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 Whitty Excerpts

Monday 24th February 2014 Grand Committee

These proposals complete the Government’s programme of improvements to the consumer landscape. In abolishing the National Consumer Council and transferring relevant functions to Citizens Advice, and transferring the OFT’s estate agency functions to HMRC and Powys County Council, this order puts the finishing touches to a landscape that will work more efficiently and effectively for the public. I commend the order to the Committee.

[Lord Whitty (Lab)]

My Lords, I declare one current interest and one past interest: I am vice-president of the Trading Standards Institute, and I was chair of the National Consumer Council and Consumer Focus.

This is the last block of changes that the Government are introducing in this field. While I will end up by wishing the organisations and their staff well in trying to work this out, I cannot but express regret and sadness at what has happened and some anxieties about the future. Not only will this order finally abolish the good work that has been done for the past 50 years by the National Consumer Council, founded by the late Lord Young of Dartington, but it reflects a failure by the Government—actually, successive Governments—in achieving just what the Minister started out by saying they were trying to achieve: namely, clarity for consumers, a lack of confusion and a lack of overlap. Even this last piece of the jigsaw transfers powers from two organisations to five, with another two, the National Trading Standards Board and the CPP, also involved, which does not exactly improve understanding and overlap.

When the NCC, Energywatch and Postwatch came together following the 2007 Act, it was a partial achievement of what the Labour Party had promised in the 2005 manifesto, with which I think my noble friend was very familiar. The original intention was to bring together all statutorily based bodies with an interest in representing the consumer in the policy-making and enforcement process. Actually, it never happened quite that way, due at that stage partly to interdepartmental problems, in that the Ministry of Transport refused to allow what is now Passenger Focus to move in, Defra batted a draw and, although there was a way of getting the Consumer Council for Water in, that was never actually triggered. The relationships with the panels that were set up in Ofcom and the then Financial Services Agency never fully materialised, although that is also reflected in the legislation.

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[Viscount Younger of Leckie]

I thank noble Lords for their valuable and detailed comments on an issue that I recognise holds some sensitivities in terms of these changes for certain members of the Committee. I thank the noble Lord, Lord Harris, for his broad support and some reassurances on the estate agency part of the changes.

I start by paying tribute to the work and experience of the noble Lord, Lord Whitty, over many years and indeed decades. I listened with some care to his comments but he will not be surprised to hear that I do not agree with much of his general analysis of the consumer landscape. We believe that these changes are beneficial. I shall start by addressing some of his overall comments, and I hope that that he will forgive me if I duplicate what has been said already.

He started by saying that the reform landscape and the changes set out under the order do not achieve the clarity that he had hoped for. We firmly believe that the reforms we are making are a great improvement. Consumers will have a single port of call for Government-funded information, advice and guidance. The Citizens Advice service will be well placed to use its expertise to direct its advocacy and speak up on behalf of consumers. I recognise that some of the detail of the order is complicated, but that is the nature of legislation. It is the outcome that is important.

The noble Lord and the noble Baroness, Lady Hayter, expressed sadness at the abolition of the NCC. I will say, if I have not said it in the past, that I personally recognise the great contribution that the National Consumer Council has made to consumer issues over the years, and the no small part that a number of noble Lords have played in contributing to that. I believe that I said this earlier, but the NCC’s strong track record of consumer advocacy was one of the key reasons for the body being folded into Consumer Focus when it was created by powers under the Consumers, Estate Agents and Redress Act 2007. The great track record of the NCC was enhanced and expanded when it joined with Energywatch and Postwatch to form Consumer Focus in 2008. It will be further enhanced when it joins the Citizens Advice service as a result of this order.

The noble Lord, Lord Whitty, asked how the consumer journey will work under the new arrangements. He cited the word “confusion” relating to other regulated issues. We believe that the consumer journey will not change significantly under these new arrangements. We are simply joining up the policy-making and regulatory oversight expertise of Consumer Futures with the existing consumer complaint-handling abilities of the Citizens Advice service. As a result of these changes, anyone needing impartial help or advice on a consumer issue, whether that is a general matter or on a regulated issue in a sector, will be able to phone the national helpline, contact their local bureau or use the interactive help on the Citizens Advice web pages.

The noble Lord, Lord Whitty, raised the issue of the failure, as he put it, to bring other related sectors within Consumer Futures. The order is more about better working and not simply about moving bodies around, which may have been the expression he used. Citizens Advice will work closely with other consumer panels, joining up on regulated issues of common interest and concern.

The noble Lord also raised an issue about the citizens advice bureaux and whether they had the expertise to deal with the work. I can reassure him that the Citizens Advice service is already fully engaged on policy and research across a very wide range of consumer issues. It has both the experience and expertise to provide a highly effective voice for consumers, and this capability will be bolstered by the expert staff transferring from Consumer Futures. The Citizens Advice service will benefit from its close connection to the citizens advice bureaux and its management of the new consumer advice helpline that is replacing Consumer Direct.

The noble Lord, Lord Whitty, also raised the issue of the funding of the citizens advice bureaux, and stated that it had been cut. I refute that by saying that the Government have not cut Citizens Advice funding. In 2014-15 we will maintain the core grant funding to the Citizens Advice service, which is a combined total of £21.8 million, at a time when other public bodies are seeing their funding cut. That will ensure that the vital central services provided by the umbrella bodies to the bureaux network are maintained. Funding to the service to deliver advocacy on energy—

[Lord Whitty]

My Lords, my question was slightly different. It concerned the addition of what was the Consumer Focus function, particularly the function that was not funded by industry, which has been handed over to Citizens Advice. Has the amount of money that was previously spent by Consumer Focus on that area of its work prior to 2010 been reflected in a proportionate increase in the funding of Citizens Advice? My impression is that it has not, and that while the aggregate amount for Citizens Advice may have been maintained in difficult times, the full reflection of what was previously done elsewhere is not reflected in that total figure. It would be useful to have the figures.