---

Public Bodies Bill [HL]

My Lords, although I now have no involvement with Consumer Focus, I was on the National Consumer Council—something that I gather I share with the noble Baroness, Lady Wilcox—before its merger with Energywatch and Postwatch. The merger in 2008 that created Consumer Focus, under the Consumers, Estate Agents and Redress Act 2007, was the result of extensive parliamentary debate. The merger was carefully designed—including here in this House—and was implemented with good planning as well as wholehearted and widespread support. The merger has created a highly successful independent champion for all consumers across England, Wales and Scotland and for postal services consumers in Northern Ireland. Consumer Focus has specific responsibilities for energy and postal services users—and, from next year, for water users in Scotland—and is admired around the world as the leading voice for consumers. I have a number of fears about the Government’s intention to abolish Consumer Focus and to pass its work to Citizens Advice. My concerns centre partly on the very different roles of Consumer Focus and Citizens Advice and partly on the duties that Parliament gave to Consumer Focus. I also have concerns about the impact on devolution, on consumer affairs and on accountability as well as on the capacity of Citizens Advice. There is also a fundamental concern about the undermining of consumer protection. Consumer Focus is not an advice or complaint-handling body but a policy and advocacy voice across the whole of consumer affairs with a record in industry-wide investigations and achievements. I have real concern about how Consumer Focus’s work on behalf of consumers—the least represented group in our economy compared with unions or business—will be maintained. Let me start by taking the example of a current consumer topic—this may sound an unusual issue—which is the volume by which bread and beer may be sold. Over the Christmas Recess, David Willetts, the Minister in the other House, started his new year by suggesting the abolition of the regulations that provide the 400-gram rule for the sale of bread and that require beer to be sold in pints and wine to be sold in specified measures. I emphasise that the National Consumer Council and Consumer Focus have never been pro regulation for the sake of it. Indeed, Consumer Focus has often championed and helped to obtain deregulation, for example, over dispensing opticians and over the numbers of licensed hackney cabs. However, it seems to me that in any such discussions on the issue of how bread is sold or whether beer should be sold only in pints, it is absolutely right that the voice of the consumer is heard. On such matters, producers will have their own view, whether that is about the profit that they can make or the freedom to innovate—which probably means selling smaller loaves. Government will have a view on whether, in the case of beer and whisky, a proposed change could affect the tax take, or, in the case of bread, on the cost of monitoring compliance. Regulators will have a view on competition and whether rules ease or hamper new entrants. However, where is the voice of the consumer without Consumer Focus? An experienced trading standards officer wrote to me when he heard about the possibility of bread quantities being changed and all those safeguards going. He said that he could not imagine that any well informed consumer would call for those changes. I do not know whether he is right or wrong, but I know that there needs to be a body that will obtain the views of consumers and reflect those in the debate. Citizens Advice is much more focused on providing advice and guidance to individuals who come through the doors of citizens advice bureaux. Theirs is not the role of looking at market structures and at future regulation, in which Consumer Focus—independent of Government and with a specific consumer interest—is so expert. Bread is just one current issue that requires what Consumer Focus can contribute to our national life, but another historic example is that of ombudsmen. Consumer Focus—then the National Consumer Council, which was possibly even chaired at the time by the noble Baroness, Lady Wilcox—made one of its most significant achievements for consumers by its original support for the concept of ombudsmen, which we all now take for granted. The National Consumer Council saw not only how consumers, once they knew that they could get their complaints heard and assessed independently, would have more confidence in the product or service but how businesses could learn from good systems of complaint handling and how regulators or the press could judge industries or individual suppliers from such intelligence. The ombudsman system has been copied worldwide, but the credit for this forward-looking advance for consumers must lie with the NCC as was. We risk losing that service to consumers by placing the policy function within an organisation whose local funding is seriously stretched and whose core function is to help those who come through its doors rather than to plan systems for decades ahead. I have six questions, to which I hope we may get some answers. The first is on Consumer Focus’s duties. Under the 2007 Act passed by this House, Consumer Focus must have regard to the interests of vulnerable consumers, including the disabled or chronically sick, pensioners, people on low incomes and those in rural areas. The organisation must investigate complaints from individuals