Public Bodies (Abolition of the National Consumer Council and Transfer of the Office of Fair Trading’s Functions in relation to Estate Agents etc) Order 2014

Monday 24th February 2014 Grand Committee

Motion to Consider

17:10

Moved by

[Viscount Younger of Leckie]

That the Grand Committee do consider the Public Bodies (Abolition of the National Consumer Council and Transfer of the Office of Fair Trading’s Functions in relation to Estate Agents etc) Order 2014.

Relevant documents: 17th Report from the Joint Committee on Statutory Instruments, 26th Report from the Secondary Legislation Scrutiny Committee.

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

My Lords, with much to cover I hope that the Committee will forgive me if I set out the prospective changes in some detail.

The purpose of this order is: first, to abolish the National Consumer Council and transfer its relevant functions to Citizens Advice, Citizens Advice Scotland and the General Consumer Council for Northern Ireland; secondly, to transfer the Office of Fair Trading’s estate agency functions to the Commissioners of Her Majesty’s Revenue and Customs and Powys Trading Standards; and, finally, to transfer residual OFT functions relating to its former consumer advice scheme to Citizens Advice and Citizens Advice Scotland. The scheme itself was transferred to the citizens advice services on 1 April 2012.

This order will complete a programme of consumer landscape improvements that the Government first embarked upon in 2011. The National Audit Office report Protecting Consumers, published in June 2011, and the Public Accounts Committee report on the same issue both highlighted the fact that the existing consumer landscape was confusing, duplicative and therefore inefficient. To address that, in April 2012, following consultation, the Government announced a series of reforms to the landscape of consumer bodies. Over the past two years, we have streamlined the landscape of Government-funded consumer organisations to make it easier for consumers to understand where they need to go to get help. The reforms will deliver a better deal overall for consumers by making it clearer who is responsible for what and by facilitating better co-ordination between consumer bodies and enforcers.

The improvements that we have made so far include: focusing the new Competition and Markets Authority, which will replace the Office of Fair Trading from 1 April, on identifying problem markets and developing effective solutions to competition issues; establishing the National Trading Standards Board and Trading Standards Scotland in 2012 to prioritise national and cross-local authority boundary consumer enforcement; moving responsibility for consumer-facing education and general consumer advocacy to Citizens Advice and Citizens Advice Scotland; moving responsibility for approval of consumer codes to the Trading Standards Institute; and launching Consumer Futures in May 2013 to represent consumer interests in gas, electricity, postal services and—in Scotland—water services. These organisations work together as part of the Consumer Protection Partnership—the CPP—to collectively identify issues causing consumer detriment, and agree priorities for collaborative action.

Let me turn now to the specifics of this order. The order will abolish the National Consumer Council and transfer relevant functions to the umbrella bodies Citizens Advice, Citizens Advice Scotland and the Consumer Council for Northern Ireland. The function will be based in the head offices of Citizens Advice, not within the local bureaux on our high streets. This change will bring together the technical expertise of Consumer Futures with evidence from consumers across the country from the citizens advice service bureaux and the national consumer advice helpline. This combination of technical expertise and intelligence gathering will enable the Citizens Advice service to act as a robust advocate for consumers, influencing policy development on general issues and on the complex energy and postal services markets. Careful analysis of emerging trends in consumer complaints will enable Citizens Advice to speak out on behalf of consumers on areas of particular concern and to lobby policymakers to improve consumer welfare.

Alongside the Consumer Futures function, anyone needing impartial help or advice on a consumer issue will, as now, be able to phone the national helpline, contact their local bureau or use the interactive help on the Citizens Advice web pages. This means that the customer journey for the consumer who has a complaint is clear and simple.

Complaints data will not be the only intelligence-gathering mechanism available to the Citizens Advice service. It will also receive the National Consumer Council’s information-requesting powers, a move overwhelmingly supported by respondents to the government consultation in 2011. Although those powers are not used regularly, the threat of their use makes it easier to obtain key information necessary for effective advocacy. I will elaborate on this point for a moment, if I may. When this order was debated in the other place, there was some concern that the Government were intending to curb Citizens Advice’s access to those information-gathering powers. I stress that the Government have no plans whatever to diminish the ability of the Citizens Advice service to fulfil the role of consumer advocate by restricting that essential power.

18:44

The Public Bodies Act 2011 requires that where statutory protections exist, they should be maintained in any transfer under the Act. That is what we are doing here. We are simply transferring the statutory provisions that would, as now, in theory give the Government the ability to limit the scope of this power in future, should that prove necessary, but I am happy to confirm that the Government cannot envisage a scenario where such a move might be required. I should also say that Citizens Advice is happy with this arrangement.

