Abolition of Consumer Bodies
Section 30: Abolition of “energywatch” and “Postwatch”
83.Subsection (1) abolishes energywatch.
84.Subsection (2) abolishes Postwatch.
85.Subsection (3) transfers the functions of energywatch and Postwatch to the Council.
86.Subsection (4) replaces a number of references to energywatch and Postwatch in existing legislation with references to the Council established under the Act. The new Council established by the Act will take over certain statutory functions of the existing consumer bodies under the Gas Act 1986 (c.44), Electricity Act 1989 (c.29), Utilities Act 2000 (c.27) and Postal Services Act 2000 (c.26). In particular, there are a number of statutory requirements to consult energywatch and Postwatch on certain issues. In future, those requirements will relate instead to the Council. Subsection (5) introduces Schedule 3, which contains transitional provisions in respect of the abolition of energywatch and Postwatch. As the existing National Consumer Council is a company limited by guarantee, there is no need to dissolve this body under the Act. Instead, it will be dissolved under the Companies Acts.
Section 31: Designation of the Consumer Council for Water for abolition
87.Section 31 gives the Secretary of State the power to designate the Consumer Council for Water for abolition. The Consumer Council for Water is the statutory consumer body established by section 27A of the Water Industry Act 1991 (c. 56). The Consumer Council for Water looks after the interests of consumers of water and sewerage services in England and Wales. An order designating the Consumer Council for Water for abolition must give the earliest date on which a transfer order or an abolition order under section 32 may take effect. Before making an order under section 31, the Secretary of State must consult the Consumer Council for Water, the Council, and anyone else that the Secretary of State considers appropriate. An order under this section can be made only with the consent of Welsh Ministers (subsection (4)) and the order may not be made unless a draft has been laid before Parliament and approved by resolution of each House (see section 62).
Section 32: Transfer orders and abolition orders
88.Section 32(1) gives the Secretary of State the power to make one or more transfer orders and an abolition order in respect of the Consumer Council for Water. A transfer order is an order that transfers functions of the Consumer Council for Water to the Council. An abolition order is one that abolishes the Consumer Council for Water. These orders may not take effect before the date specified in the designation order under section 31. A transfer order or abolition order in respect of the Consumer Council for Water may be made only with the consent of the Welsh Ministers.
Section 33: Supplementary provision about transfer and abolition orders
89.This section enables the Water Services Regulation Authority (“Ofwat”) to modify water and sewerage undertakers’ conditions of appointment, and water suppliers’ licences, as a result of or in preparation for the abolition of the Consumer Council for Water or the transfer of its functions to the Council. The powers under section 33 may only be exercised if the Consumer Council for Water has been designated for abolition under section 31 (subsection (1)).
90.Subsections (2) to (6) enable conditions in an appointment or a water supply licence to require the company holding the appointment or licence to pay sums towards various expenses described in subsections (4) and (5). These include the expenses incurred in abolishing the Consumer Council for Water and transferring its assets and liabilities to the Council; in expanding and operating an OFT scheme (described further below) to cater for water consumers; and a proportion of the expense of the Council having regard to its functions in respect of water consumers.
91.Subsection (7) enables Ofwat to make other consequential and incidental modifications to the above conditions. This power might (for example) be used to substitute references to the Council for references to the Consumer Council for Water in licence conditions.
92.The reference to an OFT Scheme is included to cover Consumer Direct. This is a telephone and internet based consumer advice service supported by the OFT that offers advice on consumer issues. The intention is to expand the activities of Consumer Direct to deal with individual consumer problems in relation to water and sewerage in England and Wales, if the Consumer Council for Water is abolished after consultation.
Section 34: Compensation for loss of office
93.Section 34 provides for the payment of compensation by the Secretary of State, with the approval of the Treasury, to members of energywatch, Postwatch, the Consumer Council for Water or the existing National Consumer Council who cease to be members of these consumer bodies because the bodies are abolished as a consequence of the measures in this Act. Compensation may cover loss of office or loss or diminution of pension rights.
Section 35: Transfer of property etc
94.Section 35 and Schedule 4 provide for the Secretary of State or the existing consumer bodies to make transfer schemes to transfer property, rights and liabilities from energywatch, Postwatch, the Consumer Council for Water and the existing National Consumer Council to the Council.
95.Subsection (1) lists the bodies to which the section applies. Subsection (2) allows the Secretary of State to direct these bodies either to make a transfer scheme to transfer property, rights and liabilities to the Council, or to transfer specified property etc. to another specified person or organisation.
