Public Bodies Bill [HL]

Baroness Hayter of Kentish Town Excerpts

Wednesday 9th March 2011 Lords Chamber

[Lord Dubs]

My Lords, the amendments in this group are to do with the Competition Commission and the Office of Fair Trading. These are among the most significant bodies covered in this particular Bill. They are fundamental to both competition policy and to consumer protection.

In passing, perhaps I may say that I regret that the BSkyB matter was not referred to the Competition Commission, but I appreciate that the topic is not one covered directly by this Bill.

I understand the Government want to merge most of the functions of the Competition Commission and the OFT, leaving some to go elsewhere. Clearly, these are matters of enormous concern but I am quite sympathetic to the idea of merging the two bodies. I have always felt there was surplus capacity in the two bodies, and they were not as sharply focused as they might have been in that one referred issues to the other.

It would be interesting to know, however, which of the functions of the two bodies will not be part of the new body. In other words, some of them are going elsewhere. I understand Trading Standards will have to take on some of the responsibilities. It would be useful to know what is in the Government’s mind as regards what the new Competition Commission will consist of, and what functions will go elsewhere and why.

This not an occasion on which to go into the details of how the Competition Commission—or, indeed, the OFT—operates, but it is complicated, because the Competition Commission takes references from other bodies, such as the OFT and sectoral regulators. It takes appeals against decisions by sectoral regulators, and matters of public concern may be referred to it by the Minister. So it is a complicated issue and I would like to know what will be the basis for references to the new Competition Commission. Will they be similar to the old ones? They cannot all be the same because the OFT itself refers issues to the Competition Commission. Can the Minister throw more light on that?

Even if we are to go down the path of merging the two bodies, surely significant lessons must have been learnt from how they operate. We can do things better, a bit differently and more economically, and we should take experience to heart. I think that the Government are going to consult on this, and I would very much like to know the nature of the consultation, how full it will be, how long it will take and what opportunity there will be to make full representations to the Government on what they have in mind.

Having said that, the Competition Commission and the OFT were, I understand, both set up by primary legislation and subject to extensive debate in both Houses. They are significant bodies. I wonder what it is about them that makes them susceptible to the rather truncated procedure under the Bill. I know that that argument has been used about other bodies in the various schedules, but surely it applies with enormous force in the case of the Competition Commission and the OFT. Parliament—I am sure, most Members of this House—would like an opportunity to debate that in full and to be able to move amendments on the proposed new body: to consider the implications, for example, of transferring some functions to local authority trading standards authorities, when they are under severe financial pressure because of the cuts. What will be left of trading standards authorities after the cuts have taken place in local authorities? Will there be sufficient to take on the functions that have come from these two bodies into a local area?

This is an unhappy way to proceed. Even if everybody agrees that the two bodies should be merged—and I would guess that a lot of people would—there is still a need to consider how it will work out in detail. I am unhappy that we are doing something so significant on what is, more or less, the back of an envelope. I beg to move.

[Baroness Hayter of Kentish Town]

I will raise a couple of issues on the consumer aspects—although there may be no other issues, as that is the purpose of these two bodies. I have three questions on which I seek information from the Minister. First, in transferring enforcement of consumer law to local trading standards bodies, how can trading standards enforce significant breaches of consumer law at national level, such as bank charges or airline practices? My second question regards supercomplaints. Is the Minister satisfied that taking supercomplaints about competition direct to the new merged body—without, therefore, the two-stage process of checking on a case—has been carefully considered before the merger was proposed?

My third question is in respect of those supercomplaints which deal with consumer detriment which arises from particular features of a market. I have in mind for example, the current supercomplaint by Which? on payment method surcharging. It is not clear to me where those sorts of supercomplaints, which come under general consumer protection regulations rather than breaches of law on competition, would be taken under the new architecture.

[Lord Young of Norwood Green]

I have sympathy with the amendment; I think that it is a probing amendment. I certainly welcome the framework document, because I think that it is an attempt to explain what is going on, even if it does not deal with every detail.

The Government state in that document that the challenge in creating a single competition authority will be to help create a framework which is genuinely greater than the sum of its parts—for example, by streamlining procedures and processes to the benefit of those who use or are affected by them. There is doubt about whether that can be achieved. My noble friend Lord Dubs was right when he said that both authorities when they were initiated were the subject of large debate and primary legislation. Is this the right way to deal with them in future? That is a major decision.

I certainly concur with some of the concerns expressed by my noble friend Lady Hayter. Indeed, I was going to ask about the consumer functions that are being transferred. The Government state that the focus is to create a single strong point of information on education and advocacy and that citizens advice services will also take on responsibility for the Consumer Direct helpline. Strong concern has been expressed in the Chamber about the idea that Consumer Focus will be merged with the citizens advice bureaux—mainly because there have been examples around the country of local authorities cutting those services. There is genuine concern about that aspect of the Office of Fair Trading’s activities being transferred to the citizens advice bureaux.

The document also mentions consumer credit functions being subject to a separate consultation as part of the HMT proposals for a new consumer protection and markets authority and that any subsequent transfer will be dealt with primarily through separate financial services legislation. It also talks about the possibility of the consumer functions being transferred in advance of the wider merger proposal. That only stresses our anxiety about whether there will be the ability at local authority level to deal with those aspects of consumer protection.

Those are our concerns about the proposals. I hope that the Minister will tackle the questions raised in his response.