The transfer of the Consumer Futures function is a testament to this Government’s confidence in the major role that Citizens Advice plays in our civil society. We firmly believe, contrary to some claims in the other place, that the leadership of Citizens Advice will be well placed to deliver the Consumer Futures functions alongside its other bureaux and helpline services. Citizens Advice will of course continue to receive the same amount of funding from an industry levy to allow it to deliver that important work.

The order also transfers essential estate agency functions currently carried out by the OFT to commissioners of HMRC and Powys Trading Standards, prior to the abolition of the OFT on 1 April. Currently, the OFT can issue warning and prohibition orders against estate agents who have acted dishonestly or breached provisions of the Estate Agents Act 1979. Ultimately it can prohibit those persons it considers unfit from carrying out estate agency work.

The Government believe that from 30 March, those functions would sit best with the enhanced activities of trading standards. That is in line with our approach, set out under the Enterprise and Regulatory Reform Act last year, which noble Lords will recall, to focus the Competition and Markets Authority, the successor to the OFT, more explicitly on market-wide issues.

Under the oversight of the National Trading Standards Board, a lead trading standards authority—that is, Powys County Council—will make use of the network of national, regional and local trading standards intelligence to provide an effective, intelligence-led, value-for-money service.

The funds for policing the UK estate agency market will be transferred from the OFT to Powys County Council, via the NTSB’s enforcement grant, and ring-fenced to ensure that it is used for the purpose intended. Powys will be responsible for approving redress schemes which handle complaints from individual consumers, as the OFT is currently. It will have access to the same tools as the OFT to ensure that estate agents meet their obligations. We would of course expect the CMA to continue to play a role if there are any market-wide issues that need considering.

The new system will also benefit from trading standards’s traditionally close relationship with business. That allows for effective oversight and enforcement of the industry. It makes more sense to assign that responsibility to a single lead authority than to distribute it across a range of different trading standards teams, who would be less able to build up the expertise and capability.

There is form here. The lead authority model has been extremely effective in delivering other trading standards services. For example, fraud worth more than £145 million has been tackled by the Scambusters and the illegal money lending teams in the past 18 months. The Illegal Money Lending Team is a trading standards unit based in Birmingham City Council, but it provides an England-wide service and has received plaudits for its successes.

When the order was debated in the other place, there was some concern about the process for appealing against warning and prohibition orders issued by Powys County Council. To confirm, the Government are not proposing any changes to the estate agents appeal process under the Estate Agents Act 1979 through this order. An appeal can be made to the First-tier Tribunal (Estate Agents), which forms part of the General Regulatory Chamber of the First-tier Tribunal. It is administered by the Tribunals Service, an agency of the Ministry of Justice. Appeals will therefore continue to be considered at the national level, not within Powys or Anglesey. In practical terms, this means that agents receiving a prohibition or warning order will appeal to the tribunal within 28 days of being notified, as is the case now.

Estate agents are also required to be registered with the OFT for anti-money laundering purposes and to pay fees to cover reasonable administrative costs. Carrying on estate agency business without being registered is a criminal offence. We are proposing to transfer this function to HMRC, which we believe will be well placed to deliver this work robustly. HMRC already supervises a number of other sectors under the money laundering regulations, and has both experience and capacity on the ground.

This order will also tidy up a number of minor legislative provisions relating to the operation of the former Consumer Direct advice line, transferred to Citizens Advice administratively in April 2012, with legislative changes to enable funding for calls relating to gas, electricity and postal services issues made under the previous public bodies order. 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 am confident that the changes I am proposing meet all these criteria.

I will begin by addressing efficiency and effectiveness. Publicly funded consumer advocacy is carried out by a number of organisations, including the NCC, Citizens Advice, Citizens Advice Scotland, and to some degree by the OFT. There has been significant overlap between these bodies and there is therefore scope for efficiency improvements in the use of public funds; for example, both the NCC and Citizens Advice produce reports for consumers on the energy market and both have strong links with sector regulators.

This order will create efficiencies by greatly reducing the overlap and duplication of effort in consumer research and analysis by merging the expertise of the NCC with the Citizens Advice service. Both Trading Standards and the OFT possess enforcement powers under the Estate Agents Act. Transferring the OFT’s powers to Trading Standards will simplify the landscape.

The appointment of a lead enforcement authority to carry out this work on behalf of all authorities means that the supervision of prohibition and warning orders will be effectively co-ordinated and consistently applied across the UK. Enforcement activity will be better targeted through continued use of a central intelligence-gathering process and decision-making gateway. The potential for enforcement gaps relating to the estate agency industry will be mitigated.

Powys County Council has been chosen to act as lead authority following a robust tendering exercise, in which every local authority in the UK was invited to bid. Bidders were required to demonstrate how they intended to carry out their new duties and to provide a breakdown outlining how the funding will be allocated. Through this process, a panel led by the NTSB selected Powys as the authority best placed to provide the most efficient, effective and value-for-money service.

