite as straightforward as the suggestion that complexity is avoided because quite a number of complexities will remain. There will be not only the Trading Standards offices of local authorities but a National Trading Standards Board as well; the Office of Fair Trading will retain some powers; Citizens Advice will have—I agree with the Minister on this—a helpful addition to its services which is, as he rightly said, well appreciated; and there will be the Consumer Protection Partnership, which I do not fully understand yet. So there are lot of different people involved and a lot of different lines to be drawn as to their responsibilities.

However, I would ask the noble Viscount about one or two particular matters. My text, as it were, for this part of what I want to say is, first, the Explanatory Note on the back of the order and what is called the explanatory document—the rather longer paper concerned with public bodies.

In the Explanatory Note on the order, the sixth paragraph—the paragraphs are not numbered—refers to Article 9. It is concerned with enforcers, who will no longer have to consult with the OFT; they will, instead, merely be required to notify the OFT. That, presumably, is in accordance with the Government’s wish to take away the responsibilities of the OFT in overall consumer protection. The Government are not arguing that they are not doing this and the OFT is losing its supervisory role.

What is most important is that in transferring enforcement, particularly to Trading Standards officers, there is to be set up—I should say it has already been set up—the National Trading Standards Board. Paragraph 7.7 of the rather large explanatory document states:

“The NTSB consists of members of Trading Standards officers”.

It means—perhaps it is a matter of semantics—a number of Trading Standards officers representing some local authorities. How they are to be chosen and so on, I do not know but, anyway, the NTSB is certainly to have a national role.

I asked at some stage of the Bill, but did not get an answer, whether that included not only Trading Standards officers—chosen I do not know how—but representative members of local authorities who, at the moment, have a role in relation to Trading Standards officers because Trading Standards officers in each local authority are accountable to councillors. So I am not sure about that.

Paragraph 4.9 of the explanatory document states:

“The Order also makes an amendment … to provide that the OFT will no longer need to consult with enforcers … Instead enforcers will simply be required to notify the OFT”.

As far as I can see, something has gone wrong with the semantics there as to what is intended. Perhaps what is intended is simply that enforcers—meaning Trading Standards officers—will simply be required to notify rather than be required to consult and listen to what the OFT has to say. If you consult, you are supposed to listen to whoever you are consulting. If you do away with consulting and have simply notification, there is no longer any need to take any notice of what you are advised. Is that what is intended? If it is, then, of course, the reduction or removal of the OFT’s supervisory role is much more deep and profound.

The only other matter I wish to mention is that in the Explanatory Note to the order. After dealing with Article 9, on which I have just been concentrating, there is a reference to Articles 10 to 13 amending the Unfair Terms in Consumer Contracts Regulations 1999. It provides that the OFT will simply have a power rather than a duty to enforce those regulations. That means, again, a considerable reduction in the OFT’s role. I am not sure whether the Government intended that because I thought they wanted the OFT to have a particular responsibility with regard to these unfair trading regulations. I may have got that wrong.

What we have today fills out the broad statements in the Bill and one needs to get the phrases right and to understand them. I will be glad if the noble Viscount will answer some of the points that I have made.

[Lord Whitty]

My Lords, I thank the Minister for setting out this order in some detail. It is, of course, as he said, part of a wider strategy towards the transformation of the consumer landscape. Attached to the explanatory document is a paper which set out nearly two years ago the way in which the Government approached that matter. One or two things have changed in the interim, and there are one or two things with which I agree and one or two things with which I disagree. However, this is only part of a bigger jigsaw. As the Minister said, the order deals with the transfer of Consumer Direct to Citizens Advice and the OFT enforcement functions to the Trading Standards services of local authorities.

In principle, I strongly support the first of these. We of course referred to it in the process of the Enterprise and Regulatory Reform Bill, so there is some overlap in the discussions we have already had here and in the Chamber. Some of it—although I suspect the Minister is not allowed to say so—may come post 8 May in a new consumer Bill, which I know his department is considering either for the next Session or the Session after. So we cannot expect everything to be resolved by this order. Nevertheless, there are some issues which I think should have been, but are not yet, resolved.

