Public Bodies Bill [HL]

Baroness Wilcox Excerpts

Wednesday 23rd March 2011 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, the debate today has reiterated the concerns about the proposals for reform expressed by the noble Baroness, Lady Hayter, and other noble Lords in Committee in January. As then, I am grateful for their contributions. The Government will consult fully on these proposals and will pay close attention to the responses received, as well as to the points made today. I had hoped that the consultation would be issued before the restrictions placed on such publications by the forthcoming elections in Scotland and Wales on 5 May. That has unfortunately not been possible. Therefore, publication will now be after those elections have occurred, for which I am sorry, as I know are other noble Lords here today.

The Government firmly believe that the functions of Consumer Focus will be better carried out by the Citizens Advice service, comprising Citizens Advice and Citizens Advice Scotland. If these functions are transferred, there will be no need for the current Consumer Focus organisation to continue to exist. That is why it is in Schedule 1 to the Bill. The Citizens Advice service is widely recognised and trusted by the public. Its unique selling point is that it has local representation through the citizens advice bureaux in communities throughout the country. It offers a presence on the high street where people can call in to get advice and information. It can cater for those who need personal contact—people who may not be comfortable with an online or telephone service. It can also assist vulnerable consumers face-to-face, identify their problems and help with solutions. While Consumer Focus currently assists around 7,000 customers directly, the Citizens Advice service advises and supports millions of individuals every year.

The alternative that the noble Baroness raises through her second amendment—to include Consumer Focus in Schedule 5 to the Bill—would keep it in existence but create a power to amend or transfer some of its functions. As she has made clear today, her amendments question the Government’s overall intent for the future role of the Citizens Advice service in research and advocacy on behalf of consumers. Therefore, I will say a little more about this.

Questions have been raised, in particular, about the capacity of the Citizens Advice service to engage at a national level with industry sector regulators and government and international bodies. On 5 March, Consumer Focus published a paper entitled Regulated Industries and the Consumer, which sets out its view of these responsibilities and the skills and capabilities needed to address them effectively. The Government take this issue very seriously. The Citizens Advice service already has a strong track record in policy advocacy. For example, Citizens Advice has launched several super-complaints, which have resulted in substantial improvements for consumers, notably about doorstep selling cooling-off rights and the payment protection insurance market. However, we do not claim that the Citizens Advice service currently has all the capabilities it needs to discharge such responsibilities and I do not believe that the leaders of those organisations would either.

It is important here that I make the point that I am talking about the national umbrella organisations Citizens Advice and Citizens Advice Scotland, not the individual, locally organised bureaux, which are independent of these national organisations. Under our proposals, funding would follow functions. This will allow the Citizens Advice service to acquire the extra skills and capabilities that it will need. This will be particularly to develop further capability in research and to increase the depth of its engagement with sectoral regulators and international consumer policy organisations.

A key issue will be to develop an effective operational model. Citizens Advice and Citizens Advice Scotland have unparalleled intelligence about consumer detriment from the front line of advice-giving. Their evidence base will expand further when they establish a successor to the national Consumer Direct helpline. They will need to bring together this evidence with the national research capability that Consumer Focus currently has, as well as its contacts with sectoral regulators and international consumer organisations. I am pleased that the respective chief executives of the three organisations are actively working together to make sure that a robust and credible operational model is established. There is still considerable time left to work through the detail. Completing the transition to the new arrangements will take until 2013, so we are not hurrying.

On other aspects of our proposals, I do not wish to take up your Lordships’ time by repeating what I said in Committee. However, I reiterate that the Government intend to provide sufficient funding for the Citizens Advice service to take on the consumer functions of the Office of Fair Trading, Consumer Focus and possibly other sectoral consumer bodies. Citizens Advice and Citizens Advice Scotland will be accountable to Parliament through this public funding, and to their trustees as independent charities.

[Baroness Oppenheim-Barnes]

To be given all these powers and functions, and to carry them out well, they will need not just extra money but a lot of different training in the different branches of consumer affairs that they will have to deal with.

[Baroness Wilcox]

Indeed, and that is why the consultation has been in-depth, why it is continuing now and why the chief executives of the organisations are coming together to make sure that this changes over and happens well. These and other issues, such as whether and how statutory powers are transferred to the Citizens Advice service and what delivery models might be appropriate in Scotland and Wales, will be formally consulted on after the elections in May.

The intention of the Government in making these proposals is to provide the best possible service for consumers, to be their champion at a national and international level, and to provide information and advice in ways that suit them best. I therefore hope that the noble Baroness will feel able to withdraw her amendment.

[Baroness Hayter of Kentish Town]

I first thank my noble friends Lord Borrie, Lord Whitty, Lord Beecham and Lord Stevenson, and the noble Baroness, Lady Oppenheim-Barnes. As a former chair and Consumer Minister, she well understands the work of the organisation, as was indicated. I bow to her judgment. I agree strongly with my noble friend Lord Borrie that the whole move is still unsatisfactory. However, the point of this amendment is to help, rather than take on the whole of that issue. It is meant to help the Government by moving the NCC to Schedule 5, thereby increasing the flexibility that is open to them as they review the consumer environment.

As her own department is now finding out, and as my noble friend Lord Beecham has said, the CABs are already overwhelmed. My noble friend Lord Hunt said that in Birmingham all five are at risk, and there is to be a 20 per cent cut in Newcastle. All their energies will be put into what they do well at the moment. Advising individuals is simply not the same job as providing cross-market advice on how markets work for consumers. Someone yesterday said to me, “I like Citizens Advice. They are just like our local post office”. As the Minister said, Citizens Advice is indeed trusted, local and it knows you. However, combining it with Consumer Focus is rather like putting the post office together with a merchant bank such as Goldman Sachs. Just because they both do the same thing—handle money—you do not merge them. Just because Consumer Focus and Citizens Advice are interested in consumers, you do not merge them.

However, that is not in the proposal in front of us. I had expected the review of the consumer landscape to be revealed. I am grateful for the information, although not the content, which we will not now receive until after 5 May. However, the Government, in advance of announcing their consultation, already wanted to put Consumer Focus into the abolition bucket. That undermines and misunderstands the work of Consumer Focus, which is about consumer input into consumer policy. As my noble friend Lord Whitty said, we risk the loss of the statutory powers if Citizens Advice is unable to take on those powers, and if Consumer Focus remains in Schedule 1. That is a big risk. As my noble friend Lord Stevenson said, we risk losing advocacy and representation.

The role of Citizens Advice is face-to-face. It is about individual consumers. It is not about national policy or taking on British Airways, Virgin, internet providers or big national organisations that can also treat consumers poorly. Although I welcome the reference to international and European consumer policy, that is quite different from representing individuals in need—over money, housing or family problems.

We are talking about a transfer of functions that were laid down in the 2007 Act. I fear that the Government want to abolish those functions; otherwise, why are they putting Consumer Focus in the abolition bucket? I have heard the words of the Minister, but there is an overwhelming case for not abolishing Consumer Focus, but for putting it into Schedule 5, under which some functions could be transferred if the review shows that that is the best way forward. I should like to test the opinion of the House.