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Clause 6 requires the NCC to produce an annual report that informs the Secretary of State and Parliament of the council’s activities within the year, but I do not see why it is necessary for the NCC to do both these things on a yearly basis. I believe that it would be far more fruitful to the NCC to enjoy some flexibility and discretion in carrying out its duties to enable it to focus on the task of championing the consumer. I beg to move.
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Lord O'Neill of Clackmannan: My Lords, I hope that the noble Lord does not wish to push this issue to a vote. I see the force of his arguments, but I disagree with them. The financial planning afforded by three years is sensible but, when we are dealing with consumer matters, long-term issues can easily be incorporated in an annual forecast of activities. Therefore, I do not think that only if you have a three-year plan will you be able to look beyond the horizon.
Let us take two of the areas for which the National Consumer Council will be responsible under the Bill: energy and postal services. It would have been most unhelpful if, over the past two and half years, a consumer council for energy had not had to indicate what it wanted to do for the 12 months ahead, given that we had energy prices of such volatility and given the difficulties that confronted the regulator, the consumer and, indeed, Parliament. Where you have rapid change, as we have had of late in the energy markets, it would be foolhardy not to do that. People would ask, “Why should the consumer council be looking into this? After all, it wasn’t in the three-year plan”.
This is not an area of disagreement. We assume that, when the Bill is enacted, one of the major responsibilities of the National Consumer Council will be the protection of the postal consumer at a time when the market is opening. We know from the 1990s, when gas and electricity markets were liberalised, that problems arose that we had not anticipated. If, in those days, the old consumer councils had said, “We’d like to look at that, but we’ve committed resource to other worthy causes”, there would have been a lack of flexibility. This is about the actions of the council and its freedom to operate. I think that, as the Bill stands, there is plenty of scope for longer-term planning within the documents and that the amendment would unduly tie the council’s hands.
One thing that has not been taken account of and which we have to recognise is that, after the Bill is enacted, the National Consumer Council will, I imagine, be of far more interest to whatever committee is responsible for it in the House of Commons. As someone who chaired the Trade and Industry Committee for a number of years, I have to say that we perhaps did not pay as much attention to the National Consumer Council as we might have done, although we paid plenty of attention to
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Baroness O'Cathain: My Lords, I support the noble Lord, Lord O’Neill of Clackmannan, on this but not because I think that my noble friend is wrong. The turgid language in the Bill is not clear. I think—I should like the Minister to confirm or deny this—that what is envisaged is a three, four or five-year plan and, within that, a financial report on where the council expects to be each year. It will say at the end of each year how it is moving towards ensuring that the plan ultimately works out.
As the noble Lord, Lord O’Neill, pointed out, things can change drastically in a market. If the council cannot react because the sums are not there, surely, under the terms of best business practice, it should say that the three-year plan has been put off course due to whatever reason and that therefore, for this year, it needs to do this and, for next year, it needs to do that.
The wording in the Bill makes the reporting process appear highly complicated. I hope that my noble friend does not feel that I have taken his amendment in the wrong way, but I think that the Bill is probably set out as it is—I hope that the Minister will confirm this—to ensure that a big hole does not appear in year one of a three-year plan without anyone knowing about it and without it being addressed until the three-year plan is reported on. I think that the provision is probably common sense.
Lord Whitty: My Lords, I largely agree with my noble friend Lord O’Neill and the noble Baroness, Lady O’Cathain, but there is another dimension to this. I do not think that the new NCC, any more than its three predecessor organisations, would have any difficulty in preparing annual work plans. Those organisations do them now and they have a corporate plan along the lines set out just now by the noble Baroness. So I do not think that planning is the issue, but the finances could be.
In particular, we have to bear in mind that this is not simply a question of a grant in aid from the DTI in the normal sense of general taxation, but of levies on designated consumers, which a large part of Clause 4 deals with. It is important not only that the new NCC knows what it has more than a year ahead, barring accidents, but also that the regulated industries know what they are expected to pay for those three years ahead. So it is sensible to deal with the finances on a three-year basis from that point of
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Lord Truscott: My Lords, I am grateful for the contributions from noble Lords. With regard to annual reports and forward work programmes, the idea is that the plan might be done for three years but it is a rolling programme. I think that that meets the point referred to by the noble Baroness, Lady O’Cathain.
The amendment would require the new council to publish a forward work programme only once every three years. We believe that the publication of an annual forward work programme strikes a good balance with the requirement to prepare an annual report in line with financial years, as I mentioned. That is the basis of the provisions as drafted. This requirement replicates the current requirement on both Energywatch and Postwatch to produce a forward work programme annually. It is also consistent with the requirement to produce an annual forward work programme on the sectoral regulators, Ofgem and Postcomm, respectively.
