Schedule 1

Consumers, Estate Agents and Redress Bill – in a Public Bill Committee at 10:45 am on 17th April 2007.

Alert me about debates like this

The National Consumer Council

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

I beg to move amendment No. 59, in schedule 1, page 53, line 7, leave out from ‘(b)’ to ‘before’ and insert

‘send a copy of the certified statement and the Comptroller and Auditor General’s report to the Secretary of State, who shall lay them’.

I do not propose to detain the Committee long on the amendment, which is minor and of a technical nature, making the Department rather than the Comptroller and Auditor General responsible for laying the new national consumer council’s accounts before Parliament. As presently drafted, paragraph 32 of schedule 1 requires the Comptroller and Auditor General to examine, certify and report on each statement of accounts received from the new NCC. The Comptroller and Auditor General must then lay a copy of each statement and of the report before Parliament.

Discussions between my Department and the National Audit Office suggested that the requirement to lay copies of all the accounts and associatedreports before Parliament should be the responsibility of the Department rather than of the Comptrollerand Auditor General. Under the provisions of the amendment, the council will send a copy of the statement of accounts to the Secretary of Stateand to the Comptroller and Auditor General under paragraph 32(3) of schedule 1. Having examined, certified and reported on the statement of accounts, the Comptroller and Auditor General will then send a copy of the certified accounts and of the report to the Secretary of State, who will be responsible for laying copies before Parliament.

Precedent for the revised arrangements has been set with other newly created bodies, such as in the Natural Environment and Rural Communities Act 2006 for Natural England and in the London Olympic Games and Paralympic Games Act 2006 for the Olympic Delivery Authority. The Secretary of State is responsible for laying the accounts of those new bodies. The amendment therefore brings the new council into line with other newly created bodies. In short, the Comptroller and Auditor General has two requirements: to certify the accounts; and to report his or her opinion of the accounts to the Secretary of State. The Secretary of State has two requirements: a duty to lay the accounts and the report before Parliament; and to report the Comptroller and Auditor General’s opinion of the accounts to Parliament. As usual, they will be laid before both Houses.

Photo of Susan Kramer Susan Kramer Shadow Secretary of State for Trade & Industry, Trade & Industry, Shadow Secretary of State, Liberal Democrat Spokesperson (Trade and Industry)

Since this is the first time on my feet, I am pleased to have the opportunity to take part in the Committee under your chairmanship, Mr. Weir. This is the first time that I have been involved in a Bill Committee, so I am afraid that I will be turning occasionally to my colleague, my hon. Friend the Member for Solihull (Lorely Burt), who has far more experience here than me; I hope you will forgive my naivety from time to time. I use this opportunity to join the Minister and others in sending condolences to those who have lost dear loved ones and friends in Virginia.

Given the short time that is available for the consideration of the Bill, my hon. Friend the Member for Solihull and I made a decision that we will get to our feet when we have something to say, but not when we do not. I have to confess that when I looked at amendment No. 59 to schedule 1, I found myself bemused as to what it was about and why it was onthe amendment paper. Will the Minister assure usthat that change does not compromise in any way the independence of the Comptroller and Auditor General or of the National Consumer Council? That fundamental concern of ours is raised by the changing of the pathway so that reports come via the Secretary of State, rather than directly to Parliament or the public. It allows a negotiating or adjustment process, and provides the opportunity to put out press releases and spin the story before the report fulfils its end purpose. If the adjustment is merely technical, we do not have a problem with it, but we do if it affects independence in any way or provides a path for influence.

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

The hon. Lady should not worry about this being her first Committee; this is my first Committee since 1999. In my previous jobs, the Government have managed to hide me away from Parliament. [Interruption.] My hon. Friend the Under-Secretary is accused of being my chaperone. Heaven forbid such a thing. Perhaps we could be known as Butch Cassidy and the Sundance Kid, as we are in that age group.