96.Subsection (3) provides that, before giving, varying or revoking a direction under subsection (2), the Secretary of State must consult both the consumer body from whom the property, rights and liabilities are being transferred, and the person to whom the property etc is being transferred (either the Council or another specified person).
97.Subsection (4) requires a consumer body which is directed to make a scheme transferring property to the Council to consult the Council before doing so.
98.Subsections (5) and (6) state that a transfer scheme must be approved by the Secretary of State before it has effect and can be modified by him, subject to consultation with the consumer body from whom the property etc is being transferred.
99.Subsection (7) allows the Secretary of State to make a transfer scheme from energywatch, Postwatch, the existing National Consumer Council or the Consumer Council for Water to the new Council.
100.Schedule 4 makes further provision in relation to transfer schemes. This does not apply to transfers to third parties (that is, to persons other than the Council) under section 35(2)(b) as such transfers are not made by way of a transfer scheme.
101.The existing National Consumer Council is a Cross-Border Public Authority under section 88 of the Scotland Act 1998 (c.46). In view of this, the Secretary of State will be required by that section to consult the Scottish Ministers before making a transfer scheme in relation to that body.
Section 36: Directions
102.Subsections (1) to (3) allow the Secretary of State to require information from energywatch, Postwatch, the existing National Consumer Council and the Consumer Council for Water about their property, rights, liabilities and functions, and to set out requirements for receiving that information, such as timescale and form.
103.Subsection (4) means that the Secretary of State can direct energywatch, Postwatch, the existing National Consumer Council and the Consumer Council for Water not to take a specified action, or not to take a particular action in specified circumstances. For example, the Secretary of State may direct the existing consumer bodies not to sign up to additional property leases which extend beyond the date that the consumer body will be abolished. Subsection (5) requires the Secretary of State to consult both the consumer body to which the direction is being given and the Council before giving, changing or revoking a direction under this section.
104.This section is intended to facilitate the making of transfer schemes, in part by ensuring that the Secretary of State is able to obtain the information he needs to make such a scheme.
Section 37: Extension of the Council’s functions: Great Britain
105.Section 37 allows the Secretary of State to make an order giving the Council additional functions if he thinks this is in the interests of consumers. Such functions must appear to the Secretary of State to be connected with the Council’s existing functions. Before making an order, the Secretary of State is required to undertake a consultation. If the exercise of the function to be conferred might affect Wales in relation to any matter in respect of which functions are exercisable by the Welsh Ministers, then he must consult Welsh Ministers.
106.The Secretary of State may not make an order under this section which makes provision which is within the competence of the National Assembly for Wales without the consent of that Assembly. Also the Secretary of State may not make any provision under this section which is within the legislative competence of the Scottish Parliament.
Section 38: Removal of the Council’s functions in relation to Northern Ireland
107.Section 38 provides that if the Secretary of State is content that a body other than the Council is to exercise the Council’s functions in relation to Northern Ireland, then he may repeal the relevant parts of this Act that extend the functions of the Council to postal services matters in Northern Ireland. Before making an order under this section the Secretary of State must consult the Council and anyone else he thinks appropriate.
Section 39: The Financial Services Consumer Panel
108.Section 39 inserts new subsections (5A) to (5C) into section 10 of the Financial Services and Markets Act 2000 (c.8). These allow the Secretary of State to direct the Financial Services Authority to appoint a non-executive member of the Council to the Financial Services Consumer Panel.
109.Paragraph 1(4)(a) of Schedule 1 to the Act enables the Secretary of State to appoint a member of the Financial Services Consumer Panel to the Council.
Section 40: The OFCOM Consumer Panel
110.Section 40 inserts new subsections (4A) to (4C) into section 17 of the Communications Act 2003 (c.21). These allow the Secretary of State to direct the Office of Communications to appoint a non-executive member of the Council to the OFCOM Consumer Panel.
111.Paragraph 1(4)(b) of Schedule 1 to the Act enables the Secretary of State to appoint a member of the OFCOM Consumer Panel to the Council.
Section 41: Interpretation of Part 1
112.This section contains interpretation provisions in relation to Part 1 of the Act.
113.This section does not define water or sewerage undertaker. The Interpretation Act 1978 (c.30) provides that these terms should be construed in accordance with section 6 of the Water Industry Act 1991 (c.56) which relates to the appointment of water and sewerage undertakers.
