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Lord Lucas: I am extremely grateful to the Minister for that explanation and for the opportunity to go through it in detail before we return to this matter after Christmas. In the context of the time that we shall have to digest what he said which, to my mind, will require going over several times before we can understand the nuances of the various let-outs which the noble Lord has allowed himself and the Government, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 192 to 197 not moved.]

Clause 49 agreed to.

Lord Ezra moved Amendment 198:

After Clause 49, insert the following new clause--

Consumer representative

(" . The Director shall establish an office of the consumer representative which will represent the consumer interest when he carries out his duties under this Act, and in particular will--
(a) advise the Director, when he is conducting an investigation under section 25, of the impact on consumers of any possible infringement of Chapter I or Chapter II prohibitions;
(b) advise the Director, when he is making a decision following an investigation under section 30, of the impact of such a decision on consumers;
(c) advise the Director, when he is considering granting exemptions under section 4, of the impact of such exemptions on consumers;
(d) assess the impact on consumers of exemptions granted under section 4 which he considers appropriate, and at a time which he considers appropriate; and
(e) publish the results of such assessments.").

The noble Lord said: This amendment refers to the role of consumers in the implementation of the Bill. Although it could be argued that supporting the interests

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of consumers is the fundamental objective of the legislation, nonetheless there is a feeling, particularly on the part of the National Consumer Council, that in achieving that objective of supporting the interests of consumers it would be helpful if consumers were formally involved in the process of applying the legislation. Therefore, it is proposed that within the competition office there should be some consumer representation in some form or another to enable consumers to participate in the consideration of developments which affect their interests. I very much hope that the Government will take on board this attempt to formalise the position of consumers' interests and that they will give it serious consideration. I beg to move.

Lord Borrie: I fully understand the noble Lord's references to the consumer interest. As he rightly said, the whole purpose of competitive activity is, or should be, for the benefit of the consumer. If my noble friend Lord Peston were in his place, he would no doubt be able to quote appropriately from Adam Smith's words to that effect. As the noble Lord, Lord Ezra, knows (because he has often referred to the matter in your Lordships' House), existing legislation allows some form of consumer representation with regard to the specific industry regulators dealing with gas, water and electricity. When referring to these matters on other occasions, the noble Lord has stated a preference for what I think he has called "the gas industry model" whereby the Gas Consumers' Council is independent of the regulator, which is known as Ofgas. However, when it comes to the regulation of the water industry, the consumer committee or council--I forget its correct title--is part of the organisation of the regulator; namely, Ofwat, which, as I recall, the noble Lord does not find quite so satisfactory.

I find the new clause which the noble Lord is proposing slightly odd because it refers to the type of model of consumer organisation which in those other areas the noble Lord has not previously thought the most desirable. The new clause states that the director--that is, the Director-General of Fair Trading--

    "shall establish an office of the consumer representative".

That suggests that it is part of the Office of Fair Trading. The noble Lord will correct me if I am wrong.

I would question the value of the new clause on certain other matters. First, in Section 2 of the Fair Trading Act, which is the governing Act of 1973 which set up the Office of Fair Trading and that of the director general, two general duties are specified. One is pro-competition and relates to examining any business matters which might adversely affect competition, and the other, which is given equal importance, is the duty to review the economy to see whether there are any practices which are adverse to the consumer's economic interest. The director general's office contains two main policy divisions. One is concerned with competition policy and the other with consumer affairs. Therefore, in a sense, the Office of Fair Trading, unlike the organisation of the regulatory bodies for the gas, electricity and water industries, already has a consumer affairs division.

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I wonder also whether the new clause is suitably worded. It refers to,

    "an office of the consumer representative".

We all like to be representative, but we cannot make someone "representative" simply by calling him such. It is a little difficult to imagine an official of a government agency, such as the Office of Fair Trading, being thought of as a representative of the consumer. I was hoping that the noble Baroness, Lady Wilcox, a former distinguished chairman of the National Consumer Council, would be in her place because--I hesitate to say this--even the NCC would not really claim to be "representative". It is a body that is appointed by appropriate Ministers.

