Clause 5

Consumers, Estate Agents and Redress Bill – in a Public Bill Committee on 17th April 2007.

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Forward work programmes

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform) 4:00 pm, 17th April 2007

I beg to move amendment No. 1, in clause 5, page 3, line 36, leave out ‘before each financial year publish’ and insert ‘publish triennially’.

Good afternoon, Mr. Weir. I am delighted that we are moving on to clause 5. I presume that I should deal with amendment No. 1 on its own and that we will then consider other matters thereafter.

The purpose of the amendment is simple but important; namely, to remove the phrase

“before each financial year publish” and insert “publish triennially”—I said that word carefully. “Triennially” involved a challenge, and we made sure that we spelled it correctly. Otherwise, three documents might have been published each year. However, I am reliably told by my “Oxford English Dictionary” that our wording is correct.

The purpose of the amendment is simple. The forward work programme should provide a strategic framework within which the new National Consumer Council will operate, so it is logical to suggest that it be published every three years rather than every year. The forward work programme, as its very name suggests, should deal with a period or more than a year. Indeed, the council will separately publish an annual report, so there will be an annual process of reporting on what has been achieved.

This is a probing amendment whose purpose isto establish the reasoning behind an annual work programme. There are examples of organisations and functions that operate on the basis of a three-year programme. A good number of police authorities have a three-year forward work programme, which seemsto work perfectly well. Similarly, local planning authorities have local development schemes that cover a three-year period.

The period can be adjusted, of course. It can be altered, it is not set in stone or completely immutable. The purpose is to provide the organisation with a perspective beyond the 12-month cycle. I suspect that with triennial publication of the forward work programme, the council would be able better to plan and use its resources. That is one reason why wewould like to explore with the Minister whether the   Government have considered that approach. It would sit well with the other publications, documents and reporting that the Government anticipate. I look forward to hearing the Minister’s remarks.

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)

I waited for an explanation of the amendment before coming to any conclusion about it. However, I am unconvinced by the hon. Gentleman’s argument.

The NCC’s work will cover a wide range of different businesses, all on different timetables, and there will be opportunities for issues to arise at any time. Who could have said three years ago that we would be considering a proposal to close 2,500 post offices in the next two years? If that had not been included in a forward plan, the NCC would not have had a position on dealing with the consequences of it. Could we have known three years in advance that we would go through a phase in which, instead of steadily declining energy prices and a consequently fairly predictable pattern of consumer pricing, there would suddenly be a volatile period of rapid rises and declines, with some very poor industry responses to that pattern?

Unpredictability characterises the issues with which consumers must deal daily, and it is inappropriate to lock into a programme for three years and—more importantly—to lock into the funding which, as we have said earlier, essentially follows the forward programme on a three-year basis.

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

Mr. Weir, I am glad that you so enjoyed the events of this morning that you have come back for the afternoon sitting. I hope that we can make progress this afternoon.

I recognise that the amendment is a probing one. However—although I do not say it to influence the views of hon. Members—it was moved in another place, where it was opposed by Conservative, Liberal Democrat and Labour Members, for good reason. It might assist if I explain why the proposals as they stand are consistent with good practice and maximum transparency.

We should not confuse the purpose of the proposals with the purpose of an annual report. An annual report sets out the achievements of the previous financial year in the work programme, along with what is coming up. The clause deals with something different. The hon. Member for Richmond Park hit the nail on the head, and I shall return to her helpful comments in due course.

The amendment would cause the new council great difficulties. We believe in maximum transparency, and consumers have a right to expect not only an annual report but a forward work programme, in line with good practice. The publication of an annual forward work programme strikes a balance with the requirement to prepare an annual report in line with financial years. The forward work programme represents the means whereby the new council sets out a programme for consumer advocacy, together with its aims and priorities and the funding requirement for carrying out those aims and priorities.

