Public Bodies Bill [HL]

Lord Newton of Braintree Excerpts

Wednesday 9th March 2011 Lords Chamber

[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.

[Lord Newton of Braintree]

My Lords, before my noble friend replies with his characteristic clarity, perhaps I may be a seeker after truth. There has been reference to consultation. I am now left totally confused. I read the briefing note that I took off the e-mail only yesterday in respect of today's proceedings, which contains the following line:

“The Government will consult on its detailed proposals in the new year”.

I am aware of the elasticity of seasons in respect of Her Majesty's Government, whoever forms it, but this seems to be getting ridiculous. Are we consulting or are we waiting?

[Lord Myners]

Will the Minister assure the House that nothing in the proposals made by the Government in respect of these bodies will in any way inhibit the freedom of recommendation of the Independent Commission on Banking? It is widely recognised that one of the key issues in banking is inadequate competition. That is evident in returns on capital and operating margins which most business sectors would die for. Banking is characterised by poor customer service, low standards of innovation and very little customer movement from one bank to another—although, on the whole, customers express themselves to be very dissatisfied with the service they receive from their current bank. To put it simply, they do not particularly like their own bank, but they have no confidence that any other bank is any better.

I fully commend the Government’s proposals to establish the independent commissioner on banking. Together with the establishment of the Office of Budget Responsibility, they represent novel and important proposals from the Government which should enjoy the full support of the whole House. However, we cannot see the freedom of recommendation in some way enfeebled by the Government denuding the effectiveness of some of the responses which Sir John Vickers and the commissioners might recommend in terms of the process, should they also be seized by the inadequacies of competition in banking for individuals and small businesses in the United Kingdom.