on electricity disconnections and can make representations to the provider. Consumer Focus refers enforcement matters to Ofgem and licence breaches to Postcomm on behalf of users. Its annual report must be laid before Parliament and Ministers. My question to the Minister is: what happens if Citizens Advice—a charity over which the Government can exercise no power—fails to carry out those statutory duties that were put in place to protect consumers? My second question is on Consumer Focus’s powers. Consumer Focus has significant powers, such as the ability to seek information from business and regulators. It is not clear that Citizens Advice is able to take on such powers. Will government retain such powers to itself, with Citizens Advice having to apply in order to use them? Consumer Focus has the right to confidential information from business, regulators, government, trading standards and the OFT. Will those powers, including access to confidential commercial information, be passed to Citizens Advice? Consumer Focus can investigate matters affecting individual consumers or raise wider issues for consumers across the economy, including the public services. Will those powers pass to Citizens Advice? Where would Citizens Advice get the expertise to undertake such market studies? Consumer Focus provides advice to government, regulatory bodies, the European Commission and other parties. Will Citizens Advice be tasked with that role and given the resources to undertake it? Consumer Focus has access to information from the OFT, Ofgem, Postcomm, Ofwat and any partnership, corporate body or person, including in the public sector, that supplies goods or services. Will Citizens Advice be allowed access to such information? Consumer Focus has the power to make supercomplaints where markets are failing consumers. Will that power, and the resources, be passed to Citizens Advice? Thirdly, I turn to devolution. The 2007 Act requires Consumer Focus to establish committees for Scotland and Wales and a postal services committee for Northern Ireland. Under the Government’s proposals in this Bill, Consumer Focus will be broken up because Citizens Advice operates in England and Wales only. Indeed, Citizens Advice has only a very small office in Wales, with very little policy capacity. That is no criticism—it reflects the fact that Citizens Advice does a very different job from Consumer Focus—but it means there are serious concerns in Wales about whether Citizens Advice can take on the work. Consumer Focus Wales exercises statutory functions conferred on Consumer Focus in so far as they are exercisable in Wales. The Wales committee listens to consumers and stakeholders in Wales about what is important to them and then decides its work plan for Wales. How will the Government ensure that the decision-making continues to be devolved to Wales by Citizens Advice? How will the Government ensure that Citizens Advice in Wales has the capacity to continue the excellent advocacy and policy work of Consumer Focus Wales? There are similar worries in Scotland, where Citizens Advice Scotland is quite separate from Citizens Advice in England and Wales. There is a real fear that Citizens Advice Scotland will not be able to take on Consumer Focus Scotland’s role and expertise. Scottish consumer champions are particularly anxious. One of them wrote to me. She said: "““There is a great deal of concern here in Scotland where Consumer Focus has a high profile and reputation. I work with both Consumer Focus and Citizens Advice and feel that they are completely different. I just hope that the Government do not think, ‘Aha, CAB equal volunteers equal cheap’. Volunteers can do a wonderful job, but they must be properly supported””." If I was being polite, I would say that there was little consultation, but I think that the truth is that there was no consultation—there was certainly no consultation with Cardiff and very little with Edinburgh —before the decision was taken that we see in the Bill. The Scottish Government have started to look at alternative solutions, as has the Welsh Assembly, but the truth is that no one outside Whitehall—indeed, no one outside BIS and the Cabinet Office, and I am not 100 per cent sure about BIS—thinks that the abolition of Consumer Focus makes sense. Consumer Focus is UK wide, with a robust devolved structure and a strong European and global role. The Government’s plans would result in there being no UK-wide consumer body. The emphasis on localism, with no voice on UK or EU matters, is a backward step in this regard, with the danger that British consumers will lose out once our international reputation was undermined. I ask the Minister whether the Government have given any consideration to that aspect. My fourth issue is accountability. Consumer Focus is subject to judicial review, falls within the remit of the Parliamentary Ombudsman and is audited by the NAO. Consumer Focus’s chief executive is an accounting officer who is personally and directly accountable to Parliament. The Government claim that this ““bonfire of the quangos”” would increase accountability. However, transferring Consumer Focus functions from a body that is accountable to Parliament to a charity that is accountable only to its board will reduce public accountability. Should this independent charity fail consumers, the Government would have no power to remove its chair or officers and Parliament would have no right to examine its plans, reports or activities. Is that