The transfer of anti-money-laundering supervision to HMRC also has substantial efficiency and effectiveness benefits. HMRC will be able to exploit operational synergies and share information across HMRC regimes where non-compliance is identified, thus realising efficiencies and introducing more effective measures.

The reforms implemented by this order maintain robust measures of accountability. Citizens Advice and Citizens Advice Scotland are required by both charity and company law to ensure good governance. It is therefore not necessary to impose further statutory governance provisions. Instead, the bodies will be held accountable through well established grant funding relationships, which will be expanded to set out the requirements and key performance indicators relating to these new activities. Performance will be closely monitored by my department to ensure that the successor bodies are delivering good outcomes for consumers and achieving good value for money for levy funders and taxpayers.

In the case of estate agency enforcement, Powys County Council is ultimately accountable to BIS. Powys will report to the NTSB in its role as co-ordinator, and the NTSB is accountable to BIS for the performance of its enforcement teams and projects, including estate agency work. Anti-money-laundering supervision is subject to HMRC cost controls and HM Treasury and parliamentary oversight.

There are also some small economic efficiencies resulting from this order. Under the OFT, the anti-money-laundering supervision of estate agents was 95% industry-funded, with the remainder coming from central government funding. The new regime will be 100% industry-funded. This represents a saving, albeit a modest one, of approximately £55,000 per year.

The Opposition in the other place questioned whether the Government had clearly met the compliance criteria under Section 8(1) of the Public Bodies Act. I remind the Committee that the Secondary Legislation Scrutiny Committee supported our view that we have thoroughly met all the relevant requirements. Indeed, the Committee was satisfied enough to invoke the 40-day scrutiny process rather than the 60-day one.

These proposals complete the Government’s programme of improvements to the consumer landscape. In abolishing the National Consumer Council and transferring relevant functions to Citizens Advice, and transferring the OFT’s estate agency functions to HMRC and Powys County Council, this order puts the finishing touches to a landscape that will work more efficiently and effectively for the public. I commend the order to the Committee.

[Lord Whitty (Lab)]

My Lords, I declare one current interest and one past interest: I am vice-president of the Trading Standards Institute, and I was chair of the National Consumer Council and Consumer Focus.

This is the last block of changes that the Government are introducing in this field. While I will end up by wishing the organisations and their staff well in trying to work this out, I cannot but express regret and sadness at what has happened and some anxieties about the future. Not only will this order finally abolish the good work that has been done for the past 50 years by the National Consumer Council, founded by the late Lord Young of Dartington, but it reflects a failure by the Government—actually, successive Governments—in achieving just what the Minister started out by saying they were trying to achieve: namely, clarity for consumers, a lack of confusion and a lack of overlap. Even this last piece of the jigsaw transfers powers from two organisations to five, with another two, the National Trading Standards Board and the CPP, also involved, which does not exactly improve understanding and overlap.

When the NCC, Energywatch and Postwatch came together following the 2007 Act, it was a partial achievement of what the Labour Party had promised in the 2005 manifesto, with which I think my noble friend was very familiar. The original intention was to bring together all statutorily based bodies with an interest in representing the consumer in the policy-making and enforcement process. Actually, it never happened quite that way, due at that stage partly to interdepartmental problems, in that the Ministry of Transport refused to allow what is now Passenger Focus to move in, Defra batted a draw and, although there was a way of getting the Consumer Council for Water in, that was never actually triggered. The relationships with the panels that were set up in Ofcom and the then Financial Services Agency never fully materialised, although that is also reflected in the legislation.

17:30

When the new Government came in, I thought that they had grasped the need to rationalise all the statutory-based bodies and the other powers. I understood that the original intention of BIS Ministers, and certainly of senior officials, was that they would try to bring together what was by then Consumer Focus, covering energy and general consumer issues, with the expertise that the NCC over the years had developed in consumer law, consumer redress, European consumer policy and so on, with particular problems on the postal and energy side. They were going to bring in the Consumer Council for Water and, hopefully, the transport bodies, and have a tighter relationship with those bodies that existed within other regulators.

That was also defeated by interdepartmental squabbles or defensiveness but was aggravated by the new Government’s double intention and their obsession with abolishing quangos on the one hand and public expenditure cuts on the other, both of which hit the activity of Consumer Focus seriously. They had another objective from the beginning, which was to transfer the whole function away from the public sector into the third sector. Some of my colleagues were deeply opposed to that but I could understand the rationale. However, they should have brought all the bodies together first and then transferred them into the third sector under the aegis of Citizens Advice, or whatever.

