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Public Bodies (Abolition of the National Consumer Council and Transfer of the Office of Fair Trading’s Functions in relation to Estate Agents etc) Order 2014 — Motion to Approve

– in the House of Lords at 5:57 pm on 11th March 2014.

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Moved by Viscount Younger of Leckie

That the draft order laid before the House on 5 December 2013 be approved.

Relevant documents: 17th Report from the Joint Committee on Statutory Instruments, 26th Report from the Secondary Legislation Scrutiny Committee, considered in Grand Committee on 24 February.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie The Parliamentary Under-Secretary of State for Business, Innovation and Skills 6:10 pm, 11th March 2014

My Lords, this order delivers better, more effective consumer advocacy and more joined-up supervision of the estate agency regime. It marks the final step in the Government’s three-year programme of consumer landscape improvements, and its merits were debated at some length in Committee on 24 February. I will now once more set out for your Lordships why these changes are sensible, necessary and in the very best interests of the consumer.

Since 2011 we have streamlined and brought coherence to a landscape that was previously confusing and duplicative, and therefore inefficient. We have made it easier for consumers to understand where they need to go to get help and have given enforcers, advocates, and advice providers the tools that they need to do their new jobs. On 24 February the noble Lord, Lord Whitty, accused the Government of making these changes solely to save money or abolish quangos. This is simply not true. We are driven by a desire to improve the offer for the consumer. That is why we have created a landscape in which it is much clearer who is responsible for what, and in which there is much better co-ordination between consumer bodies and enforcers. This is markedly better than the previous arrangements because previously the consumer could have tried to phone lots of different organisations—their local council, a regional trading standards team, their nearby Citizens Advice bureau or the Office of Fair Trading—but now they need only ring one phone number, the single Citizens Advice Consumer Service helpline, to raise a concern, whether it is about their rights, a problem about a good purchased or a service performed or, if unsure, how best to take forward a complaint.

We have established a more strategic approach to consumer enforcement, education and empowerment through the creation of the Consumer Protection Partnership. Resources are now focused where they are most needed and can have most impact because key partners within the landscape now collaborate to identify the most pressing risks to consumers and work together to eliminate this harm. We are already seeing the success from this approach. By working together to raise awareness of used-car scams during National Consumer Week last year, for example, members of the CPP reached significantly more consumers than if each had worked in isolation. So that is a good reason for change.

We have also acted to close a potential enforcement gap by establishing the National Trading Standards Board and Trading Standards Scotland. We are ensuring that complex criminal activity can be more effectively tackled by trading standards because these bodies co-ordinate and prioritise national and cross-local-authority-boundary enforcement.

I turn to the specifics of this order, which has three distinct purposes: to abolish the National Consumer Council and transfer its relevant functions to Citizens Advice, Citizens Advice Scotland and the General Consumer Council for Northern Ireland; to transfer the Office of Fair Trading’s estate agency functions to the Commissioners of Her Majesty’s Revenue and Customs and Powys Trading Standards; and to transfer residual OFT functions relating to its former consumer advice scheme to Citizens Advice and Citizens Advice Scotland. The scheme itself was transferred to the Citizens Advice Services on 1 April 2012.

One or two noble Lords have already expressed sadness at the abolition of the National Consumer Council. As I said on 24 February, I personally recognise the great contribution that that body has made to consumer issues over many years and the fact that a number of your Lordships have played no small part in contributing to that, including the noble Lord, Lord Whitty, the noble Baroness, Lady Hayter, and my noble friend Lady Oppenheim-Barnes. However, no organisation is above change and improvement, and I firmly believe that the NCC’s strong track record will be enhanced when it joins the Citizens Advice service as a result of this order.

Citizens Advice will be established as the publicly funded advocate for consumers, bringing together its existing wealth of knowledge of the problems faced by everyday consumers and Consumer Focus’s technical knowledge on the regulated gas, electricity and postal services industries. This change will create an even stronger voice for consumers, challenging public policy-making more effectively. This will mean better consumer outcomes because the issues that they are complaining about, such as confusing energy contracts, misleading prices and aggressive sales practices, will now directly influence consumer protection policy.

The transfer of the Consumer Futures function is a testament to this Government’s confidence in the major role that Citizens Advice plays in our civil society. We firmly believe, contrary to some claims in the other place, that the leadership of Citizens Advice is best placed to deliver the Consumer Futures functions alongside its bureaux and helpline services. In 2012-13 the Citizens Advice consumer helpline dealt with almost 837,000 new cases, while 91% of consumers reported that they would use the service again and 60% said that they could not have resolved the problem without the help and advice that they received. So there is evidence that change both has been necessary and is working.

Last week the noble Lord, Lord Whitty, expressed concern about funding for Citizens Advice, implying that it would have insufficient resources to deliver these new functions. I can confirm that Citizens Advice will of course continue to receive the same amount of ring-fenced funding, from an industry levy, to allow it to enhance the delivery of this important work.

These changes will also create a stronger link between national enforcement of the Estate Agents Act 1979 and local intelligence from the trading standards community by appointing a lead enforcement authority to carry out the work on behalf of all trading standards authorities. This will be overseen by the NTSB, ensuring a strong connection between local enforcement trends and national cases.

This lead authority model has been extremely effective in delivering other trading standards services. For example, fraud worth more than £145 million has been tackled by the Scambusters and the Illegal Money Lending Team in the past 18 months. The Illegal Money Lending Team is a trading standards unit based in Birmingham City Council, but it provides an England-wide service and has received plaudits for its successes. The funds for policing the UK estate agency market will be transferred from the OFT to Powys County Council via the NTSB’s enforcement grant, and ring-fenced to ensure that it is used for the purpose intended.

When the order was debated in the other place, as well as in the previous debate in the Lords on 24 February, there was some concern about the process for appealing against warning and prohibition orders issued by Powys County Council. I confirm that the Government are not proposing any changes to the estate agents appeal process under the Estate Agents Act 1979 through this order. An appeal can be made to the First-tier Tribunal (Estate Agents), which forms part of the General Regulatory Chamber of the First-tier Tribunal. This is the same appeals process as applies to dozens of areas of civil law. I am pleased to report that Powys County Council has written to the noble Baroness, Lady Hayter, to clarify this point. I hope that consequently the noble Baroness is reassured on this issue.

Questions have also been asked, both here and in the other place, about whether Powys County Council has the capability to undertake its new lead enforcement role. When the decision was made to transfer the OFT’s powers to a single trading standards authority, an open competition was run to select the local authority best placed to discharge the functions. All England and Wales local authorities were invited to bid for the work. Six bids were submitted, all of which were scrutinised by a panel that was chaired by the noble Lord, Lord Harris, and involved senior representatives from trading standards. This panel judged Powys to be the local authority best placed to provide the function and I have every confidence in the ability of its trading standards officers to carry out the work effectively.

On 24 February the noble Baroness, Lady Hayter, also expressed concern about accountability for and monitoring of these functions within our new consumer landscape. Citizens Advice and Citizens Advice Scotland both have well established grant funding relationships with my department and are already fully accountable for the use of public and levy funding through conditions placed in their annual grant letter.

Powys County Council will also be accountable to my department via the annual grant letter process. Powys will report to the NTSB as the co-ordinator of trading standards and the NTSB will be accountable to BIS, my department, for delivery of that work. Accountability for the functions under the money-laundering regulations is discharged through HMRC cost controls. I hope that noble Lords will agree that these arrangements are clear and robust.

