Clause 16

Consumers, Estate Agents and Redress Bill – in a Public Bill Committee at 9:15 am on 19th April 2007.

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Investigations relating to public post offices

Question proposed, That the clause stand part of the Bill.

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

Clause 16 provides a specific power for the new council to investigate any matter relating to the number and location of public post offices in the United Kingdom. That specific function recognises the importance of the post office network, and the valuable  work undertaken by Postwatch on the issue. It mirrors the provisions in the Postal Services Act 2000. There is no change to, or weakening of, the powers to protect consumer interest.

Maintaining the existing sectoral expertise in the postal services sector is vital to the success of the new body, and we recognise the importance of that in a sector that has only recently been opened up to competition. Having a strong consumer advocate in the postal services sector, and maintaining the sectoral expertise that Postwatch has built up and which the new council will inherit are vital to the Government's proposals for a sustainable post office network.

As a result of the clause, the new council will continue the role of Postwatch in representing the views of consumers in the Post Office restructuring programme, offering consumers a stronger voice on that and similar issues that arise in other sectors. We envisage that the new arrangements will be in place within a year of the Bill receiving Royal Assent.

The Minister for Trade, my right hon. Friend the Member for Makerfield (Mr. McCartney) referred yesterday to the project that is under way to plan the implementation of this important Bill. He assured the hon. Members for Hertford and Stortford and for Richmond Park that we would keep them briefed on the work as it progresses.

Postwatch is fully engaged in early planning for implementation of the new arrangements. Both the chair and chief executive attend the two groups that have been set up to oversee implementation. Both groups meet monthly, and also include representatives from Energywatch, the National Consumer Council and the Office of Fair Trading. The groups are tasked with ensuring that consumer interest continues to be effectively represented both during the transition to the new arrangements, and once the new arrangements are in place. Their responsibilities include work on the timetable for implementation.

Other work undertaken by the groups so far includes: the mapping of existing work; the transferral of resources and best practice to the new council as well as additional work that the new council could usefully undertake; the identification of tasks required to close down Energywatch, Postwatch and the National Consumer Council; and early planning to extend the Consumer Direct service to the energy and postal services sectors.

We are taking great care to ensure that the work being undertaken by Postwatch on Post Office network restructuring will not be disrupted during the transition period. Additional staff and other resources are being allocated to Postwatch to assist them with the programme, and these resources will be carried forward into the new arrangements for the duration of that work.

We recognise the importance that Postwatch places on the work of its regional committees, and the role they will play in the assessment of the Post Office network restructuring programme. The Bill makes specific provision to enable the new council to establish regional committees when it considers them to be beneficial to consumers. That is a matter for the new council to determine, but as I have said, we are working with the existing consumer bodies to plan for the implementation of the new arrangements. I move that this clause stand part of the Bill.

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

I am grateful to the Minister for those opening remarks. However, I think that they focus primarily on the transfer of where we are now to what is proposed in the Bill rather than what is actually in the Bill. The closure of post offices is clearly a matter of great concern to many of our communities. The Minister will know about both the hurt and the anxiety that the policies of the Government and Royal Mail are causing. However, I do not propose to rehearse here all those arguments about the way in which the Government’s policy is failing many of our communities. What I would like to do is to explore the issue and thelikely operation of clause 16, particularly the phrase in subsection 1:

“Without prejudice to the generality of section 11, the Council may investigate any matter relating to—

(a) the number and location of public post offices”.

That is, apparently, a very wide remit and it is welcome in that sense. However, I would like to explore whatthe phrase means in practice. For example, wouldthe council be able to investigate the rationale of the Minister’s policy and of Royal Mail’s decisions in the current round of planned closures? It is unlikely, I would have thought, that every last closure under the current proposals will be completed by the time that this measure comes into force. So, one would like to know whether, in fact, this power would extend backwards, to enable the council to examine something that is brought before it at that point, albeit that the original policy may have occurred before the Bill becomes law. That is one area I would like to examine.

It is not just a question of the retrospective nature of considering something that happened before the Bill becomes law; it is a question of examining the effect of that policy, which will still be current when the Bill becomes law. I do not think that a defence of “It’s retrospective, therefore we cannot look at it” would be sufficient. However, I would be interested to hear the Minister’s reply.