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

That is far too predictable coming from such a big man as the hon. Gentleman. I think that I am eyeballing him at the moment.

The hon. Member for Richmond Park asked a fair, reasonable question. I give her an absolute assurance that a duty will be placed on the Secretary of State to lay before both Houses not only the Comptroller and Auditor General’s report on the accounts, but the accounts themselves. The amendment arose from discussions with the Comptroller and Auditor General and members of his office. We feel that it is the best way of transmitting the information to Parliament.

Question put and agreed to.

Question proposed, That the schedule, as amended, be the First schedule to the Bill.

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform)

The Minister is right to suggest that he and his colleague are not Little and Large. I suspect that the hon. Member for Ealing, North (Mr. Pound) will remember the Krankies; perhaps that would be a closer comparison. Having teased the Minister in that way—

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform)

I have always trusted the Ministerto be capable of performing any function in the Government, and he has shown his dexterity in that manner.

I shall return to the order of the day and move delicately and swiftly to schedule 1, about which I should like to raise a number of practical concerns. Paragraph 1 provides the Secretary of State with the power to appoint members. Will the Minister tell us how many members are to be appointed? What would be the overall size of the council? That might be set out in regulations, or the council might be able to determine it. Given that the Secretary of State will be granted the power to make appointments, it would be helpful to know the scope of the organisation. Subparagraphs (4)(a) and (b) relate to the Financial Services Authority and Ofcom. During our consideration of clause 1, I mentioned that they are included in, although not merged into, the organisation. Appointments are permitted in that area. Will the Minister explain the rationale behind that decision?

Paragraph 10 says:

“(1) The Council may make arrangements with such persons as it considers appropriate for assistance to be provided to it.

(2) Arrangements may include the paying of fees to such persons.”

Could the Minister tell us exactly what the Secretary of State has in mind here, in particular the form of assistance and therefore the fees that will be paid for that help?

In part 3, which starts on page 45, paragraph 12, which starts on page 46, deals with the regional committees; paragraph 12 establishes that particular set of organisations. Could the Minister confirm what the boundaries of those regional committees will be? This measure provides the council with the ability to establish committees

“for areas within the United Kingdom”.

“Areas” is, of course, a different word from regions. The measure then refers to regional committees. What I am seeking to establish is the boundaries of those regional committees. For example, most Members would assume that a regional committee relates, perhaps, to the existing regions that the Government seek to administer their funds through; for example, the Government office for the south-west of England, or whatever. Would these committees be similarly bounded, or would they be smaller? Would there be one, for example, for Lancashire, or one for Yorkshire, or one for Cornwall and Devon? It would be helpful to know whether or not the Secretary of State would approve, because in the end these committees have to be approved by the Secretary of State. It would be helpful to understand the nature of this particular set of organisations.

Similarly, in part 3, paragraph 15 on page 47 is a “General provision about committees”. Paragraph 15(4) states:

“The members of a sub-committee established by a committee may include persons who are not members of the committee.”

That is entirely understandable; one may wish to have outside experts join the sub-committee to discuss a particular issue. However, it would be helpful to know whether or not these sub-committees could be made up of a majority of non-committee members. I ask that because a lot of the council’s powers are delegated down to these committees and the Committee herein the House might wish to consider whether or not  delegated powers that have financial implications could end up being exercised by a sub-committee that is not made up of people who are part of the principal organisation but instead made up of outside experts. It would be helpful if the Minister could clarify what the Secretary of State’s intention is, and what he would or would not approve.

Paragraphs 17(1) and 17(3) on page 47 deal with the “Terms of appointment etc” and examine the issue of pay and remuneration. It would be helpful for the Committee to understand what the current powers of remuneration are and how they would change. After all, the existing National Consumer Council is somewhat different to the newly enlarged organisation. It would therefore be helpful—if not now, then certainly in due course once the Committee is sitting—for us to be told what that change is likelyto be.