In practice, that opportunity was completely missed because the Cabinet Office insisted that a quango had to be abolished as fast as possible. The Public Bodies Bill was going through Parliament, and we know the inadequacies of that Act, how it was dealt with and how it has been implemented. At the same time, the Treasury was demanding cuts in public expenditure. Those cuts mainly hit the mainstream consumer activity of Consumer Focus, which was directly funded by the taxpayer. By and large, the money coming from industry, as the Minister said, continued and will continue in the new arrangement. However, all those areas of expertise that the NCC had developed have been hit seriously by cuts in expenditure. It is not true to say that there was significant overlap with the work of Citizens Advice. There was at the margin, but the work, and the prime focus of Citizens Advice, was different. The expertise is already being lost, and I fear that under the new arrangements there will be more loss.

This is not a happy story for consumer representation in policy-making. Nor is it a happy story in terms of the consumer who wants to know why his or her particular problem is not being covered by the service provider, the regulator or the Government; it is as confusing as it ever was. However, this has gone a long way down the road. I have anxieties about what will materialise. My anxieties are of three sorts, one of which in recent months has been largely allayed. It was about the apparent difficulty of getting Citizens Advice and the traditions of Consumer Focus and the NCC to understand each other. In recent months I think that that has significantly improved, or so I am informed. Of course, it is only part of the old NCC/Consumer Focus role that Citizens Advice will be taking over.

My second anxiety is that the focus of Citizens Advice will be elsewhere. It is a superb organisation in dealing with consumer complaints. Its role in policy has been more limited, and it has not had the relationship with the regulator and the industry that, for example, Consumer Focus, and Energywatch before it, developed in relation to the energy companies. Nor has expertise extended to the whole area of consumer law—perhaps, in particular, to European consumer law, where an expertise rested with the NCC and Consumer Focus and was recognised right across Europe. Indeed, the European organisation, BEUC, greatly relied on them to provide that level of expertise. That seems to be in danger of being completely lost in the new arrangements.

My third anxiety is simply about resources. Although, as the Minister said, the money that comes from the postal and energy sectors will be transferred, the money that is spent on these more general areas of expertise and input has already been cut. There has been some increase in the central government grant to Citizens Advice, but that is against the background of Citizens Advice seriously suffering, directly and indirectly, from public expenditure cuts more generally. A vast amount of the resources for Citizens Advice on the ground comes from local authorities, but that has been severely cut back in many parts of the country. Another part of its resources comes from charities, which themselves are quite dependent on public expenditure; that part has also been squeezed. I would like the Minister to give me the figures for the central government grant, but it seems to me that the Government had already cut the grant to Citizens Advice. They are now topping it up by an amount that is supposed to reflect the additional responsibilities arising as a result of the transfer of the functions of Consumer Focus and Consumer Futures into the organisation. I remain to be convinced that those resources are there.

On a happier note, and perhaps not putting quite such a gloss on history as the Minister, I am glad that the Government have changed their mind about the allocation to Citizens Advice of Section 24 powers in the 2007 Act. There were severe anxieties, some of them understandable, about transferring significant powers to demand information from providers of goods and services of all kinds that were given to Consumer Focus by the 2007 Act to a body that was no longer a public body. However, the Government seem to have seen the light on this one and those powers will now be transferred. I am glad that they are being transferred and that the Minister has reiterated the assurance that there will be no constraint on Citizens Advice using those powers. In reality, they will not be used very often, but the existence and threat of use of those powers will make providers of goods and services sit up if Citizens Advice takes on the role that Consumer Focus used to have of tackling major business bodies and government bodies over their treatment of the consumer. I therefore welcome that part of the order. I hope that the new arrangements work. I have my doubts because, frankly, it is a bit of a sorry history.

Although the transfer of estate agency functions to Powys looks slightly odd, it may well work. The reality, though, is that if you look at it in total, no one is going to understand why a problem with an estate agent in Balham is being dealt with by Powys County Council. Looked at more broadly, the reality is that as a result of this measure and the previous one, trading standards have taken on a lot more responsibilities at a time when their own resources, personnel and role within local authorities are being severely squeezed—in some local authorities, beyond the point where they are a viable operation. Therefore, while I do not disagree with giving trading standards some of the old OFT functions, I do not think that it will work effectively if the resources of trading standards in total are being squeezed at the same time. I hope that the Government will take those points on board.

[Lord Harris of Haringey (Lab)]

My Lords, I declare an interest as chair of the National Trading Standards Board, to which reference has been made several times today. I will confine my remarks primarily to the transfer of functions in respect of estate agents from the Office of Fair Trading, and will comment on the process and some of the points that my noble friend Lord Whitty has just made.

Powys County Council was selected following due process, a tendering process in which a number of other local authorities—I cannot remember whether it was five or six—had made expressions of interest and put forward detailed tendering documents. Powys County Council was awarded the contract on the basis of the strength of its bid and the perceived view that it was best able to deliver the service most effectively.

