Consumers, Estate Agents and Redress Bill [Lords]

I beg to move amendment No. 9, page 26, line 33, at end insert— ‘(10) When making regulations under this section the regulator must have regard to— (a) the needs of both domestic and non-domestic consumers; and (b) such principles as— (i) in the opinion of the regulator constitute generally accepted principles of best practice in relation to handling of consumer complaints, and (ii) it is reasonable to regard as applicable to these regulations.’. 5 July 2007 : Column 1147 The amendment has been tabled in my name and that of my hon. Friend the Member for Richmond Park (Susan Kramer). We have bundled two issues into this amendment: the application of the regulations to small enterprises, and the principle of best practice in the handling of complaints. Paragraph (a) is relevant to small businesses. Although it is clear that the general definition of ““consumer”” in clause 3 includes businesses—or non-domestic consumers, which could include small voluntary groups, and so on—there is still a gap in clause 43. Subsections (2) and (3) say that complaint-handling standards can be restricted so that they do not cover all relevant customers. In other words, Ofgem, or whoever, could say that these regulations apply only to natural persons. The amendment seeks to require their interests to be considered without reopening the wider business/consumer debate. The Minister might say that this argument is irrelevant because clause 44 includes requirements to consult, but that is not quite right. The requirement to consult applies only to those likely to be affected by the new regulations. If the complaint-handling standards apply only to private individuals, one would have to consult people representing those consumers—the energy supply companies and so on—but one would not necessarily have to consult small businesses, because they would arguably not be affected by the regulations. The standard defence at this point is that businesses do not necessarily need protection as consumers. Indeed, consumers often need protecting from businesses. However, that argument is flawed. Why should a village shop or a charity have to be an expert in all the services that they consume? Ed Wilson of Energywatch makes the point that redress is available for small businesses and other non-domestic consumers in telecoms but not in energy. The Bill provides an opportunity to improve the situation for those consumers. On a related point that goes a little beyond the amendment’s scope, it seems from clause 49(3)(b) that business or other non-domestic consumers will have access to redress schemes. Lord Truscott confirmed that in the Grand Committee in the Lords on 9 January. He also said that business suppliers will not have to join redress schemes. I would be grateful if the Minister clarified that and the suggestion that the new Department for Business, Enterprise and Regulatory Reform is minded to include businesses with 10 employees or fewer within the redress provisions. Approximately 96 per cent. of small businesses would be covered by that and it would be a welcome step. It does not appear to require any change to the text. Is it the Government’s intention to include other non-domestic consumers such as those that I outlined? On complaint-handling standards, the other part of the amendment would ensure that the regulations were governed by ““principles of best practice””, the language used in clause 49 for redress schemes. That matters because clause 49(1) was toughened up to say that the regulator ““must”” have regard to those, in the face of objections from Ofgem. It therefore matters that the regulations are as good and effective as they can possibly be; otherwise we might end up with weak standards. We would argue that it is even more 5 July 2007 : Column 1148 important to get best practice standards for complaint handling than it is for redress schemes as we are relying on the energy companies to fill the gap left by the abolition of Energywatch and so on. Part of the reason for the difference is the series of concessions from the Government during the course of proceedings on the Bill. Those were very welcome. The language on redress schemes in clause 49 was upgraded from ““good”” to ““best practice”” in the Grand Committee in the Lords, and in Committee in the Commons the Government upgraded the requirements for the regulator to prescribe standards for complaint handling from a ““may”” to a ““must””. In a speech that the then Minister for Trade, the right hon. Member for Makerfield (Mr. McCartney), made to the National Consumer Council on 21 May, he said that he would ““not settle until we have a consumer regime which is the best—not just amongst the best””. It is difficult to square that with not wanting best practice to be the standard for complaint handling. I therefore urge the Government to accept the amendment.