Lastly on this schedule, I would like to turn to part 5, on page 49, which deals with “Funding and accounts”. I think that the existing National Consumer Council relies for 81 per cent. of its funding from the Department. It is that sort of amount; the Minister nods, so I assume that the figure is in that field. As we know, the Chancellor has already indicated that there will be a reduction in funding for the Department as a whole; there were announcements on that earlier in the year. What impact would that reduction in funding have on the council and indeed on Consumer Direct?

I know that Ministers hope that the new council will be able to achieve savings by merger. However, it would be helpful to know whether the new council will be able to rely on a similar amount of money and what proportion of its income the Government anticipate will come through to the new Department.

Photo of Susan Kramer Susan Kramer Shadow Secretary of State for Trade & Industry, Trade & Industry, Shadow Secretary of State, Liberal Democrat Spokesperson (Trade and Industry) 11:00 am, 17th April 2007

I have two quick questions about the schedule. First, looking at the membership of the council, the provision gives a lot of “permissions”—for example, to appoint individuals who will liaise with other relevant bodies, or to include within the membership disabled persons or persons with special needs—but perhaps the Minister can give us a better idea of the intention. Having participated on the board of Transport for London, I know that the importance of having a range of stakeholders with expertise in different areas on that board was extremely evident in its effective functioning. Can the Minister give us a better feel for what he sees as the scope of the membership? That will affect the functioning and flavour of the council.

Secondly, much of the funding for the range of services dealt with by the new NCC—other than that coming from the Department of Trade and Industry, which funds the current NCC—will come from the industries that are brought into the scope of the new organisation, such as energy suppliers and postal services companies. However, it seems unclear in discussions with those industries whether they know where they will be heading in future. Will they continue to be asked to provide the same level of funding, or will that change if the new NCC changes its focus and   priorities, so that it spends most of its energies looking at other industries rather than those that have been regulated by the individual bodies? In that case, how will the funding issue be resolved?

I ask the Minister to look forward and tell us not only where funding will come from immediately after the new body is constituted—we assume that that will be pretty much the same as it is today—but where it will travel in future. What sort of assurances can be given to consumers that it will be adequately funded, and to present funders that their concerns will remain in focus?

Photo of Tobias Ellwood Tobias Ellwood Opposition Whip (Commons)

I have a couple of questions to ask the Minister to clarify the points made by my hon. Friend the Member for Hertford and Stortford. First, the schedule gives scope to a number of committees, and I seek clarification of the difference between a territorial committee and a regional committee. How do they work together, who is accountable to whom, and what size of area would they cover?

My second question relates to paragraph 14. It is one of those vague paragraphs, which is probably intended to cover a specific issue, but is written in such a way as to give a broad scope. I ask for some detailed clarification of its meaning. The paragraph states:

The Council may establish such other committees as it considers appropriate.”

That is a general, bland statement, and the Minister should provide a bit of detail. Who would sit on that type of committee, what would it do, and to whom would it be accountable?

Photo of David Gauke David Gauke Conservative, South West Hertfordshire

May I say what a pleasure it is to serve under your chairmanship, Mr. Weir? I, too, have a couple of points to make with regard to the schedule and the powers that the Secretary of State has to appoint the council chairman and other executive members. What, if any, role will Parliament have within that process?

I ask that question at a time when many politicians, including the Chancellor of the Exchequer, are talking about rebalancing the relationship between the Executive and Parliament. It is most often talked about in the context of the royal prerogative and declaring war, which is, thankfully, a rare occasion; none the less, there are many appointments to be made. The most obvious and frequent exercise of the royal prerogative is in appointments to organisations such as the one that we are discussing today, the NCC. If we are looking at rebalancing the relationship between Parliament and the Executive, some degree of parliamentary scrutiny of the appointments would be welcome.

