4.The Department of Trade and Industry published the Government’s Consumer Strategy on 21 June 2005, and responded to the earlier consultation on the draft strategy as follows:
“Strengthen and streamline consumer advocacy.
As we set out in our consultation document “Extending Competitive Markets: Empowered Consumers, Successful Business” the Government sees benefits in moving consumer representation in the regulated industries towards a single “National Utilities Consumer Council” model. This remains our view, and we will bring forward further details of possible plans and timetable later this year.”
5.A second consultation was undertaken from January to April 2006, in which options were set out to achieve the objective of strengthening and streamlining consumer advocacy. The Government’s response to this second consultation was published on 17 October 2006, together with a Regulatory Impact Assessment.
6.The Act makes provision for new consumer representation as follows:
The (new) National Consumer Council
7.The Act establishes a “new” National Consumer Council (“the Council”). The Council will initially replace energywatch, Postwatch and the existing National Consumer Council. The Act provides for the abolition of energywatch and Postwatch and enables their assets and liabilities, and those of the existing National Consumer Council, to be transferred to the Council. The existing National Consumer Council will be dissolved under the Companies Acts. The Act also contains a power to dissolve the Consumer Council for Water(4) and transfer its functions, assets and liabilities to the new body established by the Act.
8.The Consumer Panel established by the Financial Services Authority(5) (“the Financial Services Consumer Panel”) and the Consumer Panel established by the Office of Communications(6) (“the OFCOM Consumer Panel”) will be left unchanged, reflecting their particular “regulator-facing” role (i.e. provision of advice to regulators on the consumer interest). The Act provides for a system of cross-appointments seeking to ensure a joined-up approach between the panels and the Council.
9.This Council will have three core functions:
the representative function,
the research function, and
the information function –.
Redress Schemes and Complaint Handling
10.The Act enables the Secretary of State to require regulated providers in the gas and electricity sector (in Great Britain), the postal services sector (in the United Kingdom) and the water sector (in England and Wales) to belong to redress schemes, providing resolution and redress for their consumers. Redress schemes already exist in the financial services and telecommunications sectors and the power in the Act does not relate to those sectors. There is also an existing redress scheme in respect of billing and transfer disputes in the gas and electricity sectors.
11.The Act imposes a duty on the energy and postal services regulators (the Gas and Electricity Markets Authority and the Postal Services Commission respectively) to make regulations to prescribe standards for complaints handling by regulated service providers in the gas, electricity and postal services sectors.
12.The Act does not extend these powers to the water sector because the Secretary of State already has a power to prescribe complaint handling standards in relation to water undertakers and sewerage undertakers in England and Wales under the Water Industry Act 1991 (c. 56).
13.The Act provides a power to require licensees in the electricity and gas (Great Britain), postal services (United Kingdom) and water (England and Wales) sectors to contribute towards the costs of expanding Consumer Direct to enable it to operate in relation to those sectors. Consumer Direct is a telephone and on-line consumer advice service, supported by the OFT. The service will be extended to replace the existing consumer information and advice lines provided by energywatch and Postwatch. It may also be extended to replace the existing consumer information and advice lines provided by the Consumer Council in relation to the water sector.
Established by section 27A Water Industry Act 1991(c.56)
Established and maintained by the Financial Services Authority under section 10 of the Financial Services and Markets Act 2000 (c.8)
Established and maintained by the Office of Communications under section 16 of the Communications Act 2003 (c.21)