Given the last encounter between myself and the noble Viscount, I should thank him for at least trying to follow the procedure under the Public Bodies Bill on this order, as distinct from the Agricultural Wages Bill. The order and the explanatory document answer a lot of questions. However, as he has recognised, the Secondary Legislation Scrutiny Committee has not been entirely impressed by the way he or his colleagues have dealt with the issue of economy and have therefore recommended the enhanced affirmative procedure. I shall come back to this aspect because it largely relates to the transfer of enforcement powers and I want to deal with the transfer of the consumer advice powers first.

As I say, I welcome the transfer to Citizens Advice, particularly given the general direction of the Government’s intent on the consumer landscape. Even without that, I would have regarded it as sensible to transfer Consumer Direct to Citizens Advice. However, I have a few questions. First, Article 2(3) states boldly that the OFT’s role in this respect is abolished, except to a limited degree in Northern Ireland, which I shall come back to. Does that mean that in this area the OFT has no oversight role? There is no quality assessment of how well Citizens Advice performs, and it will continue to be partly a directly publicly funded function and partly a function based on mandatory levies on various industries. I assume those levies are simply the levies that are currently raised for Consumer Direct purposes rather than the wider levies that go via Consumer Focus.

It seems somewhat odd that the oversight role in this area is abolished completely. My noble friend Lord Borrie was complaining that the oversight role in relation to enforcement is greatly diminished, but at least there is a role there. In this area, it seems that there is no potential intervention by a statutory body. This is important because Citizens Advice, for all its great wealth of experience and expertise and the great respect in which it is held in the consumer movement and more widely, is a non-statutory body, and we are giving what was previously an administrative body supported by legislative powers responsibility for activity that was previously run by a statutory body. That presents a number of problems. In real life, they are probably resolvable, but it is odd to resolve them by abolishing the body that has ultimate, fail-safe oversight and by abolishing the new body’s responsibilities in that respect so that the CMA will have no responsibility in the area of consumer advice, as I read the effects of this order.

It is also interesting that the order does not mention consumer education, which is also being transferred to Citizens Advice. The OFT conducts quite a significant amount of activity on consumer education, and that does not seem to be explicitly covered here. Can the Minister assure me that it is subsumed in this? From the wording, it does not look as though it is, although I understand that the transfer has already been made.

The lack of a residual oversight role is important, but it also leaves Citizens Advice somewhat exposed. Articles 7 and 8 of the order and paragraph 4.6 of the explanatory document refer to Citizens Advice and Citizens Advice Scotland now being subject to the Freedom of Information Act. I can see why that has happened, but it makes Citizens Advice somewhat vulnerable. If it is subject to the Freedom of Information Act, there is the question of other powers in this area that were the responsibility of Consumer Focus under the Consumers, Estate Agents and Redress Act 2006, in particular Section 24 of that Act, based on previous powers that existed for Energywatch, which provided that Consumer Focus had pretty strong statutory powers to demand information from any company providing any good or service. Previously that power applied only to energy companies and to the Royal Mail, but it was generalised in that Act. Those powers were very effective, and were rarely explicitly used because the threat of doing so usually got you the information that you wanted.

16:29

I should have declared my past chairmanship of Consumer Focus, I therefore know about these things—although I have no current interest in that area. It is important that if advice is to be a primary responsibility of Citizens Advice with no back-up, it should also have access to those Section 24 powers. I presume that in general terms, such powers will be included in the next order—which Jo Swinson’s letter implies is going to be laid beyond the Summer Recess—dealing with the general transfer of Consumer Focus’s advocacy functions to Citizens Advice. However, that will not come into effect until well into 2014; whereas, in effect, the advice service has already started and will be given legal basis by the passage of this order. Citizens Advice will therefore have no ability to use or threaten to use those powers in that interim period. I would therefore like confirmation that it will ultimately get the Section 24 powers, and I should like to know what it can do in the interim period. The powers have been a powerful lever that we in Consumer Focus used to find very useful. It is more difficult to give those powers to a third-sector charity than to a statutory body. Nevertheless, in the course of proceedings on the Public Bodies Bill, we were assured that similar powers could be directed to third-sector bodies in this and other fields.

