Public Bodies Bill [HL]

Lord Young of Norwood Green Excerpts

Tuesday 11th January 2011 Lords Chamber

There was the establishment of Which? magazine and the Good Food Guide—voluntary efforts to try to represent the consumer. It quickly became evident that there was a collective action problem. If you were to have an effective voice for the consumer you could not just do this through, as it were, voluntary initiative and activity; you had to have a public institution that would represent consumer interests that had the expertise and capabilities so to do. By abolishing Consumer Focus we are taking away that ability for collective action which must supplement individual complaints and other initiatives. The Citizens Advice movement is basically about representing individuals and dealing with individual problems rather than collective action. I do not see an effective consumer voice as being anti-business or as an expensive quango that operates against business. I see it as good for business. Something that represents the consumer effectively is very good for business. I would make a strong argument inside the Government that it is time to rethink. I hope that in the light of what she has heard, the Minister will be prepared to do that.

[Lord Young of Norwood Green]

As a number of my noble friends have said, there are real concerns about the viability of the coalition Government’s proposals on the vital issue of consumer representation. As my noble friend Lady Hayter reminded us, Consumer Focus was created under the Consumers, Estate Agents and Redress Act 2007. It was a new organisation, carefully designed with good planning and as a result was implemented with widespread support. It has become the acknowledged champion for consumers in England, Wales and Scotland, and for postal customers in Northern Ireland.

I think my noble friend Lord Borrie talked about the enthusiasm of the chief executive of Citizens Advice for the new role, and I reflected on the comments of the chief executive of Consumer Focus, who said:

“Consumer Focus has achieved big wins for consumers in just two years—including a £70 million energy bill refund and cash ISA reforms saving over £15 million a year. We’ve delivered our biggest results in the last few months but the biggest challenges for consumers are ahead, with major reforms to the energy, post and financial services markets … What matters now, is that the transfer happens in a way that works in consumers’ interests. The expertise and knowledge that has enabled us to fight for consumers must not be lost. Changes must not be at the expense of the public’s rights and needs—which organisations like Consumer Focus were created to protect”.

That is an important and interesting comment.

There has not been much reference to the role of trading standards. The response states:

“Trading Standards is at the centre of the Government’s proposed new regime. Local challenges to fair trading will continue to be handled at local authority level, but national and regional consumer challenges will be handled by one or more dedicated, expert teams, within Trading Standards with work co-ordinated nationally for this purpose”.

Perhaps the Minister in her reply can expand on that national role of trading standards. It also states:

“In respect of Scotland and Wales, specific arrangements may need to be made”.

In the light of this debate, that is perhaps a bit of an understatement.

I am conscious of the time, so I will cut my contribution much shorter than I had intended—for which relief, much thanks; I see the Minister nodding. I cannot help remembering, given the history of inflation that we have heard tonight, negotiating a wage increase of about 23 per cent during that period in the 1970s. I was reminded of those heady days.

I shall make a couple of quick points in summation. At the moment, Consumer Focus receives approximately one-third of its funding from BIS. The remainder is gained from a mixture of licence funding paid by energy suppliers and the postal industry and funds that it may raise itself—for example, through externally funded projects. I add my voice to the cause and ask the Government whether they yet know how much it will cost to outsource those services to a local community group. What proportion of that money will come from the Government? How will the plan help to ensure that the body performing those functions is more accountable? A thread through what, as a noble Lord already said, has been an authoritative and interesting debate is that question of accountability either to the people that the body seeks to serve or to the funding providers—in the case of the Government, the funding providers being the British public. In the interests of time, I will let the Minister respond.

[Baroness Wilcox]

My Lords, this has been an amazing debate. I knew that it would take some time, but I hope that the noble Baroness, Lady Hayter, will be pleased at the amount of time and thought that has been put into some of the speeches heard here tonight—I know that I have been. It has been a real trip down memory lane too. The only person who seemed to be missing was the noble Baroness, Lady Williams, who, I believe, in those distant days gone by, set this all going in the first place. It is amazing who we have heard from: the noble Lord, Lord Maclennan, the noble Lord, Lord Whitty, the noble Lord, Lord Borrie and too many others. I shall try hard to answer some of the questions, but I hope that noble Lords will understand that, given that it is six minutes to 10, I will try not to keep you here past 11 o'clock. Settle on down then.

