Consumers, Estate Agents and Redress Bill [HL]

My Lords, I have greatly enjoyed the highly constructive debate that we have had today and I am grateful for the many incisive contributions that have been made. I welcome the noble Baroness, Lady Wilcox, to her position on the Opposition Front Bench and thank her for her acute observations. I will try my best to answer as many of the questions that were raised as possible. It may be more appropriate for some of them to be dealt with in Committee but I shall do my best in the time available. At the outset, the noble Baroness, Lady Wilcox, referred to indebtedness in society. The Government are looking at this matter with the cross-government approach set out in the Tackling Over-indebtedness Action Plan 2004. A number of associated activities deal with this area, including implementing the new Consumer Credit Act 2006 by looking at illegal moneylending, loan shark pilots and various other initiatives. It is fair to say, though, that the vast majority of credit contracts are honoured, and it is only a minority who get into trouble. The principal drivers of personal insolvencies are obviously economic. It is also interesting to look at some of the statistics. Sound domestic economic fundamentals have underpinned the growth in personal debt, but when we look at, for example, average mortgage rates, which were 5.22 per cent in September compared with 11 per cent between 1979 and 1997, mortgage holders have been saved approximately £4,000 a year on average. That is all underpinned by low interest rates delivered by greater macroeconomic stability, which have ensured that households are paying a significantly smaller part of their income in interest. We are now in a situation where unsecured consumer credit is growing at its slowest rate for 12 years. A number of noble Lords referred to the proposals for setting up Consumer Voice and to queries about whether it is just a cost-cutting exercise. The noble Baroness, Lady Wilcox, referred to that issue, as did my noble friend Lord O’Neill of Clackmannan and the noble Baroness, Lady Byford, among others. Although it is true that there will be net cost savings of around £8.9 million per annum, it is not a cost-cutting exercise. There will be savings from shared central functions, but not a reduction in those functions. Government funding will not be reduced. A number of noble Lords referred to the retention of sectoral expertise. I assure your Lordships’ House that this is an integral part of our reforms. The new NCC will need to ensure that it is an effective advocate for consumers in all markets, and therefore that it has at its disposal sufficient sectoral expertise. The noble Lord, Lord De Mauley, asked how many staff will be made redundant. We are not prescribing the exact structure of the new body in terms of staffing levels. That will be determined in conjunction with the existing consumer bodies to ensure that the new body is fit for purpose and able to undertake its new functions effectively and efficiently. The KPMG analysis itself did not assume any reduction in the number of complaints from the 2005-06 level, a point referred to by the noble Baroness, Lady Wilcox. In practice, we anticipate that the number of complaints being resolved outside the company will fall, due to the cost of the onward referral of complaints to the redress scheme. With regard to estate agents’ redress, the noble Baroness, Lady Wilcox, questioned the number of non-frivolous complaints that may go forward to an estate agent and the number of complaints that will be dealt with. The view on the Government’s side is that residential issues are at present widely defined, which will exclude certain types of complaint so that the number of complaints will be defined in such a way that only the borderline cases for further consideration will be excluded. All legitimate complaints concerning any acts or omissions committed by someone in the course of estate agency work affecting sellers and buyers of a residential property will be covered. A number of noble Lords spoke of the scope of the devolved Administrations, including the noble Baroness, Lady Wilcox, and my noble friends Lord O’Neill and Lord Whitty. It is the position that the new National Consumer Council will operate across Great Britain and in respect of postal services in Northern Ireland, but there will be no carve-outs. The new NCC is empowered by the Bill to represent consumer interests in all markets, including public services. In practice, the new NCC will need to take account of the existence of other sectoral consumer bodies. The Consumer Council for Water will be merged with the new NCC, and a new redress scheme for water consumers in England and Wales will be established. The Government have announced that the position of CC Water will be reviewed in 2008 after public consultation. However, the Bill requires the new National Consumer Council to set up a Scottish Consumer Council and a Welsh Consumer Council, which will replicate the current arrangements. Those bodies will have their own chairs and members appointed by the Secretary of State after consulting the Scottish and Welsh Ministers as appropriate, so there will be an effective voice for the Scottish Consumer Council and the Welsh Consumer Council referred to by noble Lords, including my noble friend Lord Whitty. The noble Baronesses, Lady Wilcox and Lady Oppenheim-Barnes, and my noble friend Lord Whitty asked about the independence of the NCC. I assure your Lordships that the new NCC will be an independent statutory body, underpinned by statutory functions that will enable the new body to conduct research, make inquiries, undertake investigations and make reports and representations to any party. Thenew body is empowered to determine its own work programme.