The issues to be addressed in the regulated sectors may be fast-moving—the hon. Lady alluded to the fast-moving nature of some of the markets in which the NCC will work—and if the council were required to produce a forward work programme only once every   three years, there could be difficulty. In the end, the bottom line must be the capacity of the council to intervene on consumers’ behalf, to take action, to consider research and to make proposals for the resolution of problems, including both those that have arisen or that could arise because of marketplace changes. Publication of an annual forward work programme, on which the council must consult, will ensure that the proposed activities of the council will indeed be transparent, and that it can be held to account for those activities, not only through the work programme process but through the printed responses delivered in connection with the annual report.

Consultation will allow the new council to obtain the views of key stakeholders in determining its priorities and the activities that it will undertake to achieve them. In many cases, organisations want and need to take a longer-term view for planning purposes. The hon. Member for Hertford and Stortford mentioned local authority district plans. Local authorities work on a 10-year statutory cycle, which ensures that once agreement is reached about land uses and other planning law matters, the local authority’s planning department and its elected planning committee members can make decisions over the 10-year period that are consistent with planning law and with the decisions made through public consultation and decision making—including potential public inquiries.

The process in the Bill is different, in the sense that there is a fast-moving marketplace, a need to represent consumers’ interests and a need to accommodate the possibility of intervention by an independent body on consumers’ behalf. The process must include the possibility of discussion with the regulator, with the relevant organisations, including bodies in Scotland, Wales, Northern Ireland and the regions, and with other stakeholders. It is therefore critical that there is scope for such decisions to be made on the basis of flexibility and proper priorities.

We need to be able to update and renew that vision each year. Although the speech made by the hon. Member for Richmond Park was short, I am referring to it a lot. A short contribution can contain some important fundamentals. [Interruption.] I shall give way to the hon. Member for Bournemouth, East, who has been enjoying interrupting me from a sedentary position.

Photo of Tobias Ellwood Tobias Ellwood Opposition Whip (Commons)

I am grateful to the Minister for giving way—I believe that we are developing a bit of rapport, which allows me to make the occasional sedentary intervention. If he feels slightly hurt by that, I shall certainly take guidance from you, Mr. Weir, and curtail my remarks. However, as I am standing here, let me say that this probing amendment tabled by my hon. Friend the Member for Hertford and Stortford was designed to elicit a little more information on what the forward work programmes would be, not only in a curtailed 12-month programme, but looking ahead to the second and third years beyond that. Although it may be appropriate to have such programmes for a 12-month focus, does the Minister concede that a compromise solution would be for the programmes also to include what might be on the horizon in a second and third year, and to include those things that might be coming up. We spoke at the beginning about the—

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 say to the hon. Gentleman that I do not mind whether his interventions are sitting or standing, as long as they are sensible. The hon. Gentleman started off by saying that this was a probing amendment, but then said that he was trying to negotiate a compromise. However, even the blue blood—the raw tooth and claw—of the Conservative party in the House of Lords would not support the Front Bench proposal. There was good reason for that: it is one of those probing amendments that has been badly drafted. However, at least it provides the opportunity for discussion of a legitimate issue.

The balance already exists. The hon. Gentleman makes my point for me: he is asking for flexibility, and that is precisely what the clause brings. The amendment does not provide that flexibility. We cannot use one snapshot in timing, such as January next year, for example, to make a decision that cannot be amended until 2011.

Photo of Tobias Ellwood Tobias Ellwood Opposition Whip (Commons)

Clause 5 states clearly that the forward work programme is

“a statement of any priorities of the Council for the year in relation to designated consumers”.

However, what we are asking is for those projects that will extend beyond that year to be taken into consideration. If the Minister is able to put it on the record that the document will include those projects and work programmes that go beyond the year and that that can be highlighted for the record, I think that this side of the House would be willing to support that.

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 do not question that, but I am resisting the amendment because our proposals provide an effective approach. What the hon. Gentleman is saying is that once the independent NCC establishes its work programme, it will reflect the priorities for the coming period. Thereafter, as the hon. Member for Richmond Park rightly said, if circumstances arise where a marketplace intervention by the council is needed, it will do that. It has the right to adjust its programme accordingly, and that is what we are trying to do. The amendment does not allow for that, and that is why the Committee ought to resist it.