Another issue raised on 24 February by the noble Lord, Lord Harris, and the noble Baroness, Lady Hayter, concerned the approval processes for estate agent and letting agent redress schemes. As noble Lords will no doubt be aware, the Department for Communities and Local Government is responsible for introducing redress schemes for the letting and property management sector.

The procedure for approving redress schemes in both the estate agent and letting agent sectors are outside the scope of this public bodies order, which deals only with the transfer of responsibility for approving the estate agents’ scheme from the OFT to Powys County Council. However, I can confirm that officials from BIS and the OFT have been in contact with their colleagues in DCLG to help them take account of the lessons learnt from regulating estate agents when designing the new letting and property management redress scheme. Although the two sectors may have many different characteristics, the process for mandating letting and property management agents will mirror that for estate agents.

This order also creates efficiencies by transferring responsibility for oversight of estate agents’ compliance with the money-laundering regulations to HMRC. This capitalises on HMRC’s expertise in supervising other sectors for the purpose of money laundering and creates opportunities to exploit synergies to uncover other forms of non-compliance, which will give the taxpayer extra value for money. My understanding is that the Opposition welcome this change; indeed, at the debate on 24 February the noble Baroness, Lady Hayter, said herself at column GC 301, “this bit is brilliant”.

Section 8(1) of the Public Bodies Act provides that Ministers may make an order only where they consider that it serves the purpose of improving the exercise of public functions. Such orders must have regard to efficiency, effectiveness, economy and securing appropriate accountability to Ministers. The changes I am proposing meet all these criteria. I remind your Lordships that the Secondary Legislation Scrutiny Committee supported our view that we have thoroughly met all the relevant requirements. Indeed, the Committee was satisfied enough to invoke the 40-day, rather than 60-day, scrutiny process.

In conclusion, the changes made by this order complete the Government’s programme of improvement to the consumer landscape. In abolishing the National Consumer Council and transferring relevant functions to Citizens Advice, and transferring the OFT’s estate agency functions to HMRC and Powys County Council, this order puts the finishing touches to a landscape that will work more efficiently and effectively for the public.

I commend the order to the House.

Amendment to the Motion

Moved by Baroness Hayter of Kentish Town

As an amendment to the above Motion, at end insert “but this House regrets that the draft Order fails to produce a coherent framework or single voice to protect consumers; fails to harmonise redress for estate and letting agents; and fails to produce adequate parliamentary or ministerial accountability for the new framework”.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Cabinet Office)

My Lords, contrary to what has been said, the decision to abolish the NCC was taken to implement the coalition’s promise in the coalition agreement to,

“reduce the number and cost of quangos”.

It was not taken in the interest of consumers, nor after any criticism of the NCC. Indeed, the NCC’s work has been widely recognised in the UK and beyond.

The Government said that they wanted to “simplify” the architecture of consumer representation; but they set about dismantling the NCC, and merging the OFT with the Competition Commission, before looking at the full range of responsibilities of each of those bodies. In fact, there was precious little overlap between the work of Citizens Advice and the NCC, while some of the OFT’s work—particularly on codes, anti-money laundering and redress—really does not sit happily with the Competition Commission.

The Government have now discovered this. They have replaced the NCC and the OFT with the CMA, CA, CAS, CCNI, SCOTSS, TSI, NTSB, PCC, CPP and HMRC. To help Hansard and others, that alphabetical soup stands for: Competition and Markets Authority; Citizens Advice; Citizens Advice Scotland; Consumer Council for Northern Ireland; Trading Standards in Scotland; Trading Standards Institute; National Trading Standards Board; Powys County Council; Consumer Protection Partnership; and HM Revenue and Customs. For some code approval there may also be the PSA—the Professional Standards Authority. That is hardly a clear and coherent system, either for business or for consumers. Our own Secondary Legislation Scrutiny Committee actually called for greater clarity for consumers about this new landscape. This mish-mash is not clarity.

Furthermore, none of those bodies has any direct representation from consumers. None of them has a consumer panel, nor any requirement to include someone with a background in consumer representation, despite our endeavours to ensure that for the CMA during the passage of the Bill. My concern might be driven by the need for any organisation funded to protect consumers to have some accountability to consumers; but I know that this House, quite rightly, has a broader concern about accountability to Parliament and to Ministers.

Indeed, the test of the Public Bodies Act 2011 is that measures should lead to a more efficient, effective and appropriate level of accountability to Ministers. This order fails that test.

I will take the example of estate agents, which has been mentioned already. For some years they have had to belong to a redress scheme. The OFT approved such redress schemes and could ban estate agents who broke the rules. This responsibility for redress schemes—and through them for 25,000 estate agents across England and Wales—will move to Powys County Council, which is an authority responsible to its Welsh electorate. However, for estate agents in England and Wales the elected authority of Powys will be accountable to BIS; it will report to the National Trading Standards Board in its role as co-ordinator; and it will be responsible to the Trading Standards Institute for the administration of its grant. Our Secondary Legislation Scrutiny Committee raised serious concerns about how Powys could reconcile its accountability to several different bodies. The Government have yet to answer those concerns.

Furthermore, as the House may recall and as the Minister mentioned, the ERR Act now also requires letting agents to belong to a redress scheme. Obviously, the two existing OFT-approved estate agent redress schemes will apply to be approved for letting agents. Will it be the same body—namely, Powys—that will approve redress schemes for letting agents? No—that would be far too simple. The Department for Communities and Local Government is keeping that to itself and it will be handled quite differently, even if lessons are learnt.

Not only that, but there is a risk that Scotland, Wales and individual local authorities in England will all have different approval schemes for redress schemes for the rental sector, with a consequent lack of consistency for landlords and tenants. Landlords and agents with property in more than one area could have varying rules to apply in different parts of the country. That does not just sound like madness; it is madness. At the moment we have just two redress schemes handling estate agent complaints. It would have been so sensible for them to handle letting agent complaints, given that virtually every estate agent is also a letting agent.

Instead of that, the two existing schemes will have to seek authorisations from two or more different bodies, no doubt on slightly different criteria and over slightly different timescales, and report back annually to any number of different authorising bodies. Is this getting rid of red tape for redress schemes? Will it help consumers if there are different arrangements for handling complaints about buying as opposed to renting property, or if they are dependent on where people happen to live? The answers are, I think, obvious. Why on earth can these two almost identical redress mechanisms not be harmonised?

The choice of a single local authority—Powys—to undertake this national task raises some serious questions. The original bid to the NTSB was from Powys and Anglesey. The latter was, among other things, to have heard appeals from estate agents dissatisfied with a Powys ruling. We have been told, and I have been reassured, that that is no longer the case as the First-tier Tribunal will now hear appeals. Today, I received a letter from the Minister in the other House saying that Anglesey will not have any role, and I hear from Powys—which, I think, has still failed to set a budget—that it is still looking at how to set up the system, although I gather that it now has one officer seconded to the OFT to find out how on earth to do it.

However, despite the assurance about Anglesey, today I got a letter from Jenny Willott, the Minister in the other House, saying that Anglesey is no longer to have any part in this procedure, despite having been on the original bid. Later this afternoon, I heard that an officer from Anglesey was in London today, finalising its role in the oversight of the redress schemes. Perhaps the Minister will clarify this for us. We need clarification before we agree this order. Is it now simply Powys that is due to oversee this or is it Powys and Anglesey, to which the committee chaired by my noble friend awarded the contract?