However, the current situation leaves Citizens Advice a little vulnerable, not only to the Freedom of Information Act as regards how it carries out its powers and deals with its new statutory responsibilities, but potentially to judicial review. That would, in many respects, be unfortunate for Citizens Advice, yet that would seem to be a logical conclusion from the transfer of statutory powers. It would be useful to know whether Citizens Advice, in the exercise of these powers, if not more widely, could be subject to judicial review.

There is an additional point in this area that relates to energy consumer advice. When Energywatch was wrapped into Consumer Focus, the individual advice service was split in two. Part of it went into Consumer Direct, which is dealt with in this order and will go to Citizens Advice with the rest of Consumer Direct services. However, complex and urgent problems were dealt with by a special unit of Consumer Focus, the Extra Help Unit, based in the offices of Consumer Focus Scotland. The unit dealt with complex issues, for example, when it was difficult to get a response from an energy company, and issues where there was an imminent threat of cut-off of gas or electricity. The unit often dealt with very vulnerable consumers. It is not clear where the unit is going to go. Will it be transferred to Citizens Advice or, because of its location, Citizens Advice Scotland? Or will it simply be subsumed in the powers? If there is a transfer, will that involve simply the powers, or is there a staff and resources transfer issue that would be covered by TUPE? An answer would be helpful.

Additionally, well over 10% of the issues that the Extra Help Unit dealt with were those of micro-businesses that were being threatened with their gas or electricity being cut off. You can imagine that that would be pretty urgent and potentially lethal for your business. I understand that Citizens Advice will not be dealing with businesses. If that is true, where does the responsibility for micro-businesses go to under the new set-up?

Those are complicated questions on which I would welcome clarification either today or in writing. However, I am in favour of the general terms of the transfer and in favour of the OFT retaining some supervisory function within that area. As to enforcement, the OFT retains some thin responsibility but most of the powers are to be devolved to the Trading Standards departments of local authorities. The explanatory document sets out the four main areas of regulation to which my noble friend Lord Borrie referred. It is not entirely clear as each has different terminology in relation to each of the current regulations where the role, previously with the OFT and now transferred to the CMA, will necessarily now lie. The CMA will retain the ability to be an enforcer in these and other areas. In other words, the noble Viscount referred to the fact that nobody knew whether to go to the OFT, trading standards or the various other bodies. That responsibility will still be split in relation to these and wider regulations. What is the relationship between the individual trading standards, which will have the lead responsibility now, and what will be the CMA’s residual power as an enforcer? Is the distinction in relation to size, geographical spread, across local authority boundaries, or does it depend on the kind of issue?

I appreciate that some of this is not yet sorted out, and some of it may be sorted out by discussions on the National Trading Standards Board, the trading standards partnership or, in Scotland, the consumer protection net. However, these are all somewhat shadowy bodies with no statutory existence. Yet, they will have considerable responsibility deciding where priorities lie and what the allocation of resources will be, but they will not be responsible to Parliament in any way, except for the reporting functions to which my noble friend Lord Borrie referred, and they do not appear to be responsible to the CMA. Non-statutory bodies seem to be carrying out what were previously statutory responsibilities.

The National Trading Standards Board is a co-ordinating body for encouraging leadership, and it may decide priorities, but does it have a quality control oversight of trading standards within individual local authorities? In proceedings on the Enterprise and Regulatory Reform Bill, I opposed the deletion from the role of the CMA what had been the OFT’s general responsibility for consumer protection. Those powers will disappear entirely in the new set up unless yet another order is to come which will compensate for the removal of those general powers, or will that all now rest with Trading Standards and the co-ordinating bodies we are about to set up?

