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Public Bodies Bill [HL]

My Lords, the noble Lord, Lord Young of Norwood Green, described the amendment as a probing amendment. In fact, I am in a position to accept one of the amendments so it is rather different from how the noble Lord might have perceived it. This is a concession on the hoof, so to speak. I am grateful to the noble Lord, Lord Myners, for his intervention. I am not an expert on banking. My noble friend Lord De Mauley is and has apparently just written a letter on this very subject which he is going to bring to me so that I can give some authority to the answer. Otherwise I think I would be waffling when I came to tackle the answer—waffling more than usual. As the Explanatory Notes state, the Government are proposing to merge the competition functions of the Office of Fair Trading and the Competition Commission and are minded to transfer most of the consumer enforcement functions and resources of the Office of Fair Trading to trading standards, and advice, information and education functions and resources to Citizens Advice. Merging the bodies will eliminate duplication of effort in the competition regime, while transferring the consumer functions will improve consumer empowerment and protection by simplifying the bewildering array of overlapping bodies faced by consumers when they have a problem. I can assure the House that our proposals would remove no substantive consumer protections. A merger between the Office of Fair Trading and the Competition Commission would create a single, powerful competition and markets authority with a dynamic competition culture and more flexible use of competition tools. It would eliminate unnecessary duplication of effort for business, as well as for the authority. It would be able to attract the best competition skills and would create a powerful and unified advocate for competition in the UK and internationally. Competition enforcement is an important element in the growth and productivity of the economy. While the UK’s competition regime already has many strengths, the Government believe that it is only right to consider where it can be further strengthened and rationalised in some way. On the consumer proposals themselves, the transfer of most consumer enforcement functions will target resource where it is most needed—to support trading standards services, which the Government believe are best able to ensure robust enforcement against rogue traders, scams and businesses which abuse the law and their relationship with consumers. The resources that were available to the OFT would be transferred to trading standards. I assure the House that our proposals, on which we will consult, will include a range of options for keeping flexible powers for the new competition and markets authority to use consumer enforcement tools where they are the most appropriate remedy to cure a competition problem. The transfer of the OFT’s advice, education and information functions, including the Consumer Direct helpline, to Citizens Advice and Citizens Advice Scotland , along with the functions of Consumer Focus, would place all these functions in a single organisation well-equipped to represent the consumer. The appropriate resources would accompany this transfer of functions. The Government believe that trading standards and Citizens Advice provide a first-class service and operate much closer to the public. Transferring functions to them would be wholly consistent with this Government’s support for action and decision-making at local level. In particular, devolving key elements of consumer enforcement to a local level would target resource where it is most needed. It would reduce the potential for gaps and empower local authorities to find ways to address all threats which have a combined local and national dimension. Trading standards services already have experience of handling complex cross-authority cases successfully. We need to build on that and develop a body with the right capabilities, resources and prioritisation mechanisms. Perhaps I may address this whole business of consultation. I think my noble friend Lord Newton of Braintree might have had an outdated briefing because the information on the local briefing makes clear that we are commencing a consultation process fairly soon. In fact, the consultation document may be available shortly, in the next 10 days or so, which means it will probably be available by the time we reach Report. The idea is that the consultation period should be completed within this year. The whole point of consultation is to address the detail of these proposals because it is in the mechanics of making this work that it happens. We will consult on a model that ensures that money is targeted onwards towards national enforcement priorities, set and co-ordinated by a trading standards policy board made up of chief trading standards officers for England and Wales, with similar arrangements for Scotland. National threats could be addressed on the ground through one or more dedicated expert teams, either following the existing Scambusters model or through lead individual local authorities. The Government’s consultation will also address the most economically complex consumer enforcement cases and will consider the case for the newly merged competition authority to retain some consumer law powers to supplement its competition work. Given that the Government’s proposal is to merge these bodies, noble Lords may query why they are listed in Schedule 5 to the Bill. I am happy to clarify the matter. At the time of the Bill’s introduction, there was a proposal to use Schedule 5 to transfer some functions from these bodies and consequently to use Schedule 7 to move the bodies into Schedule 2, facilitating the proposed merger. Given the removal of Schedule 7, this is no longer possible. I therefore confirm that the Government intend to bring forward an amendment at a later stage of the Bill’s passage to move these bodies into Schedule 2 to facilitate the merger. The Office of Fair Trading will need to remain in Schedule 5, in order to facilitate the transfer of its consumer functions prior to the expected order to merge. Therefore, I cannot accept Amendment 97. However, the Government have concluded that it is no longer necessary to list the Competition Commission in Schedule 5, and on that basis, I am pleased accept Amendment 89 moved by the noble Lord, Lord Dubs. I have received quite a lot of briefing on a number of issues raised by noble Lords and I will try to go through them. As we approach the dinner hour, I hope that the House will forgive me for doing so, but this is an opportunity to clear up some of these questions. The noble Lord, Lord Dubs, asked about consumer credit. It is subject to a separate consultation. In December, the Treasury and BIS issued a joint consultation on transferring the regulation of consumer credit from the OFT to the new Financial Conduct Authority. He also asked about trading standards resources, which of course will be addressed at the local authority level. But we are aware of the pressures on all services, including local authority trading standards. How local authorities allocate resources according to local priorities is a matter for them, but it is essential that any new money must be targeted on broader projects that respond to a national threat. It must complement work that is already being done rather than be seen as new funding for current projects. Nevertheless, there may be some positive benefits in the form of greater co-ordination and capacity building that would arise from these changes. Specifically as regards the future of the Local Government Group, it is our view that a board of chief trading standards officers, either as a successor to Local Government Regulation’s Trading Standards Policy Forum or the Association of Chief Trading Standards Officers, would in practice lead on the co-ordination work. The noble Baroness, Lady Hayter, asked about economically complex cases. As I mentioned in my main text, trading standards departments have demonstrated their ability and professionalism over many years, and I hope that I have indicated, by the construction of national co-ordination within the trading standards world, that we are looking to build them up in order to be able to tackle the more complex activities that have not only local impacts but also are of national significance. It is important that any changes can be addressed. In the same way, the noble Baroness asked about super-complaints. Competition elements would be part of the new Competition and Markets Authority, but the consumer, being sure of the issue, would go to the new authority for mixed market analysis, but where it is solely a matter of consumer interests, it would need to be part and parcel of the new co-ordination body within trading standards, as has been suggested. The Government intend to consult and the proposed consultation will begin soon. No set date has been set for the consultation to be concluded, but it is expected to be finished during the course of the year. In reply to the noble Lord, Lord Myners, I am pleased to be able to say that as a result of the question that my noble friend had to answer, the Government’s wider financial services agenda, the Independent Commission on Banking, chaired by Sir John Vickers, has been asked to look at the structure of banking in the UK and will consider how to promote financial stability and competition in the industry. This will include examining the complex question of separating investments from other matters. As regards the ICB, the Chancellor of the Exchequer said in the House of Commons on 9 February and my noble friend Lord Sassoon said in this House that the Government will not interfere with its independent remit. I hope that I have managed to tackle the questions raised in the debate. I am grateful to noble Lords for bringing these issues to the attention of the Committee and I am happy to support Amendment 89, moved by the noble Lord, Lord Dubs.