I note that the Minister said that he had confidence in this set-up. It is so important to house buyers that the complaints system should work. If he has that confidence, perhaps he will explain what exactly the role is and whether anyone is clear that Powys knows what it is doing. When my honourable friend in the other House asked whether we could see all the documents on the bid in time for this evening’s debate, the Minister’s colleague in the other House said that it was an FoI request and the documents would not be available until next month—so we have not been able to have the full bid papers and documents pertinent to the consideration of this order for today’s debate. Surely we should know the exact arrangements before we agree the order.

I turn to the transfer to Citizens Advice of the NCC’s policy work and statutory information-gathering powers. I should first say that, the merger having happened, we clearly wish Citizens Advice and Citizens Advice Scotland well with their remit. Citizens Advice Scotland has sent me an impressive list of its consumer education, advice and campaign work. We hope that the Government will fund both of them properly and we look forward to them working to enhance consumer protection. However, we remain concerned about European consumer policy, non-functioning markets, vulnerable consumers and future input into legislative work. Traditionally, the NCC was very active on longer-term policies, and I fear that without a single powerful consumer voice to shape public policy, the consumer interest may be weakened.

Furthermore, there is the issue of the accountability to Ministers of an independent charity, rightly and properly overseen and directed by its charitable trustees, for the use of public money and statutory powers. For example, what would happen should Citizens Advice, driven by the inexhaustible demands of desperate clients, underuse its powers simply by force of circumstance? We argued unsuccessfully during the ERR Bill that the CMA should have reserve powers to ensure that sufficient attention was paid to this new element of the CA’s remit and to ensure that it linked sufficiently with all the other players, such as trading standards, Powys and TSI, but we did not get it, so it remains unclear what would happen should Citizens

Advice fall down on this part of consumer protection. I do not suggest it will, but who would know? Who would check? Certainly not consumers, as they no longer have an independent voice.

Vincent Cable’s letter of 17 January to the noble Lord, Lord Goodlad, said that the Consumer Affairs Minister will hold Citizens Advice to account for the effective delivery of these functions on behalf of consumers—but how will that happen? Will it be simply through the terms of the grant? How will the Minister hear consumer views, and what action could she take if Citizens Advice failed to prioritise, for example, users of government-provided services? How could Parliament exercise any oversight on this?

There is also the issue of whether Citizens Advice will remain an independent charity, because the ONS has said that because it is spending public money, it is in fact now a public body. Has Citizens Advice become a quango? Therefore, have we gone through all this to get rid of a quango called the NCC and see Citizens Advice turned into a quango—so we have not reduced even by one the tally that the Government wanted to get rid of?

Much consumer law is made in Europe, and we worry whether the new architecture will ensure the continuation of the European work undertaken so effectively by the NCC. There is no mention of the EU in the explanatory document, or in the Secondary Legislation Scrutiny Committee report. Who will influence and help shape the rules coming out of Brussels on behalf of UK consumers?

The decision to wind up the NCC having been taken, we want the new system to work as well as it can for consumers. Our regret is that this order implements an overhasty, ill thought-out change caused simply by the Government wanting to reduce the number of quangos, and that it fails to produce a coherent framework or a single voice to protect consumers. It fails to harmonise redress for estate agents and letting agents, and it fails to produce adequate parliamentary or ministerial accountability for the new framework. I beg to move.

Photo of Baroness Oppenheim-Barnes Baroness Oppenheim-Barnes Conservative 6:30 pm, 11th March 2014

My Lords, I quite naturally have a great interest in this debate as not the mother or even the grandmother but probably the great-grandmother by now of the introduction of the very first National Consumer Council. My noble and learned friend Lord Howe was the Minister in charge and I think the first chairman was John Methven. The next chairman was the noble Lord, Lord Borrie. I had just come to office as a Minister of State and to establish my neutrality all my senior officials said, “You won’t want to reappoint him. He’s a supporter of the Labour Party”. I said, “I want to reappoint him because he’s the best for the job and has always been the best for the job”. Right up to the very end, he was the best for the job. That is just establishing that I am not making very much in the way of party political points. However, I would be much more sympathetic to what the noble Baroness has said today if not for the fact that during the Committee stage of the Enterprise and Regulatory Reform Bill I had a strong amendment to take out the provision that virtually ended the life of the Office of Fair Trading and another for the Monopolies

Commission but I received no support whatever from the party opposite. If I had received support—meaningful support—I would have been quite willing to table amendments at Third Reading that would have had a great deal more importance and significance. After all the things that the noble Baroness has said, I regret very much that I did not get that support at that time.

When one looks back over the years, when we started the Office of Fair Trading and when the Monopolies Commission existed and then the NCC—of which I subsequently became chairman—things were done in great detail for the benefit of consumers and to a very high standard by both those organisations, and no one is sure what exactly is replacing them. It looks extremely like just another government department, which is not exactly what we would have accepted as a replacement that would be as available and as important as those two bodies. They have had a very quick demise, considering the date of the Bill and what was then going to happen. I regret this very much indeed. However, I say on behalf of the Government and also on behalf of the Conservative Party that we have been the leaders in all matters of consumer protection. We did not have junior Ministers; we had Ministers of State, with their main responsibility being consumer affairs. We did not have secondary Ministers. For the whole 13 years that I was in your Lordships’ House in opposition, we did not have anything very important and the only Minister was a very junior Minister, who had other things in his portfolio—which I think included the little matter of Northern Ireland.

I feel that the noble Baroness has to be fair in these matters and explain why I received no support. We might have had a different outcome or influenced the Government in what they were going to do next. Now we have a big, new Consumer Rights Bill going through the other place, which I know the noble Baroness supports, as do I. We might want to tweak it here and there—indeed, that is quite likely—but it establishes that this party and this Government are not anti-consumer. As a past chairman of the NCC, I understand her concerns and I sympathise. I want to give the Government a chance to take note of what we are saying and of what we said in Committee and at Third Reading, but there are still some areas that are not clear and not satisfactory. It is not just the voice or anything of that nature but how it is going to work, which is the most important thing about it.

Therefore, I have a great deal of sympathy with this Motion of Regret. However, I still would like somebody on the Opposition Front Bench to give the right amount of praise to Conservative Governments over the years for what they have done for consumers and for the trails that they blazed, and to welcome the new consumer legislation, which is still in the other place but will be in your Lordships’ House, I believe, in the autumn. Those are my views. They are mixed, but the principle of the Motion is one with which I have to sympathise.

Photo of Lord Borrie Lord Borrie Labour 6:45 pm, 11th March 2014

My Lords, my noble friend Lady Hayter of Kentish Town gave a brilliant exposé and critique of the Government’s approach on this vital matter of organisations and their relationship with each other in the order. I want to concentrate on two matters. One is the National Consumer Council, which is to be abolished by the order; I regard that as a matter of regret. The other is concerned with estate agents. What I want to say about the National Consumer Council is, if you like, old stuff. The Government have heard not just from this side of the House but also from the other side, from people such as the noble Baroness, Lady Oppenheim-Barnes, that, in its day, the National Consumer Council, led by such as herself and the noble Baroness, Lady Wilcox, did a distinguished job with dedicated staff, reasonably well resourced. It did a great deal of research on behalf of the consumer with no ties of any other kind that would have spoilt that.