Be that as it may, there is a choice to be made in these matters. A government official, such as the Director-General of Fair Trading--and he has a consumer affairs division--ought to consult with consumer organisations to do the various things which the noble Lord, Lord Ezra, has specified as necessary if he is to carry out his functions under this new Bill. Choice is involved as to whether the director should go direct to the Consumers Association, the National Consumer Council and the various more specialised consumer bodies which now exist, or whether he should have the consumer's point of view filtered to him through some official or some part of his own office. As I see it, that is what would happen if we were to accept the new clause in its present form.

Without, I hope, overdoing it, although I greatly sympathise with the objective of the noble Lord, Lord Ezra, who wants to ensure that the consumer's interests are well understood by those who will make decisions under the Bill and that industry and consumers are consulted about the carrying out of these functions, I am not sure that this device is the best way of achieving that objective.

Baroness Oppenheim-Barnes: I apologise for arriving a few moments late and not hearing the noble Lord, Lord Ezra. I have, however, had the pleasure of hearing the noble Lord, Lord Borrie. In the absence of my noble friend Lady Wilcox, who was my distinguished and committed successor at the National Consumer Council, I must apologise to the NCC for saying that I am very much against this type of amendment, although not so much on the grounds that were put forward by the noble Lord, Lord Borrie, who has recommended the existing bureaucracy and the way in which it works in the interest of consumers. The more he explained it the more bureaucratic it sounded. I do not blame him for that because it was our legislation that created the Office of Fair Trading.

The noble Lord, Lord Ezra, spoke about placing a poultice on to the bureaucracy (if such a mixed metaphor can be used). That is not the point at all. This Bill is near to my heart. When I dealt with these matters at the Department of Trade I certainly intended to do this. My point is far more revolutionary than either of the suggestions that have been put forward. The noble Lord, Lord Borrie, knows what I am about to say.

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I believe that the whole Bill and the criteria within it should relate only to the consumer interest and not the public interest. The public interest is too diffuse and all kinds of considerations come into decisions that may or may not be in the consumer's interest. If this is a Bill to protect consumers then the basic criteria throughout should relate solely to the consumer interest. A decision would have to be made as to what was and what was not the consumer interest. I do not believe that business or industry would have anything to fear from it. Industry knows that good consumer practices mean good business. One rarely finds among successful businesses bad consumer practices, for the simple reason that they do not pay. I do not believe that business has anything to fear from those much simplified criteria. I hope that the noble Lord will be able to take a sympathetic look at this matter when he comes to reply.

3.30 p.m.

Baroness O'Cathain: Having listened to my noble friend Lady Oppenheim-Barnes, I remain unpersuaded that the National Consumer Council's suggestion that has been so well articulated by the noble Lord, Lord Ezra, should be thrown out. Even if one had a consumer interest in the Office of Fair Trading one would have the National Consumer Council, plus the consumer associations if necessary. They have a long pedigree, working extremely hard and diligently for the consumer. They are grounded in reality. They are close to the consumer and always have the consumer interest in mind. It would have been better had the Bill focused completely on the consumer. If I recall correctly, my noble friend said that it would have been better if it had dealt with the consumer interest rather than the public interest because many matters in the public interest might not necessarily be in the consumer interest. However, in the end we have the responsibility of guarding the public interest rather than just the consumer interest. I do not believe that they necessarily conflict but there is a point to be considered here.

Further, I hope that the director general gives weight to this suggestion. Both the National Consumer Council and the Consumers Association are large organisations. They have shown an openness and willingness to have a dialogue with industry. Compared with single issue groups, which tend to be politically motivated and do not necessarily speak for consumers as a whole, I believe that there is merit in getting these organisations more closely involved within the Office of Fair Trading. It is fine to say that a public servant should have responsibility for consumer interests. I do not believe that any public servant can have the same experience vis-a-vis the consumer interest as the NCC and CA.

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