In particular, thereafter would the council be able to investigate the funding issues that Royal Mail would often cite as being a case for future closures or relocations? Royal Mail is a public company and therefore has certain matters of openness, but it will also have certain matters of confidentiality, which Ministers often cite when they debate these issues in the House. Further to that, if the relevant papers are not forthcoming—whether from Royal Mail, Post Office Counters, or other related sub-units of the organisation, or indeed the Department—how will the council be able to secure those papers in order to fulfil its investigations? I think that those are the principal areas that I would like to explore with the Minister, if I may.

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 would like to explore much further the transition arrangements, as it were, that have been described, and establish whether it is possible to put in place transition arrangements that will be robust enough to deal with the kind of pace of closure that is being proposed for the Post Office network. Some 2,500 closures are proposed, the process will start in the summer and extend over two years and that figure does not include voluntary closures, which presumably will take place at the same time, particularly if we continue to have the withdrawal of business from our post offices, which makes it less and less economic for individuals to remain as postmasters and sub-postmistresses.

The Minister mentioned the regional structure that is so critically important to the way that Postwatch currently responds to consumer needs and to issues related to post office closures. As I understand it, I think that the nine regional committee members, who I believe are all Government appointees, will in effect lose their authority somewhere in the process of this transition. I wonder if the Minister can help us to understand how there will be some seamless flow of authority when these various regional committees are playing such a key role in providing advice. I understand that the consultation period for the closure of a post office will be something like six weeks, which is a very short period. If that period happens to coincide with the change in authority and personnel, perhaps the Minister could give us some idea about how that change will not disrupt the underlying purpose of the role that Postwatch has played, which is the role that the National Consumer Council intends to play in future.

I think that it is necessary to put on record a great deal of concern about the fact that transition is something that is easy to describe in theory, but very difficult to implement, particularly at a time when a very significant piece of work is being undertaken that is dependent on a part of the structure that is not core to the activity of the National Consumer Council. The principle that the Minister has described to us is of a national council rather than a regional one. It provides the opportunity to create regional, frequently ad hoc, committees, but that is not core to the structure or to the functioning of the organisation. We need to put on record that we are concerned about that.

All the discussions have focused on the 2,500 post offices that we assume will be closed with compensation under a forced closure programme. There has been very little discussion of voluntary closures, however, which will surely happen at a fairly rapid pace at the same time. There is no clarity as to whether those post offices will be replaced or what will replace them. We do not know whether they will be left closed provided that that does not disrupt the access criteria. How on earth will the new organisation cope with that process during the transition?

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

Opposition Members have raised entirely legitimate concerns about certainty. The hon. Member for Hertford and Stortford correctly described clause 16(1)(a) as wide-ranging. By way of assurance to him, I say that the questions that he raised relate to the independence of the new National Consumer Council, which we have discussed. That thread will run through our discussion of additional clauses later.

The arrangements hand over from Postwatch to the new council the examination that Postwatch has already made of the Government proposals. It has been detailed work; I think that Postwatch made 199 recommendations during the course of the consultation, the results of which are currently being assessed. The Secretary of State is due to make a statement to the House in May, when we have got past purdah and fully assessed the 2,500 responses that we have received. I hope that it will be clear that there has been a thorough examination of the conclusions that we set out in the consultation and how we reached them, and of our response to the submissions that we have received. That also relates to the point that the hon. Member for Richmond Park raised.

In his statement on 14 December, the Secretary of State laid out the access criteria that we think are appropriate for the Post Office. They will provide the template to which the new National Consumer Council will hold the Government and Post Office Ltd, by stating that there should be no further diminution. There is concern about natural closures; there will always be natural closures, because people retire or die and leases come to an end. That will be a matter for Post Office Ltd to manage. The council will hold it to account and protect the consumer’s interests.

Photo of Tobias Ellwood Tobias Ellwood Opposition Whip (Commons)

It is on the point of holding the Government to account that I wish to pose a question. My hon. Friend the Member for Hertford and Stortford stated that this is an extremely wide-ranging clause. Were the council to conduct an investigation into the number and location of post offices in England, Wales or Scotland, and come to the conclusion that there were not enough post offices, how would the Government be held to account and persuaded that we needed more?