Being in charge of the Office of Fair Trading for many years, I remember that the pieces of research done by the National Consumer Council were extremely valuable to us. They were thorough and done from a consumer angle that enabled one to counter the other angles that the Government were always getting from the CBI, the Institute of Directors and so on. There needed to be a consumer voice, and the NCC gave it.

Where we have got to at the moment is that we have an order to abolish the National Consumer Council. The Government have made what efforts they can to pass some of its responsibilities on to other bodies. Citizens Advice has long had devoted workers in the field of advice and education, not just on consumer matters but on all sorts of other personal matters of welfare, social security and so on. I do not denigrate the work of the citizens advice bureaux or say that things should not be transferred to them from other bodies. However, the National Consumer Council provided more than simply advice and education, and we are losing something. The Government have never really explained who is to do it now because the other bodies referred to—the co-ordinating bodies such as the National Trading Standards Board, well chaired by my noble friend Lord Harris of Haringey—have other responsibilities. They do not have time, in many cases, to do lengthy research to help government departments and the Office of Fair Trading. Indeed, the Office of Fair Trading is also to disappear in three weeks’ time—on 1 April, I believe, which seems a very suitable date. It is to merge with the Competition Commission to form the Competition and Markets Authority. We have talked about that in the past and I, for one, am reasonably satisfied that what has been achieved in bringing those two bodies together will give them a good start on 1 April to progress their work. However, I still do not understand, and I seriously regret, the abolition of the National Consumer Council.

As far as estate agents are concerned, Members of the House will know that the Estate Agents Act 1979 was a very substantial Act dealing with dishonesty and other breaches of criminal law that required some attention; perhaps that attention should take the form of banning the estate agent from continuing to work as such. Prior to the banning order there would be warnings and so on. The Office of Fair Trading has done that throughout the existence of the Estate Agents Act.

Once the Office of Fair Trading had disappeared, as was intended by the Government through the order now before us, who was to do the work of enforcement, banning estate agents when they had proved themselves to be dishonest and ought not to practice as such any longer? The answer is Powys trading standards department, or Powys Council. I have nothing against Powys; I do not even need to look at an atlas to know where it is. It is, none the less, a smallish area—which happens to be in Wales rather than in England. I have no doubt that my noble friend Lord Harris of Haringey, who may speak in this debate, will say that a competitive tendering process was brought about by the Government, which many county councils responded to, and Powys turned out to be the best. I did not know the various detailed points, which seem to be continuing to change even today, meaning that the order before us is not finally complete. Those matters mainly concern Anglesey —I also happen to know where that is, and I know that it does not border on Powys. However, there we are; there might be some mutual arrangement between Anglesey and another county council.

Since there was a competitive tendering bid, I dare say that it has been clearly established, according to those who examined the matter, that Powys was better than any of the other applicants. That does not mean that it is better than the Office of Fair Trading has been over the past 20 years, or however long it is. Neither does it offer any help to the Minister in suggesting that it is a suitable recipient of the very considerable banning order powers that the Office of Fair Trading has had and used from time to time over all these years. However, the Government have not had much chance of doing anything else. No doubt they searched around to find a remedy, because there are no other national bodies they could latch on to, unless possibly they wanted to overwork the Competition and Markets Authority and give it something entirely different from competition. It is not very satisfactory. If Powys does a good job, which it may well, why does it then have to go through another process of competitive tender in three years’ time? Three years is hardly enough time to get established, let alone to be ready to fight one’s corner against competitors.

The whole Bill was ill thought-out from the beginning, as my noble friend Lady Hayter indicated. It has sorted some things out as regards Citizens Advice and the work of trading standards officers in different departments coming together on a national basis to work across the boundaries. That has gone on, and it is good. However, the whole episode has led to the unsatisfactory order which is before us today. If we pass it, we do so with my regrets.

Photo of Lord Whitty Lord Whitty Labour

My Lords, I support the amendment to the Motion in the name of my noble friend Lady Hayter and her concerns about this order.

We are obviously at the final stage of this process, and the Government have determined for some time to transfer many of these functions as set out in the order. I make it clear that I hope that the new arrangements will deliver for consumers. I declare a past interest as the first chair of Consumer Focus, which was the expanded National Consumer Council, over the past four years, and as a vice-president of the

Trading Standards Institute. As this is the final stage of the dismantling of Consumer Focus, which was only established under the 2007 Act, it provides for the responsibility for those issues which still remain with Consumer Futures, the successor of Consumer Focus, namely the regulatory area of energy and post.

I rehearsed at some length in Committee—I do not intend to repeat it entirely—why I felt that the coalition Government had missed a major opportunity of doing what the Minister claims this order does: namely, to create a comprehensive consumer advocacy organisation which is clear to consumers, to government and to business. When the new Government came in they rightly identified the complexity of the existing consumer landscape and the need to simplify it. I still believe that it was the intention of BIS Ministers—the noble Lord’s predecessors—to carry out that comprehensive reorganisation. However, that scheme was hijacked by the Cabinet Office, the desire for a cull of the quangos, and the consequent timetable of the passage of the Public Bodies Bill, and undermined by the squeeze on public expenditure.

It is now three years since the Public Bodies Act was passed. I am afraid that in that time there has been some salami-slicing of the government support for consumer advocacy and of the money available. That has not just hit Consumer Focus but some of the other bodies as well. Passenger Focus, which deals with passenger transport, has had its budget significantly cut, the Consumer Panel within Ofcom that covers communications has virtually disappeared, and there has been some narrowing of the role of the Consumer Panel in what was the Financial Services Authority and is now the FCA. Therefore there is a bit of a pattern. However, at least as far as the future of Consumer Focus’s responsibilities is concerned, we know that very soon Citizens Advice and Citizens Advice Scotland will take on those final responsibilities. That it would have been better to have had a comprehensive organisation which they could take over before transfer into the third sector is, in a sense, water under the bridge. However, we therefore still have a partial coverage and not the fully comprehensive system which the Minister was claiming we have.

As regards Citizens Advice, I do not think there are any noble Lords who do not have huge respect for its work. In one sense, to broaden its policy and advocacy function will turn it into an even more effective body. However, there have to be some anxieties about both its capacity and its resources. Contrary to what the Minister has said, the resources transferred from the previous Consumer Focus structure are significantly less than that which existed within Consumer Focus. Fewer than half the staff posts will be transferred. Although the level of funding for the energy and post side will more or less be kept up, the area to which my noble friend Lady Hayter referred, which is effectively the traditional area of the NCC—consumer interest within the non-regulated markets, the whole area of private services, goods, shopping, financial services, digital affairs and so forth—has been squeezed the most.

In its relatively short life, Consumer Focus produced 300 reports, 500 responses to government consultations, and 200 pieces of research work. That requires significant resources and concentration of effort. In the area of non-post and non-energy responsibilities, that will be severely cut. To take one example, reports of Consumer Focus—or the NCC as for simplicity we had better call it—on cash ISAs and on travel money indirectly recovered £300 million for consumers.

The Minister has claimed in Committee, in a letter to me and again this evening that the resources will be the same: that the money from Consumer Focus for non-energy non-post work has transferred to Citizens Advice and Citizens Advice Scotland. Not so. Three years ago, that figure was £5 million a year. The £2.7 million to which the Minister has referred is therefore a cut of nearly half over the level of activity for traditional NCC work. We have therefore lost a significant part of the capacity to assess consumer detriment across all these fields, including the general field of consumer law and in particular, the area of European law in which Consumer Focus and the NCC were so prominent.

