Select Committee on Constitution Minutes of Evidence


Examination of Witnesses (Questions 1080 - 1085)

WEDNESDAY 12 NOVEMBER 2003

MS DEIRDRE HUTTON AND MR JAMES KING, NATIONAL CONSUMER COUNCIL

Chairman

  1080. Your status is that of a non-departmental, public body?
  (Ms Hutton) We are an executive NDPB.

  1081. That does not inhibit you in terms of making representations and lobbying government when you believe it is necessary and in the interests of the consumer?
  (Ms Hutton) Absolutely not. Somebody did once describe the National Consumer Council as the most extraordinary creation of a highly sophisticated democracy—that the government funded a body which was essentially there to criticise its actions albeit in a positive way, but that is fundamentally what the NCC does. In general terms, governments of all colours have appreciated that the value of the National Consumer Council to them lies in its independence and its robustness of thought.

  1082. Is that robustness and independence protected? Is there anything the government could do in relation to the national constitutional court if it felt it did not like what it was doing?
  (Ms Hutton) Yes. It could abolish us.

  1083. Apart from getting rid of you completely, which would be rather high profile?
  (Ms Hutton) There is either total death or death by a thousand cuts. Your budget can be cut or you can be abolished as a body. Sometimes our budget is cut in periods where government is cutting expenditure generally. That has happened to us a number of times in the past. It is not necessarily a personal attack on the Council. Although I say very strongly that I think there is merit in not being enshrined in statute because it requires you to prove yourself and prove your value in public expenditure terms all the time, if you were to offer me a foundation in statute I would not refuse it.

  1084. Given the point about resources being cut generally, how much of a problem does that create for you in as much as there has been a growth in regulation and therefore do you find that what you have to do is expand while resources are not expanding to keep pace with what you have to do?
  (Ms Hutton) We find it tremendously difficult. Our remit is to articulate the interests of consumers of goods and services, whether publicly or privately supplied, which is the entire economy. We find the demands that are made on us are increasing exponentially. The main role of my board is to give the staff strength in focusing and giving them the right to say no to government departments. We achieve more by consistently devoting at least two-thirds of our work to what we said we were going to do and sticking to our onions or our knitting, whatever the phrase is, but keeping a small amount of flexibility which allows us to respond to significant issues that emerge. It is a constant tension. James probably sits on more working parties of more government departments than any person has a right to have expected of them.
  (Mr King) The issues I have worked on this week include the child trust fund, equity release, occupational pensions and the taxi market along with this inquiry. We do have to spread ourselves thinly. One of the things that has helped us a great deal in recent years is the emergence of reasonably resourced and effective sectoral consumer bodies. Their focus will be on the consultations and the issues faced by the regulator. We do continue to have a relationship with each of the relevant sectoral regulators. However, our particular locus is often on government and public policy frameworks and the interaction between the market and the state in an area like financial services. I think it leads to a fairly compatible relationship.
  (Ms Hutton) As the sectoral consumer bodies have emerged, we have withdrawn from the detail, but the gap that we find is left from the consumer perspective is often some of the high level, connecting issues that run right across all the regulators which, on the whole, the sectoral bodies do not pick up. We have tended to put ourselves into that hole.

  1085. Is there any internal problem or tension between the fact that you have an emphasis on looking at the disadvantaged consumer against the consumer interest? Presumably at times those are not going to be one and the same.
  (Ms Hutton) No, they are not but then nor often are the interests of urban or rural consumers. There are conflicts in this field wherever you look. Quite bluntly, there are sometimes conflicts between those two constituencies. In some areas of our work particularly, we would very strongly take the view that if you start by ensuring that something is right for disadvantaged consumers, on the whole, it would be right for the whole economy. Certainly, in financial services, if you made sure the language was right for disadvantaged consumers, it would be okay for everybody. It is not always a conflict.
  (Mr King) I agree there is a conflict sometimes and I think we have a specific role there to talk up the needs of some people who might not have their needs met by the market. Does it require some kind of cross-subsidy from consumers or from the taxpayer? Somebody has to pay one way or another, if it is ensuring access to water or banking or whatever. We would look for more of a transparent, open debate about that. There are a lot of cross-subsidies within the system anyway. It is not like we have a purist cost-pricing arrangement across all the utility sectors. Sometimes, these cross-subsidies arguably work against low income consumers. Arguably sometimes the poor pay more in some circumstances such as the utilities, because the poor have to use prepayment meters quite often. They are less likely to benefit from switching, as the NAO have flagged up quite recently. I think it is right and appropriate for us to flag up these particular issues.

  Chairman: Thank you very much. That has covered an awful lot of ground. Thank you very much for your time. It has been extremely helpful and we are very grateful to you for being with us this afternoon.





 
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