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

The hon. Gentleman tries to draw me into a hypothetical discussion of “what if?” It is a legitimate question. I think that it would be a matter on which the council would have to engage with Government. If the council felt that there was a deficiency in the number of post offices or in any other area for which it thought that the Government was responsible, it would use the dynamic of its relationship with the Government to deal with that.

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

Would that dialogue be made public? Would we know that the National Consumer Council had made it crystal clear that it felt that the Government’s policy was wrong and that post offices needed to be reinstated?

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

That brings me neatly on to the hon. Gentleman’s other, earlier points about catering for information requests, the publication of those requests and how the council could seek information. We will come on to those issues in clauses 24 and 25, which include a clear power and expectation for the council to seek information from licensees, for example. We will grant it a statutory power to get information and publish reports. We will shortly come on to the clause that deals with price sensitivity and commercial confidence in the context of those who give evidence to the NCC or the Secretary of State. They need to have the confidence that, while the NCC has the power to seek their evidence and publish reports, they will not be undermined in the market place.

My final response to the hon. Gentleman is that the NCC will be fiercely protective of its independence. It will want to demonstrate that it will publish that which it believes to be in the interests of consumers.

Photo of Tobias Ellwood Tobias Ellwood Opposition Whip (Commons) 9:30 am, 19th April 2007

I am grateful to the Minister for allowing us to probe a little further this small but hugely significant clause. It clearly gives the council powers to investigate the number and location of post offices. It would be helpful for the Committee to understand where its  thoughts, recommendations or investigative reports might lead. If they are simply going to be put into a file and not presented to the public or discussed by a committee, we have to ask why the clause is there. It is there for a reason, and that is to enable the public to understand what the recommendations are. We need to know whether, when those recommendations have been made, the Government will be held to account and whether any action will follow.

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

The answer to the hon. Gentleman lies in the certainty that the new NCC will be able to act independently. It will be able to publish information and reports as it wishes. It will then be a matter for public representatives, should they think it appropriate, to hold Government to account.

I cannot imagine my colleagues seeing a report from the NCC that says that the Government have got something dreadfully wrong and sitting there quietly. They will take us to task, and I guarantee that the Opposition Benches will be in uproar. In setting out the powers and the statutory responsibilities of the new NCC, we are ensuring that there will be opportunities through all the mechanisms of Parliament for the Government to be held to account should the NCC challenge them on any matter for which they are responsible. Nothing is being hidden here.

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

Before we are in uproar on these Benches, may I more modestly ask whether, in investigating whether Government policy is appropriate, the council will be able to call Ministers?

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

I shall get back to the hon. Gentleman on that, and advise the Committee. My instinct says that that would not be an expectation. Later clauses give the NCC the ability to seek information and evidence. The Trade and Industry Committee has the opportunity to call Ministers to account, and I am sure that it will consider any report that is published in due course as closely as it already does those published by bodies such as Postwatch. It will certainly hold Ministers to account by requiring them to give evidence.

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

Would its investigative powers enable it to call directors of Royal Mail?

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

I think that we are anticipating clauses that we have yet to debate. They set out the powers of the new NCC to seek information and evidence from licensees, regulators and other interested parties. The hon. Gentleman asked earlier how we could ensure compliance. There are also powers relating to the civil courts and regulators, and mechanisms will be put in place to ensure that it is possible to obtain information that has been requested.

Photo of Tobias Ellwood Tobias Ellwood Opposition Whip (Commons)

It is important to place on record our concern about what has happened with the post offices. I hope that the chairman of the new council will demonstrate his impartiality. One of his first tasks will be to make an assessment of the number and location of post offices in England and Wales. We press the point that it will only be a matter of time before such a  report comes before Parliament; it will be the first test of the power of the council, its recommendations and its accountability.

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

There is an adjournment debate on post offices in Westminster Hall next Tuesday morning. If any of my colleagues wish to join me there it will be their first opportunity to carry on this discussion on post office closures. There will be another opportunity after the Secretary of State has made a statement to the House following the consultation exercise, to which we have had 2,500 responses. Post Office Ltd., with the assistance of Postwatch, will then engage in consultation with parliamentarians and local authorities. There will be opportunities to scrutinise the process of the restructuring programme as it progresses. Common sense dictates that the transition from the present arrangements to the new arrangements for this very important core part of the work programme should be as seamless and efficient as possible.