There are some parts of this order that I welcome. One of them is the transfer of powers which Consumer Focus had under the Consumers, Estate Agents and Redress Act 2007 to Citizens Advice. The Government were initially somewhat hesitant about that. It is important that Citizens Advice inherit those powers to require information from any provider of goods and services. As my noble friend has said, one of the consequences of this appears to be that the ONS has reclassified Citizens Advice as a quasi-quango, part of the public sector—so much for getting rid of quangos. Whatever we call it, I hope that does not mean that the independence of Citizens Advice as a charity and its ability to campaign for citizens and for consumer rights—if necessary against government policy—is thereby constrained. I hope that Citizens Advice can take on this wider role, and that in a few years’ time we shall see that organisation develop at least as strong a role in general consumer rights and advocacy as predecessor organisations. Regrettably it is somewhat hobbled in the way in which we are beginning this, but I wish it well.

Briefly, I have two other points. One transfer is that of the responsibilities for post to the Consumer Council for Northern Ireland. That should have been done five years ago. I am glad that the Government have eventually done it because it clarifies the position in Northern Ireland.

The Consumer Council for Northern Ireland is a comprehensive body. It covers all the regulated sectors: transport and water as well as energy and now post. It is also a complaints body and a consumer education body. It is exactly the kind of model that Ministers were after in the first place and that I should have liked to see here in Great Britain. It is therefore regrettable that some of the enthusiasm for culling public bodies has begun to infect Northern Ireland colleagues and that they are now looking at the Consumer Council for Northern Ireland with a view to curtailing, transferring or dismantling all or some of its functions. I hope that the Minister’s opposite numbers in Northern Ireland do not go down that road, because it is a very important body.

Finally, on trading standards, concerns have already been expressed by my noble friends Lord Borrie and Lady Hayter. There is an argument for devolving what were the functions of the OFT to local authorities and having a lead for local authorities in these areas, but that is very difficult to attain when there is such a squeeze on trading standards resources across the country. My noble friend Lord Harris reported to Committee—I hope he is going to repeat it in a moment—that there is effectively a 40% cut on the funding of trading standards in England over this period. Against that, it is difficult to see how trading standards organisations at local authority level are going to step up to carrying out the kind of job that the OFT has done in the past. I hope that we are wrong, but it is a bit of a diversion from some of the traditional role of local authorities. We are stepping into the unknown, whereas it was clear how important the OFT role in this field was.

To take one example in relation to Powys, budget discussions are continuing with Powys, but I understand that in parallel with taking on this enforcement responsibility, the likelihood is that Powys will cut its grant to Citizens Advice by at least half and possibly completely. That indicates the degree of squeeze there is on consumer activity at local authority level. At present all fronts are suffering cuts.

The Government are doing many positive things, and I join the noble Baroness, Lady Oppenheim-Barnes, not only in her defence of the history of the NCC but also in welcoming, at least in general terms, the consumer Bill that has been introduced in another place. I hope that we are moving into a more positive era. However, it is difficult to do this when capacity and resources are being squeezed on both the consumer advocacy and the enforcement front.

Photo of Lord Berkeley of Knighton Lord Berkeley of Knighton Crossbench 7:00 pm, 11th March 2014

My Lords, I shall help the noble Lord, Lord Borrie, on one small point. Being Lord Berkeley of Knighton, I reside in Powys and have had considerable dealings with Powys County Council and indeed the trading officer. I was slightly pricked by the noble Lord’s comments, and should like to inform him that Powys is quite a long way from Anglesey. Having said that, I feel that I am not expert enough to comment on the central issue, but in my experience Powys is an exemplary council. In my dealings with it and with its trading standards office I have experienced great efficiency and courtesy.

Photo of Lord Harris of Haringey Lord Harris of Haringey Labour

My Lords, I declare an interest as chair of the National Trading Standards Board, which a number of noble Lords have mentioned. I am pleased to take part in a debate where so many distinguished Members of your Lordships’ House who have played a significant and major role in the development of consumer affairs and consumer protection in this country have participated: the noble Baroness, Lady Oppenheim-Barnes, and my noble friends Lord Borrie and Lord Whitty. I am not going to travel down the historical road on which the noble Baroness, Lady Oppenheim-Barnes, took us. I recall when I was a very junior staff member of an organisation—abolished I think by a Conservative Government—called the

Electricity Consumers Council, her rather grand appearance before us when she was Minister for Consumer Affairs. I also remind her that it was, I think, a previous Labour Government who had consumer protection as a Cabinet role fulfilled by my noble friend Lord Hattersley, who is not in his place today. That was some years ago—

Photo of Baroness Oppenheim-Barnes Baroness Oppenheim-Barnes Conservative

It was not quite the same thing.

Photo of Lord Harris of Haringey Lord Harris of Haringey Labour

I accept that it was not quite the same thing.

The Minister in his introduction told us that the Government’s aim was to improve the offer to consumers. When we talk about the transfer of estate agent functions, essentially we are not talking about a change in the offer. What is happening is a transfer of what I am assured—I am not sure that the Minister actually said this in Committee—is the same sum of money that was expended by the Office of Fair Trading on the estate agent regulation functions, through the National Trading Standards Board, for the function which has now been awarded to Powys. It is, therefore, the same money, not new money. It is not an improvement in the offer. I shall come back to why that is important in a moment.

The £178,000 or thereabouts spent by the Office of Fair Trading has now passed to the National Trading Standards Board. As a board, we went through a commissioning exercise. As has been reported, six bids were received from local authorities around the country and Powys was selected by the selection panel to be the successful bidder. For the avoidance of any doubt, given some of the comments made in the other place, I should make it clear that none of those involved in the selection process was associated with the bids considered.

My noble friend Lady Hayter implied slightly pejoratively—I think that she was slightly overegging the case for the purposes of debate—that one officer from Powys had been seconded into the Office of Fair Trading to learn how to do it. I had the benefit earlier today of meeting a number of the officers from Powys who are responsible for this function. As I understand it, two officers from Powys are working in the Office of Fair Trading at present, for a very specific reason. Because of the problems that the government business managers have in processing business through your Lordships’ House and elsewhere, this order has not yet been made. As a consequence, it is not possible for preparatory work to be done in respect of how this function is to be carried out because the information cannot legally be transferred from the Office of Fair Trading to Powys County Council. So until your Lordships pass this order, the files cannot be moved and it is necessary for the officers from Powys to work through the Office of Fair Trading and carry out that function.

It is worth emphasising that this is a national function that will be delivered by a single local authority. That is not a unique model. There are a number of functions financed through the National Trading Standards Board where that is the model. The Minister referred to the illegal money lending teams for England and Wales, which are administered by a single local authority. The Illegal Money Lending Team for England is a very large organisation with a large number of staff, delivering services around the country, not only to consumers but in terms of outreach, and using the money seized under the Proceeds of Crime Act to improve consumer education. I was involved at a launch in a school in north-west London only a few days ago where a teaching pack for schools was being launched to ensure that pupils acquire the necessary skills to manage their own money and to understand the dangers of them and their families falling into the hands of loan sharks. That is a national function being delivered by a single local authority—in that case, the City of Birmingham.