It may seem strange that a single local authority—I think it matters not whether that authority is in Wales or England—is given a national function in this way, but the National Trading Standards Board does that in respect of a number of national functions. The Minister referred to the Illegal Money Lending Team for England. That service is provided through Birmingham City Council and the arrangement works extremely well. There is a similar arrangement for the Illegal Money Lending Team in Wales. Another example is the National Trading Standards eCrime Centre, which is provided by North Yorkshire County Council. These are national functions, nationally available, provided throughout the country but delivered through a single local authority. That is the arrangement that is being followed in this case.

The benefit of this structure is that while individual local authorities are leading on these issues, they are part of a national network and structure. They are able to work with local authorities around the country on the development of intelligence. A national intelligence unit for trading standards, funded by the National Trading Standards Board, is provided through Suffolk County Council. So it is part of a national network.

My noble friend Lord Whitty spoke eloquently about the way in which the Government have simplified and introduced clarity to the arrangements for trading standards and consumer protection. Of course, greater clarity and transparency would have been provided had the Government looked across legislation and considered the licensing of letting agents, which is also in progress at the moment, and seen a potential synergy between locating the licensing of letting agents with the licensing of estate agents, given that letting agents and estate agents are often effectively the same individuals. No doubt the Government’s desire for clarity and simplification will mean that these issues will be reviewed in due course.

No doubt the Minister will give us a clear assurance on this, but my understanding is that all the resources that were available to the Office of Fair Trading for this estate agency licensing work have indeed been transferred to the National Trading Standards Board, and that money will be passed through to Powys County Council to do this work. My noble friend commented on the difficult financial circumstances that most trading standards departments around the country are facing. The average reduction in trading standards budgets appears to be approaching 40%.

17:43

Sitting suspended for a Division in the House.

17:49

[Lord Harris of Haringey]

My Lords, when the Division intervened, I was simply making the point that trading standards departments around the country have been facing substantial reductions in their budgets over the past few years. It is estimated that, overall, trading standards funding from individual local authorities will, on average, have diminished by 40% by 2015, which is a substantial change. The only assurance that I can give my noble friend Lord Whitty is that the resources for the estate agency function will be ring-fenced.

The only other point that I wish to make is that the service that will be provided through Powys County Council will, however, be branded as a national trading standards function. It will quite clearly be a national function supporting estate agent regulation throughout England and Wales.

[Baroness Hayter of Kentish Town]

My Lords, I share the views of my noble friend Lord Whitty that this is actually a sad day. I am sorry that the Minister did not pay tribute to the extraordinary work that the NCC has done over its life. It has been seen as that third part of civil society. There have always been the employers and the trade unions, represented quite rightly by their bodies; a third body representing consumers has been really important for making markets work, being a big national player along with the TUC and the CBI. It is a great sadness to lose that, particularly—and I will come back to this—given the fragmentation that the Government have managed to put in its place. This was just about trying to get rid of a certain number of quangos; we know that that is what it was. There was a rush into it and very little understanding of what the NCC actually did because, as my noble friend Lord Whitty said, there was very little duplication. I should confess—or rather boast—that I was a member of the NCC council and there was very little duplication between what we were doing and what Citizens Advice was doing. Citizens Advice deals with people coming through the door; we were trying to think of problems five, 10 or sometimes 15 years ahead.

Sadly, we lost the argument by just 12 votes at the time that the Public Bodies Bill went through the House, and my guess is that, having dealt with the complexity of transferring those functions, BIS may have belatedly recognised the force of our arguments. There are problems with Citizens Advice taking over the work of the NCC. At the moment, it can answer only 45% of its telephone calls and we have heard from my noble friend about the cuts to the advice service, so there are problems there. However, we recognise that the decision has been taken and we therefore need, or want, whatever replaces the NCC to work as well as possible for the sake of consumers. That is the important criterion.

I have five questions ready to ask about the order, but before that, I have another question. Given the report on the pre-emption of Parliament by our own Constitution Committee—which noted, when the Public Bodies Act 2011 was merely a Bill, that a number of public bodies began to wind down their activities in anticipation of abolition—can the Minister confirm that no public money was spent on the abolition of the NCC and the transfer of functions prior to the relevant approval by Parliament?

On the order, there are five areas in which we seek either assurances or answers. One is on the transfer of Consumer Focus’s statutory information-gathering powers—which have already been mentioned—to Citizens Advice. There was an earlier debate here about whether those could be overused, and in fact our Secondary Legislation Scrutiny Committee returned to that issue. My concern is different: it is the potential underuse of those powers by Citizens Advice. Given the increasing demand on it for its own advice services from very hard-pressed consumers, my concern is that it might take its eye off its longer-term policy role, which has been played hitherto by Consumer Focus. It was partly with that in mind, when the ERR Bill went through, that my noble friend and I argued at that stage that someone—I think we suggested the CMA—should have a sort of reserve power to ensure that sufficient attention was paid to this element of Citizens Advice’s work, given that its own programme and budget were laid down by its individual charitable trustees. Those trustees are not accountable to BIS or any other arm of government. Our question, therefore, is: what happens if Citizens Advice falls down on that part of consumer protection? Who would know? It would certainly not be the consumers: there is no accountability for this work to consumers. The letter that Vincent Cable wrote to the noble Lord, Lord Goodlad, on 17 January, said:

“The Consumer Affairs Minister will hold…Citizens Advice…to account for effective delivery of these functions on behalf of consumers”.