the Minister’s definition of increased accountability? Fifthly, does Citizens Advice have the capacity to take over these very different functions? I am a great admirer of Citizens Advice for the advice that it offers to those who come through its doors. Citizens Advice engages thousands of volunteers who help millions of our citizens, but it is completely different from Consumer Focus. Consumer Focus has a track record of engaging with regulators and market participants on the operation of markets and regulated sectors. Consumer Focus has substantial sectorial expertise, plus the ability to apply lessons across the economy. It is true that Citizens Advice can derive intelligence from the aggregation and analysis of client experience, but it conducts only a handful of consumer research exercises each year, in contrast to the 60 research projects that are conducted by Consumer Focus annually. The Citizens Advice mission derives from experience of disadvantaged and vulnerable consumers, whereas Consumer Focus is concerned with the operation of markets generally and with responsibility for all consumers. In addition, citizens advice bureaux face a funding crisis just as they are being hit by an unprecedented increase in demand. Some CABs are seeing their local authority funding being cut by two thirds, while the number of clients seeking help with debt, benefits and homelessness has doubled. Gillian Guy, the chief executive of Citizens Advice, has warned of the risk to the most vulnerable in the Government’s benefit changes and predicts that the cuts to legal aid will affect citizens advice bureaux. Indeed, local infrastructure is already in danger of collapse in many areas. Gillian Guy has also warned the Government that her organisation is under no obligation to take on Consumer Focus’s role and there is no guarantee that it could take on the watchdog’s work. In her words, "““We can’t make offers to consumers on what we can do for them and then fail on the offer””." For her, funding is the crux, as some local authorities believe it is easier to cut grants to bodies such as Citizens Advice than to make their own staff redundant. She has problems and queries about the money for the organisation’s existing funding, let alone what will happen when it takes on this extra chunk of work. However, my questions go further than the funding and encompass the individual resources, motivations, priorities and powers, all of which are needed if consumers are not to be vulnerable to the whims of the market. That brings me to my sixth and final point, which is about concern for consumers. Is the real reason behind the Government’s intention to abolish Consumer Focus simply a lack of support for consumer protection? Citizens Advice will be able to do the job only if it is given the resources, but Consumer Focus has already had its budget cut by 17 per cent, with more cuts coming next year. There is no sign that Citizens Advice will be given sufficient extra money to take over the areas vacated by Consumer Focus and no decision has been made on whether Citizens Advice will get the legal powers to demand information from companies. Those powers were used by Consumer Focus to win a £17 million rebate for consumers from npower and a £15 million saving for ISA investors. My fear is that the Government are ending a 35-year tradition of supporting a body that has legal powers to win consumers a fair deal in markets that are dominated by the interests of producers. Citizens Advice will have its hands full taking on Consumer Focus’s tasks and coping with the increased demands made of its bureaux alongside reduced funding. Citizens Advice is a federation of 300 individual charities. Yes, it is locally responsive, but consumer protection is essentially national and European, and perhaps that is what the Government do not like. It is not apparent how this move and the resulting cutbacks will deliver a strengthened consumer regime. For reasons of time, I cannot go through all that has been said about the proposal, but my view has been echoed through all the press coverage of this debate. The Daily Mail said: "““Money Mail has no time for cash-wasting quangos … However, Consumer Focus has proved a worthwhile champion for the downtrodden consumer. It has the strength, resources and power to take on large organisations in a way that others such as Citizens Advice … cannot. Big business can call upon billions of pounds in any fight against the consumer, whereas Consumer Focus costs a mere £14 million … if there is any way it can be saved, then it should be””." Martin Lewis said: "““This is a bonkers move. To remove an organisation that has made consumers £80 million … leaves us without any state-funded body fighting for consumers. I'm a big fan of Citizens Advice, but it's a charity that focuses on individual advice, not attacking the minutiae of public policy. … The focus and power Consumer Focus had to ask questions of big business and big government were integral to supporting consumers and will be a big loss””." The Daily Telegraph asked: "““Who will protect us now from being ripped off?””." The Independent judged that the result would be, "““Consumers burned in the bonfire of the quangos””." The Observer questioned the wisdom of, "““leaving the public to rely on volunteers to follow up complaints over exorbitant gas and electricity bills””." The Times said: "““Abolishing Consumer Focus is mad””." On behalf of all consumers, therefore, I beg to move this amendment.