There are similar examples in the work that is done on e-crime, on behalf of trading standards, which is delivered by North Yorkshire County Council, and the work being done on the national intelligence hub, which is delivered by Suffolk County Council. You can go through a list of functions that are delivered by agreement, by a memorandum of understanding, by individual local authorities in this way. So the Powys example is by no means unique. It is worth recording that and to recognise that this is about establishing and maintaining a single national state agency enforcement unit, providing an appropriate adjudication system, including a process to manage appeals; to provide and maintain a web-based public register; and to approve and monitor the approved estate agent redress schemes to which my noble friend Lady Hayter referred.

The fundamental issue that should be considered in the context of this order is the Minister’s initial opening statement about improving the offer to consumers. What is being enforced here is the Estate Agents Act 1979, which was no doubt right for its time—but a lot has happened since then. Increasingly, properties are bought and sold and the interactions take place through the web. There are still an awful lot of estate agents with a physical presence in high streets, but the nature of estate agency is changing, and the time may well have come for us to look at the legal basis on which this regulatory function takes place. We also have the increasing practice of estate agents who act both for the person who is selling their property and for the person who is buying the property, somehow managing to acquire fees from both of them in the process—which probably coincides with just about everyone’s caricature view of how estate agents behave. The question of how this regulation should go forward in future also requires a look at the legislative framework, and I would be grateful if the Minister could tell us whether, perhaps in the passage of the Consumer Rights Bill that is going through Parliament at the moment, we might want to look soon at whether the Estate Agents Act 1979 is fit for purpose.

That brings me to the point that my noble friend Lady Hayter raised about letting agents. I understand that there is a distinction, but in a large number of instances a letting agent and an estate agent is the same entity. It is not simpler to have one regulatory mechanism dealt with through the process that we are discussing today and another dealt with through the DCLG process; despite the no doubt wonderful interaction that is taking place between the officials of the two departments involved, that is not sensible. It certainly causes confusion. At a time when I know that the Government are committed to reducing the burdens on business, does it really make sense to have what may be one very small local agency deal separately with two regulatory systems maintained by two different departments? I suspect that it does not.

Interestingly, earlier today I met a representative from the Independent Network of Estate Agents. I do not know how many agencies that he relates to, but it was quite apparent that he was totally confused about how the estate agent regulatory system interacted—in fact, it does not—with the process for regulating letting agents. He had lots of questions about the new process for managing letting agents, which colleagues who are responsible for delivering regulation of estate agents could not answer. But that is a demonstration that this is going to cause confusion and problems on the ground.

The other interesting message that came across from a number of the organisations or stakeholders who had come along to hear how the new system worked was their amazement that the whole exercise was going to be valued at only £178,000. These are people who are to be regulated by these processes, who said that they thought that it should cost rather more because they thought that there was rather more to do.

The Minister has talked about improving the offer to consumers, but this measure is not doing that—this is transferring the offer to consumers and administering it in a different way. There is clearly work to be done both on the legislative framework about the interaction with letting agents and in terms of the resources that can be made available for this function, if we are genuinely to improve the offer to consumers.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie The Parliamentary Under-Secretary of State for Business, Innovation and Skills 7:15 pm, 11th March 2014

My Lords, this has been an interesting debate, and I thank all noble Lords for their contributions. Just before I go into the detail of the debate, I want to cover a couple of points. First, the noble Lord, Lord Harris, asked recently about the review of the Estate Agents Act. At present, we have no plans to review the Act. However, my colleague in the other place, Jenny Willott, has written to ask the ombudsman to review the issue of double-charging, which I agree is a worrying trend.

Secondly, I thank my noble friend Lady Oppenheim-Barnes for her general support for what we are doing in the Consumer Rights Bill. I very much welcome her support for the Government’s measures to modernise consumer law, which will make a major difference on behalf of consumers and has been widely supported.

I now return to this particular order. The Government believe that the changes introduced by the order will deliver more effective consumer advocacy and more joined-up supervision of the estate agency regime. Noble Lords have raised a number of points and I will seek to address these in a few moments.

The noble Baroness, Lady Hayter, stated that the measures that we are proposing lack coherence and fail to provide a single voice to protect consumers. I challenge that assertion. The consumer journey will not change significantly under the new arrangements.

We are simply joining up the policy-making and regulatory oversight expertise of Consumer Futures with the existing consumer complaint handling abilities of Citizens Advice services. The changes do not mean additional burdens for local bureaux, as information on cases that they deal with is already collated centrally to inform Citizens Advice campaigns and reports. As a result of these changes, anyone needing impartial help or advice on a consumer issue will be able to phone the national helpline, contact their local bureau or use the interactive help on the Citizens Advice web pages.

The noble Baroness, Lady Hayter, and the noble Lord, Lord Whitty, suggested that we are simply abolishing quangos. Again, I challenge that assertion, as I did at the beginning of the debate. This is not simply about making a reduction in public bodies. Bringing together the in-depth knowledge of the regulated energy and postal service sectors with the wealth of intelligence on consumer problems available to Citizens Advice will bring coherence to public policy-making. For the first time, the consumer advocate will have detailed knowledge and understanding of the challenges facing real consumers across the country when campaigning to influence new regulation and policy development.

During the debate in Committee last week, the noble Lord, Lord Whitty, bemoaned the fact that a number of consumer bodies remained outside the scope of these changes. I reiterate that this is not about rearranging the deck-chairs for the sake of it. This is about achieving real benefits for society, by enabling consumer advocates to effectively influence energy policy, transport policy, telecommunications policy, financial policy and general consumer matters. Citizens Advice will collaborate with consumer representatives in the other regulated sectors to ensure that best practice is shared and that regulatory developments in the other sectors reflect insights from the experiences of people on the street. Trading standards officers already take enforcement action against local estate agents. Changes brought about by this order support the flow of information from local to national enforcement, bringing further coherence to enforcement in this sector.

The noble Baroness, Lady Hayter, implied criticism of the Government for failing to harmonise redress for estate agents with redress for letting agents through this order. I will say more about this in a moment, but such harmonisation was not an objective of this order and the estate agent and letting agent sectors have very different characteristics.

When the Enterprise and Regulatory Reform Act was debated in Parliament, the noble Baroness proposed an amendment that called for letting agents to be regulated in the same way as estate agents, much as she described in her speech today. This amendment was rejected by the Government on the grounds that overregulation reduces supply, which in turn reduces choices for tenants and could lead to rent increases. However, the Government recognised the value of introducing a mandatory redress scheme, and this part of the noble Baroness’s amendment is now part of the Act.

The Government have taken a consistent approach. The process to establish and approve the new redress schemes for letting agents will mirror that for the existing estate agency schemes. This follows discussions between BIS and OFT officials, with colleagues in the DCLG, to help them take account of the lessons learnt from regulating the estate agency market; such points have been made by noble Lords in today’s debate. The Secretary of State for Communities and Local Government will be responsible for approval and oversight of redress schemes for letting agents, reflecting his department’s responsibility for this sector. Oversight of the estate agency schemes, and approval for any future schemes, will reside with Powys, reflecting the extensive role of trading standards in the broader regulation of this sector.

Before I address some of the questions raised, particularly those of the noble Baroness, Lady Hayter, I will say that it is very good to have an endorsement of Powys by the noble Lord, Lord Berkeley. It was also particularly helpful to have an explanation of the changes and of the selection of Powys by the noble Lord, Lord Harris.