I declare an interest as an honorary vice-president of the Trading Standards Institute; I have great respect for Trading Standards. However, if they are to take on and improve the effectiveness of enforcement, as described by the Minister, in all of those areas that were previously at national level, and improve their activity and effectiveness at local level, they need to have the resources to carry that out. In recent years, under both Administrations, trading standards have been squeezed. They are a discretionary activity of local authorities to a large extent and they are certainly not ring-fenced in budgetary terms. Yet the need for consumers to have protection and for business to know what its responsibilities are has not diminished. The information that I have received—I mentioned this in the ERR Bill proceedings—is that because of the squeeze on Trading Standards resources, England, Scotland and Wales have lost about 13% of their funding in the past two years, but it started before that. They have also lost some 15% of staffing and as a result they are forced to focus on perhaps the larger and higher risk issues. It means that in total there has been a 20% fall in programmed scheduled visits and a 24% fall in total visits across England and Wales. The net result of this has been a 29% fall in prosecutions. That is not because the problem is disappearing and resources are being better deployed. It is because the total amount of resources has diminished. Now that Trading Standards are to get additional responsibilities handed down from previous OFT responsibilities there is not much indication of how many additional resources, relative to OFT spend, are going to go to trading standards. Some of them will be funnelled via the TSI into the new co-ordinating set-up but that does not amount to the total additional resources that are going to be needed within Trading Standards.

Perhaps this goes back to the criticism, to which the Delegated Legislation Committee drew attention, over the inadequacy of the explanatory document about the economics of this. There may be an improvement in effectiveness. To some extent that will happen but this part of the order is rated in the letter to which the Minister referred, from his colleague Jo Swinson, as having a net present value of £3.2 million. There is also a rather amorphous reference to improved leadership and so forth. I accept that some of this may occur but at best it is difficult to see how that will amount to a net present value of £3.2 million to the economy as a whole. Even if it gets near that, the benefit in net present value terms is somewhat thin.

There are uncertainties and lack of clarity about the role of the CMA as it will be in relation to Trading Standards. Some of the OFT functions, such as on scams and voluntary codes of practice, are not quantified or directed in this legislative instrument, and this itself will require resources. Most consumer organisations and the OFT wanted to give more resources. Given this resourcing uncertainty, I query whether the effectiveness and economic value of the transfer of these functions down the line to Trading Standards and the shadowy bodies to which I refer is going to deliver a better service.

I still have serious doubts about that part of the order. I hope that the Minister may be in correspondence when we consider this in the Chamber and will be able to reassure me. I have no principled opposition to this. I just think that the total picture does not add up, and does not help consumers and businesses enough to be clear about where responsibility lies. It is not clear about how enforcement will be targeted and be more effective than the previous set-up. With those comments, I would be interested the Minister’s response.

[Viscount Younger of Leckie]

My Lords, I thank noble Lords for their valuable, if somewhat caveated, comments during this debate. I will do my best to answer the lengthy questions that were raised by the noble Lords, Lord Borrie and Lord Whitty. There is some crossover in the questions. Generally, most of them focused on further clarification of the responsibilities and roles of the different bodies. I will do my best to answer the questions today rather than having to write.

This order focuses on the better delivery of consumer advice and education and will lead to enhanced levels of protection through better enforcement. As I said earlier, it is not about cuts. It is about working more efficiently and effectively for the taxpayer. The order will finalise the transfer of the consumer education and advice functions to Citizens Advice, making that trusted brand the first port of call for consumers with a problem to solve. The noble Lord, Lord Whitty, expressed concerns about the Freedom of Information Act being applied to Citizens Advice. That extension will be limited to provisions relating to the function that is transferred under the order. Citizens Advice has, under the terms of the Public Bodies Act, given its consent to the inclusion of the FOI Act.

The noble Lord also raised concerns about the interim period and whether information-gathering powers will be transferred. I can reassure him that it is the ultimate intention to transfer the information-gathering powers to Citizens Advice. In the interim, Citizens Advice will work closely with Consumer Focus to ensure that consumer welfare is preserved.