I am not clear how that will happen. Will it be done simply by the terms of the grant? If so, how will the Minister hear consumers’ views and what action would she take if, for example, Citizens Advice failed to prioritise vulnerable consumers or the users of government-provided services? How would the Minister know and what would she do if she found any such problems?

18:00

The second question arises about the transfer of the OFT’s role in issuing a warning and prohibition orders in relation to estate agents and the approval of the estate agent redress scheme, which was touched on by my noble friend Lord Harris. My noble friend also mentioned that the ERR Act made it mandatory for letting agents—sometimes, as he said, the same organisations as estate agents—to belong to a redress scheme. As he said, the Government are not giving the same powers to Powys on redress schemes for letting agents as they are for estate agents. So the existing OFT-approved redress scheme will come under the watchful eye of Powys, but those redress schemes will have to apply to a completely different body to be approved to be the redress scheme for letting agents. That would be nonsense; perhaps the noble Lord will take a moment to explain that to us.

The Secondary Legislation Scrutiny Committee also raised some serious concerns about how Powys could reconcile its accountability to different bodies. Obviously, Powys, as an elected authority, has a responsibility to its electors. As we have heard, it will be accountable to BIS for this part of its work, it will report to the National Trading Standards Board, and it will be accountable to the Trading Standards Institute for the administration of its grant. Perhaps the Minister could explain how easy it will be for the people concerned to report to so many different bodies. After all, as my noble friend Lord Harris said, it will be the national body covering 25,000 estate agents which, between them employ about 1 million people.

Meanwhile, there is the role of Anglesey. The Minister seems to say that appeals were to the tribunal, but the information I have from Powys dated 2 December 2013 outlining the appeal process—not for redress schemes but for estate agents who have been barred—states:

“The Banned/Warned person has the right to appeal against this decision and must do so within 21 days of being notified. Appeals will be referred to Isle of Anglesey County Council who will arrange a hearing of the Appeal with 14 days”.

Can the Minister confirm that I am reading that correctly and, if so, whether every estate agent in England and Wales would have to get themselves to Holyhead within 14 days for a hearing, and reassure us that Anglesey, which is, I think, only just out of special measures and likely to merge with another local authority, is up to that task?

Thirdly, I turn to the transfer of the ML role to HMRC. I just say: congratulations, this bit is brilliant. I hope that the Minister does not faint to hear that. In fact, in a previous existence, when I was chair of the Property Standards Board, I very unsuccessfully urged the then Labour Government to do that, so I am delighted that that is happening; it is very sensible. It means that the HMRC will then have a complete list of estate agents, so will be very helpful if the Minister could tell us whether that will be given to Powys, which would undoubtedly help it in its work. As an aside, it is rather silly that anti-money-laundering affects estate agents, who do not handle money, but does not affect letting agents, who do. Maybe someone else could deal with that.

Fourthly—this was touched on by my noble friend Lord Whitty—there is real concern about whether this new architecture will ensure the continuation of the European work that has been so well done by Consumer Focus and, before that, by the NCC. I do not think that the Committee needs telling how much consumer law is made in Brussels, so any reduction in that could be a real detriment to consumers. There is no mention of it, or indeed of the EU, in the explanatory document or in the scrutiny committee’s report—at least, I could not find it. Looking around the Room, I am not the only person who found that it was not there. It would be useful to have some clarification from the Minister about the continuation of this work.

Lastly, I reiterate what my noble friend Lord Whitty said: so much for a clear system. We get rid of the OFT and the NCC, and instead we have the Competition and Markets Authority, Citizens Advice and Citizens Advice Scotland, the Trading Standards Institute, Consumer Futures for a little bit, the Consumer Protection Partnership, the National Trading Standards Board, Trading Standards Scotland and Powys and Anglesey county councils. How that is a clearer architecture leaves me bemused.

The Government have said that they will monitor this set-up. Perhaps the Minister can tell us whether and how that report will come to Parliament. However, the Opposition do not consider that this order meets the test of the Public Bodies Act 2011, that measures should lead to a more efficient, effective and appropriate level of accountability to Ministers. It is a dog’s breakfast. It is accountable to Powys for some things, to trading standards for others, to BIS indirectly through a grant and accountable partly to the trustees of an independent charity. The one group to whom it is not accountable, of course, is consumers themselves.

The order implements an overhasty, ill thought-out change. It is simply about the Government wanting to abolish a quango. It is not about protecting consumer interests or about transferring the tool that is needed to a legitimate and single strong body. I fear that by splitting the system in this way, the order is diluting the powers to help consumers to get a fair deal out of the market. It is for that reason that we regret that the order has come here.