The noble Baroness, Lady Hayter, raised the issue of the line of accountability for Powys County Council and stated that it was convoluted and unclear. This is simply not true. Ultimately, Powys County Council will be accountable to BIS. Powys will report to the NTSB in its role as co-ordinator, and the NTSB will be accountable to BIS for the performance of its enforcement teams and projects, including estate agency work. For the avoidance of doubt, Powys-elected representatives will have no part in running the new estate agency functions—a point raised notably outside this House.

The noble Baroness raised the issue of the role of Anglesey and stated that the Government have still not made clear what the role of Anglesey is. Both the Consumer Affairs Minister, the Member for Cardiff Central, and I have made it clear that it is Powys County Council that will take on sole responsibility for delivering these estate agent functions. It is true that the original bid submitted by Powys County Council proposed that some of the work be carried out in partnership with Anglesey. However, during the development of the transition bid, as circumstances changed, a decision was taken to deliver all the necessary functions from within Powys County Council.

To avoid any potential conflicts of interest between its statutory responsibilities as the lead enforcement authority and local enforcement cases, Powys County Council has decided to second an official from Anglesey County Council to manage matters that relate to estate agents which operate within Powys County Council’s area. This officer will also investigate national cases under the Estate Agents Act, but will act under the authority of Powys County Council. The OFT currently operates a similar Chinese wall between its enforcement and investigative activities. If it is some reassurance to the noble Baroness, we will show the paperwork associated with Powys’s bid in due course, as promised by my colleague in the other place, Jenny Willott, in her letter to Stella Creasy today.

The noble Baroness also raised the issue of the delay in providing a response to the request from Stella Creasy on the FOI request for the paperwork on the Powys bid. I will clarify that her letter was received on Thursday night, requesting a significant amount of additional information. We issued a response to all the issues that she raised earlier today. We will provide the paperwork requested in accordance with the Freedom of Information Act 2000.

The noble Lord, Lord Borrie, asked why the estate agent powers passed to Powys. Currently, both trading standards and the OFT possess enforcement powers under the Estate Agents Act 1979. Transferring the OFT’s powers to trading standards will simplify the landscape by giving sole responsibility to trading standards. This is very much in line with the Government’s intention that trading standards be responsible for the co-ordination of national consumer enforcement. Under the oversight of the National Trading Standards Board, a lead local authority will utilise the network of national, regional and local intelligence provided by trading standards services to carry out this function. As I have said, there is a previous precedent for a local authority to discharge functions on behalf of a nation, as alluded to by the noble Lord, Lord Harris. For example, the illegal money lending teams for England, Scotland and Wales of the NTSB and Trading Standards Scotland are hosted by single local authorities.

The National Trading Standards Board ran a tender exercise in the summer of 2013, as the noble Lord, Lord Harris, has said, to appoint a lead enforcement authority to host the National Trading Standards Estate Agency Team. Each bidder was required to demonstrate how it would satisfy a number of criteria. As has been said, six applications were received in total, and these were reviewed by a panel of senior trading standards officers, supported by officials from BIS, the NTSB and the OFT. Each bidder was required to demonstrate how they would discharge the functions under the 1979 Act, and through careful analysis of bids, the panel was able to assess that Powys County Council was the authority best placed to provide the most efficient and effective management of the function. I hope that this extra information, on top of what I said earlier, gives some further reassurance to this House.

The noble Baroness, Lady Hayter, asked very clearly why Powys was not appraising letting schemes. I will reiterate that the lettings and property management work redress scheme under the Enterprise and Regulatory Reform Act 2013 is new, and only concerned with mandatory redress, as the DCLG has responsibility for letting and property management agents within government. It was decided that it would be best placed to manage the relatively straightforward redress scheme appraisal process. There is a distinct difference there.

The noble Baroness, Lady Hayter, raised the issue of some of the OFT’s functions, which she stated did not sit well with the Competition Commission responsibilities in the CMA. We agree that some of the functions of the OFT sit better with other organisations. That is precisely why we are moving responsibility for the redress scheme to trading standards so that the CMA can focus more on market-wide issues to benefit consumers and bring a closer link between front-line trading standards expertise and the estate agency redress scheme.

The noble Baroness also asked why Powys was responsible for regulating all estate agents. These functions are just two of a number of measures that the Government have in place to protect consumers from rogue estate agents. A wide range of formal actions can be taken against rogue estate agents under both sector-specific and general law. The noble Lord, Lord Harris, alluded to this.

The noble Baroness also asked whether statutory bodies should have consumer panels or consumer representatives. We completely agree that the organisations in the consumer landscape should take full account of the perspectives of consumers. We believe that this is best achieved, however, through open consultations and engagement, such as the CMA’s recent consultation on its business plan and the consultation by Consumer Futures on its work plan, rather than specifying the need for one person who represents consumers. The whole organisation should think about the needs of the consumer.

The noble Baroness had concerns about vulnerable consumers, and I agree that she raised a fair point. The Citizens Advice service also has substantial experience of addressing the needs of vulnerable people across a wide range of subject areas in which I am sure the noble Baroness will be well versed. We are confident that it will be able to deliver outcomes with no loss in quality. While Consumer Futures currently assists around 7,000 customers directly, the Citizens Advice service is advising and supporting millions of individuals.

The noble Baroness asked about measurements—in other words: how will we know that these arrangements are working? The bodies have well established grant funding relationships with BIS and are already fully accountable for the use of BIS funding and levy funding through conditions placed in their annual grant letters. Grant terms will be expanded to set out the requirements and key performance indicators relating to these new activities. Performance will continue to be closely monitored by BIS to ensure that the successor bodies are delivering good outcomes for consumers and achieving good value for money for levy funders and taxpayers. I should reiterate that these arrangements mirror those for the NCC.

The noble Baroness asked a question along the lines of: is Citizens Advice now a public body? We are confident that Citizens Advice remains a charity, and although we have recently been discussing its classification with the Office for National Statistics, the Government remain confident in their belief that Citizens Advice should remain outside the public bodies framework. I hope that that is some reassurance.

The noble Baroness also asked why the letting and management redress scheme rests in England only. She may be aware that housing is a devolved issue. It is up to the devolved Administrations to introduce the protections that are important to them and reflect their differing priorities and different housing markets. She also asked why the letting and management redress schemes simply use the estate agent scheme. It is important that the approval and redress schemes for letting agents involve a fair and transparent process. I should reiterate that simply extending the estate agent schemes to include letting agents would unfairly restrict any new provider from coming forward.

The noble Baroness asked whether Citizens Advice would play a role in Europe. Indeed, it will play a full role in Europe, working with other EU bodies to promote consumer welfare and combining the NCC’s experience with Citizens Advice’s knowledge of consumers on the ground. The CMA will continue to lead the UK regulators’ engagement by working with the NTSB to feed in the experiences of trading standards and its enhanced role in the new landscape.

The noble Lord, Lord Borrie, basically stated that the Government have not explained who will do the work of Consumer Futures. The majority of staff from Consumer Focus and the NCC will transfer into Citizens Advice. This includes the director, who will fulfil his role in Citizens Advice as well as most of the expert staff. We recognise the importance of ensuring that there is sufficient capability and capacity for this important work, and firmly believe that our plans will achieve this.

