Consumers, Estate Agents and Redress Bill [HL]

If anyone is wondering why I have been sitting quietly here at the back it is because I thought this group of amendments gave me the opportunity to come in from what I might call a slightly wider angle. I could link it to my noble friend’s Amendment No. 114 in which, on my line of thinking, she has left out the wrong paragraph—paragraph (b) rather than paragraph (a)—but I do not mean to elaborate on that or cause dissension in the ranks on this side of the House. I hope that the noble Lord, Lord Borrie, will recognise the main point that I am seeking to make and that it will become clear. However, before I say anything else, I ought to declare something rather curious—I think it could be called a potential prospective interest—in that I am chairman of the Council on Tribunals. Shortly before Christmas, a Bill was debated in this very Room that would turn the Council on Tribunals into an Administrative Justice and Tribunals Council, which would give it an interest of a much wider kind, including an interest in ombudsmen. But that is not the situation at the moment: at this stage the council has no locus in that respect, although one of the main parliamentary ombudsmen is an ex-officio member. Having acknowledged that point, I emphasise that I am speaking only for myself. I find it very strange indeed—I am using an understated word; perhaps I should say ““curious””—that we have here a Bill which appears to envisage the possible creation of rival sets of ombudsmen serving consumers. The noble Lord, Lord O'Neill, spoke of the Government seeking to create a new scheme. But that is not what the Bill states: the Bill envisages the possibility of multiple schemes. I shall come back to that. I was surprised that this did not attract more attention on Second Reading, in which debate, unfortunately, I was unable to take part. It was adverted to by my noble friend at column 971 when she asked whether it was likely that there would be more than one scheme, and then perhaps most crisply and notably by the noble Lord, Lord Borrie, who said: "““Having a number of schemes competing, no doubt, to provide the best service for customers, would seem a rather odd system of adjudication in this country. I do not think that it occurs in ombudsman schemes in insurance, banking and so on””.—[Official Report, 4/12/06; col. 974.]" Then the noble Lord, Lord Razzall, built on that point and suggested that, "““it would be better for the existing ombudsman scheme to be the one approved by the DTI and with which everybody will comply””.—[Official Report, 4/12/06; col. 1006.]" In response to all of that the Minister confirmed: "““The fact is that under the Bill we are leaving it to industry to come forward and seek approval of suitable redress schemes, in the plural, so the situation could be that several schemes are approved”” .—[Official Report, 4/12/06; col. 1012.]" As an individual, I find that very curious. The Bill, in creating the new National Consumer Council, is designed to create greater coherence and reduce confusion for consumers, but it includes this proposal. If I found a way to bring forward a proposal for a rival parliamentary, health service or local government ombudsman, I would be laughed out of court. In the financial services field, which was littered with ombudsmen, the Government went to considerable trouble to create one coherent, statutory financial services ombudsman scheme. I do not know of any proposal in a Bill being discussed on the Floor of the House or anywhere else to have rival legal services ombudsmen, so why do we have these proposals? That is my fundamental question. My curiosity is aggravated because I could just about understand the proposal if it was about choice for complainants and consumers, but it is not; it is about choice for firms as to which scheme they join. There is an obvious risk that what is in the best interests of the business rather than the consumer will be at least a factor in some decisions. I am not alone in that view. I cannot speak for the British and Irish Ombudsman Association, although I know it quite well, but I feel that I should place on record what it said in response to the relevant question in the consultation just under one year ago. Referring to the possibility of multiple schemes, it stated: "““We feel this””—" that is, multiple schemes— "““causes confusion and different standards, processes etc. BIOA supports a fully joined-up and straightforward approach to Ombudsman services for the consumer. It sees any attempt to streamline and simplify the process of dealing with complaints and receiving redress as being highly desirable and in the public interest. This would include having at the most, one scheme per industry/sector””." I note—and I should recognise this before inviting the Minister to comment—that Clause 48(2) requires a regulator to have regard to the number of other redress schemes already in place in making decisions about the interests of consumers. That implies a recognition that a plethora of schemes is not desirable. But where is the balance between one scheme and a plethora of schemes? Although the subsection does not use the word ““plethora””, how will that judgment sensibly be made? I remain extremely puzzled and I would appreciate any comment from the Minister on the reasoning in this regard. Perhaps I may ask him a specific question. I have already referred to financial services and legal services: has any other department in Whitehall gone down this path of creating the possibility of competing ombudsman schemes being chosen by the firm, not by the customer—or, indeed, of competing ombudsman schemes at all? We need a clearer understanding of the thinking behind that and the justification for it before we can conclude consideration of this part of the Bill. The noble Lord, Lord Borrie, made a good point at Second Reading and I hope that he thought it was a good point to make today. I am very grateful to him.