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

It is a shame that the Minister is so negative this afternoon; I am not sure whether he had a little raw liver at lunch, or something to make him a little more testy than this morning. The purpose ofthe amendment is to try to elicit from him whetherthe Minister and the Department, and therefore the council, would plan for a degree of flexibility in its forward work programme. I do not accept the argument that having a three-year work programme would somehow prevent the NCC from being able even to contemplate a change of circumstances in the marketplace, any more than the existing clause does within a 12-year programme. I am glad the Minister has at least been able to set out what he regards as the importance of flexibility, with which we certainly concur. On that note, having fulfilled my purpose, which was to get a proper debate going, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform) 4:15 pm, 17th April 2007

I beg to move amendment No. 5, inclause 5, page 4, line 5, after second ‘the’, insert ‘measurable’.

It is fair to say that the Government love targets. If the Treasury had had its way, there would be more targets than one could shake a stick at. However, all too often some of them are vague. All that the amendment would do is establish that the objectives should be measurable. I suspect that the Minister will say that they will be, in which case I shall be more than happy not to press the amendment to a Division. I hope that he will clarify that they will be measurable.

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)

My short intervention concerns a particular bug-a-boo of mine. These days, objectives are nearly always treated as though they have to be measurable. That means that we end up with distorted objectives because they are shaped in such a way that we can get a measurement. That is sometimes desirable, and I assume that those sort of objectives are within the scope of the measure. However, at other times, for example, in relation to including more women in decision making or engaging disabled people in a particular project, specific quotas and targets bring us into the realm of something that becomes so driven by the number that it loses all sight of common sense. I am in favour of “measurable” being included in the clause, as long as scope is retained for worthwhile objectives that are not necessarily measurable.

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 congratulate the hon. Member for Hertford and Stortford on one of the most elegant climbdowns on an amendment that I have witnessed in my 10 years as a Minister in Committee. [Hon. Members: “He has not been doing it for 10 years.”] I have been watching the hon. Gentleman’s progress very closely. From where I am standing, my comment was very flattering and, if I were him, I would take it as such.

I hope that what I am about to say balances both what the hon. Gentleman and the hon. Member for Richmond Park have said. The hon. Lady spoke some common sense. I shall assess what the hon. Gentleman said, although I am not sure whether he meant thata measurable objective was equivalent to a target or whether a target was equivalent to a measurable objective. It all depends on the basis of his argument.

The amendment requires the new council in describing projects to be undertaken in the forward work programme to include measurable objectives. It is another attempt to reduce flexibility for the new council without offering anything positive in return. Some projects simply do not lend themselves to measurable objectives. For example, if more consumers switched suppliers owing to an energy supplier and the new council running awareness campaigns at the same time, how would the new council measure how much of the success was down to it and how much to the advertising by the supplier in the market? An element of subjective assessment, including assessment by the new council, will be necessary in some cases, as the hon. Lady pointed out.

In any event, measurable objectives will usually be set out for the new council as part of its budget-setting exercise in conjunction with the Department. That is  established practice and the correct process for setting measurable objectives, which genuinely meets the aim that the hon. Member for Hertford and Stortford seeks. That issue is also covered elsewhere in the Bill. Clause 7 requires the council to include in its annual report a statement on the progress of projects in the forward work programme. The provision is doubly locked in respect of the budget-setting process, the reporting process and the forward work programme. The amendment calls for rigidity where flexibility is needed and, for that reason, I hope that I have given the hon. Gentleman an acceptable explanation.

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

I am genuinely encouraged by what the Minister said. As he knows, one our critical tasks is to put on the record the matters based on which those who will have to implement the legislation can work. His remarks have been constructive and, on that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

I beg to move amendment No. 6, in clause 5, page 4, line 12, at end insert—

‘(3A) Expenditure incurred under subsection (3) must not exceed such amount as may be prescribed in regulations.’.