The noble Lord, Lord Whitty, raised the issue of local trading standards being inadequately resourced to take on new functions. The baseline cost of policing the UK estate agency market will transfer from the OFT into the NTSB’s enforcement grant. This amount will be ring-fenced from the main portion of the grant in order to ensure that the full funding will be used for the purpose intended.

The noble Lord also raised the issues of the lack of staff transferring to Citizens Advice and the trimming of resources. I hope that I can give him some reassurance that the vast majority of policy staff will transfer to Citizens Advice. Next year’s levy-funded budget will be the same as this year’s. The noble Lord stated that funding for general advocacy has been cut. Budgets have been squeezed since 2008 in the light of pressure on the public finances, but we are confident that efficiencies created by this transfer will enable Citizens Advice to step into this role.

Photo of Baroness Oppenheim-Barnes Baroness Oppenheim-Barnes Conservative 7:30 pm, 11th March 2014

My noble friend will remember that in Committee during consideration of the then Enterprise and Regulatory Reform Bill I cited the amount of money that I made available to Citizens Advice in 1979-80 because of a small increase in its duties. It was £3 million then, which, in terms of what is being given now, causes me great concern. All members of citizens advice bureaux are not necessarily well versed in consumer affairs—they have other qualifications. If situations arise in which they do not know what to advise, who are they going to ask to tell them?

Photo of Viscount Younger of Leckie Viscount Younger of Leckie The Parliamentary Under-Secretary of State for Business, Innovation and Skills

I should like to write to my noble friend to clarify that question and give her more detail about the transfer. I hope that I will be able to give her some figures and will copy in other noble Lords to provide further details. I hope that that gives my noble friend some reassurance.

The noble Baroness, Lady Hayter, suggested that the provisions in the order do not provide—

Photo of Lord Whitty Lord Whitty Labour

Before we leave the issue of the transfer of money and personnel, is the noble Viscount saying that he rejects my view that less than half the number of posts in Consumer Focus three years ago will actually reappear in Citizens Advice, and that the non-post, non-energy side has been cut significantly—almost by half—in that period? That is a considerably larger reduction than the general cut in public expenditure to which he referred.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie The Parliamentary Under-Secretary of State for Business, Innovation and Skills

I will be writing to my noble friend Lady Oppenheim-Barnes to clarify the position on the transfer, and the letter will be sent to the noble Lord. That should directly address the issue of how many staff are likely to be transferring.

Photo of Lord Whitty Lord Whitty Labour

I accept what the noble Viscount said regarding transfer, but I was referring to the point about the transition over the past three years when compared with what the NCC was previously doing.

Photo of Viscount Younger of Leckie Viscount Younger of Leckie The Parliamentary Under-Secretary of State for Business, Innovation and Skills

I will write to the noble Lord. The noble Baroness, Lady Hayter, suggests that the provisions in the order do not provide adequate parliamentary or ministerial accountability. However, I dispute that, as the noble Baroness will know. In making an order under the Public Bodies Act, a Minister must have regard to a number of tests, including the requirement to secure appropriate accountability to Ministers. The Secondary Legislation Scrutiny Committee considers compliance with all these tests. I remind the noble Baroness that in the case of this order the committee concluded that it was content to apply the 40-day affirmative procedure rather than the more stringent 60-day process. However, I will again set out the measures that we have put in place to ensure clear lines of accountability, and I will do that in a separate letter on grounds of time.

I conclude by addressing the comments made by the noble Baroness, Lady Hayter, and the noble Lord, Lord Whitty, at the beginning concerning quango-cutting. On the one hand, we are being accused of having too many bodies; on the other hand, we are accused of being forced by the Cabinet Office to cull quangos. We think that our redesign of the consumer landscape strikes the right balance, including representation across all parts of the UK. The changes brought about by this order will deliver more effective consumer advocacy and more joined-up supervision of the estate agency regime.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Cabinet Office)

First, I thank the Minister for doing as good a job as he could with the material at hand. I think that we know that he is batting on a sticky wicket but he did his best. I also thank the noble Baroness, Lady Oppenheim-Barnes, the noble Lord, Lord Berkeley, and my noble friends Lord Borrie, Lord Whitty and Lord Harris for their contributions to my regret Motion. I particularly thank the noble Baroness, Lady Oppenheim-Barnes. She called herself the “great-grandmother”. I think I would have to say “godmother”, because it sprinkles a bit of gold dust whence it goes. Consumers have an awful lot to thank her for.

I also express thanks to my noble friend Lord Stevenson, who, as we have been going along, has managed to find for me the debates that the noble Baroness referred to concerning her attempts to halt the merger. I am afraid that my memory is perhaps not as acute as it should be but we have looked quite carefully at them and it looks as though we were trying—maybe we took the wrong call—to improve what was being proposed. With our Amendment 24ZB, which I have just looked up, and another amendment, we were trying to get the CMA to take on and strengthen the consumer protection, enforcement and guidance role. We noted the comment that the noble Baroness made at that time about the possible lack of independence brought about by bringing the two organisations together. That is slightly different from our amendment but the call that we took was to try to improve what we thought was going to happen. However, looking through the speeches, it appears that we were on the same page for quite a lot of the time.

I shall try to be brief because it is now time to draw this to a close. There are questions remaining. We get a letter saying that Anglesey has no role; now we find, if I have understood it correctly, that someone is going to be put into Powys to sit there and do the job, but that person will presumably be answerable to employers in Anglesey. We need some clarity on this. We are told that elected councillors will have no role but it is their staff to whom they have a duty of care and other employment responsibilities. It would be extraordinary if elected councillors had no say on what was going on in their premises. Nor have we had a serious answer to why we are not using the same mechanism to approve redress schemes. I did not say “the same redress schemes”; we were talking about the same mechanism to approve them.

Contrary to what the noble Viscount said, I think that this is about getting rid of quangos. This happened under the Public Bodies Act and that was referred to in the coalition agreement. My noble friend Lord Harris of Haringey is right: this is not about improving the consumer offer, much as I would have liked it to be. I remain doubtful about whether delivering national functions via local trading standards is the most effective way of promoting consumer interests.

I also still have some concerns about the independence of Citizens Advice. I gather that there are still some discussions about whether it is going to be a public body, with all that that means with regard to procurement and the organisation’s way of working. Some clarification on that is necessary. I have no doubt about the role that Citizens Advice has in helping consumers who have detriment today. We have never questioned that. Our concern is about whether influencing today’s providers, regulators, the Government and Europe can be done by the same body which, every day, answers phone calls and e-mails and has visits from hard-pressed consumers.

I should say that I am known now as Lady Hayter of Kentish Town. I was, until my last relative died there, going to be Lady Hayter of Ystradgynlais. However, I thought that it would be a bit too much of a challenge to Hansard writers—hence Kentish Town. I also lived in Bodedern in Anglesey. Therefore, I am aware of the strength of those bodies but whether they are the rights ones to take this on, I remain doubtful.

Having said all that, we can only wish all these new organisations well for the sake of consumers, for the sake of the people whom the noble Baroness has looked after for so many years and for the sake of people whom my noble friends Lord Borrie, Lord Harris and Lord Whitty have done so much for. We can only wish them well. I know that what they need at the moment is speed. For those reasons, I beg leave to withdraw my amendment.

Amendment to the Motion withdrawn.

Motion agreed.

House adjourned at 7.45 pm.