Consumers, Estate Agents and Redress Bill [Lords]

I thank the right hon. Gentleman. He spoke of the issues surrounding the abolition of Energywatch. In principle we can envisage its becoming part of the new body, but there are questions to be asked about timing and implementation. I agree with the right hon. Gentleman that there has been strong evidence of ““sticky fingers”” as energy suppliers have seen wholesale prices decline, and have delayed lowering their prices to the domestic consumer asymmetrically in terms of the point at which they raised them when wholesale prices rose. There are questions to be asked about smart metering, and about the effectiveness of consumer switching at a time of volatile pricing. We need to discuss the key role that Energywatch has played in promoting energy efficiency and dealing with issues of sustainability at a time when we are all concerned about climate change. We need to be certain that those activities and strengths will not be lost. The Government must appreciate what a difficult period we are experiencing when introducing changes such as this. Like the rest of my party, I strongly support the redress structures that the Bill foresees. I also support the ombudsman system, which builds on the previous energy ombudsman system. However, the scope of redress is left largely to the discretion of the Secretary of State. There is little in the Bill about the operation of the system, and we have a number of questions to ask about issues such as the principle of multiple competitive ombudsmen. We have all observed on examination boards the preference of providers to seek the friendliest arbiter. Multiple ombudsmen pose the risk of a race to the bottom, and a race to be the most sympathetic. What concerns me most about the transferring of watchdog bodies to the new national consumer council is the potential loss—indeed, the recognised loss—of the advocacy provided by the current system. Postwatch has had difficulty in the past—although recently it has got its act together and become something of an effective advocate—but I do not think anyone would argue that Energywatch is anything other than an effective advocate. The new council will not pursue individual investigations except in relation to a narrowly defined group of the most vulnerable people. We would like a much clearer definition of ““vulnerable””—a definition of those included in that group, and preferably an expansion of the definition. The Minister said that he wished the new body to be the lion that would roar, not the mouse that would squeak. That, too, prompts a series of concerns. As the Minister implied, for most people Consumer Direct will act simply as a traffic light system. People will telephone it, and will be given a number on which to contact, for instance, the complaints office of their energy supplier. They will pursue the matter for three months, and if they do not get anywhere they can hope for a deadlock letter from the supplier. They will then have an opportunity to fill up many forms and consult the ombudsman. The industry is undoubtedly attracted to that structure, because it hopes that many consumers will abandon the process out of frustration. Energywatch has been diligent in pursuing the issues of the individual consumer. If we look at its record, we will see that it recovered £6.7 million in compensation and bill reductions for domestic consumers in 2005 and 2006. The average award for a domestic consumer with a billing complaint—that accounts for two thirds of complaints—was £168. That is serious money. It had in-depth contact with over 220,000 consumers, and 62,000 complaints merited detailed investigation with the energy companies because they could not be easily resolved. It reduced disconnections of vulnerable customers from 26,000 four years ago to 3,000 today, which is remarkable. I have personal experience of many of the difficulties of dealing with the utilities. As you will know, Madam Deputy Speaker, I am quite recently widowed. I have had to change the name on many of my utility accounts. I have also moved. When I mention those factors to the energy suppliers, and we meet them when they are out lobbying, they immediately turn very pale and the standard response is, ““Oh, my God.”” Trying to deal with the customer service arm of many of those utilities is dire. If I had not been working on this speech over the weekend, I would have been trying to compare quite a number of bills; I think that I am being sent them for the wrong property. Over and over again, I have talked to one consumer after another—and this is a difficult and complex process. I note, for example, that, in late 2005 British Gas migrated millions of its customers to a new account and billing system. There were significant problems, and Energywatch received over 6,000 complaints in just six months. To this day, customers are still having the same problems with British Gas, including not being able to get through to the call centre. British Gas has said that it will not reach ““business as usual”” until mid-2007. However, it was kind enough to provide a briefing on the Bill. It is delighted with the new structure because it"““believes that the existing measures that energy suppliers have in place to manage complaints are sufficient””." There is complacency among suppliers and pleasure in getting the new structure, because they believe that it will finally get that nuisance called Energywatch off their backs. I understand the importance of having a code of conduct as part of becoming a member of a redress scheme, which would require energy suppliers and any other providers to have a proper complaints resolution scheme in place. All that will be important, and I hope that it can be strengthened in Committee, but I make the following point to the Minister: the new national consumer council should have the powers, and if necessary be assured that it could get the resources, to step back into the advocacy role if the new scheme does not provide the level of service and the resolution that customers have finally begun to achieve after many years of not being able to get their complaints appropriately dealt with. It seems that that is a relatively risky new step. We are taking a chance that the providers, the energy suppliers and others will step up to the level of service that they have been prodded into by groups such as Energywatch and Postwatch. There should be a plan B for dealing with the situation if that is not accomplished. I am also concerned about businesses. I know that the Minister in the other place gave an assurance that the definition of customers includes businesses. Obviously, in the past the various watchdog bodies have had a specific specialised focus on small businesses. The Minister will be aware that the Federation of Small Businesses is concerned that that same focus may not be shared by the new NCC. Indeed, there is a lack of clarity about the focus of the new NCC, what its culture will be, how intensively it will chase down different issues, and how it will manage its priorities. There is little discussion about that, other than our being told ““Trust me”” that those who are in charge—Lord Whitty and others—are people of integrity and will do a good job. That is not an adequate answer. Could we at least get some clarity on the funding of the NCC? Historically, the energy supply industry has provided the funding for the energy watchdog, and the Post Office for Postwatch. That money is now to be merged into the new NCC, and the Department of Trade and Industry has arranged for the funds to be provided to the NCC itself. However, it is unclear whether that will continue to be the arrangement over the long term, particularly if the NCC decides to focus much of its energies outside the traditional sectors. We must have some clarity about that. In terms of the publishing of reports, consumer confidence will be essential. Information must be made available to the public. That is the case not only because the taxpayer will largely have paid for the reports, but because the idea that an issue that affects consumers should be kept away from consumers, and that reports that might reveal areas of concern should not be fully disclosed, is completely unacceptable in this day and age. The public disclosure of all reports is essential. I now turn to measures to do with estate agents, which account for a major proportion of the Bill. We welcome the proposals to require estate agents to join a redress scheme and to keep the necessary records, and many of the other innovations that the Bill would introduce. The proposals are not particularly radical, but they represent an improvement on the situation in the past. However, I wish to raise again the concern about the idea of multiple ombudsman schemes; there is a fear that the industry will tend to head for the body that will give it the easiest time, and there could be a race to the bottom.