I appreciate that that matter cannot necessarily be addressed in the Bill—it is a matter for the House—but I would be grateful to know whether, for example, the model for appointing members of the Monetary Policy Committee of the Bank of England could be used. Following appointments to that body, hearings are held by a Select Committee—presumably the Trade and Industry Committee—to review them. Alternatively, could there be a more substantial process whereby Parliament has a role in confirming any appointment to the NCC?

That is important, partly, to demonstrate that whoever gets the role as chairman of the council is appointed on his or her merits and that the post is not  seen as some sort of sinecure in the gift of the Secretary of State that could be given for service to the governing party, rather than for suitability for the post. In order to avoid any unnecessary suspicions along those lines, I urge Ministers to consider some role for Parliament within that process.

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

I thank hon. Members for their questions and will go through the schedule as best I can. In doing so, I will take on board what the hon. Member for Bournemouth, East, has said. There are questions to which I will not be able to give an adequate answer, which I would give in normal circumstances. It might be helpful to give members a note and I will explain what I mean by that when I get to each stage.

The membership of the council has yet to be decided. There will be appropriate consultation with the stakeholders as part of the implementation strategy. I give the assurance that at each stage of implementation strategy, which will run from this summer into next year, we will ensure that Opposition Front Benchers are kept informed. I am also more than happy to allow our officials to discuss the matter with them during the process of implementation. There should be no secrets; we want a non-partisan approach. We intend to ensure not only that there is appropriate consultation with stakeholders within that process, but that there is certainty at each stage both for the staff in the bodies that are to be merged and for Parliament about the process leading to the implementation of the measures in the Bill. That will, of course, include appointments.

Questions have been asked about accountability. Let me be absolutely clear: in the end, the Secretary of State will make the appointments technically, but there is a procedure laid down to ensure independence and transparency in the public appointments system—and quite rightly so. The Labour Government introduced that procedure because of the failures under the previous Government, who almost weekly appointed cronies from their own party to run everything that they could possibly get their hands on. That procedure will apply but I will send a note to hon. Members about the process, so that they are clear about it.

To go back to a point made by the hon. Member for Richmond Park, it is important that the number of people appointed reflects the needs of the organisation. To be entirely consistent, the appointments should reflect the skills, knowledge and background of consumers as a whole. That cannot, of course, mean a council of 60 or 70 people, but the point that the hon. Lady makes is more than reasonable. The effectiveness of the operation will be determined by the nature, background, skills and knowledge of those appointed. I assure her that when appointments come before me as a Minister and I have to go through the process, I try to ensure that issues of gender, race, disability and knowledge are dealt with, as I told the hon. Member for Bournemouth, East. Our aim must be not to shoehorn someone in on that basis, but to ensure that the membership has the capacity to represent consumers as a whole. Those who represent consumers must have the knowledge, skills and capacity to do an effective job. I give the Committee those assurances.

On the question of a co-ordinated approach, it is also important that the bodies are established in such a way that their relationships with other parts of the consumer movement, either the regulatory bodies or the consumer panels, are coherent. We will deal with this later in the Bill—in clauses 39 and 40, I think. It is important that the structure reflects the capacity for a coherent and co-ordinated approach to the work of the new organisation.

The hon. Member for Hertford and Stortford asked about co-ordination and memberships of panels, and in many ways he gave the answer himself. It is important that we allow the capacity for expertise to be drawn in on specific issues and to ensure that when there is a report to be done or recommendations to be made, the NCC is able to bring into the organisation individuals or organisations who can add value to the decision-making process. Later clauses in the Bill relate to accountability for the work programme and the relationship between the work programme and resources. It is important to ensure that there is not only co-ordination, accountability and consultation about the work programme, but transparency about the resources available.

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform)

I welcome much of what the Minister has said. Will he confirm that the sub-committees, which could have delegated financial and other powers, would be made up predominantly of committee members—in other words members of council who have been delegated? The inclusion of experts is fine, but I suspect that hon. Members would be concerned if they formed the majority of a sub-committee that had financial powers.

