Consumers, Estate Agents and Redress Bill [Lords]

Yes, that is right. An apology on behalf of us all for the political class who seem to have lost the trust of the general public. My hon. Friend the Member for Rutland and Melton (Alan Duncan) and other Members dealt comprehensively with estate agent issues, so I want to talk about other aspects of the Bill. It is my intention to be non-partisan, as my hon. Friend was. However, the more I listen to the debate the more anxious I become about aspects of the Bill. I think we have now clarified that the DTI website is out of date and illiterate. It noted that the Bill"““completed it’s passage through the House of Lords””." That apostrophe is a grievous error. It stated that the Bill would be given its Second Reading in the House of Commons and then referred—in large letters—to ““Consumer Voice””. However, it is quite clear that the name ““Consumer Voice”” has been dropped by Ministers and the body will now be called the national consumer council. I admit that is not a big point, but it is important. I would have liked a new name for the new body, if it is to have a new role. A bit of rebranding would help to give people the idea that the new body had a slightly different and more ambitious purpose. I regret the fact that we are sticking with the old name. Perhaps I should declare an interest on behalf of all of us. I think the Bill’s philosophy is right; it has the right objective, but as so often in politics it is a question of how we reach it. I have a big reservation about the abolition, in effect, of the consumer complaint function of Energywatch in particular, but also of Postwatch. We could experience a big increase in our constituency casework for a considerable period of time, because all the problems currently referred to Energywatch and Postwatch will comes to MPs instead. The House should be warned: this is a Bill to increase the postbags of Members of Parliament. Of course, that is not to say that the objective of the proposals is not honourable—it probably is. I think that the Minister and most Members would agree that the ultimate safeguard for the consumer is a competitive market. In a truly competitive market, the consumer can say, ““I don’t like the service you have offered me, so I will go to someone else instead.”” That is the real protection: the discipline on the provider of a service or goods that if he does not perform he loses the consumer’s business. In that context, Ofcom’s decision to abandon price regulation in the telecommunications sector is interesting. Competition in the sector is now so intense that price regulation effectively becomes otiose. If we try to shift our mobile phone operators these days, the deals that we can negotiate with our current operator or prospective new ones are legion. That is clearly right. As I understand it, the new structure that the Bill is designed to bring to consumer redress issues is based on the empowerment of the consumer. The consumer should do more of his or her complaining, assisted by the Consumer Direct service. The proposed national consumer council will look more at the general overarching themes of consumer protection and consumer advocacy and will have a greater advocacy role. Where things cannot be reconciled by a direct complaint with the provider through whatever alternative resolution process is available, there is an ombudsman to deal with those hardest cases. I have no problem with that in principle, but the question is whether the various markets dealt with in the Bill are ready for this new philosophical approach. I know that sceptical comments have been made about the Bill’s purpose. Is it a cost-saving measure? Well, it should save some costs, but I will give the Government the benefit of the doubt, as I do not think that that is the leading motive. I am concerned, however, about change for change’s sake, and I shall return to that a little later. Change can often be very confusing for the people served by the organisations whose functions are being changed. The basic idea of removing the state-funded intermediary and putting more power into consumers’ hands—with advice from state-funded bodies such as Consumer Direct—is a sound one. Let us reflect on some of the particular issues. I was interested to read the National Consumer Council’s briefing, which endorses that basic approach. It states:"““The present combination of complaints handling and policy advocacy has necessitated that resources are channelled into resolving complaints which has left advocacy under funded and less effective than it might be””." I think it has a point there and that the new structure in the Bill stands a real chance of improving matters. I will return to some of the NCC’s specific concerns about energy regulation a little later. I share the concerns of the hon. Member for Richmond Park (Susan Kramer), who was worried about the completeness of the package offered in the Bill. It aspires to establish a more all-embracing consumer body, yet the two specific functions being rolled into it are—as she rightly said, and perhaps coincidentally, perhaps not—the Department of Trade and Industry functions of postal services and energy, rather than the issues of huge concern to consumers, such as the rail sector, financial services, telecommunications and water, even though the latter is included in the Bill. Let us examine clause 24, particularly subsections (1) and (9), which deal with the provision