The publication of an annual forward work programme, on which the council must consult, ensures that the proposed activities of the council are transparent and that it can be held to account for those activities. That is particularly important given that some of the new council’s funding will come from industry. Additionally, the consultation allows it to obtain the views of key stakeholders in determining its priorities and the activities it undertakes to achieve them.
I recognise that an organisation has to spend time and effort on preparing a forward work programme, but it is time and effort well spent. The forward work programme is the means by which the new council can set out a programme for consumer advocacy, set out its aims and priorities, and—because this is also important—set out its funding requirement. The Bill requires the forward work programme to cover the year ahead, but in many cases organisations are understandably keen to set out a programme covering a longer period, perhaps three or more years ahead. That enables the organisation to take a longer-term view, and by updating and renewing that vision each year, new and urgent priorities can be taken into account. Those points were made by my noble friends Lord Whitty and Lord O’Neill of Clackmannan.
The forward work programme is in many ways the showcase for an organisation. It is a statement of intent, certainly, but, more than that, it is a demonstration of ambition to make a difference and a statement of willingness to be held accountable for that ambition.
Lord De Mauley: My Lords, I thank the Minister, my noble friend Lady O’Cathain and the noble Lords, Lord O’Neill of Clackmannan and Lord Whitty, for their contributions. I am pleased that we have had the opportunity of this debate; it has been useful and flushed out some helpful information, especially on budgeting. For the moment I beg leave to withdraw the amendment.
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Amendment, by leave, withdrawn.
Clause 5 [General provision about functions]:
The Deputy Speaker (Lord Boston of Faversham): My Lords, if Amendment No. 7 is agreed to, I cannot call Amendment No. 8.
Lord Truscott moved Amendment No. 7:
Clause 5 , page 4, line 40, leave out “have regard to the desirability of acting in the manner” and insert “exercise its functions in the manner which it considers is”
The noble Lord said: My Lords, I shall also speak to Amendment No. 8, in the names of the noble Baroness, Lady Miller of Chilthorne Domer, and the noble Lord, Lord Razzall.
Both amendments seek to strengthen the new council’s sustainable development objectives and, I believe, are intended to have the same effect. Having listened carefully to the concerns raised by noble Lords in Committee, my amendment follows the precedent of Section 35(1) of the Water Act 2003, which inserts a new Section 27A(12) into the Water Industry Act 1991. This section places a duty on the Consumer Council for Water to perform its powers and duties in the manner it considers best calculated to contribute to the achievement of sustainable development. Amendment No. 7 places an equivalent sustainable development requirement on the new National Consumer Council; the terminology used is slightly different, as the new council has “functions”.
The term “functions” is defined in Clause 40 as including powers and duties. Such functions include, for example, the representative function under Clause 7, the research function under Clause 8 and the information function under Clause 9; the objective does not only relate to the internal operations of the council, for example. Both amendments therefore require the council to exercise its functions in the manner it considers best calculated to contribute to the achievement of sustainable development. Both amendments are intended to have the same effect, hence only one of them is required, and Amendment No. 7 is the preferred option. I beg to move.
Baroness Miller of Chilthorne Domer: My Lords, I am grateful to the Government for moving somewhat on my Amendment No. 8. We have tabled an amendment of our own to highlight that the Government could move further. I doubt that the NCC feels that the government amendment gives enough emphasis to the extreme importance of the sustainability duties.
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The NCC’s recent work, for example, has clearly had a significant effect. A while ago, my honourable friend Norman Baker published How Green Is Your Supermarket?.The answer for all of them was, “Not at all”—the word “green” never crossed their minds. The NCC recently published a report called Greening Supermarkets, which addressed a wide range of issues and encouraged supermarkets to start to take action. We have seen headlines about supermarkets vying
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The Government are resisting my amendment, which requires the NCC to,
It is much firmer than the Government’s amendment, which leaves it to the NCC to judge. So if push came to shove and the NCC was not exercising its functions in that manner—a scenario I cannot envisage when it is under the chairmanship of the noble Lord, Lord Whitty—and sustainability did not seem to be a big issue for it, how would the Government judge whether the council was doing enough? We know from debates on this matter that climate change will not go away. It is bound to be important, yet the pulls on the NCC may not always be about it; they may be about price. That is where some of the biggest tensions will come from, especially in the field of energy, where there will be tension between maintaining as low a price as possible and some microgeneration issues—I shall not go down that path. How will the Government ensure that, despite their somewhat strengthened amendment, sustainability will be at the heart of what the NCC does?
Baroness Byford: My Lords, I apologise that I was not able to be present on the second day of Committee stage. I hoped that we would reach my amendment, Amendment No. 100, on the first day, but that was not possible, and on the second day I was speaking at a conference in Nottingham.