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

I was getting to that point. The hon. Gentleman is correct. The measure is not about subcontracting out the democratic role of those appointed by the Secretary of State, where there is a responsibility for both the executive directors and the staff, through the Secretary of State, to Parliament. It will be for the committee to decide whether it wishes to have sub-committees. It may have some and it may not. It may have them from time to time, and their role and period of existence may be limited.

The boundaries of regional committees will beat the discretion of the new council. The territorial committees represent the nation of Scotland, the principality of Wales and Northern Ireland. The regional committees will be established as and when required to cover specific areas. Again that will be part of the process of consultation and implementation proposals. I will come back to that later.

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform)

That is an excellent explanation of the territorial side. Will the Minister confirm whether regional committees are based simply on the boundaries of existing government regions or are more flexible?

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

There has to be some flexibility.I am doing this without a brief: I am giving thehon. Gentleman my opinion. That is why the Under-Secretary of State for Trade and Industry, my hon. Friend the Member for Poplar and Canning Town, is here. An organisation that is independent is  best able to represent the interests of consumers. We will give it that independence. It will be for the new NCC to determine, after consultation on its work programme, the best way to do that and how effective consumer voices should be in the regions. Again, this is work in progress. I repeat the commitment I gave at the outset: as the process of implementation goes on apace, I will keep the Opposition Front-Bench teams aware of what we are doing.

Photo of Tobias Ellwood Tobias Ellwood Opposition Whip (Commons)

It is wonderful to see some independence of thought from a Minister. I do not know how long it will last. I would be surprised if the original regional boundaries, which the Government have spent so much time establishing, were ignored, but it is good to see that we might be able to work around that. Will the Minister spell out what the other committees mentioned in paragraph 14 are all about?

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

I was going to come to that. The hon. Gentleman is a lot younger than me, but the boundaries of the regions of England were established by Lord Heseltine. If he has a beef, perhaps he can take it up with him. I have tried to be so non-partisan this morning. A partisan politician, I have been trying to be non-partisan this morning, but the hon. Gentleman keeps tweaking my tail and I will not be able to resist much longer.

Photo of James Duddridge James Duddridge Conservative, Rochford and Southend East 11:15 am, 17th April 2007

The Minister said that there may be some flexibility about the regions. Is he thinking of altering the boundaries only slightly, but keeping the same number of regions, or of splitting regions as well as altering the boundaries, which could result in many more regional committees and a larger associated cost?

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

We must remember that the council delegates the functions to the regional committees and it is for the council to determine the best way of doing so. The hon. Gentleman is trying to paint a picture of a bureaucratic arrangement, which the Government will impose on the NCC and its delivery organisations, but that is not what will happen.

Let me give an example to illustrate why some flexibility is needed. There are cross-border activities in all the English regions on issues that relate to matters that the new NCC will deal with. It would be nonsensical if, when investigating a matter on behalf of consumers, it had to say, “Sadly, we cannot discuss that in the north-west because the bulk of the problem arises just south in the west midlands or in Yorkshire and Humberside.” It would be sensible for the committees to be co-ordinated and to co-operate; that is my point. We want to give them the maximum flexibility to speak up and speak out on behalf of consumers, to raise issues effectively and to resolve them. I hope that that answers the hon. Gentleman’s question.

There will be no cut in resources to Consumer Direct. The hon. Gentleman is trying to discover our strategic thinking on the end game—what will happen in the review and the spending round for the next three  years—but he will have to wait; I can be quite open about that. However, what is absolutely certain is that whatever the outcome, the new body will not be hobbled by a lack of financial resources. The basis for its establishment is to provide a strong, independent voice for consumers and to achieve a fundamental change by bringing together organisations that do things well but do not have appropriate redress schemes and have no direct link with Consumer Direct, which is a very important organisation.