16:45

The noble Lord asked if help for vulnerable consumers will be retained. I can reassure him that we expect the work of the Extra Help Unit to transfer to Citizens Advice. The exact mechanism of the transfer is being developed but will feature in the second public bodies order. In addition, it will enable more appropriate allocation of consumer enforcement cases between Trading Standards and the OFT, empowering and supporting Trading Standards to take on more cases of national significance, ensuring that national activity is linked to local intelligence. The noble Lord, Lord Borrie, raised the issue of the OFT losing its co-ordinating role, but I can reassure him that the OFT will retain that role as it will continue to be notified where enforcement orders are to be obtained under the Enterprise Act. This is in accordance with EU provisions. In practice, only the OFT receives notifications of such enforcement.

I turn to compliance with the Public Bodies Act. Section 8(1) provides that Ministers may make an order only when they consider that it serves the purpose of improving the exercise of public functions. I have set out how the order has regard to efficiency, effectiveness, economy and securing appropriate accountability to Ministers.

The noble Lord, Lord Borrie, mentioned that he is unfamiliar with the Consumer Protection Partnership, and I want to provide some more information for his reference and interest. We have established the CPP, which was formerly, as he will know, the Strategic Intelligence, Prevention and Enforcement Partnership, or SIPEP, for short, involving the Competition and Markets Authority, the National Trading Standards Board, the Trading Standards Institute, the Financial Conduct Authority, the Regulated Industries Unit, Citizens Advice and consumer bodies from Scotland and Northern Ireland, to share intelligence, inform the activities of each of the partners and provide accountability for the national consumer protection system. Since June 2012, the CPP has formed working groups to address how to identify consumer detriment and mass marketing scams and offer solutions to potential sources of detriment arising from the Green Deal.

The noble Lord, Lord Borrie, in talking about the CPP, asked about its role. I reassure him that it is much more than a talking shop. We believe that the CPP comprises the right partner organisations, which I mentioned earlier, and that all partners have an important role to play. It will ensure that important issues do not fall between any gaps. Its primary purpose is to identify and prioritise areas where there is the greatest detriment to consumers. Partners will then agree and co-ordinate collective action to tackle such detriment, using all available tools at their disposal.

The noble Lord, Lord Borrie, raised the National Trading Standards Board. It supports local authority trading standards services to work together to enforce consumer law against national and regional threats to fair trading. Local authority trading standards services will continue to address local threats and issues under local political control. The board deploys national funding from government and will provide leadership on cross-boundary enforcement through heads of trading standards services acting together across England and Wales. Trading standards bodies in Scotland have similar arrangements in place, and they work together to advise on UK-wide enforcement issues and the co-ordination of business education.

The noble Lord, Lord Borrie, would like clarification of who trading standards officers are and who would have political oversight of the local levels. While Government have directly funded cross-regional enforcement programmes, the NTSB’s professionals will be able to use their expertise to harness intelligence in order to prioritise resources. This will provide a direct link with local trading standards services enabling greater impact for consumers and better value for scarce public funds. The board will consist of one representative from each of the English regional and Welsh trading standards groups. These representatives are mandated to take decisions at the board on behalf of their regional group. The board will be led by an independent chair and representatives from BIS, Scotland, Northern Ireland and professional trading standards groups will act in a non-executive capacity. In addition, there is a political oversight group to ensure synergy with local political governance.

The noble Lord, Lord Borrie, asked whether the Government will retain any consumer enforcement power within the CMA. Yes, the CMA will have the power to tackle competition problems and practices—

[Lord Borrie]

The Minister is leaving the NTSB, but I still have not had an answer to the question about whether local councillors, members of the authority elected to it, will have any role in the NTSB.

[Viscount Younger of Leckie]

I hope I can answer the noble Lord’s question. Trading standards play a critical role in protecting consumers and business in their local authority areas, in particular from rogue traders, but the responsibility was split between local authority trading standards services and the OFT creating an enforcement gap. While BIS provided some support for regional and national enforcement schemes, the NTSB has been formed specifically to tackle cross-boundary and national threats.

