Consumers, Estate Agents and Redress Bill [HL]

My Lords, I declare a fairly obvious interest as the chair of the National Consumer Council. I am pleased to follow two distinguished former bearers of that office: the noble Baroness, Lady Wilcox, on the opposition Front Bench in her first legislative outing—along with my noble friend Lord Truscott—and the noble Baroness, Lady Oppenheim-Barnes. I welcome this overall approach—the consumer voice project—and the new landscape of consumer protection. I also support the more specific proposals on doorstep selling and, largely, the estate agent provisions, although I accept some of the points made by the noble Earl, Lord Caithness, on tightening them up. I shall concentrate largely on the overall structure of Part 1. I support the broad structure. There is a single first-stop shop with Consumer Direct; comprehensive coverage of ombudsman, dispute-resolution and redress systems—not necessarily all in one scheme, but covering the regulated sectors; and the single policy and advocacy body, incorporating the NCC, Postwatch and Energywatch into what is called ““new NCC””. That structure—cross-sectoral, learning from each other, and shifting the focus to areas of greatest consumer detriment over time—seems sensible. Making Consumer Direct the single, first telephone number in everybody’s minds for all consumer complaints also seems sensible. The proposal has great flexibility benefits. It ensures good systems of dispute resolution and redress in the regulated sectors, both benefiting consumers and putting pressure on, in particular, the energy companies to deal with complaints and advice rather better than they have in the past. One of my concerns is that the powers of the regulators to ensure that those standards are kept are weak. The new advocacy body, the new NCC, will enable intervention in priority areas in the way that the NCC has done in the past. The noble Baroness referred to that as ““guerrilla”” action, which is a fair comment in many ways. The NCC has developed into a centre of excellence over the past 30 years, and we need to maintain that. We are aware of its good reports and examples: the Minister referred to the Consumer Credit Act, and later this week we will discuss the Legal Services Bill, which also originated from pressure from the NCC. In the past couple of weeks, we have had the home credit system referred to the competition authorities. We have also used the super-complaint procedure in relation to garages and our resources in relation to identity theft and food quality. There is a range of different areas of potential consumer detriment. We have also made a beginning in relation to public services in Scotland and England, where we have regarded the role of the consumer of public services as of equal importance to that in the private sector. Our colleagues in the Scottish Consumer Council took the lead in identifying the latest consumer scandal, Farepak, as a serious issue. We can build on this, and therefore the general approach of the Bill is appropriate. However, I have concerns about a number of areas that require clarification. I hope that the Minister can satisfy me on them, if not today, then later during the passage of the Bill. The first is perhaps a bit aspirational: it would have been better if the cross-sectoral approach had applied to all sectors. The noble Baroness, Lady Byford, referred to water, which at least is in on a contingency basis for a later stage, but other areas with statutory provisions are not in the Bill—for example, transport is an area of great consumer concern, but does not feature in the Bill, presumably because the Department for Transport did not want it to. That is not appropriate when we are trying to create something to cover all areas of consumer detriment. I also have some problems about the transition, in particular in relation to complaints and queries that currently go to Energywatch and Postwatch. Part of the strategy that the Government have adopted, which I support, is to compel companies to adopt better ways of dealing with complainants and their queries. That particularly applies in relation to energy companies. The powers in the Bill to permit regulators to force them to do so are not only a bit weak but will also take time to have full effect. We need to know what will happen to that sort of complaint in the interim. Having an improved ombudsman system and better redress puts pressure on the companies to get things right first time, which is the objective of this policy, but these provisions will take time to have effect and we need to make sure that that is covered. The existing ombudsman system in the energy sector is not up to scratch for the job that is envisaged in this approach. There is a delay of three months because the ombudsman cannot intervene until the company has been given that long to sort a matter out. For many consumers in a difficult situation, that is pretty late in the process, so this needs tightening up. In Committee, we need to look more closely at what proportion of the complaints that are currently going to Energywatch and Postwatch will effectively be dealt with by Consumer Direct and what kinds of complaints will come to the new, expanded National Consumer Council and whether they are complex issues or involve potential disconnection or other emergency situations. Like other noble Lords, I am concerned about the independence of the new body. I was extremely pleased to hear the Minister mention in his introduction that this body will be independent. That is very important. The current NCC was set up by the Government 30-odd years ago as a limited company and has never been in statute. In some ways, that makes it exceptionally vulnerable, because any Government could come along and abolish it without recourse to Parliament. Indeed, that has been suggested on occasion. However, it also gave the NCC great flexibility. I hope that that flexibility is maintained in the new structure. Provisions on the Secretary of State’s directions and reporting will need to be subject to serious scrutiny as we proceed. Flexibility is needed because we need to shift from one sector to another. What is most detrimental to consumers today may change tomorrow, next year, and in five or 10 years’ time. Indeed, the issues on which we should focus now are not the traditional ones but those that arise in the public sector. The importance of the consumer role in public service relates, as the Government have recognised, to the changes that they are introducing in health, social housing and education. Those changes, although they may improve choice, at least on a one-off basis, do not engage the consumer on an ongoing basis in the way that we want in respect of both public and private services in future. Another issue to which my noble friend Lord O'Neill referred is devolution. The existing National Consumer Council was a pre-devolution devolution. It worked pretty well; the Scottish and Welsh councils have operated very effectively. It is important that that is sustained through the Bill. The constitutional provisions are there. There will be separate councils for Scotland and for Wales; they will have separate offices; they will be appointed in consultation with the Scottish and Welsh Executives. But the following part seems to limit their role to being just advisory to the main national council. That is not what happens at the moment and it should not happen in future. Those bodies operate substantially in the Scottish and Welsh context, in civic society and with Scottish and Welsh business, but also, crucially, with the devolved powers in Scotland and Wales to the Assembly and Parliament and local government. For example, much of the best work of the Scottish Consumer Council has been done in conjunction with the Scottish Executive in improving consumer representation in Scotland. That facility needs to be retained and the drafting does not completely reflect that role. Noble Lords would expect me to mention sustainability, especially since the Stern report. One contribution to changing attitudes and approaches to climate change must be to allow and encourage consumers to make greener choices about the goods that they purchase. Sustainability is placed as a duty on the new National Consumer Council, but that duty is not very strongly worded compared with some other provisions in recent legislation. I would like that to be addressed in Committee. I do not expect an answer from the Minister on my final point, which is about funding, because no Minister will ever give an answer on that. I certainly do not expect an answer on quantifiable funding, because my noble friend is sitting next to the Treasury Minister. There is a somewhat confusing position on the overall structure of funding because part of it depends on direct grant in aid from the department. Other parts of the pre-existing NCC and its Scottish and Welsh equivalents depend on project funding from other departments. Now, a big chunk will be based on the levy raised from energy and post companies. That will enable us to move attention into those areas and for those areas to benefit from generic consumer interest, such as the example given by the noble Baroness, Lady Byford, of post offices in rural areas—we will be able to consider the issue in a somewhat broader context. I am sure that she will agree that we need to address the totality of services available to people in rural areas and some of our more deprived suburbs. If funding is too ring-fenced, there will be too great a rigidity in what the body can do. On the other hand, we do not want to lose what the existing bodies can do in those two regulated sectors. I strongly support the general thrust of the Bill. I emphasise the areas of concern that we will need to address as it proceeds. It is a good Bill. It will need some filling out and I am sure that in subsequent stages the House will fully engage in that process. I am sure that my noble friend can answer some of my concerns tonight, but I certainly do not expect him to answer them all.