of information to the council. Subsection (1) states:"““The Council may, by notice, require a person within subsection (3) to supply it with such information as is specified or described in the notice within such reasonable period as is so specified.””" Subsection (9) states that a ““designated regulator”” means"““the Gas and Electricity Markets Authority… the Postal Services Commission… the Water Services Regulation Authority… or other person prescribed by the Secretary of State by order””." I would have thought that some of the biggest issues brought to the proposed national consumer council are likely to be about rail fares, which are a matter of great controversy. I would like the Bill to give the National Consumer Council the confidence that it can expect the information to which it has a right to come from whatever body is responsible in the new railway environment—the Department for Transport, the train-operating companies or whatever. It would be good to see such a provision fleshed out in Committee to ensure that issues of concern to consumers are fully addressed by the new national consumer council. I happen to think that there is a case for change in the system of regulation as well as consumer protection. It is an interesting question—though I am not advocating it at present—to ask whether the postal regulator, Postcomm, should merge with the communications regulator, Ofcom. When a company is looking into what medium it wants to use to promote its services, it considers a range of options, including direct mail marketing, internet and television advertising, printed media advertising and across the whole spectrum. More than 90 per cent. of our post in the UK is now business post; only about 7 per cent. is stamped, with letters passing to and from individuals. There is a case for change, but we have to be very careful when we change something, because people get used to systems. They think they know how it works and suddenly the system is abandoned. As far as I can recall, Postcomm was set up only in the Postal Services Act 2000, so it is quite a new organisation. It had a bit of a bumpy start and many would say that it did not do a very good job to begin with, but it has now become very effective. Yet precisely at the moment it becomes effective, it is all change again. I shall deal in more detail later with the impact of the round of post office closures. I worry about change. I have been in the House for 15 years, during which time I have seen the health service change, change, change and change again in a great circle. It has come back roughly to where it began when I joined the House 15 years ago, with the same system of structures back in place. It is all very well for the experts who are part of the health sector, as they are able to understand the details, but for the poor individual constituent—never mind the Member of Parliament trying to keep up with it all—it poses a real challenge. I am nervous about changing the structure of regulation, as it might actually disempower rather than empower consumers, as they may have a lesser understanding—at least in the interim—of the systems put in place allegedly to protect them. We have an enormous array of watchdogs and ombudsmen, and the Bill does only a very limited amount of tidying up. We have the parliamentary ombudsman, various sector-specific ombudsmen, the Office of Fair Trading, the Financial Services Authority, Consumer Direct, the trading standards departments of our county councils and unitary authorities—the list goes on and on. The Bill will provide some greater coherence to the system, but not a great deal more. I am worried that in many ways we are not doing enough to rationalise the system. Much will depend on the effectiveness of Consumer Direct. I would like to deal with two specific issues in greater detail—energy and postal services. The Select Committee on Trade and Industry produced its third report of this Session on 6 March and it included some words of warning on Postwatch in the light of the Bill. It said:"““We understand that the likely timescale for the integration of Postwatch within this new single organisation is around mid-2008. Given the organisation’s role in the consultation process it would be unfortunate if this major reorganisation were to occur in the middle of the restructuring programme””—" the restructuring of post offices. It offers a recommendation for the Secretary of State, stating:"““We welcome the fact that the Secretary of State is ‘reflecting upon’ the likely timetable for the moving of Postwatch’s functions into the proposed single consumer body, and urge him to reflect quickly in order to prevent unnecessary uncertainty within Postwatch””—" a point also made by the hon. Member for Richmond Park and by my hon. Friend the Member for Rutland and Melton. I am very apprehensive indeed about the timing. The National Consumer Council’s answer is to make more rapid progress with the merger of the bodies to create the certainty. That may be another way forward, but I am clear that the uncertainty that is inevitably being suffered by experienced individuals in Postwatch is not good when we face a very important round of post office closures with very significant consequences for deprived communities—urban and rural alike—over the next 18 or so months. I would like to hear more in the Minister’s reply about the Government’s view of the impact on Postwatch of the changes in the Bill. I repeat