The noble Baroness, Lady Miller, rightly raised the issue of sustainability. As the Minister knows, Natural England was recently set up. For me, there is a question about where the responsibilities will lie. The new National Consumer Council will deal with complaints, but how much additional responsibility might it have for looking at sustainability? Will it make any judgments on sustainability, or will it look to Natural England to develop those policies and then react? While the NCC is being set up now, Natural England was launched only last October, so it is still in the early stages of its remit. On a later amendment I shall take up, in particular, the position of the Commission for Rural Communities and how it has not responded on behalf of post offices. Where does responsibility for sustainability lie? What interplay will there be between the organisations? Will one body deal just with complaints while the other deals with issues on a daily basis and looks at long-term sustainability?
Lord Truscott: My Lords, the noble Baroness, Lady Miller of Chilthorne Domer, when speaking to the two amendments, asked what was the
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The noble Baroness, Lady Byford, asked about the functions of the NCC. The council is subject to challenge if its functions are not carried out. My advice is that the council is also accountable through its annual report. I will write to the noble Baroness to clarify the point further.
On Question, amendment, agreed to.
Lord De Mauley moved Amendment No. 9:
“( ) contain details about the most frequent complaints from consumers about post and energy for that year, ( ) contain recommendations, if any, for regulated energy and post companies to change their practices,”The noble Lord said: My Lords, Amendment No. 9 would place a duty on the NCC to include in its annual report details about the most frequent complaints from consumers about post and energy for the year in question, and make recommendations, should it see fit, for regulated energy and post companies to change their practices. I return to this amendment from Committee as I believe that it would support and underpin the merger of Postwatch and Energywatch at what could be one of its weakest points.
The amendment would complement the duty that we seek to place on redress schemes in Amendment No. 74, which would ensure that all suppliers of services had effective internal complaints handling procedures. We will be able to go into further detail on that point in due course. The amendment would enable the NCC fully to implement its new duty of providing insight into consumer affairs and as a provider of a complaints signposting service under Consumer Direct. That is particularly important in the light of the services the NCC will be covering. Postal and energy services are essential to all consumers, especially the most vulnerable. The impending closure of thousands of post offices highlights that the consumer will soon need assistance more than ever before.
This addition to the annual report would be a simple task for the NCC to perform. Energywatch has informed us that, as it keeps records of all the complaints it receives as a matter of course, it would simply be a matter of pulling together statistics and displaying them in a suitable form. Page 8 of the Energywatch annual report shows that very well.
As I think the Minister has pointed out, Clause 44 already places a duty on the NCC to publish statistics on complaints, but not on any regular basis. The
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Complaints demonstrate better than any poll the attitude of the consumer and how successfully providers are running their services. The amendment provides a low-cost, consumer-driven addition to the way in which the NCC will communicate through its annual report. It will also place complaints at the centre of how the NCC evaluates its own work. I beg to move.
Lord Truscott: My Lords, Amendment No. 9 would add to the obligations on the council in respect of the annual report by requiring it to include details of the most frequent complaints from consumers about post and energy for the year. It would also require the new NCC to include in the report any recommendations to regulated energy and post companies to change their practices.
I certainly agree with the objective of the amendment. I share the ambition of the noble Baroness, Lady Wilcox, and the noble Lord, Lord De Mauley, that the council should be vigilant and active in the pursuit of opportunities to increase the transparency of the relevant markets by drawing attention to the sort of problems encountered by consumers. I am also very supportive of the ambition that the council should be a positive force for change and should be able to make recommendations to companies that would improve their performance to the benefit of consumers—that is also a clear benefit to the companies. The noble Baroness, Lady Wilcox, has previously made the powerful and compelling observation that complaints are important to companies because they help them to improve their performance and develop their businesses. I support that view wholeheartedly.
Clause 9 provides the council with a general information function, which allows it to facilitate information provision to consumers, and Clause 44 obligates the council to publish information on the levels of compliance by an energy or postal services company with any complaint-handling standards set by a regulator.
I hope that there is general agreement that the new statutory functions conferred by the Bill will provide the council with every opportunity to pursue the objectives set out in the amendment. As I said, I endorse the objectives of the amendment. However, although the council may very well include such information in its annual report if it considers that appropriate, it should not be obliged to do so, because that might not be the most appropriate way to provide consumers with information on complaints or on its recommendations to regulated post and energy companies on their practices.
I hope that noble Lords will agree that, on balance, we should leave it to the council to decide how best to bring such information to the attention of consumers.
Lord De Mauley: My Lords, I thank the Minister for his response and his supportive words agreeing with the objective of the amendment. I am not
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Amendment, by leave, withdrawn.
Clause 7 [The representative function]:
Baroness Miller of Chilthorne Domer moved Amendment No. 10:
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