We made a decision some time ago about Consumer Direct’s budget. This year alone, more than 350,000 consumers have been able to access advice and to benefit from it, saving them £135 million. It was agreed that Consumer Direct’s budget of £19 million a year for 2006-07 and 2007-08 would be transferred to the Office of Fair Trading, which will have responsibility for managing Consumer Direct. The transfer is taking place now, and the OFT is in the process of recruiting additional staff to manage that process. As part of the commitment that I gave earlier to the hon. Members for Hertford and Stortford and for Richmond Park,I will provide fuller information about it at an appropriate time. The OFT is independent of Government and I have no problem with the organisation talking to hon. Members about its role and its work in respect of Consumer Direct, which is a critical first pathway for consumers to get advice, support and assistance when things go wrong.

The decisions about resources will be made in due course and reported to Parliament. Whatever those decisions are, the organisation will be given the necessary resources to act effectively.

Photo of Tobias Ellwood Tobias Ellwood Opposition Whip (Commons)

I feel I am being denied, as this is the third time I have risen to ask about paragraph 14. Unless it is a state secret, will the Minister please respond to my question?

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

I apologise to the hon. Gentleman. I was trying to give a comprehensive reply to the points made in the debate without utilising my notes. Paragraph 14 simply gives the council the flexibility to determine which committees are appropriate. What do we mean by “appropriate”? The Bill sets out the council’s statutory obligation—what it is required to do—in representing consumers. In addition, it willbe required to determine its work programme by consultation, which will be a transparent, public process. That will give the council the flexibility from time to time in its programme of work—whether that is research work, work to improve access and advocacy for consumers who have been wronged, work to establish redress schemes, or any of the work set out in the Bill—to determine whether it needs a small group of people to work effectively on behalf of consumers. The provision is designed to achieve no more or less than that, and the matter will be for the NCC andits appointed members to determine with its chief executive officer and its chair. No doubt, if it does establish such committees, its annual report to Parliament will set out what they are for and what their work and outcome are.

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform)

On paragraph 17, on pay and remuneration, the Minister said that he hoped to write to us, but it would be helpful to know about it.

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

Yes. I believe that the matter is technically determined in law by the Secretary of State, but staff remuneration will be a matter for the new body to determine in the contracts of employment for staff. I have no doubt that that will be done through the national arrangements with the public sector unions, which will continue to represent their members after the merger.

On other appointments, the remuneration scales are set down, and I shall write to the hon. Gentleman and the hon. Member for Richmond Park on the matter.

Photo of Susan Kramer Susan Kramer Shadow Secretary of State for Trade & Industry, Trade & Industry, Shadow Secretary of State, Liberal Democrat Spokesperson (Trade and Industry)

The Minister addressed the funding transfer of £19 million from the Office of Fair Trading to Consumer Direct but, as he will be aware, a significant amount of funding for Energywatch comes via the licence for the energy supply industry, and for Postwatch from the Post Office. I could ask the Minister to address the future of that funding later, when we discuss the work programme, but since he has entered that area, this might be an appropriate moment.

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

Again, I apologise. That is a very fair point. As I have set out, we are not setting up a cross-subsidy arrangement. Those bodies will be responsible for their own areas, and appropriate consultation will take place on the level of their budgets and the resources that they will have to provide. That is no different from the present situation, which we understand and know, so it will not be a difficulty. The bodies concerned are currently involved in an implementation and integration strategy, and that will continue.

The areas in which the Government have historically been responsible for payment will remain where they are—with the Government. They will be part of the open budgetary process that I described. If the hon. Lady wants an assurance that we will not turn up on the doorstep of the postal industry or another industry in a few months and say, “By the way, the cost of running this service for you is, say, £2 million, but we want £10 million off you,” I assure her that the process does not and cannot work that way. There is statutory provision to prevent that from happening.

Question put and agreed to.

Schedule 1, as amended, agreed to.