what I said in an earlier intervention—that I do not think Postwatch handled the urban reinvention programme terribly well and that I do not think that Post Office Counters handled the programme terribly well either. The lessons have been learned and we now have an organisation that can genuinely help achieve the right balance in the closures, yet it is suddenly thrown into the maximum possible degree of uncertainty at precisely the time when its expertise is most needed. I am considerably concerned about that. There is also the question of reliance on an ombudsman service for aggrieved consumers and I intervened on the Minister for Trade in his opening remarks to make a point about it. We already have an energy ombudsman in place, up and running alongside the telecommunications ombudsman, run by the same company. I spoke to a charming gentleman in the corporate affairs department today. I apologise publicly for mistaking his accent as a Yorkshire one when it was a Lancashire one—a pretty serious crime—but I was impressed by what he told me about the working of the telecommunications and energy services regulator. As far as I am aware, there is still no postal services regulator in place, so it seems worrying that we are talking about abolishing the Postwatch function and putting more responsibility back on the mail companies to provide redress for consumers. There is no ultimate redress, so a move on the timing of the establishment of a postal services ombudsman would be welcome. Clause 12, which deals with the complaints of vulnerable consumers, relates to both the postal services and energy services aspects of the Bill. It is an important issue. The new national consumers council is empowered to act in the interests of vulnerable customers and defines what they are. The clause gives the new council the ultimate jurisdiction over what constitutes vulnerability. As far as I can recall, it is a test of the reasonableness of expecting the individual to take forward the complaint him or herself. On the face of it, that seems a reasonable provision, but who will decide whether the NCC has made the right judgment? If it is not particularly long on resources, as I expect it will not be—like the Minister and the Chancellor of the Exchequer, I am in favour of the efficient operation of public services—I fear that there will be real pressure to giving the benefit of the doubt always to not taking forward the complaint. We will need to know how we can challenge the NCC’s decision not to take forward a complaint on behalf of a vulnerable consumer. I briefly mentioned the question of location in an earlier intervention, so I will not labour that point. However, I repeat my view that if the people working for the various bodies affected by the Bill can have an early indication of where the new headquarters will be, they will be able to make a much more informed judgment about the impact on their personal lives and we will be much more likely to maximise our access to their services. The Government have strongly emphasised the need to create a"““stronger, cross-sectoral consumer advocacy body to address consumer issues that frequently arise across sectors of the economy.””" However, they also talk about the need to make sure that they have access to expertise. It will be good to hear exactly how that expertise will be protected within the new reformed system and, if it is going to be protected so robustly, what was the point of destroying the old bodies that offered that expertise in the first place? I am not saying that it is wrong to do so; I am just saying that the idea needs to be tested a little more thoroughly than it has been so far. I repeat the point I made earlier about Postwatch having improved significantly. The review carried out in March 2006 by PricewaterhouseCoopers said that the body had been effective in being assertive in challenging the Royal Mail Group, as a monopolistic supplier, which it is. The Royal Mail has some interesting ideas on the stocks at present—for example, zonal pricing for business users of mail—that raise fundamental questions about the universal service obligation and so on. Competition is now beginning to develop in the postal services sector, with the Government playing their part in taking business away from the Royal Mail Group. For example, the Department for Work and Pensions has taken its business and put it with a competitor to the Royal Mail Group. There are now big issues in the postal market, and I am not saying that that is wrong. Competition is a good thing. However, it seems a little worrying to be doing away with Postwatch and risking losing its expertise at precisely this moment. I think that Members will have received a brief from WWAV Rapp Collins, which claims—I have no reason to dispute its claim—that it is"““Europe’s largest direct marketing services provider and creates marketing campaigns using all media including direct mail””." It boasts that its clients include"““the NSPCC, WWF, Cancer Research UK, Guide Dogs for the Blind, Unicef, Plan UK and the Blue Cross.””" WWAV Rapp Collins has big concerns about the proposal for zonal pricing. It says:"““Fundamentally, there has never been a greater need for an organisation with the expertise and authority of PostWatch. It will be to the severe detriment of all users of mail if it disappears into a watered down umbrella organisation.””" This is a difficult and challenging time to be abolishing Postwatch.