[Viscount Younger of Leckie]

I thank noble Lords for their valuable and detailed comments on an issue that I recognise holds some sensitivities in terms of these changes for certain members of the Committee. I thank the noble Lord, Lord Harris, for his broad support and some reassurances on the estate agency part of the changes.

I start by paying tribute to the work and experience of the noble Lord, Lord Whitty, over many years and indeed decades. I listened with some care to his comments but he will not be surprised to hear that I do not agree with much of his general analysis of the consumer landscape. We believe that these changes are beneficial. I shall start by addressing some of his overall comments, and I hope that that he will forgive me if I duplicate what has been said already.

He started by saying that the reform landscape and the changes set out under the order do not achieve the clarity that he had hoped for. We firmly believe that the reforms we are making are a great improvement. Consumers will have a single port of call for Government-funded information, advice and guidance. The Citizens Advice service will be well placed to use its expertise to direct its advocacy and speak up on behalf of consumers. I recognise that some of the detail of the order is complicated, but that is the nature of legislation. It is the outcome that is important.

The noble Lord and the noble Baroness, Lady Hayter, expressed sadness at the abolition of the NCC. I will say, if I have not said it in the past, that I personally recognise the great contribution that the National Consumer Council has made to consumer issues over the years, and the no small part that a number of noble Lords have played in contributing to that. I believe that I said this earlier, but the NCC’s strong track record of consumer advocacy was one of the key reasons for the body being folded into Consumer Focus when it was created by powers under the Consumers, Estate Agents and Redress Act 2007. The great track record of the NCC was enhanced and expanded when it joined with Energywatch and Postwatch to form Consumer Focus in 2008. It will be further enhanced when it joins the Citizens Advice service as a result of this order.

The noble Lord, Lord Whitty, asked how the consumer journey will work under the new arrangements. He cited the word “confusion” relating to other regulated issues. We believe that the consumer journey will not change significantly under these new arrangements. We are simply joining up the policy-making and regulatory oversight expertise of Consumer Futures with the existing consumer complaint-handling abilities of the Citizens Advice service. As a result of these changes, anyone needing impartial help or advice on a consumer issue, whether that is a general matter or on a regulated issue in a sector, will be able to phone the national helpline, contact their local bureau or use the interactive help on the Citizens Advice web pages.

The noble Lord, Lord Whitty, raised the issue of the failure, as he put it, to bring other related sectors within Consumer Futures. The order is more about better working and not simply about moving bodies around, which may have been the expression he used. Citizens Advice will work closely with other consumer panels, joining up on regulated issues of common interest and concern.

The noble Lord also raised an issue about the citizens advice bureaux and whether they had the expertise to deal with the work. I can reassure him that the Citizens Advice service is already fully engaged on policy and research across a very wide range of consumer issues. It has both the experience and expertise to provide a highly effective voice for consumers, and this capability will be bolstered by the expert staff transferring from Consumer Futures. The Citizens Advice service will benefit from its close connection to the citizens advice bureaux and its management of the new consumer advice helpline that is replacing Consumer Direct.

The noble Lord, Lord Whitty, also raised the issue of the funding of the citizens advice bureaux, and stated that it had been cut. I refute that by saying that the Government have not cut Citizens Advice funding. In 2014-15 we will maintain the core grant funding to the Citizens Advice service, which is a combined total of £21.8 million, at a time when other public bodies are seeing their funding cut. That will ensure that the vital central services provided by the umbrella bodies to the bureaux network are maintained. Funding to the service to deliver advocacy on energy—

[Lord Whitty]

My Lords, my question was slightly different. It concerned the addition of what was the Consumer Focus function, particularly the function that was not funded by industry, which has been handed over to Citizens Advice. Has the amount of money that was previously spent by Consumer Focus on that area of its work prior to 2010 been reflected in a proportionate increase in the funding of Citizens Advice? My impression is that it has not, and that while the aggregate amount for Citizens Advice may have been maintained in difficult times, the full reflection of what was previously done elsewhere is not reflected in that total figure. It would be useful to have the figures.

18:14

[Viscount Younger of Leckie]

Absolutely. I was going to say that I will be more than happy to write to the noble Lord to confirm the precise figures. I reiterate that it is not our intent to cut the funding. The funding to the service to deliver advocacy on energy and postal matters will be maintained as currently allocated to Consumer Futures, at £8.7 million, with an additional £220,000 allocated to the general Consumer Council for Northern Ireland to deliver postal advocacy. This funding will be recouped via the levy from the energy and postal industries.

The noble Lord, Lord Whitty, also asked whether I would ensure that the lead local authority is properly resourced to undertake this work. This is to do with the estate agency functions. The baseline costs of policing the UK estate agency market will transfer, as he knows, from the OFT into the NTSB’s enforcement grant. This amount will be ring-fenced from the main portion of the grant to ensure that the full funding will be used for the purpose intended.