This is a probing amendment, which deals with the relationship between the Government and the new consumer council. It would allow Ministers to set a cap on the council’s spending. It is important that there be a clear limit on such spending, although within that it would clearly be for the council to decide what it regards as a priority. The essence of the amendment is to gain an understanding of whether the Minister, and therefore the Department, believes that controls are in place to ensure that the new organisation’s remit focuses on efficiency and the right priorities. The amendment would simply give Ministers the power to set a cap, should they wish to do so, and I shall be interested to hear the Minister’s response.

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 accept that the hon. Gentleman has moved a probing amendment, and I hope that my explanation will reassure him and other members of the Committee about the intentions behind the clause.

The amendment takes a particularly bureaucratic approach to what we want to do. A statutory limitation on the new council’s spending is not the best way to ensure that consumer interests are met. Expenditure by the new council will be subject to a budget agreed with my Department each year, as is usual practice for non-departmental public bodies. As with similar bodies, it is likely that rolling three-year budgets will be reviewed annually to provide for as much planning certainty as possible. At the outset, therefore, there will be an understanding of the overall budget for the three years, but that will be reviewed each year to ensure that things are working effectively. To take up a point that hon. Members raised earlier, that will allow certainty about the planning process and outcomes, as resources will be dealt with in a transparent way to meet requirements.

Another important point is that the budget will be subject to close consultation—the hon. Gentleman did not raise this in his amendment, but I am sure that it  relates to the intentions behind it—between the Department, the gas, electricity and postal services companies and, later, the water companies regarding their respective contributions. It is particularly important that those sectors are involved, since they are being asked to contribute significant resources to secure the NCC’s work, albeit for public interest reasons, to which we are all committed.

When, in a previous life, I introduced the national minimum wage, I always argued that we would need a Low Pay Commission. If we impose a wage settlement on employers and ask them to put their hands in their pockets, there is a requirement for them to be involved in discussions and decision making about the level of the settlement. For a different reason, the process before us is very similar: we are trying to ensure that industries are engaged at every level as regards their respective contributions.

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

The Minister is absolutely right that I wanted to understand the relationship not only between the council and Ministers, but between the council and its contributory organisations. At what point will those organisations and their industries first be informed? I was not quite clear about that from what he said.

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 minute the process of establishing the budget and the financial resources commences, there will be engagement with the partners, including the organisations that I mentioned, the Department, the new NCC and its executive officers. It is incredibly important that we proceed on that basis. At the end of the decision-making process, we will come to an holistic figure for the three-year programme, which will be reviewed annually on a specific basis.

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

In those circumstances, how is it envisaged that a dispute between, for example, the Secretary of State and the other contributory organisations will be resolved?

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 best way to describe it is to say that it would be resolved by the Secretary of State, in the sense that there is an absolute necessity in those situations to establish a budget reflecting the agreed programme of work. That has a consultation process in its own right too, and it is important that that is so.

To answer a point that I think was also alluded to, the budget-setting process inevitably includes efficiency and value-for-money criteria, which will be worked up and are not for discussion here. A limit could have the effect of preventing the new council from addressing urgent and unforeseen issues that could arise during the year, and we should not inhibit the council in that way. In the light of my explanation, I hope that the hon. Gentleman will accept my efforts to reassure him and his colleagues.

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

I entirely agree with the Minister that the form of the amendment for which I am responsible is very crude. Naturally, it is a device that we are using, and I fully accept that it would not be something that, were I in his seat—

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

Well, if I can delicately put it this way: if we had the opportunity to swap places, then, like him, I would take the view that the amendment is crude in form. However, its purpose was simple. Rightly, the Minister has taken us through the relationships that will prevail between the council and the Secretary of State and other contributors. The financial services industry makes a significant contribution to funding the Financial Services Authority, and the processes set out in the Bill are similar. I certainly found the Minister’s remarks helpful. I hope that the industry will have done so too, and on that basis I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 ordered to stand part of the Bill.