Clause 11

Consumers, Estate Agents and Redress Bill – in a Public Bill Committee at 5:30 pm on 17 April 2007.

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General powers of investigation

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

I beg to move amendment No. 15, in clause 11, page 7, line 11, leave out subsection (2).

The amendment is reasonably straightforward. Its purpose is to seek from the Minister the rationale behind the criteria chosen, rather than necessarily to remove any criteria from being chosen. I have a further point related to that. Will a “novel issue”, which is the term highlighted in the clause, have to be entirely new? One thought that occurred to me was whether, if an issue arose in Scotland and then a similar issue arose in Hertfordshire, it would be determined to be novel, not least given the fact that the two locations have different legal systems. Will the Minister clarify exactly what he means by “novel” and what its limits would be?

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office 5:45, 17 April 2007

I will try to give the hon. Gentleman a rational explanation of what we are attempting to achieve with the clause. I accept from the outset that it is a probing amendment, and I hope to give a response to it and to provide the Committee with information that will be helpful in relation to the clause.

Clause 11 will provide the new council with general powers of investigation, and subsection (1)(a) will permit the council to investigate

“a complaint made by or on behalf of a consumer which appears to the Council to raise one or more issues of general relevance”.

A consumer could make a specific complaint on their own behalf and a wider issue could be raised by a general complaint. We need the capacity to deal with wider issues, while dealing with specific issues raised by the individual consumer. In other words, a distinction will be drawn between the investigation of a complaint that may be relevant to consumers generally and an individual complaint. The new council will not have a role in the investigation of individual complaints, other than those made by vulnerable consumers in the designated sectors.

The Bill will provide new and better ways to handle individual complaints and introduce new complaints handling standards, which will be set by the regulators in energy and postal services. It will provide a new redress scheme to determine issues that cannot be resolved by a consumer’s supplier.

On general complaints, subsection (2) empowers the new council to investigate complaints that involve novel issues that affect a group of consumers or consumers generally, or that may have an important effect on a group of consumers or consumers generally. The hon. Gentleman asked what a novel issue will be, and my practical explanation is that, as I said at the outset, it is an issue that is raised in a way that has wider implications for consumers’ rights in the marketplace. Therefore, a judgment will be made ina particular instance about what would affect such changes.

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 wish to ask for clarification on a point. As the Minister takes us through this helpful discussion of the general powers of investigation, he will be conscious that people’s complaints have been important in exposing general underlying problems, rather than just an isolated problem. Information from complaints has not only been important to the various watchdogs, but to the regulators. Given the proposed change in structure, will the Minister discuss how the information flow that he describes as complaints to or from the National Consumer Council will also transfer, where relevant, to the regulators for their purposes?

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

In that respect, “novel” does indeed mean new, but clause 11 will permit the new council to investigate other issues as well. We are therefore providing the new council with a wide scope, which I am sure that we all want to see, as it will give the council direction when exercising its powers of investigation.

I have heard the assertion that consumers will be stranded by the new arrangements. In the discussions on planning for implementation, the consumer bodies made it clear that they have no consistent means of recording contacts, inquiries and complaints and that they have no means of distinguishing the instances where consumers may be merely referred to companies or elsewhere for assistance. Consequently, consumer bodies have asked my Department to undertake a special project to get to the bottom of that matter, and we have agreed to do so with their assistance. That relates to one of the points made by the hon. Member for Richmond Park about certainty of what the process involves and about learning from the experiences of consumers, the issues that they raise and how best to resolve them.

The project consultants will first review the classification criteria across bodies—for example, contacts, inquiries, complaints, complex complaints and complex inquiries. Secondly, they will identify a set of comparable data between the bodies on volume and type of all contacts. Thirdly, they will map how inquiries and complaints are handled. Fourthly, they will develop recommendations for how designated vulnerable consumers, as defined by the Bill, will be  identified across the bodies. Fifthly, they will apply any definition developed to provide a cut of the current data relating to consumers who might be identified as designated vulnerable consumers. It is important to future debates that we can make decisions based on evidence and in a way that is effective for consumers, particularly vulnerable consumers.

The project is currently under way, and I hope that work will be complete by the end of April or the beginning of May. I assure the hon. Members for Richmond Park and for Hertford and Stortford that when work is complete, I will brief them on the outcome. From my perspective, I want to provide certainty and an assurance to all concerned in the implementation of the project that no one will be left guessing about the direction that we are taking to set up the new organisation. When it is established, the organisation’s introduction will be phased in, so that everyone—not just consumers, but those who have taken the time to develop the proposal’s structure—can be certain about it. I hope that that explanation helps hon. Members.

The hon. Lady’s legitimate question referred to the implementation strategy, which we will discuss in more detail during a later sitting, when we have more information about this serious matter.

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

It was nice to be provided unexpectedly with an additional piece of information, which I hope that the Minister will send to other members of the Committee. He understandably wished to show his willingness to share the information, but it is important that we all have the chance to deliberate on these matters. I am encouraged to know that work is taking place. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 11 ordered to stand part of the Bill.