Consumer Rights Bill
Debate between Baroness Maddock and Baroness Oppenheim-Barnes
Baroness Oppenheim-Barnes
This amendment is also very important. It is common knowledge that not a great deal is known about the actual defined duties of the regulators. I remember when I received the first Monopolies Commission report in my department, to the effect that the nationalised electricity industry was of positive disadvantage to consumers for all sorts of reasons. At that point we were able to start looking at privatising the industry, because one of the most cogent parts of the report was that it was not operating either in the interests of its customers or of its employees, which was true. So we then started to embark on a long series of denationalisation and privatisation of the utilities. When we did so, it was implied that the regulators would be very important, they would have great powers, and that they would exercise those powers on a regular basis, and also investigate. There has been a feeling recently that the regulators are not necessarily asking all the right questions.
Once again, the National Consumer Federation has given a number of examples which refer to the actual requirements as far as these people are concerned. It is its job to identify risks, scan the horizon and use consumer insight, creating the right incentives for the market to work well for consumers, ensuring that the data is published, and working closely with other regulators. It does not give the impression of being in touch at all at the moment. It needs to involve consumers and their representatives, including consumer bodies, to have a regular dialogue. What is most important is to ensure compliance with licence conditions and other rules through investigations and effective enforcement as well as imposing penalties for firms which, as we know, often amount to many millions. Only recently one of these regulators has, for the very first time, insisted that in the case of that particular fine, a certain amount had to be paid in refunds to consumers as a result of the firm not doing what was necessary, or what the regulators required them to do.
The very important first move that I would like to see, as part of this amendment, would allow them to go a lot further than that. We hear about the multimillions that are paid in fines and we are not sure where it all goes, although we know that it goes to the office of the regulators. But there is no reason now why my proposal should not be a requirement on regulators, without any real change of law, when a really bad result, certainly as far as consumers are concerned, has led to a fine. This is another very important amendment, because it is very basic and deals with problems that a lot of people do not comprehend today. They see these big fines—they read about them in the newspaper—but do not actually see them directly benefiting them. They will do, but it is not all that clear.
As I said, this amendment is a quick and fair move for consumers to make complaints and involve themselves in disputes, and also proposes, in subsection (4), that these,
“fines levied by a consumer regulator on a trader for breaches of rights … shall, following deductions by the regulator for its reasonable administration costs, be used to compensate consumers”,
who have been put at a disadvantage. Again, this is not asking the Government to do anything but to define more clearly the role of the regulator: what it should be and how this should be carried out. I beg to move.
Baroness Maddock (LD)
My Lords, I support my noble friend on this, partly because during the passage of the Energy Bill—the noble Lord, Lord Whitty, was there when we did this—I managed to get the Government to accept my amendment to promote more accurate information on energy bills. In reading my noble friend’s amendment here, I would like the regulators—just as in my amendment that is now law—to “uphold” rather than “promote” in subsection (2). I would also want them to be “upholding” rather than “promoting” in subsection (3)(a), with reference to energy bills. That is something that they should make sure happens. It is part of the law. I strongly support my noble friend here. It would be very good if we could get this in other areas. We have something rather better in energy bills thanks to the Government accepting an amendment last year in the then Energy Bill.