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

Lord Harris of Haringey Excerpts

Monday 24th February 2014 Grand Committee

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%.

--- Later in debate ---

[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?