The noble Lord, Lord Harris, spent some time speaking about Powys and the transfer of the OFT estate agency function. In thanking him for his support, I want to clarify—perhaps for the noble Baroness, Lady Hayter—that we believe that the role of Powys is very important within the new national enforcement regime, and I re-emphasise the national element of that for the avoidance of doubt. The noble Lord and the noble Baroness asked why the Government were not harmonising letting agencies in addition to the changes that we are making to estate agents. The noble Baroness will be aware that letting agents are already subject to consumer protection legislation. The Government do not believe in excessive regulation. The amendment of the Estate Agents Act to include letting agents would lead to overregulation of the market, which would run a real risk of reducing supply in the rented sector, which in turn would drive up rents and reduce the choice for hard-working tenants.

[Baroness Hayter of Kentish Town]

I am sorry that I was not clear. I absolutely understand that—I may not go along with it but I completely understand it. I asked about a different issue. At the moment, a redress scheme for estate agents has been approved by the OFT. Approval for that redress scheme will now go to Powys. I understand that. There will then be redress schemes for letting agents—I think they will be the same schemes, but that is neither here nor there. In order for a letting agent to be approved by the redress scheme, they will not be able to go to Powys to get a tick; I understand that they will have to go through the DCLG. That is the same issue mentioned earlier by my noble friend about two departments not quite co-operating. My question is not about the letting agents themselves but the approval of a redress scheme for letting agents. It is extraordinary that it is not being done in the same way as for estate agents.

[Viscount Younger of Leckie]

I have listened carefully to the noble Baroness, and I believe that she is correct. She mentioned the DCLG, and I can say that the reforms will create a new requirement for letting agents to join an approved redress scheme. It will be implemented through the Enterprise and Regulatory Reform Act 2013, which she was very much a part of, with my good self. The order simply transfers existing enforcement arrangements from one body to another rather than creating a new redress scheme. I do not know whether that answers the noble Baroness’s question.

[Baroness Hayter of Kentish Town]

We will exchange letters.

[Viscount Younger of Leckie]

Indeed, a further exchange of letters would certainly clarify the matter.

The noble Baroness raised an important point about Citizens Advice being able to answer only about 45% of calls—to paraphrase her question. I am not clear where those figures come from because Citizens Advice is now reporting very high levels of satisfaction on the use of its national call line. Perhaps the noble Baroness can advise me on where she got those figures. They may, dare I say, be slightly outdated, but I would be very pleased to speak to her offline, as it were, about that.

The noble Baroness also raised the important issue of accountability relating to Powys County Council. She said that it is convoluted and unclear, but we believe that that is not true. Ultimately Powys County Council will be accountable to BIS, as I explained in my opening speech. As she knows, Powys will report to the National Trading Standards Board in its role as co-ordinator, and the NTSB is accountable to BIS. I am not entirely sure why she is concerned about that because we believe that there is actually quite a short direct reporting line to BIS. Again, I am extremely happy to speak to her outside this Room to clarify what I mean by that. At the same time, the noble Baroness raised the issue of Anglesey. I can confirm that Anglesey’s licensing committee will play no role in appeals against Powys’s warning and prohibition orders. These will be made first to the First-tier Tribunal.

The noble Baroness also asked how the Government will ensure that Citizens Advice will deliver on the work that it has been given and how its work will be monitored. We will hold annual performance reviews with the Citizens Advice service to ensure that the new arrangements are effective and that the successor bodies are delivering on behalf of consumers. We will also make a review of the full suite of statutory provisions within five years of the order coming into force.

The noble Baroness also raised the question of whether Section 24—in other words, the information-gathering powers—would be underused. I reassure her that Citizens Advice will have full access to these powers should it require them. She also asked when Powys and HMRC would receive the list of estate agents from the OFT. HMRC is already in an information-sharing agreement with the OFT as a supervisor under the Money Laundering Regulations 2007. The order provides an information-sharing gateway for Powys that will come into force as soon as the order is made.

The noble Baroness also asked how the consumer will be represented in Europe. The CMA will be responsible for acting as the UK’s single liaison officer in ensuring compliance with the consumer protection co-operation regulation. It will forward individual enforcement actions to the NTSB unless they relate to problems where it takes the lead. However, Citizens Advice will continue to work closely with its European counterparts, as Consumer Focus does now.

I have given due regard to the Secondary Legislation Scrutiny Committee’s decision and comments. I hope that I have answered all the questions that were raised. If I have not—there were quite a few questions—I will be more than delighted to expand the letters that I have already committed to writing to the noble Baroness, Lady Hayter, and any other Peer. The Government conclude that the order meets the requirements of the Act, and I commend it to the Committee.

Motion agreed.