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

The Minister is obviously very keen to discuss the matter in other clauses, in other places and at other times. We return to the simple question, to which he has not responded: are the investigatory powers retrospective or not? It would be nice if he could respond to that question today, but perhaps he will do so next week, who knows?

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

The answer is that the new NCC has independence of action; it can determine what it wants to do. As a result of the scrutiny offered at present by Postwatch and by what will happen in the months ahead, I would be surprised if the new NCC would want, retrospectively, to look at what has gone before, or already been undertaken, and given that Postwatch will be centrally involved. I am not going to anticipate what the new NCC will, or will not, want to do; it will be for the NCC to develop its own work programme.

Photo of Steve Pound Steve Pound Labour, Ealing North

May I ask my hon. Friend if he is as concerned as I am that while we are talking about putting down markers, as the hon. Member for Hertford and Stortford did, we are in danger of extending the ambit and remit of the NCC to the area of social policy? If post office closures are defined on commercial terms within a set template, but there is undoubtedly a social policy and a social impact dimension to the closures, would it be appropriate or fair for the NCC to have to widen its remit to consider all those supernumerary issues? That is the role of Parliament; it is the commercial viability and the service delivered to the consumer that should be the prime remit of the NCC.

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

My hon. Friend makes some strong points. I reinforce what he said by adding that the new NCC has extensive investigative powers. It will determine its own work programme and it will be independent in deciding what it wants to look at. I am not going to anticipate that it will want to revisit the Government’s decisions from the full statement in December, as that will be a matter for the NCC. I would be surprised if it did so, given that it will be halfway through the work programme, which the hon. Member for Richmond Park outlined. However, it is unlikely that it would not take a very close interest in it.

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 thank the Minister for giving way, as I want to respond to the comments made by the hon. Member for Ealing, North (Stephen Pound). In the past, there has been a fairly generous interpretation of Postwatch’s responsibility to the consumer, which includes many social issues. It is not merely a matter of whether the post office gives people a decent service in the narrow sense of whether it sells stamps efficiently. The post office has a recognised social role in termsof the viability of communities and of vulnerable consumers, which I understood to be a significant part of its remit. That certainly comes into the social arena. Could the Minister to confirm whether he now sees the NCC as having a narrower role in that regard because that would raise some serious concerns for us? Where will that missing piece of activity—representation and advocacy—go if it does not fall within the remit of the NCC?

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

I hesitate to point out that the hon. Lady has tabled an amendment later in the Bill to say that the new NCC should report in the wider public interest because I may be accused by the hon. Member for Hertford and Stortford of not wanting to discuss the issue now. I am not running away from any debate, but she has tabled an amendment specifically on this issue. My hon. Friend the Member for Ealing, North was saying that there is a particular role for the new NCC, there is a role for Postwatch and we are not moving away from that. It has strong consumer interests. It has independence of action in terms of seeking information and evidence and publishing reports.

I must tell the hon. Lady that we oppose her amendment, which I am sure will come as no surprise to her, because accepting it would take the NCC into the territory where my hon. Friend says it does not have a role. It is not a social policy think tank, it is there to be the advocate and champion for consumers. If it is in the consumer interest, which may well be very wide, it has a role and it will be up to it to determine what its work programme should be and what it wants to publish. But to give it the role described in the hon. Lady’s amendment would go too far.

Photo of Tobias Ellwood Tobias Ellwood Opposition Whip (Commons)

It is interesting that the hon. Member for Ealing, North raised this issue. The council is the custodian for the consumer and so its voice must be listened to. Our concern is how far that voice will be listened to. On the question of accountability and independence, will the chairman of the council be allowed to be a signed-up many of any political party?

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

There are tried and tested arrangements that have public confidence in terms of the appointments of individuals to positions such as this. I have no reason to think that there will not be full public confidence in whoever is appointed in due course.

Question put and agreed to.

Clause 16 ordered to stand part of the Bill.

Clause 17 ordered to stand part of the Bill.