Consumer Focus has been placed in Schedule 1 because the Government believe that its functions will be better carried out by transferring them to the citizens’ advice service, which includes Citizens Advice and Citizens Advice Scotland. There will therefore be no need to retain Consumer Focus. The National Consumer Council, in its original incarnation, has a proud record. Over three decades, it established a fine reputation for representing the interests of consumers through careful research, robust policy development and by using its influence with policy-makers. I, of course, declare an interest as a former chairman of the National Consumer Council from 1990 to 1996. Prejudiced though I may be, I say that it was certainly right for its time.

The previous Government merged the National Consumer Council with Energywatch and Postwatch; and the new National Consumer Council, which took the name of Consumer Focus, opened its doors for business in October 2008. I recognise that barely two years have passed, but over those past two years, Consumer Focus has eagerly grasped its new range of powers and responsibilities on behalf of consumers. I pay tribute to the noble Lord, Lord Whitty, who chaired Consumer Focus with flair and commitment from the very start until stepping down rather loudly and cross only in November last year.

I will try to answer some questions as I go, which may distort the speech a bit, but will give some answers. The noble Baroness, Lady Hayter, asked whether abolition of Consumer Focus means that the Government are giving up on consumers. Not at all. The Government will continue to provide funding for these objectives, which we regard as highly important, and we see Citizens Advice as the most effective conduit to deliver the desired outcomes.

What about vulnerable consumers? Consumer Focus and its predecessors have played a very important role in this area. Citizens Advice also has substantial experience of addressing the needs of vulnerable people across a wide range of subject areas and we are confident that it will be able to deliver the outcomes with no loss in quality. While Consumer Focus currently assists around 7,000 customers directly, Citizens Advice is advising and supporting millions of individuals. Citizens Advice also has well developed policy and research functions as will be known to some noble Lords.

The noble Baroness, Lady Deech, asked whether the Government need to look at the whole landscape of consumer protection right across the economy and make it more effective for consumers. I agree. The Government’s proposal is further to improve consumer protection and advocacy in general and we believe that the shift of Consumer Focus’s role to Citizens Advice will deliver those services and protections closer to the citizen via the network of citizens advice bureaux, making it even more relevant and effective than it currently is.

The noble Lord, Lord Whitty, asked whether vulnerable consumers will be those who lose out most. The Government propose to transfer Consumer Focus’s statutory powers with regard to vulnerable consumers to Citizens Advice. Discussions about how we can achieve this appropriately are still going on with Citizens Advice and internally within BIS.

My right honourable friend the Secretary of State for Business, Innovation and Skills announced on 14 October last year that the Government would consult early this year on proposals to rationalise the functions of consumer protection bodies, eliminate confusion and duplication, strengthen local delivery and provide a stronger role for front-line consumer services. This is what we hope will be achieved.

We are taking the next, great, positive step forward in consumer advocacy, building on the strengths, the expertise and the bold initiatives that have gone before and of which we have heard so much tonight. Consumers need protection no less now than in the past. Increasingly sophisticated products and services need an increasingly clued-up consumer to take maximum advantage and avoid coming a cropper in the marketplace. We need to deliver assistance and advice to individual consumers at the point of need at a local level. At a national level, we need a body to continue with quality research which is capable of taking on the big policy issues of the day and fighting for the consumer interest with businesses, regulators and Government.

The noble Baroness, Lady Deech, says that things have never been worse. Maybe she is the consumer on the Clapham omnibus and not one of us who have been involved deeply in our parts of the consumer world and do not like to see any of the bits we were involved with go. Maybe her voice is the one we should be listening to now.

Citizens Advice is widely recognised and trusted by the public. It has a distinct advantage which we should seek to turn to our advantage. It has local representation, through the citizens advice bureaux, in communities throughout the country. It offers a presence on the high street so that people can call in to get advice and information. It can cater for those who need personal contact people who are not necessarily comfortable with a telephone or online service. It can assist vulnerable consumers face-to-face, identify problems and help with solutions. Citizens Advice has an excellent track record of advocacy on behalf of consumers at a national and local level. We therefore intend to direct almost all central government resources for non-financial consumer education, information, policy and advice to Citizens Advice.