The noble Lord, Lord Borrie, asked whether members of the local authority are members of the NTSB, which goes a little further in answering his original question. The answer is no. Heads of local authority trading standards comprise the NTSB. There is a political oversight group made up of representatives of local government and the LGA which connects local decision-making with national enforcement.

The noble Lord, Lord Borrie, was concerned that the OFT will not oversee enforcement supervision. In this case, the OFT, Trading Standards and other enforcers will share a power to enforce. This will ensure that while the OFT will be able to continue to use its expertise in this area, other enforcers, including Trading Standards, will take up cases that more appropriately fall to them. Trading Standards will act as the lead enforcers of this legislation and will retain a duty to enforce the regulations, except in the case of the Unfair Terms in Consumer Contracts Regulations 1999. That is complex, but I hope it explains that slightly more clearly.

The noble Lord, Lord Whitty, asked how Citizens Advice will be accountable for Consumer Direct and consumer education. The work of the Citizens Advice service on Consumer Direct will be accountable to the Consumer Minister through grant arrangements set up by the Department for Business, Innovation and Skills. These grant arrangements will set out challenging performance targets which will be closely monitored by the department. I can reassure the noble Lord, Lord Whitty, that Citizens Advice will take on the role of consumer education.

The noble Lord, Lord Whitty, also asked whether Citizens Advice could be subject to a judicial review. There is a low risk that Citizens Advice may be subject to a judicial review in relation to the function transferred. However, it is more likely that other legal claims will be brought, such as negligence. The Citizens Advice services have taken their own advice on this risk and have given their consent to the transfer of the consumer advice functions on that basis.

The noble Lord, Lord Whitty, wanted to clarify who SMEs will receive advice from. Most business-facing advice and education will transfer from the OFT to the Trading Standards Institute from 1 April 2014, but businesses seeking advice as consumers will be able to access Consumer Direct as before.

The noble Lord, Lord Whitty, also asked for clarification on whether the NTSB will quality control Trading Standards. The NTSB itself, and the teams that it sponsors, are subject to tight funding terms and conditions to ensure that they deliver against business priorities. Local trading standards are subject to local government procedures. The noble Lord also raised concerns about cuts to local trading standards services. The provision of local trading standards services is a matter for individual local authorities, and even in the current climate, they will continue to take local and pan-local cases.

The intention is that there will be specific funding for enforcement against national threats separate from the budget for local issues. There are plenty of examples of cases where local officers have dealt with complex cases successfully. The NTSB will ensure that resources are allocated to large cases as and when appropriate. In addition, local officers often have a culture of working with business to resolve problems. I believe that trading standards services have already demonstrated their ability and professionalism over many years, and I hope that the noble Lord would agree with that.

[Lord Whitty]

Can the Minister say how much of what had been the OFT budget for dealing with these national, cross-boundary and complex issues will be fed down to the NTSB and trading standards services?

[Viscount Younger of Leckie]

I have that information somewhere, but I will certainly revert to the noble Lord with a particular reply.

The final question I have here, although there may be others on which I shall write to the noble Lords, Lord Whitty and Lord Borrie, was raised by the noble Lord, Lord Whitty, about the resources to support the transition of functions. We believe that Trading Standards will be better resourced to take on this new, enhanced role. Increased central government funding for national leadership and co-ordination of enforcement activity is being provided to the National Trading Standards Board, which has responsibility for co-ordinating the delivery of significant national and geographic region cases that cut across local authority boundaries. For example, the so-called scam buster teams already work across local authority boundaries to target the worst rogue and misleading trading practices and fraudulent activities that may be beyond the capacity of individual local authorities.

The Consumer Minister and I have given due regard to the Secondary Legislation Scrutiny Committee’s decision and comments, and the Government conclude that the order meets the requirement of the Act. I commend the order to the Committee.

Motion agreed.