Public Service Contract (Hansard, 3 May 1989)

§ Mr. David Porter (Waveney)

I beg to move, That leave be given to bring in a Bill to establish a public service contract, with compensation on failure to supply, between community charge and ratepayers and local authorities; and between consumers and public services. Compensation when a service is not supplied is a buzz word. It is high on the agenda of consumer affairs, and rightly so. Compensation from British Rail when it fails to deliver people, even within its scandalous 10-minute margin of error, will strike a chord with passengers everywhere. Compensation from the Post Office when the much heralded special deliveries do not arrive the next day or when first-class post does not achieve the Post Office's national 90 per cent. target will create a value-for-money and redress-for-grievance concept almost undreamt of by long-suffering customers inured to monopolies.

This Bill is about quality of service contracts linked to penalties where those are not met. Penalties provide the motivation to the industry or service provider to meet quality standards and provide compensation for individuals who suffer sub-standard service. I am grateful to the National Consumer Council for its helpful advice in preparing for this motion.

I submit that compensation from the Land Registry or the Passport Office—the average wait at the six passport offices in response to straightforward applications is still 28 working days—from agencies and from Government Departments would warm the hearts of many individuals who have found that frustration and impotence can lead to that terrible state of banging one's head against a brick wall when lapses of service occur. Compensation might even render the parliamentary answer, "I will answer my hon. Friend as soon as possible," a fob-off of the past.

A serious application of the Bill might occur where health authorities have not treated patients for specified operations within a contracted period. Compensation could be used to allow the patients to go private. That kind of incentive could be effective where management is for or against private health care and the proposed changes.

The Bill is equally applicable to local authorities. Until a few years ago, local authorities were monopoly suppliers. They determined their own levels of service. Now increasingly, through competitive tendering, the focus is on customer service. Local authority managers are more arrangers of a mix of cost-effective options to deliver to their communities the service and care increasingly demanded of them. Public service contracts are a logical evolution from that. They can cover everything from a council's statutory obligations to emptying bins and keeping streets free from litter. The local government ombudsman already investigates reports of maladministration. If maladministration is found, he should be given powers to order compensation for the consumer, community charge payer or ratepayer.

Customer complaints about British Rail rose sharply in the 1980s from 60,000 a year to 92,000 a year. The figure was rising until 1986 when the publication of the figures was stopped. The Central Transport Consultative Committee states that complaints from area committees are still increasing. It believes that British Rail abandoned publishing complaint figures because such information might be used to its disadvantage. 181 The service offered to and from Liverpool street station since Easter can at the most charitable be described as a shambles. It typifies the problem. Vandalism on overhead lines and teething troubles with the new signalling are unavoidable. However, guards not giving information and journalists and photographers being escorted off station premises if they attempt to report the travelling public's fury is quite a different matter.

British Rail is reluctantly being forced to give the odd refund here and the occasional token compensation there. It should be dragged kicking and screaming, if necessary, into extending season tickets and paying compensation automatically. Under the rights of carriage regulations, it has no responsibility or obligation to deliver passengers in a seat or on time. Under the Bill, when a ticket is purchased a public service contract is entered into for that journey. Failure to deliver would bring agreed compensation. If a guard inspecting a ticket on InterCity found a passenger standing because no seats were left, he would issue a voucher for compensation for that service failure.

The same fundamental idea of delivery within an agreed, contracted time and within accepted comfort levels could apply to London Transport. Public service contracts, varying during the day to reflect the reality of customer use, would help London Transport management keep the paying, travelling public at the forefront of their minds.

Compensation and limited liability are now watchwords and an incentive within British Telecom. From 1 April this year, when British Telecom fails to restore a service within two days, or to provide a new service within two days of the agreed appointment date, it pays the customer £5 for every extra day of delay. Alternatively, British Telecom accepts liability for claims for loss up to limit of £5,000 for business customers and £1,000 for residential customers. That is a superb example of the private sector responding to public clamour for a better deal. That service obligation is very welcome—even though it did not apply years ago.

The Water Bill, now being considered in another place, will establish a customers' charter. Each company is required to draw up an individual code of practice about 182 services, terms and conditions and how to complain, together with an entitlement for domestic customers of £5 cash or credit each day that certain basic and, in effect, contracted standards are not met. In what will be a private sector industry, there is expectation of good consumer practice and compensation. The regulation and enforcement of contracts is crucial. Be it electricity, water, gas, telecommunications or whatever, the regulator must be able to intervene in the quality of supply and service standards.

The obligation to supply individuals from a monopoly advantage is not covered by the Bill but should be noted as part of the process of dealing with utilities from the consumer's viewpoint. In the United States, most states have a utilities commission that can refer to the district attorney any cause for believing that a utility has violated a lawfully enforced service standard. The attorney files either a criminal prosecution or a civil suit for compensation against the company. That leaves the individual in a position to take civil action, knowing that the company has already been found guilty of breach of service regulation, and the individual usually gets out-of-court compensation.

That is a lengthy process, and we do not need to go down that road. We can have a simpler and a far more effective right to compensation. My Bill would complement the Consumer Protection Act 1961 and a tranche of consumer legislation. Compensation in private and public services is an idea whose time has come. I commend my Bill to the House.